Valid Soluções (VLID3) Q2 2025 earnings summary

Executive summary

• Q2 2025 net revenue was R$490–501 million, down 5% year-over-year, with EBITDA at R$92–104 million, a 29% decrease year-over-year, and net income for the semester at R$128 million (EPS R$1.63).

• New businesses grew 50% year-over-year, now representing 17% of total revenue and 38% of EBITDA, with ARR of R$324 million.

• Mobile segment showed strong recovery, with revenue up 37% year-over-year and EBITDA up 52%, offsetting Pay segment declines.

• Pay segment revenue dropped 45–46% year-over-year, with negative EBITDA and ongoing pricing and margin pressure in Brazil and Argentina.

• R$75 million paid in dividends and interest on equity YTD, with an additional R$61 million distribution announced.

Financial highlights

• 2Q25 EBITDA margin was 18.7–19%, down from 24.9–25% in 2Q24; gross margin at 32.3% (vs. 36.6% in 2Q24).

• 6M25 EBITDA was R$196 million, a 20% decrease year-over-year; net income for 2Q25 was R$55 million.

• Net cash position at quarter-end was R$49 million; net debt/EBITDA at -0.1x.

• Operating cash flow conversion for 6M25 was 70–73%, in line with historical levels.

• Leverage ratio decreased from 1.8x in 4Q21 to 0.6x in 2Q25.

Outlook and guidance

• Management expects continued strong growth in new businesses, especially in digital government and onboarding.

• Mobile segment is expected to remain a positive contributor, leveraging international demand and eSIM expansion.

• Pay segment faces a challenging outlook, with no expected volume growth and continued margin pressure; focus is on efficiency and digital portfolio development.

• R$85 million allocated for acquisitions in 2025, supporting both organic and inorganic growth.

• Anticipates improved cash conversion and operational efficiency in the second half of 2025.