Semantix(STIX) - 2023 Q1 - Quarterly Report

Financial Performance - Total revenues for the three-month period ended March 31, 2023, were R$39,679,000, a slight increase from R$39,434,000 in the same period of 2022, representing a growth of 0.62%[4] - Gross profit for the same period increased to R$16,874,000, up from R$12,708,000 in 2022, marking a growth of 32.5%[4] - Operating loss for the three months ended March 31, 2023, was R$46,266,000, compared to a loss of R$43,590,000 in 2022, indicating a deterioration of 6.1%[4] - Net loss for the period was R$47,815,000, compared to R$43,886,000 in the prior year, reflecting an increase in loss of 9.4%[6] - The company reported a comprehensive loss of R$47,979,000 for the three-month period ended March 31, 2023, compared to R$41,951,000 in 2022, an increase of 14.4%[6] - The Group reported a loss before income tax of R$ 50,364 thousand for the period ended March 31, 2023, compared to a loss of R$ 45,788 thousand for the same period in 2022[6]. - The Group reported a loss of R$47,624,000 for the three months ended March 31, 2023, compared to a loss of R$43,824,000 for the same period in 2022[106] Cash and Assets - Cash and cash equivalents decreased to R$231,765,000 as of March 31, 2023, down from R$338,020,000 at the end of 2022, a decline of 31.4%[2] - Total assets decreased to R$596,416,000 as of March 31, 2023, from R$702,541,000 at the end of 2022, a reduction of 15.1%[2] - Total liabilities decreased to R$244,284,000 as of March 31, 2023, from R$281,116,000 at the end of 2022, a decline of 13.1%[2] - The total balance of loans and borrowings decreased to R$ 70,289 thousand as of March 31, 2023, down from R$ 78,671 thousand at the end of 2022[49]. - The Group's total deferred consideration and contingent liabilities decreased to R$ 46,499 thousand as of March 31, 2023, from R$ 63,915 thousand at December 31, 2022[53]. Revenue Breakdown - Revenue from third-party software was R$21,410, remaining stable compared to R$21,411 in the previous year[82] - AI & data analytics services revenue decreased to R$7,875 from R$7,992, a decline of 1.5%[82] - Proprietary software as a service (SaaS) revenue increased to R$10,394 from R$10,028, showing a growth of 3.6%[82] - Total financial revenues for the three-month period were R$10,363, up from R$4,295, marking an increase of 141.5%[89] Expenses and Costs - Total operating costs and expenses for the three-month period were R$85,945, slightly higher than R$83,024 in the same period of 2022[86] - Personnel costs rose to R$36,579 from R$31,257, reflecting an increase of 17.5%[86] Investments and Acquisitions - The company invested R$9,476,000 in the purchase and development of intangible assets during the three months ended March 31, 2023[8] - Semantix completed the acquisition of Elemeno Inc. on February 21, 2023, for a total consideration of R$4,020, which includes R$1,988 paid in cash and R$2,032 payable in installments from 2024 to 2026[33] - The acquisition of Elemeno is expected to enhance Semantix's flagship proprietary platform, the Semantix Data Platform (SDP), particularly its MLOps suite[31] - The Group acquired certain assets, including software from ATSaúde, for R$ 5,430 thousand as part of its strategic plan to expand in the Healthcare & Life Science industry in Brazil[46]. Shareholder Information - The earnings per share for the three-month period ended March 31, 2023, was restated to R$ (0.60), a correction from the previously reported R$ (0.69)[29] - Semantix's total shares outstanding as of March 31, 2023, was reported at 79,099,587 ordinary shares[27] - The weighted average number of common outstanding shares increased to 79,949,000 in 2023 from 62,000,000 in 2022, affecting the calculation of losses per share[106] - Basic and diluted losses per share for the period were R$0.60, improved from R$0.71 in the previous year[106] - The company authorized an increase in its stock repurchase plan from US$5 million to US$10 million on March 29, 2023[72] - As of March 31, 2023, the company held 1,392,474 shares in treasury, with a total amount of R$22,143 spent on repurchased shares during the quarter[73] Financial Management and Risk - The Group's strategy is to maintain a positive net cash position, with capital management policies aimed at sustaining investor and market confidence[101] - Financial risk management focuses on minimizing adverse effects from market risks, including foreign exchange and credit risks[97] - The financial board is responsible for identifying and managing financial risks, ensuring adherence to approved policies[98] Taxation - The effective tax rate for the Group was 5.1% for the period ended March 31, 2023, up from 4.2% in the previous year[6]. - Unrecognized deferred tax assets related to net operating losses amounted to R$ 52,297 thousand as of March 31, 2023, compared to R$ 45,838 thousand as of March 31, 2022[43]. Other Financial Metrics - The Group's total expected credit loss increased to R$25,386 as of March 31, 2023, from R$24,365 as of December 31, 2022, representing an increase of approximately 4.2%[38] - The Group's trade and other payables decreased to R$91,391 as of March 31, 2023, from R$106,023 as of December 31, 2022, showing a reduction of approximately 13.8%[39] - The Group's contract assets decreased to R$86,751 as of March 31, 2023, from R$95,871 as of December 31, 2022, indicating a decline of approximately 9.5%[37] - The balance of derivative warrant liabilities increased to R$ 11,287 thousand as of March 31, 2023, from R$ 2,886 thousand at December 31, 2022[62]. - The Group recognized a loss on derivative financial instruments of R$ 8,738 thousand for the period ended March 31, 2023[57]. - The Group's financial covenants amount to R$33,562,000 as of March 31, 2023, down from R$37,494,000 as of December 31, 2022, with compliance confirmed for both periods[102] - There were no transfers between Level 1 and Level 2 for recurring fair value measurements during the periods presented[96]