Financial Data and Key Metrics Changes - Operating free cash flow grew by 16% in the first half of the year, significantly outpacing the top line growth of 6% [10] - Net revenue reached R$98.2 million, a 6.5% increase compared to the first half of 2024 [11] - Adjusted EBITDA for the first half was $21 million, representing a 20% decline compared to the same period last year [11] - Revenue recurrence reached 92.2%, with churn decreasing to 2.4% a year, reflecting improved customer engagement [11] Business Line Data and Key Metrics Changes - Cost savings of R$5.2 million were unlocked through automation and AI initiatives, equating to 50% of all free cash flow generated in 2024 [5] - The company established a foundation for an additional R$12 million in savings over the next 12 months [5] - The implementation of AI has led to a 40% increase in productivity for engineers working with Claude Code [5] Market Data and Key Metrics Changes - The average EBITDA multiple for acquisitions has decreased to as low as 3.5 times, down from 10-13 times two years ago, benefiting the company's acquisition strategy [17] - The Brazilian interest rate is currently at 15%, the highest since 2002, which has positively impacted the company's capital raising efforts [17] Company Strategy and Development Direction - The company is focused on increasing cash flow generation and operational efficiency through AI-driven initiatives and preparing for scaling through new acquisitions [2] - A binding term sheet was signed to acquire MCA Solutions, expected to contribute approximately R$40 million in pro forma annual revenue and R$20 million in pro forma EBITDA [9] - The company aims to complete another two acquisitions by year-end as part of its broader plan to scale its platform and enhance value delivery [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to generate more cash than ever and expects continued improvement in cash generation margins [15] - The company does not foresee any adjustments needed on projections for the business moving forward despite high interest rates [17] - Management highlighted the successful implementation of AI across various functions, positioning the company well for digital transformation in Brazil [22] Other Important Information - The company has doubled the total volume of deal flow and is finding better accretive targets with an average EBITDA of 46% [9] - The Nvni AI Index was created to track AI adoption across portfolio companies and M&A targets, aligning leadership around a clear AI strategy [6] Q&A Session Summary Question: How do you plan to fund future acquisitions? - The company plans to raise straight debt to fund future acquisitions, leveraging improved cash generation margins [15] Question: Do you plan to divest any other companies? - The company does not plan to divest any businesses currently in the portfolio, focusing instead on cash flow generation [16] Question: What impact does the historically high interest rate have on Nvni companies? - The high interest rate has led to lower acquisition multiples, benefiting the company's capital raising strategy [17] Question: Which company did you divest? - The company divested SmartNX [18] Question: Discuss how you are implementing AI and its impact on the company. - AI is being implemented in customer support, sales, software development, and financial workflows to enhance digital transformation and increase free cash flow [22] Question: When can we expect the new companies to be acquired? - The company is in due diligence with four companies and aims to close all acquisitions within the year [23] Question: Discuss cross-selling synergies between your operating companies. - The company is implementing Salesforce across all portfolio companies to leverage existing customer networks for increased sales [25]
Nvni (NVNI) - 2025 Q2 - Earnings Call Transcript