ZAMP (ZMMP.Y) Q1 2025 earnings summary

Executive summary

• Net operating revenue rose 13% year-over-year to R$1.2 billion in Q1 2025, driven by organic growth, acquisitions, and strong digital sales, with digital channels accounting for 54% of revenue.

• System-wide sales reached R$2.3 billion, up 58% year-over-year, reflecting the integration of Subway and Starbucks.

• Digital sales grew 23% year-over-year, now representing 54% of total revenue, with loyalty program users reaching 20 million.

• Adjusted EBITDA fell 2.7% year-over-year to R$127 million, impacted by integration costs and higher protein prices.

• Net loss improved to -R$43.5 million from -R$90.8 million in 1Q24.

Financial highlights

• Gross margin declined 70 bps to 63.4% due to higher beef costs, partially offset by Starbucks and Subway contributions.

• Adjusted EBITDA margin was 10.9%, down 1.7 p.p. year-over-year.

• Net debt decreased 9.6% year-over-year to R$743.1 million; leverage stable at 2.2x.

• CAPEX totaled R$54.6 million, mainly for new stores, technology, and remodeling.

• Adjusted operating cash flow was -R$103.6 million, impacted by working capital and tax credits.

Outlook and guidance

• Focus remains on gross margin improvement, operational efficiencies, and leveraging digital and delivery channels.

• Management expects cost pressures from protein inflation but believes in operational levers to mitigate impact.

• Integration of new brands is nearly complete; future growth expected from expanded portfolio and digital channels.