Good morning, ladies and gentlemen, and welcome to Plano & Plano's first quarter 2026 earnings call. This conference is being recorded, and the replay will be made available later at the company's investor relations website. The slide deck is also available for download. All participants will be on a listen-only mode during the company's presentation. After the presentation, we will hold a question and answer session when further instructions will be provided. Before we proceed, we would like to inform you that any statements that may be made during the call related to Plano & Plano's business perspectives, operating and financial targets are based on the beliefs and assumptions made by the company's management and on information currently available to Plano & Plano.
Forward-looking statements do not guarantee performance as they involve risks, uncertainties and assumptions as they refer to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that overall conditions, the sector conditions, and other operating factors may affect the future of the company and lead to results that differ materially from those expressed in such forward-looking statements. Today with us are Mr. Rodrigo Fahn, Mr. Rodrigo Luna, Mr. João Hopp, and Mr. Anselmo Soares, CEO, Vice President, Executive Vice President, and CFO respectively. Now I'd like to turn the conference over to Mr. Luna, Vice President, who will begin the presentation. You may proceed.
Hello and good afternoon, everybody. Welcome to Plano & Plano's first quarter 2026 earnings conference call. Our first quarter of 2026 was marked by an increasingly focused positioning and also a redirecting of the generation value levels. This movement is materialized through a commercial policy focused on the value attributes of our products. This strategy has been accompanied by adjustments in the commercial approach, which seek to balance this movement with the SoS level compatible with the business plan, future growth, and launch opportunities.
The company is working to rebuild its sales space in a disciplined manner, preserving its commitment to the desired profitability. Additionally, since 2024, the company has been able to launch products with higher margins, vintage after vintage, as a result of the learning curve in the lower middle income segment, the current bracket four of the Minha Casa, Minha Vida program, as well as scale gains in launched projects whose average PSV has increased year after year. Another highlight of the quarter was the completion of projects linked to the Pode Entrar Program started in December 2023.
Once again, we'd like to highlight such achievement. We built and delivered 3,640 units in 24 months. Few companies in Brazil have this capability, and we are very proud to have fulfilled our commitment to the City Hall of the city of São Paulo and to have enabled housing for thousands of low-income families. To ensure compliance with the delivery deadlines, there was an additional engineering and execution effort with a higher concentration of costs in the final stage of the works. At the same time, the operating environment remains challenging, especially due to cost pressure in the construction sector, driven by how heated the sector is in São Paulo metropolitan region, and more recently by the effects of the war in Ukraine. The company has been acting proactively to mitigate these impacts with operational efficiency and cost management initiatives.
All of our projects are on track to be delivered strictly within the deadlines agreed with our clients. Our sector continues to bring significant opportunities, especially with the evolution of the Minha Casa, Minha Vida program, which expands the eligible population and strengthens the structural demand for housing. In this scenario, Plano & Plano is paying close attention to the challenges of inflation and SoS and remains well-positioned to capture this potential, supported by its expertise in the segment and by a strategy increasingly oriented towards efficiency, profitability, and value creation for shareholders. I will now hand the conference over to João Hopp, who will present the operating and financial results for the period.
Thank you, Luna, and good afternoon, everybody. In the first quarter of 2026, Plano & Plano launched four projects with a total PSV of BRL 989 million . This result accounts for a quarter-on-quarter increase of 60% and a year-on-year decrease of 16%. Considering launches only in the private market at Plano & Plano share, in the first quarter of 2026, the company launched 834 million, a 37% quarter-on-quarter increase and a 2.6% year-on-year drop. We remind you that in the fourth quarter of 2025, the company signed a contract with CDHU for a project with a PSV of 56 million. In recent years, the company has demonstrated consistent and sustainable growth in its launches, considering total launches accumulated between 2022 and the last 12 months as of the first quarter of 2026, including the private and public markets, the company grew at a compound annual rate of 38.1%.
We highlight that the PSV of launched projects is a good proxy for future revenues and profitability, since it is a matter of time until the respective sales are completed and the projects progress. It is important to remember that Plano & Plano is characterized by delivering its developments practically 100% sold, and that at this moment, all our projects are on schedule. Total sales, 100% in the first quarter of 2026, reached BRL 842 million , a 1.6% reduction year-on-year, and a quarter-on-quarter reduction of 45%. This decrease in sales speed reflects the adjustments made in our commercial policy, prioritizing business profitability. Considering total pre-sales, including private and public markets, since December 31, 2022, the company has grown at a compound annual rate of 33.3%. The company's net revenue reached a total of BRL 738 million in the first quarter of 2026, 21.4% higher year-on-year, and 31.3% lower quarter-on-quarter.
We ended the first quarter of 2026 with BRL 3.4 billion in revenues to be recognized. Given that our production is within the respective schedules, it is a matter of time until this revenue is recognized in the results. In the first quarter of 2026, adjusted gross profit reached BRL 217 million, a year-on-year increase of BRL 10 million. Adjusted gross margin in the private market was 31.4%, a quarter-on-quarter increase of 0.2 percentage points. Adjusted gross margin in the public market was 7.6% in the quarter. This performance reflects the advanced stage of the projects and the engineering effort to deliver the projects according to the schedule, and we had to concentrate the costs in the period. The developments were fully delivered within contractual deadlines. It is important to highlight that the program's profitability remains consistent throughout the cycle, with a cumulative gross margin of 24.7%.
Adjusted gross margin in the first quarter of 2026 was impacted mainly by the performance of projects launched up to 2023, which posted a margin of 9.6% in the period. This result largely reflects the increase in costs of these projects, especially the ones related to Pode Entrar Program, which recorded an adjusted gross margin of 7.6% in the quarter due to additional expenses associated with the completion of the works. As shown in the chart, projects launched in 2026 show higher margins. In the first quarter of 2026, the new vintage still carries little weight in consolidated results, limiting its positive impact in the period. It is important to emphasize that the materialization of sales margins in the results depends on the behavior of future inflation.
At the end of the first quarter of 2026, the backlog margin in the private market was 38.8%, with an increase of 60 basis points compared to the backlog margin of December 2025. The company has managed to maintain its backlog margin at healthy levels, with small fluctuations resulting from the mix of the products sold. In selling expenses, there was an increase in their share of the net revenue compared to the same period of the previous year. The increase was 1.2 percentage points, rising from 8.8% of the revenue in 1Q 2025 to 10% in 1Q 2026. This movement is mainly explained by the change in the revenue mix, with a reduction in the share of the Pode Entrar project, which accounted for 20% of the revenue in the first quarter of 2025 and approximately 8% in the first quarter of 2026.
Excluding revenue from Pode Entrar, which doesn't have any selling expenses, the selling expenses over the net revenue would have been 10.9% in the first quarter of 2025 and 10.8% in the first quarter of 2026. If we look at our track record, we can see that the indicator of selling expenses over net sales in the private market remains at healthy levels, reflecting the positive impact of measures adopted to improve operational performance and keep customer acquisition costs under control. Administrative expenses accounted for 6.2% of the net revenue in the first quarter of 2026, a year-over-year decrease of 0.6 percentage points. We should remember that administrative expenses are largely linked to the launch pipeline, which will only produce effects on revenues over time. The chart shows the evolution of administrative expenses and their relation with launches over the periods.
We can see that the nominal expenses went up as the expansion of the operations and the indicator related to the launches remains relatively stable, ending the period ended in March 2026 at 31.7%. In 1Q 2026, net income, 100% was BRL 44 million, while the net margin was 5.5%. Compared to previous periods, there is a decline in both the income and the margin. Our expectation for 2026 is that seasonality of results will be similar to 2025, with increasing net income results quarter after quarter until the end of the year. The company ended the first quarter of 2026 with a cash consumption of BRL 93.8 million. In December 2025, Plano & Plano completed the works related to 3,640 units of the Pode Entrar Program.
As a result, the company has the right to receive the last installment of the contract equivalent to 10% of the total contract value, about BRL 70 million. The deadline for the payment of the last installment is up to six months after the formalization of the delivery of the units. Out of this amount, approximately BRL 20 million were received in the first quarter, while the remaining BRL 50 million are expected for the second quarter of 2026. We also highlight the high volume of sales carried out in the self-employment professional segments. The transfers related to these sales are concentrated throughout the second quarter after the opening of the personal income tax filing calendar. With the progress of these transfers, we expect to see a relevant and positive contribution to cash generation in the second quarter.
Another factor that contributed to cash consumption in the period was the distribution of BRL 16.3 million in dividends to partners through SPEs. As of March 2026, gross debt totaled BRL 1.1 billion, considering cash and cash equivalents and restricted financial statements of BRL 1.04 billion. The company had a net debt of BRL 69 million at the end of the first quarter 2026. As a result, the net debt over equity ratio stood at 5.9%. These numbers do not include lease liabilities. This concludes our presentation, and we are here to take any questions you might have. Thank you.
We will now begin the Q&A session for investors and analysts. If you wish to ask a question, please type your name and organization in the Q&A field. Please stand by as we collect the questions. The first question comes from Ygor Altero from XP.
Hello, everybody. I would like to know more about your perspective for cost inflation. How is your inflation rate in comparison with the INCC, the National Construction Cost Index? Can you pass on costs? Can you maintain margins? I would also like to understand more about the gross margin dynamic. It was under pressure in this quarter because of Pode Entrar. I would like to know if there is another effect to be considered, and what can we expect for the gross margin over the coming quarters. Thank you.
Hello, Ygor. Good afternoon, and thank you for your questions. Okay. Let us talk about inflation. Plano & Plano, for a long time, has had a very strict engineering control cost, and we have our own index, ICPP, the Plano & Plano Index. What we have seen in the latest months was an acceleration in ICPP. It is at 5.25% over the last 12 months against a 5.84% INCC, the National Construction Cost Index. So we are below the INCC. We have the bargaining labor adjustment to happen next quarter and also the war. So we believe that until the end of May, the ICPP will be between 7%- 7.5%, and then it should slow down.
It should drop gradually, but it is going to depend on the dynamics of the oil-based products and what price it will be at so that we understand what type of price we will have to pass on to consumers. When we measure the exclusive effects of the war in Ukraine, we try to separate our common negotiations. We already knew the prices would go up, and we try to separate the effects of the war. We have been following up on that every week.
Our latest result shows that the war can cause an additional inflation of 1.8%, and that is why we are calculating the future inflation to be at 7%, according to our own index. About prices, if you look at the current inventory at the end of April, and we exclude what we sold and launched, meaning that we are comparing the inventory now to what it was in December last year, the price is 9.1% higher than the prices in late December. We tried to increase the price to increase profitability and obviously to try and protect ourselves from the effects of the war. We try to increase prices when possible. If you compare December to April, you will see an average price increase of 9.1%.
We are managing on a project-by-project basis and type-by-type basis so that we can have the desired SoS and the desired profitability. Now, your question about gross margin, Ygor. In the future, as the units are sold, we remove the legacy from the base, and we start recognizing the numbers in the revenue and margin. What we expect, according to our backlog margin, which is already higher than the one at the end of last year, we can see a gradual evolution of the gross margin over time. That is our current scenario. Thank you, Ygor.
Thank you, João.
Next question comes from Ana Júlia Zerkowski from UBS.
Hello, good afternoon, and thank you for taking my question. We have a question about margin, especially when it comes to provisions. How can we compare the current provision level to what it was in the past? How much of the provisions are reflected in the coming vintages? Meaning, the current gross margins, do they already have the current level of provisions, or should we expect that to happen going forward? Also about price increases, what will the impact be of those price increases?
Well, about the provisions, what we have had as our policy is that we update the budget for engineering at the end of each month. We consider the incurred costs, and the costs to be incurred are updated according to the INCC index. Any inflation index is reflected month by month in the inventory that we are recognizing. We update that at the end of the month. Every month, we automatically reflect the new prices on our margins because we are including the INCC provisions in the costs to be incurred. We automatically reflect that every month.
It all depends on the INCC dynamic that can accelerate or slow down, but it is automatically recognized in the results. Now, about non-recourse sale. It is one of the tools that we have to land the contracts with the clients. We know how important it is. Between giving discounts or non-recourse sale, it is a better opportunity than giving the discount. It is a very important tool for us in the sales department. What we have been doing is to focus on the non-recourse sale before delivering the units, and that is what we are favoring. We made a decision project by project, depending on the liquidity of the product and depending on the income bracket that we want to get. Yes, we are using it, and this year, perhaps we used it in 12% of our sales.
Thank you, João.
Next question comes from Gustavo Fabris from BTG Pactual.
Hello, good afternoon. I have two questions. I would like to know more about cash generation. What do you expect for cash generation in the coming quarters? I would also like to know if you are reconsidering your initial expectation of 2026 being a year of cash generation. My second question is related to the cost scenario for materials and workforce and also the inventory and SoS level. I would like to know if there is anything that would cause you to rethink your target of growing by BRL 500 million- BRL 1 billion in launches this year. Is that still the assumption for 2026?
Thank you, Gustavo. This is João. In terms of cash generation, we want to generate cash this year. We are envisioning that for this year. We are going to see a strong concentration in the second quarter because of the sales to the people who can prove their income using their income tax return, and that accounts for BRL 1 billion in PSV. We are going to see a peak in the second quarter. That is not going to change our cash expectation for the year.
Now, when it comes to launches, differently from previous years, Plano & Plano has products in a pipeline that is already on track to be launched. Materials and workforce comes from a very strong partnership with suppliers, and we are delivering the works on time. We know that the market already has some companies struggling a lot with that. We are in line with engineering, and we still have appetite to launch BRL 500 million- BRL 1 billion above the previous year. Of course, there is a lot to be done still, but that is what we are working for. As we implement the improvements in sale and SoS, we will be able to launch more throughout the year, but the expectation is maintained so far.
Okay. Thank you.
The next question comes from Pedro Lobato from Bradesco BBI.
Hello. Good afternoon. Thank you for taking my question. About selling your portfolio, what do you think about that financing modality? Also, when it comes to rates, what would be the rate in that case? Is it compatible with the rates that you get in your debt? Also thinking about dividends for the rest of the year, since you expect to generate cash, what is your perspective related to dividend payouts in 2026?
Hello, Pedro. Good afternoon. This is João. Now, about selling the portfolio, what we do is to bring together two things, the growth appetite in the company and also the CRIs that we launched, which have a covenant. We need to manage those covenants. Since the advance of portfolio is a non-financial liability, it helps us in closing the covenants, and we used that in the past quarters. Our latest rate was the CDI rate + 2.35, and we used it exclusively as a mechanism to manage the covenants vis-a-vis the growth appetite that the company has. We can have another deal like that over the course of the year. The latest one was in March, and we might launch another one in 2026. In the next 60 days, we do not see any need to do that, to have any advance of receivables, but it is a feasible option.
When it comes to dividends, we do not know what the dividend payout ratio would be until the end of the year. We usually make that decision towards the end of the year, depending on the performance, cash generation, sales, and the POC method. We are going to see that at the end of the year, depending on the macro scenario as well. We are still to make that decision. As a policy, we can tell you that the cash that we do not need for the operation, Plano & Plano prefers to distribute that money to the shareholders so that you decide what to do with that money. But that decision will be made later.
Okay. Thank you. Enjoy the weekend.
The next question comes from Rafael Rehder from Safra.
Hello. Good afternoon. I have two questions. The first one is about the launch mix. I would like to know if anything changes in the dynamics since you are trying to increase prices. Do you expect to concentrate launches in a specific bracket that you believe would be easier to set higher prices? And about the gross margin, can you tell us more about how the backlog margin breaks down in each category and your expectations for 2026?
This is João. I am going to address your question about the mix, and Anselmo will talk about the backlog margin. As for the mix, we started the year with an expectation to concentrate launches in the second bracket. It is basically at the base of the pyramid with very good liquidity. What we did so far since January was to revisit our pipeline, looking for products that could be fit within the bracket one category. We took a look at the product mix to understand how to serve that bracket, as very few companies can.
If you look at the snapshot from May, we see a potential of 20% in bracket one. It used to be 5% in the beginning of the year. The change in the mix was between the different categories to improve the liquidity of the products, improving the offer of products in bracket one. And bracket two is almost at 60% of the launches. That was the main change. 20% bracket one, 60% bracket two for this year. Okay? That is what you should consider.
Good afternoon, Rafael. This is Anselmo. About the backlog margin. It was 38.2% late last year, and there was a 0.6 percentage point improvement, reaching 38.8% at the end of the first quarter. And it is improving because of those sales. As we said earlier, we can see that the sales in 2026 have higher margins. And also the 2023 vintage, which has lower margins, they weight very little in the backlog margin, around 8%. So it is going to have very little impact on our backlog margin going forward.
Okay. Thank you.
Next question from Elvis Credendio with Itaú BBA.
Hello, good afternoon. I have a question about the 2026 vintage. I would like to know why it has such a high gross margin, 39%, because the SoS in the first quarter was below your past performance. I'd like to know if you believe it is feasible to keep the margin at that level, or if you think it was a one-off situation that is exclusive to Q1 2026. Now about your sales policy. How are sales progressing in the second quarter? Maybe with the improvements in the Minha Casa, Minha Vida program, you're seeing a reaction in demand. Do you think you are going to need more aggressive policies going forward? Thank you.
Hello, Elvis. This is Rodrigo Luna. We corrected the sales levels from 2025 to 2026 to have a different orientation in 2026, and the SoS, as expected, suffers a little bit when you correct prices. That was already on our radar. And within those three months in the quarter, we tried to recover. And towards the end of the first quarter, we saw that recovery. In the beginning of the second quarter in April as well, the sales policy continues the same, and we will continue working with what we consider to be the best policy between margins and SoS.
The SoS was slightly lower than what we delivered in prior years, but as I said, since we corrected the prices, that was already expected. Maybe the impact was a little bit tougher than we expected, but it's part of the game. And throughout 2026, we believe that we will be able to recover our SoS. And the margin and deliveries are at a level that we consider to be healthy. If I can ask a follow-up question, what is the SoS level that you believe could be sufficient to optimize the returns? We continue to pursue 55% SoS, which is part of our track record and is in our budget. We have delivered it over previous years, and it's still on our radar.
Okay. Thank you.
The next question comes from Matheus Meloni from Santander.
Hello. Good afternoon. Thank you for taking my question. First, I wanted to have more color on the budget review. Was it already incorporated in your backlog, or is that review being reflected only in the most recent launches? The works in 2024 and 2025 that are more advanced, they are suffering a little bit more with the cost prices, right? My second question is related to cancellations. In the quarter, they were a little bit higher, so I wanted to know if there is any detail that we should consider this quarter, maybe a one-off effect. What can we expect? Can we expect the cancellations to go back to normal levels or should we expect it to be higher?
Hello, Matheus. This is João. About the budget review, do you mean the works budgets? The works, every vintage are updated every single month. When you asked about 2024 and 2025, those older vintages, of course, the costs incurred are at a higher percentage, but we have contracts in place for a large portion of the work. So the inflation and price adjustments won't have such a high weight. Now, recent works would have that potential, on the other hand. When we launch the projects, we are considering a higher inflation, and we have already incorporated that in our recent launches budgets. So the answer is yes, the budget review already happened, and it will continue to happen every single month. Now, cancellations went up in the first quarter because of the BRL 1.5 billion in sales in the fourth quarter 2025.
Many clients, after signing the contracts, before they make payments, they cancel the contracts in the beginning of the year because of the strong sales in the previous year. That is the effect of the clients that come from informal sales, as we call it. When they get close to their income tax return, they realize that they are losing money, and they tend to cancel more. It is important for you to consider cancellations in the last 12 months to exclude those seasonal effects, but we do not see any structural changes.
Thank you.
This concludes the Q&A session. Now I would like to turn it over to Mr. Rodrigo Luna for his closing remarks.
Again, thank you very much for your participation in our earnings call for the first quarter of 2026. We continue to be very optimistic about 2026. The price adjustment in the first quarter was already in our plan with a lower SoS, and that is a part of the game when you change your price policies. It is natural. We continue to work with the same parameters.
We are optimistic with the market and the adjustments in Minha Casa, Minha Vida program to allow families to have their own home in the lower brackets and also bracket two, three, and four, but especially in our case, brackets one and two. We continue to pursue another record-breaking year, knowing that the challenge is very tall, especially because of the cost pressure due to the war in Ukraine. But again, demand in Brazil is very strong.
Plano & Plano continues to be very well-positioned in the most important market in Brazil, in São Paulo, a resilient market with a very strong demand that is guaranteed for the coming years, and we will continue to work hard to resume the SoS levels that we have always delivered. Enjoy the weekend and Mother's Day here in Brazil. Thank you.
This concludes Plano & Plano's earnings call for today. Thank you very much. See you next time.