Good morning everyone, and welcome to Positivo Tecnologia Q2 2022 earnings release video conference. My name is Rafaela. I am the IR manager, and it's a pleasure to be here with you this morning. Introducing the team here with us today, Hélio Rotenberg, Positivo Tecnologia CEO. Caio Gonçalves de Moraes, CFO and IRO. Rodrigo Guercio Teixeira, Corporate VP. Norberto Maraschin Filho, Consumer VP. We'd like to inform you that this video conference is being recorded and will be made available on the company's IR website. For the Q&A session, we suggest that you send us your questions using the Q&A icon in the bottom of your screen. If you want to ask your question live, just let us know using the Q&A icon and your name will be announced. At this point, a prompt to activate your microphone will appear on your screen. Now over to Hélio who'll start the presentation.
Good morning, everyone. We are really happy, I'd say proud. That's how we feel. Because the strategy that we started to design back in 2018, 2019 is now bearing fruit, proving that we were right. Some segments are doing better than others. This is our strategy in which diversification is the key role. Diversification of products, of market segments, and we were right. We are achieving record results in this quarter and in the first half of the year. Gross revenue of BRL 1.9 billion in the Q2 , BRL 3.1 billion in the first half of 2022. We have already increased our guidance to now BRL 5.5 billion-BRL 6.5 billion. If in the Q1 that was BRL 3.1 billion, we are telling you that it will reach BRL 5.5 billion-BRL 6.5 billion year round.
What's important is that our revenue graph changed. It's interesting to see what happened over time. 59% comes from what we call commercial. 20% of what we call consumer, and 21% that we really made sure to allocate separately is the special, the ballot boxes, electronic ballot boxes, which is different. It's not a recurrent revenue. Although we have already won the bid for next year. You can see what happens really in our day to day. Can we go back to the first slide, please. Our EBITDA is also aligned to what I just told you and aligned to revenue, BRL 300 million in the first half, BRL 185 million in this quarter, and LTM EBITDA of BRL 492 million.
When we also compare the second half of last year, first half of this year. Adjusted net income was BRL 19 million, BRL 119 million the first half. Some highlights. Commercial that accounted for 59-60% of our revenue. That came mostly from payment solutions. BRL 131 million, much higher than what we had last year. That's why we have Norberto with us today so that he can address this issue. As for service revenue, HaaS and tech services, we also saw an increase. We have opened a new center in São Paulo in order to meet the needs of these new contracts. Also for multi-brand computers, we see HaaS increasing in many companies. Server revenue has also grown. We have many servers that will be used to develop the largest server.
We also have the 5G arriving in the country, and that's why we also have Rodrigo Guerço to talk about these specific issues. Our ROIC also increased, and this is increasing. Our EBITDA is increasing our ROIC and also our net income. We are very happy with the results we have achieved. As I mentioned, if we can go back, I'd like just to stress what commercial is. What we're calling commercial. When we talk about consumer, we're talking about goods for households, be it directly or indirectly. Be it direct sales by sellers, retailers. This is how the market defines consumer. Commercial is everything else. What we sell to companies, public institutions, private organizations, and what we sell to them. Commercial PCs, HaaS, payment solutions, tech services. Education technology, servers, storage and tablets.
As for consumers, PCs, accessories, smartphones, feature phones, tablets, smart home devices, and as I mentioned, we also have the special project separated. Let's go over what happened with the segments, and that we do not depend on the consumer segment. I'm not saying that consumer is not important. On the contrary, we have a strong presence in consumer. We have also increased our results in the Q2 compared to the of 2022. We have introduced Infinix, which gave us many opportunities with regard to smartphone. The target market was BRL 7 billion, now to BRL 55 billion. Because you have to consider the entry level, mid-level, and high level. Infinix really was accepted by consumers.
As for corporate or selling to small, mid-size, and large companies, we are doing well, just as we're doing well for public institutions. You can see the progress in this segment, and you can see that for commercial, it has achieved now 59%. Some highlights I have already mentioned, but just to clarify. We are increasing mainly in large companies by selling servers, computers. New accounts, 161% increase in sales to large companies. Also 52% in sales to small, mid-sized business. You can see this is for the last 12 months. 50% of sales are to new customers. We are increasing our market share. As for services, tech services, we see an increase in growth. We started to sign large multi-brand contracts. Also we have acquirers and sub-acquirers with regards to payment services.
We also offer a unique technical support. As for us, once again, relevant numbers. 364% increase in comparing to the first half of second year. 227% in this quarter. As for servers, also Hybrid Cloud, Multi-cloud. We are also achieving very good results. Positivo Solutions is a brand that's being now recognized by the market. With that, we see this increase. Out of that pie chart, out of those 59%, virtually half of that is for private companies. Payment solutions. I am not going to go over that because I am going to ask Norberto to talk about that. Over to you, Norberto. He is going to talk later. As for public institutions, the government buys a great deal from us, as well as Secretariats of Education.
Just to give an idea, we have sold more than 290 different customers and to federal, state, municipal administrations and also other branches of the government. The market is reacting, and with that, we have already almost BRL 2 billion that we have already won. If you go over the pipeline of acquisitions by public institutions, you can see that it went from BRL 5.5 in 2021 to BRL 8.5 in 2022. When I talk about pipeline, I'm talking about deals that will probably be closed in the next months. Next, as for consumers, as I mentioned. The sell-out of retailers to consumers lies on the same level. As we know, the inventories in the Q1 was very high at retailers, not only of computers, but of every single good.
Now we have the normalization of inventory, so selling increases, and that really matters, the level of sell-out that we have. Now we are reintroducing Infinix because we just had a pilot last year and we started to deliver this product in May. This product is being sold at retailers and it was sold only at Via Varejo and Vivo, and now we are also expanding the number of sellers. We are doing good with Infinix. As for smart homes, we are launching new products in order to master some areas. We are leaders in lamps, and we also did very good at Amazon Day. Now we have launched the smart lock. For those of you who are listening to us, check the smart lock. You can install it by yourself.
We actually ran a survey of what we already had in the market in order to innovate as well. The same goes for the robot vacuum cleaner. Now I'd like to turn it over to Caio Gonçalves de Moraes, and he will discuss the financial highlights.
Thank you very much, Hélio Rotenberg. Well, good morning everyone. First slide is about gross revenue. We have already mentioned, we've already talked about this new classification of segments. What we see is an expressive growth, both in this quarter as well as in the first half of the year, 78.2%. These are based by the increase in commercial segment, which accounts for, as we know, virtually 60% of our revenue. I'd like to highlight the increase of, selling servers, also increase in payment solutions. BRL 3.8 million against BRL 1.8 million last year.
HaaS and tech services 126% up compared to last year. We saw an increase in other segments. Strong sales to public institutions, 141% this quarter, not to mention electronic ballot boxes. That accounts for BRL 836 million. The recovery in consumer segment. Retail that accounts for 24% of our gross revenue. In the Q1 , it accounted for 13%. In this quarter, 24%, particularly with the launch of Infinix. Next slide, EBITDA. As for recurring EBITDA, I'd like to highlight the quarterly numbers, BRL 341 million, a record, and also for the first half of the year, BRL 311 million. You can see that this really is very close to what we had in 2021. For the Q2 , it was BRL 185 million.
As for margin, there was a retraction, you can see, of by 1.6 percentage points, especially because of consumer segment. In last year, we had increased sales. Also we need to consider the interest rate that is now high. Also what really turned into revenue. As for the inventory levels at retailers, we also believe that we will see improvement in the margin. Just as in commercial, margins are higher, and that's why we achieved this double-digit margin, 11.4% for this quarter. Next slide, adjusted net income. Once again, I'd like to highlight the record that we achieved for this Q2 , BRL 90 million and 190 for the first half of the year. We also see that we had increased expenses, 34 in the Q2 of 2021 and a higher level this year.
As well as the CDI rate, that also increased to 12.2% in 2022. That translates into a lower net income. Also as for FX, when we go over this quarter and the last year's quarter, we see that we were also right in our policy regarding FX. Also we see that when we compare the levels, you can see that we also have adjusted the mark-to-market numbers. Next, we talk about the ROIC. I'd like just to highlight how we have evolved on that, especially if we compare to the Q1 . You can see that there is a retraction compared to last year, considering capital invested in order to have a very strong second half of the year.
As we have already mentioned, we still have high inventory levels by the end of June, and that will start to decrease by delivering to corporations and public institutions starting the Q3 . That will mean cash, especially in the third and more specific on the Q4 . This will also lead to a better financial leverage. In June, that achieved the highest level. We had already anticipated that. Although this is 2.1 times higher, this had already been expected. We also have a very good capital structure for our businesses. We have improved the profile and also the quality of our indebtedness. Today, 56% of our debt is considered long-term debt, and approximately 50% of total debt is in the capital market. We are also seeing an increase in agreements with some funding agencies.
As we generate more cash over the next quarters, we will also improve our capital structure. By doing that, being able to allocate more resources and also returning more to our shareholders. Now, I'd like to turn it over to Hélio Rotenberg again. Well, wouldn't it be better if we turn it over to our colleagues to commercial then? Let's start with Rodrigo Guerço, the Corporate VP.
Good morning, everyone. Thank you. Thank you, Hélio Rotenberg. Thank you, Caio Gonçalves de Moraes. I'd like to highlight some points and also to give you more flavor on top of what Hélio Rotenberg already told us, on how we are positioning ourselves and that we expect to increase in specialized solutions. That certainly helps us also to bring the environment of integrators and also increasing revenue recurrence. More specifically, I'd like to talk about specialized solutions.
We are targeting IoT, high performance computing, AI, in trying to capture all these markets, because we know that this will happen, and also considering what 5G will bring to us. By doing that, we see that there is a need. There will be an increase in services. Also companies will need to decentralize their processing that right now is being done at centralized data center. This is a global trend. It's not going to be different in Brazil. Our portfolio is very comprehensive in order to target and meet all these needs. Finally, as for services, which is something very important to us, we're talking about a market that we have an addressable market of BRL 4 billion-BRL 5 billion, including POS. We still have a lot to grow, and we have already won many contracts.
In the first half, we won contracts with private organizations. Oftentimes, Positivo was not the owner of the installed base. What do I mean? These are organizations that do not necessarily buy our hardware. What I'm trying to say is that it's. We don't need to sell the hardware first and then offer services. We can certainly take advantage of services by offering them to any company. Well, this is what I had to share with you. Now let me turn it over to Norberto.
Good morning, everyone. Let me talk to you about payment solutions. I'll try to be pragmatic and share some key aspects regarding this segment and why we believe we are doing good. This market is a market of BRL 4 billion-BRL 4.5 billion.
When we talk about selling hardware, we say that in Brazil, we have a market that is a BRL 4 billion-BRL 4.5 billion. We go beyond the POS. There will always be a hardware, there will always be a solution, and we will be present in order to provide you with the most innovative solution. Still with regard to addressable market, we also have services, which is part of tech services. Just to give an idea, this addressable market immediately by Positivo is BRL 350 million, and it's directly related to hardware with regard to payment solutions. The hardware that we have built in. Let me give one example. POS from Cielo or Stone, which are major acquirers. They stay in the market for 3-5 years.
Every year, all these devices should generate BRL 350 million-BRL 400 million only, and where Positivo is already present and selling. This is a recurring revenue. This is what is really great about payment solutions. Once we sell payment solutions, well, this is a highly technical sale in which security is key. We believe that today, Positivo has the best team with regard to the development of security solutions in Latin America. We started our contracts 10 years ago, but we then started to also becoming more and more specialized so that we could offer unique solutions. These technical sales also represents a entry barrier. That means that this is not a market to everyone. This is very interesting for Positivo. Positivo should achieve a very relevant position, both in hardware and recurring services.
We are carrying out negotiations. You may ask, "Well, why don't you tell us who you have already closed deals with?" There is an issue of confidentiality. We cannot expose strategies from our customers, and that's why we have to keep this information in-house. You will start to see Positivo in large acquirers, sub-acquirers and Fintechs present nationwide. I believe that the key message is this technological differentiation that we present, and we believe that our capacity, our abilities will also bring very pleasant news. These are the key messages I like to share, and I'll be available should you have any questions. Now, I'd like to turn it over to you, Hélio and Caio.
Okay. Before we open to questions, I already mentioned that we are increasing our guidance by BRL 500 million.
In the past, it was 5-6, and now we are switching to 5.5-6.5. We see that corporate is increasing. We have a very strong pipeline. We have already signed contracts that are important as well with public institutions. We have already gained BRL 800 million with electronic ballots, but we also have still a very strong presence and contracts with both the public and the private sector. As for servers, we are also doing very good. Norberto talked about payment solutions, and we'll have good news by year-end. We are also achieving good results in HaaS. This is the new guidance for 2022, BRL 5.5 billion-BRL 6.5 billion. After this brief introduction, after sharing our optimism, our really happiness in sharing these results, we will open for questions.
I'd like to remind you that if you want to ask a question, we recommend you to use the Q&A icon in the bottom of your screen. We have a question from Bernardo Guttmann from XP. He will ask a question live. If the operator can please unmute Bernardo.
Hello. Good morning, everyone. Can you hear me? Yes, we can, Bernardo. Thank you, Hélio, Caio, the entire team. I have two questions. First, it's about consumer dynamics. Electronic retail segment had a relevant drop in the Q1 . I'd like to understand the level of inventory at retailers, what we can expect for the second half. Second question is about the cash flow, considering also new capital. You have entered new segments in which you also have a demand of increasing working capital.
With this, in the second half, we see that you will have an increase in your cash. Can we say that the leverage peak took place now in the Q2 ? If you can talk about your capital structure and leverage.
Bernardo Guttmann, good morning. With regard to consumer, what happened was the following. We had high inventory levels at the turn of the year. In the Q1 , the selling was very tough. Selling was lower than sell-out. Now we had the normalization of inventories at the end of March, beginning of April. The Q2 was better because we had the selling level equal to sell-out, and that's what we expect to see. Inventory levels at retailers are, I'd say, balanced despite the drop in income. We may have some retailers with higher inventories.
We also have some inventory, but that is why we also have this indebtedness, although that does not account for most of it. Right now we have sell-in balanced to sell-out. What we see is that sell-out is 15-20% lower than last year, but still higher than 2021. We expect that to continue. We don't know how the government financial support to the population is going to help us. We also need to consider seasonality, Black Friday, Christmas, but we believe that we'll stay on the same levels regarding sell-out, matching sell-in. As for indebtedness, I'll talk about it very briefly, and then I'll ask Caio to go over it. We delivered a great deal in the Q2 , but we have not been paid yet, and that's why the indebtedness level is higher.
I'll ask Caio to give more color to it.
Exactly. As I had already anticipated, the leverage peak will take place in June, especially considering inventory levels and also the timeline for being paid. We delivered servers, we delivered the projects to the government. At the beginning of the Q3 , we'll start to deliver, and we'll start to being paid at the end of the Q3 and the Q4 . We will also see an improvement in our capital structure. If you go over our plan, you will see that it's much better. We will see lower leverage in the second half of the year with increased capacity to also pay our gross debt.
Perfect. Thank you very much. You were very clear.
We have a question from Lilian Oliveira. What are the unique aspects that you like to highlight regarding tech services?
What makes Positivo an appealing option to customers? I'd like to ask Guercio to answer that question.
Thank you very much for your question. Well, I usually say that it's very important that everybody knows that historically, Positivo has a presence, a reach to serve our customers, which is also a unique offer. So what I like to highlight is that we have a unique capacity, considering decentralization on how we render services, on how our logistics is implemented in order to serve this continental country. So decentralized support, and that was really designed in order to also increase our competitive advantage. The second point I'd like to highlight is that usually the service segment, particularly commercial, it's based on products. There is this trend in adopting solutions that come from other countries and other continents.
Positivo has also a unique capacity of understanding and adapting to meet the needs and demands of Brazilian customers that oftentimes present needs that are different from US and European consumers. Let's bear in mind that if you travel 150 kilometers from the capitals of Brazil, you already start to face challenges, not only regarding logistics, but also regarding connectivity. That really requires services that can be adapted in order to meet that need. That's something we do. Thank you very much, Rafa.
Thank you, Guerço. Now we have two questions from Wagner Silva and from another participant about Infinix.
Can you please talk about the increased penetration of Infinix, the scale, and some other aspects, please?
With regard to the penetration of Infinix, as I mentioned, we have a larger potential market in the mid-level.
Everybody buys a smartphone that costs between BRL 1,000-BRL 3,000. We started with Via Varejo and Vivo, and today we're expanding that to other retailers. Selling to other retailers. We also have a program to strengthen this brand in Brazil. We are very optimistic that it will really increase its penetration and gain a very relevant market share.
Great. Thank you very much.
We have another question from Marcos Ribeiro. You mentioned Hybrid IT. Do you believe that this is a trend? How can Positivo better benefit from that? What value can Positivo deliver to customers? This is a question for Guercio. Thank you. Thank you, Hélio. Well, first of all, yes, that's a trend. Why do I say that it's a trend?
Historically speaking, with the public cloud, we had this large movement in 2016, 2017, in which there was this run towards public clouds. I'd say that today this is much more balanced when we talk about Hybrid IT. When you look at companies that are very successful in commercial, they have adopted a strategy that I usually say that is the best of the two worlds. Hybrid IT, in which you have on premises all the recurring transactions or whatever is strategic. When you use them, what is left, for example, if you want to develop a solution to support your business, kept at a public cloud. That's where we see increased resilience and the increased capacity to meet the demand of businesses by the digitization of businesses.
This adds great value because for a long time, IT was considered a department that really put the brakes on development. Once you have a Hybrid IT, when you need to increase your agility, when you really need so technology resources in order to expedite everything to an immediate level and also to stop doing that once you no longer need it. Hybrid IT is a global trend. It's not only in Brazil, and you should use the best of the hybrid environment, so public and private clouds.
Great. Thank you very much.
We have another question from Wagner Silva.
He says, "I hold high expectations with your pilot education product. The 4.0 in which the company's education is part of it.
Can you also give us more flavor regarding future outlook?" Well, there are two addressable markets when we talk about education or Education 4.0. We have our education technology, and we also have our hardware. We see an increasing hardware for education, both in the public and private segments. HaaS for education has also increased. We see great level of sales, and obviously we have schools that are renting that. With that, we can increase our parts. HaaS is doing very good. On the other hand, we have in education technology, which does not account for a large portion of our revenue, but is increasing and it will increase this year. We are providing technologies, robotics, just as Lego for Education or micro:bit for educating students. We also want to be the one-stop-shop for Brazilian education.
To date, besides our products that we keep on developing and enhancing, we also see the products of startups. The number of tech startups has increased, but without that robust sales possibility. This one-stop-shop will allows us by having aggregated reports, not only by us, but also third parties. We will be able to present a whole solution to schools.
Great. Thank you, Hélio.
We have one more question from Poise Dorodo. He's an analyst buy-side from RACAP.
He says, "Good morning. Can you please provide us more details about expansion and investments in the server segment? And can you also talk about the margins of this business?" Well, I'll answer that very briefly, Rodrigo Guerco. With regard to investment, we are investing on servers also. Not only on portfolio, but also on working capital.
We see this strong presence and also strong diversification for edge computing. We are well prepared for this portfolio. As for servers margins, they are very similar to what we have for corporate. There is not much difference between them. Great. Thank you very much. We have another question from Danielle Vieira. The net margin of the first half was lower against 2021. The same goes for the financial expenses. To what level do you expect to deliver your net margin compared to 2021? Financial cost has increased, that's true, and that's why the net margin decreases a little. We are very optimistic in order to really match what we delivered last year. We are working in order to achieve that.
Great. Wagner Silva has another question. The company has successfully closed the electronic ballot boxes project.
What can we expect regarding projects as big as that? Well, we already have the 2024 electronic ballot boxes for 2024s that will be delivered in 2023. The gross revenue will account for BRL 1.2 billion, so $176 million. We are pursuing looking for other projects, but they're still in our pipeline, and we cannot comment on them till we close them. We also have a very strong engineering project. We are also prospecting this area, and we believe that we will also bear fruits, good fruits in this segment.
Thank you. Great. Well, I don't see any other questions in the Q&A, so I'd like to turn it over to Hélio for his final remarks.
Well, I'd like to thank you all for joining us, and I hope I always come to you to give you good news just as I did today. Thank you very much. Thank you, everyone, and have a great day.