Good morning, everyone, and welcome to the Valid Results Call for the fourth quarter of 2024. I'm Julia Araujo, Coordinator of Corporate Finances and IR. Before we start, please let me share some housekeeping announcements. This event is being recorded, and all participants will be watching the teleconference during the broadcast.
We also have simultaneous translation into English available. The slide deck that we'll share today is available on our IR website. Shortly after the event, the replay will also be available. Before we finish, we'll start the Q&A session. The questions can be sent right now at any time during the broadcast. All you have to do is use the chat here at the Zoom platform.
It's important to clarify that any statements that may be made during this video conference regarding the company's business expectations, projections, and operational and financial goals are assumptions of our board, based on information that is available to the company today. Future considerations are not a guarantee of performance. They involve risks, uncertainties, and premises.
They refer to future events and depend on circumstances that may or may not occur. Investors should understand that the economic landscape and conditions of the industry, other operational factors, can affect the company's future and lead to results that differ from those shared here today. Let me welcome Mr. Ilson Bresson, CEO of Valid, and Mr. Olavo Vaz, CEO and Director of IR. Bresson, good morning.
Good morning, Julia, and good morning, all of you who are joining us in this Results Call for the fourth quarter of 2024, especially our shareholders' base. I'd like to take this moment to thank all of Valid's collaborators on behalf of the Executive Board. Each one of you helped us build together the results we are about to share today. 2024 was an important year of transition, marked by the largest liquid revenue of Valid's history and the validation of a new business avenue.
This shows the company's ability to transform itself in an unwavering strength of the capital structure, the most solid of the capital since its IPO in 2006. Robustness was confirmed by the latest rating analysis by Moody's Local by the end of February, leading it to its highest level since it began to be evaluated.
In the past quarter of 2024, we had the largest liquid net revenue for the period, reaching R$589 million in net revenue, with R$2.17 billion of revenue, 4% below what we delivered in 2023, with IRR close to R$2.35 billion. Given this total net revenue, I want to emphasize the revenues coming from new businesses. We reached the fourth quarter of 2024 with R$66 million of revenue, bringing the year's total to over R$216 million, a 300% growth year-on-year in the past two years. In terms of EBITDA, we closed the fourth quarter with R$110 million in the year, with R$487 million, with a margin of R$18.6 million in the quarter and R$22 million in the year's total.
The most pressing result in 2024 is given especially by the lower results of Telco in the first half of the year and lower margins in pay in the second half, verticals that returned to their pre-pandemic historical dynamics. Regarding the net revenue of $381 million in 2024, $63 million were obtained in the fourth quarter. This record was influenced by the partial sale of our participation in Qubic in the first quarter of 2024. However, without considering this sale, the recurring net revenue of Valid in 2024 was $269 million, the best result ever obtained by the company.
In the last quarter, we had an operating cash flow of $178 million, bringing the year's total to $425 million, an 87% EBITDA conversion. In the second year in a row, this indicator is close to 90%. With these consistent results and performance, combined with a balanced capital structure, we reached the end of 2024 with a liquid cash flow of $190 million and made payments of over $140 million in gains and profits, representing 43% of the company's recurring revenue, in line with the level Valid has been paying since its IPO in 2006.
Now let me talk about the three main highlights and the three new businesses which began to be invested in in the turn of 2022 to 2023. With these, revenues grew 300%, adding $260 million, which means 10% of all Valid's revenues. Considering only the past quarter of 2024, the revenue reached $66 million, or recurring revenue run rate of $260 million. These three business firms could account for 17% of Valid's consolidated EBITDA. This shows the company's ability to transform, focusing on growing businesses and sustainable margins.
The digital government, a portfolio that added R$ 90 million to our revenue in 2024, Valid has projects being developed in 12 Brazilian states. In Mobile and OEM solutions, in the past two years, we've carried out projects with 144 clients in almost 60 countries on all continents. In digital onboardings, we are updating the portfolio and products to move forward in new fronts and clients. In these three business units, we should get the most of Valid's growth over the next few years, and we do believe we will exceed 15% of representativeness still in 2025. Let's imagine that this call is not from a listed company like Valid, but from a startup showing its performance and results.
When you look at a 300% growth year-on-year of a business and portfolio that started almost from scratch in 2022, what will be our perceptions on the valuation of this startup? Let me highlight that this business started in 2022 with BRL 3 million, grew to BRL 54 million in 2023, and reached BRL 260 million in revenue in 2024. Certainly, we could conclude that this startup has a huge potential for growth and exponentialization of its revenue and value. If it were a startup, it would be a fantastic growth route, right? This is a company that is deleted off the market with over 70 years of credibility and with an incredible generation of cash flow.
Because this potential almost hidden in Valid that we are working with to generate growth in the coming years, anchored in the central competencies developed throughout our histories, applied to the markets and clients with which we already operate. Moving on, let me highlight a slide here that has been part of our presentation since the beginning of 2024, with this new management team.
We trust the ability of extracting value from traditional business and, at the same time, generating value from new businesses based on our central and core competencies. We have invested more in technology and product portfolio, retaining and attracting talents and people of people who go there and do. The strong culture of thinking about the sustainable growth of the company at the service of the clients, shareholders, and society is the essence of the culture we build.
When you compare the guidelines adopted in the results of 2024, we come to the end of this year, the fiscal year, feeling we have accomplished this mission and confident that we can take Valid to a new cycle of growth and relevance to our clients, shareholders, and the whole of society in the coming years. Looking towards the future, we are focused on the following actions.
For a short-term horizon, our focus remains on the consolidation of new businesses, especially digital government, digital onboarding, and digital Mobile. We also want to extract value from our traditional businesses, whether Mobile cards or documents. The specific dynamics of each of these business areas provide us with a range of risks and opportunities we are used to dealing with throughout our history. Among these two things, I mean extracting value and generating value, we are planting seeds to the future and working on the basis that we understand to be the platform of safe identity and valid data.
For a medium-term horizon, we want to continue increasing the relevance of new businesses, reaching 25% of the total net revenue by 2027. We also want to expand the digital products cross-portfolio using our core competencies in markets that are adjacent to the current ones. Cybersecurity, strategic partnerships with big techs and their cloud and management suite portfolios, in addition to data platforms, are among our priorities. Finally, for horizon number three, we start what we call Expedition 2030, a year in which we want to show a company with a new net revenue matrix with a platform of safe identity and data.
We will put Valid at another level of relevance as a player based on trust and relationships with the society. We are working on this new portfolio with which we intend to double Valid's net revenue and multiply its market value. Now let me call Olavo, who will discuss financial results of 2024. I will be back with you for our Q&A. Olavo, hello.
Thank you, Mr. Bresson. Good morning, everyone who is with us today. Let's start by looking at Valid's revenue and EBITDA in the last quarter in the closing of 2024. We ended this quarter with a revenue of R$589 million, a 7% drop compared to the fourth quarter of 2023. This is the largest quarterly revenue of Valid, which also accounts for an increase of 2% compared to the last quarter.
Both in ID and Mobile, we had a revenue above previous periods, with a drop coming from the pay vertical due to a poor comparison base, especially against the fourth quarter of last year, as in that time there was the maximum devaluation of the Argentine peso. In the closing year of 2024, Valid's revenue reached R$2.1 billion, a 4% drop compared to the numbers of 2023.
We have a drop in the year-on-year comparison in Mobile due to the beginning of a bad year in 2024, a scenario that changed in the second quarter. In terms of pay, due to the poor comparison basis with the year of 2023, when Argentina started a major process of political and financial restructuring. The numbers of the year have an annual inflation adjustment of $124 million, $20 million of each only in the last quarter.
The impact of the entire inflation adjustment in 2024 was BRL 60 million. Due to the challenges we saw in the Mobile verticals in the beginning of 2024 and tighter margins in pay in the second quarter, we anticipated a year with worse margins than we faced last year. We ended the quarter with an EBITDA of $110 million, a 26% decrease compared to the fourth quarter of 2023, and a 17% drop compared to the third quarter of 2024.
The biggest drop in both periods occurred in the pay vertical, which has been impacted by a scenario with little additional core demand, given the current levels of interest rates and a strong pressure from cost denominated in dollars. I'll later talk more about this unit.
EBITDA in this year was $487 million, with a margin of 22.4%. This lower margin in 2024 was expected because in 2023 you still had a repressed margin for documents and better prices in pay, especially in Brazil. Even with this quarter, with a drop in EBITDA in this annual comparison, we delivered a profit of $63 million, a 77% increase compared to the last quarter of 2023.
It was possible especially due to a strong reduction in financial expenses and better tax allocation. The same vision is even clearer in the annual result. Even with an EBITDA that is 14% lower, the recurring profit of Valid was 26% higher than in 2023, at a level of R$ 269 million. The financial result in 2024 was R$ 75 million, better than 2023, especially due to a reduction in financial expenses as the company has been decelerating. In terms of taxes, in 2024, we had a lower EBITDA when compared; we had a lower tax allocation compared to 2023.
The search for a lower tax will remain as a goal in 2025, and the use of interest on equity within the limits will be a direction and a priority to our team. With a recurring result of R$ 269 million, we had a positive contribution of asset sales in the first quarter of R$ 112 million, which leads to an annual profit of R$ 381 million, accounting for R$ 4.81 per share. Let's talk about some figures and indicators. There's a small drop in EBITDA in 2024, but with a net margin above previous years, considering recurring numbers.
For ROIC, we had a small decrease in 2024, closing at 18.2%. Finally, for ROE, we ended 2024 with an indicator close to 21%. Let's now talk about variation in cash flow. In the past quarter, we had a generation of operational cash of R$ 178 million, which accounts for a conversion of 162% of EBITDA in the period. This indicator was positively affected by improvements in the main capital lines, such as receivables, stocks, taxes, and suppliers.
In the past quarter of the year, we also had the largest volumes of CAPEX in the period, about 50% of the entire volume of 2024. This was due to the payment of acquisitions, earnouts, as well as the activation of some projects, both in ID and Mobile, focused on delivery functions in the last period of the year. In these months, there were also the largest volumes of profits payments and payments of gains at the order of $60 million. Even so, we end the year with a cash flow of $770 million, or about $30 million above the closing of the third quarter.
Consolidating the values of the year, the strong operational generation of the last quarter contributed to the conversion of EBITDA in cash flow to 87% in 2024. In addition to CAPEX and financial expenses, let me talk about another year of reduction of the company's gross debt, in addition to the positive contribution of the sale of assets and positive exchange effect. Since Valid has an important share of its cash flow in strong currency today, we started 2025 with a comfortable cash flow position, which helps the company to go through moments of greatest challenges in a more comfortable position.
I talked about the advances in the main accounts that make up our capital. Let me talk about them. In stocks, quarter- after- quarter, we see the evolution of the indicator with an improvement of almost $20 million only in the last quarter. Similarly, in accounts payable, we improved the indicators by another $20 million only in the last quarter. In accounts receivable, for the beginning of the third quarter, we recovered the Mobile market.
We saw an increase in these accounts since the segments, the payments deadlines are more dilated and dollarized. We continue to focus on improving our cash flows indicators, although new advances will be marginal. In recent years, we had a special look towards the leverage issue, having hit a major milestone in the first quarter of 2024, when Valid became a company with cash flow for the first time since its IPO in 2006. Since the end of 2020, Valid has reduced its gross debt from R$1.2 billion to R$580 million. That is a 52% decrease. At the same time, our cash flow position rose 58% in the period, reaching R$770 million in the end of the past years.
The screen shows that we have a comfortable cash flow position with less than 20% of our debt exceeding in the short term in its maturity date, in addition to a high bankability with our main partner banks. In the last quarter, we only carried out one financial operation, which involved the prepayment of a debt with Santander Bank in Spain, and we resumed this operation here in Brazil. We continue to look for operations that improve or strengthen Valid's liabilities.
A few days ago, we completed a new acquisition with BNB Bank. This is a small operation, $7 million, but it marks the opening of doors for Valid together with this institution, which is important in the Northeast region, a region where Valid holds relevant businesses and operations. This operation has a 60-month amortization period, the longest for Valid, as well as a reduced cost below CDI.
2024 was another year of prominence for Valid's share. Let me talk about liquidity first. We closed the year with an average volume negotiated of $12 million per day, an increase of 33% year on year. In terms of profitability, our shares rose 30% in 2024, a level that is well above IBOVESPA and the small caps index. This performance is even stronger when we take into account the 24 and 36-month windows. Even with the strong performance, we at the company's administrative board continue to see a possibility of valuing our shares, and we are constantly buying shares in the market.
I close here the slide on capital markets, reinforcing Valid's commitment to take part of its results back to shareholders. In 2024, we made $142 million in payments of gains, parts of extraordinary dividends, and a large portion through interest on equity. We had an 80% dividend yield and 53% payout when we consider the recurring results. Now I'll talk about verticals. Let's start with ID and digital governance, a vertical in which Valid is the national leader in physical and digital issuance of documents.
This quarter, we reached the market of 7.8 million issued documents, an increase of 10% regarding the fourth quarter of 2023, just below the third quarter of 2024. Remember that the third quarter is always the strongest of the year due to calendar effects. With this, we closed the year with 30 million issued documents, the best year in the company's history. In the next few slides, I will share on the opening of documents between CNH, the driver's license, and identity cards, DRG.
In financial terms, the division delivered in the last quarter a revenue of R$ 225 million and EBITDA of R$ 61 million, accounting for an increase of 7% in revenue and a drop of 9% in EBITDA. Although we have advancements in revenue in digital onboarding and digital government, the implementation of large projects by the end of 2024 had a pressure on the margin. Bresson talked about the importance of new businesses for Valid, but let me highlight the relevance in this vertical.
In 2024, new businesses accounted for 17% of this vertical revenue and for 26% of EBITDA. With all of this, we closed the year with this vertical adding R$ 846 million in revenue and R$ 263 million in EBITDA, which represents growth in both indicators if compared to 2023. Right now, I'll talk more about the issuance of documents and the reason that leads us to believe that we all will have a great potential in the coming years. In the top chart, we see the evolution of driver's license issuance, and in the white line, this is in the white line. The blue line shows identity cards issuance in the last three quarters.
As we knew, we would see a gradual drop in the volumes of driver's licenses because the non-issued stocks before the pandemic have ended. In 2024, this drop in driver's licenses was of 7%. This drop would be a concern if we didn't count on the expressive advances of the ID portfolio, which began to evolve in the early period of 2024. These advances become clearer when we divide the line between the old state identity card and the new national identity card.
From the turn from 2023 to 2024, there is a really enormous growth in the issuance of new identity cards. Brazil ends 2024 with 17 million national identity cards, about 10 million issued by Valid. Although 17 million new identity cards were issued, that is a small fraction of the Brazilian population. The most advanced state, I mean the one with the highest percentage of the population with the new identity card, is Piauí, about 25%. I would like to remind you that Piauí was the first state to issue the new SIN, the new identity card, as early as December 2022. In general, states today have about 7%-10% of their population with this new identity card.
Let me talk about age groups. Today, the age group with the highest issuance is between 15 and 19 years old. This is when this age group of citizens that reach majority, they become majors and they need identity cards for education and benefit programs. This gives us an interesting outlook for the next few years, considering that until the beginning of 2032, the old state identity cards will no longer be valid. There is like a contracted demand for documents in the next eight years. With this, we would have a higher number of the current standards.
However, this seems to be a very conservative view since governors already noticed the importance of having up-to-date biometric databases that can communicate with each other. We will encourage the speed up of issuance of these new identity cards. It's an important indicator that we will evaluate in new performance. We have comparable bases.
In the past quarter of 2023, it had an effect in revenue of BRL 79 million and EBITDA of BRL 16 million due to the max devaluation of peso in December 2023. In the fourth quarter of 2024, the inflation effect was only BRL 18 million in revenue and BRL 700,000 in EBITDA. In revenue, we have around BRL 60 million of decrease explained by inflation, an effect that EBITDA was BRL 70 million between the fourth quarter of 2023 and the fourth quarter of 2024. Even excluding inflation, payment verticals faced a more competitive landscape in the second half of 2024. We have a stressed currency scenario leading to tighter prices.
We had a higher volume in 2024 than in 2023, but prices were slightly lower. Cost pressures led to lower margins. Closing the year with BRL 125 million EBITDA, a margin of almost 16%. In 2025, we will work harder looking for cost opportunities and improvements in operational work in this vertical. Now, let me talk about the Mobile segment. We ended the fourth quarter with sales of BRL 174 million and EBITDA of BRL 3 million, 18% margin, with a growth of 12% in revenue and 27% in EBITDA year on year.
In 2024, we just started with Mobile presenting weak results, but we achieved during the year a margin close to 18%. Within the bracket, we had mentioned in other results calls between 18%-20%. As in the ID vertical, quarter after quarter, we see solution and OEM projects gaining traction in this vertical. In 2024, we closed the year with these deliveries accounting for BRL 72 million in the vertical revenue, accounting for 13% of the total.
Let me highlight that in this past report by the end of February, Counterpoint Research saw Valid as one of the leaders in the eSIM segment, which strengthened us in our search for transforming our performance in the segment. Before we start our Q&A session, let me talk about three subsequent events that occurred after December. In our past RCA in February, the board approved the payment of BRL 124 million in equity, 1.57 per share. These payments will be done in equal quarter payments in March, June, September, and December.
This really strengthened the commitment of Valid in returning the gains and earnings to our shareholders, especially in the forms of equity. We also recently had the elevation of our rating by Moody's Local, according to what Bresson told us in the beginning of his presentation. Also, we completed the financial operation with BNB Bank, whose resources we received in the first week of March. This is our presentation for the fourth quarter of 2024. Now, let me ask you for two minutes while we get organized here, and we will be right back with our Q&A sessions, which can be submitted through our chat. Thank you once again.
[Foreign language]. We're back with our Q&A session. You can submit your questions using the chat. First question comes from Fábio Bresson. Talking about guidance, Mobile and pay expectations for the first quarter of 2025, and which will be the strategy regarding operations in Argentina.
Hello, Fábio. Thank you for the question you made. Mobile and pay verticals, they present dynamics that get back to our experience. Last year, the Mobile vertical had a pretty good recovery throughout the quarters. From the first to the last quarter, there was a phenomenal recovery, and we see that this year, the same behavior in looking for volumes and tier one clients is the same. The SIM card dynamics is very competitive, and cost management, volume scale management is fundamental. It is key.
In Mobile, we can see that the speed of migration and the speed of adoption of eSIM, especially in several geographies, several countries, are being discussed by MNOs and operators and carriers. In OEM, device manufacturers are starting to launch in a higher volume, low-end or middle-range devices that can work with eSIM. We see this competitive leverage and advantage in our eSIM card business, and we can acquire more territorial coverage.
The ePay vertical last year, I mean, as Mobile recovered, ePay suffered with the margin, especially in the second semester. Here, the specific dynamics that is in Brazil and Argentina is that we should pay attention to costs, maintain our market share, or make our market share grow, especially in Brazil, aligning our costs with our abilities to be more aggressive in terms of price because our excellence and credibility is very high among our clients in Brazil and elsewhere. It will be a year and a semester, pretty competitive, and we feel ready to face it. Specifically, talking about Argentina, we have a slightly better market share position.
Having access to these clients, to this channel, gives us the advantages of being in this more aggressive negotiation to adapt and be quick enough to adapt to that new reality of the scenario in Argentina with an opening of external competition. This will be a very tense, there will be tension in these dynamics to maintain this market share and increase our volume so our relative overhead costs can be decreased and look for higher volumes.
Next question comes to Fábio also to Olavo. With BRL 190 million net revenue, how will be the allocation of capital in 2025? Is the company evaluating M&A?
Hello, Fábio and everyone. Thank you for your question. Fábio, regarding the capital allocation, the first point here is that throughout the previous years, we were really concerned of using our cash flow to create this, to leverage the company.
Today, we have a very comfortable position, and banks are interested in refinancing and expanding our debt. We start dedicating our resources to give them back, give them back to our shareholders in the form of equity, in the form of dividends. We have recently announced a new round of gains in equity with payments made quarter- by- quarter throughout this year.
An important point, I mean, yesterday, we saw that we are talking about the growth we are aiming at for the coming years. This growth will demand more investments within the company and outside the company as well. If you look at what we have invested in terms of CAPEX in the past years, this is a small amount if compared to our revenue. It's not that this amount will double or triple, but no, but we can expect for this growth journey, more investment in our CAPEX aiming at our expansion. In our inorganic side, we have an M&A team within the company.
They are ready to approach the market, and we are approached to several fronts. In the past, we had smaller opportunities, I mean, opportunities that had a direct fit with our day routine operations. Now we are dealing with larger cases. We have to be more careful with these new possible cases, but M&A is still a concern for us. This will be part of 2025 and the coming years as well.
Next question comes from Matheus to Bresson. When you look at the new businesses and to the goal of doubling the company in five years, how much of this growth is within the company and how much we will need in terms of M&A?
Hello. New businesses, as we have just said, they grew 300% if compared to last year. If you think about 2022, it was a small business, R$3 million, and now it's a huge business. To double the company, we need these new businesses to grow at the order of three digits or high two digits. This is what we aim at. This is our commitment towards growth so we can make the size of our company double by 2030. I cannot tell you how much will be within the company or based on M&A or organic or inorganic, but M&A could be an important source to acquire to achieve new market turnover, EBITDA. This can help us to double the size of the company by 2030.
There are our—we have to think about our core competencies. We started to reinforce this team last year with our new CTO and the expansion of the product and technology team. These more core and base essential elements in our portfolio have to do with this management of our identity and the continuous use of the identity proof in transactions we all need to work with. This will be important because this will be done in-house. Considering this balance, this will be like 50-50 or 40-60, and the M&A opportunities will dictate some of this pace. The in-house pace to improve this portfolio, to improve this product is already intense, will keep on being intense in 2025.
Next question comes from Paolo, also to Bresson. Good morning. Could you talk a little bit about the advancement in digital government onboarding and Mobile and the expectation for these verticals this year?
Hello, Paolo. Talking about Mobile, I can repeat the same information I have just shared with you. We see in Mobile, in the digital Mobile, that the carriers want this, especially in the eastern part of the globe. There is an acceleration of the use of eSIM because it is convenient to adopt this technology that is still evolving.
On the other hand, we have in this market this new type of device, which is accessible, is affordable, more affordable, middle-range devices or even low-range devices. They allow us to sell our licenses both to OEMs and also implement our platforms, our subscription management portfolio. Mobile has this advantage. We can keep on growing. Regarding digital onboarding, this is a platform we are focusing on, paying attention to opportunities in terms of partnerships because in digital onboarding and in this vertical, we see the adoption and the creation of a platform that will allow us to be present in the use cycle of our
IDs in different transactions applied both to public benefits or the concession of government benefits to citizens and also particularly to meet the demands of the private sector, banks, e-commerce, and retail in general. It is more than digital onboarding. This is an evolvement. This is the evolution of this portfolio. There is a product gap that needs to be filled, and we are paying attention to that.
In parallel to this, complementing the product gap, we are investing in a commercial sales team and products team to access new markets, new clients, and several of them are already in conversion pipeline. This will be an important year for this type of growth, especially focusing on these core competencies in digital onboarding. A little more complex operations in both the private sector and the public sector need them. In digital government, we have operations in over 12 states and also some conversions in the pipeline.
We hope that any of our products and tools that are available for this digital governance can be converted and implemented, rolled out. We have these digital government platforms applied to states and departments that need to digitalize their routines. We are also looking for opportunities within the traffic departments, the state traffic departments. We will keep on investing on all of these fronts. Last year, we achieved 10% of the revenue. In 2025, we expect to reach 14%-15% of new business representation in the total revenue of Valid. This is what we aim.
Next question comes from Matheus to Olavo. In the past quarter, we saw pressured margin in ID and pay. What can we expect in terms of margins for each of Valid verticals? In Mobile, can we still have improvements? Is there room for improvements? Can we see lower EBITDA due to the investments needed to support new businesses?
Matheus, you talked about margin, that it was pressured in ID and pay. This is more in pay than ID. ID had a margin drop, but it is a small drop. Starting with ID, the pressure we see in the margin in the past quarter can be explained by some projects. There is a cost demand that is initial. I'm talking specifically about the implementation of the ID project in Bahia. There are initial costs, and then later the ramp-up is fairly quick. This will offset the costs. As we do the transition to more e-digital products, this will require a little more investment, but the margin level we have in ID, around 30%, this is a sustainable level moving forward. In pay, Bresson discussed its dynamic that we have seen.
Yes, we had a strong dollar pressure. There was the valuation of the dollar in the past semester, especially in the past quarter. There is a cost component of the chip, the antennas that are all dollarized. Passing this cost towards the clients is not something that is automatic. It is not simple. You face this pressure. Because of that, we intensely work to improve these dynamics. I believe that once we have a strong balance sheet, this will give us a power of competitiveness in this market, especially considering all the qualities in delivery, the time of relationship with our clients.
In pay, in Argentina, throughout the past few years, we saw a favorable scenario and landscape to us due to the closing the country faced. Valid was almost the only international player in Argentina. We benefited from that. However, throughout the past year, this market will be changed a bit. It is hard to imagine that we would be almost the only players in Argentina now that we have more competition. We still have a very favorable position, a very good level.
We have worked with volume and costs. However, in pay, we are in this landscape that requires more caution in terms of competition and the background. In Mobile, as Bresson said, we started 2024 in a very tight spot. We had an evolution throughout the year. Throughout the past year, we always mentioned that our goal was to deliver margin between 18% and 20%. We closed our figure very close to that. If you consider the history, this was how the segment would behave.
We cannot move away from the historical reality, a historical reality. With the advancement of OEMs, it is possible to achieve higher margins in the segments. However, these new businesses in Mobile still have a small representativeness in the whole. As they gain traction, we will be able to look for bigger margins, right?
Next questions come from Nishio to Bresson. With the guidance of doubling the revenue by 2030, with CAGR of 12.3%, could you talk more about 2025 and 2026? Consider the impacts of a lower level of renewal of driver's license. In 2025, there will be less driver's licenses because of the pandemic history. In 2026, due to the extension from five to ten years in the validity on the expiry date of these driver's licenses.
Thank you, Nishio. Good morning. Thank you. In less than guidance, I would say that the ambition to double the size of the company by 2030 has to do with this belief in Valid. We cannot accept that in our markets, we have achieved our maturity in these markets.
We see, we feel, and we believe that the relevance that we have for our clients in the three ecosystems we work can lead us to a higher level. We have this internal ambition. We do believe we can mobilize all of our collaborators, employees, so we can accelerate more and more towards making the company grow in the top line and results because the history tells us that we can grow bigger and we are planning to deliver much more. The whole market knows that this driver's license reality, both for 2025 and 2026, starting in 2026, every new driver's license will have a longer expiry date from 5 to 10 years.
This will generate some impact. I have said this in previous calls. Maybe in 2022, when I started working with the ID vertical at Valid, or even in 2021, when I was dealing with another vertical, maybe that was my main concern when I was looking at the ID vertical. How to offset, I mean, how to offset this huge drop in the volume of the emission, the issuance of new driver's license. This concern is no longer a major concern. It would be good to maintain those volumes, but this is a given reality.
We managed in the past few years to offset this gap with the launching of digital government business. Looking to 2025 and 2026, what we have for 2025, considering this driver's license gap, is offset by digital government already. We also have some other positive perspectives. We have more relevance in terms of new SIM, the new national identification card. Before, the volume of IDs was 30% or one-third, and now the volume is expected to grow immensely. We have two-thirds or three-fourths of our volumes in this business of new identity cards.
Considering the driver's license, we have to readapt this contract, respecting the minimum guarantees of those contracts. Also, we will keep on renegotiating in the new call for bids as we have less volume and selling driver's license as a service. Probably the average price will go up. Third, we will increase the scope of services in the traffic departments, the Detrans. Today, we offer the state traffic departments driver's license, but we have started working with other businesses, other products to educate new drivers.
We can digitalize other documents at the Detrans, the state traffic departments, because they need to rely on a lot of technology to operate. On one hand, we have to adjust costs, and on the other hand, increase the scope of the services we can provide. The mass of the portfolio, the mass of revenue can help us to offset this and even have the possibility to make the company grow much more by 2030.
Another question by Nishio. Bresson talked about inorganic growth. Could you talk about possible M&As in the pipelines or any region, size of company that is in the radar of your company? Are you focusing in ID companies? And in terms of clients and products, are you more focused on expanding the basis of clients or expanding the product portfolio?
Nishio, complementing what Olavo said before, we have a team dedicated to looking at a broad pipeline of opportunities and options to invest in. We have some certainties. First, in terms of priority geography for M&As, we have Brazil.
We work positively to encourage Valid portfolio in Brazil that are in line with our idea to be a major platform of safe IDs, safe documents in Brazil. We can also consider a lot of work. We can consider we have a lot of work in Brazil. However, the view we have on this data and safe IDs disconnects core Valid competencies in terms of biometrics and biometric match. It also connects us with services that we can provide to banks, e-commerce, retail, I mean, the private sectors.
We have to consider all the segments in which we need to prove our identities to have more security in our transactions, to have more safety in our transactions. Proof of identity, which is our core competence through these years, can be applied in the cycle of use in the services we use. Advancing towards a transnational platform is also our focus. Digital onboarding and this part of transnational range are in our radar.
We also aim at increasing our capacity in GovTechs. GovTechs is also a focus. This proof of identity remains our main priority to implement internal portfolio capabilities and maybe channels and platforms that can be accessed to expand our presence in this market.
Next question is also from Nishio to Olavo. Could you talk about increasing costs in the fourth quarter of 2024, mainly driven by the stronger dollar, or how you want to mitigate this pressure and improve margins in 2025?
I said that in the ID vertical, cost increase is because of this new operation. You do not have proportional revenue. This will be offset. This will be balanced later on. The major pressure has to do with the increase of the dollar. In the last year, the dollar was BRL 5.40. It goes to BRL 6, and obviously, this will affect us. What have we done to offset this and also improving, maybe improving costs and margins? First, in terms of offsetting, we have revenue in strong currency, and we invest in strong currency.
This does not have to do with the operational EBITDA directly, but as I have cash outside Brazil and the Brazilian real is devalued, I will have more Brazilian reais by the end of the day. You can compensate this in the financial result. In terms of margin and going back to what I previously said, when we look at Valid in 2021, 2022, and 2023, we had expressive efforts to improve our operations, improve synergies, decrease plants, decrease personnel, leave geographies that did not make sense, and focus on our core businesses made us take those margins in the order of 10-15%, and take them to 25%.
We had a positive wave of demanded documents, a high volume of cards, and also the scenario in Argentina. Now, this drop in margin, of course, we have to be careful and have to have caution. We are not looking for 30% margins right now. They are not attainable at the moment. As Bresson said in the report we launched, we are focused on transforming and making Valid grow. We have the ability to deliver a bigger Valid.
Of course, we're not going to deliver this growth at any costs. We are not going to consider margins. But we are not going to see the margin going from 20 to 30 right now. No. What we want to do is to improve our delivery to our clients, to our new clients in new segments, possibly too.
Next questions come from Lorenzo. Could you talk about the general management of dividends for 2025?
Regarding dividends, this is a recurring question. The scenario or the idea of the top management and the board, our idea hasn't changed. One of our top priorities is to return part of our results, part of our profits to our shareholders. We have done that through return on equity called JCP in Brazil. We are not going to leave this priority aside. We are looking to prove that.
Our bylaws also define the legal minimum, 25%. When you look at the company's history since 2006, when IPO and considering 2024, looking at our recurring revenue, we have a payout at the order of 50%. Last year, it was 53% considering recurring revenue. Will this happen in 2025? We have just started the year. Only with what are considering what we have announced in return on equity alone, we have a good quantity of gains to be paid.
Considering in-house investments, M&As, if possible, certainly we will consider the possibility of returning more to our shareholders. In a nutshell, we will take this return on equities. We will look for investments in-house or outside as well. If possible, we will share these profits, share these gains with our shareholders based on our top management work.
This was our final question. I would like to thank Olavo and Bresson and all of you. Our lines are available for all of you. I hope you have a good day and take care. Thank you very much for your participation.