Morning, everyone. Welcome to the conference call of Lavvi to announce the results for the third quarter of 2025. The presentation and comments on the results will be presented by Ralph Horn, CEO, Sandra Attie, CFO, and Vitor Charak, IR Coordinator. Simultaneous interpretation is available at your Zoom platform. If you want to listen to the translation, choose the interpretation button on your Zoom screen and choose your preferred language. This presentation will be recorded and will be available afterwards for your reference at www.lavvi.com.br. The slide deck will also be available on our platform. All participants will be connected in listen-only mode during the company's presentation.
Then we are going to start a questions and answers session where further instructions will be provided. We would like to inform that forward-looking statements are based on the beliefs and assumptions of Lavvi's management and information currently available for the company. Forward-looking statements involve risks, uncertainties, and assumptions because they relate to future events and therefore dependent circumstances that may or may not occur. Investors, analysts, and journalists should consider that factors related to the macroeconomic environment, industry-specific factors might lead results to be materially different from those expressed in such forward-looking statements.
Now I will turn the conference to Mr. Ralph Horn. Please, Mr. Horn, you may start.
Good morning, everyone. I would like to thank everyone. It's an honor to have you here at this conference call to comment on the results of Lavvi's for the third quarter of 2025. We are very pleased with Lavvi's performance in this quarter, despite a slightly more timid quarter in launches with two Minha Casa, Minha Vida. About our accounting results in these first nine months of 2025, we had records in the lines of revenue, gross profit, net profit. We were able to generate some cash in the quarter and announce the payout of approximately BRL 125 million, or BRL 0.64 per share, following the consistency of value generation for our shareholders.
For the third quarter of this year, we will have the launch of Casa Cerâmica, which is located in the city of São Caetano. We are very excited. This is very well located, very close to the shopping mall and the park. In addition, we have the launch of other high-end projects in partnership with Cyrela. Finally, last week we finalized our third capital raising, totaling BRL 400 million, and we are now ready to invest in new lands, our raw material that must continue growing.
Now I would like to give the floor to Sandra to talk about the operating results.
Good morning. As Ralph said, we had a timid quarter in terms of launches, but we remain strong in performance. Starting on slides number four and five, we had just two launches of Minha Casa, Minha Vida, totaling BRL 425 million. On one side, we had the Novvo Vila Prudente , where we opened for sale half of the project, and we sold 22%. Today, we have already sold 45%. This project is going to be booked in Q4. In contrast, Astro Santa Marina sold 75%. It's 75% sold. Then we are going to book the equivalent share that we hold in the project.
In slide seven, launches and sales have dropped if we compare the nine months of 2024 when we had major launches that had been strategically delayed from 2023. In this quarter, sales exceeded the launched volume. Once again, SoS is above 54%, as you can see here on the slide. We have to be in our shares. As we delivered a deluxe project, our finished inventory increased to 7.3% in VGV or 4% in the number of units. Selling these higher ticket luxury units, we are now going to relaunch the project. We have finished a decorated apartment, and it is wonderful. We are going to charm our customers and resume sales.
On slide 10, still about Villa Versace, delivered in August, everything decorated with Versace Home furniture. We have already sold 83% of the project. It is either settled or transferred to the bank. It was not difficult to transfer our customers that got to their keys very easily. We still have access, even though it is more expensive, but we sold fast and with a shorter portfolio, which ends up covering our construction.
On slide 11, you can see the land bank. The Lavvi brand is concentrated in the south zone of the city of São Paulo, the higher-end districts of the city. We have BRL 6.6 billion in Lavvi's percentage, 87% high, medium to luxury. We also have Minha Casa, Minha Vida, which is the low income. We also signed the 100% swap of the only plot of land outside the city of São Paulo in the city of São Caetano, Espaço Cerâmica. We have 182 million PSV. Lavvi is going to manage the project. We launched it on October 30th, and as expected, it was a huge success. In less than one week, we already have 90% sold. The other units are also allocated.
Now, I would like to give the floor to Vitor, who is going to report the financial results.
Thank you, Sandra. Good morning, everyone. I will start on slide 13 with the financial highlights of the third quarter. Net revenue rose 5% in the quarter YoY, mainly driven by the evolution of our construction works. In the first nine months of 2025, we had an increase of 26% year-over-year record for the period. The adjusted gross margin was 37.6% quarter-on-quarter, and the same at 37.6% in the first nine months, up 3.7 and 3.4 percentage points year-over-year. As a result, net income reached BRL 204 million in the quarter and BRL 309 million in a year, with a net margin of 25.1%. ROE remained at 29%.
Our backlog grew 18% when compared to the same period of the previous year. The quarter we had cash generation in the amount of BRL 3.4 million. Year to date, we burned BRL 74 million in cash. We would have generated BRL 319 million without investment in land. Finally, we ended the quarter with a debt of BRL 74 million.
In addition to these results on slide 14, on the right, you can see the investment income. The positive change is a reflection of a more robust cash flow and a higher Selic rate in 3Q 2024. At the bottom of slide, starting with G&A, we see a high that reflects the company's growth. Even so, we managed to remain practically stable in terms of percentage of net revenue. In sales expenses, we increased 12% in the quarter and 19% in the nine months. Finally, we had a 20% growth in net income for the quarter when compared to the third quarter of 2024. In the nine months, net income reached BRL 309 million, a record for Lavvi in the period.
On slide 15, you can see a consistent growth of revenue and net income year-on-year, keeping net margins above 20% since the IPO. On slide 16, ROE 29%, showing its resilience. On the next slide, you can see the unearned revenue totaling BRL 2.4 billion with a slight reduction against the previous quarter. The margin of 37% implies approximately BRL 900 million of future gross profit. Now on slide 18. In this quarter, the company generated BRL 3.5 million in cash, which would be a generation of BRL 73 million without investments in land. Year to date, we burned BRL 74 million cash or generated BRL 319 million in the ex-land deal.
We are now on slide 19. On Tuesday this week, we approved dividends totaling BRL 124.7 million that will be paid out to shareholders later this month on the 26th. In this manner, we have BRL 879 million paid out to shareholders since 2021. Finally, on slide 20, you can see that we completed our third CRI issuance. Total volume was BRL 400 million, three series, amortization the seventh, eighth, ninth, and 10th years at rates close to 101 of the CDI. With this, we reinforce our cash and are ready to buy new land.
Thank you very much for your participation, and now we are open for your questions.
We are now going to start our questions and answer session. If you want to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. If you want to ask your question in audio, please click on the raise hand button. Please wait while we collect the questions. Our first question comes from Herman Lee from Bradesco BBI. Please, Mr. Lee.
Good morning, Ralph, Sandra, and Vitor. Just one question. About SoS that dropped slightly. Which are the factors that explain the drop in SoS, maybe funding, or is it something more micro comparison basis? Can you explain that?
Good morning, Herman. How are you? Yes, in August and September, there has been a drop in the market. In terms of our inventory as to launches, we didn't have. Now in October, inventory came back to us and launches are very strong too. But in talking to the market, August and September, there was a drop in the market. We don't really know why. It might have been seasonal, but it's good because we had a good October, both in launches and inventory.
Very clear. Thank you very much.
Our next question comes from Gustavo Fabris from BTG. Please, Mr. Fabris, you may ask your question.
Good morning, everyone. Thank you very much for taking my question. I would get the details about Minha Casa, Minha Vida project. What is the maturity stage that we are in now? Then I'm going to divide my question, two points. First, in terms of margin, to understand the execution. Is it better or is there any gap to close versus the competition?
Number two is the land bank. How does the current land bank relate to your targets, and what is the marginal land bank going to look like, the land bank that you are going to purchase from now onwards? Any specific range, location? What is your objective with the new land that you are going to buy?
Gustavo, good morning. Until today, we have launched three My Home, My Life , and the result of the sales and margins was very good. It is about 18%, some 16%- 18%. We are going to deliver the first project six months late. We are bracing to do that. We are happy with the operation, and this delay was because people did not do all the piping below the land before starting. First thing, we wanted to outsource this part, and then we had to do it, and this is a lesson learned. Now, for the next two projects, we are slightly more knowledgeable and we have a large land bank coming next year with very well-located land.
We have Santa Marina very close to the subway, and we bought another one here in São Paulo, in Largo Treze. Then there is a second one in Perdizes, the famous land of Itaú, and we are very optimistic with the operation. In short, we are happy, but we have been learning. I think that we have learned a lot. We are going to deliver two projects now, the one in Barra Funda and another project in Brás. The entire building to Brookfield, and we are not making any of the mistakes that we made in the first one. We have already hired market agents of the companies, and they are helping us to understand this process better. Thank you.
Gustavo, just complementing. Ralph mentioned the margin of 16%, 18%, but this is not accounting margin. It is a profit at present value. Now, the accounting margin is driven up in accounting.
Thank you very much, Ralph and Sandra, for your answers.
Our next question comes from Ruan Argenton from XP. Mr. Argenton, please, you may ask your question.
Good morning, everyone. Thank you very much for the space, for taking my question. I have two questions. Number one, could you share with us your expectations in volume of launches in 2026? I think that you have some major projects in your pipeline. Hípica, Vicente Rao, also to be launched at some point in time. How are these projects going to fit into your pipeline, and what is the expected volume next year?
The second question is just for investments in land. I would like to understand how we should see the land replacement scenario that you are seeing in the future. Overall, how is this going to relate to cash? There is an investment scenario in land and cash generation. Should this volume continue? How should we imagine investments in land looking into the future? Thank you.
Hello, Ruan. How are you? Next year we have a quite large land bank. We have Hípica. We have high standard in Itaim. We have Moema. We have Paraíso. None of that has 100 m except for Hípica. There are some for 2027 because the approval will come at the end of the year. We do not like to work from 70- 100 sq m is an exception when it is within a condo. We have life, we have that footage. 70, 80, up to 130. Everything did well except for the 70 and 30. Middle class is having more difficulty to buy. The 70- 100 that is suffering today, they are not being able to get the margins that we would like.
We do not operate very well in that market, so we do not focus on them. We are going to focus on high-income club condos in My Home, My Life . This is going to be our focus for next year. Now, as to the land bank replacement, we are focusing on purchases. We should have new swaps because new negotiations are coming as swaps. I think that Lavvi is getting better known. So it is easier for them to accept the swaps because of the results that we have been producing. We are going to buy cash if there is good business, but we are always looking at cash so that we are not out of capital.
We want to keep it because of the CRIs, the debt that we have. We do not want to pay interest. We are going to leave the money in cash and we just pay delta. So if any good businesses come up, because the CRI is the cheapest debt in the market.
Just complementing what Ralph said, also considering our land bank and some about the one that we have just announced. As we always say every quarter, as we have been doing every year, we always look at our cash flow, and when we have surprises in launches, sales, we end up paying out additional. So that is why we are paying out this BRL 100 million additional this quarter. As we had expected with the news of taxes on dividends, we are going to assess which amount we are likely to pay out still this year.
Okay. This is clear. Thank you.
As a reminder, if you want to ask a question, please click on the Q&A icon at the bottom of your screen and type your question. If you want to ask a question on the microphone, click on the raise hand button. Wait while we collect questions. Once again, if you want to ask a question, please click on the Q&A icon at the bottom of your Zoom screen and type your question. If you want to questions in audio, please click on the raise hand button.
Next question comes in writing from Heloisa Cruz from Stoxos. "Are we likely to see other launches in Greater São Paulo in addition to the one in São Caetano do Sul?"
Yes, whenever we think it is good. São Caetano is exactly half an hour from my office. It is closer than other parts of the city. São Caetano is a very good market and others too. Well, it depends on the business. If it is good, we are going to go there.
Once again, if you want to ask a question, please click on the Q&A icon and type your question. If you want to ask questions on the microphone, please click on the raise hand button. Please wait while we collect questions. The questions and answers session has now ended. We would like to give the floor to Ralph Horn for his closing remarks.
I would like to thank everyone for your presence. We are still excited despite the Selic interest rate. The year has been very good. We have very good news. We have sold lots of inventory, and there is lots of work next year, and we hope we will be able to keep on the good work. Thank you all very much.
Our conference call has now ended. Thank you so much for your attendance, and have a good day.