Earnings Call: Q2 2025

Aug 8, 2025

Summary

Q2 revenue, EBITDA and net income grew, led by insurance, while debt declined 35% YoY. Management expects a more challenging H2, with credit conditions and higher interest rates weighing on the outlook.

Good morning, everyone. Welcome to Q2 2025 earnings conference call of Wiz Co. For simultaneous interpretation, you can click on the interpretation icon at the bottom of your Zoom screen. Then choose the language of your preference, English or Portuguese. For those of you listening in English, you can mute original audio. After the company's presentation, we will open for Q&A. To participate, just send us your question using the Q&A icon. Your answer will be answered by Wiz Co representative. If your question is not answered during the call, the Investor Relations team will then contact you afterwards. Before moving on, we would like to stress that any forward-looking statements made during this conference is based on Wiz beliefs and assumptions, as well as on information currently available to the company. Forward-looking statements, they involve risks and uncertainties because they relate to future events. Therefore, they rely on circumstances that may or may not occur. Investors and analysts must understand that macroeconomic environment, the industry, and other operational factors can lead to materially different results than those expressed in said forward-looking statements. Now let me introduce Wiz Co's team. Today with us, Marcus Vinícius de Oliveira, CEO, Mr. Lucas Neves, CFO and IRO, and Mr. João Resende, our Manager of Investor Relations. Now let me turn it over to Mr. Marcus Vinícius, who will start the presentation. Please go ahead. Good morning, everyone. Welcome to our Q2 2025 earnings conference call. Before I hand it over to Lucas, please allow me to share a brief message with you. This quarter, we celebrated a major milestone for our company. It has been 10 years since we were listed on the Brazilian Stock Exchange. This is no ordinary achievement. It fills us with pride and deserves to be celebrated. The road to this point has been marked by perseverance, commitment to transparency, strong governance, and the creation of value for the market. As for our second quarter results, despite a challenging macroeconomic environment in Brazil, we once again demonstrated our resilience and our ability to consistently deliver results. Throughout today's presentation, you will see figures that reinforces Wiz' ability to grow in a solid and sustainable way. I would like to start by highlighting the company's consistency in generating insurance premiums. This quarter, we issued BRL 979.9 million in premiums, up 11.4% year-over-year. Looking at the first half of the year, we hit a record of nearly BRL 2 billion, an increase of 13.6% versus the first half of 2024. This achievement strengthens our company's scale, robustness, and relevance in the market. These gains contributed to a strong quarterly close. Consolidated EBITDA reached BRL 189.1 million, up 13.9% from Q2 2024. Consolidated net income came in at BRL 93.2 million, a 34% increase year-over-year, while parent company net income totaled BRL 49.4 million, up 45.8% versus second quarter 2024. In our insurance segment, we posted BRL 93 million in consolidated net income for this quarter, a 34.9% increase year-over-year. Key highlights include the performance of BMG Corretora, BRB Seguros, and Inter Seguros, which once again surpassed its own records, reaching 9.6 million active contracts. In credit and consortium, despite Brazil's macroeconomic headwinds, we also made progress. The segment's net revenue closed the quarter at BRL 38.3 million, up 5.8% year-over-year. Net income rose 35.4% compared to Q2 2024, reaching BRL 13.3 million. In addition to celebrating 10 years as a public traded company in Brazil, the first half of the year also marked Wiz Co's 52nd anniversary. We feel confident that we are on the right path and ready for much more. We remain committed to rigorous cash management, hunger for innovation, and sharp focus on our strategic plan. As always, I want to emphasize the crucial role each Wizzer plays in this steady journey of progress. I also extend my thanks to our board of directors, committees, and shareholders. We are ready for the second half of the year and very proud of what we achieved so far. Thank you. Now, over to our CFO and IRO, Lucas Neves. He will now discuss the financial results. Lucas, over to you. Thank you, Marcus. Good morning, everyone. I will start with the financial section with slide number 3. I will cover the main events and operational and strategic highlights for this quarter. I will begin by highlighting progress on Wiz Pro, Wiz Co's proprietary technology platform. Over the course of Q2 2025, advancing all four areas that make up the tool: sales, operations, management, and engagement. Today, seven business units are using the system, their regular commercial operations. In the sales module, we enhance the mobile experience, ensuring greater accessibility and smoother customer journeys. In operations, we rolled out new operational features and improved registration capabilities. In management, we launched new monitoring dashboards and improved the commission management process, boosting process efficiency. Finally, in engagement, we introduced new campaign features to strengthen client engagement and loyalty. Regarding Wiz Co governance structure, on April 25, 2025, the company elected a new board of directors. Previously formed by nine full members, it now has six, two of whom are independent. This restructuring is aligned with the company's commitment to agility in decision-making. Moving on, we closed the second quarter of 2025 with net debt of BRL 333.1 million, a reduction of BRL 179.3 million year over year. That is a drop by 35%. This consistent improvement is mainly due to the payment of acquisition-related accounts payable, supporting the company's de-leveraging and reinforcing Wiz Co's commitment to efficiency and sound resource management. I would like to also highlight Inter Seguros' performance, which delivered a record this quarter, underscoring the unit's consistency in generating strong results. Gross revenue reached BRL 82.5 million for the first time, up 42.1% from the same period last year. Net income was BRL 27.7 million, an increase of 39% compared to Q2 2024. This winning business model has enabled us to consolidate our leadership position in the segment. To close this slide, I would like to note Wiz Co's 10th anniversary as a listed company on B3. On June 4 this year, Wiz Co celebrated 10 years as a publicly traded company in the Brazilian capital market. This milestone reflects our commitment to transparency, governance, and value creation for the market. Our journey so far has been marked by resilience, overcoming challenges, and consistent delivery of results. We are ready to generate even more value and make a difference for our shareholders, the market, and society for decades to come. Moving on to slide 4, we share the financial highlights for Q2 2025. We posted net revenue of BRL 286.8 million, up 16.3% compared to Q2 2024. Excluding net revenue from Rede Caixa's runoff operations, net revenue was BRL 241.2 million, representing 22.2% growth year over year. This quarter, we saw steady growth both in insurance revenue, which rose 31.9% year-over-year, and in credit and consortium revenue, which was 5.8% higher than in Q2 2024. It is also worth noting that premiums issued in a single quarter reached BRL 979.9 million, 11.4% higher than Q2 2024. On slide six, we have the summary of consolidated results. In Q2 2025, EBITDA reached BRL 189.1 million, 13.9% higher than in Q2 2024, driven by strong commercial performance across our units. Consolidated net income grew 34% year-over-year, totaling BRL 93.1 million. Boosted by operational results, net income attributable to controlling shareholders came to BRL 49.4 million, up 45.8% from Q2 2024, and that is a plus BRL 15.5 million driven by EBITDA performance. On slide seven, we outline the adjustments considered in our adjusted view. This quarter, we made no EBITDA adjustments. In net income, we adjusted non-recurring and non-cash effects below the EBITDA line. Highlights include depreciation, amortization, and impairment adjustments totaling BRL 21.7 million related to amortization of intangible assets recognized from the acquisitions of BRB Seguros, Promotiva, and other business units. In financial results, we recorded an adjusted present value, AVP, of BRL 8.8 million on the future installments of acquisition costs for the company's portfolio companies, and monetary update of BRL 2.4 million on acquisition payables, partially offset by a BRL 1.9 million negative impact on exchange rate variations on contracted financial instruments. In income tax and social contribution, the amounts reflect the tax effects of the D&A and impairment and financial result adjustments. We ended the quarter with adjusted net income of BRL 116.8 million, 17% higher than Q2 2024. On slide eight, we assess the breakdown of the parent company. In Q2 2025, the parent company recorded EBITDA of BRL 80.2 million, up 28.8% compared to Q2 2024, certainly growth by BRL 17.9 million. This result was mainly driven by strong commercial performance across several business units, reflected in the equity income line, MEP. In Q2 2025, Wiz parent company posted BRL 59.9 million in equity income, 43.3% above results achieved in Q2 2024. Net income, parent company reached BRL 49.4 million in Q2 2025, an increase of BRL 15.5 million compared to the second quarter of 2024 or plus 45.8%. This result was achieved, driven especially by strong performance from the company's business units. On slide 10, we begin the presentation of results by segment. The reconciliation between segment results and consolidated results is in the appendix of this presentation and in the earnings release. In the first quarter of the year, 83% of net revenue came from our ongoing operations. Business units consolidated by Wiz in the insurance segment represented 61% of our recurring results. We continue to see strong diversification of results alongside sustained revenue growth, a performance made possible by the company's focus on delivering its strategic objectives. On slide 11, we present the operating performance of our segments. In the insurance segment, net commission revenue reached BRL 183.5 million in Q2 2025, 31.9% higher than the prior period, reflecting another quarter of solid performance in multiple units. Notable performance from BRB Seguros, BMG Corretora, and Wiz Corporate. Also noteworthy is the performance of Inter Seguros, which posted gross revenue of BRL 82.5 million or plus 42.1% year-over-year, generating BRL 12 million in equity income for Wiz during this quarter. Slide 12, we present the units engaged in distributing credit and consortia, Promotiva and Wiz Parceiros. We achieved net revenue ex commissions in credit and consortia, a 5.8% growth or BRL 2.1 million higher than in the same period last year, and EBITDA of BRL 23.6 million, up 12.2% from Q2 2024. These results reflect the strong performance of the Wiz Parceiros operations, which grew 52.6% compared to Q2 2024, posting BRL 8.5 million in net revenue ex commissions, and issuance of BRL 1.1 billion in credit and consortial letters, 21% above the same period last year. Also relevant, Promotiva closed the quarter with BRL 29.8 million in net commission revenue, representing 77.8% of the segment's consolidated revenue in Q2 2025. Now on slide 13, we present the service segment, which includes Wiz Concept and the runoff Rede Caixa operation. In Q2 2025, service segment posted net revenue ex commissions of BRL 20.6 million, down 11.5% from Q2 2024. The unit ended the period with EBITDA of BRL 3 million, up 21.8% year-over-year, maintaining its focus on business profitability. Finally, for the runoff Rede Caixa, we report results from the stock of revenues tied to sales made up to February 14, 2021. In the quarter, this line added BRL 43.1 million in EBITDA to the company, 7.7% below Q2 2024 due to a 7.5% drop in revenue from the operation. On slide 14, I highlighted the main points regarding corporate and below EBITDA results. In Q2 2025, corporate G&A expenses totaled BRL 11.9 million, BRL 2.9 million lower than in Q2 2024, thanks to greater efficiency in corporate costs. As for the BRL 19 million for Q2 2025, that is mainly due to lower adjusted present value, amounting impact of exchange rate variations on contracted derivative financial instruments. Finally, in Q2 2025, we recorded an effective tax rate of 34.4%, mainly due to non-deductible expenses for corporate income tax purposes, such as adjusted present value and capital losses. On slide 15, we show our cash flow breakdown for the quarter. We closed the quarter with a consolidated cash balance of BRL 304.8 million. The cash flow of minus BRL 133.7 million in the period was mainly due to payments related to the company's acquisition payables. In the quarter, we also paid BRL 79.2 million in dividends to non-controlling shareholders of our subsidiaries. With that, we conclude this presentation, and we will now begin our Q&A session. Thank you. Now, I'd like to turn it over to Mr. João Resende, who will open the Q&A session. Once again, in order to participate, please click on the Q&A icon and your questions will be answered by Wiz Co's management team. João, please go ahead. Good morning, everyone. I'd like to start by thanking each one of you for joining us this morning. Let's start our Q&A session. I'll start with a question from Ricardo Buchpiguel from BTG. You're asking about the seasonality that is usually positive for our top line in the second half of the year. But considering the headwinds and credit offer, that may be limited. Besides that, Wiz subsidiaries are more mature. So considering this scenario, it makes sense to think that will it be very close to the first half results? Well, as for seasonality, it's part of our business. So we expect that for the second half of the year, we face some challenges, and it would not be different. But we also have some upside possibilities. And we always come up with more positive results. But you're right. You should be aligned to the first half of the year. We expect to see more challenges in the second half compared to previous years. Thank you, Marcus. Lucas, a question to you once again from Ricardo Buchpiguel. He says that the company is operating with a leverage below 0.7 and also considering EBITDA. Does that mean that even without growth, but keeping current cash generation, we would have been net cashing in one year and a half and also an increase in payout. Considering, what do you see regarding cash generation? Would it make sense for you to increase payout because that would turn into net cash. What are you going to do with the surplus in a year and a half? Well, let's put in context. First of all, we did not have those options. All cash generation, except the minimum legal requirement of 25%, was used for amortization, right? Now we also have plans for payout in April, so the last installment of BRB and also Inter. Then we will start to see surplus of cash. We expect to generate cash to pay that in April along 2025. So from now on. We have already mentioned that in previous calls. To increase the payout of dividends is one of the potential scenarios that we foresee. But if you consider high interest rates, it's really difficult for you to find an asset that will provide us a return that is higher than what we need. Of course, we are examining the scenarios available. But yeah, we are optimistic. Great. Lucas, William Barranjard with Itaú BBA. He's asking about BRB. Can you please comment about the strong results from BRB about its organizational products? William, thank you for your question. Sure. BRB really stood out this quarter. Please allow me to say that. The first quarter was not as strong. It was a revenue of BRL 60 million, so below the first quarter of 2024. There was a gap that needed to be closed, and we worked hard with the BRB team in order to look for opportunities. We understand we have this challenge regarding credit generation. What we foresee for BRB is that it should be within the range of what we saw previously. But you're right, it was a very robust result, and that was really related to credit generation and also credit life insurance premiums. William also asked about insurance segment. How do you see the appetite for credit by partner banks? Will it slow down and would that have an impact on issuance of insurance? I believe Marcus mentioned that when he talked about what to expect for the second half of the year. I don't think that it was easy. This quarter was not easy regarding credit generation. That is related to cost control and also increasing our improvements in penetration. Promotiva, we saw this drop. There are many channels in which we face that challenge. To me, I don't think that the next quarter, it's not going to be easy, but not different from what we have seen. We don't see this extreme change, just as Marcus mentioned. Okay, thank you. Another question from Itaú BBA. There was an improvement in financial expenses, both consolidated as well as in the parent company, but interest rate is increasing. How do you see the next quarters? Well, we expect to see an increased drop, and that was actually masked by the Selic rate. We have a net debt of approximately BRL 333 million, as you can see in the earnings release. Every time Selic rate goes up, that increases our financial expenses. But because we are holding cash in order to deleverage the company, we have generated BRL 100 million cash. Consider the second quarter of last year to this year. We have that decreasing and interest rates going up. For the second half of the year, for the second quarter, we expect to decrease our financial expenses. It was supposed to be bigger, but because of the Selic interest rate increase, it did not happen as we expected. I would like just to add that we also paid acquisitions, as you know, right from Inter, as you mentioned. We expect that also help us to decrease our financial expenses. Now, Pedro Calixto is an investor. Lucas talked about dividend payout, but he also commends the company for the results. Does the company intend to increase the frequency of dividend distribution on payout? Great question, Pedro. In October of 2023, we decreased the payout from 50% to 25%. The idea at that point was to generate cash to deleverage the company, and that was done. We conducted a very sound cash management. What we have today in April of 2026, we will probably have settled our liabilities, and then a window of opportunity will emerge. Then this increase in payout is one of the possibilities, because we will see the company in conditions to invest, and that has already deleveraged. We are sure that at the beginning of 2026, we may share good news to our investors. Great. Thank you. Now, a question from Leonardo Piovesan with Quantzed. Can you please talk about recovering results from BRB? Actually, Leonardo also asks us to talk about what had a negative impact regarding other expenses and revenues this quarter. Leonardo, I believe that I have already touched on that when I answered Ricardo. BRB and Bancassurance had impact in credit transactions of BRB. For this quarter, we also had impact of payments of PIS and COFINS. Two and a half years of PIS and COFINS expenses, BRL 6 million. Now we have settled that, so we expect a very strong quarter. It would be a runoff, but we would rather not do that. We do not want to make adjustments. With 10 business units, every month, we have something, right? Now, a question from Evandro Medeiros. He asks: What explains the strong results in marketing consortiums at Wiz Co and also considering the entire market, so what explains this more positive scenario? Evandro, thank you very much for your question. There are many factors that explains that. For two years, we really cleaned our partner portfolio. Now we are working with partners with a high sales rate. That is very important for the entire chain to work well. Considering the high interest rate, consortiums look at many companies and many people, and we know that that product is more appealing at this level of interest rate compared to also other lines of credit. Research reports also showed us, and one thing we would like to highlight, we changed our payment model of our partners. Consortium, oftentimes, we have a partner, a business indicator. Then we receive a commission from the admin, and then I transfer that to the partner that generated that operation. For some, we are splitting. We pay already directly the business partner. That drops our revenue from that. But we also transfer less. We are very optimistic with consortiums for the next quarter. We also see a good performance regarding sales of consortiums in Wiz Corporate, Promotiva. We believe that this line will be relevant for our results in the future. Great. We have answered all open questions. I would like to thank each one of you for joining us. Thank you, Lucas. Thank you, Marcus. Please, we are open to answer any further questions you may have. Do not forget to get in touch with us.