Bemobi Mobile Tech S.A. (BMOB3) Earnings Call Transcript & Summary

[Interpreted] My name is Bruno Giardino, IR Director at Bemobi. We are here once again for another earnings release presentation for the second quarter of 2026. Today, we have our officers here. We have Pedro Ripper, CEO; and Andre Veloso, CFO; and Andre Strecker, CFO -- are actually CRO. We also have [indiscernible] from our IR team. We are recording this presentation. You'll be able to see slides and hear speakers during the presentation. You have access to simultaneous interpreting into English, should you prefer this language. At the lower bottom right, you have an interpretation button and you can pick English. We have an English channel that can be used by pressing the button called interpretation on the bottom right corner of your screen and then choosing the option in English. I would like to highlight that the presentation -- after the presentation, we will hold a question-and-answer session. And now I'll switch back to Portuguese. After hearing from our officers. We'll have a Q&A session exclusively for analysts and investors. You receive more instructions to ask questions when we start the Q&A session. Before we proceed, let me read something to you. We'd like to make clear that any forward-looking statements that may or may not be made during this conference regarding our financial forecasts, operational forecasts and other beliefs are based on beliefs and assumptions by the Board as well as on information that is currently available. This entails risks and uncertainty because they relate to future events meaning that they rely on things that may or may not happen. Investors must understand that general economic conditions in this industry and other operating factors may have a significant impact on our performance, leading to results that differ materially or significantly from what we're discussing here. Let me now hand it over to our CEO, Pedro Ripper, who will start our presentation. Thank you.

[Interpreted] Once again, thank you. Good morning. I'm happy to be here sharing information about the second quarter of 2026. Let me start sharing my screen with you. Let's hope this work and we have a short video for you today. Today, we have a very similar script as the one we're used to using here. We have 3 different blocks here. First, we're going to be discussing strategy with a relevant update regarding our position. We're going to take a little break to understand what has been happening with Bemobi, especially vis-a-vis transformation in our perspectives for the future. Before talking about financial metrics, we're going to give you an update on business with TPV, new clients and product innovation. And finally, we're going to see financial results. Regarding strategy, we had an important landmark here. If you've been following us for 5 years, we've been undergoing intense transformation. We made a bet, we went into the payments industry in a very timid way at the beginning. Now for this quarter, we are not only creating a new brand, but we are leaving behind a brand that used to have a payment business to a payment business. It sounds subtle, but this has to do with all the work we've been doing in the vision of the future that we have for ourselves. If we think about figures, let's go back in time. we've seen drastic change, dramatic change in the last 5 years. We tripled our revenue since our IPO. We're going to quadruple it by the end of the year, close to BRL billion in net revenue. We tripled our EBITDA and we more than quadripled our net income. We had good dividends for our shareholders as well. It was also almost BRL 0.5 billion in this period in dividends. It's important for us to also understand how the market is shifting and how we see changes, macro changes in Brazil in the digital world, we see a dramatic change in the payments industry here. So we took a turn when it comes to our business position, and this is shown by our KPIs here. In this quarter, we surpassed an important end mark. More than 2/3, 70% of our business is now focused on payments, software, which is our big bet. We've also been significantly increasing the volume of processed payments. We have a run rate of almost BRL 16 billion -- BRL 4 billion in the last quarter. We are no longer working with a single industry, too. We used to have a telecommunications DNA through our partnership with telco companies in Brazil, but we've been specializing in our other verticals to create very good solutions for them. Right now, we're very consolidated in 5 big verticals. Together, we're talking about over $2 trillion in the Brazilian economy, almost $2 trillion that these businesses create in the Brazilian economy. Finally, we are executing our strategy well. We were able to convince most of the biggest company in these industries to be a part of our role of partners. These are some of the highlights that we've had during the transformation that we built in the last few years. During this process, we also had very specific M&As. There's the concept of holding with independent business, but we actually wanted to work on the proposition of complementary value. We integrated these businesses little by little. Either we onboarded new specialties, new verticals, new capabilities, new tax solutions, but we saw the business as one integrated thing where basically all of these brands, we phased them out and they have been 100% integrated into Bemobi's operations. If they haven't, it is only a matter of time or it's because of our strategy. For instance, with agenda do, we have a very specific product for a very fragmented market, so it makes sense for us to keep them independent. We also had our rebranding. You can look at our new look on this slide. This is our new logo. Let me give you the backdrop. So we had multiple brands and multiple stories. Each one of these brands or each one of these stories represented a chapter for Bemobi. As a side effect, we had a business portfolio that was hard to understand, partly because of fragmentation, partly because of our business model. So evaluating Bemobi was hard and challenging. And we were basically being valued through each one of these pieces. In the last few years, with our changes in our brand and positioning which is very, very important, we tried to dramatically simplify not only our business, but also our storytelling. I used to joke that our elevator pitch required a 100-story building because it took us a long time to explain what we did -- but now we can do it with 1 or 2 stories. We have a simpler architecture, simpler products, offerings simpler structures and this makes us more aligned with our future. And our ambition is also more concrete now with payments, especially in a highly digitalized environment, which is now AI-enabled, we see the capacity of payment, which is usually in the back office of companies becoming a competitive edge. So you need to have extreme alignment with payments and with your strategy in your business, and we had to develop capabilities to be able to deliver on this promise. These capabilities are things that make Bemobi have a competitive edge. We have 4 pillars here. Number 1 is something that we've been insisting on, which is having sector specialization. In the first 4 years, we focused especially on sectors that have 1 North Star. Usually, we have recurring services, lots of regulations and some kind of gap since these are universal sectors, they had some kind of gap in adopting new payment technologies. We also went into a fifth which is ecosystems with franchises, distributors and other ecosystems that work with the B2B2C model. Now by being specialized, we were able to better understand the pain in each one of these sectors and to actually offer them payment solutions that cater to these pains. Our second pillar is to understand this extremely fragmented market that is changing so quickly in turn something complex into something simple through orchestration, which we call intelligent payments. Not only do we want to offer multiple modern payment methods like closed loops and new PICs modalities and new wallet modalities and new payment mixes, payment that are recurring intelligent payment or smart payment and orchestrating all of this to make it simpler for whoever is collecting this money. The third pillar means acknowledging that payments are not happening in a vacuum. In the industries that we work with, this journey starts much earlier than the point of payment. For instance, it starts with a payment slip. In many of these industries, people receive letters in the mail or they receive a PDF in their e-mail and oftentimes, they go to spend. Then you have to go to digital panels, you make the payment. And at the end of the day, you have to deal with reconciliation. You have to make sure you write that off and you have to make sure all the process is followed. So there's lots of friction. And this just drives value for companies. So we want to reduce friction. And Bemobi is working in the user experience chain. During this journey, we may help clients deliver a digital payment slip through WhatsApp and we're rolling up our sleeves. We're working with legacy systems oftentimes to make sure this process runs smoothly. This is a third element of our competitive edge. Finally, in the last 2 years, we've believed that AI is still at the beginning of its journey. There's lots to come. There's lots of change that we're going to see on the horizon, but we're not going to be followers. We believe there is huge opportunity in hyper personalization for payments and collections. We can work with predictive payments and predictive behaviors to improve collection. We can also use AI agents that are going to pay bills on behalf of end customers and our partners and billers need to be prepared for this. These are the 4 pillars that are our foundation, enabling us to turn payments into competitive edges. This is our new look for Bemobi. And we're trying to work together with our brand, our positioning and our ambition that we've been making more concrete in the last 5 years to prepare for the next 5 years. So let's watch a short video. This is going to show how we are aiming for a simpler storytelling. [Presentation] Again, this is very playful, but I believe this video showcases our new perspective in a very clear way. With this orchestration, simplification and end-to-end journey. And the idea that we should be heavily specialized by industry. This was a longer introduction. So now let's go to our updates. Let's start with our clients. As we always say, we try working with the leaders in each sector. In upper education, we had lots of wins. We have Dukes in our portfolio, one of the biggest companies for higher education in the country. And we have 2 new partners that are really interesting here. Vitro is also ranking among the top 5 in this industry, leading distance education here. We established this partnership after a long time establishing our priorities. And now we have a partnership with FMU. They are also a part of our portfolio of clients now acquired by Anima. So this consolidates our presence in this industry. It is something recent for us because we've been in this industry for 1 to 1.5 years. We're also very happy after a long time of aligning our vision and aligning our digital journey with this client to onboard AGM. We had wins with SABESP basically a year ago. So now we have the second biggest player in this industry in an industry that is growing a lot in Brazil with lots of privatization efforts. [indiscernible] is one of the biggest consolidators and one of the best utilities in Brazil for this, and they understand that payment methods could be an advantage. In health care, which is our smaller sector may be. We are working with APV. We've been working with them for about a year. We saw the first results in this quarter, and now we have a partnership with Qualicorp. Qualicorp in APV that together are the 2 companies that have the biggest numbers for private health care, one of them takes care of benefits, but they both take care of the relationship and collection processes within customers. We've been building this partnership for over 2 years, and we can finally announce it. Finally, if you have been following us, you know that we're really careful when we choose new segments. Now with recurring essential services, we've been keeping an eye on condominium administrators for 1.5 years. This is very important in Brazil. And payments are still very detached from modern payments. So we now have a good partnership with APSA the third biggest condominium manager in Rio de Janeiro. We want to create a new experience for payment collection and billing. This is another vertical for recurring service. So for our clients, we have very good penetration for some groups that are already partners. We have 7 out of the 10 biggest telecommunication companies, 8 out of the 10 biggest utilities, 2 out of 5 basic education companies, 2 out of 7 higher education companies and 2 out of the 5 biggest health care companies. When you take a look at this slide, it may feel like we don't have much space to grow because, in theory, we hold most of these clients. but this would not be the right take. When we look at the potential that we have in each one of these accounts, we may have 5% to 10% in each one of them. And when we see where our growth comes from, usually in the last quarters, 2/3 of our growth comes from growth from our current accounts, which goes to show that we still have lots of room to grow where we are already present and 1/3 of growth comes from new partners. So if we were to stop getting new clients now, which obviously is not going to happen, we would still have the potential of tripling or quadrupling Bemobi with our current customer base. Of course, for our growth engine, which is more sophisticated. We have a combination of new clients, new verticals and better penetration for our current clients. But with this slide, I think it is easier to convince leaders in each industry that the value proposition we're building is actually very solid. For products, we have 2 highlights here. We finalized our production with them, and we're going to have live case in the next 2 months. First, something that only a few businesses in Brazil offer, and I think no independent payment player offers this. Maybe Mercado Livre is the only 1 that does this, but they do it for themselves, which is the ability to help customers when paying a bill, a bill in our case, a product in the case of Mercado Livre to combine 2 different payment methods. This may sound minor, but in Brazil, people have low income levels. So it's very common for people to have low balance in their accounts and to have to use credit. So combining payments or paying something with a PIX transfer and another share with installments is really major here. This really unlocks their payment capacity and offers a more convenient service to clients. Now hand-in-hand with this, we are also fostering innovation here. We have a partnership with Livelo. Livelo may have the biggest loyalty plan for different social classes in Brazil. Because, of course, you have mileage plans that are focused at the top of the pyramid, but you have almost 11 billion points in the hands of consumers right now here and we are now creating a new way to use these points to pay for bills. So little by little with select partners, but at some point with every Bemobi partner, you see the possibility of using our points during checkout, not only combining payments but also connecting it to your Livelo account. So hypothetically, if you have points that are worth $60 for a 100 BRL build, you could use the $60 to deduct it from your bill. Again, I emphasize that this is an example of how we're always trying to make people's lives easier and to acknowledge the different dichotomies that we see in Brazil, which is a very heterogeneous country. Now thirdly and lastly, let's talk about the results for this quarter. This is not a financial metric. But it's a good lead indicator. This is the total volume of processed payments. We had very robust 54% growth. Here we have our last vertical with marketplaces in ecosystems, which happened with the acquisition of Paytm. And on the right, this is what we see, we see that, first, we had telecommunications with payments. And after a couple of years, basically, the new segments are the same size as telecommunications. Telecommunications is still growing, but it is only natural for new sectors to have higher growth or faster growth. Another highlight is that we have a very healthy take rate. We are a little bit flat year-on-year. And this drop is expected we've been talking about it as we process new PIX transfers. It is only natural that we're going to have a faster TPV acceleration then the acceleration of our revenue. But we do believe that both revenue and the contribution of margin are going to keep growing at a very healthy level. Now let's discuss revenue. We have some breaks here. It is a little bit more complex. So we have some breakdowns. First, we have the organic view. And then we have a neutral view taking into account foreign exchange fluctuation which better represents the real growth of -- the real speed of growth in our business. Because we had some of our business running outside of Brazil. So with a nonorganic growth, we grew 36% year-on-year. Without foreign exchange fluctuation, we grew 15% and 30% with Paytm. But if we were to double click this, the highlight is that in our main vertical, payments, we had 75% of growth. So with Paytm that's 75%. Now if we were to exclude Paytm, with their 2 legacy systems, we grew 53%. This is very robust payment and this was led by our main vertical, which at its essence is our new Bemobi. So let's see the revenue breakdown. We have breakdown by region in international revenue. We had 60 to 40. So Brazil was already most of the business a year ago. But since payments is really focused on Brazil, and it's growing very rapidly in spite of having overall growth for our international line, our mix changed a lot. We also had a little negative effect from foreign exchange. But this breakdown happens, especially because of the high growth of our payments in Brazil. With the breakdown by business, if we put payments and software together, we're over 70%. And the other original more mature business at Bemobi for the first time are reaching around 30%. These are still relevant businesses, they are still resilient, but they are losing share in a relative way. Let's now hand it over to our CFO, Andre Veloso, who will be able to discuss the other financial metrics.

[Interpreted] Thank you, Pedro. Good morning. It's a pleasure to be here with you again to discuss our earnings release presentation. So here, we have our gross margin. We have 12% year-on-year. This is organic and 21% if we take Paytm into account, reaching BRL 55 million. Would we have a slight decrease for the relative margin. This happens specifically in the organic number because of the acceleration of growth for payments with a mix of solutions that leads to something a little bit smaller than what we had last year. But with the consolidated numbers with paid time because of this new company that has been recently integrated into the group, they have lower levels of profitability. So this creates a little bit of pressure for our consolidated results. It is also important to notice that we don't have a quarter-on-quarter comparison. We basically have a stable margin here. And in our opinion, this is very healthy for the execution of our business plan in the medium to long term. Next, so here we see our OpEx indicator. We had a 3% of organic growth and 10% of growth with Paytm, a little bit over BRL 75 million in OpEx. So we used tailwinds because of ForEx. But this is also associated with expenditure control at the company, and we were able to innovate dilute investments to reinforce our structure that took place in the second quarter of the previous year. So we kept the growth of our expenditures in the level that was very different than expected from a revenue standpoint. For the adjusted EBITDA, we had an accelerated growth compared to revenue, 24% in the organic figure, 33% if we take into account Paytm. And for the relative margin, in both cases, we were able to find margin expansion, 34.9% for the consolidated and for the organic almost 37%. Here we have our EBITDA minus CapEx. It's important to make a note here. Oftentimes, we feel like this market is not paying attention to this indicator. But in our opinion, this is an indicator that better reflects our operating performance at Bemobi. Let me tell you why. Most of our CapEx is focused on the activation of workforce with IT projects and product projects. So to avoid any kind of discussion between OpEx and CapEx, this is an indicator that encapsules all of it. So this is an excellent proxy of our capacity to generate operating cash flow. It's impressive to see the capacity that our business has to use its business model and its operational leveraging to improve this indicator over time because our CapEx has been clearly growing at a lower level compared to our EBITDA. So both in the organic figure and the consolidated figure, we are at a level of a cash conversion that is 81%, which is really healthy. And little by little, we are improving the performance of indicator over time. Next, we have profit or the adjusted net income. We had 30% of growth a little bit over BRL 45 million. Obviously, this happened not only because of better operational performance but also because of the impact of what we paid in the previous quarter in interest on equity. This is partially offset with lower financial results for this period. Since last year, we've been returning lots of cash to shareholders, and this has been reducing our cash inventory that is available to us. In a way, this is also improving our capital structure. So this is what I have to share on the adjusted net income. Finally, we have our cash position. From an operational standpoint, we were able to see an increase of BRL 44 million driven by the EBITDA minus CapEx indicator. We had a little injection of free cash flow in our business are actually working capital, a little injection of working capital into our business for payments, which is the biggest growth engine. And if we look at the free cash flow, it was negative by BRL 21 million compared to the previous quarter, especially because we used BRL 60 million in initiatives to return money to shareholders. One of them was the buyback of most of what we had for the swap through a share buyback program. We also had another BRL 16 million in interest on equity that were acknowledged and paid out in the second quarter. We also had the payment of price adjustments for the Paytm acquisition at the end of the year. And we had the dismantling of the swap position that I mentioned earlier, which brought a positive cash flow adjustment. So we [indiscernible] at BRL 5.6 million, and we ended this period at BRL 328 million. We just acknowledge another tranche of BRL 16 million in interest on equity that will be paid by the end of the month. We are aligned with the 100% payout that we set for this year. Thank you again for being here, and let me hand it back over to Pedro Ripper for his end remarks or closing remarks.

[Interpreted] Great. I'm going to close this out and then we have a few minutes for Q&A. Again, we had a strong quarter. For our figures, once again, payments is a highlight. We are very accelerated there. With Paytm soon, we're going to give you more visibility, but we've seen that this was a good acquisition. We are still at the very beginning, we still have to capture lots of value, but we are executing it well. I insist that it is worth looking at it carefully because we do believe we're going to have a good engine of growth in the future for this. Our hypotheses for operational leverage has been very consistent. I want to make it clear that we could have an opportunity here to bring profitability up, but we haven't been doing it because we do believe that we should be making extremely important investments in product and team expansion. And in a way, these are important for us to keep this rhythm of growth from now on. So even though we look at 36% of organic growth for the EBITDA, we don't want to keep increasing this forever. We may reduce it slightly. So that, on the other hand, we can accelerate growth. And we are very comfortable with this trade-off. I think ultimately, this is what is going to maximize sustainable growth in the medium to long term. I think what makes me the most excited about this quarter because we may have a great strategy, we may have great financial results. But the feel for the future are big businesses, big clients that agree with our hypotheses that agree with our value proposition and that then are going to become a new source of revenue. Of course, there are many, many clients that I'm not highlighting here, but in one single quarter, we were able to onboard many big players from the new sectors that we are just starting to explore. This is a big validation of our business model, in my opinion. I'm not saying that our next sales are not going to be challenging, but this is good. It is easier for our clients to make decisions when they see our history. They see that their peers are reaping the fruit. Of course, as we grow in these industries, we also learn a lot with these clients. So this creates a virtual cycle. With condo payments, this is a huge, huge market, over BRL 100 million. We have lots of fragmentation challenge in this industry. So our first endeavor here is a first experience so that we can learn a lot from APSO, which is extremely sophisticated and who also agrees with our vision on what the payment journey should be. We do believe that we are going to be able to unlock value in this industry. And if this proves to be right, then we're going to scale this up. Finally, we still believe that we have a huge journey of product and innovation ahead of us. We should have more news on AI in the next half of the year. There's traditional payments. There's a combination of regulated software and AI. And we believe this is really powerful. Usually, you're going to associate AI with software, but especially regulated processes. This is going to be very strong. And we've been raising the bar in the right way when it comes to operating payments in Brazil. But AI could definitely boost productivity and innovation for new business models. So we're going to be talking about products that we believe are going to be a competitive edge from now on, on our pipeline. Now let's go to the video. I'm going to stop sharing my screen. And Bruno is going to help us start the Q&A.

[Interpreted] Of course, Pedro, thank you. So let's start our Q&A. Our first question comes from Bernardo Guttmann from XP.

[Interpreted] Congratulations on these results and on the new contracts that you were able to get. Pedro, I'd like to start off by talking about the condo market. I think you talked about this in the Brazil Journal article. You said that in this vertical, you need a different playbook because it's a very fragmented market, and you need to reach hundreds of managers to reach scale. How do you tackle that? Can you create a distribution model or a partnership model that allows for you to scale up without increasing our CAC too much or are you going to do it gradually. Because the TAM seems to be extremely relevant for this vertical. Can I have another question here. We recently had a conversation about Bemobi initiatives with AI. And you were really careful. You didn't talk about short-term monetization. You said that the most immediate impact should be in productivity. Another quarter has passed. What has evolved more quickly than what you expected? Do you see any initiatives where there is a more concrete bridge between the productivity gains and the financial impact?

[Interpreted] Great Bernardo. I know you've been doing this for a while, and it's great that you see that this model is shaping. We've been studying condo bills for at least 1.5 years. Let me tell you what makes us excited and the challenges that lie ahead. What makes us excited is that condo managers are twofold. First, of course, you have to manage accounts. You have to consolidate condo accounts, you have to provide some services. And there's also a financial component to it, a condo manager is not a financial institution, but they end up playing an indirect role of organizing working capital for the condo structure, they won't loan money, but in a way they end up doing that. So we have 2 opportunities here. Number one, just like in the other sectors, we work in these payments methods were ancient. And I live in a condo and I would love to have other options because I think this could make the lives of end consumers much easier very in line with what we see in the other industries. And I do believe that as the Central Bank tries to create more regulation for the payment sector in the financial sector. The managers will have to become more professional and we'll have to transition into using partners for some of these financial operations. So we use 2 capabilities here. This is an essential recurring service, but it's also a B2B2B model. You have a building manager that provides services to a condo structure. So I think we're very well positioned to solve this issue. Now let's go back to your question, which is very valid. I think we need to cross 2 bridges. First, we need to build a big case. This is why we want to work with EPSA. We want to unlock many of these topics, and EPSA is a very sophisticated player. Number two, having done that, let's see, we're able to unlock this. How do you scale it up? We have some formats for that. It's not the first time we go into a fragmented industry. If you remember of this used to work, we have 2 segments that used to be heavily fragmented in Bemobi. First, elementary education. The biggest player has 3%. It's thousands of schools. And in this case, we went for an M&A with agenda do. They had a good software solution with good outreach and we integrated payments. And we did something similar with 7Az and we just bought the other 49% of them. Working with ISPs, which is 15,000 providers. So the playbook of figuring out a sector, tackling an issue and then having NRP or an acquisition is one of the paths that we can follow. And that is what we're going to do here, but I just want to make you comfortable that we've worked this muscle. We've been able to get more fragmented industries and being able to do this. So we need to first cross the first bridge, and we trust that we have a good value proposition, and we're going to start working on the possible paths to get there. Secondly, regarding AI, I'm also very cautious I believe that overall, and I don't want to overly criticize people. This market is leaning into associating anything that is good or bad to AI. So if thousands of people are laid off, we think that it's because of AI, but actually, it is not a straight forward. Of course, this could happen in real life. But I can tell you that when Andre was talking about this very important metric, EBITDA minus CapEx and our CapEx is 90% intangible. When developing software and product, that's 90% of our CapEx. And in the last 2.5 years, we really dove into this and this is one of the reasons why we've been able to grow with the other indicators significantly faster than what we could have grown without AI. Because we had product deliveries that were huge, and it's unlikely that we had -- that we would have been able to do it without AI without this kind of operating leverage. So we don't have a number of sense, but it's clear that the output that we have right now with the same teams that are now using AI is significantly higher than what we would have in the past, and we didn't have an increase in headcount. So it's clear that we have accelerated operational leverage because of AI. So when we talk about what's good, like creating value for what's new, I would say that the initiative that is more concrete is the initiative of converging to activities. Usually for our biggest partners and clients, this is done separately. First, you have collection that's when you collect for a bill that is not due yet or has only been due for a few days. And after a few due dates, then you go into first collection. But this breakdown is arbitrary. And the second step is usually done by specialized companies in the pre-AI world.p However, as we onboard these capabilities, we can include in our take rate, a share of this addressable market. This is already happening. We have a share of our revenue that comes from this. I don't want to be a salesperson, and I don't want to say how much of it came from AI because it's not as straightforward, but I can clearly tell you that without AI, we wouldn't have been able to do this because we're not going to build a call center at Bemobi. But AI allowed for us to go into a new segment. We are at the beginning of a long journey. But we do believe that these 2 industries of payment and collections are going to become 1 single thing, and we are well positioned to bite a share of this market. There's other things, and we're going to talk about these concrete results as we have better news and then we're going to have a better split between our initiatives that are enabled because of AI. Was I able to answer your question, Bernardo?

[Interpreted] Yes. Thank you so much, and we'll see you next week at the CEO conference.

[Interpreted] Definitely, I'll be there.