Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Locaweb Servicos de Internet SA (BSP:LWSA3, Financial) reported a significant increase in platform subscription revenue, growing by 22.3%, indicating successful client engagement.
- The company's own stores GMV reached BRL5.8 billion, up 16.3% year-over-year, highlighting strong monetization potential.
- Locaweb Servicos de Internet SA (BSP:LWSA3) achieved a 19% increase in EBITDA with a substantial margin of 22.3%, showcasing operational leverage.
- The company returned over BRL200 million to shareholders through share buybacks and dividends, demonstrating a commitment to shareholder value.
- Locaweb Servicos de Internet SA (BSP:LWSA3) maintained a robust net cash position of BRL447.4 million, ensuring financial stability and flexibility for future investments.
Negative Points
- Consolidated net revenue growth was below potential, increasing only by 6% to BRL1370 billion, partly due to the impact of subsidiary Squid.
- The company faced challenges in recovering from a non-recurring effect related to a logistics contract termination, affecting gross profit.
- Despite growth in various segments, the BeOnline SaaS unit saw minimal net revenue growth of only 0.5% year-over-year.
- The macroeconomic environment in Brazil remains challenging, impacting the company's growth potential and market conditions.
- December 2024 showed weaker-than-expected GMV growth, indicating potential volatility in consumer demand and market dynamics.
Q & A Highlights
Q: Can you elaborate on your strategy to accelerate revenue and how it aligns with your shareholder return initiatives?
A: CEO Rafael Chamas explained that the strategy focuses on sustainable growth without compromising profitability. The company plans to leverage existing assets, such as robust e-commerce platforms and embedded finance solutions, to unlock value through integrated offerings. Otavio Dantas added that the strategy involves clear metrics and incentives to ensure alignment across the organization.
Q: How do you plan to manage cash generation given the upcoming BRL230 million earnout payment?
A: CFO André Kubota stated that despite the earnout payment, the company's cash position remains robust at BRL450 million. The business continues to generate significant cash, which will be strategically allocated to reinvest in growth and shareholder returns, including a new share buyback program.
Q: What are your expectations for GMV growth in 2025, and how does it impact customer churn and LTV?
A: CEO Rafael Chamas noted that while the macroeconomic environment is challenging, the company expects continued growth in GMV, driven by a focus on high-quality customer acquisition. Willians Cristiano Marques added that the strategy targets more mature customers, leading to improved LTV and reduced churn.
Q: How does the macroeconomic environment affect your business, and what measures are you taking to mitigate these challenges?
A: CEO Rafael Chamas acknowledged the challenging macroeconomic conditions but highlighted the company's diversified customer base and focus on larger clients as key factors in mitigating risks. The company is also leveraging its comprehensive e-commerce solutions to attract and retain customers.
Q: Can you provide more details on your CapEx plans and whether they will impact operational expenses?
A: CFO André Kubota explained that while CapEx levels in Q4 were higher due to specific projects, the overall annual CapEx is in line with expectations. The focus remains on growth and cash generation, with investments aimed at accelerating growth without significantly increasing operational expenses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
