Hypera (HYPE3) Q1 2025 earnings summary

Executive summary

• Sell-out grew 6.9% in Q1 2025, with 20.6% growth in non-retail and 6.0% in retail, driven by a 28% increase in patented medications.

• Net revenue for Q1 2025 was R$1,080.9 million, down 40.8% year-over-year, mainly due to working capital optimization reducing inventories and receivable days.

• Operating cash flow reached a record R$570 million, up 18.9% from Q1 2024, despite negative EBITDA and net earnings from continuing operations.

• The company expects normalization of operations and financials from Q2 2025, with gross margin and EBITDA margin returning to historical levels.

Financial highlights

• Net revenue was R$1,080.9 million, down 40.8% year-over-year.

• Gross margin was 47.2%, down 1,390bps year-over-year.

• Marketing expenses rose 40% to R$367.2 million; selling expenses increased 21.9% to R$262.2 million; G&A expenses were R$86.2 million.

• EBITDA from continuing operations was negative R$148.5 million; net earnings from continuing operations were negative R$138.8 million.

• Free cash flow increased 9.2% year-over-year.

Outlook and guidance

• Sell-out growth is expected to accelerate to 8% for 2025, supported by new product launches.

• Gross margin is expected to normalize above 60% and EBITDA margin to return to 35% in Q2 2025.

• Marketing and selling expenses are expected to remain at current levels, with more balanced distribution throughout the year.

• CapEx for 2025 is expected to be below last year’s level.

• Working capital optimization is expected to conclude in early Q2 2025, supporting sustainable growth.