By Brazil Stock Guide – Localiza&Co (B3: RENT3) reported net income of R$939 million in 4Q25, up 12.1% year over year, as the Brazilian car rental and fleet management leader accelerated pricing discipline, boosted used-car sales and delivered a sharp recovery in return on invested capital. Consolidated revenue rose 11.7% to R$11.0 billion, while EBITDA increased 12.1% to R$3.7 billion.
The quarter marked a turning point in profitability metrics. Annualized ROIC reached 15.5% in 4Q25, translating into a 5.5 percentage-point spread over after-tax debt cost, signaling a return to the company’s historical value-creation range. EBIT climbed 17.8% year over year to R$2.4 billion, reinforcing operating leverage gains.
Pricing Discipline Drives Margins
In Rent-a-Car, average daily rates rose 6.3% year over year to R$156.8, while utilization reached 80.3%. EBITDA margin expanded to 68.6%, up 3 percentage points from a year earlier. Fleet Management delivered even stronger margin gains, reaching 76.2%, benefiting from portfolio optimization and improved cost controls.
The used-car division (Seminovos) posted record quarterly sales of 77,358 vehicles, with revenue up 15.6% year over year. Although margin temporarily narrowed due to marketing investments and store expansion, management signaled improving trends early in 2026 as volumes accelerate.
Cash Generation Strengthens Balance Sheet
Free cash flow before interest nearly doubled in 2025, reaching R$6.3 billion, supported by improved fleet renewal dynamics and operating efficiency. Net debt stood at R$31.1 billion at year-end, equivalent to 0.57x fleet value, maintaining what the company describes as a “comfortable leverage profile.”
Despite higher financial expenses linked to Brazil’s elevated CDI rate, Localiza’s disciplined capital allocation and declining fleet renewal capex helped offset headwinds.
Outlook: Returns Before Growth
Management reaffirmed its priority of restoring returns to pre-integration levels following the Locamerica merger. With fleet age and mileage trending down, pricing power stabilizing and swap contracts mitigating interest volatility, the company enters 2026 positioned to gradually expand spreads further.
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