Hello, welcome to Intelbras' first quarter 2026 earnings call. My name is Bruno Teixeira, head of investor relations, and it's a pleasure to join you this morning. I am joined in this earnings call by Henrique Fernandez, CEO, to get the presentation started. This conference is being recorded and will be available at the company's IR website, where you can also find the slide deck. You can download it now to follow along with the presentation, and after the call, you will also be able to find the video playback in our website. During the Q&A session, please use the Q&A feature on the bottom of your Zoom screen. Please enter your name, organization, and the language in which you are asking your question. We are going to take your questions in the order that they are submitted. When we call your name, you will receive a pop-up message to enable your microphone. The information contained in the presentation and any statements that may be made during the conference call about the business perspectives, projections, as well as operating and financial targets for Intelbras, are based on the beliefs and assumptions of the company's management, on currently available information. Forward-looking statements do not guarantee performance. They involve risks, uncertainties, and assumptions as they refer to future events, and therefore depend on circumstances that may or may not come to pass. Investors should understand the general economic and market conditions, as well as other operating factors may affect the future performance of Intelbras and lead to results that differ materially from those expressed in such forward-looking statements. Now that these housekeeping announcements are out of the way, I will begin the presentation. Then we will move on to Q&A. Let's get started with our presentation. As usual, these are the main highlights for the second quarter of 2026. We have delivered sequential revenue growth at 3.5%, which is closely aligned with what we are seasonally used to, and a drop at 7.5% in revenue in comparison to Q2 last year, which is associated to the stronger foundation of last year, which we mentioned, by the way, in the Q1 earnings call. This revenue is closely aligned with our projections, and these are expressive results. We are quite satisfied at these results. We've had a robust quarter, a growing EBITDA quarter-over-quarter and year-over-year, it's reaching almost BRL 170 million, almost BRL 169 million. Our net income is very similar to that of the first quarter of the year. Now, we should point out that there was no positive impact from the tax income that we were expecting, these results are quite interesting for our quarter. Our ROIC is drawing closer to our target. There's been significant evolution over the course of this year and an improvement vis-a-vis the previous quarter at about 18.8%. Our gross margin has grown, and this has a direct bearing on our EBITDA margin. This has been a sequential increase vis-a-vis our first margin of the year of our first quarter. If we compare this to last year, our growth has been rather robust. It's important to look at margins one after the other sequentially, because they make more sense than just comparing it to the previous year. We see a journey of business evolution, and this journey can be better depicted in a sequential fashion. There've been some interesting operational results, and the net margin is also quite good, similar to Q1 as mentioned earlier, when we also increased our absolute net profit. Let's talk about revenue. There are two topics depicted here in this graph. First, I'd like to call your attention to the evolution of our revenue over the course of the semester. Our third quarter was quite strong last year. Our first quarter this year was not as strong. For this year, second quarter and third quarter are according to plan, and they're actually moving according to our forecasts, with a growth a little bit over 4% considering our forecasts for the year. Revenue has seen a bit of a challenge. We're not expecting significantly thriving revenue for this year, but it's still according to plan. One of the biggest aspects we need to consider here are our key businesses. We call them our core businesses here at the company. I'd like to call your attention to our numbers for 2021 when we became publicly listed. Back then, the results were good, but they were not our major growth drivers. They were indeed part of our revenue, and they were significant at that point. We can use 2021 as a benchmark and then look at the revenue for the first six months of 2026. Growth has been significant for the company in comparison to 2021. It's a very similar situation to what we're facing now in 2026. We wanted to reiterate that because something happened to our solar business in 2022. 2023, there was a problem in that segment. In 2024, our revenue for EPON was quite significant, and then our exposure to EPON was reduced the following year, in 2025. We changed our strategy, we revised our solar strategy. All of these moments here, 2022, 2023, 2024, 2025, if we compare those years to 2021, perhaps our analysis can become clearer. Our operating results show significant EBITDA growth. Last year was impacted by a weaker first quarter, but our EBITDA was significant. Our results improved significantly and we're quite satisfied with them. If we look at the baseline for Q2 2025 and compare that to Q2 2026, we see that most of our results come from sustained growth because of our gross margin expansion. If we look at a year-over-year comparison, we're still a bit behind, but our revenue is still below the higher end of the gross revenue. Our expenses are under control and closely aligned with last year. Almost no change there. This shows that the quality of sales has a strong bearing on sales. We moved from BRL 154 million- BRL 168 million. There's a big increase of 14.7%. Let's talk about consolidated gross profit and gross revenue. Here, I'd like to call your attention to the fact that there's a better margin threshold that we were delivering last semester because of our mix, and we expect that mix to continue to evolve. Structurally speaking, that margin is at a better level than we were delivering last year, if we look at the average margin for last year as a reference. Also, there's a big leap between the first and second quarters, in addition to the effects of the mix, which is structural. The margin has also been increasing because we're practicing costs that include replacement costs, because our costs that are going to be reported as sold costs will actually be absorbing these costs with the new prices and with the new purchases that are coming up. It's important to keep that in mind when we look at the rest of the year as well. PVA also has an effect, and we've been discussing that over the last few calls, so we wanted to show you that again this time. The PVA effect this quarter relatively helps. There's significant help here vis-à-vis the EBITDA and if we compare that, there's about 30 basis points in difference. The effects of PVA will continue to be negative over the course of the year, but we expect that to reduce its negative impacts as our stock or our inventory becomes better financed and as our interest rates, at least our local interest rates, tend to go down. This is outside of our control. We'll monitor the situation, but inventory financing is an area that we are focusing on, and the results so far in Q2 have been quite interesting. About our business highlights. Security is quite relevant. It continues to account for over 6% of our revenue. There's been a drop year-over-year because security was the main segment where there was a lot of pent-up delivery. We were able to supply everything in the second quarter of last year. Our second quarter of 2025 is quite strong. That means the drop now is higher. We knew back then that that was going to happen. Growth has remained pretty much zero between the first and second semesters. This is actually quite well aligned with what we see out there. We knew that the first quarter had been quite strong, and since our expectation for security is to deliver a growth for the year very similar to what we saw last year and maybe even better, similar to the first quarter of this year. The reality is that quarter-over-quarter will be growing not very much. By the end of the year, growth is expected to be similar to what we're seeing in the first quarter. We're very happy about this. We are all according to plan. We delivered on the plan for our three business areas, and we're quite well satisfied with the revenue there. Like I said earlier, Security has benefited from replacement cost-based price adjustment, while averaging inventory cost increasing gradually. Let's look at ICT. There's been year-on-year growth at 7%, and quarter-on-quarter it's at 12%, so this accounts for one-fourth of our revenue in total. Perspectives here are quite positive, quite healthy for our revenue. This really counterbalances the GPON effects on our results, as we said earlier. GPON is expected to lose relevance when it comes to our ICT results, and we're seeing that materialize right now. The positive aspect of this is that as business networks evolve according to our predictions and everything moves forward according to plan, we will continue to see an evolution in our margins, and there's going to be a significant effect in the second quarter. There's a big effect from the mix and also from the pricing of replacement costs. Lastly, let's talk about our Energy segment. This accounts for 15% of our revenue in this quarter. There's been a drop year-on-year, and it's significant. In the first quarter of last year, our Energy revenue base had the contribution of Solar, a significant contribution from Solar, by the way. We adjusted our strategy. We adjusted our commercial dealings according to that strategy. Now in the second semester, the revenue levels are quite higher than the first semester of last year. Looking at the first semester of 2026, it's quite aligned with the last two quarters of last year. This is a normal business trend. This is why growth has been at 4% here. This reflects quite well the evolution of our other Energy businesses. For example, Solar is losing its space. It continues to be relevant, but it's actually not so big anymore. As for UPS and vehicle chargers, those are gaining relevance, and that's quite healthy for our business. It also helps us make up our gross margin in that segment. Energy is now the second biggest segment in terms of gross margin when we look at the numbers. It's no longer the lowest growth margin across all three segments. If we look at all these results and the impact on cash, this is an important point to make. We see that operational cash generation has been significant. There's been a significant evolution, the need for working capital and all of our work done with inventory and accounts payable, and the numbers are quite healthy and the results are there and are visible. Another semester with strong cash flow generation. Debt amortization is as expected. In Q3 and Q4, our debentures will be amortized, and that's the main aspect to call your attention to when it comes to our cash reduction, because we'll be paying our liabilities. We expect the quarter to continue to generate cash quite significantly. We're moving from BRL 1.3 billion-BRL 1.4 billion in terms of cash evolution. BRL 580 million would be the delta between those two numbers. It's rather robust. If we look at CapEx, we're allocating some of our CapEx to our factory in Manaus. The CapEx there becomes visible in our results. We've secured the land, and now we're working in construction. That expansion will continue going forward. We've communicated that to the market. We mentioned that topic in the previous meeting. Over the last 18 months, we've been doing this investment, and other investments have to do with operations. Our CapEx for maintenance, for example, has been according to plan, as calculated, and we expect that to continue. Before I give the floor over to Henrique, let me tell you about our perspectives. We continue to focus on prudence amid macroeconomic and global uncertainties, both in Brazil and abroad. There's been an increase in costs because of inflation. This situation has not yet been resolved, so we need to be careful, and we need to tweak things as needed in terms of supply and in terms of pricing. This is what's been happening in the second quarter. This issue still warrants attention, and we will remain prudent in our day-to-day activities and in the decisions we make. This has a direct bearing on commercial discipline. We don't price and execute things haphazardly. We always follow strong discipline in our commercial team when we do our negotiations and when we do our allocations, and we continue to do that in a very transparent fashion. Despite all that, we believe that these margins may fluctuate over the course of the second half of this year, and this is largely due to what we expect will happen with the costs, and we'll adjust our prices as needed. This is a message that Henrique has been hammering home for quite some time. Brazil and Intelbras have now actually been focusing on revenue quality. We don't expect to grow revenue just to provide a larger top line if it's not actually backed by important results like the ones we've had in the first quarter. I wouldn't just look at quarters, I would look at the first half of the year as a whole. We'll continue to focus on that in the work we do, and we'll continue to monitor our business. We just want to focus more and more on client proximity because clients We're increasingly focused on our channels and our commercial partners because that's how we can extract more value from our business, and that's how we can provide or deliver better results like we did in the first quarter and now in the second quarter. That said, let me give it over to Henrique. We're building this brick by brick, right? Thank you, Bruno. Good morning, everyone. Bruno went over the numbers, so I want to share a little bit of the history behind them. Results only make sense when we understand three things: what happened, what we're doing now, and where this takes us. The most important interpretation of this quarter is one that shines light on everything that comes next. The quarter's revenue came in lower compared to last year. Here I'll repeat what Bruno said. This decline is not the business losing momentum. It is a matter of the comparison baseline that we're using. Last year, we had an a typical second quarter. Our system migration held back revenue at the beginning of the year and concentrated deliveries shortly thereafter in the second quarter, and this created a peak that does not repeat. We had already warned about this during the first quarter conference or earnings call because we wanted you all to be aware of this, even though you all have the figures. It is also worth noting the backdrop to all this. We continue to operate in a weaker economy with consumption under pressure and fiercer competition at the top lines. In scenarios like this, as I often say to the team, the most important thing to do is to stay close to our customers, because this environment demands more from us, a lot more from us every single day. That is precisely why the right time frame through which to view Intelbras is the six-month period, not an isolated quarter. A six-month window dilutes the noise and shows the real trend. In the six month period, the company is growing, revenue grows, and profit grows much more strongly than revenue, in fact. That's the first message that I wanted to impart upon you. Based on the reading of the six month period and even in a difficult environment, Intelbras is doing well. Of course, there's always much room for improvement. What most defines this moment for the company is not the size of the revenue, it is the quality of the results we have delivered. We delivered more profit with a healthy sales base. Profit grew far above revenue, and the margin was the best we've had in the last 18 months. This does not happen by chance. It happens because we made a deliberate choice some time ago when we started talking about ROIC as a compass and about the quality of revenue itself. We prefer selling better to merely selling more, and the results for this semester prove that this thesis is working. Now, I'll be transparent about the nature of this margin and repeat what Bruno said to emphasize it because this is part of the story we're telling, so that there will be no question about it. Part of this gain is cyclical. It comes from a point in time when prices are already set at replacement cost, while our book cost still carries cheaper inventory. This portion should normalize over time, returning to margins that are closer to our recent history. Another aspect is structural and derives from a better product mix, expense discipline, and prioritization. This part is here to stay. Here's the figure that best reflects this moment. Today, we have two businesses undergoing deliberate portfolio adjustment. Solar, where we chose to prioritize profitability over market share, and GPON, where we are concluding a planned exit. These have been our choices, and because they are choices, they intentionally reduce revenue and end up softening the growth shown in the consolidated figures. When we look at the core business without Solar and without GPON, the picture becomes very clear. Without Solar and GPON, our revenue grew double digits in the semester with significant real growth, with profit growing above revenue. There you have it. Double-digit revenue growth with profit growing faster than revenue. This is the momentum we're building, and we want to maintain that at Intelbras. The consolidated results show a more modest growth because it carries the effect of our own portfolio-related decisions. The engine that really matters is accelerating and accelerating profitably. Not saying that other business areas are not important. Of course, they are, because there's a lot of promise for them in the future. Again, this is where an indicator that has become our compass comes in. Return on invested capital, ROIC. ROIC or R-O-I-C, was one of the indicators that led us to review our portfolio. When a business consumes a lot of capital and yields little return, it destroys value for the company even if it generates revenue. In times of high interest rates, this becomes even more evident. That was one of the insights that guided us in our decisions about solar and GPON. The results of this discipline are clearly visible. Return on invested capital has risen again, and consistently so, leading to a more profitable operation with lighter capital and with room for additional improvement. I want to leave an important message so that no doubt remains. We have not lost the appetite to invest and to open up new businesses. Much on the contrary. What changed is the approach. Today, we look at each new opportunity with the benefit of lessons of the past, with return on capital as a criterion, with a very clear entry thesis, and with the discipline to choose where it is worth putting our money. We do indeed continue to have an appetite to grow the company even further with a great deal of awareness and maturity. That is our culture. We are growth-oriented, and that's why the team is focusing on. I will now talk about the point that I know is on your minds, security. Security is the heart of Intelbras. It's our largest business, and in this standalone quarter, it showed lower revenue. Here's where the exact same time frame from the beginning applies, the six-month time frame. The base effect weighs more heavily, precisely in the security business, because that's where last year's peak was highest. In the past year time frame, security has grown, revenue has grown, and gross profit has grown even more so with an improvement to the segment's margin. The heart of the company is healthier and more profitable than a year ago. That is a perspective that the isolated quarter time frame hides and the half-year window now reveals. The growth avenues that robustly supported security in recent years remain the same. For security, our strategy is clear. We're driving the segment toward an evolution from selling a product to delivering a complete solution, adding more and more software. All of this is meant to improve the customer's experience, the effectiveness of the solution, and to set ourselves apart from the rest of the market. Our growth avenues increasingly lie in solutions where we add software, artificial intelligence, and full integration with Intelbras' various solutions, thus increasingly promoting cross-selling. At the end of the day, those who need a Wi-Fi security solution will need a more robust Wi-Fi transmission system, and that's where our access points come in. If the system cannot stop, it will need a UPS. If they want to spend less on energy, they will need solar. If they want to store images in the cloud for backup, they'll need our cloud, and so on. This is a movement that sustains security for the coming years, and it has already begun. Let's move over to ICT, which was one of the highlights of the last year. ICT grew significantly even with our planned exit from GPON underway. This is the most important aspect to understand. We're intentionally reducing a product line, yet the segment has grown in the half-year time frame. It grew because the right businesses within ICT are accelerating. The major highlight is structured cabling. Our optical fiber factory in Tubarão has been consistently growing its production, benefiting from anti-dumping measures that benefit the domestic industry. We also have our enterprise networking area showing continuous and consistent growth, both for the corporate market and for large projects. This is a more gradual yet steady growth, closely aligned with our value delivery, because once again, things are increasingly connected. These connections to the various areas will be increasingly needed when we talk about technology solutions. The message about ICT is simple. We're replacing legacy lines with the businesses of the future, especially with regard to Wi-Fi connections and network management. This transition is already showing positively in the numbers. Once again, we're reducing the GPON product line, leaving only the router portfolio, which is part of the smartphone solution. For the remainder of the year, GPON will account for even less of our revenue. There's a segment that tells perhaps better than any other, the story that I've been sharing with you today, and that is energy. If we look at energy minus solar, that is the lines that we chose to grow, this segment features the company's largest margin expansion this semester, and this is no accident. It is an exact snapshot of our thesis, which is less dependence on a low return business and more focus on profitable avenues. Two of these avenues deserve highlighting. First is UPS, a market where we have a strong position and which continues to grow with good profitability driven by an increased need for quality power and equipment protection. The second is vehicle chargers. This is a young avenue linked to structural trends, but one which is already delivering growth and that we see as having significant potential going forward. Energy is living proof that when we choose our growth avenues well, revenue and profit go hand in hand and the margin responds. The same maturity we apply to the portfolio appears in the way we manage our capital. This semester, we generated a significant volume of cash, while at the same time we began investing in the expansion of the plant in Manaus. Generating cash and investing at the same time is what we call discipline. The main driver of this cash generation was our inventory. We significantly reduced inventory over the past year without compromising customer service, and that's an important point, by the way. Today it operates at a much more efficient level. In parallel, we began financing a larger portion of this inventory with our suppliers. There were multiple avenues to improve the company's operations. Less capital tied up in inventory means more free cash flow and a better return on the capital we employ. It is the logic of ROIC applied to day-to-day operations. We maintain a net cash position which provides security to the business and flexibility for our choices. It is a position of strength from which we run the company. Even more so in a more challenging economic environment that we find ourselves in. This leads us to the future for our next steps. The expansion works in Manaus have already begun this quarter. The new area allows us to integrate the operation, gain cost efficiency and expand our productive capacity. We believe in the growth we see ahead with an environment with long-term benefits guaranteed, for example, by the free trade zone in Manaus. We're preparing the company for the next phase without relinquishing the discipline that has brought us this far. I wanted to leave you with a simple idea. This quarter is not defined by the revenue of an isolated period. It is defined by quality and direction. In terms of quality, we delivered profit growing above revenue, the best margin in the last 18 months, and a strong cash position within an environment where the economy is weaker and competition is fiercer. In terms of direction, we as a company chose profitability that uses return on invested capital as a compass that modernizes its investments and continues to have an appetite for investment, always in a mature fashion. A core business that grows double digits in revenue and even more so in profit. The story behind these numbers is a story of an Intelbras that is more profitable, more disciplined, and better prepared for what lies ahead over the next half year and over the coming years. We're confident in our direction, and we remain committed to generating value for our shareholders, for our customers, and for our employees as well. Thank you very much. We will now take questions. Thank you, Henrique. Let's look at the questions. The first one is from Gustavo Farias. Gustavo, go ahead. Hello. Good morning, Bruno, Henrique. Thank you so much for the opportunity to be here, and congratulations on the quarter. I have two questions. First, this has to do with price pass-throughs. Could you tell us a bit more about them and how much of our portfolio has been affected by these pass-throughs, and whether you still see space for price pass-throughs to happen? Also what has been the impact in volume. My second question has to do with inventory. Could you give us more color on what the second half of the year will be like vis-à-vis inventory, and how much of the inventory is still at lower price points, and how much of that will remain until the end of the year? How much space do we need to increase or do we have to increase those prices? Okay. I'll answer first, and then Henrique can follow up. The first point you made has to do with the evolution of prices. Cost increases have a generalized impact on electronics. Memory modules can be found in multiple products, also copper, embedded circuit boards. Those can be found across the board in our electronic products. The pass-through need remains comprehensive for our entire portfolio, for all of our products. The size of that pass-through will change from one segment to another. Each business manager will look at the perspectives and the ability to retain or pass through these prices, and will adjust accordingly. We don't have a specific number to share with you because these are fragmented decisions that vary from one product to another, from one strategy to another, and while the team will make the increases as they are needed and as we can actually increase them. The main message here that we want to make clear is that Intelbras has the capacity to pass through these prices and when needed, it does so. As an example, are the results of the pass-through of prices in our operations. We've seen these results because pass-through capacity is there, and that's evident. About what you said about inventory, I think this ties with your previous question. Our inventory has been improving. It's been reducing in size, and this means that we're consuming more than we are purchasing. The effects of these new costs will be amortized accordingly. Those of you who have been monitoring us for longer know that this happened in 2024 when we were making up our stock. We were making a lot of purchases, and there was a currency exchange issue. We bought a lot, the price in dollars went up, and the cost of these new purchases was a lot more relevant in our average cost composition. In the first quarter as a whole, new inflows are now accounting for less in our average cost, they gain more relevance as we consume. For the second question, I wanted you to know that we are going to rotate that inventory. We will need to account for new costs, as a consequence, we'll need to accommodate this margin, or we might require new price adjustments. You also asked about the potential impact of these new price increases and whether there's room to increase prices further. We believe that yes, whenever needed, we will do that. This reality affects all players in the market, not just Intelbras. Big global brands are now announcing price increases in their products. The market will need to adapt to this new reality. If you look at the context, can I increase prices? Yes. Will that have an impact on volume? I think we need to look at this from a macro perspective. Clearly, there will be an impact on volume, this can be seen clearly if you look at our results. Revenue is according to plan. I wouldn't see that variable for increasing prices as a headwind for our revenue to grow further over the years. We instead want to keep our revenue knowing that the prices will be a bit higher, that may be compensated by slightly smaller volumes. I believe I answered all your questions. I'll hand it over to Henrique for any follow-up. Okay. Thank you so much for your question. There's no objective answer to your question when it comes to volume and price. In some of our business areas, in our first semester, we actually had to reduce prices. We reduced those prices strongly to achieve greater market share, volume actually increased by 50% for those business areas. If you look at the portfolio as a whole, some of these products go up higher and others lower. It really depends on the situation of our market share, also how we read the market, also what our competitors are doing. This is why we can't just give you an objective number. Okay. The answers were clear. Thank you so much. Thank you, Gustavo. Next up is Bernardo from XP. Good morning, Bernardo. Please open your mic and ask your question. Good morning, Henrique, Bruno. Thank you for the opportunity. Congratulations on your results. I have two questions for you. First, about margins. I wanted to know a bit more about that. That was the main highlight of the quarter. I wanted to know more about the quality of this improvement. How much of this is actual structural change as a result of changes in management, commercial discipline, product mix, and how much of it was due to one-off components? In other words, what do you believe will be the new profitability threshold for Intelbras going forward? My second question has to do with the ICT, which has been quite a positive surprise over the last few quarters. I wanted to know how much of that increased performance is actual structural change. Is there a big effect from market share, or are there other components or variables that are helping the situation? Let me start to answer this question about the ICT business area. Good morning, Bernardo. You missed our last earnings call, didn't you? It's good to see you here today. Our ICT business has been benefiting from structured cabling by anti-dumping measures, which benefit the domestic industry as a whole. Basically, the revenue and the margin for that business line improves, not because we want to earn more, but because the raw materials for that business area is becoming scarce. The market is now closed to importers because those products are more expensive now, and the domestic market has become cheaper. This is a reasonable price base, and it makes it easier for us to run the business. In the past, it used to be unsustainable. There's another component, which is the reduction of our GPON business segment. GPON did not really contribute to our business profitability. As we reduce our exposure to that business line, all the other ones tend to behave more positively. Obstacles decrease in size. There's been an improvement in the global perspectives for that business area. Corporate networks has been helping us, because more and more things are getting connected to the internet and to networks, and they need products like the ones we offer. The sales model is very similar to our own sales model when it comes to electronic security. We provide that electronically. We work with distributors who then go to IT integrators, and sometimes our resellers will use these components as part of our electronic security solution in small, medium, and large-scale companies. From an ICT perspective, that is what is behind our improved numbers. We continue to believe that this business segment will continue to bear fruit going forward, especially in view of AI and business evolution, because more and more people require fiber optics, network products. They need increasingly robust Wi-Fi connections. These were tough decisions to make in the past, but we made them. I believe we found the right path. We struck a good balance, if you will. Now, going forward, we'll continue to bet on this. We'll continue to develop new products according to those lines. We'll continue to add more customers to our client base, and we'll continue to improve, because the market potential for that business segment is huge. About the margin, Bernardo. If we look at a long-term analysis and we look at 2013, that's a good 2013 is a good number. For two semesters, we've been at above 14%. Now, 13 will be the midline, and for better years, we might be higher than that. We might need to make adjustments, and the margin may actually go up above 13%. Generally speaking, keep in mind that Q2 is more active, has more volume, so growth perspectives are more significant when it comes to revenue, to our commercial activities out in the field. We need strategies to address and reap these opportunities. One of the strategies is indeed price adjustment and more aggressiveness. As Henrique said, when we changed the price, we saw significant changes in volume. Volume went up in areas that are still under expansion. I would look at historic numbers for comparison. Now, we might be a bit higher than our historic numbers, but our yearly margin might not coincide with our half-year margin. That might be overly optimistic. Of course, it's up to you to make your respective analyses. As we see things, the margins will be a bit more conservative. We have strategies in place to continue to gain more market share. The company will need to continue to grow, and we're focusing on the second semester. When we look at expenditures are in line with last year, and the breakdown of these expenditures is as follows. Our commercial expenditures are well structured. Our administrative expenditures, those are seasonal, fourth quarter, second quarter, and usually, we distribute the results and we provide equity to our employees. There are also other expenditures. For example, financial credit, R&D expenditures, but those are all at the right levels. We expect them to be in line with our overall expenditure packages. Now, this evolves over time. When it comes to our expenditures, I think the situation is positive. I wouldn't say that the same margins we've had so far will continue over the rest of the year. That might be overly optimistic. Thank you for your answers, and congratulations on the results. Now, let's give it over to Maria Clara. We have a lot of people who are asking questions. We might need to be briefer in our responses. Over to you, Maria Clara. Can you hear us? Maria Clara, can you hear us? We'll go to Leandro Bastos from Citibank. Go ahead. Good morning, Bruno and Henrique. Can you hear me well? Yeah, we hear you. Great. I have two questions I'd like to follow up on price increases. Can you tell us a bit more about that? What have your competitors been doing? Have they been increasing prices like yourselves, a bit less, a bit more? Relatively speaking, what's that been like? Especially for security. That's my first question. Second question has to do with capital allocation. For a few quarters now, the company has been generating a lot of cash. There's the issue with dividends and also CapEx going into the plant in Manaus. How do you see capital allocation going forward? Do you expect that to continue to increase? Returns to shareholders, do you think that's going to continue to increase as well? Those are my questions. Thank you. Hello, Leandro. Good morning. The price increases we're seeing worldwide applied to the commodity. Ore, for example, memory, copper, plastic, embedded circuit boards, all those have gone up in price significantly. This applies to us and to everyone in the industry. Looking at our competition, they've been increasing price at the same scale as we have, or sometimes even more. In some cases, a bit lower, but nothing significant. It's pretty much the same price increases that we've been having here that our competitors have been practicing as well. No need to worry about that because this is widespread price increases that affect the whole market. Everything makes the prices higher for consumers and as such, there's an impact on volume as well. About capital allocation. I mentioned one of our investments in Manaus. Works have started, and the timetable is actually quite good. We expect that to continue over the next 18 months. We've also distributed a dividend, we will continue to do so to distribute dividends on a semester basis. Now, cash needs to be in our cash, of course. We always tend to be more conservative when it comes to that, the market needs to understand that. We might know that this might mean a certain degree of mismatch with economic theory, there's a lot of uncertainty in Brazil. We're heavily exposed to Brazil. Pretty much all of our business is in Brazil, we buy in dollar and we sell in real, BRL, we need cash. This cash actually sustains our strategies. That's the first area that we make our cash available to. All of this has been invested, it's yielding returns at the CDI rate. From an income tax perspective, there's no problem. There's no problem in having our investments in other companies. Our income tax rates are quite low, that means we have access to that benefit when we look at the results from our financial investments. Of course, distributions are a decision that the board makes, we decided to make those dividends available, in a midterm fashion. We'll continue to look at the situation and analyze it, if we find that there's additional cash available to the company, I don't see any impediment to distributing that cash. When people ask me about that, I often say that I would keep that available as an option, as things progress and as the board makes its decisions, that distribution volume may be adjusted up or down. I wouldn't say that there's an expectation to increase the distribution at this point in time, considering the company's valuation model. Okay. Thank you. Thank you. Let's give the floor now to Marcelo Santos from JPMorgan. Go ahead, Marcelo. Good morning. Thank you for the Q&A session. My first question to you has to do with working capital. Like you said, there's an important capital release. Is there more capital to be released, where would it come from? That's my first question. My second question is, you mentioned that you're divesting from GPON, that you're exiting that business line. Where are we in that exit, what would be the end game? Are we at 50%, 90% of that exit? Are we where we want to be? I wanted to know more about this, if you will. Good morning. Thanks for your question. Let's make that clear. Our exit from GPON. Well, we're buying a few components just for the final kits we still have in our inventory. By year's end, we expect to fully close out all of our inventory with no substantial write-off because we're matching nearly everything. The assembly lines that we've been using are now being put to use in other lines that are experiencing growth, for example, UPS routers. So to be clear and to be transparent, that is our plan. The impact is pretty much nil when it comes to the company's overall results. Where do we get our working capital from? Well, there's always ways to improve that in our inventory. There's always room for improvement in our inventory. That's what we want to do. We're looking for ways to improve our S&OP process and our planning process. We're looking for ways to further integrate everyone, including our retail stores, our distributors. We're looking to integrate them into our integrated planning here at the company so that we all speak the same language. We would have a small impact on our capital in our inventory. Our inventory is important. It's strategic in nature. We need to have that. That's part of our principles, to continue to offer quality to our consumers. Our supply chain is very distant from us, and problems may occur, and we need to be prepared. We can't always be at the penalty line, as we say here in Brazil. We're trying to increase our efficiency, and we are trying to expedite and improve our phase-out process as we're doing in GPON, because there will be no material impact on our overall business from exiting GPON. We're financing stock at about 80% this quarter. Our days of inventory are also according to plan, as we expected. This is not an outlier. Our results for Q2 will not differ greatly from the results from Q3. We want continuity because that's what makes our operation generate capital, generate cash. Our expectations for Q2 will not actually generate a lot of cash from significant improvements. We're actually seeing the operation run on higher thresholds, which we believe are adequate when it comes to working capital. A follow-up for GPON. Phase out is expected to be completed by year's end. What do you expect in terms of revenue for Q1, say, Q2? I just wanted to know what the headwind would be as a result of that. Thank you Marcelo, we're moving from two digits. As you might remember, at the end of the year, it was about 20% for GPON. We're still at double digits in the first half of this year, and we expect that number to go down to a single digit in the second half of the year as we continue to sell our inventory. As for routers, that component will be maintained in our product portfolio. We expect that to remain the same and to account for a significantly relevant number in our breakdown. That's how we're looking at revenue in the second half of this year. We expect revenue to be lower in the second half as a result of this initiative, it will be lower than what we had in the first half of the year from ICT because of the situation we are in. Marcelo, is that clear? Clear. Thank you. We have a few more questions. A few more people are going to ask their questions, but we only have one minute left. I'll give the floor to Lucas from Belfor, and we'll answer his question. All the other questions that we haven't been able to respond to here will be answered by email. I apologize to all the analysts. We don't have time for everyone. We decided to follow the sequence of people who rose their hands or raised their hands to ask questions. We will set up an agenda to talk to you as well. Lucas, you're next. Go ahead and ask your question. Lucas, you don't seem to be here. I'll give the floor now to Henrique, for his closing remarks. Once again, I'm fully available. I want to keep in touch with all of you and answer your remaining questions. Go ahead, Henrique. Thank you so much for being here. I'm also grateful to the entire Intelbras team and to our customers, to our board. We believe we've had a wonderful semester, and it goes to show that our path has been correct. We've been building it brick by brick, step by step. We've been focusing on our ROIC with a lot of maturity, with a lot of efficiency. We're looking for the best way to invest our capital. We've reduced our staff, but we've increased our productivity. After this commercial restructuring, we are capturing more of our customers' attention. We're working more closely with them. As we see it, the scenario is quite positive. Our revenue, our profit, and our ROIC are all pointing up, and we're very happy about that. We're in no way complacent, and we really want to continue to grow going forward. That's what we'll be focusing on in the second half of this year and all the upcoming years. Once again, thank you so much, and we'll see you in the next EC. Thank you so much. This brings us to the end of our second quarter earnings call