Locaweb Serviços de Internet S A : Dados Econômico-Financeiros

Locaweb Serviços de Internet S.A.

Individual and consolidated interim financial information march 31, 2024

(A free translation of the original report in Portuguese containing financial statements prepared in accordance with the Brazilian and International standard on review Engagements (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively))

KPDS 1335223

Locaweb Serviços de Internet S.A. Individual and consolidated interim financial information on March 31, 2024

Contents

Report on review of quarterly information - ITR	3
Interim statements of financial position	5
Interim statements of result	7
Interim statements of comprehensive income	8
Interim statements of changes in shareholders' equity	9
Interim statements of cash flows	10
Interim statements of value add	11
Notes to individual and consolidated interim financial information	12

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KPMG Auditores Independentes Ltda.

Rua Verbo Divino, 1400, Conjunto Térreo ao 801 - Parte, Chácara Santo Antônio, CEP 04719-911, São Paulo - SP Caixa Postal 79518 - CEP 04707-970 - São Paulo - SP - Brasil Telefone [phone]

kpmg.com.br

Report on review of quarterly information - ITR

To the Shareholders and Administrators of

Locaweb Serviços de Internet S.A.

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Locaweb Serviços de Internet S.A. ("the Company"), contained in the Quarterly Financial Information Form (ITR) for the quarter ended March 31, 2024, comprising the statements financial position as of March 31, 2024, the respective statements of profit or loss, other comprehensive income, statements of changes in equity and cash flows for the three-month period then ended, including notes the financial statements.

Management is responsible for the preparation of the interim financial information in accordance with CPC 21(R1) and International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by International Accounting Standards Board - IASB, and for the presentation of this information in accordance with the standards issued by the Comissão de Valores Imobiliários, applicable to the preparation of the Quarterly Financial Information (ITR). Our responsibility is to express a conclusion on these interim financial information based on our review.

Scope of review

We conducted our review in accordance with the Brazilian and International Standard on Review Engagements (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively).

A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Conclusion on the individual interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the individual interim financial information included in the Quarterly Information referred above has not been prepared, in all material respects, in accordance with CPC 21 (R1), applicable to the preparation of Quarterly Information - ITR and presented in accordance with the standards issued by the Comissão de Valores Mobiliários.

Conclusion on the consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information included in the Quarterly Information referred above has not been prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34, applicable to the preparation of Quarterly Information - ITR and presented in accordance with the standards issued by the Comissão de Valores Mobiliários.

Other matters - Statements of added value

The interim financial information referred above comprise the statements of added value (DVA), individual and consolidated, for the three-month period ended March 31, 2024, prepared under the responsibility of Company's management, and presented as supplementary information for the purpose of IAS 34. These statements, were submitted to the review procedures performed together with the review of the Quarterly Financial Information, with the purpose to evaluate whether these are reconciled to the financial information and to accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Added Value. Based on our review, nothing has come to our attention that causes us to believe that the statements of added value referred above have not been prepared, in all material respects, in accordance with the criteria defined in this Standard and consistently in relation to the interim financial information taken as a whole.

São Paulo, May 08, 2024

KPMG Auditores Independentes Ltda.

CRC 2SP-014428/O-6

Original report in Portuguese signed by

João Paulo A. Pacheco Neves

Accountant CRC 1SP222303/O-4

KPMG Auditores Independentes Ltda., uma sociedade simples brasileira, de responsabilidade limitada e firma-membro da organização global KPMG de firmas-membro independentes licenciadas da KPMG International Limited, uma empresa inglesa privada de responsabilidade limitada.

KPMG Auditores Independentes Ltda., a Brazilian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Locaweb Serviços de Internet S.A.

Interim statements of financial position as at March 31, 2024 and December 31, 2023

(In thousands of Reais)

		Parent company		Consolidated
	Note:	03/31/2024	12/31/2023	03/31/2024	12/31/2023
Assets
Cash and cash equivalents	3.1	938,886	949,283	1,126,301	1,188,223
Accounts receivable	4.1	19,707	21,817	802,556	707,556
Taxes recoverable		6,676	2,944	8,255	4,049
Income tax and social contribution recoverable		8,053	11,237	19,298	23,250
Other assets	5	25,925		17,750		41,231		27,315
Total current assets		999,247		1,003,031		1,997,641		1,950,393

Financial assets	3.2
Court deposits	14
Other assets	5
Deferred income tax and social contribution	21

Total long-term assets

-	-	17,630	16,617
402	402	619	498
6,109	5,396	8,983	8,284
136,399	130,213	200,406	182,807
142,910	136,011	227,638	208,206

Investments	7	2,261,565	2,250,061	-	-
Property, plant, and equipment	8	55,168	59,388	85,022	89,431
Intangible assets	9	148,439	147,118	2,284,804	2,288,148
Right-of-use asset	10	56,392		58,784		65,352		68,210
Total non-current assets		2,664,474		2,651,362		2,662,816		2,653,995
Total assets		3,663,721		3,654,393		4,660,457		4,604,388

The accompanying notes are an integral part of the interim financial information.

5

Locaweb Serviços de Internet S.A.

Interim statements of financial position as at March 31, 2024 and December 31, 2023

(In thousands of Reais)

		Parent company		Consolidated
	Note	03/31/2024	12/31/2023	03/31/2024	12/31/2023
Liabilities
Suppliers		15,886	25,207	34,110	45,575
Loans and financing	12.1	-	-	18	60
Lease liabilities	12.2	8,956	8,772	12,812	13,694
Salaries, charges, and social benefits	13	41,546	37,495	120,592	108,366
Other taxes payable		4,308	4,281	13,914	14,546
Services to be provided	4.2	47,622	48,867	95,335	94,717
Receivables to be transferred		-	-	601,300	559,662
Interest on equity and dividends payable		5	5	5	5
Taxes in installments	11	261	256	3,114	3,065
Derivative financial instruments	23.g	160	-	160	-
Obligation with investment acquisitions	7.1	437,874	440,218	574,917	575,093
Other liabilities		3,257		5,491		22,962		26,770
Total current liabilities		559,875		570,592		1,479,239		1,441,553
Lease liabilities	12.2	56,358	58,667	61,866	63,675
Services to be provided	4.2	5,103	2,971	5,103	2,971
Taxes in installments	11	1,153	1,196	13,836	14,270
Obligation with investment acquisitions	7.1	136,292	132,446	187,499	186,111
Provision for contingencies	14	2,853	3,071	5,850	6,168
Provision for investment losses	7	2,258	3,304	-	-
Deferred income tax and social contribution	21	-	-	5,733	6,002
Other liabilities		-		-		1,502		1,492
Total non-current liabilities		204,017	201,655	281,389	280,689
Net equity
Share capital	15	2,940,141	2,940,141	2,940,141	2,940,141
Treasury shares	15	(72,935)	(63,218)	(72,935)	(63,218)
Capital reserves	15	80,110	77,074	80,110	77,074
Other comprehensive income		(106)	-	(106)	-
Accumulated losses		(47,381)		(71,851)		(47,381)		(71,851)
Total net equity		2,899,829		2,882,146		2,899,829		2,882,146
Total liabilities and net equity		3,663,721		3,654,393		4,660,457		4,604,388

The accompanying notes are an integral part of the interim financial information.

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Locaweb Serviços de Internet S.A.

Interim statements of result

Three-month period ended March 31, 2024 and 2023

(In thousands of Reais)

		Parent company		Consolidated
	Notes	01/01/2024 to		01/01/2023 to		01/01/2024 to		01/01/2023 to
	03/31/2024	03/31/2023	03/31/2024	03/31/2023
Net operating revenue	18	80,986		89,166		320,612		302,847
Cost of services provided	19	(53,660)		(63,548)		(168,077)		(159,259)
Gross profit		27,326	25,618	152,535	143,588
Operating revenues (expenses)
Sales expenses	19	(11,575)	(11,842)	(67,072)	(63,327)
General and administrative expenses	19	(7,213)	(7,663)	(59,896)	(57,945)
Loss due to impairment	19	(527)	(335)	(2,626)	(1,296)
Equity income	7	3,137	(6,404)	-	-
Other operating revenues (expenses)	19	26		56		667		202
		(16,152)	(26,188)	(128,927)	(122,366)
Income before net financial revenues (expenses)		11,174		(570)		23,608		21,222
Financial revenues	20	26,944	38,614	34,687	43,048
Financial expenses	20	(7,934)		(27,112)		(25,436)		(49,181)
Net financial income (expenses)		19,010		11,502		9,251		(6,133)
Income before income tax and social contribution		30,184		10,932		32,859		15,089
Current income tax and social contribution	21	(11,846)	(11,131)	(26,203)	(23,232)
Deferred income tax and social contribution taxes	21	6,132		7,432		17,814		15,376
		(5,714)		(3,699)		(8,389)		(7,856)
Net profit for the period		24,470	7,233	24,470	7,233
Earnings per share
(expressed in BRL per share)
Basic profit per share	17				0.04	0.01
Diluted profit per share	17				0.04	0.01

The accompanying notes are an integral part of the interim financial information.

7

Locaweb Serviços de Internet S.A.

Interim statements of comprehensive income

Three-month period ended March 31, 2024 and 2023

(In thousands of Reais)

	Parent company		Consolidated
	01/01/2024 to		01/01/2023 to		01/01/2024 to		01/01/2023 to
	03/31/2024	03/31/2023	03/31/2024	03/31/2023
Net profit for the period	24,470	7,233	24,470	7,233
Other comprehensive income
Cash flow hedge	160	-	160	-
Deferred taxes on cash flow hedges	(54)	-	(54)	-
Comprehensive income for the period	24,576		7,233		24,576		7,233

The accompanying notes are an integral part of the interim financial information.

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Locaweb Serviços de Internet S.A.

Interim statements of changes in shareholders' equity

Three-month period ended March 31, 2024 and 2023

(In thousands of Reais)

					Share capital			Treasury shares		Capital Reserves				Profit Reserves
					Capital	Expenses							Stock	Goodwill							Other
			Paid up		stock	with the					Goodwill on		option	on the					Profit		comprehensive		Accumulated
			capital		yet to be	issuance					capital		plan	issuance of					retention		income		(Losses)
			stock		paid in	of shares		Treasury shares		transactions		reserve	shares		Legal reserve		reserve				profits		Total net equity
Balances on December 31, 2022	3,006,937	3,495			(76,201)	(47,481)		(22,344)	73,771			11,895	3,892	23,623	-	-	2,977,587
Net income for the period	-	-			-	-		-	-			-	-	-	-	7,233	7,233
Total comprehensive income for the period	-	-			-	-		-	-			-	-	-	-	7,233	7,233
Capital increase	3,495	(3,495)			-	-		-	-			-	-	-	-	-	-
Share-based payments	-	-			-	-		-	1,471			-	-	-	-	-	1,471
Balances on March 31, 2023	3,010,432	-			(76,201)	(47,481)		(22,344)	75,242			11,895	3,892	23,623	-	7,233	2,986,291
Balances on December 31, 2023	3,013,866	2,476			(76,201)	(63,218)		(22,344)	87,523			11,895	-	-	-	(71,851)	2,882,146
Net income for the period	-	-			-	-		-	-			-	-	-	-	24,470	24,470
Cash flow hedge	-	-			-	-		-	-			-	-	-	(106)	-	(106)
Total comprehensive income for the period	-	-			-	-		-	-			-	-	-	(106)	24,470	24,364
Capital increase (Note 15.a)	2,476	(2,476)			-	-		-	-			-	-	-	-	-	-
Repurchase of own shares	-	-			-	(9,717)		-	-			-	-	-	-	-	(9,717)
Share-based payments	-	-			-	-		-	3,036			-	-	-	-	-	3,036
Balances on March 31, 2024		3,016,342		-			(76,201)		(72,935)			(22,344)		90,559			11,895		-		-		(106)		(47,381)		2,899,829

The accompanying notes are an integral part of the interim financial information.

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Locaweb Serviços de Internet S.A.

Interim statements of cash flows

Three-month period ended March 31, 2024 and 2023

(In thousands of Reais)

	Note		Parent company		Consolidated
			01/01/2024 to		01/01/2023 to		01/01/2024 to		01/01/2023 to
		03/31/2024	03/31/2023	03/31/2024	03/31/2023
Cash flows from operating activities
Profit before income tax and social contribution		30,184	10,932	32,859	15,089
Adjustments to reconcile profit (loss) before income tax and social
contribution with net cash flow from operating activities:
Depreciation and amortization	8;9;10	11,757	11,865	31,552	29,005
Equity income	7	(3,137)	6,404	-	-
Passive lease interest, derivatives, exchange and monetary
variations		1,344	1,127	1,316	1,077
Remeasurement fair value of contingent consideration	7.1	4,641	24,007	7,081	29,687
Share-based payments	16	2,326	936	3,427	1,487
Provisions and other adjustments		102	849	(3,190)	1,589
Changes in assets and liabilities
Accounts receivable from customers		1,790	447	(93,266)	6,502
Taxes recoverable		(548)	5,252	1,811	8,010
Other assets		(8,888)	(2,107)	(14,615)	(3,312)
Court deposits		-	-	(121)	6
Suppliers		(2,966)	(2,794)	(5,197)	(1,495)
Salaries, charges, and social benefits		3,939	1,741	11,835	4,409
Other taxes payable		(3,553)	(3,371)	(7,099)	(6,672)
Services to provide		887	2,267	2,750	2,079
Receipts to be passed on		-	-	41,638	(26,749)
Other liabilities		(2,234)	(217)	(3,798)	1,076
Income tax and social contribution paid			(8,304)		(7,116)		(21,854)		(16,000)
Net cash from operating activities		27,340	50,222	(14,871)	45,788
Cash flows from investing activities
Acquisitions of property, plant and equipment		(7,359)	(7,959)	(10,200)	(10,360)
Obligation with the acquisition of investments	7.1	(3,139)	(6,252)	(5,869)	(34,530)
Capital increase in subsidiary	7	(8,591)	(51,480)	-	-
Financial Assets		-	-	-	(3,749)
Acquisition and development of intangible assets	9	(5,462)	(4,602)	(16,327)	(14,578)
Net cash used in investing activities			(24,551)		(70,293)		(32,396)		(63,217)
Cash flows from financing activities
Payment of lease liabilities	12.2	(3,469)	(3,053)	(4,892)	(4,433)
Loans and financing paid	23.f	-	-	(42)	(179)
Interest and exchange variation paid	23.f	-	-	(4)	(9)
Repurchase of own shares		(9,717)	-	(9,717)	-
Net cash (used in) generated by financing activities			(13,186)		(3,053)		(14,655)		(4,621)
(Reduction) net increase in cash and cash equivalents			(10,397)		(23,124)		(61,922)		(22,050)
Cash and cash equivalents at the start of the period		949,283	1,309,361	1,188,223	1,448,231
Cash and cash equivalents at the end of the period			938,886		1,286,237		1,126,301		1,426,181
(Reduction) net increase in cash and cash equivalents			(10,397)		(23,124)		(61,922)		(22,050)

The accompanying notes are an integral part of the interim financial information.

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