LWSA3

Locaweb, currently organized under the corporate name LWSA S.A. and traded on B3 under the ticker LWSA3, emerged in 1997 as one of the pioneers in website hosting services in Brazil. With operations starting in 1998, the company began by offering specialized hosting and quickly expanded its activities with the launch of Locaweb PRO, migration of servers to more robust infrastructures, and the construction of its own data centers. In the early 2000s, it navigated the dot-com bubble while maintaining its strategy of expanding its portfolio, incorporating solutions such as voice portal (Locavoz), hosting with support for Java and .NET, and data center and VoIP services. In this process, it obtained accreditation as a domain registrar from ICANN and Registro.br, consolidating a relevant position in the Brazilian digital presence market.

Throughout the 2010s, Locaweb intensified its transition to a Software as a Service (SaaS)-based model, focusing on B2B solutions aimed at the digital transformation of companies. In 2010, the entry of the Silver Lake fund, in the manager’s first investment in Latin America, marked the beginning of a phase of faster growth supported by strategic acquisitions. In this stage, the company incorporated businesses such as Tray (e-commerce platform) and All iN (e-mail marketing), expanding its scope from hosting and cloud to a broader ecosystem of digital solutions. The expansion trajectory continued with acquisitions of KingHost, Delivery Direto, Cyberweb, ITCapital and the creation of initiatives such as Yapay, focused on payment solutions.

The IPO carried out in February 2020 represented a turning point in LWSA3’s history, enabling a significant acceleration of its inorganic growth strategy. Between 2020 and 2022, the company completed 14 acquisition moves focused on e-commerce, digital marketing, ERP, financial services and logistics, integrating brands such as Etus (social media management and digital marketing), Bling (ERP for SMEs), Vindi (recurring billing), Melhor Envio (logistics), Octadesk (conversational commerce), as well as Dooca, Bagy, ConnectPlug, Credisfera, Pagcerto, Samurai, Síntese, among others. This acquisition cycle strengthened the company’s technology ecosystem and expanded its offering of complementary solutions, with founders of several acquired companies remaining as executives or employees, which contributed to preserving knowledge and entrepreneurial culture within the group.

Locaweb’s business model has evolved into an ecosystem of integrated digital solutions aimed primarily at corporate clients, with an emphasis on small and medium-sized enterprises, although it also serves larger clients. The company organizes its activities into two main lines reported financially: BeOnline/SaaS and Commerce. Corporately, these fronts are broken down into five macro segments: BeOnline/SaaS (which brings together brands such as Locaweb, Nextios, KingHost and Octadesk), Commerce Platform for SMEs (Tray, Bagy and Melhor Envio), Enterprise Commerce Platform (Wake, until its divestment in 2025), ERP and Management (Bling and ConnectPlug) and Financial Services (Vindi and Pagcerto as a payment institution). The structure of this portfolio allows the company to explore operational synergies, software integrations and cross-sell and up-sell strategies across a base of approximately 700 thousand active customers distributed across various sectors of the economy.

The Commerce segment is LWSA S.A.’s main revenue source, accounting for about 69% of net operating revenue in 2024, while BeOnline/SaaS represented 31%, according to data reported by the company itself. Within Commerce, Locaweb operates as an “e-commerce enabler,” offering virtual store and ERP platforms aimed at SMEs and enterprise clients, and also as a provider of “e-commerce components,” with transactional solutions in financial services, recurring payments and integrated logistics. The monetization model combines auto-renewing subscriptions—typical of SaaS—with revenues tied to merchants’ GMV (Gross Merchandise Volume), percentages over revenue (in Vindi’s case) and percentages over shipping fees (in Melhor Envio’s case), as well as pay-per-use modalities for certain complementary products. Revenue is diversified, with no dependence on any single relevant client, since no customer accounted for more than 10% of net revenue in 2024.

In the BeOnline/SaaS segment, Locaweb maintains its historical activities in hosting, domain registration, cloud computing services, and productivity and digital marketing solutions, supporting companies in building an online presence and managing customer relationships. The company combines its own data center infrastructure, in-house software development and implementation, support and consulting teams that continuously monitor product usage, collect feedback and adjust features. The development process for new products follows a structured cycle that includes an exploration phase (market research and design), development (MVP, testing and design), sales (online channels, inside sales and corporate team) and ongoing operation and improvement. The commercial strategy is based on digital lead acquisition via paid online media and organic traffic, nurturing these leads with specialized content on e-commerce and digital marketing, and closing sales through internal channels or dedicated executives.

LWSA focuses its operations on the Brazilian market, without material revenues abroad in recent years, and seeks to capture the structural advance of digitalization and e-commerce in the country. In e-commerce, the company indicates a relevant share of the GMV of Brazilian digital retail, focusing on helping SMEs adopt technological tools similar to those used by large retailers, while also maintaining dedicated solutions for more complex clients. In the hosting, domains and cloud segment, sector data from specialized consultancies point to a growing domestic market in which Locaweb highlights the combination of its time in operation, brand recognition and breadth of product offerings as competitive factors. The company also invests in partnerships and integrations with major global technology platforms, seeking to expand the reach of virtual stores and optimize the digital sales journey.

From a regulatory standpoint, LWSA is subject to the general framework of municipal, state and federal laws related to the operation of establishments, licenses, permits and land-use and environmental protection rules, although its activities are not environmentally intensive and do not require complex environmental policies. The company operates in a regulatory context that is sensitive to the protection of personal data, being directly affected by the General Data Protection Law (LGPD), the Brazilian Civil Rights Framework for the Internet, the Consumer Defense Code and the actions of consumer protection agencies and the National Data Protection Authority. As it processes significant volumes of data from customers, employees and third parties, compliance with the LGPD involves implementing technical and administrative information security measures to mitigate the risks of incidents and sanctions. In addition, through Pagcerto, which is authorized by the Central Bank of Brazil as a payment institution, Locaweb is subject to specific rules of the Brazilian Payments System, covering capital, governance, cybersecurity, compliance and internal control requirements.

On environmental, social and corporate governance (ESG) matters, LWSA prepares annual sustainability reports based on Global Reporting Initiative (GRI) guidelines and the Sustainability Accounting Standards Board (SASB) framework, aligning its initiatives with UN-defined Sustainable Development Goals. The report, assured by an independent third party, includes information on management practices, human capital, governance, ethics and socio-environmental impacts, in addition to disclosing milestones such as the first inventory of greenhouse gas emissions under the GHG Protocol, including initial scope 3 analyses. These elements reinforce the institutionalization of governance and transparency in a technology company listed on B3, whose long-term strategy involves technological integration of acquisitions, corporate simplification and the capture of synergies in a scalable ecosystem of software and digital services.

From an economic-financial perspective, Locaweb combines revenue growth with operating margins typical of companies with recurring software and cloud services. In 2024, net operating revenue reached approximately R$ 1.37 billion, with a gross margin close to 48% and adjusted EBITDA around 20% of revenue. The company showed improved profitability compared to 2023, reversing a net loss into profit, in addition to maintaining a relevant net cash position, which supports its capacity to invest in product development and in the infrastructure needed to support the growth of its customer base. This financial profile is directly linked to the auto-renewing subscription model and to the diversification of revenues across different e-commerce verticals and SaaS solutions, which characterize LWSA3’s positioning among technology companies listed on the Brazilian stock exchange.