International expansion strategy and expansion of the product portfolio contributed to the positive result recorded by the company in the year.
Padtec Holding (B3: PDTC3) – the sole shareholder of Padtec S/A, a leading manufacturer of optical transport systems – ended 2023 with net revenue of R$ 368.7 million, a value that represents an increase of 0.8% compared to the R$ 365.7 million obtained in 2022. The company recorded, in 2023, a 6.5% reduction in revenue from sales of DWDM systems in Brazil, compared to the previous year; however, it showed growth of 2.5% in revenues from DWDM sales in the foreign market and 38.5% in revenues from the Services, Software and Platforms unit, also in relation to 2022.
The compound annual growth rate (CAGR) of total net revenue, in the period between 2020 and 2023, was 14.2%. In the same period, the DWDM equipment business unit recorded a CAGR of 8.6% in Brazil and 45.7% in the foreign market. “This proves the success of Padtec’s strategy of international expansion and diversification of activities, which had a year very focused on profitability”, states Carlos Raimar, CEO and CEO and Investor Relations Officer at the company.
Among the relevant initiatives carried out in 2023 within this strategy, he highlights the opening of the commercial office in Peru, the company’s fourth in Latin America (the others are in Argentina, Chile and Colombia), with the aim of expanding Padtec’s presence in region and facilitate sales and operations support for customers in Andean and Central America. Another important action was the partnership signed with FYCO, a global company specializing in telecommunications solutions, aiming to expand Padtec’s presence in Mexico and boost the implementation of networks based on DWDM technology in that country.
The gross profit in 2023 was a record in the company’s history: R$ 131.3 million, which represents a 12.3% increase compared to 2022, when it was R$ 116.9 million. The gross margin also grew, going from 32% in 2022 to 35.6% in 2023. Padtec’s EBITDA reached R$ 56 million in 2023 (EBITDA margin of 15.2%), which means an increase of 25.7% compared to the previous year (R$ 44.6 million, EBITDA margin of 12.2%). Another highlight is that, after several years, the company will submit for deliberation at the Ordinary General Meeting, scheduled for the end of April, the distribution of dividends to its shareholders, in the amount of R$ 0.046 per share.
An important result achieved in 2023 – the year in which Padtec introduced a new brand to the market – was the significant increase in its customer loyalty index, measured by research based on the Net Promoter Score (NPS) methodology. The company achieved an NPS index of +77, a result that places it in the Excellence zone, according to the NPS interpretation ranges. It was a significant jump compared to 2022, when the NPS was +55, and the highest historical level since the survey began in 2017.
In the area of research and development, Padtec invested R$ 41.5 million in 2023 – 11.2% of its net revenue –, maintaining its commitment to technological innovation. “Our commitment is to continually invest in the evolution of our line of products and services, always pushing the limits of innovation, and supporting our customers’ mission-critical operations. In this way, we offer the market solutions at the forefront of technology in optical communication systems, ready to meet current and future market demands”, highlights Argemiro Sousa, Chief Operations Officer for Equipment at Padtec.
In January last year, the company launched a DWDM solution aimed at regional providers looking for a flexible, high-performance, and affordable alternative for the evolution of their networks: the disaggregated dual transponder of up to 400 Gb/s per optical channel (or 800 Gb/s in total). Additionally, in September, Padtec announced a new product platform for DWDM networks developed to meet demands for ever-increasing transmission capacity: the LightPad Max. Scheduled to launch in the first half of 2024, the platform consists of a complete product line with a new generation of transponders and extremely high data transmission capacity, with up to 1.2 Tb/s per optical channel (or 2.4 Tb/s in total), in mechanics measuring just 1U in height. The year 2023 also marked Padtec’s entry into the switches and routers market, through a partnership with the companies UfiSpace, from Taiwan, and IP Infusion, from the USA.
In Padtec’s ESG (Environment, Social and Governance) agenda, one of the highlights in 2023 was the association with the FBA – Fiber Broadband Association, which aims to promote the adoption and advancement of optical transmission technologies in the Americas, both Latin and North. The initiative is aligned with Padtec’s strategy of participating in collaborative and research projects led by global communities that seek to drive technology innovation, as well as new business models and applications.
For 2024, Padtec’s plans include continuing its international expansion strategy, mainly through new partnerships and new sales channels, and expanding the portfolio of service, software and outsourcing solutions offered to the market. “These solutions can be developed by Padtec itself, or through partnerships and acquisitions from other companies. In this sense, Padtec remains attentive to opportunities that can accelerate the growth of its business through the integration of skills and technologies, both in Brazil and in international markets”, says Raimar.
The full results report is available on the ‘Investor Relations’ page of the Padtec website (www.padtec.com.br/investor/padtec-holding/).
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