Locaweb Serviços de Internet S.A. (LWSA3) Earnings Call Transcript & Summary

[Interpreted] Good morning, ladies and gentlemen. Welcome to LWSA's Q2 2025 Earnings Conference. Joining us today are CEO, Mr. Rafael Chamas; and CFO and IRO, Mr. Andre Kubota. For the Q&A session, we will also be joined by the company's senior management team. This event is being streamed online via Zoom webinar with simultaneous interpretation into English and will be available for replay at ri.lwsa.tech. You can download the slide deck for this presentation from the results center under the Financial Information tab on the same website. The reported figures are stated in Brazilian reais and have been prepared in accordance with Brazilian accounting standards as set forth by the Brazilian Accounting Pronouncements Committee. Before we begin, we would like to note that any statement made during this presentation regarding LWSA's business prospects, operational and financial forecasts or future growth estimates is merely a projection and as such, is based only on management's outlook for the business. This outlook depends substantially on market conditions, the performance of the Brazilian economy, the industry and international markets and therefore, may change without prior notice. Unless stated otherwise, all variations and rounded figures presented here have been calculated in thousands of Brazilian reais. This business performance presentation includes both accounting and non-accounting data such as organic and pro forma operating and financial results as well as projections based on the company's management's expectations. The non-accounting data have not been reviewed by independent auditors. [Operator Instructions] I will now turn over to Mr. Rafael Chamas, who will begin the presentation, followed by Mr. Andre Kubota. Mr. Chamas, please you may proceed.

[Interpreted] Thank you. Good morning, everyone. Thank you for joining us for LWSA's Q2 2025 Earnings Conference. I have a few core messages before turning over to Andre Kubota. First of all, I'd like to talk about the acceleration of the company's revenue growth. In Q3, or actually Q2, there's been significant progress, especially in the e-commerce department. Also our profitability for the fourth consecutive quarter has increased. In fact, not only our profitability, but our cash generation has also progressed. We ended the first six months of 2025 in a very strong position, and we'll be detailing that moving forward. Lastly, more from a product perspective, we talk about the progress we've had this quarter, especially when it comes to the use of AI, both from an internal use perspective, but most importantly, about the productivity and the experience of our customers, which is where the game is actually being won considering the new possibilities AI has allowed us. In the following slide, we talk about the operational results from the perspective of the most important KPIs, GMV, TPV and our subscriber base. We ended the second quarter with BRL 19.4 billion in GMV, up 15.1% year-over-year in TPV. We've been talking about this for some time. In the second quarter of 2024, we did not have what we expected, and we ended Q2 of 2025, up 19% in TPV, having processed BRL 2.1 billion during this time and our subscriber base in e-commerce with close to 200 million subscribers, up 5.2% year-over-year. So these are operating indicators, which obviously help us explain the advance in our commerce department, most importantly, which is what we look at in the following slide. So in every bar, every period since Q1 2024, we see both how our consolidated group has grown and the commerce operations more specifically. So since Q1 2024, this has been our best quarter, both for the group at large and for our commerce operations. So we ended Q2 2025 with 10.4% growth for the group at large, up 1.6 percentage points versus Q1 and more than 2x what we grew in Q1 2025, or actually Q1 2024, and also over 2 percentage points up from the previous quarter. So we end up growing by 15.4% year-over-year. So this is very important for us in such an important indicator. And as I mentioned earlier, this progress has obviously brought in more profitability, and we'll look at our cash as well later on. But when it comes to profitability, we ended Q2 with a BRL 75.9 million EBITDA with a margin of 20.5%. And here we talk about the last four years since 2022. And as you can see, we have had consistent results year after year in keeping with the company's strategy, which has been to streamline organizationally and to leverage the core businesses of the company, also with greater synergy within our compounding and complementing services. So these are combined elements, which obviously have added substantially to the company's profitability. And moving on to the following slide, we have also been generating more cash. We ended Q2 2025 with an operational cash generation. In this case, considering our CapEx and working capital with a generation of BRL 90.6 million with a net revenue margin of 12.6%. So from a financial perspective, and Andre will give you more details about this, what we've been able to do was accelerate the company's profitability and the profitability being a result of this organizational streamlining strategy, especially when it comes to turning this streamlining or the streamlined operations into profitability. So when it comes to AI, we have increased our internal productivity. We have been very agile as a company and particularly effective in everything we've set out to do. The company's engineering operations have been fully outfitted with AI tools, which obviously increases the team's ability to create multiple models and even rethink how engineering operates within the company. In the first six months of the year, 100% of the company have adopted these tools and growth has been very robust. In a few cases, we have seen a real gain in productivity by as much as 80% when it comes to the delivery of code for the same type of activity. So when these tools are well leveraged, well managed, are effectively a tool for productivity gains that's very important and significant for the company. Now it's also about internal productivity. I mentioned one or two quarters ago about a proprietary tool that we've developed. We have worked with Octadesk to produce a tool focused on customer service and the entire customer service within the group have leveraged this tool. This includes actually intelligent agents. So in tools that we have already rolled out the solution, we have seen a 50% decrease in calls being fully completed by our agents. results have been very sound. I would say that the entire chain of customer service has improved and evolved and become more effective, which naturally will improve our customer satisfaction and efficacy rates. Moving on to the next page. We give you a different perspective for AI, which is our customer experience. Here at LWSA, we've been obsessive about how we can add more productivity and help our customers sell more and how we can help make their experience while using our tools improve as well. On the left-hand side, we mentioned multiple deliverables. This is not an exhaustive list. We have delivered many, many items in our portfolio. But I would say some of the main tools where we can bring more productivity and improve our customers' experience are here, starting with a streamlined journey, considering the multiple ways our customers can sell, starting, for example, with the listings with multiple SKUs, multiple teams, every channel determines a different way for you to apply. And we rolled out something very interesting in our SME platform where with only the name of the product, we already bring the full description of what the product is, what it is used for. We already use SEO strategies and bring that to the marketplace adapting the language to what that marketplace is proposing to do. This is a lot more effective for the customer. They ultimately spend less time, and this translates into better sales because the listing looks a lot more comprehensive and aligned with the customers' language. When it comes to onboarding, which is the start of the e-commerce operation, which is usually a challenge for the customer. So we're adding very meaningful tools, which makes onboarding a lot simpler and streamlined. What we want is for customers to have a good relationship with the platform and a simpler way to start. So the idea is for the tool to be rolled out and for their logo to be created and the domain to be launched all the entire operation starting in a much simpler way to bring a product that's already robust to customers that need a lot of agility in their starting -- in the start of their journey. So these are very context-specific tools that improve the customer journey. Now a more sophisticated perspective is to allow the company to accept multiple intelligent agents. These agents are already and will continue to be an important part of automation, productivity and intelligence, operating in several different contexts. What we have done is prepare all our products so that they can be accessed and become accessible to multiple agents. And we not only have our own agents. I mentioned our customer service agents, but we also offer these agents to our end customers. So there's a multitude of uses that ultimately enhance productivity and the experience of our customers in general. Lastly, before turning over to Kubota, it is my pleasure to introduce to you Marcelo Scarpa, our new Financial Services VP. He's joined us just under a month ago, and he is taking over a department that has a very significant or very great significance to the company. He has a lot of experience, and there's a lot to be built within his vice presidency. And I'm confident that under Scarpa, we will move even further ahead considering everything that we have in terms of opportunity of things to do. On the screen, you have a short summary of his background. He has a lot of experience in fintech, operation, credit. So he will definitely be able to add a lot to our financial services journey. And if you have more questions, Scarpa will be joining us for the Q&A today. Well, this is what I had, everyone. I will now turn over to Andre Kubota.

[Interpreted] Thank you, Rafael, and thank you all for listening to us during this conference. I'll start by talking about the most important financial indicators, starting with the net revenue in Q2 2025. Our growth strategy is still consistent. Growth has accelerated to 10.4% year-over-year to BRL 370.8 million. In commerce, we're slightly outpacing that by 15.4% year-over-year, coming to BRL 266 million. On BeOnline and SaaS, which is an area that's growing slightly more slowly, growing by BRL 104.8 million much like last year. And it's important to consider the large customer base we have within this segment. Moving over when it comes to our EBITDA, as Rafael said in the beginning, our performance remains very consistent with growth accelerating to 16.1% year-over-year and growing our margins versus last year. It's important to remember that this is the fourth consecutive quarter where our margins have grown from a consolidated standpoint to BRL 75.9 million during the quarter. In the commerce business, our margins have grown from 17.8% to 19.6%, up 27.2% year-over-year to BRL 52.1 million this quarter. In BeOnline and SaaS, as we mentioned when talking about revenue, there's been an impact here as well. So we are essentially in line with what we presented last year, also with a very significant margin of 22.7%. Moving on to the following slide, talking about our cash flow. Our operation continued to generate significant operational cash flow with BRL 102.7 million. And over the last 6 months, BRL 90.6 million. We should also point out a decrease by 66% in taxes versus what we paid last year, remembering that last year, we paid just over BRL 70 million, which is a result of our incorporations and the amortization of our goodwill, which concluded at the end of Q1. So this is the level that we expect to see moving forward in the next few months. As to working capital, just like we mentioned last quarter, we expect to see some volatility when considering our financial operations because of our consistent cash flow. And when we look at a broader period, this tends to normalize, which is what happened during our last six months. As to our earnouts, the final payment took place during this period, we still have the withholding, which did not affect the calculations. ultimately, we end the period with a very robust cash of BRL 277.3 million. Lastly, on our final slide, a strong cash generation after taxes and after growth, we continue to pay dividends to our shareholders. This year, we're talking about BRL 35 million in stock buyback, which is essentially 1/3 of the program that we started early this year. And in dividends, we have paid BRL 28.6 million. This concludes our financial comments, and we'll open for questions.

[Interpreted] [Operator Instructions] Our first question comes from Mr. Leonardo Olmos with UBS BB.

[Interpreted] I apologize I was on mute. Thank you so much for your presentation. We are very glad to see so much healthy progress being made at LWSA. I have two questions. The first one is a bit longer and the second one a bit shorter, and please feel free to dive as deep as you feel comfortable with. So if you could please start by talking about your strategic plan, what are the most important levers moving forward? My second question, if you could please give us a little more color when it comes to the operations, which was a positive highlight for us with such a strong second quarter. What were the drivers for that? And how do you see this developing looking ahead?

[Interpreted] Thank you so much for your words. Now I will share the answer with the team. I'll start by talking for the strategy. Kubota will talk about the plans, and then we'll take on your second question.

[Interpreted] We are moving full steam ahead with the deployment of the plan. In general terms, this is a plan that is multipronged. Of course, this is something we'll develop over a period of five years. We started with close to 10 fronts at the beginning of the year, even because there is an entire operation to put this in practice in addition to our everyday activity. So generally speaking, it's moving forward very well. and we are gearing up to launch in a few different fronts as we had planned earlier. So it's going well. Considering new fronts that we've been discussing, of course, we do not want to build. These are initiatives that will take time to material front that we've been discussing, especially since Scarpa joined us is a credit operation. But of course, we have several different fronts going back to our idea of integrating the system more and more, thinking of multi-channel approach. AI is another thing that Rafael mentioned when it comes to the progress we've made, and we are discussing several other opportunities as well.

[Interpreted] Just to add a little bit more, I think this plan is a consequence of the cycle of investments we've made over the last five years. I think it's important to say that it's always been clear to us where we wanted to go. And to make that direction clear, we needed to go through a significant -- a period of significant investments and we've brought important assets to our ecommerce operation. We now have a business with scale and with a very significant customer base, which has allowed us to now start thinking about more tactical strategies guided by the strategic plan, which involved a reorganization. So the entire organization chart is focused on the customer journey. So this is already an important change in the company's perspective considering the product channel and platform for specific journeys. So the retail for SME, retail for large customers, all of that to enable financial services. So there has been a significant time when it comes to reorganization within the company. And I think that our figures have reflected how much scale and profitability we've been able to gain with our costs being diluted and an acceleration for the company at large. And now we heard about important fronts, but using the assets that we already have in house, whether that's via streamlining or offerings. And this touches on your second point when it comes to our capacity to add new customers. But not only that, what we want is to make our experience with the product a lot more comprehensive and well-integrated. In the second to last call, we had I talked about how our logistics have integrated really well on the system our users enjoy, which has to do with our e-commerce operation. And we also talk about our marketing journey, which is another enabler. So, in essence, we went through a very significant time alongside our investments, which now allow us to think about our strategy for the next few cycles. I apologize, I ultimately eluded your second question. I just wanted to go to our cross-selling. I think that as you can see we were able to dilute the cost within the company and still see the pace of growing our customer base within the company. I think this is already a result of streamlining part of our operations. This has helped us increase our sales. Our companies are also gaining scale as we streamline the branding strategy. I think this was a result of a combination of efforts and having these several different fronts have allowed us to continue with this strategy, which is to grow our customers. Lower costs also help us to monetize part of our customer base. So this is an important part of the equation that we work on here within the company.

[Interpreted] Our next question is by Mr. Lucca Brendim with Bank of America.

[Interpreted] Congratulations on your results. We have two questions. First, if you could please add a bit more color about your cloud initiative. When do you expect the product to start being sold? And what magnitude do you expect this to take? What will be the addressable business of the addressable market? And if you could also update us on how Wake is doing? And what do you expect for this initiative moving forward?

[Interpreted] I will turn over to Higor, who will talk a little bit more about cloud.

[Interpreted] Lucca, thank you for your question. Let's start from the beginning. The initiative was born out of our discovery of several opportunities we had to make our own business more optimized. We are obviously a huge technology consumer. We have a huge technological park. So in addition to our data center, we also consume external clouds. And when we started looking at this environment a bit more closely, we realized there was this huge window for us to start looking into new experiences. This started about two years ago when we began to outline what would be a new cloud infrastructure to serve our workload, so our internal systems. So we rolled out this ecosystem and realized that from an ecosystem robustness and cost-benefit relationship standpoint, this was not only competitive, but very strong from a transformation capacity in terms of how companies consume technology. So we realized that this new cloud technology we deployed in-house would allow us to add to our own operations more speed, low cost and great scalability, which was compatible to what any other company in the market needs to function. So we started not only from an internal initiative, but also from a product-facing initiative. We started thinking about ways to open this to the public at large, which is what we started doing now. So we are in a soft launch phase. We've run several different tests with real-world clients. One of the most important clients have already tested and very successfully so was Tray at the beginning. And this was sort of the litmus test for this new environment. We've made all the necessary investments. So everything we needed to get the strategy or get the offering up and running. So we are now on a go-to-market phase. So what's our expectation? And what do we expect this market to look like? So we expect $3.5 billion market. This is what companies in Brazil consume when it comes to public clouds. We're talking about public clouds with the same attributes that any other AI or Infrastructure-as-a-Service offerings have in Brazil. So this is a highly competitive product with a virtually unbeatable cost/benefit ratio and with a world-class like structure. So we're very happy with what we built. We've already seen great benefits when we look at our internal workloads. There are still several assets to migrate to this new environment. But I would say that we are very confident this will be a very strong product for our market. So in general terms, this is what we have to say. Feel free if you have any other question, but we could also take this offline later, if you'd like.

[Interpreted] It was very clear, everyone. So to my first, actually to my second question about Wake, if you could please update us on that, that would be great.

[Interpreted] Yes, Alessandro Gil, who is the head of that department, could may be take that question.

[Interpreted] Yes, of course. Thank you, Lucca, for your question. I just wanted to remind everyone that this is the brand's second year in effect. We spent a year restructuring the operations and we relaunched the brand with this new value proposition in 2023. The response has been very positive from the market. We are being invited to some important discussion tables. The results have been in line with what we expected. We have tapped into customers with a very significant GMV, some of which will go online in the next few months. In terms of product and strategy, we are integrating our product lines increasingly more. The customer journey is increasingly better integrated, including a few of the AI initiatives Rafael just talked about are being tapped into. So we have an e-commerce platform with an omnichannel strategy that's very well aligned with what customers have. And this is added more and more opportunity to our clients and prospects. And one thing that's been critical for us is the fact that we've developed very expertly, I have to say, this relationship that we have between the brick-and-mortar world and the online world. I'd say that this better integrated strategy between the digital and the real life has allowed great retailers to join our platform. So we see a very bright landscape for us moving forward in the next few quarters.

[Interpreted] Our next question comes from Maria Clara Infantozzi with Itaú BBA.

[Interpreted] Congratulations on your results. Hello, everyone. Thank you for taking my questions and congratulations on your results. We have been seeing a substantial improvement in the commerce business. I have two questions. First of all, about your growth prospects for this unit. How do you see the commerce business growing moving forward, especially for the second-half? We hear about a substantial slowdown in consumer spending in that market, so I wonder how you've been thinking about that in the shorter term. And my second question is to Scarpa specifically. Hi, Scarpa, how are you doing? If you could talk a little bit about what is your mandate, what are the main levers you plan, you plan to explore from a payments market perspective? I think it would be interesting to hear from you about that.

[Interpreted] Maria, thank you for your question. I will take your first point. And obviously, if anyone has anything to add, please feel free to do so. As to the shorter-term growth, Maria, I just wanted to remind everyone about our business model. We run a commerce business that's very much based on repeat purchases and platform use. So this is a very resilient strategy. Much of our revenue comes from subscription payments. Obviously, within our customers' business, it represents a slightly lower percentage. So we understand that economic slowdowns will always represent an impact, but we also understand that our platform is essential for our clients to continue keeping their business alive. So we understand that regardless of any slowdown, we have good visibility and good stability in that sense. And from a performance standpoint, we are seeing no slowdown. We are halfway through the third quarter. This is the middle of August. And what we've seen throughout August and the first two weeks of this month is very much in line with what we saw in the first and second quarters of the year, which is also consistent with our medium to long-term planning. And that's true for all of our platforms. Also, we have a similar perspective for the end of the year with no significant change from what we discussed last year, and that's also in line with our performance in the first half of the year. I don't know if you have any follow-up. If you do, I'm available. But otherwise, I'll just turn over to Scarpa to take your second question.

[Interpreted] Maria, it's great to talk to you. I will separate my answer into two great blocks. First of all, in the financial, we are doing really well. Rafael talked about a 19% growth we've had. We are also making some adjustments. We've renegotiated some contracts, which placed us on a very positive level when it comes to negotiations. So we're growing our operations really well. And the second block would be credit. I come from this world, and I see a very substantial avenue for growth within the company. Obviously, it still needs structure. We still need a better structure to collect information at the end. I think this is something that will unlock a lot of value for the company. Considering the information we have for each unit could also benefit our credit model so we can start offering credit in a very accurate way at competitive rates, obviously, starting in a more conservative place, but then understanding what the appetite is and what the environment is. But to your point, I see the avenue in a very positive light. We have been discussing the road map for products, receivables -- advance in receivables. So this is my early diagnosis with just two months in the company, but we're very positive about this vertical.

[Interpreted] Our next question is by Mr. Luis Chagas with XP.

[Interpreted] I have two questions. First of all, when we look at platform subscriptions, there's been significant growth both in year-over-year and quarter-over-quarter terms. If you could please explore a few of these known elements. What have you changed in pricing? And do you see room to improve in the next few months? And the second question is about capital allocation. Seeing as earn-out payments are essentially concluded, how do you see your capital allocation moving forward, both in terms of stock buybacks, you have been very strong on that sense, but also new acquisitions. My understanding is you're now focused on realizing your synergies in-house. But if you could add more color to that, that would be great.

[Interpreted] Luis, this is Andre Kubota again. Thank you for your question. I will address your questions starting with the ARPU one. I think it's always important to highlight that there's been an increase in our ARPU, but we're always very concerned in not increasing our average ticket or even our ARPU just for the sake of it. Our criteria when it comes to doing that is always consistent with our growth and the use of additional features by our customers. So this not necessarily represents an increase in prices for our customers. They might be using third-party tools or they might be growing their store. It only makes sense that we grow alongside our customers. Obviously, we want to make sure that we stay competitive. And we are monitoring all of these indicators making sure that we grow our tickets as our customers grow and also while adding new features and improving our products, always making sure that we not only stay competitive but also that we continue to add value and more purpose to our customer. So this is a little bit of where we stand when it comes to ARPU and increases.

[Interpreted] Yes. Just picking up on what you said, Andre, I think there are two components very important here. One is what Andre mentioned. And the second one that I'd like to add is, ultimately, a large share of the company's revenue comes from SME customers. And it's a characteristic of SMEs to grow on tandem with us. One thing that has progressed, especially with the more robust journeys is additional monetization with the company's success. And in addition to that, as they grow their own journey with us, allow them to expand their ARPU because they are using more robust tools seeing as their need increases as they themselves grow. But there's also the fact that we are stepping into a landscape of larger clients, including our work with Wake. As we heard, this is a 2-year operation. But for these clients, we are thinking about monetization that's larger per client. So these are a few things that make us think about the company's ARPU when we look at it from a consolidated perspective.

[Interpreted] Now moving on to your second point about our capital allocation. I just wanted to take a step back to mention that we are a company whose scalability has been proven and our operational leverage as well. So consequently, we can generate a lot of cash. So I think that when it comes to capital allocation, our understanding is we are part of a market that still enjoys great potential for growth. We have a few avenues. Scarpa has mentioned a few of them and Rafael as well. So we see significant opportunities to continue to grow generating more value to our customers in a growing market. So the first point for us, which is obvious, would be to continue to invest in more products and our customer avenue to allow them to continue to grow and to add more value to what they do. That obviously is embedded in our CapEx. So that would be the first line of capital allocation. But even after that, there will still be surplus cash, and we already see a few fronts to continue to allocate that capital. One of them on which we worked really well last year, and we continue to do this year is stock buyback. So we concluded one part of the program in April, and we have a new one this year. This new one, which will last for 18 months that we started in February, we've performed about 30% between February and July of this year. And in addition to that, we are also distributing our dividends to shareholders. So considering that, we have already shared BRL 73 million, which is part of our base. So we do not have a formal policy, but we allocate capital according to where we feel more value will be generated for the company and our shareholders.

[Interpreted] Our next question comes from Mr. Silvio Doria with Safra.

[Interpreted] Congratulations on your results. You talked about your prospects for commerce during these current six months. If you could please talk more specifically about BeOnline, what are your expectations? And what the growth curve should look like during these six months? Should we expect this unit to grow a bit more or not? What about EBITDA? I would like to understand whether there's still room to continue to grow your EBITDA? Or should we consider your 20% as a margin cap for this year at least? And aside from synergies, what are the most significant drivers for the improvement in your EBITDA margins? I don't know if you have that granularity, but how much margin improvement have you seen in your EBITDA during this half of the year specifically?

[Interpreted] Silvio, this is Higor speaking. Let me talk a little bit about BeOnline. We are still adhering to our plan to improve our efficiency on the business unit. We still have some large contracts where we have the opportunity to sit down for renegotiation. And when those negotiations are not favorable to what we understand to be good metrics for the company, we simply discontinue the service and think about what's most important for the business. That strategy is still underway. We spare no effort to increase our profitability. And I think that when we look at it from a backward-looking perspective, thinking about the operation, we've been able to stay within the range we always share with the market, which is this is an operation with 25% average EBITDA. So obviously, every quarter, we see the margin behave in a slightly different way. And that's because of changes in contracts with suppliers or some miscellaneous contracts where we see a bit more costs being included, which is only natural for this operation. So we should see some fluctuation in performance and profitability for this operation in the shorter term. But in the longer term, this is an operation that aims to and actually manages to deliver around the 25% EBITDA margin. Looking ahead, our perspective is very much anchored in, number one, increasing profitability within this portfolio. And obviously, our local web cloud that we talked about earlier as one of the levers that we not only have the opportunity, but the ability to be strong competitors in this market. And also when we look at a more internal -- from a more internal perspective to BeOnline market, we can still expand this margin over the next five years, thinking about cross-selling this customer base to the rest of the group's environment. Of course, there's a long road to go, but it is an important avenue for growth for this operation. And it is strategic to us because we're talking about a huge customer base. We have about 300,000 customers within this space that could be monetized. So just to add a bit of color when it comes to BeOnline, I think that's it. We still continue to see some avenues for growth. We do not expect any bumps along the way, quite the contrary, things feel very much under control. And when it comes to monetization of those larger clients, our strategy will remain the same. And talking about AI, I brought two perspectives, first from an internal standpoint and the second from a customer-facing standpoint. And to your point about cost, a few of the cases we could think about when it comes to AI productivity, the two ones that we focused most of our attention within the group. First of all is software development and software engineering and the second is customer service. So these are two different perspectives. When we think about software engineering, the most important part where we see gains is productivity. We have a robust team that gains more productivity, thinking about the improvement and enhancement of our products, enhancing the integration across our structures. So, ultimately, this is an AI use profile that make us more competitive with our existing team. Looking ahead, obviously, we continue to evolve and grow our revenue being more productive with our existing team without the need to grow with the same or in the same proportions. And the second, I think, is precisely about productivity gains, games. When we think about customer service, there is other use case. I mentioned that our tool in Octadesk is very robust. The market has responded really well, and we've also used it in-house, replacing all our customer service tools for us, which in addition to being a bot, also has an infrastructure that allows for the deployment of autonomous agents. In the operations that we've started this rollout, which has been very -- which is very recent. It started in the second half. The existing use cases, we've seen about 50% decrease in the number of calls. So there are two important points. It would be very convenient to see that there are fewer calls, but the calls are not well responded. I think that we have a very well-oiled machine when it comes to training these agents. So we see good responses, sometimes even better than what our human teams offered. So I think this is because of a very well-performed deployment of this tool. And this impacts our direct costs. So these are two use cases, I would say, have evolved really well within the company. congratulations on your results.

[Interpreted] Our next question is by Mrs. Victoria Antonello JPMorgan.

[Interpreted] Our first question is about your own store GMV. We saw a slight slowdown during this quarter. And I wonder if you could give us more details about how the GMV has evolved in your different customer bases. And the second is about the credit product. How has the initial net debt evolved in this project? And do you believe that the macroeconomic situation in Brazil has slowed down the start of this initiative.

[Interpreted] Hi, Victoria. I'll allow Willians to talk about GMV and later we can talk about credit.

[Interpreted] Thank you, Rafael, and thank you, Victoria for your question. We indeed saw a slight slowdown, but it was nothing that stood out to us. All our indicators, churn and store maintenance have been in keeping with expectations and especially thinking about the store GMV, that has outgrown the market by and large. We've grown by 12.3% this quarter. So it's outpacing inflation and outpacing growth of the industry at large. So I think that we can think about it in fluctuating terms. Of course, we see ranges because of a few holidays, for example, Mother's Day, which is not always focused on physical gifts. We now have Father's Day. So considering PME or SMEs, we see the indicators performing very much in line with what we expected. I'll turn it over to Ale to talk about it from a large customer's perspective.

[Interpreted] Thank you, Willians, and thank you, Victoria, for your question. Well, we felt a few things, especially in stores that have been with us for slightly longer. Our same-store sales were slightly more positive than it was for stores that went online in the last two months. And we also saw a difference across categories with the GMV because our operations are growing substantially in fashion because winter this year was more effective, which is not something we had seen in the last two years for this business specifically, we saw GMV go up significantly. And also we had some major customers facing a challenges with the inventories, not in fashion, but in other segments. And we saw that indeed there was a decrease in GMV for a few of these, but that's already picking up in the early months of Q3.

[Interpreted] Thank you, Ale. Just in closing about credit, I think it's important to say that currently, we do not have any allocation of our own capital on credit. So this is a factor that is not being assessed currently. The integrated journey for financial services is something that we aspire to work on. We saw a very successful operation for payments at large. So we already have this operation that's very integrated into our e-commerce operations. And it's working in a way that's very harmonious with our platform, offering solutions that make it obvious for the customer to use our solution as opposed to a third party because we have quality, we have good price. And most importantly, we have experience. It's a service that complements the use of our platform. This has really rounded the credit experience really well in a sense within our operations, we have a volume of advanced receivables that's part of our payments service that we do really well, which shows we are very adept at this type of leverage and using that leverage. The progress we expect to see with Scarpa is having a transactional environment that will leverage the use of software and turning it into a financial service environment as well with all of those tools integrated into the customer journey. We would never think of operations where we would compete with banking services. It's always in connection with what our platforms already provide. So we continue to think about what that would mean in terms of our product experience.

[Interpreted] Our next question comes from Mr. Daniel Federle with Bradesco BBI.

[Interpreted] Congratulations on your results. What we would like to do is follow up on two points that were already discussed, especially in commerce, the latest messages made it feel like the company would go into a phase where they would invest in regrowth, which could lead to a margin that would not grow as much. But we saw growth accelerating and margin increasing as well. So my question is, have you actually been able to accelerate without compromising your margins if your prospect of slower growth was more for the second half of the year? And the second is, I would like to follow up on same-store sales, especially your larger customers with Wake because we had a public competitor that saw same-store sales slowdown in Q2, and Q3 seems to be even more challenging than Q2 was. I'd like to know whether you are facing the same challenges. I felt like the second -- the last answer seem to indicate that you're actually accelerating in Q3. So these were my questions.

[Interpreted] Daniel, this is Andre Kubota speaking. Thank you for your questions. I will take the first one, and I think it would be interesting for Alessandro to take the second one. So to your point about our margins, it's important to remember that ours is a business that's naturally scalable. So we reported growth of over 15% while growing our margins as well. That was between 17% and 19%. And this is a margin that's already growing. And I think that's only natural for a business that's growing in the mid-teens to have margin growth that's commensurable with that. I think when we talk about investments, it's also important to note that we continue to invest. Our investments have actually increased over what we had last year. And part of that has to do with our CapEx, but part of that is also connected to the EBITDA margin. So we haven't failed to invest quite the contrary. Our investments in our own growth have actually increased. And I think that this has consistently marginally helped the results that we've seen in the last few quarters when it comes to acceleration. And that's much because of what we've seen and we will continue to see in the next few quarters. I don't know if that addresses your question. I'm available to any follow-up, but I'd like to turn over to Ale, who will talk a little bit about the store GMV.

[Interpreted] Thank you for your question, Federle. Well, this goes back to something I had already mentioned. Over the last 18 months, especially because of the management of synthesis and adjustment of what we called Wake IMS, we've invested significantly in our omnichannel strategy, especially in the fashion industry. So for those customers where we gained strength in the last few months, we did not feel our same-store sales went down. Obviously, we are in the process of growing. This is a new unit within the group. And we have been bringing in larger clients. But what we've been feeling from retailers, especially those who are coming to us is that they're seeking to grow their operational efficiency. So using technology to improve their inventory management, improve their mix and optimizing their operations have allowed them to seize better opportunities and doing better when it comes to the sale itself. So looking ahead and after talking to some of our retailer clients, and obviously, those who are focusing on larger appliances and electronics might be feeling that a little bit more heavily. But on industries, we've been growing more steadily, fashion, building material, these are industries where we do not see a slowdown coming in the next few months.

[Interpreted] With no further questions, the Q&A session is now closed. I will now return the conference to our CEO, Mr. Rafael Chamas for his closing remarks.

[Interpreted] First of all, I'd like to thank our team for such robust deliverables as we were able to show in the first quarter. And I'd also like to thank all of you for joining us. Thank you. Have a great day.

[Interpreted] This concludes LWSA's Q2 2025 Earnings Conference. On behalf of the company, we would like to thank you for joining us and wish you a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]