Valid Soluções (VLID3) Q3 2024 earnings summary

Executive summary

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

• New businesses contributed R$64 million in 3Q24 and R$150 million year-to-date, representing 10% of total revenue.

• Strong performance in IT, Digital Government, and Mobile offset weaker Pay vertical.

• Strong capital structure with R$150 million in net cash and R$103 million operating cash flow in 3Q24.

• Paid R$87 million in dividends/JCP YTD, with another R$43 million scheduled for November 2024.

Financial highlights

• Net revenue up 4% YoY in 3Q24 and 12% sequentially; 9M24 revenue down 2% due to weak 1H24 Mobile sales.

• EBITDA for 3Q24 was R$132 million, down 6% YoY, margin at 22.8%; YTD EBITDA at R$378 million, down 10% YoY.

• Net income attributable to shareholders was R$90 million in 3Q24, up 49% YoY, with a 16% net margin; EPS for 3Q24 was R$1.14.

• Recurring net income for 9M24 was R$206 million; asset sale in 1Q24 added R$112 million, totaling R$318 million net income for 9M24.

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

Outlook and guidance

• Expect continued growth in digital onboarding, mobile solutions, and Digital Government, with new business revenue share to increase.

• Strategic focus on 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.

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

• eSIM and mobile digital solutions targeted for expansion, especially in emerging markets.