Enjoei S.A. (ENJU3.SA) Earnings Call Transcript & Summary

Welcome to the Enjoei conference call to discuss the results for the third quarter '25. This conference is being recorded, and the replay can be accessed on the IR site of the company. The presentation is also available for download. [Operator Instructions] Before proceeding, please bear in mind that the forward-looking statements made here are based on the beliefs and assumptions of the company management and on information currently available to Enjoei. Such statements are no guarantee of performance. They involve risks and uncertainties as they refer to future events and therefore, depend on circumstances that may or may not occur. At this conference, along with us, we have Ana Lu McLaren, Chairwoman of the Board; Tie Lima, CEO and IRO; and Carlos Brando, the CTO. I would like to give the floor to Tie Lima, who will begin the presentation. You may proceed.

Good morning, everyone. We ended the third quarter of 2025 with enthusiasm for Enjoei's trajectory of solidity and sequential growth as well as significant process and product technology and channel expansion. From a financial standpoint, the results reflect consistency and discipline. We closed the quarter with a gross margin of 56.4% and adjusted EBITDA of BRL 5.9 million, the highest value ever recorded and robust liquidity position of BRL 241 million, which gives us a solid foundation to continue investing in sustainable growth. Total GMV reached BRL 411 million in the third quarter, remaining stable compared to the previous quarter. The net take rate measured by the ratio of gross revenue of GMV increased 0.8 percentage points in the quarter. This result demonstrates great efficiency in the conversion of completed transactions. Net revenue reached the highest level ever recorded by the company in the quarter, totaling BRL 70.1 million. This advance was accompanied by a 5.8% improvement in gross profit, reaching BRL 39.5 million with a gross margin of 56.4%. These results reflect the efficiency of the Enjoei platform and a stringent management of incentives. Another important highlight was a sequential improvement in marketing expense dilution, which reached 17.4% of net revenue, the best result in the company's history. This achievement reflects the consistent execution of our strategy based on efficiency we're using the transactions using fewer resources. Adjusted EBITDA reached the highest level ever recorded by the company, totaling BRL 5.9 million. Finally, it is worthwhile highlighting the cash generation of BRL 11 million in the quarter, contributing to a cash position of BRL 209 million and total liquidity of BRL 241 million. In the offline channel, we ended the quarter with 9 franchise units the result of ongoing efforts to bring fashion consumption into the physical world as well. This progress reinforces the confidence in Enjoei's franchise model supported by a robust technological infrastructure. Among the 9 units, 3 stores have been inaugurated in Goiânia, Rio de Janeiro and Sao Jose do Rio Preto, while the remaining stores are under implementation for the first half of 2026. In addition to the franchises, we continue to operate 3 company-owned stores in Sao Paulo to refine the offline operating model. In technology and product, we had a particularly remarkable quarter. I'd like to invite Brando, our CTO, to share a few highlights about important launches.

Thank you, and good morning to everybody. We had 2 launches aligned to our focus and expansion of value in the Enjoei ecosystem. We launched EnjoPay, our own sub-acquiring platform. We now process our user payments internally, which was previously handled by third parties. This gives us full autonomy on the management of receivables. We can manage transactions instead of depending on third parties. In practice, we have gained lower MDR costs, a better cash management, and this creates a sound position for new products. The second highlight is an advance in generative artificial intelligence besides the customer service, which is already integrated, operating 24/7 with tools delivering context-aware responses. We have agents within the platform that can resolve the request of user end-to-end without human intervention. They can consult our logistic partner to offer rapid responses to our partners. The responses have been very positive, reducing the time of service, an increase in satisfaction and of course, improving the efficiency of our teams. Our service through artificial intelligence shows the commitment of Enjoei to use technology in the day-to-day of our business. I would like to give the floor back to Tie, who will speak about novelties at Elo Sete.

At Elo Sete, we worked on renewing our visual identity and brand positioning. We believe in the potential of a network that values what is created with care, hand paint and authentic. The new Elo Sete brand is more margin and dedicated to strengthening the bond the connection with this creative community. This new positioning allows us to approach, attract and retain sellers who bring unique and special inventory placing the platform in a different space from traditional marketplaces. During this period, we also enhanced our commercial tools and media strategies to boost sales while preserving profitability levels. The effects of these actions have already started to appear in September and October with the best GMV performance of the year. We, therefore, closed the quarter with a sense of progress and confidence. We remain firmly focused on executing our strategy centered on technology and omnichannel presence, always guided by efficiency and the generation of consistent results.

Thank you very much for everyone's participation. [Operator Instructions] Our first question is from Danniela from XP.

I have 2. The first refers to the resumption of investments in performance marketing in the quarter, which is your mindset? I know that you had a rebranding, a relaunch of Elo Sete. Now because of the seasonality of the holidays, is this the right time to do this? If you could help us with this rationale and what will happen going forward? My second question is about EnjoPay. You speak about using this with consumers, which are the type of financial products you're thinking about? And if you have a value proposition for the seller, on your platforms?

Thank you, Danni, for the question. I will answer the marketing question first, especially referring Elo Sete. We have been able to enhance our marketing investments, also bringing in revenue. The learnings that we had in the past is that marketing investments lost their support when they were much to reduce. So we're now working with more efficient investments. We have focused on efficiency in the product Elo Sete as well. As you can see, we have a completely new brand. Now these are investments that have a return on investment, always incorporated. And these investments are forever efficient, and we have seen room for this. We're being very cautious, of course. We're learning and executing. But when you simply look at this, we see that there is space for investments in Elo Sete as well. And EnjoPay. EnjoPay has grown. It has grown in terms of its recurrent consumers and has also grown when it comes to the recurring sellers. We have an active base that is much better at present, a much more sound base and more efficient growth. And this is the mindset that we have taken on, but we're always thinking about marketing expenses vis-a-vis the revenues on our 2 platforms. Now what we're going to begin to do are 2 things in truth. We're going to think of new ways of payment in EnjoPay. We have a large concentration of customers from new bank. We can work with New Pay for conversion, for example. When you think about cash management, this is where the beauty of this new story lies. Now all of this is under our control, receivables and payables from Elo Sete. We can anticipate by -- this by 2 days. And of course, we will have savings of 30% during production and 70% subsequently. So we're looking upon all of this very efficiently. What we were paying for CDI was 70%. If we remove this from our cash, we can apply this in our business once again in a very efficient manner. What we're doing at present is to stabilize that business for a stable cash management, efficient cash management and working capital going forward. This is something that we're going to do during the use of EnjoPay. Now if you look at the results of the quarter, when we look at the line item financial expenses in terms of the company cash by anticipating receivables, our profit will be much greater than what we see in this quarter, simply because of what we have just presented here. And how is this going to bring more and how this is going to bring profitability for our core business as a whole?

Our next question comes in writing from Mr. [indiscernible], investor. Can you comment on how the recision of [indiscernible] and [indiscernible] will impact your future results? Which are other growth avenues that the company is pursuing to grow their revenue and attain profitability?