Ladies and gentlemen, welcome to LWSA's Q4 2025 earnings conference. Joining us today are CEO, Mr. Rafael Chamas, and CFO and IRO, Mr. Andre Kubota. For the Q&A session, we will also be joined by the company's senior management team. This event is being streamed via Zoom webinar with simultaneous interpretation into English and will be available for replay at ri.lwsa.com.br. The slide deck for this presentation can also be downloaded from the results center under the Financial Information tab on the same website.
All figures are stated in Brazilian reais and have been calculated in accordance with Brazilian accounting standards as defined by the Brazilian Accounting Pronouncements Committee.
Before we begin, please note that any statement made during this presentation regarding LWSA's business prospects, operational and financial forecasts or future growth estimates is merely a projection and as such, is based solely on its management's outlook for the business. This outlook relies heavily on market conditions, the performance of the Brazilian economy, the industry and international markets, and therefore may change without prior notice. Unless stated otherwise, all variations in rounded out figures presented here have been calculated in thousands of Brazilian reais.
The following business performance presentation includes both accounting and non-accounting data such as organic and pro forma operating and financial results, as well as projections based on the company's management's expectations. The non-accounting data have not been reviewed by independent auditors.
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When doing so, please remember to state your name and the name of your company. As standard practice, your name will be announced so you can ask your question live, and a prompt to activate your microphone will appear on your screen.
I will now turn over to Mr. Rafael Chamas, who will begin the presentation, followed by Mr. Andre Kubota. Mr. Chamas, you may proceed.
Good morning, everyone, and thank you for joining another LWSA conference for the Q4 2025 earnings. We start with an executive summary for a very important period for the company with execution challenges and many others.
The team was able to deliver very consistent results, very much in line with what we had programmed for the year. Let's start with a few important highlights. I've been saying this for some time, but it was a very significant challenge to accelerate our results. 2024 had been a year where we fell behind our potential, and we've shown consistency for a few quarters when we had acceleration, and our Q4 results were even better than those of Q3. We'll give you more details a few slides further. I think that's a very strong message.
Second, we also wanted to change or to transform this growth into cash. We also had increased profitability. This was a very important point for us. We've had over BRL 100,000 more and a lot more than EBITDA in economic performance.
We're also able to turn that into cash generation. Cash generation was a huge highlight. We saw involvement in costs for several quarters, and this quarter, again, allowed us to end 2025 with a BRL 224.8 million cash performance. A free cash flow almost in the double digits which was very important. Even more important than that, we were able within a year with great deliverables, focusing on accelerating growth and increasing our excellence, divestments in operations that offered few synergies for us. We could change all of that energy into bottom line, and most importantly, in cash generation.
Finally, this was a year with great progress for us when it comes to integrating our products and consolidating our ecosystem and our architectural infrastructure to operate in a more integrated way wherever it makes sense.
We're considering the progress in AI places us in a very important place to strengthen our strategic centrality with a great orchestrator of the dynamics for these type of company in Brazil, especially with our POSs. Moving forward with more details about these figures, especially or specifically about Q4. We ended Q3 with a GMV of BRL 21.6 billion, or rather 20.8% in TPV, which is about BRL 2.5 billion. 21%, we ended the quarter with BRL 2.5 billion. I'd like to dive a little bit deeper in this because this is very important for the company.
This is a company whose economic model for monetization, including an embedded. For us it is a strength and we in the fourth quarter 2024. Specificity.
In Q4 we had a performance that also fell behind a little bit. Q4 also shows, as we had said in Q3, our TPV again showed that we have regained our strength with a robust growth of close to 21%. Our subscribers base also grew by 6.8%.
We ended this quarter with 206.3 thousand new customers. Looking at our economic results, our revenue again grew even more than in Q3 with 16.4% in net commerce revenue, which led to a consolidated result of +11.1%. close to BRL 381 million close to BRL 382 million in revenue, actually.
Our EBITDA close to 97%, BRL 96.6 million, which gave us a 25.3% margin and an increase of 1.6 percentage point in our margin. Great profitability, especially when it comes to cash generation. Close to 80% increase in free cash flow with BRL 3.6 million, which gave us a 16.7% margin. In the following slide, similar snapshots as we showed for Q3. We've shown again consistency. Our GMV grew by 14.1%, BRL 79.5 billion. Our TPV going up 17.7% with BRL 8.9 billion in transactions throughout the year. A very significant result.
Looking at our actual results, we ended the year with 15.3% growth in commerce, which shows that Q4 performed even better than the year as a whole, BRL 1.1 billion in results in that side of our operations. Consolidated net revenue up 10.3% with BRL 1.5 million. Our EBITDA was close to BRL 330 million, 2.1% margin and 1.3 percentage point increase in the margin. Again, a highlight to our cash flow. We end the year at BRL 225 million in cash flow with a 15.1% margin. I would say that this was a very successful year when it comes to accelerating our bottom line in a high growth industry, which is commerce.
Over 16% growth throughout the year and strengthening our strategy via a focus on our operations and in capital allocation, developing our products. All of which enabled us to generate even more cash.
I would now like to add a little bit more context with regards to our products and our AI dynamics within LWSA. Moving forward to the next slide. I think it's important to actually recap who we are, because within that logic of who we are and what we've built as a company, it makes it easier to understand where our operation is headed, whether we're talking about customer experience or how they will consume or how this AI agents integrate into our operations. From the internal organization perspective, synergies and efficiency.
These are very interesting topics to explore.
Before anything, I t's important to make it very clear or make very clear who we are. We are essentially serving SME, so close to 6,000 customers, 206,000 customers which account for 20.8% of the industry, so with many integrated operations.
What we have as a solution purports to make our customers' life seamless, to give them integrated solutions. What we want them is to have essentially an operating systems involving back office, sales operations, customer relations, and obviously all of that being enriched by transactional systems. Whenever we think about our customer journey, we think about the physical world, the digital world, inventory management, order management, integrations with multiple sales channels, B2C, all of the journey with checkout risks, assessment, the integration with multiple logistic channels.
There is a huge operational sophistication with critical workflows.
Because of all our operational system with many transactional operations, we offer a favorable environment for our customer in the sense that all of that is working in a very integrated and seamless way.
Even more than that, from a strategic perspective for us, we sort of lock them into our ecosystem. Ultimately, we are a company that tries to make our customers' lives simpler, but at the same time create an operation that's difficult to replicate. Even as we simplify and streamline the development and onboarding operations which benefits us significantly, we go beyond a mere the software layer, we actually improve our relationship with the customer. What we do is create a much broader data and critical workflow ecosystem where everything is integrated, making our customers' operational lives a lot simpler.
Moving forward, I made it a point to talk a lot about the systems to understand our agentic architecture, because I think it's critical to understand what we bring to e-commerce as a changing interface. After all, there's progress in how customers are interacting with their sales procedures, but also how our customers operate their own system. Even more than that, we streamline interactions. There's progress in how we think about these interactions. One thing that has to be clear is that agents are not operating in a void. In order for them to operate well, and on the right-hand side of the slide, there's more detail about that. Our interaction interfaces require that our agents operate unstructured data.
After all, the way we operate and make increase and orchestrate all of that rely on automated and integrated data adding a lot of context. Context is provided by those who have operational depth. Integrated workflows enabling these operations to provide productivity, and most importantly, a layer that adds governance that's reliable. It's critical to say that there's progress, there's an evolution in the interface, but in order for this interface to work well, these dynamics upon which we build our operations, they're essential.
What we need as a company and what we have been building and as part of our strategy, which is why I made it such a point to bring this operational system, is that our infrastructure is reliable so that this transactional operation that's now evolving with these agents is leveraging the business dynamics that we see today. What we have is now an agentic layer, which we call LWSA's Agentic layer, which is ultimately what's connecting and orchestrating the entire workflow specificity and the SKUs that's required for our logistics operations and the agnosticity of our integrated system. With all of these layers that will enable these agents to operate, not only our own agents, but also outside layers as well.
The role that we play as we connect to multiple channels, logistics channels now evolves into one that offers multiple agentic possibilities. The core of our operations and our strategic wealth remains intact. The value of what we do is ultimately in our infrastructure, in our ability to operate and orchestrate this multiplicity of dominions and this diversity that's critical for our customers to succeed in their operations. I always like to remind people that AI is making a lot of things easier and is bringing more people into the digital space.
To bring them is one thing, but to offer them the opportunity to succeed requires a lot more than a mere interface, a lot more than a seamless integrated journey. They need a system that's robust enough to allow them to succeed. That's something that we do naturally. That's in our DNA.
That's our strategic view, which is why I always say that agentic AI ultimately increases our customer centricity and helps us to rethink how we can serve them.
Moving forward, another way to think about the use of AI for our customers, also a lot of focus on the product strategy. We want to provide them a much better experience, offer more productivity. AI makes our customers' experience easier in digitalization. There are many customers, and I'll not show all of them here, but it's very important to think about how we build and advance our product.
Thinking about the streamlined journey, that adds a few important points. Just as an aside, a company like ours can bring very specific use cases when it comes to the use of AI. Very specific aspects which enable productivity gains.
Because we are a very expensive, we give our customers a very interesting AI experience, and these are a few ways to think about that. For example, onboarding and multiple selling channels, the ability to enable our customers to sell more, improving their SEO and content generation. Streamline onboarding, so the setup itself.
Our products are affordable, they're user-friendly, and in order to allow our customers to be successful, we can leverage that robustness with simplicity. We have several interesting use cases where friction was removed and their onboarding was made simpler. Obviously, more sophisticated uses because of the wealth of data that we have and the depth of that data. We can think of sales campaign automations to help our customers to sell more. We have specific cases, but which are developed and leveraged by AI, elevated by AI.
Ultimately, a very interesting thought. The profile of most customers we serve, which are customers with not a lot of digital resources. It's likely that they will use isolated tools unless we offer them. The marginal adoption of solutions that will make our customers' lives simpler when that makes sense, that has to be experienced in a solution that's already their own operational system.
The more we can make our customers' lives simpler, or the more possibilities we can offer them, the more likely it will be that they will use them via these broader, more comprehensive solutions, which are ours, than that they will use them in isolation. That it's important to think about that as we think about the pricing of these products.
The way we think our solutions and how we charge for them also enables us to bring more solutions within a broader scope to add more value to our customers. Last but not least, when we think about how AI has impacted our operations within the company, I think there are two important things for us to discuss here. Obviously, this is how we've moved forward with our operations for some time.
Two ways to think about that is software development and the other is operational efficiency. From the software development standpoint, productivity and roadmap acceleration are two very important things for quite some time. We've been quite early adopters when it comes to unified co-development tools from the beginning.
Close to 100% of our coders use those tools, and that's obviously offered some very important operational gains.
When thinking about our roadmap, of course, we have a few use cases. We've had 55% productivity gains in Q4. Obviously, the early adoption of these solutions that leverage AI in co-development has been very fruitful. We also have technologies to monitor, to train chapters where we share the best practices. Endless operational practices that have allowed us to leverage these tools internally to improve our productivity within the core of what we do, which is software development.
In efficiency, I have been offering you a few cases for some calls now, but we've seen significant financial gains in customer service. We have very interesting data points here. 35% reduction in the number of contracts per business day, and also a significant reduction in headcount, 25% year-over-year.
Overall, the company saw a substantial decrease in headcount year-over-year. Obviously, this has been accelerated by the adoption of AI.
Whenever possible, we've tried to add efficiency and rethink the operation. I think that this provides differentiators from a cost standpoint in co-development and also in service, in customer service.
With that, I will turn over to Andre Kubota.
Thank you, Rafa, and thank you to everyone joining us today.
I will start by talking a little bit more about the company's financial data on Q4 2025. Breaking it down, starting with the net revenue in Q4 2025. In consolidated terms, the company grew 11.1% year-over-year, coming to BRL 381.5 million, with 16.4% increase in commerce to BRL 280 million.
Beyond mine size, standing close to the same point as it was last year with 101.8 million BRL. On to the next slide, a very interesting development looking at net revenue Q over Q. We saw an acceleration in consolidated terms by 11.3% versus Q3 of 2024, driven very much by the commerce unit that's advanced by 16.4%. Compared to Q3. Looking at our adjusted EBITDA, we saw a significant increase by 18.7 percentage points with a very robust margin by 25.3%, coming to 96.6 million BRL, with a very strong performance in commerce by 27.9% to a record margin by 25.9%, coming to 72.3 million BRL.
The online SaaS retained a very robust margin by 23.7%, coming to BRL 24.2 million. When we look at the development over time in the following slide, we see that this is the healthiest margin we've had in a long time, 25.3%. With the record nominal figure in this Q4 of 96.6%. That in addition to that, our cash conversion has been very strong, which we demonstrate in the following slide.
Compared with the last 12 months, quarter-by-quarter, we started at BRL 33.1 million, considering the operational cash flow in Q4 2024 in 12 months to date. That represented a margin over revenue by 2.6%, and we reached in Q4 2025, BRL 224.8 million.
A 15.9% margin. One important thing to say about cash generation is we have consistently generated cash to our shareholders, and it was no different in 2025. Of those BRL 225 million, BRL 48.1 million was returned via buybacks and BRL 160 million via dividend that was approved last year and actually paid in November 2025, in February 2026. On that note, we start our Q&A.
I will turn over to the operator. As a reminder, if you'd like to ask a question, please submit it using the Q&A icon at the bottom of your screen. As per standard procedure, your name will be announced, so you may ask your question live.
Our first question comes from Mr. Gustavo Farias with UBS. Please, sir, you may proceed. Good morning, everyone.
First of all, congratulations for the very strong results of this quarter. We have two questions. The first one is about what you've recently announced with the cloud. If you could please talk a little bit about the magnitude of this opportunity. Do you have any internal target that you may share, such as the base operations, and how do you plan to distinguish yourselves with this product?
My second question is about your TPV growth. We saw TPV going or outpacing your GMV with the payment solutions. If you could detail what the specific actions were in your operation that allowed for this improvement in Q four, that would be very useful.
Thank you. Good morning, Gustavo. This is Igor speaking.
I will take your first question about our web cloud operations.
Next, I will turn over to Scarpa, who will answer your TPV question. We launched the product a few days ago. I just wanted to quickly recap so that everyone's on the same page. Locaweb Cloud is an internal initiative that began about two years ago. This is a project that started way back when, with a focus on adding to the group's operations the possibility to leverage cloud operations that was just as competitive in terms of robustness and space as any other public cloud in the market, but which could offer a very strong money for the customer spot. We wanted it to be very significant. Over the course of the last two
years, we developed based on open source solutions. This is now an open source solution, and it's born out of a publicly available technology.
We're not talking about anything proprietary. This really is an evolution of what's already available in the market for many companies in the world to use. We evolved based on the internal focus of, at first, assess the use requirements internally. We saw based on that it could be very organically adopted by the market at large. Looking at our hosting operations purely, they have an infrastructure calling since the beginning.
Today, when we look at the operations that serve the market's infrastructure, especially now with the new wave of vibe coding and AI execution, these companies have served a wave of growth and great many possibilities to serve the market with very interesting solutions, cost-effectively speaking, and also bringing these new solutions very promisingly.
This is a solution that's built with a focus of being very robust with great cost effectiveness. We already see some gains in customer cases when compared to traditional clouds of over 50% reduction in costs. It offers highly beneficial returns to customers, but obviously, without losing sight of our product quality and robustness, which is what this product actually delivers.
We found the ideal conditions to launch this right now and to do that, while being very prepared for any execution from the customer side in terms of LLM or AI agents or vibe coding to be integrated and executed within this solution. The timing could not be more perfect. The product couldn't be better suited to the cost effectiveness and solution requirements.
Obviously, we are not talking about any guidance, I can't talk about numbers. Considering the size of the market in Brazil, we're talking about a cloud market worth about $4 million. It could represent huge gains for Locaweb. We already have several customers running the solution as a proof of concept. Some of them already running them in production. Internal operations already running for quite some time in a very solid way.
We feel very confident, Gustavo. We feel like this could really be a huge differentiator in the Brazilian market, and it's just the beginning. Now I'll turn over to Scarpa for the answer to your other part of your question.
Good morning, Gustavo.
Well, I'll ask Scarpa to talk about this issue because I think there are two very important things to think about. When it comes to TPV acceleration, of course, TPV is not a single solution. It's part of an entire journey, so it has to be very integrated and add to the experience of embedded payments via the platform. I think it also helps. Scarpa adds another perspective when we think about planning for the future. Financial systems are part of a very important strategic core.
That's been the levels historically, but with a more integrated management system for the platform and payment means, many a world of opportunities opens up for us. I think there are two very important aspects to talk about. Scarpa, if you could please take that. Hi, Gustavo. It's a pleasure to talk to you.
On TPV, we do have a well-tractioned operation. 2025 was a very positive year for us. We grew 21% to close to BRL 9 million in TPV. That's a combination of factors. The increased penetration into other platforms, I think that validates our embedded finance theory. Also increased operations efficiency, a consistent reduction in the chargeback of our operations.
A combination of multiple factors provided for this improved TPV. As Rafa said, we work under the assumption that TPV is a great leverage. We also have other avenues for growth. All of our banking and credit operations that we've been discussing within the company make up this set of options that our financial services vertical offers. 2025 provided a very significant response in terms of TPV. As Rafael said, it's just one of our avenues.
We have our banking suite of solutions, especially with our new accounts, which have been involved great efforts. We will be leveraging all of those fronts in 2026. On that note, I will turn over to Williams, who will finish answering.
Thank you, Scarpa. I'd like to take the opportunity to say hello to everyone and thank Gustavo for his question.
I'd like to say that for a long time, we've been improving the integrated ecosystem view. Payment is a complete part of the customer journey from the beginning, from the outset. They start their online store with the ability to receive payments. We've been improving that integrated solution. In 2025, we've brought even more options to the platform.
The customer has the overall view of their transactions. They can reconcile their figures and look at their financial events.
This really provides a unified experience within the platform, including payments. I think that has been a building block that's allowed us to grow over TPV. To support all of that product integration, we also have a very integrated operation. If anyone has any question about their payments, they do not have to go through a different channel.
The platform team can solve simpler questions, and if it's a more complex question, we have a transparent pipeline for the provision of those answers. The client has a unified experience. They don't see separate operations. The customer sees that as a single solution, and we see that as a differentiator. As a response, we've seen that increase in penetration.
Very clear, guys. Thank you so much for the answers. Again, congratulations on your results.
Our next question comes from Mr. Bernardo Guttman with XP.
Please, sir, you may proceed. Good morning, everyone. Thank you for taking my questions. Congratulations on your results.
I have two questions. The first one about margins and operational leverage. You've delivered a significant improvement in your margins this quarter. I just wanted to understand a little bit better how much of that is coming from your operational leverage in commerce, and how much of that reflects more broad or more comprehensive initiatives. You've showed the slide about the agentic layer that integrates data and applications and operations.
The question that remains is, in this scenario where AI is increasingly more present in the creation and operation of online store, what do you believe will actually become a differentiator? Is it the integrated infrastructure, your database or the ability of building agents upon these ecosystems?
Where could you maybe see risks to disruption in these model?
Thank you.
Apologies, we were on mute, so I'll start the answer again. Thank you.
Good morning, everyone. Thank you for your question, Bernardo. I will address the first part of the question, and then the team will take the second part. Starting with our margins and leverage, you pointed out some very interesting points. I think it comes down to the combination of a few factors, and I will address a few of the most important ones. I think our business is naturally one where fixed costs are diluted as we accelerate growth. It's a natural path for our business and something that we've consistently delivered. That would be point number one.
Second, we've worked really hard, especially over the course of last year. Over the course of this year, the effects will become clearer in terms of operational synergies and cost reductions. We have the full transaction to the centralized cost center and service centers.
Perhaps the most important point is it comes down to a journey that started a few years ago. When it comes to the allocation and optimization of our portfolio, we've talked a lot about this, that we are seeing our portfolio become a lot more streamlined, not only in terms of the number of products, but also in how integrated they are. Obviously, that leverages the allocation of capital into the journeys we feel are more profitable and offer the greatest growth potential.
Perhaps trying to sum up the most important points, that's how I would lay it out. I'll turn over to Rafa, who will take the second part of your question with regards to AI.
Good morning, Bernardo. I'll address a few strategic points. Then I will mention some specific cases, even so as to make it more tangible. One thing that I tried to bring in the first slides, it's very important to understand that the role we play today when we build these solutions is a lot more important than the environment where we interact with customers. The wealth of what we do is in our infrastructure, which obviously starts with data. Not only that, but these are contextualized data.
When leveraged in a robust way, allows these workflows to work really well. I'm talking about several workflows.
There are many ways for these data points to be integrated. What we've built with this group, and I think Williams was very successful in how he addressed the integrated payments experience within the platform. That's precisely it. Because we have the platform with an integrated checkout, the experience of, you know, advancing receivables takes place within the platform's integrated ecosystem. We integrate many different domains of this operation.
Complex layers of structured data and workflows, which are ultimately set up on a long history of experience with the customer, is what creates the strength of the infrastructure we have. When we think about what AI brings, of course, we've had generative AI helping us for quite a while with some classic use cases in terms of customer experience with roadmaps that allow the experience to be even more seamless and adds a lot of positive feedback for us.
There's another side of the story which was rethought when we begin to see these agents in action. They offered a different way of thinking the interface. The way the customer consumes and consequently how they use or operate their own systems, that evolves, that becomes more streamlined, more conversational. You remove friction, you remove clicks.
Again, in order for that to work that seamlessly, agents have to be built in a way that they speak to those integrated data points. We begin to think about the company's evolution in a different way, in an agnostic way, which is very important, but in a way that's complementary to everything else that we do. The company now has hundreds, if not thousands, of integrations with multiple agents in the market, whether we're talking about solutions that complement things that we do not have or the way they offer our customer to access multiple different services.
Again, over 400 different integrations. In our management system, we're talking about thousands. Something that ultimately already works as a multiple orchestration layer is now expanded with these agents now connecting to our infrastructure.
Whether we're talking about our own agents, which we will make available to our customers to streamline their own operations or market agents as well. I will allow Igor and Williams to offer a few more practical exampl es.
Hi, Bernardo, this is Alê speaking. Thank you for your question. Adding to what Rafa said, we have a very consistent view of how we should organize ourselves for this period. Rafa said it really well. Indeed, we have a lot of information. We retain the history of orders, for example, and without that context, agents can't help with anything. One important point for us is: How can we strengthen this relationship with our customers, making sure that our data is more robust and more consistent?
In Wake's case, more specifically, our CDP, which adds context for our clients, is very important, and it speaks or it interacts with two other layers which are very important for us as well, and they've been illustrated in the slide that Rafa mentioned.
There's an internal orchestration of those agents and the development of these agents which will be performing these actions. Allocate a product to a store with a specific inventory, that's very important for us and very functional to our platforms.
There's an entire world outside, which is the multi-agentic world. We're also working very hard on building that infrastructure so that we can orchestrate multiple agents and speak to Google's ACP and other agentic infrastructure standards, so as to make sure that our products and our internal agents are connected with this multi-agentic world.
I don't know if you have anything to add, Williams.
Yes. First of all, thank you, Bernardo, for your question. I also wanted to talk about the SME logic. We're talking about small groups, which are often connected with the physical stores. When we bring AI to those operations, that represents the difference between success and failure, because they'll be able to scale up their business a lot more successful, even being comparable to other large groups. Adding AI to our software actually leverages what those small guys can do. One differentiator for us, looking at LWSA as an ecosystem, is that journey from the execution of inventory. You have that orchestration and logistics within the operation.
Adding AI and agents up onto that allows you, for example, to upload your stores a lot quickly.
You have the entire inventory there, you have the intelligence to set up that inventory a lot quicker. Second, with the integrated operation, you tend to consume AI within our offerings than to consume individual AI softwares from outside or from third parties and having to connect that to their core operations. We can already connect our own AI solutions to offer them in a much simpler way. SMEs always want a more integrated solution, and that's the huge differentiator, in our opinion, for LWSA.
Yeah. I just wanted to add another perspective in addition to what all of you have already said.
This is Igor speaking, Bernardo. What I wanted to add is how we think about AI within the group. We are a very pragmatic technology solution, and we understand really well how technology affects our customers' lives.
The application of AI in our case will consider how customers will actually benefit, and not only by what I call vanity metrics. Sometimes we see the market talking about, "Well, I'm producing X lines of code using AI." Ultimately, that's purely a vanity metric, because what really matters is how the customer will benefit from that. Every case that you've heard so far mentioned by Williams and Alê and Rafa.
All of them are strongly affected or driven by how customers are benefiting from this. We're not creating the agentic layer because it's cool or because everyone else is doing it, but rather because we actually understand that looking to our architecture, our systemic architecture and the architecture over which our systems are built, bringing these functionalities accelerate the operation. They make our customers more productive faster.
We've been very pragmatic and kept our feet on the ground, but there's really a world of opportunity that we can leverage, and that's the road we are treading.
Excellent, everyone.
Yeah, I just wanted to add another point. You, you've asked about disruption. I think just in closing and, you know, picking up on everything that's been said, we have a very resilient model, as was said earlier. I think that disruption will come on the interface of more standalone products which are not integrated into the journey. We've been talking a lot about how focused we are on an integrated journey. We could consider that the same fundament could support the theory of disruption for a few products that we can't integrate very well into our journeys.
That's the same basis that will sustain the opportunity we have to enrich those same journeys with services that integrate generative AI. I think we see a lot more opportunity for growth than for disruption. Of course, we might have some exposure that we'll have to manage over time.
Okay, thank you and congratulations on the results.
Our next question comes from Mr. Marcelo Santos with JP Morgan.
Please, sir, go ahead.
Good morning, and thank you for taking my questions. I'd like to go back to Bernardo's first question, where you talk about your margins. You mentioned the management of your fixed costs, but also the work on synergies and cost optimization and portfolio optimization. I'd like to hear from you from 0 to 100%, where do you feel you stand in that process?
I assume you've listed a number of projects to conclude all those transformations that are in place. How many of them have already been completed? How many are still remaining?
That's my first question.
The second, of course, when we look at the commerce business, your acceleration has been really healthy. When you look specifically at the revenue from the platform, that was a bit more volatile. I think that it grew faster in Q3, but a bit more slowly in Q4. I just wanted to understand what do you see as a trend for that side of the business and what explains that fluctuation?
Good morning, Marcelo. Thank you for your question. I'll try to explore your question from the margin and leverage standpoint.
Just taking a few steps back, after the IPO, we are a company that made several acquisitions, over 20 in total. I think that obviously that added a lot of complexity to our operation, which was only natural.
We're talking about several different fronts. I think that we've made a lot of progress in many of them. I think it's hard to offer a specific number, but I would say that on the operational side, I would say that we are further ahead. We have realized many of the synergies, especially when it comes to support. I say that from the unified journey perspective, we might be maybe from the midpoint up. I think from the brand consolidation, we've made great progress.
I think that making our journeys across those different products a lot smoother or from a client perspective, looking as a single journey, of course, there's a lot of improvements we still need to make. I would say that we are maybe earlier in the process when it comes to operational synergies. We've also had a lot of synergy in terms of our brands.
We had a long list of brands, and we have streamlined that as well over time, which has provided a lot of operational synergy as well. Maybe one thing that perhaps we are very far ahead in is our portfolio optimization. We had several products and maybe even companies that we either discontinued or evolved in a few of those products, embedding them into our unified journey or brands and others where we actually divested.
I think that we've made great progress in that sense, and I think that from a divestment standpoint, at least we've concluded the progress. We had the last ones last year and with Squid and Nextios, which within our portfolio had growth potential that we saw as smaller versus what we had before.
That becomes even clearer in the figures for this quarter in the improvement of our gross margin and EBITDA margin. Obviously, that portfolio optimization might be closer to completion than the rest. Moving on to the second question on the platform revenue and subscription revenue. I think that first of all, considering our ARPU. One thing we always say is it is not specifically about price, but it's more about the calculation of our customer subscription payments.
It's important to say that our pricing is very much focused on the value we're adding to the customers, and also on how much our products and services are adding to their journey. When we look at our ARPU figure year-over-year, not necessarily there's been an increase in our products prices, but a lot more of it is based on how much our customers have grown and added more products and features within the platform and the group.
Obviously an increase in cross-selling. As we said earlier, even when we look at our total revenue, the penetration in terms of payments and logistics. Our monetization is seen very much like that, and we really believe that what we're doing is helping our customers sell.
We talked about AI, what we try to do is add AI solutions to help them sell and remove friction. As our customers grow, we believe there's still room for our ARPU to grow alongside our customers without necessarily increasing the prices of our products and our services when they're on the same level.
Thank you.
Thank you.
Our next question comes from Mr. Luca Bressan with Bank of America. Please go ahead.
Good morning, everyone. Thank you for taking my question. I have only one question. I just wanted to hear from you, how do you see the commerce market evolving here in Brazil? What was the end of the year like? Did the year end on a weaker or stronger note? How do you see the start of this year, and what are your prospects for the remainder of the year?
Do you expect an acceleration considering every macroeconomic aspect, including the elections? That would be great. T
hank you. Hi, Luca. This is Alessandro speaking. Specifically about the last quarter of the year, October was very much like what we used to see. November was also a good month, but December was a bit more challenging.
Thinking about our GMV, part of our profitability comes from other aspects, specifically with Wake. Some of our fixed costs come from our physical stores integration, so we are a bit less susceptible to those fluctuations. Looking at this year, January was in line with expectations. February, I think even because of Carnival, the challenge was a bit more significant. In early March, we were already seeing a better response, so we might have a quarter in line with expectations.
Thinking about the year, of course, there's a lot of uncertainty starting with retail. Retailers still don't know exactly what will happen. Even though this is an election year, which in some aspects even brings more money to the economy because it makes the population more optimistic. We really expect people to have money in their hands.
We also have a year with several holidays and the World Cup by mid-year, which also affects our GMV evolution. This is a year where we'll have to look at our operations quarter by quarter to see how things will evolve. We have our fingers on the pulse of the operations so that we act in accordance with whatever the year brings.
Now, William, over to you.
From an SME perspective, we also saw a Q4 a bit more challenging, especially in December. November had been a good month. What we see is the number of sellers is increasing, so the number of the absolute number of stores is increased, and also the average sales for each seller actually increased, maybe because of the macro aspects for the country. In 2026, we had that shift because of Carnival. Last year, that had been in March. I think February is not a good benchmark because it is a shorter month, and it has the Carnival festival.
We have March now with more working days, so we believe there might be a recovery thinking of that seasonal aspect.
SMEs are even more affected by seasonal aspects because of the long tail, so they suffer a little bit more. We expect to recover this quarter, and with everything that we've been doing, as we've said earlier, we expect to add more and more ability for these SMEs to compete with larger companies. They might have a better quarter, depending, of course, on these movements in the economy at large.
Thank you. Thank you for your answers.
Our next question comes from Mr. Frederico with BTG Pactual BBI.
Thank you. I think that most of the structural and strategic questions have already been asked. I will focus on two more specific aspects. We saw, for example, the cost of AIP with the cost of TPV increasing more in Q4. I just wanted to understand whether that's specific or a trend.
CapEx as a percentage of revenue. I saw that it came back in Q3, maybe more context about that would be great. Following up on Marcelo's question about your subscriber base, the increase quarter-over-quarter was maybe common. Should we think about this business growing in sequence in the next quarters, or was this seasonal, and we should think more in a year-over-year basis?
Thank you. Thank you for your question, Frederico .
This is Marcelo speaking. On TPV, when we look at the margin by TPV, it remains very stable. When you look at it year-over-year, it's pretty much in line with expectations. We've grown 21% our TPV in the quarter with 17.7 year-over-year. The TPV margin is very much steady and in line with what we're seeing. I'll ask Kubota to detail the CapEx perspective.
Good morning, Frederico . Thank you for your question.
On CapEx, I think that there may have changes quarter-over-quarter or any difference quarter-by-quarter. When we look at a longer time horizon, it's been very much in line with what we delivered in previous quarters. Whatever quarter you look at, even in nominal figures or as a % of the revenue, bearing in mind that much of our CapEx is focused on the development of new products and the evolution of our existing products and our journeys, and very much linked with future growth. I think that looking ahead, the trend has been very similar to what we've had in previous years, so that's what you should consider.
I think that it's important to note when it comes to subscription, a lot of our revenue is coming from those subscriptions, and it's grown consistently. When we look at it quarter-over-quarter, the nominal growth of our ARPU or revenue per customer, that's been increasing consistently.
This trend, we're talking both quarter-by-quarter and year-by-year. I think that in 2024, we saw very significant growth, and perhaps the impact on the basis year-over-year might have been impacted versus Q3.
You know our business dynamics very well, we are always piling revenue up. When you look at it year-over-year, there might be some changes quarter-by-quarter, depending on maybe a specific campaign or any other specific impact.
We've been growing quarter-by-quarter in a year-over-year basis for a long time. Thank you.
With no further question, the Q&A is now closed. I will now return the conference to our CEO, Mr. Rafael Chamon , for his closing remarks.
Well, first of all, thank you so much everyone for joining our conference. Thank you for your questions. I'd like to also thank our team, more particularly as you see, this was a great year for us. Many, a lot of progress in many different fronts, so we hope 2026 is an even better year for LWSA, and I'm sure it will be. See you, everyone.
This concludes LWSA's Q4 2025 earnings conference. On behalf of the company, we would like to thank you for joining us and wish you a great day.