Locaweb Serviços de Internet S.A.

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What it is

Locaweb began in 1997 as Brazil’s first internet service provider and has since grown into the country’s dominant digital platform for small and medium-sized businesses, offering everything from web hosting and email to online storefronts and payment processing.

The company runs two segments: Be Online/SaaS — hosting, cloud, domain registration, and email tools — and Commerce, which facilitates online retail through e-commerce platforms and payment solutions under brands including Tray, Tray Corp, and Yapay.

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Who owns it

Gilberto Mautner and Claudio Gora founded the company in 1997; the two are cousins who shared an early passion for technology. The founding family and insiders collectively hold about 28% of the shares (EODHD), giving them real weight without outright control.

Gilberto Mautner remains on the board as co-founder and vice-chairman. Institutional investors — funds, pension plans, and asset managers — hold a further 55% of the company (EODHD), meaning professional money effectively sets the market agenda for LWSA3.

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Who runs it

Rafael Chamas Alves, who had served as the company’s CFO and investor-relations director, took over as CEO in February 2025, succeeding Fernando Biancardi Cirne, who moved to a seat on the board.

Chamas Alves had been with the company since April 2016, serving as financial director and head of investor relations. His elevation from CFO to the top job signals that financial discipline — not further acquisition — is the new governing principle.

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The money, in plain words

Sales grew from R$1.29 bn (US$250 mn) in 2023 to R$1.49 bn (US$289 mn) in 2025 — revenue growth of about 15% over two years (our calculation) — but the bottom line swung sharply. Full-year 2025 revenue reached R$1,488.5 m (US$289 mn), up 10.3% year-on-year.

The 2025 net loss of R$225 m (US$44 mn) (a net margin of −14.6%, EODHD TTM) is largely a paper wound: the company sold its Wake Creators / Squid unit for R$45 m (US$9 mn) in October 2025, and that transaction produced a non-cash accounting write-down of R$287.8 m (US$56 mn) on the quarter’s results — a one-time charge that overwhelms what was otherwise improving underlying trading. The 2024 year, for comparison, produced a net profit of R$42 m (US$8 mn), a net margin of +3.1% (our calculation).

The balance sheet is sound: the company holds R$465 m (US$90 mn) in cash against only R$75 m (US$15 mn) of debt, leaving net cash of R$389 m (~US$76 m, our calculation) — a comfortable cushion for a business of this size.

Free cash flow — the real money left after running and investing in the business — reached R$224.8 m (US$44 mn) in full-year 2025, up 77.7% year-on-year in the fourth quarter alone. Cash is improving even as reported profits look ugly; that gap is what serious investors are watching.

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What it is doing now

The new CEO has pivoted from buying companies to trimming them. LWSA completed divestments of Squid and the Nextios portfolio to prioritise core operations, with no new acquisitions planned in the short term.

Active subscribers grew to approximately 204,000, with improved revenue per customer and strong trends from both small businesses and larger clients. The company has also made significant progress in embedding artificial intelligence into customer-facing products and internal operations.

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What to watch

• Reported profit vs. real cash: The 2025 net loss is distorted by the Squid write-down; watch free cash flow and quarterly operating income, not the headline loss, to gauge the true trajectory.
• Commerce segment momentum: Q3 2025 net revenue rose 10.9% year-on-year to R$387.4 m (US$75 mn), with the commerce segment growing faster at 16.6% to R$283.4 m (US$55 mn) — if that gap widens, the mix shifts towards higher-value, stickier revenue.
• Capital returns: Through October 2025, the company returned R$75.6 m (US$15 mn) to shareholders — R$47 m (US$9 mn) via share buybacks and R$28.6 m (US$6 mn) in dividends. Whether that pace holds under the new CEO matters for income-minded holders.
• Macro exposure: Management flagged cautious optimism for 2026, monitoring macroeconomic factors, seasonality, and election-year impacts in Brazil. A weaker real or higher Brazilian interest rates raise the cost of capital and compress the valuation multiples the market will pay for a growth stock with thin margins.

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This is news, not investment advice.