TOTVS (TOTS3) Q4 2025 earnings summary

Executive summary

• Achieved strong top- and bottom-line growth in 2025, with consolidated net revenue exceeding R$5.77 billion, driven by recurring revenue and innovation in AI and cloud solutions.

• Launched LYNN, the first proprietary AI foundation in Brazil, marking a strategic shift toward AI-driven solutions and reinforcing leadership in digital transformation.

• Adjusted EBITDA reached R$1.50 billion for the year, up 22% year-over-year, with margin expansion to 26.1%.

• Adjusted net income was R$910 million for 2025, up 26% year-over-year, and EPS increased 25%.

• Maintained a solid financial position and high market valuation, supported by strong cash generation and capital market performance.

Financial highlights

• Net revenue for 2025 grew 17% to R$5.77 billion, with SaaS revenue up 25% and recurring revenue representing 91% of total revenue.

• Adjusted EBITDA margin for the year expanded to 26.2%, and ROIC reached 20%.

• Adjusted net income for 2025 was R$910 million, up 26% year-over-year; EPS (LTM) was R$1.55, up 25%.

• TechFin segment's adjusted EBITDA grew 43% year-over-year, with margin rising to 13.4%.

• Free Cash Flow for 2025 reached R$889 million, converting 98% of Adjusted Net Income.

Outlook and guidance

• Management expects continued margin improvement, recurring revenue growth, and disciplined cost control, with a focus on AI-driven solutions and digital transformation.

• Integration of Linx is expected to generate significant synergies and value.

• Ongoing investments in software development, with planned CAPEX of R$600 million over four years.

• Expansion of addressable market through TaaS and cloud solutions.