Valid Soluções (VLID3) Q3 2024 earnings summary

Executive summary

• Achieved record recurring results in 3Q24, with net revenue of R$580 million and EBITDA of R$132 million (22.8% margin), marking the best quarter of 2024 for recurring performance.

• Net income reached R$90 million in 3Q24, up 49% YoY, with a margin of 16%; recurring net profit for 9M24 was R$206 million, nearly matching full-year 2023.

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

• Strong capital structure with net cash position of R$150 million and operating cash generation of R$103 million (78% of EBITDA) in 3Q24.

• Paid R$87 million in dividends YTD and announced R$43 million in interest on capital for November 2024.

Financial highlights

• Net revenue up 4% YoY and 12% sequentially in 3Q24; YTD sales at R$1.58 billion, 2% lower than 9M 2023.

• Q3 EBITDA of R$132 million, up 2% sequentially but down 6% YoY; YTD EBITDA at R$378 million, down 10% YoY.

• EPS for 3Q24 was R$1.14 (+49% YoY); 9M24 EPS was R$3.96 (+79% YoY).

• Non-recurring profit of R$112 million in Q1 from asset sales; consolidated net income for 9M24 was R$317.7 million, up from R$175.8 million YoY.

• Cash and cash equivalents increased to R$542.2 million from R$422.0 million at year-end 2023.

Outlook and guidance

• Focus on expanding digital onboarding, mobile solutions, and Digital Government, with new revenues targeted to grow over 50% YoY and reach 10% of total revenue in 2024.

• Anticipate further expansion in eSIM and secure connectivity, targeting tier one clients and OEMs, especially in Asia.

• Government acceleration of national ID rollout expected to drive volumes for several years.

• Confident in offsetting potential revenue declines from ID/driving license renewals with new products and digital government initiatives.

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