Good morning, and thank you for holding. Welcome to Grupo Multilaser's conference call today discussing the earnings of the first quarter of 2026. If you need simultaneous translation, this tool is available on the platform. Simply click the Interpretation button on the globe icon at the bottom of the screen and select the language you prefer, Portuguese or English. For those listening to the conference in English, there is also the option to mute the audio in Portuguese by clicking on Mute Original Audio. We inform that this conference is being recorded and will be available on the company's IR website, where you will also find the complete set of materials for our earnings release. You can also download the presentation on the chat icon, also available in English. During the company's presentation, all participants will have their microphones disabled. After that, we will begin the question and answer session.
To ask a question, click on the Q&A icon at the bottom of your screen and write down your question. To join the queue, inform if you would like to open your audio and video. When your name is announced, a request to enable your microphone will appear on your screen. We please ask you that all questions are asked at the same time. Note that the information in this presentation and the statements that may be made during this conference call relating to Grupo Multilaser's business prospects, projections, and operational and financial targets are based on the company's management's beliefs and assumptions as well as on currently available information. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events, and hence, depend on circumstances that may or may not occur.
Investors should understand that general economic conditions, industry conditions, and other operating factors may affect the future performance of Grupo Multilaser and lead to results that differ materially from those expressed in such forward-looking statements. For the full disclaimer, please refer to the second to last slide of this presentation. Here with us today we have the company's executives, André Poroger, CEO, and Eduardo Belelas, CFO and IRO. I turn the floor to André, who will begin the presentation.
Hello. Good morning, everyone. Thank you for attending our call to discuss the first quarter of 2026. Before we begin talking about the numbers, a summary of the quarter, I have a personal disclaimer to make. In April, it's been one year of the new management in Grupo Multilaser. I would like to thank everyone for your trust. Thank my team as well.
Everyone helping and contributing greatly to the trajectory of these results and the transformation. I'll talk a little bit about the summary of this quarter. Talking about the quarter, we have five important indicators to summarize things. We have good news here in all indicators, which makes us very proud of what has been done and is being done. In net revenue, we presented growth of 14.3%. A decrease compared to the fourth quarter, but it's normal with seasonality, and the fourth quarter was greatly driven by the sales of Black Friday, seasonality of electronics at the end of the year. Significant growth compared to the first quarter of 2025. In gross margin as well, we have excellent news. We reached the level of 30.4%.
Extraordinary growth compared to the same quarter of 2025, where we had 23.7%. Gross margin is due to very strong work being done by the team in terms of pricing the best mix. As you remember, we had an important reduction on the product mix. We came from more than 3,000 products to currently 1,700 products in our portfolio. This adjustment in the mix greatly contributed to the gross margin results. We have an effect here as well of a one-off situation. As you know, we are seeing an effect due to the increase in the cost of electronic components, especially memories, processors. At the same time, obviously, this price increase continues. It has not stopped. This is a global factor that impacts all manufacturers, not only Multilaser, both in Brazil and abroad.
It's a global issue. We've been able to pass through this increase to the price. That's good news. That was also a factor of an anticipation, the concern of the market, seeing a continuation of this increase. We have customers who preferred to advance their orders. That also brought us the possibility to improve margin specifically this quarter, but the trajectory is very good. I mean, there has been an impact. We've been able to capture. That's the good news. We've been able to capture this on gross margin. The trajectory is very good from 2023 to 2025. In the last quarter, the fourth quarter, I understand we maintain consistent improvements of growth margins.
As for EBITDA, another excellent piece of news, we delivered BRL 96.5 million, a leap of almost BRL 91 million when compared to the first quarter of 2025, where we made BRL 5.5 million. The reflection of gross margin and control of expenses. Our expenses, even though the margin grows and revenue growing 14.5%, our expenses dropped 4%. We have more awareness of our net revenue, and still being able to have a nominal reduction of expenses is a reflection of the work done by all of the team, their dedication to have a very efficient operation, and this is an ongoing work. We have not stopped. This is ongoing. We also had a reflection on the net income, BRL 123 million, an increase of 91% when compared to the first quarter of last year. It was good last year with BRL 65 million.
There's an improvement here of EBITDA, gain in gross margin, reduction of expenses, a positive foreign exchange variation. Even without that, we remain positive. That's a very significant, important, consistent trajectory. Maybe what really makes us happy and gives us peace of mind is cash generation. If you remember, we had cash burn in the first quarter of last year. We burned slightly more than BRL 330 million, and this quarter we've been able to generate cash. We know that this Q1 is always a more challenging quarter in terms of cash generation. We were still able to generate BRL 65.8 million, and that's a progression of more than BRL 400 million year-on-year. That's an indicator that we monitor very closely and makes us very confident. Obviously, this cash generation is a huge relief.
We had a net debt last year of BRL 190 million. All of these indicators are very exciting for us with the trajectory. There's still a lot to be done. We're working hard on the portfolio, looking at new opportunities and capturing the opportunities that appear even in a challenging scenario. I will now turn to Belelas, our CFO, to talk about the financial numbers, and then I come back to give you more color on the different segments.
Thank you, André. Good morning, everyone. Now talking a little bit more in more details, as André has already anticipated, our net revenue in the quarter was BRL 872 million, a decrease compared to the fourth quarter, but this is due to seasonality. If we look to the first quarter of 2025, we had an increase of 14.3%.
If we break it down by segment, André will give you the details, but we're able to see how strong we were in the corporate segments, especially in network and memory lines. Also due to that anticipation, that advance of purchases from our customers to guarantee a lower price considering the increase in prices of memories and components in the global market. Going into gross margin, although we are talking about a reduction of amounts when compared to the fourth quarter, the percentage was 30.4%. When we compare it to the same period of last year, it's almost 7 percentage points of an increase. Here, there's an aspect of the portfolio mix, the focus of the company and more profitability of products, not worrying as much with sales volume. We are still able to show better sales volume than the first quarter of 2025.
On the next slide, EBITDA. We deliver EBITDA of $96.5 million of net revenue, the highest EBITDA for the company since 2022, speaking of the different quarters. Compared to the fourth quarter of last year, that was a good quarter. We doubled gross EBITDA margin in absolute value. We delivered almost BRL 40 million more. This is a reflection here that André already mentioned of gross margin, product mix, and a small share of that advance of the price pass-throughs that we've been able to do, capturing that opportunity. Expense management that has been developing quarter- by- quarter, you can monitor to keep track of the percentage of expense compared to revenue has been decreasing. All that combined brings EBITDA to a much higher level than what we have been delivering. The magnitude of these results is that it's 100% operational results.
There's no reversion of provisions or anything that is non-recurring in these results. On net income, we delivered BRL 123 million. Here there's an effect of BRL 35 million positive of FX. Despite the positive foreign exchange variation, net income is consistent and very close to the EBITDA that we delivered. Comparing to recent quarters, in 2024 it was negative due to FX variation. That's the opposite effect from what we're seeing now. The first quarter of 2025 was heavily impacted by FX as well. Just as EBITDA, it is operational net income without non-recurring events, and net income is reflecting that FX variation. Talking a little bit about cash flow, we generated BRL 65 million of operating cash. The same period of last year we delivered a operational cash burn of BRL 330 million.
That evolution led our cash generation during all 2025 to be close to BRL 60 million. When comparing to the entire year of 2025, except for the first quarter, our cash generation would have been robust. This effect that we see now in the first quarter with the discipline with our accounts, the management of the payments and receivables from our customers gives us this perception that the strategies have been well executed. Today we have cash that allows us, moving to the next part of this flow, of having distributed or paid out dividends of BRL 40 million this quarter, reducing our debt by BRL 40 million, and noting that even in this first quarter we also captured BRL 50 million with BNDES. If it wasn't for that, the reduction of our debt would have been even greater.
Now on indebtedness, we closed the first quarter with gross debt of BRL 433 million, with cash of BRL 624 million. Therefore, net cash, negative net debt of BRL 190 million. This cash would have been sufficient for us to pay 2.4 times the short-term debt. We have the short-term debt, that's no concern for us due to how robust our cash position is. Concluding the financial portion, the company remains focused on the delivery of results with discipline and expense management, managing the mix and gross margin, capturing opportunities that arise, and we will be increasingly more prepared for whatever comes from the macro scenario. André will give you more details. In addition to the memory scenario, there's also the freight and so on. We continue with this discipline to be a company that is cash generating and is capable of paying its shareholders. Thank you.
André, you have the floor.
Thank you, Edu. Let's talk a little bit about the different segments. As you well know, we have three main segments of activity that we call the corporate segment, involving all of the B2B operations, from gym equipment to buildings and gyms. We have a large operation of distribution and manufacturing of optic fibers equipment for internet providers. We have a mobility factory in Manaus where we produce for Royal Enfield and our electric mobility brand, Watts. We have a memory operation, Brasil Componentes, that produces memory for the main industries in Brazil. We have our manufacturing partnerships as well with Oppo and Hisense, and more recently, already captured in this first quarter, our new partnership with Sennheiser. That's a global reference for professional audio equipment for major events, promoters, broadcasters, that we've started to ramp up in this first quarter.
The second is what we call Tech Consumer, of our technology brands, as well as partner brands that we fully operate, where we run the full operation from our manufacturing, distribution, marketing, sales, post-sales. That's where we have our brands, Multi, NARTools, DJI. The Specialized Consumer segment, that is basically our kids line with toys and baby products, and Multi Saúde, which is a retail operation for healthcare technology products for pharmacies. Talking a little bit about the distribution, the breakdown of these three segments. In the Corporate segment, it was a driver of the growth for this quarter in terms of revenue. We had significant growth of revenue compared to the first quarter of last year. There is a seasonal aspect, as I mentioned at the beginning, compared to the fourth quarter, it makes the revenue drop.
The good surprise here is the additional margin increase. As we mentioned, this segment tends to have lower growth margins because they're B2B operations and partnerships where we work with a service fee that is at the same time lower, but it is free of risk and it helps dilute the company's expenses. There's a lot due to the operation of capturing the anticipations. We were able to have a good pass-through in the memory sales, as well as for government. Still, we understand that we would have had evolution here. This is an area where we're contributing a lot, and we're very focused on our corporate customers. Moving on to tech consumer. You can see a drop in revenue of around 15%, and this drop is not a surprise. Quite the opposite. This was a strategic decision the company made to focus on profitability.
With that shortage of memory, of components, and making the cost of products to rise globally, our inventory loses value as a consequence. We prioritize profitability instead of volume right now. That had a positive reflection. As much as there is an impact, the line that had the greatest impact was TVs, that we made the decision to hold back and make it more profitable due to those future increases. If it weren't the screens and the TVs and tablets line, that was also an effect of cost increase due to memory, all of these line would have been growing 42%. It is a strategic effect.
Strategic that when we look at gross margin, we see that even if the revenue is 15% lower and preserving inventory, we deliver the same nominal volume in terms of margin compared to periods where the revenue was higher. I understand that here we're able to make the current inventories more profitable, also capturing that margin. In this category, we have important lines, audio, PCs, notebooks, and portable appliances. This line has been growing. In audio we had growth compared to the previous quarter of more than 40%, almost 40%, actually 36%, PCs 54.2%, and home appliances 31%. These are lines we've been investing heavily. These are thriving categories with a lot of potential for growth. In addition to the others, that we also understand that the focus is profitability, definitely, but we tend to focus on the growth of these lines as well.
Maintaining profitability, of course, the focus. We won't let go of this focus in profitability. That's good news. Despite the loss of revenue, this is very good and very exciting to see in categories where we're growing and affirming our position as a major player in this retail. In specialized consumer, there's also a decrease here in revenue. This drop, and last year we had a significant divestment where we left the pet division. We had a factory for hygiene mats for dogs. That was one of the main pet markets. There's an impact here. We had a revenue base from the pet business at the beginning of 2025, and that's no longer present. We feel a little bit of that effect in the top line on revenue. The focus here is the same as we've been working on in consumer tech.
That's the search for profitability. This is a division that, although has a smaller revenue, has been bringing profitability, contributing to gross margin. Here we see an opportunity for growth. With the space it may be more difficult, but over time we have good projects in these segments, basically healthcare, kids and toys. Revenue is reduced, but that was strategically We prioritize profitability due to revenue, and we understand the strategy is working well. To give you more color, we talked a lot about this. You have a shortage, as you all know. Everyone who works on the electric, electronics market knows what's happening in the global market. There's a rush for the manufacturing of the AI servers in the world, and this rush led the price of components to go up overall.
The more traditional electronics industry consumes chipsets and processors, memories that are not as sophisticated as the AI servers, and they struggled more because the global manufacturers prioritize demands of higher tickets and profitability. That has been affecting the whole industry. It has impacted the industry of computers, network equipment that we have with providers. Overall, just to share a little bit with you about our sentiment, when there's a global increase that affects all of the manufacturers the same way, we don't worry as much because it is a bad impact, of course, increasing prices. Since it is something happening for everyone, we understand that the market adjusts to this new reality. A TV that used to cost less than BRL 1,000, you see now a TV costs BRL 1,200, BRL 1,300. In that sense, the market will adjust.
Nobody's going to stop buying a TV because of BRL 200, BRL 300. The market adjusts to a new reality. Here, of course, there is a point of concern, but I think it's a relatively mild concern as long as we're able to pass this through, and that maybe there will be a transition. We've been able to capture positively this quarter, and we're monitoring it closely. We have involvement with the supply chain and the local memory production, I think we are in a good position. Obviously, we're monitoring it. There will definitely be an impact, we are looking at this closely, and we are very confident. Here are the initiatives to conclude.
We have been in a trajectory that makes me very proud, the comments that we're seeing in the P&L and the main indicators, especially net cash, makes us very confident with the operation in the future and situations or crisis that may arise. I think we are a lot stronger, this is a work that is ongoing. It doesn't end. It's, I think, the whole team. It's not the work of one hero. It's the whole team dedicated to finding opportunities to reduce expenses. Very strong working capital managements that we monitor day to day. Portfolio optimization, I think that was very right on. We are closer to the consumers, closer to our clients, defining together this portfolio, so that's another win. I think that will bring more results. We are in this process. Now we're also going through a situation of monitoring opportunities.
Multilaser is always a business company. We're always looking at new businesses, looking at opportunities. We grew a lot in recent years, and now we optimized it. We're not gonna do anything crazy, quite the opposite. Obviously, we will always look at our radar opportunities that maybe, considering our learnings, our lessons from the past and trying to capture opportunities both in new lines and so on. I think that's it. To conclude here, yeah, that's it. Thank you very much for your participation. Let's open for questions. Thank you.
We will now begin the questions and answer session. Noting, to ask a question, please click on the Q&A icon at the bottom of your screen. Write down your question to join the queue. When announced, you will see a request to open your microphone.
You should then enable your microphone and ask your questions. Please ask all of your questions at that time. Our first question in writing from Rodrigo Chávez, investor. Good morning. Congratulations on the results. Considering the cash access and the return to profits, have you considered a more recurring dividend payment?
Good morning. Thank you for your question. It's good that this question only comes up because of the cash generation we're presenting. Our current policy of dividends and our bylaws as a minimum mandatory of 25% of net income compared to 2025, we did that, exceeding that. Right now, our intention, our priority is to continue to reducing debtness. We have an important share in the short term of BRL 70 million, and we will, without a doubt.
This is in the agenda of the board of directors to discuss dividend payment, always in line with the profitability that the company will deliver, as well as cash availability. We are considering, but the priority right now is still to reducing indebtedness, to at least comply with the bylaws of the minimum 25% payout.
Just to add here, what Edu said is perfect. With a long-term view, I think that, of course, whenever there's the possibility for cash generation, we do want to be a company that pays dividends. This is our focus. Of course, always prioritizing the company's financial health, but we do want to have this recurring annual payment.
Next question, also in writing by Eliseo, investor. "Good morning. Congratulations on the results. Could you please explain a little bit more about Multi's memory division, please?"
Good morning.
We have here one of the business units in the corporate segment where we manufacture memory at our plant in Minas Gerais, and this memory manufacturing supply both our own electronic products and the market as well. We have some types of memories that we already get revenue strongly. Of course, it depends on a component that is the wafer, that's a silicon component, the main component of memory devices, and this component also suffers from fluctuations according to the global market. It's not like we have a cost that's disconnected from the global market. It remains connected. It's like oil. If the oil price goes up abroad, it goes up here as well.
We end up having this. It is connected to what happens globally, but that also makes us, what's the main differential here is that we have a connection with these large manufacturers of the silicon wafer, the main memory component, and looking forward in a scenario of shortage, the partners who are closer end up having the product supplied. That puts us in this position of being more connected to this environment specifically. Considering this scenario shortage and price increase.
Next question also in writing by investor Mateus Loewen. Good morning. The shortage and the consequent increase of memory prices, may it negatively affect the results of the second quarter and the remainder of the year? What about the government's option to end Remessa Conforme? Can it affect the company?
Good morning. This shortage brings a benefit.
I mean, we end up having a good result even without that aspect of the advance, the anticipation of purchases. It's important to say that. The situation of this advance purchase brought additional gains from what we would have had. It would have been good results, but were even better. Obviously, the second half of the year, looking at the new inventory coming in at a higher cost tends to pressure margins, but there's also the pass-through. As I said, it's a global pass-through of prices. It's not our exclusively. The price goes up for everyone. The trend is to have this pass-through, which leads margins to remain stable.
Maybe we won't have the additional capture that we had right now, but I believe we have a trend, and we're building a good scenario considering the portfolio reduction of expenses, and all of that will contribute. The scenario is what we see. Obviously, this extraordinary one-off improvements, quarter- by- quarter we work on maintaining maybe 30, but definitely higher than the trajectory that we delivered in the past. There was something else about that? About the tax, the Remessa Conforme tax. Of course, the industry as a whole, we don't know how the reaction's going to be, but it does end up being an additional competition. Now there's still ICMS tax that is maintained. It's not brought down to zero. It's the federal tax. For our products, we need to feel it.
I mean, it's been released before. We didn't feel it when it was blocked. We didn't feel any major change due to that. Of course, it's bad. I think it's bad for Brazil. It's bad for the industry. We're here paying taxes, almost 4,500 employees, employing people. You have a Chinese manufacturer that sends products here without going through any of those stages and not paying taxes on top of everything. That doesn't really make any sense. It's bad for everybody, for the industry. We don't anticipate any major impact in our view.
The Q&A session is concluded. We would like to turn the floor to André for his closing remarks.
I would like to thank everyone for attending. Thank you for your confidence. Thank you to the team who's been building these results and this positive trajectory.
We know that the path is not always a straight line, but it's a positive path. Considering the risks we're facing and the issues, we face them and create opportunities, that's what's very important, and I think that's the mindset that the whole team shares. Thank you, and hope to see you next quarter.
Multilaser's conference call on the first quarter of 2026 is now concluded. The investor relations department remains available to answer any questions and doubts. Thank you very much. Have a great day.