Valid Soluções (VLID3) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 was R$518 million, up 7% sequentially but down 3% year-over-year; H1 2024 revenue was R$1.0 billion, down 5.7% year-over-year.

• Net income for Q2 2024 was R$80 million, up 43% year-over-year; H1 2024 net income reached R$228 million, driven by a R$137 million gain from the Cubic sale.

• Core business performance remained strong, with ID and digital government segments growing 19% year-over-year in Q2; new business lines contributed 8.5% of total sales.

• Dividend and interest on equity payments totaled R$52 million in 2024, with R$0.44/share IoE approved for August.

• Strong capital structure with net cash position of R$137 million at quarter-end and ongoing reduction in gross debt.

Financial highlights

• EBITDA for Q2 2024 was R$129 million, down 4% year-over-year but up 11% from Q1 2024; margin at 25%.

• Adjusted EBITDA for H1 2024 was R$278.5 million, up 13% year-over-year; margin reached 27.8%.

• Operating cash flow for Q2 2024 was R$173 million, representing 134% of EBITDA.

• EPS for Q2 2024 was R$0.97, up 38% year-over-year.

• Gross margin in Q2 2024 was 36.6%; H1 2024 gross margin was 36.8%.

Outlook and guidance

• Focus remains on extracting value from core activities and accelerating new revenue streams, with investment in innovation and operational excellence.

• Mobile segment expected to continue recovery in H2 2024; digital government and onboarding solutions to ramp up.

• Management expects improved results in Mobile and overall business in the next six months, supported by strong cash position and reduced indebtedness.