LWSA3 Locaweb

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 went through the dot-com bubble while maintaining its strategy of expanding its portfolio, incorporating solutions such as a voice portal (Locavoz), hosting with Java and .NET support, 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 companies’ digital transformation. 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 more accelerated growth supported by strategic acquisitions. During this stage, the company incorporated businesses such as Tray (e-commerce platform) and All iN (email marketing), extending 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 the history of LWSA3, 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 broadened its offering of complementary solutions, with founders of several acquired companies remaining as executives or employees, which helped preserve know-how and an entrepreneurial culture within the group.

Locaweb’s business model has evolved into an ecosystem of integrated digital solutions mainly aimed 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 major fronts for financial reporting purposes: BeOnline/SaaS and Commerce. At the corporate level, these fronts are broken down into five macro segments: BeOnline/SaaS (which includes brands such as Locaweb, Nextios, KingHost and Octadesk), Commerce Platform for SMEs (Tray, Bagy and Melhor Envio), Commerce Platform Enterprise (Wake, until its divestment in 2025), ERP and Management (Bling and ConnectPlug) and Financial Services (Vindi and Pagcerto as a payment institution). The design of this portfolio allows the company to explore operational synergies, software integrations and cross-sell and up-sell strategies over a base of approximately 700,000 active clients spread across various sectors of the economy.

The Commerce front is the main source of revenue for LWSA S.A., accounting for around 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 automatically renewing subscriptions—typical of SaaS—with revenues linked to merchants’ GMV (Gross Merchandise Volume), percentages on revenues (in the case of Vindi) and percentages on freight (in the case of Melhor Envio), as well as pay-per-use models for certain complementary products. Revenue is diversified, with no dependence on any material individual client, since no client accounted for more than 10% of net revenue in 2024.

In the BeOnline/SaaS segment, Locaweb maintains its longstanding role 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, gather feedback and adjust functionalities. The process for developing new products follows a structured cycle that includes an exploration phase (market research and concept), development (MVP, testing and design), sales (online channels, inside sales and corporate sales team) and operation and continuous improvement. The commercial strategy is based on digital lead acquisition through paid online media and organic traffic, nurturing these leads with specialized content on e-commerce and digital marketing, and closing deals through internal channels or dedicated sales executives.

LWSA focuses its operations on the Brazilian market, with no 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 in the GMV of Brazilian digital retail, with a focus on supporting SMEs in adopting technological tools similar to those used by large retailers, while also maintaining dedicated solutions for more complex clients. In the hosting, domain and cloud segment, industry data from specialized consultancies indicate a growing domestic market, in which Locaweb highlights the combination of its years 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 business operations, permits, licenses and zoning and environmental protection regulations, although its activities are not environmentally intensive and do not require complex environmental policies. The company operates in a regulatory environment that is sensitive to personal data protection, being directly affected by the General Data Protection Law (LGPD), the Civil Rights Framework for the Internet, the Consumer Protection Code and the actions of consumer protection agencies and the National Data Protection Authority. As it processes significant volumes of data from clients, employees and third parties, compliance with the LGPD involves implementing technical and administrative information security measures to mitigate the risk 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.

In environmental, social and corporate governance (ESG) matters, LWSA prepares annual sustainability reports based on the Global Reporting Initiative (GRI) guidelines and the Sustainability Accounting Standards Board (SASB) framework, aligning its initiatives with the Sustainable Development Goals defined by the UN. The report, assured by an independent third party, includes information on management practices, human capital, governance, ethics and socio-environmental impacts, and discloses milestones such as the first greenhouse gas emissions inventory in accordance with 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 capture of synergies in a scalable ecosystem of software and digital services.

From an economic and financial perspective, Locaweb combines revenue growth with operating margins typical of recurring software and cloud services companies. 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 investment capacity in product development and in the infrastructure needed to support the growth of its client base. This financial profile is directly linked to the automatically renewing subscription model and 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.