TOTVS (TOTS3) investor relations material

Executive summary

• Achieved 30 consecutive quarters of double-digit organic recurring revenue growth, with a 22% CAGR over the last 21 quarters and recurring revenue multiplying 4.3x over 7.5 years.

• AI enablers now account for up to one-third of net new ARR additions, accelerating sales and operational results.

• Integration of Linx, RD Station, Suri, and TBDC has unified go-to-market strategies, improved operational efficiency, and created a highly efficient cash-generating unit.

• Launched LYNN, a proprietary AI foundation, and preparing to unveil a portfolio of AI agents at Universo TOTVS in October.

• Executed the largest share buyback program in company history, with a new program 50% larger announced, targeting up to 15% of free float.

Financial highlights

• Net revenue reached R$1.92 billion in 2Q26, up 13.3% year-over-year, with recurring revenue at R$1.78 billion (+15% y/y), representing over 92% of total net revenue.

• Gross ARR additions grew 28% year-over-year, surpassing BRL 400 million in a single quarter.

• Adjusted EBITDA increased 22.5% year-over-year to R$487 million, with margin expanding 190bps to 25.4%.

• Adjusted net income rose 5.9% year-over-year to R$241 million, with a net margin of 12.5%.

• Free cash flow to firm surged 50% year-over-year to R$295 million, with operational cash generation at R$506 million.

Outlook and guidance

• AI adoption among Brazilian SMBs is in early stages, presenting a unique growth opportunity as the company acts as a trusted advisor.

• Launch of LYNN and upcoming AI agents expected to expand TAM and drive future growth.

• No expectation of worsening churn; client retention expected to stabilize.

• No quarterly guidance planned; focus remains on long-term value creation and operational discipline.