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, increased customer monetization, and reversing prior underperformance.

• Adjusted EBITDA margin expanded to 25.3% in Q4 2025 (+1.6 p.p. YoY), with full-year margin up 1.3 p.p. to 22.1%, reflecting operating leverage and efficiency gains.

• Free cash flow reached R$224.8 million in 2025, with a 77.7% increase in Q4 YoY and a 15.1% margin, supporting financial flexibility.

• Significant progress in artificial intelligence for customer-facing products and internal productivity, including 55% productivity gains and 25% headcount reduction.

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

Financial highlights

• Q4 2025 consolidated net revenue grew 11.1% YoY to R$381.5 million; full-year revenue up 10.3% to R$1,488.5 million.

• Adjusted EBITDA reached R$96.6 million in Q4 2025 (+18.7% YoY, 25.3% margin); full-year EBITDA was R$329.7 million (22.1% margin).

• Free cash flow for 2025 totaled R$224.8 million (15.1% margin); Q4 free cash flow margin at 16.7%.

• Cash and cash equivalents at year-end 2025 were R$371.9 million; net cash position R$250.6 million.

• Net income was 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, leveraging integrated solutions and AI.

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

• Market conditions remain uncertain due to macroeconomic factors, elections, and seasonality, but optimism persists for 2026.