Valid Soluções (VLID3) Q3 2024 earnings summary

Executive summary

• Achieved record recurring results in 3Q24, with net revenue of R$580M, EBITDA of R$132M (22.8% margin), and net income of R$90M, up 49% YoY, marking the best quarter of 2024.

• New businesses contributed R$64M in 3Q24 and R$150M YTD, representing 10% of total revenue.

• Strong performance in IT, Digital Government (16% YoY net revenue growth), and Mobile offset Pay segment weakness.

• Robust capital structure with net cash position of R$150M and operating cash flow of R$103M (78% of EBITDA) in 3Q24.

• Paid R$87M in dividends YTD, with R$43M scheduled for November 2024.

Financial highlights

• Net revenue up 4% YoY in 3Q24 and 12% sequentially; YTD sales at R$1.58B, 2% lower than 9M23.

• EBITDA of R$132M in 3Q24 (22.8% margin), down 6% YoY but up 2% sequentially; YTD EBITDA at R$378M, down 10% YoY.

• Net income of R$90M in 3Q24 (16% margin), EPS of R$1.14 (+49% YoY); YTD recurring net profit of R$206M.

• Asset sale in 1Q24 added R$112M; total net income for 9M24 was R$318M.

• Operating cash flow conversion was 78% of EBITDA in 3Q24 and 70% in 9M24.

Outlook and guidance

• Focus on earnings generation from current businesses and accelerating new revenue streams, targeting new revenues to grow over 50% YoY and reach 10% of total revenue in 2024.

• Expect continued growth in digital onboarding, mobile solutions, and Digital Government, with margin improvements as new projects mature.

• National ID card rollout expected to accelerate, with full population reissuance by 2032.

• Strategic pillars include investments in technology, talent, operational excellence, and financial management.

• Plans to position as Brazil's SAFE Data and ID Platform, evolving across ID, Pay, and Mobile ecosystems.