T4F Entretenimento S.A. (SHOW3.SA) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining Time For Fun's earnings conference call. We opened the quarter with the return of the Popload Festival, which brought outstanding national and international attractions to Brazil and reaffirmed Time For Fun's positioning in the multicultural festival circuit. Following this, we held the fourth edition of Turá São Paulo Festival, which celebrated Brazilian music over 2 days of programming at Ibirapuera Park, bringing together big names from the national scene and a solid portfolio of sponsoring brands. An important milestone was the announcement of the new addition of the Tura Porto Alegre Festival originally scheduled for May 2024 and canceled due to the severe floods that hit Rio Grande do Sul. In the International show segment, we held performances by the band Incubus in São Paulo and Curitiba with tickets sold out and shows by the Band Bush in Rio de Janeiro and Curitiba. At the Renault Theater, the musical Wicked continues to perform far above average at the box office, leading to an extended season. Let's now move on to explain the financial variations. On Slide 5, in the second quarter of '25, our net revenue was BRL 54.4 million, a decrease of 1.4% compared to the second quarter of '24, mainly due to a BRL 54.5 million drop in event promotion revenue impacted by a lower number of events in the period and the absence of proprietary productions in the family and theater segment. In contrast, box office, food and beverage and venues operation grew 18.9%, driven by the Wicked musical season at Teatro Renault and box office sales for the Incubus and the Rose shows. Sponsorship revenue increased by 80%, reaching BRL 15.1 million, mainly from the Popload and Tura São Paulo festivals. On Slide 6, gross profit reached BRL 13.2 million with a gross margin of 24.3%, an improvement of 28.4 percentage points over the previous year. This improvement was primarily driven by more efficient cost management at festivals and excellent box office performance, including sold-out shows and significant advanced sales. SG&A totaled BRL 14.9 million, a 57% increase compared to the second quarter of '24. This increase is mainly due to one-off expenses related to tax obligations from prior periods, the absence of the reversal of provisions that had been beneficiated last year's results and the hiring of new professionals to reinforce the company's strategic areas. On Slide 7, EBITDA was positive at BRL 3.1 million versus negative BRL 7.3 million in the second quarter of '24. The improvement is associated with the growth in gross profit and the increase in sponsorship revenues, especially at festivals, in addition to the positive effect of the reversal of provisions in line of other operating expenses. Moving on to Slide 8. The net financial result was negative by BRL 4.2 million, an improvement of 74% compared to the same quarter of the previous year. This evolution was driven by the decline in the net negative impacts of exchange rate, monetary and hyperinflation variations. On the other hand, financial expenses increased by 59%, pressured by losses on swap operations and the increase in passive interest. On Slide 9, we see the net loss, which was BRL 0.1 million this quarter versus a loss of BRL 24.9 million in the second quarter of '24. In the first half of the year, the net loss was $12 million, a 57% reduction compared to the loss of BRL 27.9 million in the first semester of '24. This effect reflects the combination of operational improvements with the advance in financial results. We now see the company's cash flow shown on Slide 10, which ended the quarter with gross cash of BRL 97.8 million and total debt of BRL 64.4 million, thus generating net cash of BRL 33.4 million. On Slide 11, we have the cash flow breakdown where we see operating cash generation of BRL 7 million versus consumption of BRL 27.1 million in the second quarter of '24. Consumption of BRL 0.4 million in investment cash flow in line with other periods. And in the financing cash flow, the negative balance of BRL 3.6 million is due to the payment of debt interest. For the second half of 2025, we have confirmed attractions in different segments. In indoor shows, we have scheduled performances by South Korean Band, the Rose in August, British Singer, Georgia Smith in October and RYX and French Duo Polo & Pan. The Tura Porto Alegre Festival stands out in the festival calendar as a symbolic event for the cultural revival of Rio Grande do Sul. Additionally, we have announced a tour by Marisa Monte, one of the most renowned names in Brazilian music, reinforcing our presence in the national concert segment and expanding the diversity of our attraction portfolio. We ended the quarter reinforcing our commitment to delivering exciting experiences with the financial strength necessary to sustain our growth and with the ability to attract talent and partners who share our vision. We thank everyone for their trust and remain steadfast in our mission of uniting people through music and culture. Thank you so much for your participation in this call.