Hello. Welcome to Locaweb Company's Q1 2023 earnings conference. I'm Gracielle, Locaweb's Media Officer. Joining me today are CEO Fernando Cirne, CFO and IRO Rafael Chamas, and Commerce Enterprise VP Alessandro Gil. This conference is being streamed online via webcast with simultaneous interpretation into English and will be available for replay at ri.locaweb.com.br. You can also download the slide deck for this presentation by clicking on the webcast link. The statements contained in this document, relative to Locaweb's business prospects, operational and financial forecasts, as well as future growth estimates, are merely projections, and as such, are based solely on its management's expectations about the future of the business. These expectations strongly rely on market conditions, the performance of the Brazilian economy, the industry, and the international markets, and therefore may change without prior notice.
Unless otherwise stated, all variations in rounded off figures here presented were calculated in BRL thousands. This performance report 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 has not been reviewed by independent auditors. During the question and answer session, we kindly ask you to use the Q&A button located at the bottom side of your screen to submit your question, stating your name and the name of your company. By standard practice, your name will be announced. You can ask your question live. A request to activate your microphone will pop up on your screen. I'd like to invite Mr. Fernando Cirne to present the company's results. Please, Mr. Cirne, you may proceed.
Thank you, Gracie. Welcome, everyone, to our Q1 2023 conference. I'd like to thank all the members of our board, stakeholders, shareholders, and everyone who contributed with the result that we are reporting for this quarter. Starting on slide three, we have to mention the strong alignment of our results with our budget. We reached the expected net revenue and exceeded the expected EBITDA. On consolidated EBITDA margin, we've reached 17.1%, up 3.8 percentage points versus Q1 2022 and up 1 percentage point versus the last quarter of last year. On the EBITDA margin for our acquired operations, we've reached -1.2%. This means a 7.5 percentage point increase versus the 1Q of 2022 and a 1.6 percentage point rise versus Q4 of 2022. On the topic of net revenue, we saw a 21.7% increase versus the 1Q of last year.
When we look at the net revenue for our commerce operation, which is what's been growing most significantly in our group, the increase was by 38.8%. If we break that down into acquired and organic companies, we have first an increase by 43% and on the organic side, growth by 32.5%. We'd like to stress that our e-commerce operation has been growing because of both sides. This is to say that there's not a more substantial increase on one side than the other. Our gross margin reached 47.4%, up 3.7 percentage points versus the same period of last year.
Our recurring customer base on the e-commerce side has been growing consistently, which is what we've seen for the last two years, give or take, and this time reaching 171,000 subscriptions. Lastly, our e-commerce ecosystem generated BRL 13.3 billion in GMV, showing Locaweb's consistency in Brazil's e-commerce ecosystem. Moving on to the next slide. Here we have, as I said before, the continued and consistent development of our paying subscriber base on the e-commerce side. We've seen this since our IPO and since the COVID-19 pandemic, the fact that this curve has not slowed down. In Q4, we had 162,000 paying subscribers, now we've reached 171,000 paying subscribers. This has been continued growth with no slowdown.
I think this is significant that I mean, when we're talking about a unique, we're talking about subscribers and not unique customers on the bottom, which is different from what we're saying when you look at the graph. These 450,000 customers are also using the platform only one-off. In the following slide, we see the reason behind this continued uniform increase. We've recently seen an acceleration in sales after Q2 2020. It's nearly doubled from a base year 100 to nearly 200 in the first year after the pandemic. Ever since, Locaweb has been able to sustain that level with no slowdown. We have sustained that level to this day, so there has not been a slowdown after the end of COVID-19.
We've been able to help companies go digital after COVID, and ever since, whether it was by technical improvements or product developments or the acquisition of other companies, we've been able to maintain this level of customers, which is a huge achievement when it comes to growth for us. Moving on to slide six. When we talk about Rule of 40, this is a way to assess a company's health when it's in a growth stage. Talking about our commerce operations, we've seen a 38.8 net revenue growth with 14.8 adjustment EBITDA margin, 14.8%, with an overall 54%. Moving on to the next slide, we see the same information for our overall operations, reaching 39% in our Rule of 40. Moving on to slide eight. A little bit about the GMV of our overall e-commerce.
Breaking it down from e-commerce, where we grew by 13.5%, and looking at our own stores, our GMV has grown by 17% year-over-year. This is because of the incentive we've provided to our retailers, in terms of doing their own marketing efforts. This has been a significant push from the group on the e-commerce side. We are putting everything that's available to our customers in front of them. With that, our overall GMV on e-commerce, meaning the platform's GMV combined with the transactional GMV for marketplace integrators and so on and so forth, we saw an increase by 20.3% for our entire ecosystem, reaching BRL 13.2 million in GMV in Q1 2023.
Moving on to slide nine, we have the rise in our net revenue for the five largest acquired companies. It's important to underscore that these acquired companies already account for some 85% of the revenue of all our acquired companies following our IPO. I think that showing that these companies are growing by the tune of over 40%, the most important message here is that we made the right decision by acquiring them. It's also important to say that Locaweb's organic operations are growing by over 30% as well, which is to say that the entire e-commerce operation within Locaweb has been performing in a very healthy way. Moving on to slide 10 now.
You can see the information for our or invoicing GMV within our ERP operations, which increased by 33%, reaching BRL 28.7 billion in the 1Q of the year. When we talk about the number of labels issued on the logistics side, we saw an increase by 6%, but in terms of net revenue, the increase was by 34% comparing Q1 this year with the same period one year earlier. Moving on to slide 11. A little bit about payment methods. Our TPV has gone up 49% in the 1Q versus the same period last year, coming close to BRL 1.5 million in TPV during this quarter. A very significant, very meaningful number, and even outpacing other readings for the company, especially on the commerce side.
Part of that is because we have continued to bring synergies on payment services within the group, which led us to reach 35% of these, of this TPV coming from synergies across our operations. On to slide 12. Within our strategy of always providing new avenues for growth for the company, during this quarter, we've consolidated the launch of our new brand called Wake. I'd like to talk a little bit about what's behind our launch of the Wake product. We have a competitive environment for medium-sized and large e-commerce players offering a huge set of opportunities. Along those lines, in 2016, we acquired a really excellent e-commerce platform to serve this specific audience.
With our acquisitions made since our IPO, we created products not only to enrich our SME ecosystem, but also to enhance what we call this corporate journey, meaning the journey for medium-sized and large-sized companies. At the end of 2021, our board of directors, thinking about the future of the companies and within this idea of new avenues for growth, decided that we could start merging these companies we'd acquired. That would grow into this more enterprise system becoming a single operation. With that in mind, we brought in a market executive, Alessandro Gil, who's been with us since January 2022 to spearhead this initiative. Gil spent the entire year 2022 by integrating several different applications, at the core of which is the platform that we acquired in 2016. We spent the entire year putting up this unified integration and unifying our tools.
Finally, in April of this year, we released this set of operations called Wake. I will now turn over to Alessandro Gil, who will tell you a little bit about what Wake is and where we stand with Wake. Ultimately, the message I want you to hear is that Wake is no longer a wish, but a reality. The first Wake seed was actually planted back in 2016, and we really watered it and nurtured it over the course of the past three years by acquiring products that would enhance Wake and integrated all of them over the course of last year. The launch that we had last month was just the cherry on top of that. I will now turn over finally to Mr. Gil, who will talk about our plans with this brand. Thank you.
Hi, Fernando. Thank you. Thank you to everyone who's joining us in this earnings conference. On slide 13, I'd like to reinforce everything that Fernando said. Essentially, we took assets within the company that were well-positioned in this market, but which needed a bit more of investment and a sharper focus on outlining the roadmap, which we did over the course of last year. On 26 April , this entire transformation and development was consolidated in the launch of the new Wake platform. Currently, our operations are divided in three building blocks. First of them being Wake Experience, which encompasses the old All IN platform, which is now an experience platform. The second being Wake Commerce, which includes Ideris, a marketplace platform, Tray Corp, a commerce platform, Síntese, omnichannel services, and Sammy bringing payment expertise and application expertise.
Lastly, Squid by Wake, which is Latin America's greatest and largest platform for marketplace management. Moving on to slide 14. Everything we've developed over the course of last year was focused on condensing the journey and the product. Everything that we did in 2022, and which we presented at our event last month, showed how we as a technology company may offer solutions to help our clients across their digital journey. Starting with customer attraction, Squid is definitely a critical platform that brings content discovery and engagement. Even more than that, we see Squid being fundamental during the purchase stage because we strongly believe that social network will become the new marketplaces, and we are focusing our efforts on covering and providing this c-conversion of pro-platforms to our customers. In addition to that, Squid also covers the entire retention stage.
We have a very comprehensive platform that creates platforms and turns users into content generators, which allows major brands to leverage the relationship that they had with their clients to retain and acquire new clients. When we look at digital commerce and omnichannel strategy, which go from the discovery stage to the delivery stage, we have strong appeal in catalog development, personalization of the experience using displays and personalized queries, even leveraging the audience. Today, the entire management of platforms has great integration with all platforms in the country and a very useful and high-performing user experience, which is the most important thing for us when managing an e-commerce platform.
When we think about omnichannel strategies, brick-and-mortar stores, marketplaces, and the entire last mile stage is critical for our clients to provide their customers greater engagement and naturally take their business to higher conversion rates. In our last building block, which is digital experience, this is one where we really transformed the product that we already had in-house. Something that used to be a marketing email trigger, we transformed into a full-on customer engagement platform where we can quantify, duplicate, and change clients in clear audiences with clear triggers via mail campaigns and social media platforms and ultimately personalize them into a commerce platform. In the following slide, I'd like to mention some of these excellent highlights the company reported during this quarter.
First of all, when we compare our booking rates, meaning sales from our clients in Q1 2023 versus the same period in 2022, we saw an outstanding growth figure of over 482% year-over-year this quarter. To us, this is more than a sign that we are on the right path and that Wake has been doing a great job in telling this story and talking about the digitalization of medium-sized and large companies. Our average ticket also grew by 180% versus Q1 2022. Not only are we selling more, but we're also being able to sell to clients with a much higher average ticket, which will turn into a higher income for us in future quarters.
We have over BRL 3 million in MRR across our pipeline, meaning there's opportunity for us to continue to grow at a very strong rate throughout the year. We currently have over 1,300 leads that we're working on. As Fernando said, Wake is already a reality with clients such as the ones whose logos we have on the slide already in-house and operating with our solutions and very well. Now I'd like to turn over to Rafael Chamas, who will go over our financial results.
Thank you, Alessandro, and thank you to everyone who's joining us on this call. Moving on to slide 17, I'd like to start by mentioning the company's most significant highlights this month in financial terms. Some of them have already been mentioned, but I just wanted to underscore them.
We saw a 22% increase in net revenue during this quarter to BRL 302 million, with Commerce growing by 39% year-over-year and great results from both the newly acquired operations and what we call our organic operations. Our ecosystems GMV increased by 20%. Our subscriber base went up by 27%, adding up to over 170,000 subscribers. Our TPV grew 49% to BRL 1.5 billion over this quarter. Very importantly, let's talk about our profitability. We have very significant increases in several different lines, starting with our gross margin, which grew by 3.7 percentage points year-over-year. Similar to what we had in our EBITDA margin, which increased by 3.8 percentage points, ending this period at 17.1%.
Lastly, something we've been talking about, very emphatically in our last results, the decrease in our financial expenses which finance our debt payments, which decreased by 11.8% compared with Q4 2022, which naturally provides a very interesting leverage rate when we think about the group's cash position. Moving on to the next slide. Here we have the net revenue result broken down by operation. Our consolidated result up 21.7%, made up by 38.9% on the Commerce side, which ended the quarter at BRL 200 million. Our Be Online size operations down 1.8% to BRL 102 million. We've been saying this for a few calls.
online operations had slowed down, which had an impact on our revenues, but we also had a very good profitability increase on the other hand. Moving on to slide 19, something I highlighted in Q3, which was that decrease we had in Q4 of last year, which as I said, was one-off. On this chart, we have the historical record for our client base and the curve of our ARPU going down. In our Q4 earnings release, we had already showed the preliminary results for Q1. In Q1 2023, we have gone up to a similar level to what we had historically and a significant increase versus Q4 '22, which once again shows that this was only a one-off drop during that period. The following slide shows a little bit of our profitability.
I had mentioned our consolidated results. What brought them was our profitability is still at a very substantial rate and at the levels that we've mentioned for Be Online and Síntese. This came from organic commerce, Be Online with 23%, and also our newly acquired companies, as we said, following a very clear growth line already reaching breakeven point. We ended Q1 2023 with a -1.2% margin, a very significant development from Q4 2021 when we reached -12%. This combination of more robust growth on organic commerce with the expansion in both Be Online and our newly acquired companies have led to what we've shown in the highlights, which was a wider profitability margin and a wider EBITDA margin as well. Here we have in the following slide, the company's adjusted EBITDA.
We ended the 1Q with a 57.1% increase, or so 17.1% margin is a very significant increase from 13.2%, which is what we reported last in the same quarter last year. In commerce, we have essentially both of the consolidated EBITDA, consolidated percentage of 14.8%. On the online and SaaS with the steady income, we also saw an interesting increase by 19.4% coming to BRL 22.1 million during this period, with the margin going from 17.7% to 21.5%. Substantial results for the company also, in keeping with what we are saying, a disciplined cost discipline, clear plans to upsell via the companies that we have acquired, whether by scale or by operational efforts as what Alessandro brought.
We're continuing to grow, but with increased profitability always. Moving on to slide 22, the company's net income, an increase of 59.7%, reaching BRL 7.1 million. On the adjusted net income side, BRL 33.4 million versus BRL 29.7 million the previous year, accounting for a 12.2% increase. On slide 23, our net cash position for the company at large. We ended with BRL 1.4 billion cash. We have payable earn-outs that amount to BRL 850 million, which have been written in the company's balance sheet, which leaves us at a net cash after having paid all of these earn-outs at BRL 500 million reais. This is it. I would like to thank everyone again for joining us, and we will now start our Q&A session.
Thank you, Rafa. Our first question comes from Mr. Marcelo Santos with JPMorgan. Marcelo, you may proceed.
Good morning, everyone. Rafael, Cirne, thank you for taking my questions. I'd like to talk a little bit about the margins with my two questions. First of all, the organic commerce margin. Wake seems to have a smaller weight than we expected, at least for Q1. Do you think this was a one-off event? Is there a risk of that having greater weight in Q2, seeing as you've just started having launched it in Q1? Or is this a sign for what we should expect in Q2? Then I would like to talk about the margin for the acquired companies, which have essentially reached breakeven during this quarter. Should we expect this trend to continue in the next few quarters when talking about the margin for those newly acquired companies? These are my questions.
Thank you. Hi, Marcelo. This is Fernando speaking. Let me take your first question. Indeed, we were able to essentially cancel out Wake's effect in the 1Q because of a strong cost control for all of our organic commerce operations, which still allow the company to grow 23%. I think this really shows that we are committed to profitability without any adverse impact on our growth trend. This commitment will be the same for the second quarter. The company's mindset hasn't changed. Starting in Q3 and Q4, we expect to start seeing the effect of the sales that we've had during this quarter, which were very positive. Over the long term, our organic commerce margin is absolutely under control.
I think this is an operation that's very much on the right path and should even see an increase in revenue. As to the organic margins, we have been working on a long-term plan. This growth has been sustained, especially by a strong increase in our operations. We reported a 43% increase year-over-year, and this is a margin effect that comes from two different fronts, one being our operational leverage affecting growth and other being the merger of some of these operations. This is a long-term work that will continue to take place. It's not short-term. It should take at least two years as we continue to work for us to have what we would call a baseline margin level for us to continue our operations. These are positive figures, but there's still a lot to do.
Adding to that, Marcelo. Our gains in organic margin or our organic gains in our margins come from our operating cash activities, which is to say we haven't had to crush the margins, but rather growth. Bling, for example, has shown very substantial margins. We have not had to crush our media investments in order to have that. In theory, moving forward, if we were to see a decrease in profitability, we could still have leeway to change that. We're not doing that on the inorganic side. On the organic side, we did use a cost management tool to be able to counter the effect produced by Wake, and we will continue to make as much effort as possible in Q2. Starting in Q3, we expect this problem to be a lot milder.
I hope I was able to answer your question. Just one question. On the organic side, you cut costs in marketing, for example. The answer is yes, we did spend less on marketing. One important thing to mention is that it didn't affect our sales, which was very interesting. I think that we have been able to, in a more apparent way, operate with a number of people that's smaller than we had budgeted. This has been a very great highlight for us. Our headcount is below what we had budgeted for, so we have been able to operate in a more efficient way.
Hi, Marcelo. This is Rafael speaking. I just wanted to add to what Fernando said.
I really highlighted the wider gross margin that we reported, so you can see a significant dilution in costs here. As Fernando said, the leverage in margins come from the comics and gross margins so much more than what's below that, which shows how well our costs have been diluted as we continue to grow. Thank you for your question.
Thank you.
Our next question comes from Leonardo Olmos with UBS. Leonardo, you may proceed.
Hi, good morning, everyone. Thank you for taking my questions. I'd like to first ask something more focused on revenue. If you could please talk about your main growth drivers throughout the year, focusing on your subsidiaries. For example, is Tray expected to start growing again on a quarter-by-quarter basis? What do you see the main drivers within Wake in addition to Squid?
Fernando mentioned in the beginning a 30% growth on the organic side. What exactly do you mean by that, and how should we expect that to perform moving forward?
Hi, Leonardo. How are you? All right. I'll start by talking about growth in our subsidiaries, but also other drivers. When it comes to Tray and Wake, I'll turn over to Willians and Ale to cover that.
Very quickly, I think that Tray would be focusing on organic growth. Let me talk about inorganic growth. On the inorganic side, as I said, we are going by 43%, as I said, and this is based most importantly in Bling's case and even Melhor Envio and Squid, where we will continue to invest. I think the message here is we are not cutting costs.
We're investing in those companies, boosting our profitability and our operational leverage, we're continuing to invest in these companies. Another important thing, new investment fronts, which are new but are not eating into our margins. For example, cross-selling. We have hired a new cross-sell director. He has been with us for three weeks, cross-selling is one example of a growth avenue that we'll be investing in that provides profitability and revenue. Or actually brings profitability without compromising the group's profitability. This is a growth-oriented company. We are seeking profitability without failing to invest in growth fronts that do not eat away at our profitability. Wake, for example, we invested substantially in the product, but our margins were not decreasing because of that.
Part of the gains we had in investments were offset by the merger of some of these operations. The investment has been done essentially in full, so now all we have is the revenue cycle. This is one example of investment that will only show benefits in terms of growth. Now I'd like to turn over to my colleagues to talk about Tray and Wake as well. Thank you.
Hi, Leonardo. Thank you for your question. Good morning, everyone. On the topic of Tray, I also like to take two steps back before talking about the future to talk, first of all, about the revenue mix. When we look at Tray only from a financial standpoint, the problem is that Tray had two one-shot revenue sources that saw a change during this quarter.
We had logistics which after we acquired, in review, decreased and that accelerated last year. Logistics went away from Tray into Melhor Envio. Also on marketplace we saw a re-pricing movement that affected it last year. When we look at its growth compared to our revenue, it's stagnant now. The truth is, on the PMR side, it's never stopped growing by about 20%. We have the revenue mix that provides this effect, which gives the misguided impression that it hasn't grown. Another impact comes from the basis for comparison. Tray has been growing, but we compared it to a period where there were a lot of restrictions on the economy because of the pandemic, which led it to end where it did this quarter.
Q2 of last year didn't see as hard an impact from the pandemic than the 1Q. We've been seeing weaker results or a weaker basis for comparison. I think that the next few quarters we'll see some improvements. I also wanted to talk about improvements we had in Tray. We were able to review our pricing strategy, also looking at our marketplace and also at our set of products. In Q1, that allowed us to attract a number that was higher of clients, and you saw that figures that also have to do with Tray operations. We also have a very well-rounded operation in terms of client retention. Our churn has been going down successively, and that has a positive impact on those figures as well.
Most importantly, the new pricing, which will have a more diluted impact over the course of the year. Clients coming in starting in January are contributing to the marketplace revenue, and we're also in a position where we can start charging a little bit more from customers already in our base. The plan is to start growing in its upline again, but it's never stopped growing in the recurrent line. The comparison with weaker basis for comparison in previous quarters will allow us to see Tray with more substantial growth rates in the next few quarters. I think that Alessandro can talk a little bit about Wake. Then if we forgot to mention anything, Leonardo, please just let us know.
Thank you, Willians.
Hi, Leonardo, thank you for your question. Our prospects couldn't be better in all fronts with Wake.
We're looking good on a year-to-year basis, but every product within Wake, in Commerce, Experience, IMF, all of those have been performing in a very promising way. The point is we have longer sales horizon, so the lead time is obviously longer than for Tray or Bling, which are products with a higher revolving time. That's because these processes are more complex. Until we realize the full potential of a contract, it takes 4-5, sometimes even 6 months. In Q1, we reported a significant number of new contracts closed because of the focus of clients to whom we've already been telling Wake's story.
We believe that now that we have actually launched the company on April 26th, where we were able to tell the story a little bit better and be clearer to our clients and to the market in general with a logo and a structure, I think shows that we will continue to be on the same pace in terms of sales, which should reflect on our revenue, but mostly later in the year and early next year.
That was very clear. Thank you so much. I just wanted to quickly mention when we combine all of that, of course, Wake will accelerate, but your Locaweb's overall organic income, should we expect an acceleration over the course of 2023 from those 22% we saw in Q1?
I can take this one.
Well, Leo, I think that it will also depend on how the economy picks up. I think that Locaweb has delivered a very positive growth rate. We're talking about 32% in inorganic, 43% in inorganic, which is very positive, even against a backdrop of an economy that we know is not moving. Now, if the economy starts performing well again, we will have another driver behind a Locaweb in the second half of the year. Now, another important thing we didn't mention, Leo, is Be Online SaaS. I will even take Igor's thunder here. We saw improvement in this operation. We're now working at a new margin level, close to 24%. We removed a few low profitability clients. We are trying to start growing again. Of course, there's the barrier of inflation, but we expect to move up again.
There's this scenario, but the core of the message here is that since its IPO, Locaweb has been growing at much higher rates than e-commerce at large, and that's our goal.
That was very clear. We were very positively surprised by the figures you reported, so thank you.
Thank you, Leonardo. Our next question comes from Marco Nardini. Marco, you may proceed.
Good morning, everyone, and thank you for taking my questions. First of all, if Alessandro could please talk a little bit more about the most important experiences with Wake. What have you seen in terms of the competition and also the most significant challenges here in the beginning? My second question is for Igor about the Be Online SaaS margin. It was clear that the negative effect that we saw last year was one-off.
Can we expect these margins to normalize now in the next few quarters? About ARPU, if you could talk about the most important initiatives you guys have adopted in this field, that would be great. Tha nk you.
Hi, Marco. Thank you for your questions. We have been more optimistic about the supply in general when looking at Wake. Of course, the products may be sold individually, but it offers a great value proposition when considered as a full-on suite. The response has been very positive so far from clients to what we are setting out to do. More than that, I think that retail in general has sought different ways of improving their digitalization and actually rethinking their cost structure.
Our operations are 70% based in Brazil, which allows us to be very competitive and offer a value proposition that's finding great adherence in the Brazilian market. We have people in-house that have been operating on the retail space for over a decade, and we are being able to offer something with a great fit to what these companies are experiencing in Brazil right now. We have great prospects in terms of accelerating all of that in the next few quarters. I can take that now, Ale.
Thank you for your question, Marco. I will start with margins, and then I'll move on to ARPU. That was perfect. I think that you've reinforced that, and Marco, our two colleagues have already said that as well. This was definitely one-off and is definitely behind us now.
It placed us at a different level in terms of operational efficiency. We now have a much greater speed and a better opportunity to work on our supplies to our client base and also the market. We're very wise in making the decision to adjust our margins. We believe that we are now at a normal level. In previous calls, I had mentioned that we expect to see this margin range where we expect the operations to stand on. Of course, we should gain a little bit more efficiency over time, but what we're seeing is a soft moving curve. What we understand is that this is the level that we should expect to see in our Be Online operations. As Fernando well said, we have been doing this work of.
Clients whose contract did not make us comfortable from a profitability standpoint, we have been constantly trying to sanitize this base and very successfully so. On the other hand, our c-client base have been providing us a very interesting booking level. Just to give you an idea, we performed 24% better than last year, so a very substantial client acquisition for Be Online. We are very optimistic that this is a well-oiled operation. Now, to the second point you mentioned, with a better systemic structure, we've been very efficient in adjusting our price packages for our client base. In addition to the cross-sell efforts we've been doing for a few years now, and we are seeing the results of that in the amount of products per client on the Be Online space.
I think one highlight for our ability to expand in Arbo is our efficiency in upselling to our client base in terms of packages and standalone products. I think that the increase in our ARPU, because of our margins and income, but especially our profitability, this growing client base for our ARPU.
That was very clear, guys. Thank you.
I just wanted to add something to your answer to the ARPU. Igor answered it very well, but I think that the pricing strategy is something we have been working very strongly onAcross the entire group, we understand that our product offers a very high value to our customer, and we have been working on pricing it well. This is something we will be working on for the next year and a half. Obviously, there's an opportunity to increase our ARPU there.
Another thing is our cross-sell strategy. The idea to bring in a director to spearhead that is definitely an amazing opportunity to grow our ARPU as well. Obviously, ARPU is a major driver for the group at large. I'm sorry for interrupting you.
No. No problem. That was perfect. Thank you, Fernando.
Thank you, everyone. The next question comes from Luca Berdin with Bank of America. Luca, you may proceed.
Hello. Good morning, everyone. Thank you for taking my question. My first question has to do with the seasonal period. I think that especially when we look at your newly acquired companies, seeing as some of them have come onboard a very short time ago, sometimes it's difficult to understand how their seasonal periods work.
If you could please explain for your main subsidiaries what the seasonal trends look like and what we should expect for the next few quarters. With regard to Tray, I would like to understand for this quarter when we see this higher top-line figure, you have talked about this before, is there an effect from Tray Corp that's more significant or because of Wake, we should expect to see more of that coming in the next few quarters. Thank you.
Good morning. About seasonal trends. We have been with these newly acquired companies for over a year now, and I always like to say we have been able to continue to grow these companies, preserving their profitability. When you look behind, these are great proxies for the trend of our acquisitions. About Tray, I think Ale made it very clear.
The result for the old Tray Corp, which is now Wake, our corporate platform, the results will come when the very good bookings translate into financial results. This is not what we're seeing at this point when we look at the revenue side.
Okay. That was very clear. Thank you.
Any additional question from our attendees? With no further questions, I turn the conference back to Mr. Fernando Cirne for the final remarks.
Thank you, Gracie. I'd like to thank all our attendees for your questions and for joining us in this call, and most importantly, everyone who contributed to the results we were able to report. Results I think were very interesting for the entire group, for the shareholders and even considering the present state of the industry. Thank you very much to all of you.