Nvni Group Limited (Nuvini) — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone Q4 filing; separate Q4 results are not provided. Financial statements are prepared under IFRS and primarily presented in Brazilian reais (R$). The historical results are principally those of Nuvini S.A.; the SPAC business combination closed September 29, 2023, and Nuvini shares began trading on Nasdaq in October 2023.
Business context
Nuvini acquires and operates B2B SaaS companies, primarily in Brazil, using a decentralized operating model. It reported seven acquired businesses, including Smart NX, acquired in 2023. All 2023 revenue was generated in Brazil. The company reported 21,708 clients and said no client represented more than 10% of revenue.
Financial performance and liquidity
Amounts below are in R$ millions unless stated otherwise; figures may not total due to rounding.
| Metric | FY2023 | FY2022 | Change or context |
|---|---|---|---|
| Net operating revenue | 168.985 | 124.545 | +36% |
| Gross profit / gross margin | 102.847 / 60.9% | 71.732 / 57.6% | Margin improved |
| Operating loss | (189.194) | (95.700) | Includes R$176.282m one-time non-cash listing expense in 2023 |
| Net loss | (247.862) | (114.206) | Loss widened substantially |
| Adjusted EBITDA | 44.238 | 18.315 | Non-IFRS measure; adds back major transaction-related and other items |
| Cash from operating activities | 2.809 | 14.196 | 2023 cash generation benefited from higher supplier payables |
| Adjusted free cash flow | (9.409) | 9.874 | Non-IFRS; operating cash flow less capital expenditure and acquisitions |
| Cash and cash equivalents, including short-term investments | 11.398 | 8.015 | Year-end balance |
| Working capital deficit | 308.579 | 311.821 | Material liquidity shortfall |
| Total shareholders’ deficit | 53.629 | 94.961 | Improved, but remained negative |
Subscription services generated R$147.986m, up about 40%; data analytics revenue was R$11.944m, down about 14%; set-up and service revenue was R$8.147m, up about 84%. Average monthly recurring revenue was R$13.285m versus R$9.996m; average recurring revenue represented 87.7% of revenue versus 84.8%. Monthly customer renewal was 96.7% versus 95.4%.
Reported operating costs included R$11.373m of goodwill impairment (versus R$86.897m in 2022). Financial expense, net, increased to R$55.110m from R$16.730m, largely reflecting acquisition consideration remeasurement and financing costs. Capital expenditures were R$12.218m, including R$8.648m of capitalized development costs.
Borrowings included R$51.197m of debentures, R$5.289m of loans and financing, R$13.901m of investor loans and R$9.867m of related-party loans. These amounts are distinct from R$232.077m of deferred and contingent acquisition consideration. Approximately R$227.077m of that consideration was classified as current at year-end. The debentures bear interest at CDI plus 10.6%; the filing says about 97.5% of loans and borrowings were floating-rate.
Material changes and unusual items
- Revenue grew 36%, reflecting Smart NX and growth in subscription services, including at Effecti, Ipê and Mercos. Data analytics declined after two Datahub clients reduced their contracts.
- The September 2023 business combination generated a R$176.282m non-cash IFRS 2 listing expense. The filing also describes substantial transaction/advisory costs; reported disclosures do not give a single consistent total for all transaction costs.
- Cash from operations fell despite being positive, and the filing attributes the 2023 cash result partly to a R$38.956m increase in supplier payables and payment timing.
- Goodwill impairment fell from R$86.897m to R$11.373m; the 2022 charge was primarily associated with Leadlovers, while the 2023 charge related to Datahub.
- Adjusted EBITDA rose to R$44.238m, but it is a non-IFRS measure and includes add-backs for the listing expense, IPO transaction expenses, impairment, share-based compensation and warrant fair-value movements.
Outlook, risks and contingencies
Management plans organic growth, further acquisitions and expansion beyond Brazil, and stated a goal of at least four acquisitions annually. It described an engaged pipeline of 19 companies and approximately 15 additional targets. These are strategic aims, not formal revenue or profit guidance; the filing provides no numerical financial forecast.
- Going concern: The auditor highlighted substantial doubt about the company’s ability to continue as a going concern. Management reported that year-end cash was expected to fund about six months of operations, while acknowledging significant additional financing needs. The statements contain no adjustments for the outcome of this uncertainty.
- Debt and payment obligations: The company was out of compliance with debenture covenants at December 31, 2023; the debt was consequently classified as current. The reported debt-service coverage ratio was 0.6x against a 4.0x threshold. Holders granted a waiver on December 19, 2024, without changing the amortization date. Acquisition installments were repeatedly deferred or renegotiated, sometimes for payment in shares; as of December 24, 2024, certain installments remained unpaid, with further extensions being pursued.
- Controls and reporting: Management concluded disclosure controls were ineffective and identified material weaknesses in financial reporting controls, accounting resources and IT general controls. Remediation was planned, with about US$1.0m estimated cost and a target of fiscal 2025; completion and effectiveness are not assured. The auditor did not opine on internal-control effectiveness.
- Nasdaq: The filing describes a late-20-F deficiency and a November 2024 staff determination, with a hearing scheduled for January 14, 2025. It also reports a bid-price notice for trading below US$1.00, with a compliance deadline of April 30, 2025. Delisting could materially reduce liquidity and access to capital.
- Other risks: Key exposures include dependence on acquisitions and financing, Brazilian economic and currency conditions, floating interest rates, customer renewals, cloud-hosting providers, cybersecurity and privacy regulation, competition, and potential dilution from equity financing and warrants.
- Legal contingencies: Provisions for risks were R$30.820m; additional possible-loss civil and tax contingencies totaled R$5.661m and were not provided for. The filing states no provision was recorded for legal proceedings at December 31, 2023.
Most important facts for investors to verify
- Whether Nuvini can secure sufficient financing and meet near-term cash obligations, including acquisition consideration and debt service.
- The status and terms of subsequent deferrals, cash-versus-share settlements, and unpaid acquisition installments.
- Whether the debenture waiver remains effective and whether covenant compliance or further waivers are achieved.
- Progress in remediating material weaknesses, and whether future filings require accounting corrections or restatements.
- Nasdaq hearing outcomes, bid-price compliance, and the company’s ability to maintain its listing.
- The quality and durability of adjusted EBITDA and operating cash flow, including the effects of payable timing and non-IFRS adjustments.
- Potential dilution from warrants, share-based awards, private placements and convertible notes; the filing reports 23.05m warrants outstanding at December 31, 2023, exercisable at US$11.50 per share.