Earnings call transcript: Sequoia Logística Q3 2025 shows strategic revenue decline

Sequoia Logística, a prominent logistics company, reported a strategic revenue contraction in its Q3 2025 earnings call. The company deliberately exited unprofitable segments, leading to a 39% drop in net revenue for the quarter. Despite this, Sequoia maintained stable gross profit and improved its EBITDA margin to 31.3% for the first nine months of 2025. The stock’s last close was at 0.29, with no immediate post-earnings market reaction reported.

Sequoia Logística’s decision to exit certain B2C and indoor logistics operations resulted in a significant revenue decline, but it was a calculated move to focus on more profitable segments. The reality paints a more challenging picture: the company’s gross profit margin stands at negative 1.05% for the last twelve months, and InvestingPro Tips highlight that the company "suffers from weak gross profit margins." The stock has plummeted 98.5% over the past year and currently trades at just $0.06, near its 52-week low of $0.05. With a market capitalization of just $670,000 and an InvestingPro Financial Health score rated as "WEAK," the company faces significant headwinds. Investors can access 15 additional ProTips and comprehensive analysis on the platform.

Sequoia projects an EPS forecast of 3.62 USD for FY2025 and 7.1 USD for FY2026. Revenue is expected to reach 627.36 USD in FY2025 and 972.47 USD in FY2026, reflecting the company’s confidence in its strategic repositioning and future growth potential. Notably, analysts anticipate significant sales growth, with revenue growth forecast at 347% for FY2025, and predict the company will return to profitability this year despite current losses. For deeper insights into Sequoia’s turnaround potential, the comprehensive Pro Research Report—available for this and 1,400+ other stocks—transforms complex financial data into clear, actionable intelligence.

Sequoia’s management emphasized the importance of focusing on profitable segments and improving operational efficiency. They highlighted the benefits of the extrajudicial recovery process and agreements with PGFN, which contributed to the improved EBITDA margin. Executives also noted the significant reduction in workforce as a key factor in lowering costs.

Sequoia Logística’s strategic choices in Q3 2025 reflect a focused effort to enhance profitability and streamline operations, setting a foundation for future growth despite current revenue challenges.

Leopoldo de Bruggen e Silva, Director, President, Financial Director, and Director of Investor Relations, Sequoia Logística: Good morning, ladies and gentlemen. Good afternoon. Welcome to the video conference of results for the Sequoia Logística, with reference to the third quarter ended September 30, 2025. We have with us today Mr. Leopoldo de Bruggen e Silva, Director, President, and Financial Director and Director of Investor Relations. We inform that the presentation is being recorded and translated simultaneously. The translation is available by clicking on the interpretation button. For those listening to the conference in English, the option of silencing the original audio in Portuguese by clicking on Mute Original Audio. During the presentation of the company, all participants will be with their microphones disconnected. After that, we will start the Q&A. To make questions, click on the Q&A icon and type your name and the company followed by your question.

Moderator/Compliance Officer, Conference Moderator and Legal Compliance, Sequoia Logística: We clarify that any declarations which may be made during this teleconference relative to the perspectives and business plans on Sequoia, operational goals and financial goals are projections of the directors of the company, which may or may not happen. Investors should understand that political factors, macroeconomic factors and other operational factors can affect the future of the company and lead to results which are materially different than those expressed in these future considerations. To open the video conference of the third quarter of 2025, I pass the word to Mr. Leopoldo de Bruggen e Silva. Thank you for the presence of everyone. It’s a pleasure to be here with you. We have worked hard to restructure and help the company grow.

I would take advantage here to extend my thanks to the entire exceptional team that we have here, well, along those counselors and our lawyers and consultants. We’re gonna start the presentation with the general vision of our company. We have had significant advances in the transaction with the PGFN. We’ve complied the commitments with the initial recovery, deleveraging our debts with the recent 13th issue of debentures, and following repositioning the company for the segments that generate cash. We have initiated the restructuring of the debts of Sequoia in 2023, reagreeing with the debts and with debentures which are convertible up until the 31st of December of 2025. The total of non-convertible debts, we have debts that acquired together with the group of Move3, and the anticipations of receivables for the recurring working capital.

For debts that are not convertible, approximately half will only come due in 2029 and 2032 due to the global agreement realized at the end of 2023. One hundred and ninety-one million migrated from convertible debentures in the recent thirteenth emission. Being such, we retired the short-term cash flow, allowing for the recovery of the growth of the company. In the case of Move3, acquired in March of 2024, this segment of credit bank card, bank cards is the principal pillar of generating cash of the company, as we will mention going forward.

The Mega Sorter, which started its operations in July 2024, doing the testing of the sorting of large packages for e-commerce, are discussing alternatives for its monetization together with the cannibalization of this segment. We have operated in the last two years with smaller clients, e-commerce clients, and even rented capacity, sorting capacity. The e-commerce market has changed to a larger concentration in marketplaces, verticalizing logistics and utilizing exclusive partners. Due to the scenario of the segment, B2C, we’re evaluating the reallocation of resources for other segments. Reflects our discipline, our capital discipline, and the focus on the generation of value for the company. In October 2024, we protocolled a request for extrajudicial recovery after an agreement of 54% of our creditors.

With the majority of these suppliers of Sequoia and of the Transportadora Americana, this agreement has been complied with, as you can see in this slide, with a minimum amount agreed to by April 2026, and a larger amount only to be paid between 2030 and 2033. In the case of PGFN, we initiated the negotiations two years ago. We have come into a request for the reduction of the capacity of payment, and we’ve had to wait for the approval of the recovery, extrajudicial, recovery plan. With the approval of the plan, it began in October 2025, the prosecutors conceding discounts on the interest and principal. This does not count as it has no guarantees, neither does it impede the sale of assets.

Finally, for 2026, our focus is on logistics of credit cards through the Flash Courier in this segment, the B2B segment. We want to prioritize and grow this segment, which demonstrates consistent cash generation. We’ve been for 30 years in the credit card logistics, and the B2B segment of the group has always been a reference in the market. As I commented earlier, we are seeking alternatives to monetize the Mega Sorter in the B2C operation. We have already launched a disconnection for those collaborators in this segment. This is being conducted together with the union and within the legal requirements foreseen. Looking at the next slide. Net revenue fell by 39% in the third quarter of 2025, and in the first 9 months of 2025, reflecting the deliberate segment of negative margin segments such as B2C and indoor logistics.

The gross profit has been stable, even though we’ve had a strong falloff in revenue, evidence of the improved infrastructure profitability. The gross margin could still grow through our focus on the most profitable segments. We should point out that the company needs to operate in the reduction of its corporate structure beyond the liabilities that make up its expenses of SG&A. The EBITDA margin for the nine months of 2025 was positive 31.3%, an improvement when compared to the first nine months of 2024, due principally to the impacts of the extrajudicial recovery and the agreement with the PGFN. These impacts totaled.

Besides this relevant recovery of operational leverage of these operations and administrative and the depreciation and amortization of the warehouses and fleets for nine months of 2025, even considering many non-recurring expenses are reflected in this slide. Going to the next slide. Flash Courier presents stable revenue being the segment that we call cash cow in our group, with a good generation of revenue, margin, and quality of its receivables, investing its resources to maintain and grow this segment of operations. More than 80% of our revenue comes from this segment, being the principal generator of positive results in this period. The segment, B2C segment shows negative margin since 2024. The B2C segment shows a fall off with this strategy of demobilization.

In the B2B, we’ve had a strong contraction in 2025 due to the moment of restructuring of Sequoia Logística and the Transportadora Americana, and the proxy of clients and contracts through 2026. Finally, the revenue with the sale of assets have helped us to sustain our cash during this restructuring period. Looking at the next slide. For the BRL 464 million revenues, we had BRL 460 million in costs. Freights and franchises represented BRL 401 million. In other words, 93% of the cost of this period. Labor was 45% of our costs. In the last years, we operated in the reduction of our labor cos