Valid Soluções (VLID3) Q1 2025 earnings summary

Executive summary

• Net revenue reached R$501 million in Q1 2025, up 4% year-over-year, driven by strong growth in New Businesses and the consolidation of VSoft, while EBITDA was R$104 million, down 10% year-over-year, mainly due to pressure in the Pay segment.

• Net income was R$73 million, with a margin of 15%; recurring net income (excluding asset sales) was R$44 million, up 23% year-over-year.

• New Businesses contributed 15% of revenue and 27% of EBITDA, reflecting a strategic shift toward higher-margin digital and technology solutions.

• Strong operational cash generation of R$133 million, with a net cash position of R$157 million and disciplined capital allocation.

• Major divestments and acquisitions, including the sale of Colombian assets and the acquisition of VSoft, realigned the business portfolio.

Financial highlights

• Net revenue: R$501 million (+4% YoY); EBITDA: R$104 million (-10% YoY, margin 20.8%); Net income: R$73 million (-50% YoY, margin 14.7%).

• Recurring net income (excluding asset sales): R$44 million (+23% YoY).

• Operating cash flow: R$133 million, representing 127% of EBITDA, driven by improved working capital.

• EPS for 1Q25 was R$0.93, up 66% sequentially but down 50% year-over-year.

• Share price rose 48% over the last 12 months; average daily trading volume up 25% YoY to R$11 million.

Outlook and guidance

• Focus on expanding new digital businesses, leveraging technology and innovation for future growth, with continued investment in operational excellence.

• Management expects continued growth in Digital Government and Mobile, supported by recent acquisitions and ongoing investments.

• Anticipates recovery in the Pay segment in the second half of 2025, driven by improved pricing conditions.

• M&A activity remains a strategic priority, targeting technology and transaction-focused companies.

• Ongoing shareholder remuneration through Interest on Equity payments and share buybacks.