Net revenues hit record of R$ 48.6 million versus R$ 38.5 million in same quarter of 2019
São Paulo, 12 May 2020. Sinqia (B3: SQIA3), provider of technology for the financial system, today announces its first quarter 2020 results. Net revenues reach a record of R$ 48.6 million, an increase of 26.2% – or R$ 10.1 million – over the first quarter of 2019.
According to Mr. Bernardo Gomes, company’s CEO, “this growth is explained by the good performance of the Software unit, whose net revenues reached a record of R$ 35.0 million, growth of 41.1% over the first quarter 2019 mainly due to the consolidation of results of the last four acquisitions: Atena, ADSPrev, Softpar and Stock&Info”.
Mr. Bernardo also points out that recurring revenue represents the best performance in the company’s history: “Recurring revenues reached a record of R$ 41.2 million, growth of 27.5% over the first quarter 2019, representing 84.7% of the total, the highest percentage of the historical series”. According to him, “this is an important characteristic that provides us with predictability in the results, even in times of crisis”, he adds.
Gross profit was R$ 15.8 million, an increase of 29.2% over the first quarter 2019, with a gross margin of 32.4%, an increase of 0.7 percentage points over the same period of the previous year, despite the higher costs with software implementation.
General and administrative expenses were R$ 12.5 million, an increase of 3.0% over the previous year also due to acquisitions. However, an important relative reduction was noted, to 25.6% against 31.4% of net revenue in the same quarter of 2019, due to the capture of synergies with the integration of the acquired companies.
Adjusted EBITDA was R$ 3.4 million, a reduction of 5.7% over the first quarter of 2019, with an adjusted EBITDA margin of 7.0%. Profitability continues to be pressured by high implantation costs, totaling R$ 5.6 million in the quarter, which increased to 35.3% from 21.9% of the gross profit in the first quarter of 2019.
Regarding the dissemination of COVID-19, “we have kept all the commitments assumed with our customers and we remain prepared to support them in this scenario, with the software, services and corporate teams working remotely since mid-March”, highlights the executive.
Finally, Mr. Gomes points out that Sinqia remains in a comfortable financial situation, with gross cash of R$ 340.9 million at the end of the quarter. “In face of uncertainty and economic downturn, we are assessing the impacts of the crisis on our M&A pipeline and adopting a more conservative stance, aiming at maintaining high liquidity and low leverage. The opportunities continue to exist in abundance, we will wait for the right moment to convert them, without jeopardizing the long-term plan.”