Q2 2026 Totvs SA Earnings Call (English, Portuguese) Transcript

Aug 6, 2026 / 02:00 PM GMT

Release Date Price: $12.5 (+0.68%)

Transcript

Key Points

Positve

Totvs SA (TTVSY) reported a significant acceleration in gross ARR additions, with year-over-year growth jumping from 9% in Q2 2025 to 28% in Q2 2026, surpassing the R$400 million milestone in a single quarter.
AI enablers are becoming a major growth driver, accounting for 29% of net new ARR additions in the quarter, up from 23% in Q4 2025, and contributing to one-third of incremental recurring revenue.
The company achieved its 30th consecutive quarter of double-digit organic recurring revenue growth, with a 22% CAGR over 7.5 years, demonstrating strong and consistent business momentum.
Adjusted EBITDA grew 22% year-over-year with a 190 basis point margin expansion, driven by operational leverage, rigorous cost control, and the successful integration of LINX, which has already surpassed a 20% margin.
The company is executing a massive share buyback program, repurchasing and canceling 70 million shares (nearly 50% of its free float), positioning it among the world's largest tech companies in buybacks and signaling strong confidence in future value creation.
TechFin is scaling rapidly, with TPV reaching R$2.8 billion (up 31% YoY) and net funding revenue growing 24% YoY, driven by new products like 'Compromissa' and improved funding efficiency.

Negative

The net ARR addition was negatively impacted by a 60 basis point drop in the retention rate, reflecting reduced financial capacity of some clients due to the prolonged high-interest-rate environment.
The company experienced higher-than-expected credit losses in its TechFin portfolio, with additional provisions for expected losses pushing EBITDA and net income into negative territory for that segment.
Adjusted net income fell 11% quarter-over-quarter, primarily due to the net debt resulting from the issuance of ventures to fund the LINX acquisition.
The company's share price has underperformed the sector, climbing only 20% from recent lows compared to a 40% rise in the IGV index, despite delivering superior financial and operational performance.
The company faces uncertainty regarding the recovery of churn rates, as some clients in extrajudicial recovery have caused isolated spikes, and management cannot provide full visibility on when these rates will return to stable levels.
The postponement of the Universal Totvs event from June to October due to the FIFA World Cup caused a one-time impact of approximately R$14 million on sales and marketing expenses, representing about 80 basis points.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

TOTS3.SA - Totvs SA
Q2 2026 Totvs SA Earnings Call (English, Portuguese)
Aug 06, 2026 / 02:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good morning and welcome to the earnings video conference of the second quarter of talk.

I'm Serio Serio, and as always, I'm here today with Berriz and our CFO Brian to present the main highlights of the operator, and again, we will have our usual Q&A session.

Before moving forward, it's important to remember that. Predictions about total future development performance are based on current information and assumptions. They encompass uncertainties and risks and manufacturers may change company's outcome. They may be different from the expectations here presented. Now I give the floor to Dennis that we will start the presentation in slide 3. Okay, Sergio, thank you very much. Good morning and land ho.

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