Financial Performance - Nuvini reported net losses of R247.9 million, and R348.3 million as of December 31, 2024[73]. - Nuvini's net operating revenue for the year ended December 31, 2024, grew 14%, from R193.3 million in 2024[81]. - Nuvini's future profitability may take time to achieve, as it continues to incur significant expenses and losses during its growth phase[73]. - The company has incurred an increasing amount of debt in recent years to support acquisitions, impacting its financial flexibility[242]. - Nuvini's financial performance may be significantly affected by general economic conditions and fluctuations in currency exchange rates[246]. Client Retention and Revenue Risks - As of December 31, 2024, 97.1% of clients renewed their subscriptions to Nuvini Group services or products every month, compared to 96.7% in 2023 and 95.4% in 2022[91]. - Nuvini S.A.'s future revenue flow is uncertain due to clients' ability to terminate engagements at any time, potentially leading to significant revenue loss[92]. - If a significant number of clients reduce their usage of Nuvini's SaaS solutions, the company may need to increase sales and marketing expenditures, adversely affecting its financial condition[93]. - Demand for Nuvini's SaaS solutions may fluctuate due to economic conditions, affecting clients' capital spending and, consequently, Nuvini's revenue[106]. Growth Strategy and Acquisitions - Nuvini plans to continue acquiring other SaaS businesses to expand into new markets in Latin America, with a focus on Brazil[77]. - Nuvini has completed seven acquisitions since its inception and aims to integrate these businesses while maintaining their independent operations[79]. - Nuvini's growth strategy is dependent on the successful identification and acquisition of suitable SaaS business candidates[77]. - The company faces risks related to its rapid growth, including potential strains on management and operational capabilities[81]. Cybersecurity and Data Protection - The Nuvini Group's proprietary data platform processes and stores sensitive data, making it vulnerable to security breaches that could harm its reputation and demand for its services[117]. - Cybersecurity threats, including ransomware and phishing attacks, are prevalent and increasing, posing significant risks to the Nuvini Group's operations and client data security[118]. - Security breaches could lead to litigation, regulatory actions, and significant liabilities, adversely affecting the Nuvini Group's business operations[121]. - The Nuvini Group may incur additional costs to comply with increasing cybersecurity demands from clients, which could affect its financial performance[127]. Intellectual Property and Legal Risks - The Nuvini Group's inability to protect its proprietary technologies could adversely affect its competitive position[135]. - The Nuvini Group's intellectual property rights may not provide adequate protection in jurisdictions with less stringent laws, impacting its competitive position[144]. - The Nuvini Group may face significant legal expenses and operational delays due to claims of infringement against its proprietary technology[138]. - The Nuvini Group's businesses could be adversely affected by unauthorized use of its proprietary technology, which may be difficult to police[135]. Economic and Political Environment - The Nuvini Group's business is significantly impacted by the economic conditions in Brazil, which has experienced uneven growth and mild recessions recently[156]. - Ongoing political instability and corruption investigations in Brazil have led to a decline in market confidence, adversely affecting the Nuvini Group's business and share prices[161]. - Economic and political uncertainties in Brazil may lead to adverse effects on the Nuvini Group's operations and the trading prices of its shares[159]. - The Brazilian government's fiscal reforms are uncertain, which may adversely impact Nuvini's business and financial condition[164]. Compliance and Regulatory Risks - The Nuvini Group's consolidated effective income tax rate could be adversely affected by changing tax laws and interpretations[203]. - The Nuvini Group may face increased exposure to regulatory actions and fines if unable to lawfully transfer personal data from the EEA[197]. - The evolving nature of privacy and data protection laws may require the Nuvini Group to expend significant resources to adapt to changes[202]. - The Nuvini Group operates in jurisdictions with high corruption risks and must comply with anti-corruption laws, which if violated, could result in significant liabilities[220]. Internal Controls and Financial Reporting - Nuvini has identified material weaknesses in its internal control over financial reporting, which could result in material misstatements in future financial statements[229]. - Nuvini expects to incur approximately US$1.0 million on remediation efforts to address identified material weaknesses in internal control over financial reporting in fiscal year 2025[235]. - The company plans to hire accounting and finance personnel with public company reporting experience to strengthen its internal controls and compliance[232]. - Nuvini's management has concluded that its internal controls over financial reporting were not effective as of December 31, 2024[229]. Debt and Financing - Approximately 97.5% of Nuvini's loans and borrowings were subject to floating interest rates as of December 31, 2024, primarily linked to the CDI floating rate[170]. - Nuvini's ability to generate sufficient cash flow from operations is critical to service its debt obligations, which may limit its operational flexibility[252]. - Non-compliance with financial covenants may lead to defaults, potentially resulting in accelerated debt obligations and adversely affecting cash flows and liquidity[257]. - The Company requested waivers for covenant violations on December 13, 2024, and April 24, 2025, which were granted by debenture holders, alleviating concerns regarding potential early debt maturity[255][256].
Nvni (NVNI) - 2024 Q4 - Annual Report