Locaweb Serviços de Internet (LWSA3) Q4 2025 earnings summary

Executive summary

• Net revenue grew 11.1% in Q4 2025 year-over-year and 10.3% for 2025, driven by ecosystem development and increased customer monetization.

• Adjusted EBITDA margin expanded to 25.3% in Q4 2025 (+1.6 p.p. YoY), reflecting operating leverage and efficiency gains.

• Free cash flow reached R$224.8 million in 2025, with a 77.7% increase in Q4 YoY, supporting financial flexibility.

• Significant progress in artificial intelligence, boosting both customer-facing products and internal productivity.

• Strategic focus sharpened with divestitures of Squid and Nextios, concentrating on profitable, synergistic operations.

Financial highlights

• Consolidated net revenue: R$381.5 million in Q4 2025 (+11.1% YoY); R$1,488.5 million in 2025 (+10.3% YoY).

• Adjusted EBITDA: R$96.6 million in Q4 2025 (+18.7% YoY), margin at 25.3%; R$329.7 million in 2025 (+17.2% YoY), margin at 22.1%.

• Free cash flow after capex: R$63.6 million in Q4 2025 (+77.7% YoY); R$224.8 million in 2025 (+580.1% YoY), margin at 15.1%.

• Cash and cash equivalents: R$371.9 million at year-end 2025.

• Net income: R$31.8 million in Q4 2025 (vs. -R$17.5 million in Q4 2024); adjusted net income R$69.0 million (+60.9% YoY).

Outlook and guidance

• Management expects continued double-digit net revenue growth, margin expansion, and robust cash generation, supported by ongoing efficiency initiatives and AI integration.

• Strategic focus remains on scalable, profitable businesses and further integration of the solutions ecosystem.

• Monitoring macroeconomic factors, including elections and seasonal effects, with expectations for steady performance in 2026.