Business Context and Reporting Period
Nvni Group Ltd (NVNI) is a Cayman Islands exempted company that operates as a holding entity for a portfolio of B2B Software-as-a-Service (SaaS) businesses primarily in Brazil. The company completed a business combination with Mercato Partners Acquisition Corporation in September 2023. This Form 20-F covers the fiscal year ended December 31, 2024.
The company's strategy involves acquiring profitable SaaS companies in fragmented markets, providing back-office support, and fostering organic growth. As of December 31, 2024, the group owned seven acquired companies, including Effecti, Leadlovers, Ipe, Datahub, OnClick, Mercos, and Smart NX.
Key Financial Metrics (Year Ended Dec 31, 2024)
| Metric | 2024 (R$) | 2023 (R$) | Change |
|---|---|---|---|
| Net Operating Revenue | 193.3 million | 169.0 million | +14.4% |
| Gross Profit | 122.5 million | 102.8 million | +19.1% |
| Operating Profit | 16.5 million | (189.2 million) | Improvement |
| Net Loss | (78.2 million) | (247.9 million) | -68.4% |
| Adjusted EBITDA | 57.4 million | 44.3 million | +29.6% |
| Adjusted EBITDA Margin | 29.7% | 26.2% | +3.5 pp |
| Cash and Cash Equivalents | 18.0 million | 11.4 million | +57.9% |
| Working Capital Deficit | (348.3 million) | (308.6 million) | Worsened |
| Shareholders' Deficit | (111.6 million) | (53.6 million) | Worsened |
Note: All figures are in Brazilian Reais (R$) unless otherwise noted. The 2023 results were significantly impacted by a one-time non-cash listing expense of R$176.3 million related to the SPAC merger.
Material Changes vs. Prior Period
- Revenue Growth: Net operating revenue increased 14.4% to R$193.3 million, driven primarily by an 18% increase in SaaS platform subscription services (R$175.1 million). Data analytics and set-up services saw slight declines.
- Profitability Improvement: The company moved from an operating loss of R$189.2 million in 2023 to an operating profit of R$16.5 million in 2024. This improvement is largely due to the absence of the R$176.3 million one-time listing expense recorded in 2023 and a reduction in General and Administrative expenses (excluding the listing expense) from R$93.2 million to R$57.7 million.
- Net Loss Reduction: Net loss decreased significantly by 68.4% to R$78.2 million, reflecting improved operational performance and lower non-recurring charges.
- Goodwill Impairment: The company recorded a goodwill impairment of R$18.3 million in 2024 (compared to R$11.4 million in 2023), primarily related to the Datahub and OnClick cash-generating units.
- Financial Expenses: Net financial expenses increased to R$85.2 million (from R$55.1 million) due to higher interest and penalties on deferred and contingent consideration, as well as foreign exchange losses.
Guidance, Outlook, Risks, and Unusual Items
Going Concern and Liquidity
The filing explicitly states that the company's ability to continue as a going concern is raised as a substantial doubt. The company has a working capital deficit of R$348.3 million and a shareholders' deficit of R$111.6 million. Management plans to address this through equity financing, debt refinancing, and extending payment terms for acquisition earn-outs.
Recent Capital Raises: In January 2025 (subsequent to the reporting period), the company raised approximately US$14.9 million through private placements to improve its cash position and guarantee obligations for the next 12 months.
Debt and Covenants
The company holds significant debt, including R$40.7 million in debentures and R$277.2 million in deferred and contingent consideration on acquisitions. The company was not in compliance with the Debt Service Coverage Index (DSCI) covenant (0.7x actual vs. 4.0x required) as of December 31, 2024. However, debenture holders granted a waiver for the 2024 violation in April 2025.
Nasdaq Listing Compliance
The company received multiple deficiency notices from Nasdaq regarding:
- Minimum Bid Price: The share price was below $1.00 for 30 consecutive days. The company has a compliance period until October 13, 2025.
- Market Value of Listed Securities (MVLS): The company failed to maintain the minimum MVLS of $35 million. A compliance period extends until October 13, 2025.
- Interim Financials: The company was late in filing Q2 2024 interim financials but filed them on February 4, 2025, resolving that specific deficiency.
Internal Controls
Management concluded that internal controls over financial reporting were not effective as of December 31, 2024, due to material weaknesses in accounting resources, segregation of duties, and IT general controls. The company plans to invest approximately US$1.0 million in remediation efforts in fiscal year 2025.
Unusual Items
- Listing Expense (2023): A one-time non-cash charge of R$176.3 million was recorded in 2023 related to the SPAC merger, which significantly distorted 2023 comparability.
- Class FF Shares: In March 2025, the company issued 500,000 Class FF shares with 1,000 votes each to the CEO and CFO to consolidate voting control.
Key Facts for Investor Verification
- Going Concern Status: Verify the sufficiency of the US$14.9 million raised in January 2025 to cover the R$348.3 million working capital deficit and upcoming debt maturities.
- Debt Covenant Waivers: Confirm the status of the April 2025 waiver for the Debt Service Coverage Index and the terms of any future waivers required for the debentures.
- Nasdaq Delisting Risk: Monitor the share price and market value to ensure compliance with Nasdaq rules by the October 13, 2025 deadline to avoid delisting.
- Internal Control Remediation: Track the progress of the US$1.0 million remediation plan for material weaknesses in internal controls over financial reporting.
- Deferred Consideration: Assess the sustainability of the R$277.2 million deferred and contingent consideration liability, which is accruing interest and penalties due to missed payments.
- Revenue Quality: Verify the 97.1% client renewal rate and the stability of the SaaS subscription revenue model amidst high Brazilian interest rates (SELIC at 14.25% as of the report date).