Why Linx?

Por que a Linx?

Por que a Linx?

Market leader with expertise in retail

We are the market leader and enjoy 40.2% market share in retail management software in Brazil, nearly three times larger than our closest competitor and larger than our top three competitors combined, according to the IDC Linx Report. We believe we have significant expertise across many retail verticals, which combined with our comprehensive solutions has allowed us to become the leading provider of cloud and on- premise software solutions for the retail sector in Brazil, according to the IDC Linx Report.

We work in close proximity with our customers to understand their businesses and business needs and are thereby able to offer them bespoke software solutions. Our long-term presence has enabled us to develop products with what we believe is exceptionally high adherence to the retail sector, naturally creating strong barriers for new entrants. Concurrently, this has allowed us to develop dedicated expertise and local knowledge of best practices across retail verticals including apparel stores, auto dealerships, gas stations and convenience stores, drug stores, electronics and appliance stores, general merchandise stores, home centers, and food service. As a market leader, we believe we attract and retain the best and most innovative technology professionals in the retail software industry.

Innovative, comprehensive and easy-to-deploy solutions for retailers

We believe we were the first to introduce many innovative software solutions enabling the retail industry in Brazil to increase the level of automation and efficiency. For example, we introduced the seamless integration of ERP and POS in the 1990s and the seamless integration of ERP, POS, connectivity and electronic payments in 2003. We believe we continue to stay at the forefront of the technology migration in Brazil and enable retailers to adopt next generation solutions as their business needs grow and increasingly require our cloud, e-commerce and mobile solutions.

Our comprehensive and integrated solutions address the needs of retailers from SMBs to the largest global retailers and major franchisors in Brazil. Our scalable and modular cloud and on-premise solutions can easily be configured to enable subsector and size-specific functionality and features with seamless integration across retail stores and franchise locations. For example, our bespoke solutions can include: ERP, consisting of order management, production control, inventory management, store management, logistics, financial management, accounting and tax; POS; customer relationship management, or CRM; e- commerce; NF-E; NFC-E; Mobile aplications connectivity, which includes multiple options for electronic payment transactions.

We believe our software enables retailers to embrace changes to their business needs through our rapid innovation cycle and frequent updates, which generally contain new functionality, support for the complex and fluid multi-state tax system and new regulatory requirements in the country. In addition, our software evolve based on performance requirements and user experience. By offering our software solutions as a cloud-based service, our customers can operate our latest version without the burden of large upfront investments and upgrade costs, while having the flexibility to configure our applications to meet their specific business requirements.

Predictable business model with history of growth and profitability

We sell our cloud and on-premise solutions primarily through annual subscription contracts payable monthly with automatic renewals that adjust for inflation on the anniversary of the contract, creating with this high recurrence and predictability in our results. Our portfolio of products, customer service and business model have allowed us to achieve what we believe is high customer satisfaction.

Our net revenues from continued operations and Adjusted EBITDA have increased at a CAGR of 15% and 10.1%, respectively from 2014 to 2016. Over this same time period, the recurring portion of our revenues from continued operations remained at an average of 84%, which gives us high visibility and predictability in our business. Our Adjusted EBITDA margin was 25.1% in 2016.

Large and diversified customer base

We benefit from a large and diversified base of customers ranging from SMBs to large retail chains. We have expanded our customer base from 12,771 in 2012 to approximately 43,966 as of 2016. We benefit from low customer concentration, with our largest customer representing only 2.6% of our revenues in the trimester ended in December 31, 2016, Our top 100 customers represented only 32.2% of the total revenues, in the same period. We believe that the high level of customer satisfaction led to low rates of non-renewal, which allowed us to achieve a high renewal rate of 94.4 in 2016.

History of successful growth acquisitions

We believe we have developed a strong capability and track record of identifying, negotiating and integrating acquisitions. Moreover, we developed an integration model that enables us to integrate in a timely and efficient manner our acquired businesses. Since 2008, we have successfully acquired 22 companies. Our acquisition strategy is focused on enhancing retail vertical breadth, expanding our operations into new regions within Brazil and adding new technologies to accelerate our pace of innovation. For example, our acquisition of Quadrant, in 2008 reinforced our presence in the State of Rio de Janeiro; our acquisition of Custom in 2011 expanded our presence in the southern region of Brazil; while our acquisition of Compacta in 2012, and the assets of Seller, in 2013, enabled us to enter the food services and the gas station and convenience stores verticals, respectively; while the acquisition of Direção reinforces the offering of TEF, the acquisitions of Big Systems and Softpharma in December 2014 allowed us to enter a new retail vertical, the pharmacies vertical, the acquisition of Neemu and Chaordic in September 2015, leading companies in personalized online shopping experience, focusing on search and recommendation tools for e-commerce, and the acquisition of Synthesis, in July 2017 represents the first step in Linx´s international expansion, aiming to significantly increase its addressable market and to be prepared to the internationalization of its Brazilian clients.