Neogrid Participações S.A. ($NGRD3)

Good morning, everyone. Welcome to the teleconference announcing Neogrid's Q4 2025 Earnings Results. Joining me here today are Nicolas Simone, our CEO, and Augusto Vilela, CFO and Investor Relations Director. Please note that this presentation is being recorded. It includes simultaneous translation. [Operator Instructions] Before we begin, I remind you that any statements and projections reflect management expectations and are subject to risks and uncertainties. After the highlights, we will open to question and answers. The recording and slides will be available on Neogrid's IR website. Now I would like to give the floor to Nicolas Simone, for his presentation. Good morning, Nicolas.

Thank you, and good morning, everyone. It's a pleasure to be here with you. 2025 was a year of difficult choices and concrete results. And that is what I want to talk about. Before getting into the highlights, I want to contextualize what this result represents to me and I believe to all those we follow Neogrid. When we took over management, we were clear that -- we had cleared that what we needed to be done, refocus on generating results with discipline and without shortcuts. What we are presenting today shows that this journey is on the right track and gives us a lot of conviction about what is still to come. I would like to begin by highlighting 3 indicators that summarize well, what happened in 2025. First, the reversal of EBITDA. We closed Q4 2025 with an adjusted EBITDA of BRL 4.7 million and a margin of 7.2%. In the accumulated of the year, it was BRL 13.9 million with a margin of 5.2%, reversing the negative result of 2024 and demonstrating Neogrid's the ability to generate recurring operating results. Second, cash generation. We delivered a positive free cash flow in 2025 of BRL 7.9 million reversing the negative of BRL 21.4 million of the previous year. For us, cash generation is the vital thermometer of the quality of our business model. In summary, positive free cash flow after the negative year of 2024 gives us conviction to invest in the next phase. Third, agility and efficiency. On the chart here, on the slide, we show that we had 20% reduction in staff. We went from 1,018 employees in December 2024 to 816 employees in the end of 2025. the lowest number since 2022. This is not only lower cost, but it's the reflection of a company that made decisions with responsibility. And today, we operate with much more focused on agility and in decision-making. In the reversals of EBITDA and cash flow, we had a reduction in the number of people are the product of profound structural changes that took place in the organization in processes such as governance and execution culture. Another topic that is worth highlighting is -- was in terms of the organizational point of view. We consolidated Neogrid in 2 business units, supply chain and Collaborative Intelligence. After 2 ways of adjustment, we had a more effective and simpler structure with each BU having a complete management of the customer relationship from demand generation to after sales. Throughout the year, these units gained operational maturity, more focus, more agility and a much more precise vision on how we generate value. We have renegotiated relevant contracts of infrastructure, implemented zero-based budgeting and unified finance, commercial performance and governance into a single structure. Each of these decisions had a direct short-term impact and they were right decisions to be made at the right time. We have already implemented tools, policies and governance for the use of artificial intelligence. Internally, we have use cases of AI in various areas of Neogrid. And we've been mapping and developing intelligent agents to scale our operations. We have conducted internal hackathons to develop tools that our own employees can create and operate with these agents, but we control and using the market's best practices. This internal agenda is not only an efficiency project. It's also the foundation for the evolution of our value proposition to the market. Finally, I would like to mention that on the next slide, we had the framework of the market, and we have a summary. What we delivered in 2025 was very much focused on [ renego ]. So the part of [ ren ], we have established the operation. We have cut what did not generate value, and we created a positive and real value base based on structure. This work is not over yet because it is the foundation of all the other things, and this gives us leverage for the next steps. In terms of growth, we are expanding what we have already done, expanding the solutions of Collaborative Intelligence and supply chain to have Neogrid as individual processes not only as individual products, but as also a platform. Now let's talk about transform, which is what we are building for the continuity of Neogrid. So it's important to have simultaneous attention within the short and long range. So a bimodal execution. So if we have the two, they need to be conducted simultaneously. The history of several sectors so that the companies that are leading the next decade are not necessarily the biggest in the moment, but they are the ones that found a new way to generate value. And in this direction is -- and we're looking towards this direction. And what gives us ground for that are the assets that we already have of the supply chain in Brazil, a sound base of clients, deep relationship with industry distributors and retail, a product portfolio that covers all the journey of this chain and the expertise accumulated over the years to address the supply chain and a very qualified team that we have in this market. So what we're doing is to think how these assets can generate value not only in terms of solutions and services, but also with different monetization models that can be manifested in several directions, new products, new services or new commercial models. What guides us is the conviction that we have the right ingredients to create something that is difficult to be replicated. AI is the driver of this transformation. It allows us to connect automated data and make automated decisions, which was something that was not possible before. In order to do that, we work with what we call global transformation. So to reimagine value adding and creating new value multiples for Neogrid. On the other hand, operational efficiency and the organization of the process and the infrastructure with the same tools. therefore, increasing predictability. So with that, the speed to capture ROI is much faster because we have in our hands what needs to be done. The effects of internal automation are already appearing in the results of 2025, and they tend to be intensified along 2026. So we want to be efficient both for us and our clients. I want to wrap up by mentioning what I consider the more underestimated ingredient in these transformations in the companies and in the market, which are people. AI tools are advancing all the time week after week. But what cannot be copied is an organization that has a good governance and good people. So we are training the capacity of all the teams to create and operate these agents. So Neogrid agentic, is not a product, it's a company. So the numbers that Augusto is going to present are the proof that this is a real path, and it's already showing in the results of 2025. Now I give the floor to Augusto, so that he can detail that better.

Thank you, Nicolas. Good morning, everyone. So I would like to open through MRR, what we're doing to accelerate this. We closed December 2025 with BRL 24.2 million of MRR with CPG and Electro that are consolidated client basis with a stable MRR of BRL 20.3 million. This is a relevant result when we consider that the quarter absorbed integrally the loss of international contracts that we have already communicated to the market. So these effects are behind. Looking forward, we have 3 initiatives that have been executed since last year with very good positive results. The first is that we bring -- we are more and more client centered with the alignment of incentives for the relationships and strategies to expand the existing accounts. The other is the expansion of ICP. We are already advancing in new segments in 133 verticals such as pharma and [ PAT ]. And finally, the third that we have already mentioned, which is the focus on the international growth. We are prioritizing the segment again. And finally, these 3 fronts added to the transformation that Nicolas presented, they are vectors that give us confidence to resume consistent revenue growth. Moving to the next slide. We here open our revenue line and I would like to start with our net revenue in the fourth quarter that closed in BRL 65 million and BRL 270 million in 2025. This represents a contraction of 6.7% and 1.2% compared to Q4 2024. Furthermore, we -- I would like to highlight that our recurring revenue recorded 97.8% in 2025 and very close to Q4. And that reinforces the predictability of our business model and the quality of our business model as well. Our service revenue, the retraction is pretty much related to our commercial policy, which will prioritize more and more long-term contracts as well as consumption-base monetization. The international operations represented 9.4% of total revenue in 2025, a reduction of 1.3 percentage points compared to '24 in reflection of the loss of the contract churn that I have already mentioned. It's worth noting that 10.1% exchange rate appreciation was observed during the year. On the chart on the right, we show a mix per business unit, and we see that the supply chain unit advanced to 57.1%, [ 3.1% ] compared to 2024 while the Collaborative Intelligence unit represented 42.9%. Advancing to Slide 10. We see that Neogrid closed 2025 with a gross margin of 59.1%, which is practically stable in face of 2024, which is a result -- relevant result considering the drop in revenue. The supply chain presented a margin of 63.6% and the one of Collaborative Intelligence, 50.5%. So it's a total cost line decreased by 1% for the year, capturing the structural efficiency gains that we achieved in 2025. Now on Slide 11, we have the operational expenses. The debt represented 54.4% of the revenue in 2025 compared to 58.3% in the year of 2024, an improvement of 3.9 percentage points in the quarter, we went from 56.6% in Q4 '24 to 54.9% in Q4 '25. These numbers have been consistent across all lines. G&A, so the administrative and general decreases decreased 1.6 percentage points during the year, reflecting the reduction in the number of employees mentioned before. And the sales expenses dropped by 2.5 percentage points, resulting in structural efficiency gains. And the revision of events such as Neogrid Executive Summit, which was proved to be more efficient in both costs and customer engagement. When we include this capitalized expenses, this CapEx, this improvement becomes more evident. In relation to the total expenses of '24 compared to '25, we had a reduction of 9.8 percentage points in the revenues of each year, demonstrating that we are operating with a significant -- significantly leaner and more efficient structure compared to '24 -- to 2024. On the next slide, as a consequence of everything that we have presented so far, especially the reduction in the operating expenses, we presented a recovery in our adjusted EBITDA, which went from BRL 2.7 million in Q4 '24 to BRL 4.7 million in Q4 '25. This led us to an adjusted EBITDA margin of 7.2% in Q4 '25, which is an improvement of 3.3 percentage points. In the accumulated view in 2025, the EBITDA -- the adjusted EBITDA recorded BRL 13.9 million with a margin of 5.2%, strongly impacted by the good results of Q3 '25. The performance of the adjusted EBITDA demonstrates Neogrid's ability to generate recurring results and the success of the measures that were adopted throughout the year. It's worth mentioning that Q4 '25 did not have any relevant adjustments in the EBITDA. So the results exclusively reflects the operation. The main adjustment in the accumulated of the year refers to the reversal in general with the acquired companies that have an amount of BRL 9.9 million, and this effect was already detailed in Q3 and is coming from the anticipation of the contracts that we did during Q3 with the companies acquired over the recent years. Now going to the next slide, we see that we have a moving on the cash flow. And on the left-hand side, we see that we closed the year with a free cash flow positive of BRL 7.9 million maintaining the investment level and reversing the negative impact to BRL 21.4 million. And before I continue, I want to highlight an indicator that shows the quality of the operational improvement. We went from BRL 36.9 million of EBIT to practically BRL 39 million in a single year. So the cash flow generated in the year was BRL 16.9 million. And after CapEx investments of BRL 6.7 million, we arrived at free cash flow of BRL 7.9 million which is a result that demonstrates the operational advancements are already being translated into real cash generation. So we closed December with a cash of BRL 130.7 million and a net cash of BRL 124.1 million. Excluding the obligations with the acquired companies, the adjusted cash -- net cash reached BRL 121.7 million, which is a growth of 10.7% compared to 2024. This result reflects the combination of 2 elements, the operational improvement of Neogrid that we saw on the next slide, with the efficiency initiatives and the reversion of the earn-outs to be paid with the anticipation of the contracts -- with this contracts in the second semester. Going to Slide 15, I would like to just make a brief summary of the process of the public offer that is ongoing. So reminding that in December 22, 2025. Dalpe Gestão e Participações announced its intention to make a takeover bid for Neogrid shares for the price of 29% with the intention of gaining control of the company and canceling its stock exchange. In January, there was a special meeting to deliberate the hiring of an independent appraiser and a price review, then CVM temporarily suspended the process on January 13. On February 5, we held the special meeting and approved the hiring of Seneca Evercore as an appraiser. On March 7, the appraisal report was published with a price indication between BRL 29.42 and BRL 32.36 per share. On March 12, the offer adjusted the price to BRL 30.89 and the process was resumed. The company has acted with complete transparency throughout this process, promptly fulfilling all regulatory obligations and responding shareholder requests. And I would like to highlight that Neogrid is a passive part in the transaction between the offers and shareholders. And our management needs to ensure that the process takes place with due governance and the market is informed in a timely and complete manner. We'll continue communicating the next steps as the process progresses. With that, I conclude my presentation and will be available to answer possible questions. Please thank you very much, and you can proceed.

[Operator Instructions] Our first question comes from -- I guess that is not identified. He says, Neogrid operations has been affected by the offer of public -- of the public offer and acquisitions at the moment. What are the next steps expected?

Well, I'm going to answer first. And then Augusto, if you need, you can complement. I will start with the conclusion. The operation was not impacted, on the contrary, in 2025, an intensive transformation year, we reverted our EBITDA. We had a cash flow of BRL 21 million. So and we reduced our expenses in all operational lines. And this was only possible because the organization kept focus on what matters, our customers, our products and our efficiency agenda. So I talk about a societary process, of course, they're a company, that is a public company. And it's our responsibility as the management to ensure that they not -- they do not interfere in the operations. So with internal continuous communication. And I can add something. The team is very much engaged. You know, the projects are advancing and our value proposition to the market continues evolving. And before I give the floor to Augusto to complement the answer. I would like to thank all the Neogrid team that is making every effort to put Neogrid where it deserves to be. So this thank -- I need to mention this thank to all the team that is so engaged and is putting so much energy in doing that. Okay. Augusto, please, would you like to add anything?

Thank you, Nicolas. Well, about the next steps of OPA, like I mentioned on my slide, the company is passive in this process. We are not conducting the operations, but the next step is the continuity of the evaluation of the registration by CVM. This is the natural course of the process. And the company is informed about the development, and we will continue communicating the market as the progress -- as the process advances. And here, I would like to take this opportunity. We are receiving some questions and we are receiving some questions on the Q&A, especially from Marcelo [indiscernible]. And thank you for the questions and for [ Ricardo Goldfarb ]. And I also see some questions for [ Michael Glase ]. And in general, about methodologies used in the evaluation report of the company that determined the range of fair prices. The evaluation report was conducted by an independent company, which was CNK Evercore that was selected by minority shareholders, specifically for this public. And here, as company administrator, it's not up to us to discuss these methodologies because we did not participate in these discussions. So about discount rates or methodologies that were used, so it's not up to us to make comments on that. I think that these issues can be sent directly to the bank or to those that are conducting the process of the public offer. And we will continue communicating the market as we know the developments of the process and the next steps. Also, we have 2 questions about the price. If the final price is going to be corrected by the [ Selic ] or not, it's also not up to the company to determine that about pricing, but we will communicate you any -- about any information that we have with this regard in terms of the cost of the operation, okay? And we're going to direct the companies that we are receiving to the team that is conducting this process.

[Operator Instructions] Our next question comes from [indiscernible]. Well, the projection of the evaluation report brings a line of revenue growth within the mid- and long range as a way of cost dilution. But we see a drop in revenues in this quarter. Could you let us know how expected that was? And what generated this churn?

Thank you, [indiscernible]. Thank you for your participation. It's a pleasure to have you here. I'm going to start, Nicolas and if you want to complement feel free. But the projection that is indicated was based on projections of the company. with an estimate of future results based on the current model and current business of the company and based on the evaluation report. And what we have there in that simulation is we forecast a growth accelerated a long time -- the growth accelerating a long time. And it's the opposite of this quarter because in this quarter, we had specifically a case of international contracts that were canceled in the end of 2025, which were relevant. And we had already been giving disclosures of this event since the results of Q3 2025. So here, the main reason is that Neogrid over the past years strategically decided to prioritize the operation in Brazil. And with that, we had some service changes abroad but the strategy was altered since last year. So we are reprioritizing and going back with the focus on international contracts, trying to get new contracts and get closer to the clients, the customers that we have abroad. But this was basically the main reason for this reduction in this quarter, okay? But we expect a trend of reversion within the mid and long range, okay? Nicolas, do you want to mention that?

It's important to complement that it's not a loss of competitiveness like we had presented in Q3 2025. We just reactivated the strategy of expanding the ACP of the company and focus on international operations as well. So as a result, we will see this change of route and we expect good results for that. Okay. But what I want to make clear is that it's not a loss of competitiveness and because Brazil grew last year and we started -- we finished December with almost BRL 20 million. So as you know, in the CPG sector, where we have the biggest presence have been facing a very relevant moment with pressure on margins and volume, in the consumption industry. So this growth and growing in this scenario, even if it's a small growth, it's not -- cannot be considered something trivial, okay? So I want to reinforce that this is not loss of competitiveness, okay? And we are placing this strategy for Q2 of 2026 to go back on track and expand internationally.

Here, just to complement, I want to add something about the questions [indiscernible] asked. He asked what are the initiatives that are ongoing that will support growth and efficiency this year, if you want to answer it Nicolas?

When we talk about efficiency, we are focusing a lot, and I talked about that on my slide, to be [ agentic ] company inside. So we have a lot of digitalization and automation initiatives of our processes. We want to clearly reduce the service cost. So do more with less. So these efficiency gains are extremely important for that as well as the strategy that we are using to work with our companies. So what we want is to work on is how we can improve our current products focusing on adding value to our customers, but also transforming Neogrid and making it more agile and more efficient. So we have several factors that we are putting at the table with a lot of clarity. And with this bimodal approach, to look at the future of the company with new products, new value offers, but also being a more efficient company, a more agentic company inside so that this path can give us a more accelerated ROI. And that depends on us. So it's important that we have this approach to grow even more in 2027. We started in 2025, like I've mentioned before. But I believe that in 2026, we are able to accelerate and deliver much more value than we did in 2025.

The Q&A session is over. We would like to give the floor to Nicolas Simone for his final considerations.

Well, people, first, I want to thank everybody. And I want to close with honesty and conviction. So 2025 was a year of clear choices. We made decisions that we needed to make, and we delivered real results. This gives us the foundation to be bigger in 2026. We believe a lot in that. We have data, the data, we have the products, we have the team, we have the path. So Neogrid of the future that I talk about the Agentic and Neogrid is not a destination. It's a process. And we are just starting this process. So like I said before, Agentic Neogrid is not a product, it's a company. So that goes through a huge cultural change. That is why I want to thank the team a lot for the results that we have achieved in 2025. And clearly accelerate these results for 2026. So thank you, everybody, for being with us in this journey and for being us with us here today in this call.

The Neogrid webcast is finished. We would like to thank everybody for the participation, and have you all a great day.