Bemobi Mobile Tech (BMOB3) Q2 2024 earnings summary

Executive summary

• Achieved robust double-digit revenue growth in Q2 2024, led by Payment Solutions and SaaS integration, with Digital Subscriptions recovering and net income more than doubling year-over-year to R$39.7M, aided by a lower effective tax rate.

• Operational cash flow increased 15% YoY to R$35.6M, with a cash conversion rate of approximately 74%, and a solid cash position of R$514M despite one-off disbursements.

• Strategic focus on integrating SaaS with Payment Solutions and expanding into essential recurring service industries, driving over 60% of revenue from these combined offerings.

• Resilient performance in digital subscriptions and high growth in credit scoring within microfinance, despite a decline in the overall microfinance segment.

• Continued expansion in geographic coverage and client base, with operations in 52 countries and a diversified portfolio beyond telecom into utilities, education, and health.

Financial highlights

• Net revenue grew 11% YoY to R$147.2M in Q2 2024, with Payments revenue up 15.8% and SaaS up 14.7%.

• Adjusted EBITDA increased 11% YoY to R$48.2M, with margin slightly up to 32.8%.

• Adjusted net income ex-swap more than doubled YoY to R$39.7M, with net margin reaching 27%.

• Operating cash flow reached R$35.6M, up 15% YoY, and cash conversion rate remained strong at ~74%.

• Ended the half-year with R$514M in cash, despite R$60M in one-off disbursements for interest on capital, profit sharing, and share buybacks.

Outlook and guidance

• Management expects revenue acceleration in the second half as new enterprise clients are onboarded and services rolled out, especially in Digital Payments.

• Anticipates further margin expansion as new clients are onboarded, though not expected to be linear each quarter.

• Expects stable performance in microfinance, with potential for significant growth in credit scoring as it expands to new countries.

• Plans to remain aggressive in dividends, interest on equity, and share buybacks, while prioritizing M&A aligned with core business lines.

• Optimism for future expansion, with new business initiatives gaining traction.