By Brazil Stock Guide – TOTVS S.A. (B3: TOTS3) reported an adjusted net income of R$248.7 million in the third quarter of 2025, a 10.2% increase compared to the same period in 2024, driven by strong recurring revenue performance and an expanding EBITDA margin, which reached 26%. Consolidated net revenue came in at R$1.56 billion (approx. US$288 million), up 17.8% year-on-year, while adjusted EBITDA reached R$404.8 million, a 22.7% growth.
The results reflect the company’s strategy of prioritizing recurring revenue, which now accounts for 91.5% of the total, and the operational efficiency of its Management and RD Station business units. Net Annual Recurring Revenue (ARR) addition was R$220.2 million, up 27% year-on-year, indicating sustained traction in the business model.
“In a business with such high recurrence and client retention levels, the next year is built in the current one. In this case, 2026 is being properly built upon the excellent year of 2025,” said CEO Dennis Herszkowicz in a statement to shareholders. The company also highlighted the growth trajectory of Techfin, its joint venture with Itaú, which posted adjusted net income of R$16.1 million, up 71.8%.
Brazil’s technology sector has benefited from corporate migration to the cloud and demand for ERP and automation solutions, in an environment still marked by high-interest rates and caution regarding capex spending. TOTVS maintains its leadership in the business management segment, with total ARR of R$6.27 billion, while RD Station regains momentum in SaaS sales.
TOTVS shares have gained 18% year-to-date, reflecting expectations of continued growth. The stock last traded at R$27.45. Analysts from Itaú BBA and BTG Pactual signal that the consistency in free cash flow – which rose 54% in the quarter to R$280.5 million – and the reduction in net debt strengthen the balance sheet for potential acquisitions, such as the recently approved purchase of Linx.
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