Earnings Call: Q2 2026

Aug 7, 2026

Summary

Q2 revenue and consolidated earnings declined amid payroll-credit disruption and a weaker market, while Inter Seguros and Omni1 grew. Deleveraging continued, and management expects payroll-related pressure through H2.

Good morning, everyone, and welcome to Wiz Co's video conference to discuss the results for the second quarter 2026. For simultaneous interpretation, please click on the globe icon labeled Interpretation at the bottom center of your screen and select your preferred language, Portuguese or English. For participants listening to English, you can mute the original audio. Following the presentation of results, we will go on to the question and answer session. To participate, simply submit your question using the Q&A icon on the platform. Should your question not be answered during this session, our investor relations team will contact you subsequently to provide a response. Before proceeding, we would like to clarify that any statements made during this conference regarding Wiz's business outlook, projections, and operating and financial targets constitute the beliefs and assumptions of the company's management, as well as information currently available to Wiz. Forward-looking statements are no guarantees of performance and involve risks, uncertainties, and assumptions as they relate to future events and therefore depend on circumstances which may or may not occur. Market situations and other conditions may impact the results of Wiz. Today we have with us Mr. Lucas Neves, the CEO, IRO and CFO, and Mr. João Resende, the IR manager. I will now turn the floor over to Mr. Lucas Neves, who will begin the presentation. Well, good morning, everyone, and welcome to Wiz's second quarter 2026 earnings conference call. Throughout the first half of the year, part of our business related to credit origination and lending was impacted by regulatory changes that altered the dynamics of the payroll-deductible loan market. Naturally, this new environment affected the performance of businesses that played an important role in our earnings generation, such as BMG Corretora and Promotiva. We recognize that these developments of this nature are inherent to regulated industry. We also understand that while they may temporarily affect some of our businesses, these operations will adapt their strategies and diversify their portfolios. With this in mind, we have remained focused on what is within our control, improving administrative efficiency and maintaining a disciplined cost structure with a 9.3% reduction in corporate costs for the quarter and a reduction in the company leverage, a reduction of BRL 194.4 million in the second quarter of 2026 vis-à-vis the same period last year, directing our efforts to new business opportunities. For example, the implementation of the partnership with Banrisul and Paraná Banco and the launch of new direct consortia sales. Despite the short-term impact on payroll-deductible lending, we remain an operationally diversified company and have delivered some growth in business units such as Inter Seguros and Omni1. At Inter Seguros, in the second quarter of 2026, we had a net income of BRL 37.4 million, up 34.7% vis-à-vis the same period last year. At Omni1, we ended the quarter with a net income of BRL 16.2 million, 67.6% increase versus the second quarter of 2025. This financial discipline and the strong performance of several business units enabled us to close the first quarter at BRL 93.4 million, broadly in line with the BRL 96.1 million reported in the first half of 2025. Excluding the non-recurring effects related to changes in company's senior management that represented BRL 6.1 million negative impact in the first quarter. In the second quarter, the parent company net income reached BRL 53.6 million, an increase of 8.4% compared to the second quarter of 2025. Our financial strength is also reflected in capital allocation policy. In the first half of the year, we announced an additional dividend distribution of BRL 15 million to be paid on December 31st and BRL 50.5 million dividends that will be paid in July. We celebrated on July 1st the recognition for the second consecutive time of the Pró-Ética company, an initiative led by Brazil's Office of the Comptroller office in partnership with the Instituto Ethos. This recognition reinforces the strength and maturity of our integrity program. Thinking about the second half of the year, I would like to thank the Wizards who, with discipline, have guaranteed results. I would also thank our customers, partners, and shareholders. I am convinced that we are on the right path to hit the arrival line of 2026 quite satisfied with our results. I will now go on to slide number 3, where I will speak of the main operational and strategic events for the semester. On July 1st, we celebrated another milestone in its journey, recognition for the second time of the Pró-Ética program, an initiative of the Brazil Office of the Comptroller General. This recognition reinforces the strength and maturity of our integrity program and represents one of the most prestigious corporate integrity certification. We also released our 2025 integrated report, presenting our main achievements and progress made throughout the year. We have the publication of the first greenhouse gas emissions inventory, which received the GHG Protocol Silver Seal, important milestone for our sustainability agenda. I would also like to highlight the outstanding performance of Inter Seguros that delivered a record quarter. Gross revenue reached BRL 94.8 million, the highest level ever recorded, 14.8% increase compared with the same period last year. EBITDA totaled BRL 54.8 million, a 30.1% year-over-year increase, with net income reaching BRL 37.4 million, an increase of 34.7% compared to the second quarter of 2025. I highlight the consistent performance of Omni1. As it concluded the first half of the year, it closed at BRL 56 million, BRL 58.6, and net income totaled BRL 16.2 million, an increase of 67.6% compared to the same period last year. On a year-to-date basis, net income reached BRL 29.7 million, 67.6% growth compared to the first quarter of 2025. This performance was primarily driven by credit life insurance and assistance programs. We go on to slide 4 with the highlights of financial highlights. We reported a net revenue of BRL 235.3 million, a decline of 18% compared to the second quarter of 2025. Excluding the Run-Off Caixa net revenue, it's BRL 189.5 million, down 21.4% year over year. The quarter was marked by a more challenging environment across part of our operations, with credit segmented impacted by regulatory changes, besides a more adverse macroeconomic event, as mentioned earlier. It is also worth highlighting that parent company net income reached BRL 53.6 million, 8.4% higher than the second quarter of 2025. Going on to slide 6, we arrive at the summary of consolidated results. During the quarter, EBITDA totaled BRL 152.8 million, 19.2% below the second quarter of 2025, reflecting the challenges faced by some of our business units. Looking at consolidated net income, we recorded a 10.6% decline year over year, totaling BRL 83.3 million. The parent company net income reached BRL 53.6 million, 8.4% higher than the second quarter of 2025. On slide number seven, we present the items considered in our adjusted view. During the quarter, no EBITDA adjustments were made. Regarding net income, the main adjustments refer to depreciation, amortization, and impairment totaling BRL 21.6 million because of the amortization of intangible assets recognized in connection with the acquisition of BRB Seguros Promotiva. The amounts presented reflect the tax effects of the adjustments recorded in D&A and impairment and financial results. As a result, we closed the quarter with adjusted net income of BRL 101.0 million, 13.5% lower than the same period last year. On slide number eight, we review the parent company results. During the quarter, the EBITDA was BRL 73.5 million, 8.4% lower than the second quarter of 2025. Performance was primarily impacted by a more challenging operating environment in the businesses, effects of regulatory changes in the private payroll credit market, which reflected in the equity method income. During the period, equity method income represented BRL 48.2 million, 19.6% lower than the same period last year, but 8.3% higher than in the first quarter of 2026. The parent company net income was BRL 53.6 million for the period, 8.4% higher than the second quarter of 2025. We go on to slide 10, where we see the presentation of results by business segment. The reconciliation between our segments and consolidation results are available in the earnings release. Year to date, 81% of net revenue was generated by ongoing operations. Insurance business units consolidated by Wiz represent 67% of our recurring revenue. We see a diversification of our revenue base, and this was possible because we delivered the strategic goals of the company. On slide 11, we present the operating performance of our business segments. The second quarter was marked by a challenging environment for the Brazilian insurance market. The political and economic backdrop, elevated interest rates, and pressure on household income continued to weigh on the production of mass-market insurance. Our business units generated BRL 879.7 million in written premiums, a 10.2% decline. In the insurance segment, we registered BRL 157.1 million, 14.4% lower year-over-year, reflecting the verticals during the quarter. A highlight was Omni1 that reported net revenue of BRL 28.8 million, representing a 66.1% increase compared to the second quarter of 2025. Another highlight was the Inter Seguros posting net revenue of BRL 65.7 million, 26.4% higher than the same period last year, BRL 16 million in equity method income through Wiz during the quarter. On slide 12, we show you the units working in consortia and credit distribution, Promotiva and Wiz Parceiros. We reached BRL 32.4 million in credit and consortia segment, a 15.4% decline compared to the same period last year, reflecting the structural changes affecting private payroll credit. Business units originated BRL 3.3 billion in the second quarter of 2026, 10.1% lower than in the second quarter of 2025. We go on to slide 13, showing you the Run-Off Caixa operation. During the quarter, Run-Off Caixa business unit contributed BRL 43.7 million in EBITDA to the company, 1.5% higher than in the second quarter of 2025. This result was driven by higher net revenue and credit life insurance cancellation provision, partially offset by lower life insurance revenue. On slide 14, we see the corporate and below EBITDA results. During the quarter, corporate, general, and administrative expenses totaled BRL 10.8 million, 9.3% lower than in the second quarter of 2025, reflecting the seasonality of expenses. Now below EBITDA, the result of BRL 7.4 million negative presented an improvement of BRL 12.1 million compared to the second quarter of last year. This is explained by a reduction of 60.2% in present value adjustment and BRL 5.8 million gain from fair value adjustments. Finally, during the quarter, we reported an effective tax rate of 30% for nondeductible expenses for corporate income tax and social contribution. Continuing on to slide 15, we see the composition of our cash flow for the quarter. We ended the quarter with consolidated cash balance of BRL 386.1 million. Free cash flow reflects strong operating cash generation of BRL 125.9 million, partially offset by dividend payments to shareholders and cash outflows for investment totaling BRL 60.8 million. The positive variation of BRL 20.6 million during the quarter was driven by normalization of accounts receivable balances and the reversal of one-off time effect related to insurance premium transfers. In investments, we have BRL 60.8 million, primarily reflecting the payment of interest and principal related to acquisition payables with a concentration of maturity in the second half of the year. In addition, BRL 54.8 million was distributed to non-controlling shareholders of our parent companies. On slide 16, we end the presentation with the evolution of our net debt. Net debt ended the quarter at BRL 138.7 million, representing a 58.4% reduction vis-a-vis the same quarter in 2025, and BRL 70.3 million decrease versus the previous quarter. This reflects the consistent deleveraging process that has been executed in the last quarters with financial discipline. Our net debt to EBITDA ratio reached 0.3 times, the lowest level in our history. This is the result of a combination of strong operating cash generation and proactive liability management, providing us with a solid financial position as we enter the second half of the year with confidence. With this, we would like to conclude the presentation and go on to the question and answer session. Thank you. I will now turn the floor to Mr. João Resende, who will moderate the question and answer session. If you wish to participate, please send your question to the Q&A icon. The questions will be addressed by our two company representatives. You can continue. Good morning, everybody. Before everything, I would like to thank you for your attendance in the earnings call for the second quarter 2025. I thank you for attending our Q&A. We do have some questions, and we will read them out throughout the meeting. The first question is from Ricardo from BTG. He greets everybody and asks us to remark on the behavior of BMG revenues and Promotiva up to present, considering the changes in payroll credit. This impacted the second quarter, but he wanted to know if it was possible to observe a recovery during the last few months through the use of other products. Lucas, if you could answer this question. Thank you, Ricardo, for the question. I have a problem with my camera, but I'm here. Before we speak about the specific points you are asking about, given the macro environment, we were very satisfied with the results of this first quarter, even with a Selic that restricts the consumption of families and the regulatory changes on payroll credit with a relevant impact in some products in the company. We had a net income improvement quarter-on-quarter. We are also growing, as you can see. These are some of the strengths of the Wiz business model. First of all, the diversification of our business. When we face difficulties, we see significant growth in Omni, in Inter Seguros, which shows something that we have been sharing in the company, the cost control. I also believe it reinforces the need to continue to open up new initiatives to become more diversified and less dependent on those impacts. That strong process of deleveraging that we are going through, first of all, enables us to grow organically and to pay out shareholders. We will be paying out BRL 100 million in dividends, 2.5 times more than we paid out last year. When we think about the macro situation and what was delivered this quarter, we have done everything within our reach. To answer your questions, Ricardo, what do we see in Promotiva? We are a few months away from the third quarter to give you a full answer, but we see a slight recovery in Promotiva vis-a-vis the second quarter, still not at the levels that we had last year. I remind you that Promotiva does depend on INSS. It represents less than one-fourth of the production of Promotiva, but it does impact all of the agreements of banking correspondents. The recovery is good but slower than we would wish. When we speak about BMG Corretora and to give you more details, I will offer you more details in the answer. The first important data that I would like to convey is that the INSS market is shrinking. The origination data, their public data from January to May, we have a reduction of 28% of origination in the market. This affects BMG partners and all segments working in the market. The INSS market as a whole has been decreasing in the market. When I look at what is happening, the regulatory changes, first of all, we see that this market is attempting to reduce dependence only on INSS. These were difficult months for the banks, and they are reflected in the origination data. More than returning to previous levels, the banks that we partner with and other banks we work with are devoting their energy to enter other credit lines. Perhaps the most important one is private payroll credit. This is a product that has had a relevant digital origination volume, and at the beginning, they had a higher default rate. It's an important thing to reduce the default of the product, and private payroll covers unemployment for some months, and of course, it has a lower distribution cost as it is distributed digitally. Banks are going to do other things. When we speak specifically about the INSS, the challenge that we have been facing is that banks no longer discount the amount of insurance. There's an entire structure of means of payment that you have to work with, and this change will take time. I can't tell you that we'll resolve this in one month or two months. To go back to the levels we had last year. We're going to face a challenging second half of the year. We're going to have to begin building from scratch, have a broader base of origination, work with this private payroll, which is something new for all of the banks. Our results in these units will still be under pressure. We will do our best, but we hope to bring positive news in the other units of the company. There is another question of William. We have heard your answers, and perhaps you would like to complement this. William is asking about the environment of payroll credit and the changes in regulation and collaterals, and at which point of the adjustment are we now at the macro point with high interest rates, more diversified products. What is the reading of Wiz Co for the second half of the year, and which would be the main opportunities of allocation for the growth of your portfolio? Of course, keeping in mind what you have already said. He wants an update on how we are going to allocate capital, strong cash generation for some time. We are very close to becoming net cash, and this also speeds up the payment of dividends. Is this what we can expect from Wiz Co? William, thank you. Simply to complement some points you mentioned, the timing of the adjustment, that will probably take the entire half of the year, which means this will pressure our results. We are working a great deal in these business units with new initiatives. From the viewpoint of interest rates and high default rates and indebtedness, we are in the mid to final position. The process, of course, is lower than we had imagined in terms of the interest rates. But every time that you reduce interest rates, you increase and you broaden the margin. I think we are advancing more slowly than everybody would wish, but this is the problem. I am more optimistic in terms of Selic that we will have a less restrictive market. But there is an entire construction that has to be done in the payroll market for the second half of the year. To speak about capital allocation and dividends, we are quite satisfied with the payout that we are carrying out this year. We were in the stock market for 10 years, and historically, we have always had an interesting volume of payout for the company. William, I think we are harvesting the work of three years. We are at 0.3 times EBITDA deleverage. We are generating more cash than profit. The payout of 50% that we presented last year is a level that we can continue to use to delever the company and, of course, create capital comfortably and create other opportunities. At this market moment, we want to maintain our shares attractive, and I do look upon this change with positive eyes. Thank you, Lucas. We have a question from Evandro Medeiros from Finclass. Many of the questions are connected. He speaks about the present day level, about the expenses of the parent company, if this is a normal level, and if we can think of a payout of 70% of dividends because of the strong cash generation. Evandro, thank you for the question. I have two comments here. First, about the cost of the parent company, secondly, about the payout. To speak about the cost of the parent company, this is one of the positive sides of controlling costs. We invested in Wiz Concept last year with a thesis of simplifying our company, and we are harvesting this effect. We have 132 workers in the second semester compared to 170% last year, a reduction of 30%. From the corporate viewpoint, there are relevant adjustments to be made. Of course, there are always things to be done, improve processes, but the stick of the adjustment that we could carry out, we have done. When we look at the parent company, not only the corporate company, but also the partners, we are full of projects with our partners. In the management message, we spoke about this. We are very enthusiastic. We have hired 20 people in July to begin this process. The cost that this will add to the parent company will be a healthy cost because we are going to create new revenues. This will drive the growth of revenues and eliminate the cash run-off in the parent company. This increase in cost is for new businesses, the secondary markets, for example. The more relevant adjustment has already been made in the parent company. We spoke about this last year, the size of the board, our management structure, and much more. Thank you. Lucas, we have another question from Mr. Igor Da Silva. In the case of problems in distribution for banking correspondents in Promotiva, for example, which will be the behavior of Wiz? How does Wiz fit into this scenario? If we have clauses that protect us in the case of distribution, what do we do in those cases? We do have protection clauses that are prior to the distribution. Nothing of concern to our management. The benefits and risks of the acquisition remain with the previous manager, and we do not have relevant problems. This is part of our day-to-day business. Thank you, Lucas. So far, we do not have any additional questions. If we have no more questions, I would like to thank all of you for your attendance. I thank you for your questions. As always, we are at your entire disposal to respond to the remaining questions that may appear. Thank you very much and have a great day.