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, with core business showing strong performance and new businesses contributing 8.5% of total sales in 6M24.

• Net income for Q2 2024 was R$80 million, up 43% year-over-year, with LTM net income at R$324 million and R$212 million excluding asset sales.

• Operating cash generation reached R$173 million in Q2 2024 (134% of EBITDA), with net cash position at R$137 million.

• ROIC reached 22.5% LTM, reflecting improved profitability and operational efficiency.

• Dividend payments continued, with R$51 million paid in 2024 and R$35 million/0.44 per share scheduled for August.

Financial highlights

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

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

• 6M24 net income was R$228 million, boosted by a R$137 million gain from the sale of Cubic.

• Operating cash flow for the quarter was R$133 million, representing 134% of EBITDA.

• Gross margin in Q2 2024 was 36.6%; gross debt fell by R$101 million to R$584 million, with only 17% due in the next 12 months.

Outlook and guidance

• Focus remains on extracting value from core activities and accelerating new revenue streams, with strategic pillars 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.