BR Biopharma Q3 2026 Earnings Call Transcript

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November 6, 2026

Key Takeaways

  • Negative Sentiment: Q3 revenue fell 7.5% year over year to BRL 123.3 million, while nine-month revenue declined 3% and net income was BRL 96.3 million. Management attributed pressure on profitability and efficiency to market uncertainty, delayed client decisions, and lower revenue generation.
  • Positive Sentiment: Investment Banking activity strengthened, with 19 deals announced through September versus seven a year earlier, including a significant share of M&A transactions. Management said the pipeline is near record levels, though conversion has slowed to roughly 25%–30%, with delays more common than deals being abandoned.
  • Negative Sentiment: Capital Markets faced a selective funding environment: Q3 issuance totaled around BRL 1 billion across eight deals, down from BRL 1.9 billion across 15 deals in Q2. Year-to-date deal count rose, but the average ticket fell 55.1% year over year to BRL 127 million.
  • Positive Sentiment: BR Partners reduced Securities Warehousing from BRL 3.3 billion to BRL 2.6 billion, lowering leverage to 2.43x from 3.26x and raising its Basel ratio to 23.9% from 21.6%. Management said the lighter balance sheet preserves flexibility to pursue opportunities selectively.
  • Positive Sentiment: The company announced BRL 12.6 million in interim dividends, equal to BRL 0.12 per unit and a 54% payout ratio. Wealth Management also continued to grow, reaching BRL 6.2 billion in assets under advisory, with year-to-date revenue up 22.1% year over year.
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Earnings Conference Call
BR Biopharma Q3 2026
00:00 / 00:00

There are 1 speakers on the call.

Operator

Good day, everyone. Thank you for waiting. Welcome to BR Partners' video conference call to discuss third quarter 2026 earnings results. We inform you that this conference call is being recorded and can be accessed in the company's IR website, where you will find the full package of our financial disclosure. During the presentation, all participants will be in listen-only mode. Later, we will have a Q&A session. To ask questions, click on the Q&A icon at the bottom of your screen and type in your question. If you prefer to use the microphone to ask live questions, just let us know by message, and we will send you a request to enable your mic.

Operator

We emphasize that the information contained in this presentation and forward-looking statements that might be made during the video conference call relating to BR Partners' business prospects, projections, and operating and financial targets are based on the beliefs and assumptions of the company's management, as well as on information currently available. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operating factors may affect the company's future performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, we have the following officers present: Ricardo Lacerda, CEO, José Flávio Ramos, CFO, Danilo Catarucci, Managing Director and Head of Capital Markets, Marcelo Costa, Managing Director and Head of Treasury Sales and Structuring.

Operator

Now I will turn the floor to Raul, who will start the presentation. Good day, everyone. Good day, everyone, and thank you for joining in our conference call to discuss 3Q26 earnings. Starting with the financial highlights, we ended the third quarter in an environment marked by greater volatility and uncertainty in the economic and political landscape, which contributed to clients postponing their decision-making. In this context, the diversification of our activities and the tactical balance sheet management remain key differentiators in our business model. In Q3, total revenue was BRL 123.3 million, down 5.2% quarter-on-quarter and down 7.5% year-over-year. Year to date, revenue reached BRL 388.2 million, a reduction of 3% compared to the same period last year. Revenue from clients totaled BRL 84.2 million in Q3 and BRL 295.3 million year to date.

Operator

Net income was BRL 23.5 million for the quarter and BRL 96.3 million in the first nine months of 2026, with ROAE at 11.5% for the quarter and 15.9% year to date. In terms of operational highlights, we announced 19 investment banking deals until September, compared to seven in the same period last year, with a significant share of M&A operations. We also received a prestigious institutional recognition from Euromoney as the best fixed income bank in Brazil in 2026. On slide three, we highlight the evolution of revenue diversification. Since the pre-IPO period, we have been investing in the development of businesses with higher recurring revenue, seeking to broaden our revenue streams and reduce our historical dependence on more cyclical activities.

Operator

As we can see in the chart, between 2020 and Q3 2026, revenue from more recurring businesses grew at an average rate of 25.6% per annum, compared to 15.2% for total revenue and 3.4% for Investment Banking. This trend demonstrates the growth of these divisions and their increasingly significant contribution to the diversification of our business model. It is important to note that each of these activities responds differently to market conditions. As a result, diversification allows us to better balance revenue generation across different economic cycles. During the year, we observed an improvement in our IB activity, with a higher number of deals closed. At the same time, other business lines continued to contribute to revenue generation this quarter, notably Treasury Sales & Structuring and capital revenues. On the next slide, we see the evolution of revenue from clients.

Operator

In Q3, revenue from clients totaled BRL 84.2 million, while year to date, revenue was BRL 295.3 million, a reduction of only 1.8% compared to the same period last year. Revenue from clients accounted for approximately 68% of total revenue for the quarter, reflecting lower activity in some divisions and a greater contribution from capital revenues. Year to date, this share stood at approximately 76%, in line with the figure for the same period in 2025. We therefore continue to have a diversified base of revenue sources, with a significant share coming from activities directly related to our clients. Moving on to slide five, on Investment Banking and Capital Markets, we observed different dynamics between the two business segments throughout the quarter. In Capital Markets, the more selective environment impacted volume of issuances.

Operator

An environment of heightened economic and political uncertainty, coupled with a still high cost of funding and greater selectivity in the credit market all contributed to longer processing times and the postponement of funding decisions. In IB, however, we observed continued M&A activity with an increase in the number of announced deals and opportunities in Capital Solutions. Combining these two divisions, revenue totaled BRL 53.4 million for the quarter and BRL 218.6 million year to date, remaining practically flat compared to the first nine months of 2025. Breaking down our Investment Banking activity, we announced 19 transactions in the first nine months of 2026, compared to seven in the same period last year. Of this total, approximately 84 were M&A deals, with the remainder divided between Capital Solutions and Board Services. Our pipeline remains diversified with opportunities across various sectors, primarily financial services, telecommunications, healthcare, retail, and agribusiness.

Operator

We also continue to identify opportunities in Capital Solutions, particularly in transactions that require more complex financial structures. The pace at which these transactions are closed remains subject to market conditions and clients' decision-making. Still, we have remained active in originating and executing new mandates. Among the recently announced transactions, I would like to highlight a few. We served as financial advisor to Rodobens in its strategic agreement with Bradesco Seguros for distribution of insurance products. We also advised on the creation of a joint venture between Boa Safra, Bestway Seeds, and Flour Mills of Nigeria, focused on the production, processing, and marketing of seeds in Nigeria. In addition to these deals, we advised Emeis on the sale of its assets in Latin America and Kovr on the sale of the company to PicPay.

Operator

These operations showcase the diversity of our mandates and our ability to operate across different sectors and deal structures. On the next slide, in capital markets, we continue to operate in an environment of greater selectivity with high funding costs and more cautious funding decisions on the part of companies. In the third quarter, we conducted eight issuances totaling around BRL 1 billion, compared to 15 transactions and BRL 1.9 billion in the previous quarter. Year to date, the volume of issuances reached BRL 5.3 billion, spread across 42 operations, compared to 24 transactions in the same period of 2025. Therefore, we saw significant increase in the number of deals, but with smaller tickets. The year-to-date average ticket stood at BRL 127 million, a 55.1% decline year-over-year. This reflects a more selective market with smaller deals and greater caution in making funding decisions.

Operator

Now moving to Treasury Sales & Structuring. We saw recovery in revenue this quarter. We reached BRL 25.9 million, up 39.6% compared to Q2 2026. For the first nine months, revenue totaled BRL 63 million, down 9.8% compared to the same period last year. Quarterly results were favored by increased market volatility and the continued growth of our client base. This performance underscores the importance of a platform that meets the recurring needs of our clients and contributes to the diversification of our revenue streams. On the next slide, starting with Wealth Management, we continue to track the platform's progress. We ended September with BRL 6.2 billion in assets under advisory. Revenue for this division totaled BRL 4.9 million in Q3 and BRL 13.8 million year to date, growing 22.1% compared to the same period of 2025. This performance reflects the growth of our client base and the gradual expansion of the platform.

Operator

As for capital revenues, revenue totaled BRL 39.1 million in Q3, a 52.5% increase compared to the previous quarter. The quarterly recovery was driven by the recycling of positions in Securities Warehousing throughout the period. For the first nine months of the year, this totaled BRL 92.9 million, dropping 6.6% year-over-year. Turning now to our financial and operational performance, we ended the first nine months of 2026 with net income of BRL 96.3 million, a net margin of 24.8%, and ROAE of 15.9%. As for our efficiency indicators, Efficiency Ratio stood at 61.6%, while the comp ratio was 34.1%. These indicators reflect the increased weight of expenses during a period of lower revenue generation. We continue to monitor this trend closely, focusing on cost discipline and the productivity of our investments.

Operator

On the other hand, revenue per Managing Director remained relatively stable at around BRL 29.5 million compared to BRL 30.1 million in the same period of the previous year. We remain committed to the development of our teams and to the execution capabilities of our business units, seeking to maintain productivity and profitability in our operation. On the next slide, as regards capital structure, we ended September with total capital of approximately BRL 1.26 billion, consisting of BRL 831 million of shareholders' equity and BRL 427 million additional Tier 1 capital. Our funding totaled BRL 5.34 billion, with average maturity of approximately 743 days. Thus, we maintain a long-term funding structure aligned with our strategy of preserving liquidity and ensuring flexibility needed to support our clients and business opportunities. On the next slide, we show the evolution of our capital allocation and balance sheet management strategy during the quarter.

Operator

In an environment marked by greater volatility and uncertainty, we chose to adopt a more conservative stance in capital allocation, seeking a lighter balance sheet during this period. As a result, we reduced our Securities Warehousing from approximately BRL 3.3 billion at the end of June to BRL 2.6 billion at the end of September. This contributed to a reduction in leverage, which fell from 3.26 times to 2.43 times, while the Basel ratio rose from 21.6% to 23.9%. This progress reinforces our discipline in balance sheet management, preserving financial strength and maintaining flexibility for new investment opportunities, always with a focus on the efficient use of capital to support our activities with clients. Finally, regarding shareholder returns, we are announcing the payment of interim dividends for the third quarter of 2026.

Operator

The total amount will be BRL 12.6 million, equivalent to BRL 0.12 per unit, a payout ratio of 54%. The record date will be November 12, and payment is expected for November 26. In conclusion, the first nine months of 2026 were marked by a more challenging environment, with greater volatility and delayed decisions across various markets. in this context, we saw a decline in profitability compared to last year, but we managed to keep revenue from clients largely stable, expand our IB activities, and strengthen our solid capital structure. In addition, we have a diversified business model with activities that meet different client needs and that remain in demand even in more challenging economic scenarios. This characteristic allows us to navigate different market cycles with complementary revenue streams and a more balanced business platform.

Operator

For the coming periods, our priorities remain the execution of our mandates and the deepening of our relationships with our clients, disciplined expense management, and the efficient allocation of capital. Thank you very much for participating, and we are now available for the Q&A session. We will now begin the question and answer session. To ask questions, click on the Q&A icon at the bottom of your screen and type in your question to get in line. When you're announced, a prompt to enable your microphone will appear on the screen, and you must open your mic to ask questions. We recommend that you ask all questions at once. To start with the first question, first question from Ricardo Buchpiguel with BTG Pactual. Ricardo, go ahead. Good afternoon, everyone. Thank you for the opportunity to ask questions. I have two.

Operator

I understand that the volume in the M&A pipeline is very robust, but it came a little worse than expected in deal conversion. So, if you could elaborate on the conversion rate today, and how does it compare to more stressed cycles in the past, and what would be a more normal level in your view? And my second question, thinking about this movement of sale of securities in Q3, could you comment on the bank's appetite to include DCM in the current portfolio at the current interest rates? And if there is lower appetite, could this be a barrier to the growth of the capital markets next year? Perfect, Ricardo. Thank you for the questions.

Operator

As for the first one, I can say that the conversion rate is a little lower than normal, around 25%-30%, and this is very much due to the whole uncertainty and volatility that we have faced. But a good sign is that when you don't have conversion of a deal, you can have one of two results. The operation can die, or it can just be delayed. What we have seen so far is more delays than mortality of the deals. I think that our pipeline remains very robust. I would say close to record levels, actually. But unfortunately, given the whole scenario, we have lower conversion. But nothing that a more benign landscape of interest rates and expectation regarding the fiscal side cannot reverse. Because like I said, we don't see a lot of mortality of the deals, but rather more delays.

Operator

To your second point, yes, we do have appetite. If you look at our Q3 earnings, it is clear that we took advantage of this more positive market moment to leave our balance sheet lighter, and I think this was the right move considering a highly volatile situation. Our interpretation was that the electoral race was very, very equal, very tied, and when the market started assigning almost 80%-90% likelihood of a right-wing victory, we saw that there was some asymmetry in that perception. So, we tried to accelerate this process to reduce risk. This ended up putting us in a very comfortable position for us to use now our balance sheet under a new landscape with a risk pricing that is now totally different.

Operator

Yes, the appetite remains, and of course, we are always cautious because we use our balance sheet much more to generate operations with our clients and to make deals that will bring us fees possible. But we are now entering a more delicate moment, but we have reinforced the capital and flexibility to use our balance sheet. Danilo, do you want to add anything, or José Flávio maybe? But basically, this is my view. No, I think this is it. Just to underscore what we always say, we use our balance sheet in a tactical way.

Operator

When we saw that window with the rates ending the quarter at the level that they did during the electoral moment, we took advantage and kind of, quote-unquote, "cleared the portfolio." The market was taking a lot of loans, the rates closed, so we put it in our pocket, and as Ricardo said, we now have a very light balance sheet to enjoy the opportunities that will arise now. Of course, things looking forward might be strange, so we're being very selective in everything that we do. Very clear. Thank you very much. Next question from Bernardo Guttmann with XP. Mr. Guttmann, go ahead. Good afternoon. Thank you for taking my question. I would like to explore the debt market. What caught my attention is that you increased a lot the number of issuances throughout the year, but the financial volume dropped. The average ticket is lower.

Operator

So I would like to understand whether this reflects a change in the mix of operations or whether we are seeing a deterioration of market conditions. Looking ahead, how do you see the dynamic of issuances, particularly given greater selectivity of investors and discussions involving incentivized instruments? Is this changing the profitability of the operations for you? Thank you. All right, let me address that. Regarding the average ticket, this is much more related to the moment, to the timing of those three months before the elections. We had a reduction in the number of clients that were looking for money, so that number dropped as it normally happens before any election. Looking ahead, for example, this quarter, this has come back to normal. But looking forward, we will have to understand what the new rates will be so that we can answer your question.

Operator

I would say that this was more linked to the elections and the electoral period, and looking forward, it will depend on the administration, on what the next administration will be like, so that we can tell you whether we expect an improvement or a worsening. It will also depend on investors. There is this discussion about the exemption that came back to the pipeline now. The market is still digesting everything that has happened in this last week, basically. What we are doing is digesting this, but most likely, the market, in terms of volume, the average should go back to what it was before. We do not expect a reduction, and we do not see a reduction in our appetite. What we have today is more selectivity in credit, considering everything that we thought was going to happen.

Operator

Interest rates closed to 300 points, and now it has gone back 200, 300 points. So we have to keep our finger measuring the pulse to see whether and where we are going to invest our capital. Okay, thank you. Before we proceed, as a reminder, if you want to ask a question, you have to click on the Q&A icon at the bottom of your Zoom screen and type in your question to get in line. Next question from Pedro Leduc with Itaú BBA. Mr. Leduc, go ahead. Good afternoon, everyone. Thank you for the opportunity. We saw that you reinforced your provisions this quarter, the credit provisions. If you could comment on that a little. Was this general? Was this more specific? Because in the earnings release, you mentioned interest rate conditions, and since then, since the end of Q3, this has worsened a little bit.

Operator

Could we expect a slightly higher level of provision for the portfolio in the coming quarters? That is my first question. Second question is not related to this, but in the tax reform, now that we have a little bit more clarity, just a little bit, could you comment where the tax reform could have an impact and what measures can you adopt? Thank you. Hello, Pedro. Thank you for the question. Regarding credit provisions, we follow Resolution 4966. So when volatility increases in a derivatives operation, for example, we have to increase provisions. There was a one-off provision that we made in the quarter that led to this greater movement. For Q4, we do not expect anything different, and no one-off event that will change what has been happening so far. As for the tax reform, again, we are monitoring it. There is nothing too clear yet for us.

Operator

We are working with our fiscal department, with our advisors, and auditors, but we are still tracking this to understand the possible impacts. Okay, thank you. Next question from Arnon Shirazi with Citi. Go ahead. Hello, good afternoon. My question has to do with Wealth Management revenue. When do you think this will have more materiality to contribute to volume in the top line? Thank you. Well, we are working hard for this number to make a difference in the top line. We are growing basically quarter after quarter. The revenue, well, we are cutting to break even, as you all know, and you know very well, this is a very disputed market. It is a fierce market in terms of competition. When the M&A market returns, that is a pool where we can fish better. Again, we are pursuing what we have said in prior quarters.

Operator

We want to bring in originators and bankers that will make sense to our strategy. The business is progressing as expected. We are pleased with the way in which we are growing, but of course, we have a much greater ambition here. I think that in another year, this business will start having more traction and will be more material in the revenue for the group as a whole. Excellent. Thank you. Again, if you want to ask questions, you should click on the Q&A icon on the bottom of your screen and type in your question to get in line. The Q&A session has come to an end. Now, I would like to turn the floor to the management for their final statements. All right. I just would like to take this opportunity to thank you for participating, investors and analysts.

Operator

Of course, we are dealing with a very volatile scenario where we posted a slightly weaker quarter than what we have been delivering in historical terms. On the other hand, we see positive signs, like I said, in terms of the size of the business portfolio we have, both in Investment Banking and in Fixed Income. The fact that despite a number of events that have impacted the economy, geopolitical aspects, interest rates, we still see huge resilience in client engagement in the deals that can come to fruition for us. So we are far from having a positive scenario as we expected at the turn of the year. However, we do not see any signs that we are diving into a very negative cycle.

Operator

I think that we are working to maintain engagement with our clients, maintain our business portfolio, and of course, count on a slight improvement in the macroeconomic scenario to allow our conversion rate to go back to normal. I think that this is a summary of the landscape that we are dealing with. Again, thank you very much for joining us in this earnings call and for your support. BR Partners video conference call relative to Q3 2026 has come to an end. The Investor Relations department will remain available to answer any further questions you might have. Thank you very much to all participants, and have an excellent afternoon.

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