Lavoro Limited (LVRO) Q3 2023 Earnings Report

Lavoro Limited reported a mixed QQ3 2023 quarter. On a BRL basis, the quarter’s revenue reached BRL 2.546 billion, with gross profit of BRL 297.9 million and a gross margin of 11.7%. Operating income was -BRL 46.8 million and net income was -BRL 292.9 million, driven by onetime business combination costs and non-operating charges that weighed on profitability. Adjusted EBITDA stood at BRL 26.2 million, yielding an EBITDA margin of 1.0%. The company also disclosed substantial year-to-date momentum: nine-month revenue rose about 25% year over year to roughly BRL 1.5 billion, and Adjusted EBITDA rose about 38% to BRL 147.9 million (9M ended March 31, 2023), underscoring the platform’s scalable growth trajectory despite near-term margin compression.

Management emphasizes a strategy of accelerating organic growth through cross-selling between Crop Care and retail segments, expanding high-margin Crop Care offerings (notably private-label and biologics), and a disciplined M&A program. The closing of Cromo Química (adjuvants) in the last quarter strengthens the vertically integrated Crop Care portfolio, while Referência Agroinsumos (~2,000 customers across 9 locations) is expected to close in Q4 2023, expanding footprint. However, NS Agro remains delayed and has been excluded from pro forma guidance, reflecting execution risk in large acquisitions. The company remains confident in Brazil’s addressable market (~10% current share) and expects continued farmer investment in inputs amid a favorable long-term agricultural backdrop, supported by a new Brasilseg agricultural insurance partnership and capacity expansions at Agrobiológica.

Looking ahead, management provided consolidated FY2023 guidance (as-reported): BRL 1.95–2.05 billion revenue and BRL 154–159 million Adjusted EBITDA (7.8–7.9% margin). On a pro forma basis (excluding NS Agro due to timing), revenue guidance is BRL 1.99–2.13 billion with BRL 172–178 million Adjusted EBITDA (8.4–8.6% margin). The growth drivers – cross-sell, margin mix with Crop Care, and operating leverage from synergy realization – remain intact, but execution risk around M&A and near-term pricing/mix volatility warrants close monitoring.