Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018 | |
Document - Document and Entity Information [Abstract] | |
Document Type | F1 |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2018 |
Trading Symbol | PAGS |
Entity Registrant Name | PAGSEGURO DIGITAL LTD. |
Entity Central Index Key | 1,712,807 |
Consolidated balance sheets
Consolidated balance sheets - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | |||
Cash and cash equivalents | R$ 2545389 | R$ 66767 | R$ 79969 |
Financial investments | 0 | 210,103 | 131,239 |
Note receivables | 4,883,321 | 3,522,349 | 1,715,514 |
Receivables from related parties | 909 | 124,723 | 300,809 |
Inventories | 61,602 | 61,609 | 21,023 |
Taxes recoverable | 18,008 | 14,446 | 17,703 |
Other receivables | 18,834 | 27,956 | 4,495 |
Total current assets | 7,528,063 | 4,027,953 | 2,270,752 |
NON-CURRENT ASSETS | |||
Judicial deposits | 1,198 | 872 | 534 |
Prepaid expenses | 506 | 160 | 146 |
Deferred income tax and social contribution | 63,822 | 37,015 | 8,305 |
Property and equipment | 11,065 | 10,889 | 4,558 |
Intangible assets | 190,638 | 158,868 | 86,108 |
Total non-current assets | 267,229 | 207,804 | 99,651 |
TOTAL ASSETS | 7,795,292 | 4,235,757 | 2,370,403 |
CURRENT LIABILITIES | |||
Payables to third parties | 2,975,297 | 3,080,569 | 1,304,031 |
Trade payables | 119,155 | 92,444 | 61,719 |
Payables to related parties | 44,973 | 39,101 | 76,249 |
Derivative financial instruments | 0 | 6,613 | |
Borrowings | 0 | 205,204 | |
Salaries and social charges | 26,192 | 34,269 | 20,269 |
Taxes and contributions | 57,862 | 52,064 | 6,911 |
Provision for contingencies | 5,213 | 4,648 | 680 |
Dividends payable and interest on own capital | 0 | 22,243 | |
Other payables | 23,028 | 15,872 | 15,244 |
Total current liabilities | 3,251,720 | 3,318,967 | 1,719,163 |
Deferred income tax and social contribution | 63,226 | 42,809 | 24,378 |
Other payables | 3,624 | 3,590 | 0 |
Total non-current liabilities | 66,850 | 46,399 | 24,378 |
TOTAL LIABILITIES | 3,318,570 | 3,365,366 | |
EQUITY | |||
Share capital | 25 | 524,577 | 524,577 |
Legal reserve | 0 | 30,216 | 6,277 |
Capital reserve | 4,311,782 | 0 | |
Equity valuation adjustments | (6,701) | 55 | 0 |
Profit retention reserve | 148,378 | 312,047 | 96,008 |
Non-controlling interests | 23,238 | 3,496 | 0 |
TOTAL EQUITY | 4,476,722 | 870,391 | 626,862 |
TOTAL LIABILITIES AND EQUITY | R$ 7795292 | R$ 4235757 | R$ 2370403 |
Consolidated statements of inco
Consolidated statements of income - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Profit or loss [abstract] | |||||
Net revenue from transaction activities and other services | R$ 442848 | R$ 190425 | R$ 1224261 | R$ 480025 | R$ 268198 |
Net revenue from sales | 93,986 | 118,438 | 471,924 | 260,594 | 176,517 |
Financial income | 274,838 | 138,808 | 818,624 | 392,429 | 219,462 |
Other financial income | 116,360 | 836 | 8,576 | 5,337 | 10,744 |
Total revenue and income | 928,032 | 448,508 | 2,523,385 | 1,138,385 | 674,920 |
Cost of sales and services | (444,762) | (242,893) | (1,324,380) | (623,667) | (382,483) |
Selling expenses | (83,614) | (71,106) | (245,759) | (199,937) | (162,642) |
Administrative expenses | (219,024) | (32,520) | (153,177) | (84,461) | (61,129) |
Financial expenses | (16,524) | (19,218) | (104,544) | (68,301) | (29,696) |
Other (expenses) income, net | (1,109) | (594) | (12,021) | (6,660) | 1,345 |
PROFIT BEFORE INCOME TAXES | 163,000 | 82,177 | 683,504 | 155,359 | 40,315 |
Current income tax and social contribution | (20,935) | (19,085) | (214,988) | (7,431) | (2,587) |
Deferred income tax and social contribution | 6,391 | (2,468) | 10,278 | (20,149) | (2,239) |
INCOME TAX AND SOCIAL CONTRIBUTION | (14,544) | (21,553) | (204,710) | (27,580) | (4,826) |
NET INCOME FOR THE PERIOD | 148,456 | 60,624 | 478,794 | 127,779 | 35,490 |
Attributable to: | |||||
Owners of the Company | 148,378 | 60,625 | 478,781 | 127,186 | 35,084 |
Non-controlling interests | R$ 78 | R$ 1 | R$ 13 | R$ 593 | R$ 406 |
Basic earnings per common share-R$ | R$ 0.4988 | R$ 0.2311 | |||
Basic and diluted earnings per common share - R$ | R$ 1.8254 | R$ 0.4849 | R$ 0.1338 | ||
Diluted earnings per common share-R$ | R$ 0.4969 | R$ 0.2311 |
Consolidated statements of comp
Consolidated statements of comprehensive income - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Profit or loss [abstract] | |||||
Net income for the period | R$ 148456 | R$ 60624 | R$ 478794 | R$ 127779 | R$ 35490 |
Currency translation adjustment | 67 | 55 | 55 | 0 | 0 |
Net income for the period | 148,523 | 60,679 | 478,849 | 127,779 | 35,490 |
Owners of the Company | |||||
Net income for the period | 148,445 | 60,680 | 478,836 | 127,186 | 35,084 |
Non-controlling interests | 78 | (1) | 13 | 593 | 406 |
Net income for the period | R$ 148523 | R$ 60679 | R$ 478849 | R$ 127779 | R$ 35490 |
Consolidated statements of chan
Consolidated statements of changes in equity - BRL (R$) R$ in Thousands | Total | Share capital | Net parent investment | Capital reserve | Share-based long-term incentive plan (LTIP) | Legal reserve | Equity valuation adjustments | Profit retention reserve | Retained earnings | Total | Non-controlling interests |
Balance at Dec. 31, 2014 | R$ 426563 | R$ 42568 | R$ 381569 | R$ 266 | R$ 380 | R$ 424783 | R$ 1780 | ||||
Net income for the period | 35,488 | 27,209 | R$ 7873 | 35,082 | 406 | ||||||
Currency translation adjustment | 0 | ||||||||||
Constitution of legal reserve | 490 | (490) | |||||||||
Distribution of dividends | (174) | (174) | (174) | ||||||||
Profit retention reserve | 7,209 | (7,209) | |||||||||
Reclassification of net parent investment in connection with separation | 399,048 | (399,048) | |||||||||
Balance at Dec. 31, 2015 | 461,877 | 441,616 | 9,730 | 757 | 7,588 | 459,691 | 2,186 | ||||
Net income for the period | 127,779 | 127,186 | 127,186 | 593 | |||||||
Currency translation adjustment | 0 | ||||||||||
Non-controlling acquisition | 2,779 | 2,779 | (2,779) | ||||||||
Capital increase | 63,264 | 26,610 | 36,654 | 63,264 | |||||||
Payout capitalization | 56,351 | R$ 46384 | (267) | 4,539 | (14,239) | ||||||
Constitution of legal reserve | 5,787 | (5,787) | |||||||||
Distribution of interest on own capital | (26,059) | (26,059) | (26,059) | ||||||||
Profit retention reserve | 83,881 | (83,881) | |||||||||
Balance at Dec. 31, 2016 | 626,862 | 524,577 | 6,277 | 96,008 | 626,862 | ||||||
Net income for the period | 60,624 | 60,625 | 60,625 | (1) | |||||||
Currency translation adjustment | 55 | ||||||||||
Balance at Mar. 31, 2017 | 687,486 | 524,577 | 6,277 | 96,008 | 60,625 | 687,487 | (1) | ||||
Balance at Dec. 31, 2016 | 626,862 | 524,577 | 6,277 | 96,008 | 626,862 | ||||||
Net income for the period | 478,794 | 478,781 | 478,781 | 13 | |||||||
Currency translation adjustment | 55 | R$ 55 | 55 | ||||||||
Non-controlling acquisition | 3,483 | 3,483 | |||||||||
Constitution of legal reserve | 23,939 | (23,939) | |||||||||
Distribution of dividends | (238,803) | (96,008) | (142,795) | (238,803) | |||||||
Profit retention reserve | 312,047 | (312,047) | |||||||||
Balance at Dec. 31, 2017 | 870,391 | 524,577 | 30,216 | 55 | 312,047 | 866,895 | 3,496 | ||||
Balance at Mar. 31, 2017 | 687,486 | 524,577 | 6,277 | 96,008 | 60,625 | 687,487 | (1) | ||||
Net income for the period | 418,170 | 418,156 | 418,156 | 14 | |||||||
Currency translation adjustment | 55 | 55 | 55 | ||||||||
Non-controlling acquisition | 3,483 | 3,483 | |||||||||
Constitution of legal reserve | 23,939 | (23,939) | |||||||||
Distribution of dividends | (238,803) | (96,008) | (142,795) | (238,803) | |||||||
Profit retention reserve | 312,047 | (312,047) | |||||||||
Balance at Dec. 31, 2017 | 870,391 | 524,577 | 30,216 | 55 | 312,047 | 866,895 | 3,496 | ||||
Capital restructuring | (524,556) | R$ 866819 | R$ 30216 | R$ 312047 | |||||||
Net income for the period | 148,456 | 148,378 | 148,378 | 78 | |||||||
Currency translation adjustment | 67 | ||||||||||
Non-controlling acquisition | 12,908 | (6,756) | (6,756) | 19,664 | |||||||
Issurance of common shares in initial public offering, net of offering costs | 3,289,806 | 4 | 3,289,802 | 3,289,806 | |||||||
Shares issued-stock option plan | 126,540 | R$ 126540 | |||||||||
Share based long term incentive plan (LTIP) | 155,160 | 155,160 | 155,160 | ||||||||
Balance at Mar. 31, 2018 | R$ 4476722 | R$ 25 | R$ 4283161 | R$ 28621 | R$ 6701 | R$ 148378 | R$ 4453484 | R$ 23238 |
Consolidated statements of cash
Consolidated statements of cash flows - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Profit before income taxes | R$ 163000 | R$ 82177 | R$ 683504 | R$ 155359 | R$ 40315 |
Expenses (revenues) not affecting cash: | |||||
Depreciation and amortization | 18,007 | 10,762 | 51,571 | 31,246 | 18,933 |
Loss of fixed assets sold | 49 | 0 | 0 | ||
Chargebacks | 14,438 | 17,434 | 47,854 | 31,557 | 27,490 |
Accrual/(reversal) of provision for contingencies | 725 | 272 | 3,538 | 603 | (2,134) |
Share based long term incentive plan (LTIP) | 130,303 | 0 | |||
Unrealized loss on derivative instruments | 0 | 6,613 | 0 | ||
Provision of obsolescence loss | (1,686) | 0 | |||
Other financial cost, net | 274 | 3,446 | 660 | 5,549 | (3,902) |
Changes in operating assets and liabilities | |||||
Note receivables | (1,449,214) | (229,126) | (2,060,875) | (783,954) | (552,984) |
Changes in receivables subject to early payment | (1,137,210) | 150,113 | |||
Changes in receivables not subject to early payment | (312,004) | (379,239) | |||
Inventories | 1,693 | (13,365) | (40,586) | 20,181 | (25,090) |
Taxes recoverable | (2,700) | (15,942) | 8,055 | 8,579 | 4,760 |
Other receivables | 3,948 | (351) | (23,495) | 17,214 | (16,912) |
Other payables | 7,193 | 3,015 | (2,046) | 13,491 | (2,222) |
Payables to third parties | (105,272) | 138,716 | 1,776,538 | 620,940 | 313,958 |
Trade payables | 25,633 | 31,011 | 29,531 | 25,430 | 31,836 |
Receivables from (payables to) related parties | 129,643 | (47,440) | (64,400) | (214,549) | 121,467 |
Salaries and social charges | (8,077) | (3,710) | 13,341 | 6,618 | 13,275 |
Taxes and contributions | 19,350 | 23,982 | (3,109) | 3,867 | 150 |
Provision for contingencies | (331) | (1) | 486 | (42) | 0 |
Net Changes in operating assets and liabilities | (1,053,073) | 880 | 420,616 | (51,298) | (31,061) |
Income tax and social contribution paid | (34,806) | (156) | (166,389) | (18,059) | (2,690) |
Interest income received | 73,804 | 56,111 | 208,563 | 146,346 | 81,349 |
Interest paid | (9,174) | (9,175) | 0 | 0 | |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (1,014,075) | 47,662 | 453,615 | 76,989 | 47,598 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Amounts paid for business acquisitions, net of cash acquired | (22,225) | 0 | 0 | ||
Purchases of property and equipment | (976) | (52) | (7,873) | (1,996) | (3,219) |
Purchases and development of intangible assets | (29,695) | (21,266) | (99,673) | (70,394) | (38,880) |
Acquisition of financial investments | (209,569) | (337,098) | 0 | ||
Redemption of financial investments | 211,116 | 113,742 | 132,107 | 206,190 | 190 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 180,445 | 92,424 | (207,233) | (203,298) | (41,909) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from borrowings | 0 | 199,390 | 0 | ||
Payment of borrowings | 0 | (199,480) | (199,480) | 0 | 0 |
Payment of derivative financial instruments | 0 | (5,831) | (5,831) | 0 | 0 |
Proceeds from offering of shares | 3,444,875 | ||||
Distribution of dividends | (54,273) | 0 | 0 | ||
Transactional costs | (147,972) | 0 | |||
Transaction with non-controlling interest | (4,650) | 0 | |||
Capital increase by non-controlling shareholders | 20,000 | 0 | |||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 3,312,253 | (205,311) | (259,584) | 199,390 | 0 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2,478,622 | (65,225) | (13,202) | 73,081 | 5,689 |
Cash and cash equivalents at the beginning of the period | 66,767 | 79,969 | 79,969 | 6,888 | 1,199 |
Cash and cash equivalents at the end of the period | R$ 2545389 | R$ 14744 | R$ 66767 | R$ 79969 | R$ 6888 |
General information
General information | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
General information | 1. General information PagSeguro Digital Ltd. (“PagSeguro Digital” or “Company”) is a holding company, subsidiary of Universo Online S.A. (“UOL”), referred to together with its subsidiaries as “PagSeguro Group”, was incorporated on July 19, 2017. Pagseguro Internet S.A. (“PagSeguro Brazil”) was contributed to PagSeguro Digital on January 4, 2018 . PagSeguro Digital has control of 99.99% of the shares of PagSeguro Brazil. PagSeguro Brazil is a privately-held corporation established on January 20, 2006, headquartered in the city of São Paulo, Brazil, and engaged in providing financial technology solutions and services and the corresponding related activities, focused principally on micro-merchants and small and medium-sized The PagSeguro Brazil’s subsidiaries are Net+Phone Telecomunicações Ltda. (“Net+Phone”), Boa Compra Ltda. (“Boa Compra”), BCPS Online Services LDA. (“BCPS”), R2TECH Informática S.A. (“R2TECH”), BIVACO Holding S.A (“BIVA”) and Fundo de Investimento em Direitos Creditórios—PagSeguro (“FIDC”). These consolidated financial statements include PagSeguro Brazil and its subsidiaries Net+Phone, Boa Compra, BCPS Online Services, R2TECH, BIVACO and FIDC. 1.1 Initial Public Offering (“IPO”) On January 26, 2018, PagSeguro Digital completed its Initial Public Offering (IPO). A number of 50,925,642 shares were new shares offered by PagSeguro Digital and 70,267,746 shares were offered by the controlling shareholder UOL. The initial offer price was US$21,50 per common share, for gross proceeds of US$1,095.2 million (or R$3,444.2 million). The Company received net proceeds of US$1,046.0 million (or R$3,289.8 million), after deducting US$43.8 million (or R$137.8 million) in underwriting discounts and commissions and US$5.2 million (or R$16.7 million) of other offering expenses. The shares offered and sold in the initial public offering were registered under the Securities Act of 1933, as amended, pursuant to the Company’s Registration Statement on Form F-1 o 333-222292) 1.2 Long-Term Incentive Plan (“LTIP”) Members of our management participate in a Long-Term Incentive Plan, or LTIP, which was established by UOL for its group companies on July 29, 2015 and has been adopted by PagSeguro Digital Ltd. Beneficiaries under the LTIP are selected by UOL’s LTIP Committee, which consists of our Chairman and two officers of UOL, and are submitted to our Board of Directors for adoption. The policy for recognizing and measuring share-based payments in the interim period is described in Note 17. | 1. General information PagSeguro Digital Ltd. (“PagSeguro Digital”), a subsidiary of Universo Online S.A. (“UOL”), referred to together with its subsidiaries as “PagSeguro Group”, was incorporated on July 19, 2017. As described in Note 8 – Subsequent events, on January 4, 2018, Pagseguro Internet S.A. (“PagSeguro Brazil”) was contributed to PagSeguro Digital, PagSeguro Brazil no longer presents consolidated financial statements. PagSeguro Digital has control of 99.99% of the shares of PagSeguro Brazil. Refer to Note 8 for further details. PagSeguro Brazil is a privately-held corporation established on January 20, 2006, headquartered in the city of São Paulo, Brazil, and engaged in providing financial technology solutions and services and the corresponding related activities, focused principally on micro-merchants and small and medium-sized The PagSeguro Brazil’s subsidiaries are Net+Phone Telecomunicações Ltda. (“Net+Phone”), Boa Compra Ltda. (“Boa Compra”), BCPS Online Services LDA. (“BCPS”), R2TECH Informática S.A. (“R2TECH”), BIVACO Holding S.A (“BIVA”) and Fundo de Investimento em Direitos Creditórios – PagSeguro (“FIDC”), for which the operations are described in note 4. These consolidated financial statements include PagSeguro Brazil and its subsidiaries Net+Phone and Boa Compra, which are under entities under common control and were transferred to PagSeguro Brazil from its parent UOL on July 29, 2016 and were accounted for retrospectively in these consolidated financial statements at UOL’s carrying amounts. Additionally, UOL transferred net assets of its business related to the payment operations on August 1, 2015, which were also accounted for retrospectively as a transfer between entities under common control. For periods prior to the transfer date, the operations included in these consolidated financial statements were on a carve-out On August 1, 2017, PagSeguro Brazil carried out a reverse share split of 2:1 shares which was approved and effective at the same date. As a consequence of the reverse share split, the share capital previously represented by 524,577,214 common shares, was reduced to 262,288,607 common shares. The reverse share split was accounted retrospectively (Note 19). |
Presentation and preparation of
Presentation and preparation of the consolidated financial statements and significant accounting policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Presentation and preparation of the consolidated financial statements and significant accounting policies | 2. Presentation and preparation of the unaudited condensed consolidated interim financial statements and significant accounting policies These consolidated interim financial statements, which are unaudited, do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements. These unaudited consolidated financial statements for the three-month period ended March 31, 2018 were authorized for issuance by the PagSeguro Group’s Board of Directors on May 28, 2018. 2.1 Basis of preparation of consolidated interim financial information This unaudited consolidated interim financial report for the three-month period ended March 31, 2018 has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standard Board. This unaudited condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2017 (the “Annual Financial Statements”). The accounting policies and critical accounting estimates and judgments adopted are consistent with those of the previous financial year and corresponding interim reporting period. 2.2 New accounting pronoucements Effective for periods beginning on or after January 1, 2018 The following new standards have been issued by IASB and are effective for the three-month ended March 31, 2018: IFRS 9—“Financial Instruments”: addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014 and is effective as from January 1, 2018. It replaces the guidance included in IAS 39 related to the classification and measurement of financial instruments. The main amendments brought by IFRS 9 are: (i) new criteria for the classification of financial assets; (ii) new impairment model for financial assets, which is based on expected losses, replacing the current model of incurred losses; and (iii) relaxation of the requirements for the adoption of hedge accounting. Management evaluated the new guidelines introduced by IFRS 9 and did not identify any material impact for the PagSeguro Group. IFRS 15—“Revenue from Contracts with Customers”: this new standard introduces the principles to be applied by an entity to determine the measurement and recognition of revenue. This standard is based on the principle that revenue is recognized when control of a good or service is transferred to a customer, and, therefore, the principle of control replace the principle of risks and benefits. This standard replace IAS 11—“Construction Contracts”, IAS 18—“Revenues” and related interpretations, and becomes effective on January 1, 2018. Management evaluated the new guidelines introduced by IFRS 15 and did not identify any material impact for the PagSeguro Group. Therefore, changes to standards or new pronouncements applicable to the years presented in the consolidated financial statements were not relevant to PagSeguro Group, for retrospective disclosure and disclosure of amounts. Effective for periods beginning on or after January 1, 2019 IFRS 16—“Leases”—this new standard requires lessees to recognize the liability of the future payments and the right of use of the leased asset for virtually all lease contracts, including operating leases. Certain short-term and low-value There are no other IFRS or IFRIC interpretations not yet effective that could have a material impact on PagSeguro Group financial statements. | 2. Presentation and preparation of the consolidated financial statements and significant accounting policies 2.1 Preparation and presentation of the consolidated financial statements These consolidated financial statements include the financial statements of PagSeguro Digital and its subsidiaries, which are all under common control and were prepared exclusively for the purpose of presenting, on a comparative basis, operations in a consolidated manner, for the years ended December 31, 2017, 2016 and 2015. The consolidated financial statements include the carve-out From January 1, 2015 through July 31, 2015, when the PagSeguro Brazil financial statements were prepared on a carve out basis, certain assets and liabilities, revenues, costs and expenses directly related to the payment operations were controlled separately. Additionally, other indirect corporate expenses recorded at UOL were allocated to these carve-out These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements are presented in thousands of Brazilian reais, unless otherwise indicated, which is the PagSeguro Group’s functional currency. The consolidated financial statements have been prepared under the historical cost convention, which is modified for certain financial assets and liabilities (including derivative instruments) measured at fair value. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying PagSeguro Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. PagSeguro Group has adopted all pronouncements and interpretations issued by IASB that were in effect at December 31, 2017. These consolidated financial statements for the years ended December 31, 2017, 2016 and 2015 were approved by PagSeguro Group’s Board of Directors at a meeting held on March 07, 2018. 2.2 Consolidation Consolidated financial statements PagSeguro Group consolidates all entities over which it has control, when it is exposed or has rights to variable returns on its interest in the investee, and has the ability to govern the investee’s relevant activities. The subsidiaries included in the consolidation are described in Note 4. Subsidiaries Subsidiaries are all entities over which PagSeguro Digital has control. Subsidiaries are fully consolidated from the date on which control is transferred to PagSeguro Digital. They are deconsolidated from the date that control ceases. Identifiable assets acquired and liabilities and contingent liabilities assumed for the acquisition of subsidiaries in a business combination are measured initially at their fair values at the acquisition date.PagSeguro Group recognizes any non-controlling non-controlling Non-controlling Transactions, balances and unrealized gains on intercompany transactions are eliminated. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. The accounting policies of the subsidiaries are changed, where necessary, to ensure consistency with the policies adopted by PagSeguro Group. 2.3 Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or the dates of valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation at year-end 2.4 Cash and cash equivalents Cash and cash equivalents are held for the purpose of meeting short-term cash needs and not for investment or any other purposes. PagSeguro Group classifies as cash equivalents a financial investment that can be immediately converted into a known amount of cash and is subject to immaterial risk of change in value. PagSeguro Group classifies financial instruments with original maturities of three months or less as cash equivalents. 2.5 Financial instruments – initial recognition and subsequent measurement i) Financial assets Initial recognition and measurement Financial assets are classified in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity, available-for-sale held-to-maturity available-for-sale. Derivatives are also categorized as measured at fair value through profit or loss unless they are designated as hedges. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the statement of income. Financial assets include cash and cash equivalents, current financial investments, note receivables, receivables from related parties, and other receivables. Subsequent measurement The subsequent measurement of financial assets depends on their classification, which may be as follows: Loans and receivables Loans and receivables are carried at amortized cost using the effective interest rate method. Financial assets at fair value through profit or loss This category includes derivative financial instruments which do not meet the hedge accounting criteria defined by IAS 39. Financial assets at fair value through profit or loss are presented at fair value in the balance sheet, with the corresponding gains or losses recognized in the statement of income. PagSeguro Group values its financial assets at fair value through profit or loss, as it intends to trade them within a short period of time. Reclassification to loans and receivables, available-for-sale held-to-maturity Derecognition A financial asset or, where applicable, a part of a financial asset or part of a group of similar financial assets, is derecognized when: • The rights to receive cash flows from the asset expire; • PagSeguro Group transfers its rights to receive cash flows from the asset, or assumes an obligation to pay the received cash flows in full to a third party under a “pass-through” arrangement; and (a) transfers virtually all the risks and benefits of the asset, or (b) neither transfers nor retains virtually all the risks and benefits of the asset, but transfers control of the asset. When PagSeguro Group has transferred its rights to receive cash flows from an asset and has not transferred or retained substantially all the risks and benefits of the asset, this asset is recognized to the extent of PagSeguro Group’s continuing involvement in the asset. In such case, PagSeguro Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that PagSeguro Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of the consideration that PagSeguro Group may be required to repay. ii) Impairment of financial assets PagSeguro Group assesses, at the balance sheet date, if there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indication that the debtors are experiencing significant financial difficulty, probability that the debtor will enter bankruptcy or other financial reorganization, default or delinquency in interest or principal payments, and indication of a substantial decline in the estimated future cash flows, such as changes in maturity dates or economic conditions related to default. iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified as financial liabilities at fair value through profit or loss, other financial liabilities, or as derivatives designated used for hedge, when appropriate. PagSeguro Group determines the classification of its financial liabilities at initial recognition. Financial liabilities are initially recognized at fair value and, in the case of other financial liabilities, plus directly related transaction costs. Financial liabilities include payables to third parties, payables to third parties of related parties, trade payables, trade payables of related parties, borrowings, and other payables. Subsequent measurement The subsequent measurement of financial liabilities depends on their classification, which may be as follows: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include held-for-trading Financial liabilities are classified as held-for-trading Gains and losses on held-for-trading Other financial liabilities After initial recognition, interest-bearing borrowings are subsequently measured at amortized cost, using the effective interest rate method, and are recognized in the statement of income. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in “Financial expenses” in the statement of income. Derecognition A financial liability is derecognized when the obligation is discharged, canceled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statement of income. iv) Financial instruments – offsetting Financial assets and liabilities are presented net in the balance sheet if, and only if, there is an existing and enforceable legal right to offset the amounts recognized and an intention to offset or to realize the asset and settle the liability simultaneously. v) Fair value of financial instruments The fair value of financial instruments actively traded in organized markets is determined based on quoted market prices at the balance sheet date, without a deduction of transaction costs. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These techniques include the use of recent arm’s length transactions, reference to other similar instruments, discounted cash flow analysis or other valuation methods. 2.6. Note receivables The amounts are mainly related to receivables from credit/debit card issuers and acquirers originated from transactions through PagSeguro Group platform, and from the sales of credit/debit card readers. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current The provision for impairment of note receivables, however based on PagSeguro Brazil’s risk assessment the need of provision is immaterial because the note receivables are mainly comprised of transactions approved by large financial institutions that have a low level risk based on ratings received from major credit rating agencies. Additionally, these financial institutions are the legal obligors to the note receivables. See Note 24. Note receivables are initially recorded at the present value of expected future cash flows. The note receivables from installment transactions is an estimate based on the present value of the future cash flows, using average appropriate terms and rates, which are in accordance with the terms of these transactions. PagSeguro Group incurs financial expenses when an election to receive early payment of note receivables from financial institutions is made. The finance expense is recognized at the time the financial institution agrees to liquidate a note receivable due in installments on a prepaid basis, and it is recorded as Financial expenses in the statement of income. 2.7 Inventories Inventories consist of debit and credit card readers. Inventories are stated at the lower of cost and net realizable value. The cost method used for inventories is the weighted moving average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. 2.8 Property and equipment Property and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items and may also include finance costs related to the acquisition of qualifying assets. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with these costs will flow to PagSeguro Group and they can be measured reliably. The carrying amount of replaced items or parts is derecognized. All other repairs and maintenance expenses are charged to the statement of income during the year in which they are incurred. The assets’ residual values and useful lives are reviewed at the end of each reporting period, and adjusted on a prospective basis if appropriate. Depreciation is calculated under the straight-line method, based on the estimated useful lives as shown below (in years): December 31, 2017 2016 Data processing equipment 2,5 to 5 2,5 to 5 Furniture and fittings 10 10 Facilities 10 10 Leasehold improvements 10 10 Machinery and equipment 5 to 10 10 Vehicles 5 — An asset’s carrying amount is immediately written down to its recoverable amount when the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amounts, and are recognized within “Other (expenses) income, net” in the statement of income. 2.9 Intangible assets Software licenses are capitalized on the basis of the costs incurred to acquire the software and bring it to use. These costs are amortized on the straight-line basis over the estimated useful life of the software (three to five years). Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by PagSeguro Group are recognized as intangible assets. Directly attributable costs, which are capitalized as part of the software product, include costs incurred with employees and expenses allocated to software development. Borrowing costs incurred during the software development period may also be capitalized. Other development expenditures that do not meet the capitalization criteria are expensed as incurred. Development costs previously recorded as an expense are not recognized as an asset in a subsequent period, and are presented within “Advisory and consulting services”. Computer software development costs recognized as assets are amortized over the estimated useful life, which does not exceed five years from the date that technological feasibility is met. 2.10 Impairment of non-financial Non-financial non-financial When estimating the value in use of an asset, the future estimated cash flows are discounted to their present value using a pre-tax PagSeguro Group annually assesses whether there is any indication that a previously recognized impairment loss no longer exists or has decreased. If there is such indication, the asset’s recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the asset’s carrying amount does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognized for the asset in prior years. 2.11 Payables to third parties Payables to third parties refer to funds payable and amounts due to merchants that use PagSeguro Brazil platform. PagSeguro Group recognizes the fair value of the transaction which is the transaction amount, net of the transaction cost. 2.12 Provisions Provisions are recognized when PagSeguro Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be estimated reliably. When PagSeguro Group expects the value of a provision to be reimbursed, in whole or in part, for example, due to an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. Expenses associated with any provisions are presented in the statement of income, net of any reimbursements. PagSeguro Group is a party to legal and administrative proceedings. Provisions are established for all contingencies referring to lawsuits for which it is probable that an outflow of funds will be necessary to settle the contingency/obligation and a reasonable estimate can be made. The assessment of the likelihood of loss includes the evaluation of available evidence, the hierarchy of laws, available case law, recent court decisions and their importance in the legal system, as well as the opinion of outside legal counsel. The provisions are reviewed and adjusted to reflect changes in circumstances. 2.13 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of services and goods in the ordinary course of PagSeguro Group’s activities. Revenue is presented net of sales and excise taxes and returns. PagSeguro Group recognizes revenue when: (i) the amount of revenue can be reliably measured; (ii) it is probable that future economic benefits will flow to PagSeguro Group; (iii) recognized when control of a good or service is transferred to a customer; and (iv) specific criteria have been met for PagSeguro Group’s activities. PagSeguro Group’s revenue substantially comprises: • Revenue from transaction activities and other services: Revenue from fees charged for intermediation of electronic payments, and other services such as prepaid cards, which are recognized at the time the purchase is approved by the financial institution. Revenues from fees charged for intermediation of electronic payments are recognized on a gross basis and related transaction costs are recognized as Cost of sales and services, since PagSeguro Group is considered to be the principal in the intermediation transaction. PagSeguro Group has primary responsibility for providing the services to customers and also directly sets the prices for such services, independently from the related transaction costs agreed between PagSeguro Group and the card schemes or card issuers; and • Revenue from sales: Revenue from sales of credit and debit card readers and similar items, which is recognized at the time the risks and benefits are transferred and when control of a good is transferred to the customers, i.e., on delivery of the equipment. Under Brazilian consumer law, clients have seven days after ordering Point of Sale equipment (“POS devices”) in which to cancel the purchase. Returns of devices are accounted for as deductions from revenue from sales at the time the equipment is returned. • Financial income: is recognized as a result of the discount rate charged on the early payments of Payables to third parties (merchants). The income is recognized at the time the merchant agrees to receive a sale in installments on an early payment basis, and it is recorded as Financial income in the statement of income. 2.14 Distribution of dividends and interest on own capital Distributions of dividends and interest on own capital to PagSeguro Brazil’s shareholders are recognized as a liability in the financial statements at year-end, The tax benefit of interest on own capital is recognized in the statement of income. 2.15 Current and deferred income tax and social contribution Current income tax and social contribution Tax assets and liabilities for the current year are calculated based on the expected recoverable amount or the amount payable to the tax authorities. The tax rates and tax laws used to calculate the amount are those enacted or substantively enacted at the balance sheet date in the countries where PagSeguro Group operates and generates taxable income. Current income tax and social contribution related to items recognized directly in equity are recognized in equity. PagSeguro Group periodically evaluates the tax positions involving interpretation of tax regulations and establishes provisions when appropriate. Deferred taxes Deferred taxes arise from temporary differences between the tax bases of assets and liabilities and their carrying amounts at the balance sheet date. Deferred tax liabilities are recognized for all taxable temporary differences, except in the following situations: • When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit; • On temporary tax differences related to investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; • Deferred tax assets are recognized on all deductible temporary differences and tax loss carryforwards, to the extent that it is probable that taxable profit will be available against which they can be offset, except when the deferred tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss; and • Deferred tax assets are recognized on the deductible temporary differences associated with investments in subsidiaries only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and that taxable profit will be available against which the temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each balance sheet date and a deferred tax asset is recognized to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are reviewed, at each balance sheet date, and recognized to the extent that it is probable that future taxable profit will be available to allow their utilization. Based on the local law of Cayman (The Companies Law of 1960), there is no taxation on the income earned in the companies based in this locality, therefore, we do not have tax impacts for the PagSeguro Digital. For the subsidiaries of PagSeguro Digital, deferred tax assets and liabilities are measured using the prevailing tax rates in the year in which the assets will be realized and the liabilities will be settled. The currently defined tax rates of 25% for income tax and 9% for social contribution are used to calculate deferred taxes. Deferred tax assets and liabilities are presented on a net basis when there is a legally or contractually enforceable right to offset the tax asset against the tax liability, and the deferred taxes are related to the same taxable entity and subject to the same tax authority. 2.16 Employee benefits – Benefits of performance PagSeguro Group recognizes a liability and an expense for benefits of performance based on a methodology that takes into consideration the target of performance attributed to PagSeguro Group’s stockholders after certain adjustments. PagSeguro Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. 2.17 Business combination PagSeguro Group accounts for business combinations using the acquisition method. The cost of an acquisition is measured as the sum of the consideration transferred, based on its fair value on the acquisition date. Costs directly attributable to the acquisition are expensed as incurred. The assets acquired, and liabilities assumed are measured at fair value, classified and allocated according to the contractual terms, economic circumstances and relevant conditions on the acquisition date. Goodwill is measured as the excess of the consideration transferred over the fair value of net assets acquired. If the consideration transferred is smaller than the fair value of net assets acquired, the difference is recognized as a gain on bargain purchase in the statement of operations. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. 2.18 New standards not yet effective The following new standards have been issued by IASB, but are not effective for 2017: IFRS 16 – “Leases” – this new standard requires lessees to recognize the liability of the future payments and the right of use of the leased asset for virtually all lease contracts, including operating leases. Certain short-term and low-value There are no other IFRS or IFRIC interpretations not yet effective that could have a material impact on PagSeguro Group financial statements. 2.19 New and revised pronouncements in effect The following new standards have been issued by IASB: IFRS 9 – “Financial Instruments”: addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014 and is effective as from January 1, 2018. It replaces the guidance included in IAS 39 related to the classification and measurement of financial instruments. The main amendments brought by IFRS 9 are: (i) new criteria for the classification of financial assets; (ii) new impairment model for financial assets, which is based on expected losses, replacing the current model of incurred losses; and (iii) relaxation of the new requirements for the adoption of hedge accounting. Management evaluated the new guidelines introduced by IFRS 9 and did not identify any material impact for PagSeguro Group. IFRS 15 – “Revenue from Contracts with Customers”: this new standard introduces the principles to be applied by an entity to determine the measurement and recognition of revenue. This standard is based on the principle that revenue is recognized when control of a good or service is transferred to a customer, and, therefore, the principle of control will replace the principle of risks and benefits. This standard will replace IAS 11 – “Construction Contracts”, IAS 18 – “Revenues” and related interpretations, and becomes effective on January 1, 2018. Management evaluated the new guidelines introduced by IFRS 15 and did not identify any material impact for PagSeguro Group. Therefore, changes to standards or new pronouncements applicable to the years presented in the consolidated financial statements were not relevant to PagSeguro Group, for retrospective disclosure and disclosure of amounts. |
Consolidation of subsidiaries
Consolidation of subsidiaries | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Consolidation of subsidiaries | 3. Consolidation of subsidiaries At March 31, 2018 Company Assets Liabilities Equity Net income Ownership – % Level PagSeguro Brazil 12,158,276 7,848,351 4,309,925 57,768 99,99 Direct Net+Phone 1,101,314 1,066,680 34,634 (9,323 ) 99,99 Indirect Boa Compra 700,068 679,402 20,666 705 99,99 Indirect BCPS 1,559 291 1,268 319 99,50 Indirect R2TECH 3,188 858 2,330 764 51,00 Indirect BIVA 2,464 2,217 (247 ) (1,174 ) 74,93 Indirect FIDC 259,710 71,357 188,353 6,657 90,00 Indirect The operational context of the subsidiaries is to be read in conjunction with the annual financial statements for the year ended December 31, 2017. BIVA: On January 15 and March 12, 2018, PagSeguro Brazil acquired an additional interest of BIVA (15.12% and 0.50%, respectively), bringing total interest to 74.93% of BIVA’s total share capital (59.31% as of December 31, 2017). The total amount paid for this acquisition was R$4,650. For more details see note 9. FIDC: On March 29, 2018, two investors contributed capital in the amount of R$ 20 million in the subsidiary, acquiring only senior and mezzanine quotes PagSeguro Brazil’s equity ownership is 90% in the FIDC as of March 31, 2018 (100% as of December 31, 2017). On March 31, 2018 the share capital of the FIDIC is composed of subordinated quotes, senior quotes and mezzanine quotes. PagSeguro Brasil owns 100% of the subordinated quotes. The senior and mezzanine quotes pay 107% of the Interbank Deposit Certificate (CDI) with annual amortization of interest. | 4. Consolidation of subsidiaries At December 31, 2017 Company Assets Liabilities Equity Net income (loss) Ownership Level PagSeguro Brazil 7,553,504 6,686,516 866,988 478,781 99.99 Direct Net+Phone 1,018,218 974,260 43,958 (8,441 ) 99.99 Indirect Boa Compra 629,246 609,284 19,962 5,715 99.99 Indirect BCPS 1,236 251 985 429 99.50 Indirect R2TECH 2,460 894 1,566 1,307 51.00 Indirect BIVA 2,482 1,730 752 (1,569 ) 59.31 Indirect FIDC 182,163 404 181,759 1,758 100 Indirect Operations of the subsidiaries • PagSeguro Brazil: is engaged in providing financial technology solutions and services and the corresponding related activities. PagSeguro Brazil has investments in the following companies: o Net+Phone: Is mainly engaged in acquisition and selling POS (Point of sale) devices and similar items. On July 29, 2016, UOL transferred its investment in Net+Phone to PagSeguro Brazil, as a capital contribution, in the amount of R$ 44,317. o Boa Compra: Allows its clients to operate cross-border transactions where the merchant and consumer are located in different countries across Latin America, Spain, Portugal and Turkey. On April 5, 2011, UBN Internet Ltda. (“UBN”), a subsidiary of UOL, acquired a 51% equity interest in Boa Compra. On July 26, 2013, UBN acquired additional 24% equity interest, increasing its total ownership in Boa Compra to 75%. In May 2016, UBN acquired the remaining 25% equity interest, becoming the owner of 100% of Boa Compra. On July 29, 2016, UBN’s equity interest in Boa Compra was spun off to its parent company UOL. Subsequently, UOL transferred its 100% equity interest in Boa Compra to PagSeguro Brazil as a capital contribution, in the total amount of R$ 12,034. o BCPS: On January 1, 2017, PagSeguro Brazil acquired 99.5% of the share capital and obtained the control of BCPS. BCPS’s main activity is to enable clients of the PagSeguro Brazil Group to operate cross-border transactions where the merchant and the consumer are located in different countries of Latin America, Spain, Portugal and Turkey. o R2TECH: On May 2, 2017, PagSeguro Brazil acquired 51% of the share capital and obtained the control of R2TECH. R2TECH’s main activity is in the information technology industry, focused on the processing of back-office solutions, including sales reconciliation, gateway solutions and services, the capture of credit cards with administrators and acquirers. o BIVA: On October 3, 2017, PagSeguro Brazil acquired a controlling interest of 51.41% in BIVACO Holdings SA, whose main objective is to acquire participations in other companies, commercial or civil, as partner, shareholder or quotaholder, as well as the management of these holdings. In November 2017, PagSeguro Brazil acquired an additional interest in BIVA, bringing our total interest to 59.3% of BIVA’s. BIVA has investments in the following subsidiaries: ◾ Biva Serviços Financeiros S.A : whose main objective is the intermediation between investors, financial institution and credit borrowers by medium of electronic platform; ◾ Biva Correspondente Bancário Ltda: whose main objective is to structure financing for small and medium enterprises following the model crowdfunding, in the peer-to-peer o FIDC: On October 4, 2017, FIDC was constituted for the purpose of acquiring payables to third parties held by PagSeguro Brazil (“Assignor”). PagSeguro Brazil consolidates the financial statements of FIDC, which represents an investment fund constituted to finance the growth of PagSeguro Brazil’s early payment of receivables feature. The consolidation is justified by the fact that the risks of default and the responsibility for expenses and administration related to the FIDC are linked to subordinated quotas held by the PagSeguro Brazil. |
Segment reporting
Segment reporting | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Segment reporting | 4. Segment reporting Operating segments are reported consistently with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, responsible for allocating resources and assessing the performance of the operating segments, is the Board of Directors, which is also responsible for making the PagSeguro Group strategic decisions. Considering that all decisions are based on consolidated reports, and that all decisions related to strategic and financial planning, purchases, investments and the allocation of funds are made on a consolidated basis, the PagSeguro Group and its subsidiaries operate in a single segment, as payment arrangement agents. The PagSeguro Group is domiciled in Brazil and has revenue arising from local customers and customers located abroad. The mainly revenue is related sales from domestic market. Net revenues from the international market represents 2% and 2% for the three-month periods ended March31, 2018 and 2017, respectively. | 5. Segment reporting Operating segments are reported consistently with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, responsible for allocating resources and assessing the performance of the operating segments is the Board of Directors, which is also responsible for making PagSeguro Group strategic decisions. Considering that all decisions are based on consolidated reports, and that all decisions related to strategic and financial planning, purchases, investments and the allocation of funds are made on a consolidated basis, PagSeguro Group and its subsidiaries operate in a single segment, as payment arrangement agents. PagSeguro Group is domiciled in Brazil and has revenue arising from local customers and customers located abroad. The main revenue consists of sales to the domestic market. The international market represents 2%, 5% and 8% for the years 2017, 2016 and 2015 respectively. |
Cash and cash equivalents
Cash and cash equivalents | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Cash and cash equivalents | 5. Cash and cash equivalents March 31, 2018 December 31, 2017 Short-term bank deposits 20,694 66,767 Short-term investment 2,524,695 — 2,545,389 66,767 Cash and cash equivalents are held for the purpose of meeting short-term cash needs and include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three-month or less, and with immaterial risk of change in value. Balance amount as at March 31, 2018 is relatated to excess of cash and cash equivalents proceeds originated from the IPO transaction mentioned in Note 1.1. | 6. Cash and cash equivalents December 31, 2017 2016 Short-term bank deposits 66,767 79,969 66,767 79,969 Cash and cash equivalents are held for the purpose of meeting short-term cash needs and include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three months or less, and with immaterial risk of change in value. |
Financial investments
Financial investments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Financial investments | 6. Financial investments March 31, 2018 December 31, 2017 Short-term investment — 210,103 — 210,103 Short-term investments consisted of two repurchase agreements, with an average return of 96.0% of the Interbank Deposit Certificate (CDI). This financial asset was classified as fair value through profit and loss. | 7. Financial investments December 31, 2017 2016 Short-term investment 210,103 131,239 210,103 131,239 Short-term investments consist of two repurchase agreements, with an average return of 96.0% of the Interbank Deposit Certificate (CDI). This financial asset was classified as fair value through profit and loss. |
Note receivables
Note receivables | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Note receivables | 7. Note receivables March 31,2018 December 31,2017 Legal obligors Visa Master Hipercard Total Visa Master Hipercard Total Itaú 349,272 1,128,312 311,450 1,789,034 237,335 751,542 250,817 1,239,694 Bradesco 449,645 119,721 — 569,366 333,108 83,160 — 416,268 Banco do Brasil 364,329 103,753 — 468,082 287,334 84,504 — 371,838 CEF 95,462 118,096 — 213,558 69,974 83,684 — 153,658 Santander 164,853 468,908 — 633,761 122,614 310,946 — 433,560 Other 214,628 584,640 — 799,268 141,802 393,999 — 535,801 Total card issuers (i) 1,638,189 2,523,430 311,450 4,473,069 1,192,167 1,707,835 250,817 3,150,819 Cielo – Elo — — — 173,879 — — — 151,851 Cielo — — — 107,394 — — — 80,464 Redecard — — — 38,204 — — — 45,289 Amex — — — 49,409 — — — 39,608 Vero — — — 16,605 — — — 21,463 Other — — — 22,939 — — — 31,864 Total acquirers (ii) — — — 408,429 — — — 370,539 Other1 — — — 1,823 — — — 991 Total other — — — 1,823 — — — 991 Total note receivables 1,638,189 2,523,430 311,450 4,883,321 1,192,167 1,707,835 250,817 3,522,349 (i) Card issuers: receivables derived from transactions where the PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa, Mastercard or Hipercard. However, the PagSeguro Brazil´s contractual note receivables are with the financial institutions, which are the legal obligors on the note receivables.Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa, Mastercard or Hipercard, as applicable, in the event that the legal obligors do not make payment. PagSeguro Brazil started operating directly as a financial intermediary in 2016. (ii) Acquirers: refer to card processing transactions to be received from the acquirers, which are a third parties acting as a financial intermediaries between the issuing bank and PagSeguro Brazil. This balance also includes the receivables from sales of debit and credit card readers. The maturity analysis of note receivables is as follows: March 31, 2018 December 31, 2017 Due within 30 days 2,647,347 2,213,929 Due within 31 to 120 days 1,763,293 1,045,825 Due within 121 to 180 days 140,265 114,953 Due within 181 to 360 days 332,416 147,642 4,883,321 3,522,349 | 8. Note receivables December 31, 2017 2016 Legal obligors Visa Master Hipercard Total Visa Master Total Itaú 237,335 751,542 250,817 1,239,694 99,433 244,741 344,174 Bradesco 333,108 83,160 — 416,268 115,009 36,032 151,041 Banco do Brasil 287,334 84,504 — 371,838 91,414 29,425 120,839 CEF 69,974 83,684 — 153,658 23,837 30,979 54,816 Santander 122,614 310,946 — 433,560 48,695 79,085 127,780 Other 141,802 393,999 — 535,801 50,716 93,473 144,189 Total card issuers (i) 1,192,167 1,707,835 250,817 3,150,819 429,104 513,735 942,839 Vero — — — 21,463 — — 331,807 Cielo — — — 232,315 — — 355,949 Redecard — — — 45,289 — — 56,025 Amex — — — 39,608 — — 4,090 Other — — — 31,864 — — 24,804 Total acquirers (ii) — — — 370,539 — — 772,675 Other — — — 991 — — — Total other — — — 991 — — — Total note receivables 1,192,167 1,707,835 250,817 3,522,349 429,104 513,735 1,715,514 (i) Card issuers: receivables derived from transactions where PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa or Mastercard. However, PagSeguro Brazil’s contractual note receivables are with the financial institutions, which are the legal obligors on the note receivables. Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa or Mastercard, as applicable, in the event that the legal obligors do not make payment. PagSeguro Brazil started operating directly as a financial intermediary in 2016. (ii) Acquirers: refers to card processing transactions to be received from the acquirers, which are third parties acting as financial intermediaries between the issuing bank and PagSeguro Brazil. This balance also includes the receivables from sales of debit and credit card readers. The maturity analysis of note receivables is as follows: December 31, 2017 2016 Due within 30 days 2,213,929 970,086 Due within 31 to 120 days 1,045,825 609,689 Due within 121 to 180 days 114,953 43,144 Due within 181 to 360 days 147,642 92,595 3,522,349 1,715,514 |
Related-party balances and tran
Related-party balances and transactions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Related-party balances and transactions | 8. Related-party balances and transactions PagSeguro Group is controlled by UOL (incorporated in Brazil). i. Balances and transactions with related parties: March 31, 2018 December 31, 2017 Receivables Payables Receivables Payables Immediate parent UOL—cash management (a) 909 — 124,721 — UOL—sales of services (b) — 22,124 — 32,286 UOL—shared service costs — 11,958 — — Affiliated companies UOL Diveo Tecnologia Ltda.—cash management (a) — — 2 — UOL Diveo Tecnologia Ltda.—sales of services (b) — 3,558 — 621 UOL Diveo Tecnologia Ltda.—shared service costs — 90 — — Concurso Virtual S.A. — 1,479 — 1,522 Transfolha Transportadora e Distribuição Ltda. — 1,869 — 745 Livraria da Folha Ltda. — 1,143 — 1,078 Empresa Folha da Manhã S.A. — 1,707 — 2,320 Others — 1,045 — 529 909 44,973 124,723 39,101 (a) The receivables/payables transactions with related parties arising from cash management were ended at the date of the IPO. The remaining balance of R$ 909 was fully paid during the month of April 2018. (b) Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in hosting from UOL Diveo Tecnologia Ltda. March 31, 2018 March 31, 2017 Revenue Expense Revenue Expense Immediate parent UOL—shared service costs (a) — 43,041 — 12,044 UOL—sales of services (b) 468 12,921 — 12,703 Affiliated companies UOL Diveo—shared service costs (c) — 123 — 25 UOL Diveo—sales of services (d) — 6,542 — 4,748 Concurso Virtual S.A. 28 — 34 — Edgar de Abreu Ltda. 149 — 40 — Transfolha Transportadora e Distribuição Ltda. — 2,624 — 3,814 Livraria da Folha Ltda. 71 — 135 — Others 22 — 11 — 738 65,251 220 33,334 (a) Shared services costs mainly related to (i) payroll costs, (ii) IT structure / software and (iii) property rental costs are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. Such costs are included in administrative expenses. The increase in the balance refers to payroll taxes related to LTIP in the amount of R$28,400, which are paid by the parent company UOL and reimbursed by the PagSeguro Group. (b) Sale of services related to advertising services are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. (c) Shared services costs are incurred by the affiliated company UOL Diveo and are charged to PagSeguro Brazil pursuant to contractual agreements. The main costs are related to IT structure/software. (d) Sale of services from the affiliated company UOL Diveo related to technical support in hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. ii. Key management compensation Key management compensation includes short and long term benefits of PagSeguro Brazil’s executive officers. At March 31, 2018, the short and long term compensation related to the executive officers for the three-month period ended March 31, 2018 amounted to R$27,845 (March 31, 2017—R$878 includes only short-term). | 9. Related-party balances and transactions PagSeguro Group is controlled by UOL (incorporated in Brazil), which owns 99.99% of the shares as of December 31, 2017, prior to PagSeguro’s Digital initial public offering in January 2018. i. Balances and transactions with related parties: December 31, 2017 2016 Receivables Payables Receivables Payables Immediate parent UOL – cash management (a) 124,721 — 300,809 — UOL – sales of services (b) — 32,286 — 59,692 Affiliated companies UOL Diveo – cash management (a) 2 — — 1,383 UOL Diveo – sales of services (b) — 621 — 9,360 Concurso Virtual S.A. — 1,522 — 1,900 Transfolha Transportadora e Distribuição Ltda. — 745 — 1,196 Livraria da Folha Ltda. — 1,078 — 2,285 Empresa Folha da Manhã S/A — 2,320 — 21 Others — 529 — 412 124,723 39,101 300,809 76,249 (a) The receivables/payables with related parties arising from cash management are settled within one month and are free of interest. Shared service costs are offset with these balances. The receivables are unsecured in nature and no provisions are held against receivables from related parties. In April and September 2017, PagSeguro Brazil decided to settle a portion of its outstanding balance with related parties, as described below. On April 30, 2017, PagSeguro Brazil approved the settlement of R$22,149 related to interest on own capital that was distributed with respect to the year ended December 31, 2016. PagSeguro Brazil agreed with UOL that the full amount of this outstanding interest on own capital would be offset against receivables under the centralized cash management with UOL. In addition, as described in Note 19, on September 29, 2017 PagSeguro Brazil approved and distributed a total of R$238,803 in dividends, consisting of (i) dividends related to the year ended December 31, 2016 in the amount of R$96,008; and (ii) dividends related to the six-month (b) Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in computing and hosting from UOL Diveo Tecnologia Ltda. (“UOL Diveo”), which started in 2016. In addition, during 2016, an amount of R$ 63,264 (composed by R$ 26,610 and R$ 36,654) previously recorded as accounts payable was used for capital contributions, as described in Note 19. 2017 2016 2015 Revenue Expense Revenue Expense Revenue Expense Immediate parent UOL – shared service costs (a) — 58,375 — 31,498 — 12,369 UOL – shared service costs – carved out (b) — — — — — 12,032 UOL – sales of services (c) 689 46,976 — 81,007 — 22,458 UOL – sales of services – carved out (d) — — — — — 36,737 Affiliated companies UOL Diveo – shared service costs (e) — 24 — 1,710 — — UOL Diveo – sales of services (f) — 28,953 — 18,069 — 25 Concurso Virtual S.A. 117 — 134 — 389 — Transfolha Transportadora e Distribuição Ltda. 39 15,405 — 5,500 — 806 Livraria da Folha Ltda. 319 — 349 — 347 — Others 316 130 261 101 121 — 1,480 149,863 744 137,885 857 84,427 (a) Shared services costs mainly related to (i) payroll costs, (ii) IT structure / software and (iii) rental costs are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. Such costs are included in administrative expenses. (b) The main costs that the UOL Group allocated to PagSeguro Brazil (based on the number of employees and/or the time worked, basis that management believes is reasonable), are (i) payroll costs, (ii) IT structure / software and (iii) rental costs. The allocated costs to the carve-out (c) Sale of services related to advertising services are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. (d) Sales of services related to advertising services were allocated based on intercompany cost, a basis that management believes is reasonable from January 2014 through July 2015. (e) Shared services costs are incurred by the affiliated company UOL Diveo and are charged to PagSeguro Brazil pursuant to contractual agreements. The main costs are related to IT structure/software. (f) Sale of services from the affiliated company UOL Diveo related to technical support in computing and hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. ii. Key management compensation Key management personnel includes only short term benefits of PagSeguro Group executive officers. In 2017, the total compensation paid to the executive officers amounted to R$ 3,487, (R$ 2,658 and R$ 2,243 in 2016 and 2015, respectively). |
Business combinations
Business combinations | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Business combinations | 9. Business combinations The acquisitions described below are in accordance with PagSeguro’s Digital business strategies, as well as the products offered by them and their client portfolio. a) BCPS On January 1, 2017, PagSeguro Brazil acquired 99.5% of the share capital and obtained the control of BCPS. The amount paid in the acquisition was R$406, which was settled in cash on that date. The fair value of the acquired assets, amounting R$568, and the assumed liabilities amounting of R$75 at the acquisition date are substantially similar to their book value. A bargain purchase gain of R$87 arose from the acquisition of BCPS. The impacts of the acquisition were not considered material to PagSeguro Brazil. b) R2TECH On May 2, 2017, PagSeguro Brazil acquired 51% of the share capital and obtained control of R2TECH. The consideration for the purchase was R$9,200, of which R$2,940 was settled in cash on the acquisition date, R$460 was paid on August 14, 2017 and R$2,300 was paid on April 23, 2018. R$3,500 is variable installment, subject to the attainment of some specific targets for the year of 2018, established in the acquisition agreement, with payment deadline up to 10 business days after the conclusion of the Company’s audited financial statements. Based on current management expectations, this performance goal will be achieved. c) BIVA On October, 2017, PagSeguro Brazil acquired control with the acquisition of a 51.41% interest in Bivaco Holding SA. The total consideration paid for the purchases was R$18,470, which was settled in cash on the acquisition date. The fair value of the assets acquired, in the amount of R$2,350 and the liabilities assumed, in the amount of R$997 on the acquisition date, are substantially similar to their book value. The goodwill of R$17,117 arising from the acquisition is attributable to the future profitability of the business in synergy with the products offered by PagSeguro Group. The purchase price allocation may be subject to changes in the measurement period as defined in IFRS. On November 30, 2017, the PagSeguro Brazil acquired the additional interest of 7.90% of the issued shares for a purchase consideration of R$2,394, increasing PagSeguro Brazil’s interest to 59.31%. On January 15 and March 12, 2018, PagSeguro Brazil acquired additional interests of 15.12% and 0.50%, respectively, for a purchase consideration of R$4,650. The carrying amount of the non-controlling non-controlling | 10. Business combinations The acquisitions described below are in accordance with PagSeguro’s Digital business strategies, as well as the products offered by them and their client portfolio. Book value of Purchase accounting adjustment Fair value of The assets and liabilities arising from the acquisition Cash and cash equivalents 51 — 51 Assets acquired 2,598 — 2,598 Liabilities assumed (1,312 ) — (1,312 ) Property, plant and equipment and intangible assets 643 2,498 3,141 Value of net assets 1,980 2,498 4,478 Goodwill 26,184 (2,498 ) 23,686 Bargain purchase gain (87 ) — (87 ) Purchase cost 28,077 — 28,077 Consideration for the purchase settled in cash 22,276 Cash and cash equivalents at the subsidiary acquired (51 ) Amount paid on acquisitions less cash and cash equivalents acquired 22,225 a) BCPS On January 1, 2017, PagSeguro Brazil acquired 99.5% of the share capital and obtained the control of BCPS. The amount paid in the acquisition was R$406, which was settled in cash on that date. The fair value of the acquired assets, amounting R$568, and the assumed liabilities amounting of R$75 at the acquisition date are substantially similar to their book value. A bargain purchase gain of R$87 arose from the acquisition of BCPS. The impacts of the acquisition were not considered material to PagSeguro Brazil. b) R2TECH On May 2, 2017, PagSeguro Brazil acquired 51% of the share capital and obtained control of R2TECH. The consideration for the purchase was R$9,200, of which R$2,940 was settled in cash on the acquisition date and R$460 was paid on August 14, 2017. R$2,300 and R$3,500 are variable installments, subject to the attainment of some specific targets for the year of 2017 and 2018, respectively, established in the acquisition agreement, with payment deadline up to 10 business days after the conclusion of the Company’s audited financial statements. Based on current management expectations, these performance goals will be achieved. The fair value of the assets acquired, in the amount of R$348, and the liabilities assumed, in the amount of R $215 on the acquisition date, is substantially similar to their book value. The goodwill of R$9,067 arising from the acquisition is attributable to the future profitability of the business and the synergy with the products offered by the PagSeguro Group. During the year ended December 31, 2017, PagSeguro Group identified some changes to the initial purchase price allocation (PPA), which were completed in the measurement period as defined in IFRS, as shown below: i) Intangible assets—Portfolio of customers: the fair value attributed to the Customer Portfolio was R$ 768, using the real discount rate (without inflationary effects) of 15.30%; ii) Intangible assets—Non-competition: iii) Intangible assets—Right-to-use c) BIVA On October 3, 2017, PagSeguro Brazil acquired control with the acquisition of a 51.41% interest in Bivaco Holding SA. On November 30, 2017 there was an additional interest of 7.90 was acquired, increasing PagSeguro Brazil’s interest to 59,31%. The total consideration paid for the purchases was R$18,470, which was settled in cash on the acquisition date. The fair value of the assets acquired, in the amount of R$2,350 and the liabilities assumed, in the amount of R$997 on the acquisition date, are substantially similar to their book value. The goodwill of R$17,117 arising from the acquisition is attributable to the future profitability of the business in synergy with the products offered by PagSeguro Group. The purchase price allocation may be subject to changes in the measurement period as defined in IFRS. |
Property and equipment
Property and equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Property and equipment | 10. Property and equipment (a) Property and equipment is composed as follows: March 31, 2018 Cost Accumulated Net Data processing equipment 11,262 (5,647 ) 5,615 Facilities 53 (24 ) 29 Machinery and equipment 5,469 (681 ) 4,788 Furniture and fittings 397 (76 ) 321 Leasehold improvements 263 (39 ) 224 Vehicles 140 (52 ) 88 17,583 (6,518 ) 11,065 December 31, 2017 Cost Accumulated Net Data processing equipment 11,024 (5,114 ) 5,910 Facilities 53 (23 ) 30 Machinery and equipment 4,738 (444 ) 4,294 Furniture and fittings 397 (66 ) 331 Leasehold improvements 263 (29 ) 234 Vehicles 132 (42 ) 90 16,607 (5,718 ) 10,889 (b) The changes in cost and accumulated depreciation were as follows: Data Facilities Machinery Furniture Leasehold Total At December 31, 2017 Cost 11,024 53 4,738 397 263 132 16,607 Accumulated depreciation (5,114 ) (23 ) (444 ) (66 ) (29 ) (42 ) (5,718 ) Net book value 5,910 30 4,294 331 234 90 10,889 At March 31, 2018 Opening balance 5,910 30 4,294 331 234 90 10,889 Additions 238 — 731 — — 7 976 Depreciation (533 ) (1 ) (237 ) (10 ) (10 ) (9 ) (800 ) Net book value 5,615 29 4,788 321 224 88 11,065 At March 31, 2018 Cost 11,262 53 5,469 397 263 139 17,583 Accumulated depreciation (5,647 ) (24 ) (681 ) (76 ) (39 ) (51 ) (6,518 ) Net book value 5,615 29 4,788 321 224 88 11,065 | 11. Property and equipment (a) Property and equipment is composed as follows: December 31, 2017 Cost Accumulated Net Data processing equipment 11,024 (5,114 ) 5,910 Facilities 53 (23 ) 30 Machinery and equipment 4,738 (444 ) 4,294 Furniture and fittings 397 (66 ) 331 Leasehold improvements 263 (29 ) 234 Vehicles 132 (42 ) 90 16,607 (5,718 ) 10,889 December 31, 2016 Cost Accumulated Net Data processing equipment 7,574 (3,692 ) 3,882 Facilities 52 (19 ) 33 Machinery and equipment 548 (140 ) 408 Furniture and fittings 190 (40 ) 150 Leasehold improvements 100 (15 ) 85 8,464 (3,906 ) 4,558 (b) The changes in cost and accumulated depreciation were as follows: Data Facilities Machinery Furniture Leasehold Vehicles Total At December 31, 2016 Cost 7,574 52 548 190 100 — 8,464 Accumulated depreciation (3,692 ) (19 ) (140 ) (40 ) (15 ) — (3,906 ) Net book value 3,882 33 408 150 85 — 4,558 At December 31, 2017 Opening balance 3,882 33 408 150 85 — 4,558 Cost Purchases 3,316 1 4,171 176 94 114 7,873 Acquisition of subsidiary 134 — 19 31 69 18 271 Depreciation Depreciation (1,422 ) (4 ) (304 ) (26 ) (14 ) (42 ) (1,812 ) Net book value 5,910 30 4,294 331 234 90 10,889 At December 31, 2017 Cost 11,024 53 4,738 397 263 132 16,607 Accumulated depreciation (5,114 ) (23 ) (444 ) (66 ) (29 ) (42 ) (5,718 ) Net book value 5,910 30 4,294 331 234 90 10,889 |
Intangible assets
Intangible assets | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Intangible assets | 11. Intangible assets (a) Intangible assets are composed as follows: March 31, 2018 Cost Accumulated Net Expenditures related to software and technology (i) 291,666 (134,293 ) 157,373 Software licenses 12,529 (2,398 ) 10,131 Customer relationships 1,981 (246 ) 1,735 Goodwill (ii) 21,399 — 21,399 327,575 (136,937 ) 190,638 December 31, 2017 Cost Accumulated Net Expenditures related to software and technology (i) 241,490 (115,665 ) 125,825 Software licenses 9,510 (2,043 ) 7,467 Customer relationships 1,981 (91 ) 1,890 Goodwill (ii) 23,686 — 23,686 276,667 (117,799 ) 158,868 (i) PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. (ii) Goodwill provided on the acquisition of the companies R2TECH and BIVA. (b) The changes in cost and accumulated amortization were as follows: Expenditures Software Customer Goodwill Total At December 31, 2017 Cost 241,490 9,510 1,981 23,686 276,667 Accumulated amortization (115,665 ) (2,043 ) (91 ) — (117,799 ) Net book value 125,825 7,467 1,890 23,686 158,868 At March 31, 2018 Opening balance 125,825 7,467 1,890 23,686 158,868 Cost Additions 50,176 3,019 — — 53,195 Others — — — (2,287 ) (2,287 ) Amortization Amortization (18,628 ) (355 ) (155 ) — (19,138 ) Net book value 157,373 10,131 1,735 21,399 190,638 At March 31, 2018 Cost 291,666 12,529 1,981 21,399 327,575 Accumulated amortization (134,293 ) (2,398 ) (246 ) — (136,937 ) Net book value 157,373 10,131 1,735 21,399 190,638 | 12. Intangible assets (a) Intangible assets are composed as follows: December 31, 2017 Cost Accumulated Net Expenditures related to software and technology (i) 241,490 (115,665 ) 125,825 Software licenses 9,510 (2,043 ) 7,467 Customer relationships 1,981 (91 ) 1,890 Goodwill (ii) 23,686 — 23,686 276,667 (117,799 ) 158,868 December 31, 2016 Cost Accumulated Net Expenditures related to software and technology (i) 143,989 (61,858 ) 82,131 Software licenses 5,393 (1,416 ) 3,977 149,382 (63,274 ) 86,108 (i) PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. (ii) Goodwill provided on the acquisition of the companies R2TECH and BIVA as described in Note 10. (b) The changes in cost and accumulated amortization were as follows: Expenditures with Software Customer Goodwill (ii) Total At December 31, 2016 Cost 143,989 5,393 — — 149,382 Accumulated amortization (61,858 ) (1,416 ) — — (63,274 ) Net book value 82,131 3,977 — — 86,108 At December 31, 2017 Opening balance 82,131 3,977 — — 86,108 Cost Additions 97,491 1,210 971 26,184 125,856 Acquisition of subsidiary 10 1,419 — — 1,429 Transfer — 1,488 1,010 (2,498 ) — Amortization Amortization (53,807 ) (627 ) (91 ) — (54,526 ) Net book value 125,825 7,467 1,890 23,686 158,868 At December 31, 2017 Cost 241,490 9,510 1,981 23,686 276,667 Accumulated amortization (115,665 ) (2,043 ) (91 ) — (117,799 ) Net book value 125,825 7,467 1,890 23,686 158,868 |
Payables to third parties
Payables to third parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Payables to third parties | 12. Payables to third parties March 31, 2018 December 31, 2017 Payables to third parties 2,975,297 3,080,569 2,975,297 3,080,569 Payables to third parties correspond to amounts to be paid to commercial establishments with respect to transactions carried out by their card holders, net of the intermediation fees and discounts applied. PagSeguro Brazil’s average settlement terms agreed upon with commercial establishments is up to 30 days. | 13. Payables to third parties December 31, 2017 2016 Payables to third parties 3,080,569 1,304,031 3,080,569 1,304,031 Payables to third parties correspond to amounts to be paid to commercial establishments with respect to transactions carried out by their card holders, net of the intermediation fees and discounts applied. PagSeguro Brazil’s average settlement terms agreed upon with commercial establishments is up to 30 days. |
Salaries and social charges
Salaries and social charges | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Salaries and social charges | 13. Salaries and social charges March 31, 2018 December 31, 2017 Profit sharing 4,943 15,237 Salaries payable 2,962 2,758 Social charges 4,618 5,102 Payroll accruals 12,624 9,807 Other 1,045 1,365 26,192 34,269 | 15. Salaries and social charges December 31, 2017 2016 Profit sharing 15,237 8,696 Salaries payable 2,758 1,682 Social charges 5,102 3,225 Payroll accruals 9,807 5,877 Other 1,365 789 34,269 20,269 |
Taxes and contributions
Taxes and contributions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Taxes and contributions | 14. Taxes and contributions March 31, 2018 December 31, 2017 Taxes Services tax (i) 34,008 14,837 Value-added tax on sales and services (ii) 13,439 3,830 Social integration program (iii) 11,878 9,918 Social contribution on revenues (iii) 71,773 59,358 Income tax and social contribution (iv) 20,995 35,474 Other 1,501 1,264 153,594 124,681 Judicial deposits (v) Services tax (15,525) (11,375) Value-added tax on sales and services (6,685) (2,665) Social integration program (10,277) (8,188) Social contribution on revenues (63,245) (50,389) (95,732) (72,617) 57,862 52,064 (i) Refers to taxes on revenue from transaction activities. (ii) Refers to the Value-added Tax on Sales and Services (ICMS) amounts due by Net+Phone, related to tax substitution and tax rate differential, applied on sales of credit and debit card readers. (iii) Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income. (iv) Refers to the income tax and social contribution payable on current income taxes and contribution. (v) PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed initems “i”, “ii” and “iii” above. | 16. Taxes and contributions December 31, 2017 2016 Taxes Services tax (i) 14,837 1,382 Value-added tax on sales and services (ii) 3,830 3,596 Social integration program (iii) 9,918 2,690 Social contribution on revenues (iii) 59,358 16,544 Income tax and social contribution (iv) 35,474 — Other 1,264 690 124,681 24,902 Judicial deposits (v) Services tax (11,375 ) — Value-added tax on sales and services (2,665 ) — Social integration program (8,188 ) (2,516 ) Social contribution on revenues (50,389 ) (15,475 ) (72,617 ) (17,991 ) 52,064 6,911 (i) Refers to taxes on revenue from transaction activities. (ii) Refers to the Value-added Tax on Sales and Services (ICMS) amounts due by Net+Phone, related to tax substitution and tax rate differential, applied on sales of credit and debit card readers. (iii) Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income. (iv) Refers to the income tax and social contribution payable on current income taxes and contribution. (v) PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed in items “i”, “ii” and “iii” above. |
Provision for contingencies
Provision for contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Provision for contingencies | 15. Provision for contingencies Some companies of PagSeguro Group are party to labor and civil litigation in progress and are discussing such matters at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these matters are estimated and periodically adjusted by management, supported by the opinion of its external legal advisors. March 31, 2018 December 31, 2017 Civil 4,895 4,326 Labor 318 322 Current 5,213 4,648 PagSeguro Group is a party on tax lawsuits involving risks classified by legal advisors as possible losses, for which no provision was recognized at March 31, 2018, totaling approximately R$22,160 (December 31, 2017—R$ 25,800). PagSeguro Group is not a party to civil and labor lawsuits involving risks classified by management as possible losses. | 17. Provision for contingencies Some companies of PagSeguro Group are party to labor and civil litigation in progress and are discussing such matters at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these matters are estimated and periodically adjusted by management, supported by the opinion of its external legal advisors. December 31, 2017 2016 Civil 4,326 555 Labor 322 125 Current 4,648 680 PagSeguro Group is a party on tax lawsuits involving risks classified by legal advisors as possible losses of approximately R$25,800 and R$29,726, for the years ended in December 31, 2016 and 2017, respectively. PagSeguro Group is not party on civil and labor lawsuits classified by management as possible losses. |
Income tax and social contribut
Income tax and social contribution | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Income tax and social contribution | 16. Income tax and social contribution (a) Deferred income tax and social contribution Tax Tax Technological Other Other Total Deferred tax At December 31, 2016 1,051 3,606 (24,378 ) 3,647 — (16,074 ) Included in the statement of income (874 ) — (4,354 ) 2,759 — (2,468 ) At March 31, 2017 177 3,606 (28,732 ) 6,406 — (18,542 ) Included in the statement of income 1,310 (721 ) (12,460 ) 26,236 (1,616 ) 12,748 At December 31, 2017 1,487 2,885 (41,192 ) 32,642 (1,616 ) (5,794 ) Included in the statement of income 3,934 (180 ) (11,344 ) 23,054 (9,073 ) 6,391 At March 31, 2018 5,421 2,705 (52,536 ) 55,696 (10,689 ) 597 (i) The main temporary differences representing the balance of the deferred tax liability refers to the benefit granted by the Technological Innovation Law ( Lei do Bem Deferred tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable. Tax losses do not have expiration date. The estimated realization of deferred tax assets in non-current March 31, 2018 December 31, 2017 Assets Liability Assets Liability 2018 24,883 (24,509 ) 8,895 (20,728 ) 2019 7,974 (21,789 ) 4,040 (18,008 ) 2020 6,045 (6,235 ) 2,111 (2,454 ) 2021 982 (4,999 ) 982 (1,434 ) 2022 23,938 (5,694 ) 20,987 (185 ) 63,822 (63,226 ) 37,015 (42,809 ) (b) Reconciliation of the income tax and social contribution expense At March 31, 2018 and 2017, the PagSeguro Group computed income tax and social contribution under the taxable income method. The following is a reconciliation of the difference between the actual income tax and social contribution expense and the expense computed by applying the Brazilian federal statutory rate for the three-month periods ended March 31, 2018 and 2017: March 31, 2018 March 31, 2017 Profit for the period before taxes 163,000 82,177 Statutory rate 34% 34% Expected income tax and social contribution (55,420 ) (27,940 ) Income tax and social contribution effect on: Permanent additions (exclusions) Gifts and other non-deductible (364 ) (37 ) Research & development and technological innovation benefit—Law 11.196/05 (i) 13,553 5,551 No taxable earnings (ii) 30,916 — Other additions (3,228 ) 874 Income tax and social contribution expense (14,544 ) (21,552 ) Effective rate 9% 26% Income tax and social contribution—current (20,935 ) (19,085 ) Income tax and social contribution—deferred 6,391 (2,468 ) (i) Refers to the benefit granted by the Technological Innovation Law ( Lei do Bem (ii) Refers to the benefit granted by based on the local law of Cayman (The Companies Law of 1960), there is no taxation on the income earned in the companies based in this locality. As a result of the local tax regulations, all the exchange variantions from dolar to reais which generates income has no tax impacts for the PagSeguro Digital. | 18. Income tax and social contribution (a) Deferred income tax and social contribution: Tax losses Tax credit Technological Other Other Total Deferred tax At December 31, 2015 3,363 — (6,257 ) 3,363 — 469 Included in the statement of income (2,312 ) — (18,121 ) 284 — (20,149 ) Taken directly to equity — 3,606 — — — 3,606 At December 31, 2016 1,051 3,606 (24,378 ) 3,647 — (16,074 ) Included in the statement of income 436 (721 ) (16,814 ) 28,995 (1,616 ) 10,278 At December 31, 2017 1,487 2,885 (41,192 ) 32,642 (1,616 ) (5,794 ) (i) The main temporary differences representing the balance of the deferred tax liability refers to the benefit granted by the Technological Innovation Law ( Lei do Bem Deferred tax assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable. Tax losses do not have expiration date. The estimated realization of deferred tax assets in non-current December 31, 2017 2016 Asset Liability Asset Liability 2017 — — 940 (8,126 ) 2018 8,895 (20,728 ) 940 (8,126 ) 2019 4,040 (18,008 ) 940 (8,126 ) 2020 2,111 (2,454 ) 940 — 2021 982 (1,434 ) 4,545 — 2022 20,987 (185 ) — — 37,015 (42,809 ) 8,305 (24,378 ) (b) Reconciliation of the income tax and social contribution expense PagSeguro Group computed income tax and social contribution under the taxable income method. The following is a reconciliation of the difference between the actual income tax and social contribution expense and the expense computed by applying the federal statutory rate for the years ended December 31, 2017, 2016 and 2015: December, 31 2017 2016 2015 Profit for the period before taxes 683,504 155,359 40,315 Statutory rate 34% 34% 34% Expected income tax and social contribution (232,391 ) (52,822 ) (13,707 ) Income tax and social contribution effect on: Permanent additions (exclusions) Participation in the results of partners and managers (314 ) — (234 ) Gifts (375 ) — (149 ) R&D and technological innovation benefit – Law 11.196/05(i) 24,987 15,898 11,596 Interest on own capital — 8,860 — Tax Incentives – Law Rounet Art. 18 1,981 — — Other additions 1,402 485 (2,333 ) Income tax and social contribution expense (204,711 ) (27,580 ) (4,826 ) Income tax and social contribution – current (214,988 ) (7,431 ) (2,587 ) Income tax and social contribution – deferred 10,278 (20,149 ) (2,239 ) (i) Refers to the benefit granted by the Technological Innovation Law ( Lei do Bem |
Equity
Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Equity | 17. Equity a) Share capital At March 31, 2018, share capital is represented by 315,037,963 common shares of par value of US$0.000025 each. Share capital is composed of the following shares for the three-month periods ended March 31, 2018 and year ended December 31, 2017: December 31, 2017 shares outstanding 262,288,607 New shares were offered in PaSeguro Digital IPO process (i) 50,925,642 Shares issued related to the LTIP (i) 1,823,727 March 31, 2018 shares outstanding 315,037,976 (i) During the year 2018, shares of PagSeguro Digital were issued as a result of the initial public offering and long-term incentive plan, see details in note 1.1, and note 1.2 and 17 (c). Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the IPO gross proceeds. b) Capital reserve Capital reserve can only be used to increase capital, offset losses, redeem, reimburse or purchase shares or pay cumulative dividends on preferred shares. On January 26, 2018, as described in Note 1.1, issued 50,925,642 new shares at a price of US$ 21.50 per share were issued , representing net proceeds of US$1,046.0 million (or R$3,289.8 million). Refer to Note 1.1 for further details. c) Share based long term incentive plan (LTIP) Members of our management participate in the LTIP, which was established by UOL for its group companies on July 29, 2015 and has been adopted by PagSeguro Digital Ltd. Beneficiaries under the LTIP are selected by UOL’s LTIP Committee, which consists of the Company’s Chairman and two officers of UOL, and submitted to the Company’s Board of Directors. On January 26, 2018, beneficiaries under the LTIP were granted rights in the form of notional cash amounts without cash consideration. These rights vest in five equal annual installments starting on July 29, 2015, or the date of employeement, the earliest of both dates. Under the terms of the LTIP, upon completion of the IPO, the vested portion of each beneficiary’s LTIP rights was converted into Class A common shares of PagSeguro Digital at the IPO price (US$ 21.50) which is the assessed fair value at the grant date. As a result, the beneficiaries of the the LTIP exercised a total of 1,823,727 new Class A common shares upon completion of the IPO. The unvested portions of each beneficiary’s LTIP rights will be settled on each future annual vesting date in shares. The shares granted under the LTIP are subject to a one-year lock-up lock-up one-year lock-up. This arrangement is classified as equity-settled. For the three-moths period ended March 31, 2018, the Company recognized compensation expenses related to the LTIP in the total amount of R$155,160. The maximum number of common shares that can be delivered to beneficiaries under the LTIP may not exceed 3% of our issued share capital at any time. The total shares granted were 5,292,738, so the outstanding shares as of March 31, 2018 were 3,469,011. There was no forfeitures or expirations in the three months ended March 31, 2018. There are no shares, which are vested and exercisable as of March 31, 2018. d) Dividends At the Extraordinary General Shareholders Meeting held on September 29, 2017, PagSeguro Brazil’s shareholders approved the distribution of (i) R$142,795 of dividends related to the six-month e) Equity valuation adjustments The Company recognizes in this account the accumulated effect of the foreign exchange variation resulting from the conversion of the financial statements of the foreign subsidiary BCPS, represented by the accumulated amount of R$ 122 as of March 31, 2018 (R$ 55 as of December 31, 2017). This accumulated effect will be reverted to the result of the year as gain or loss only in case of disposal or write-off The Company also recognized in this account the difference between the book value and the amounts paid in the acquisitions of additional interests of the non-controlling | 19. Equity a) Share capital As at August 1, 2017, PagSeguro Brazil carried out a reverse share split of 2:1 shares which was approved and effective at the same date. As a consequence of the reverse share split, the share capital previously represented by 524,577,214 common shares, was reduced to 262,288,607 common shares. The reverse share split was accounted retrospectively. At December 31, 2017, all issued shares were fully paid. At December 31, 2017, the share capital, after retroactively reflecting the reverse share split, is represented by 262,288,607 common shares, with no par value. Share capital is composed of the following shares: December 31, 2015 shares outstanding (1) 220,808,044 Capitalization of control party related party payable (2) 13,305,204 Issuance of shares to UOL for transfer of Net+Phone and Boa Compra (3) 28,175,359 December 31, 2016 shares outstanding 262,288,607 December 31, 2017 shares outstanding 262,288,607 PagSeguro Brazil has reflected in its statement of changes in shareholders’ equity the issuance of shares during the periods that such shares were issued. For earnings per share purposes, PagSeguro Brazil has considered 262,288,607 as outstanding during each of the years ended December 31, 2017 and 2016, as shares in (1), (2) and (3) above were issued to UOL, the control party, as part of the recapitalization. (1) The shareholder UOL increased PagSeguro Brazil share capital on August 1, 2015 by the amount of R$ 329,961 (164,980,523 shares) and on December 30, 2015, by the amount of R$ 69,087 (34,543,522 shares), in the total amount of R$ 399,048, through the transfer of assets and liabilities related to payment operations which had been previously recorded in UOL, thus centralizing these activities in PagSeguro Brazil from thereon, resulting in total shares outstanding at December 31, 2015 of 220,808,044; (2) On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 26,610 (13,305,204 shares); (3) On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 36,654 (18,327,103 shares) in Net+Phone. After that, as described in Note 2, in July 2016, UOL transferred its investment in Boa Compra and Net+Phone to PagSeguro Brazil, as a capital contribution in the amount of R$ 56,351 (28,175,359 shares). Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. b) Legal reserve The legal reserve is established pursuant to the bylaws, at 5% of annual profit, up to the limit of 20% of paid-up c) Profit retention reserve PagSeguro Brazil management is proposing the establishment of a profit retention reserve totaling R$ 312,047, relating to the profit for the year ended December 31, 2017 to cover PagSeguro Brazil capital budget, to be approved by the shareholders following the issuance of the financial statements. d) Dividends Pursuant to the bylaws, 1% of the profit of PagSeguro Brazil will be distributed as dividends to the shareholders. PagSeguro Brazil bylaws establish that profit for the year and interest on own capital should be allocated, in full or in part, to the constitution of reserves. Presented below are the dividends distributed by each entity consolidated in these financial statements other than Net+Phone and BIVA which recorded accumulated losses in all periods presented: December 31, PagSeguro Brazil 2017 2016 2015 Net income for the year 478,781 115,727 37,010 Net investment — — (27,209 ) Net income 478,781 115,727 9,801 Transfer to legal reserve (5%) (23,939 ) (5,786 ) (490 ) Adjusted income for the year 454,842 109,941 9,311 Mandatory minimum dividends (1%) 4,548 — 93 Additional dividends proposed (ii) 234,255 — — Total dividends distributed 238,803 — 93 Interest on own capital (i) — 26,059 — Number of common shares 262,289 262,289 220,808 Dividends per share (in reais) 0.9105 0.0000 0.0004 Interest on own capital 0.0000 0.0994 0.0000 (i) The distribution of interest on own capital was approved in the shareholders’ meeting held on December 30, 2016. (ii) At the Extraordinary General Shareholders Meeting held on September 29, 2017, PagSeguro Brazil’s shareholders approved the distribution of (i) R$142,795 of dividends related to the six-month December 31, Boa Compra 2017 2016 2015 Net income for the year 5,715 4,858 1,625 Transfer to legal reserve (5%) * — — — Adjusted income for the year 5,715 4,858 1,625 Mandatory minimum dividends (1%) — — 16 Additional dividends proposed — — 65 Total dividends distributed — — 81 Number of common shares 5,381,317 5,381,317 198,557 Dividends per share (in reais) 0,0000 0,0000 0,4079 * Allocation to legal reserve was not required because the legal reserve reached the limit of 20% of share capital. |
Earnings per share
Earnings per share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Earnings per share | 18. Earnings per share a) Basic Basic earnings per share are calculated by dividing the profit attributable to shareholders of the PagSeguro Group by the weighted average number of common shares issued and outstanding during the three-month periods ended March 31, 2018 and 2017: March 31, March 31, Profit attributable to stockholders of the Company 148,378 60,624 Weighted average number of outstanding common shares (thousands) 297,454,853 262,288,607 Basic earnings per share—R$ 0.4988 0.2311 b) Diluted Diluted earnings per share is calculated by adjusting the weighted average number of common shares outstanding to assume the conversion of all potential common shares with dilutive effects. The Company has as category of potential common shares with dilutive effects only share-based long-term incentive plan. In this case, a calculation is done to determine the number of shares that could have been acquired at fair value. March 31, March 31, Profit used to determine diluted earnings per share 148,378 60,624 Weighted average number of outstanding common shares (thousands) 297,454,853 262,288,607 Number of shares under option 3,469,011 — Nmber of shares that would have been (2,339,734 ) — Weighted average number of common shares for diluted earnings per share (thousands) 298,584,130 262,288,607 Diluted earnings per share—R$ 0.4969 0.2311 | 20. Earnings per share Basic and diluted earnings per share are calculated by dividing the profit attributable to shareholders of PagSeguro Group by the weighted average number of common shares issued and outstanding during the year: December 31, 2017 2016 2015 Profit attributable to owners of the Company 478,781 127,186 35,084 Weighted average number of common shares 262,288,607 262,288,607 262,288,607 Basic and diluted earnings per share – in reais 1.8254 0.4849 0.1338 The denominator was retrospectively adjusted for the issuance of new shares as a result of the reorganization of companies under common control, as further described in Note 1, as well as to the reverse share split approved and executed on August 01, 2017 (See note 19). PagSeguro Group’s basic earnings per share equal its diluted earnings per share, since PagSeguro Group does not have any dilutive instruments. |
Total revenue and income
Total revenue and income | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Total revenue and income | 19. Total revenue and income March 31, March 31, Gross revenue from transaction activities and other services 514,074 217,252 Gross revenue from sales 129,678 166,221 Gross financial income (i) 288,419 145,743 Other financial income(ii) 116,360 836 Total gross revenue and income 1,048,531 530,052 Deductions from gross revenue from transactions activities and other services (iii) (71,226 ) (26,827 ) Deductions from gross revenue from sales (iv) (35,692 ) (47,783 ) Deductions from gross financial income (v) (13,581 ) (6,934 ) Total deductions from gross revenue and income (120,499 ) (81,544 ) Total revenue and income 928,032 448,508 (i) Includes (a) interest income from early payment of notes payable to third parties and (b) interest on note receivables due in installments. (ii) The increase in the period refers to foreign exchange gain on the currency conversion of the primary offer proceeds for the three-month period ended March 31, 2018 in the amount of R$89,866, and financial income on financial investments classified as cash and cash equivalents for the three-month period ended on March 31, 2018 in the amount of R$25,694 (March 31, 2017—R$360). (iii) Deductions consist of sales taxes. (iv) The deductions are composed by sales taxes and returns. (v) Deductions consist of taxes on financial income. | 21. Total revenue and income December 31, 2017 2016 2015 Gross revenue from transaction activities and other services 1,391,381 543,818 305,298 Gross revenue from sales 655,153 371,517 238,947 Gross financial income (i) 858,410 411,413 243,566 Other financial income 8,576 5,337 10,744 Total gross revenue and income 2,913,520 1,332,085 798,556 Deductions from gross revenue from transactions activities and other services (ii) (167,120 ) (63,793 ) (37,101 ) Deductions from gross revenue from sales (iii) (183,229 ) (110,923 ) (62,430 ) Deductions from gross financial income (iv) (39,786 ) (18,984 ) (24,104 ) Total deductions from gross revenue and income (390,135 ) (193,700 ) (123,635 ) Total revenue and income 2,523,385 1,138,385 674,920 (i) Includes (a) interest from early payment related to the discount of notes payable to third parties paid in advance and (b) interest on note receivables due in installments. (ii) Deductions consist of services taxes. (iii) The deductions are composed of sales taxes and returns. (iv) Deductions consist of taxes on financial income. |
Expenses by nature
Expenses by nature | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Expenses by nature | 20. Expenses by nature March 31, March 31, Transactions costs (247,161 ) (104,861 ) Cost of goods sold (99,444 ) (100,402 ) Marketing and advertising (90,939 ) (69,769 ) Personnel expenses (i) (242,353 ) (20,311 ) Financial expenses (ii) (16,524 ) (19,218 ) Chargebacks (iii) (14,438 ) (17,434 ) Depreciation and amortization (iv) (18,007 ) (10,762 ) Other (36,167 ) (23,574 ) (765,033 ) (366,331 ) Classified as: Cost of services (328,806 ) (125,041 ) Cost of sales (115,956 ) (117,852 ) Selling expenses (83,614 ) (71,106 ) Administrative expenses (219,024 ) (32,520 ) Financial expenses (16,524 ) (19,218 ) Other expenses, net (1,109 ) (594 ) (765,033 ) (366,331 ) (i) The increase refers to compensation expenses related to sthe LTIP for the three-month period ended March 31, 2018 in the amount of R$ 130,303 and the respective payroll taxes in the amount of R$ 80,270. (ii) Our financial expenses include (a) Financial Operations Tax (IOF) related to the remittance of cash from Cayman to Brazil in the amount of R$ 13,135 for the three-month period ended March 31,2018 (March 31, 2017—R$0), (b) charges to obtain early payment of receivables owed to us by card issuers to finance our early payment of receivables feature in the amount of R$ 1,465 for the three-month period ended March 31,2018 (March 31, 2017—R$16,382). (iii) Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 22 (ii). (iv) The depreciation and amortization amounts incurred in the period are segregated between costs and expenses as presented below: March 31, March 31, Depreciation Cost of sales and services (511 ) (225 ) Selling expenses (1 ) (3 ) Administrative expenses (288 ) (146 ) (800 ) (374 ) Amortization Cost of sales and services (18,800 ) (11,234 ) Administrative expenses (140 ) (30 ) (18,940 ) (11,264 ) PIS and COFINS credits (*) 1,733 876 Depreciation and amortization expense, net (18,007 ) (10,762 ) (*) PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. | 22. Expenses by nature December 31, 2017 2016 2015 Transactions costs (661,067 ) (283,630 ) (145,969 ) Cost of goods sold (451,635 ) (233,419 ) (178,608 ) Marketing and advertising (275,394 ) (204,857 ) (153,467 ) Personnel expenses (105,794 ) (63,280 ) (48,130 ) Financial expenses (i) (104,544 ) (68,301 ) (29,696 ) Chargebacks (ii) (47,854 ) (31,557 ) (27,490 ) Depreciation and amortization (iii) (51,571 ) (31,246 ) (18,580 ) Other (142,022 ) (66,737 ) (32,665 ) (1,839,881 ) (983,027 ) (634,606 ) Classified as: Cost of services (829,661 ) (357,811 ) (191,710 ) Cost of sales (494,719 ) (265,856 ) (190,773 ) Selling expenses (245,759 ) (199,937 ) (162,642 ) Administrative expenses (153,177 ) (84,461 ) (61,129 ) Financial expenses (104,544 ) (68,301 ) (29,696 ) Other (expenses) income, net (12,021 ) (6,660 ) 1,345 (1,839,881 ) (983,027 ) (634,606 ) (i) Our financial expenses include (a) the charges we incur to obtain early payment of receivables owed to us by card issuers and acquirers in order to finance our early payment of receivables feature for merchants, (b) interest expense on our other borrowings and (c) the cost of swaps relating to our foreign currency borrowings. (ii) Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 24 (iii). (iii) The depreciation and amortization amounts incurred in the period are segregated between costs and expenses as presented below: 2017 2016 2015 Depreciation Cost of sales and services (1,088 ) (895 ) (904 ) Selling expenses (10 ) (11 ) (27 ) Administrative expenses (714 ) (371 ) (393 ) (1,812 ) (1,277 ) (1,324 ) Amortization Cost of sales and services (54,151 ) (32,846 ) (18,377 ) Administrative expenses (375 ) (59 ) (333 ) (54,526 ) (32,905 ) (18,710 ) PIS and COFINS credits (*) 4,767 2,936 1,101 Depreciation and amortization expense, net (51,571 ) (31,246 ) (18,933 ) (*) PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses, when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. |
Financial instruments by catego
Financial instruments by category | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Financial instruments by category | 21. Financial instruments by category PagSeguro Group estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies for each situation. The interpretation of market data, as regards the choice of methodologies, requires considerable judgment and the establishment of estimates to reach an amount considered appropriate to each situation. Therefore, the estimates presented may not necessarily indicate the amounts that could be obtained in the current market. The use of different hypotheses to calculate market value or fair value may have a material impact on the amounts obtained. The assets and liabilities presented in this note were selected based on their relevance. PagSeguro Group believes that the financial instruments recognized in these consolidated interim financial statements at their carrying amount are substantially similar to their fair value. However, since they do not have an active market, variations could occur in the event the PagSeguro Group were to decide to settle or realize them in advance. PagSeguro Group classifies its financial instruments into the following categories: March 31, December 31, Financial assets Measured at fair value through profit or loss: Financial investments — 210,103 Amortized cost: Cash and cash equivalents 2,545,389 66,767 Note receivables 4,883,321 3,522,349 Receivables from related parties 909 124,723 Other receivables 18,834 27,956 7,448,453 3,951,898 March 31, December 31, Financial liabilities Amortized cost: Payables to third parties 2,975,297 3,080,569 Trade payables 119,156 92,444 Trade payables to related parties 44,973 39,101 Other payables 26,652 15,872 3,166,077 3,227,986 | 23. Financial instruments by category PagSeguro Group estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies for each situation. The interpretation of market data, as regards the choice of methodologies, requires considerable judgment and the establishment of estimates to reach an amount considered appropriate to each situation. Therefore, the estimates presented may not necessarily indicate the amounts that could be obtained in the current market. The use of different hypotheses to calculate market value or fair value may have a material impact on the amounts obtained. The assets and liabilities presented in this note were selected based on their relevance. PagSeguro Group believes that the financial instruments recognized in these consolidated financial statements at their carrying amount are substantially similar to their fair value. However, since they do not have an active market, variations could occur in the event PagSeguro Group were to decide to settle or realize them in advance. PagSeguro Group classifies its financial instruments into the following categories: December 31, 2017 2016 Financial assets Measured at fair value through profit or loss: Financial investments 210,103 131,239 Loans and receivables: Cash and cash equivalents 66,767 79,969 Note receivables 3,522,349 1,715,514 Receivables from related parties 124,723 300,809 Other receivables 27,956 4,495 3,951,898 2,232,026 December 31, 2017 2016 Financial liabilities Measured at fair value through profit or loss: Derivative financial instruments — 6,613 — 6,613 Amortized cost: Payables to third parties 3,080,569 1,304,031 Trade payables 92,444 61,719 Trade payables to related parties 39,101 76,249 Borrowings — 205,204 Dividends payable and interest on own capital — 22,243 Other payables 15,872 15,244 3,227,986 1,684,690 |
Financial risk management
Financial risk management | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Financial risk management | 22. Financial risk management PagSeguro Group activities expose it to a variety of financial risks: market risk (including currency risk and cash flow or fair value interest rate risk), fraud risk (chargebacks), credit risk and liquidity risk. The PagSeguro Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the PagSeguro Group’s financial performance. PagSeguro Group uses derivative financial instruments to hedge certain risk exposures, when applicable. Among the main market risk factors that may affect the PagSeguro Group’s business are the following ones: (i) Foreign exchange risk Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency. As of March 31, 2018 and December 31, 2017, the PagSeguro Group is not materially exposed to this foreign exchange risk. (ii) Fraud Risk (chargeback) The PagSeguro Group’s sales transactions are susceptible to potentially fraudulent or improper sales and it uses two processes to control the fraud risk as such: The first one consists of monitoring, on a real time basis, the transactions carried out with credit and debit cards and payment slips, through an anti-fraud system. This process approves or rejects suspicious transactions at the time of the authorization, based on statistical models that are revised on a periodic basis. The second process detects chargebacks and disputes not identified by the first process. This is a complementary process and increases the PagSeguro Group’s ability to avoid new frauds. (iii) Credit risk Credit risk is managed on a group basis and are limited to the possibility of default by: (a) the card issuers, which have the obligation of transferring to the credit and debit card labels the fees charged for the transactions carried out by their card holders, and/or (b) the acquirers, which are used by PagSeguro Group to approve transactions with the issuers. In order to mitigate this risk, the PagSeguro Group has established a Credit and Liquidity Risk Committee, whose responsibility is to assess the level of risk of each of the card issuers served by the PagSeguro Group, classifying them into three groups: (i) card issuers with a low level of risk, with credit ratings assigned by FITCH, S&P and Moody’s, which do not require additional monitoring; (ii) card issuers with a medium level of risk, which are also monitored in accordance with the Basel and property, plant and equipment ratios; and (iii) card issuers with a high level of risk, which are assessed by the Committee at monthly meetings. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance (iv) Liquidity risk PagSeguro Group manages liquidity risk by maintaining reserves, bank and credit lines for the obtaining borrowings, when deemed appropriate. PagSeguro Group continuously monitors actual and projected cash flows, and matches the maturity profile of its financial assets and liabilities in order to ensure the PagSeguro Group has sufficient funds to honor its obligations to third parties and meet its operational needs. PagSeguro Group invests cash surplus in interest bearings financial investments, choosing instruments with appropriate maturity or sufficient liquidity to provide adequate margin as determined by the forecasts. At March 31, 2018, the PagSeguro Group held cash and cash equivalents of R$ 2,545,389 (R$ 66,767 at December 31, 2017). The table below shows the PagSeguro Group’s non-derivative Due within Due within 31 Due within 121 Due within 181 Due to 361 At March 31, 2018 Payables to third parties 2,759,059 150,703 35,515 30,020 — Trade payables 103,868 8,980 1,894 2,055 2,358 Trade payables to related parties — 44,973 — — — Other payables — — — 23,028 3,624 At December 31, 2017 Payables to third parties 2,890,080 133,070 31,081 26,338 — Trade payables 81,152 6,032 1,740 1,083 2,437 Trade payables to related parties — — — 39,101 — Other payables — — — 15,872 — | 24. Financial risk management PagSeguro Group activities expose it to a variety of financial risks: market risk (including currency risk and cash flow or fair value interest rate risk), fraud risk (chargebacks), credit risk and liquidity risk. PagSeguro Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on PagSeguro Group’s financial performance. PagSeguro Group uses derivative financial instruments to hedge certain risk exposures. Among the main market risk factors that may affect PagSeguro Group’s business are the following ones: (i) Foreign exchange risk Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency. As of December 31, 2016, PagSeguro Group had borrowings denominated in foreign currency which are linked to derivatives (swaps). In accordance with management’s policies, derivative transactions are allowed, as long as they are hedged by a swap entered into with prime financial institutions, for the sole purpose of hedging against risks of fluctuation in exchange or interest rates. The amounts of derivative financial instruments are summarized as follows: December 31, 2016 Maturity Notional value Fair value Foreign exchange and interest January 2017 129,480 132,761 Interbank Deposit Certificate (CDI) January 2017 (129,480 ) (138,036 ) — (5,275 ) Foreign exchange and interest March 2017 70,000 71,537 Interbank Deposit Certificate (CDI) March 2017 (70,000 ) (72,875 ) — (1,338 ) Total — (6,613 ) (ii) Cash flow and fair value interest rate risk This risk arises from the derivative financial instruments (swap) that replaces the risk of the exchange and interest rate variation associated with borrowings by the CDI. In this case, the swap’s liability leg is the CDI, exposing PagSeguro Group to the variation of this interest rate. For better risk management, PagSeguro Group chooses to enter into borrowings and derivatives with short-term maturities, which enable a better management of the rates. As of December 31, 2017, the Group is not exposed to this risk. (iii) Fraud Risk (chargeback) Sales transactions which are intermediated by the PagSeguro Group are susceptible to potentially fraudulent or improper and PagSeguro Group uses two processes to control the fraud risk as such: The first one consists of monitoring, on a real time basis, the transactions carried out with credit and debit cards and payment slips, through an anti-fraud system. This process approves or rejects suspicious transactions at the time of the authorization, based on statistical models that are revised on a periodic basis. The second process detects chargebacks and disputes not identified by the first process. This is a complementary process and increases PagSeguro Group’s ability to avoid new frauds. (iv) Credit risk Credit risk is managed on a group basis and are limited to the possibility of default by: (a) the card issuers, which have the obligation of transferring to the credit and debit card labels the fees charged for the transactions carried out by their card holders, and/or (b) the acquirers, which are used by PagSeguro Group to approve transactions with the issuers. In order to mitigate this risk, PagSeguro Group has established a Credit and Liquidity Risk Committee, whose responsibility is to assess the level of risk of each of the card issuers served by PagSeguro Group, classifying them into three groups: (i) card issuers with a low level of risk, with credit ratings assigned by FITCH, S&P and Moody’s , which do not require additional monitoring; (ii) card issuers with a medium level of risk, which are also monitored in accordance with the Basel and property, plant and equipment ratios; and (iii) card issuers with a high level of risk, which are assessed by the Committee at monthly meetings. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance (v) Liquidity risk PagSeguro Group manages liquidity risk by maintaining reserves, bank and credit lines for the obtaining borrowings, when deemed appropriate. PagSeguro Group continuously monitors actual and projected cash flows, and matches the maturity profile of its financial assets and liabilities in order to ensure PagSeguro Group has sufficient funds to honor its obligations to third parties and meet its operational needs. PagSeguro Group invests cash surplus in interest bearings financial investments, choosing instruments with appropriate maturity or sufficient liquidity to provide adequate margin as determined by the forecasts. At December 31, 2017, PagSeguro Group held cash and cash equivalents of R$ 66,767 (R$ 79,969 at December 31, 2016). The table below shows PagSeguro Group’s non-derivative Due within Due within Due within Due within Due to 361 At December 31, 2017 Payables to third parties 2,890,080 133,070 31,081 26,338 — Trade payables 81,152 6,032 1,740 1,083 2,437 Trade payables to related parties — — — 39,101 — Other payables — — — 15,872 At December 31, 2016 Payables to third parties 1,228,922 60,396 10,152 4,561 — Trade payables 54,125 4,827 63 2,704 — Trade payables to related parties — — — 76,249 — Borrowings — 208,374 — — — Dividends payable and interest on own capital — — — 22,243 — Other payables — — — 15,244 — |
Capital management
Capital management | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Capital management | 23. Capital management PagSeguro Group monitors capital on the basis of the gearing ratio which corresponds to net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current During the three-month period ended March 31, 2018, the PagSeguro Group’s strategy was to maintain a gearing ratio of up to 20%. PagSeguro Group had no loans at March 31, 2018, and December 31,2017 therefore no gearing ratio is presented. | 25. Capital management PagSeguro Group monitors capital on the basis of the gearing ratio which corresponds to net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current During 2016, PagSeguro Group’s strategy was to maintain a gearing ratio of up to 20%. The gearing ratio at December 31, 2016 was as follows: December 31, 2016 Borrowings 205,204 (-) Cash and cash equivalents (79,969 ) Net debt 125,235 Total equity 626,862 Total capital 752,097 Gearing ratio 16.65% PagSeguro Group had no borrowings as of December 31, 2017. |
Fair value measurement
Fair value measurement | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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Fair value measurement | 24. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. A three-level hierarchy is used to measure fair value, as shown below: ◾ Level 1—Quoted prices (unadjusted) in active markets for identical assets and liabilities. ◾ Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). ◾ Level 3—Inputs for the assets and liabilities that are not based on observable market data (that is, unobservable inputs). The financial investments whose fair value adjustments is classified as Level 1. There were no transfers between Levels 1, 2 and 3 during the three-month period ended March 31, 2018. | 26. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. A three-level hierarchy is used to measure fair value, as shown below: ◾ Level 1 – Quoted prices (unadjusted) in active markets for identical assets and liabilities. ◾ Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). ◾ Level 3 – Inputs for the assets and liabilities that are not based on observable market data (that is, unobservable inputs). At December 31, 2017 and 2016, PagSeguro Group had financial investments whose fair value adjustments is classified as Level 1. PagSeguro Group did not have any other assets measured at fair value in 2017 and 2016. At December 31, 2016, derivative liabilities measured at fair value are classified as Level 2. There were no transfers between Levels 1, 2 and 3 during the year. |
Critical accounting estimates a
Critical accounting estimates and judgments | 12 Months Ended |
Dec. 31, 2017 | |
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Critical accounting estimates and judgments | 3. Critical accounting estimates and judgments Accounting estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Based on assumptions, PagSeguro Group makes estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below: (a) Estimated useful life of intangible assets PagSeguro Group uses an estimated useful life to calculate and record the amortization applied to its intangible assets which may differ from the actual term over which the intangible assets are expected to generate benefits for PagSeguro Group. The amortization of software usage rights is defined based on the effective period of the license contracted. The amortization of internally developed software is defined based on the period over which the software will generate future economic benefits. (b) Deferred income tax and social contribution PagSeguro Group recognizes deferred income tax and social contribution based on future taxable profit estimates for the next ten years. These projections are periodically reviewed and approved by management. (c) Provision for contingencies PagSeguro Group recognizes provisions for civil and labor suits. The assessment of probability of loss includes assessing the available evidence and jurisprudence, the hierarchy of laws and most recent court decisions. Provisions are reviewed and adjusted to take into account changes in circumstances such as the applicable limitation period, findings of tax inspections and additional exposures identified based on new issues or decisions of courts. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
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Borrowings | 14. Borrowings Type Interest rate Average Maturity December 31, December 31, Borrowings in foreign currency Bank Borrowings Fixed interest rates 2,36365 % January 2017 — 133,874 Bank Borrowings Fixed interest rates 2,86450 % March 2017 — 71,330 — 205,204 In July 2016, PagSeguro Brazil obtained a borrowing denominated in foreign currency in the amount of US$ 40,000 thousand, equivalent to approximately R$ 129,390, maturing in January 2017. In addition, in September 2016, PagSeguro Brazil obtained another borrowing in foreign currency in the amount of US$ 21,766 thousand, equivalent to approximately R$ 70,000, maturing in March 2017. At the same time, PagSeguro Brazil contracted derivatives (Swaps) for both borrowings, for the specific purpose of protecting them against exchange rate fluctuations. The derivative rate corresponds to 110% of the average daily interest rate of the Interbank Deposits (DIs). Interest on borrowings were paid at the maturities of the transactions, together with the total settlement of the financial instruments during the year ended December 31, 2017. The borrowing agreements did not contain any collateral clauses or covenants to be complied with by PagSeguro Brazil. |
Other disclosures on cash flows
Other disclosures on cash flows | 12 Months Ended |
Dec. 31, 2017 | |
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Other disclosures on cash flows | 27. Other disclosures on cash flows Non-cash 2017 2016 2015 Transfer of assets and liabilities — 56,351 399,048 Capitalization of related party transactions — 26,610 — The issuance of shares described in Note 18 refers to non-cash |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2017 | |
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Subsequent events | 28. Subsequent events (i) IPO – Initial Public Offering On January 26, 2018, PagSeguro Digital concluded its global offering of 121,193,388 Class A common shares, of which 50,925,642 were new shares offered by PagSeguro Digital and 70,267,746 shares were offered by the controlling shareholder UOL. The initial offer price was US$21,50 per share. The shares are traded on the New York Stock Exchange (NYSE) since January 24, 2018, under the symbol “PAGS”. The proceeds received from the shares offered by PagSeguro Digital, excluding charges and underwriting fees, totaled approximately US$1,1 billion. Management expects that the proceeds received by PagSeguro Digital will be used for working capital purposes, future acquisitions and investments in technologies and products complementary to the business. (ii) Long-Term Incentive Plan—LTIP Members of the Company’s management participate in a Long-Term Incentive Plan (“LTIP”), which was established by UOL for its group companies on July 29, 2015 and has been adopted by PagSeguro Digital. Beneficiaries under the LTIP were granted rights in the form of notional cash amounts without cash consideration. These rights vest in five equal annual installments starting one year after the beneficiary’s grant date, the earliest of which was on July 29, 2015. Under the terms of the LTIP, upon the Company’s IPO the vested portion of each beneficiary’s LTIP rights may, at the discretion of our Board of Directors, either be converted into Class A common shares of the Company at the IPO price or paid to the beneficiary in cash. The conversion rate applicable for any issuance of Class A common shares to be issued in respect of vested LTIP rights may be adjusted, pursuant to each beneficiary’s individual LTIP agreement, if our market capitalization at the date the Company’s IPO is lower or, in some cases, higher than the reference market capitalization set in the LTIP. As a result, upon the Company’s IPO, the individual LTIP agreements of certain beneficiaries were adjusted to determine conversion at the IPO of our Class A common shares. The Company’s Board of Directors converted all such vested portions of the beneficiaries’ LTIP rights into Class A common shares of the Company at the IPO price, without cash consideration, upon completion the IPO, instead of paying such vested portions in cash. As a result, members of the Company’s management who are beneficiaries under the LTIP as a group received a total of 1,821,043 new Class A common shares upon completion the IPO. The shares issued under the LTIP are subject to a one-year lock-up lock-up one-year lock-up. (iii) Acquired an additional BIVA On January 15,2018, PagSeguro Brazil acquired an additional interest of 15.82% in BIVA, bringing our total interest to 75.13% of BIVA’s total share capital. The total amount paid for this acquisition was R$4,600. |
Presentation and preparation 35
Presentation and preparation of the consolidated financial statements and significant accounting policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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2.1 Preparation and presentation of the consolidated financial statements | 2.1 Basis of preparation of consolidated interim financial information This unaudited consolidated interim financial report for the three-month period ended March 31, 2018 has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standard Board. This unaudited condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2017 (the “Annual Financial Statements”). The accounting policies and critical accounting estimates and judgments adopted are consistent with those of the previous financial year and corresponding interim reporting period. | 2.1 Preparation and presentation of the consolidated financial statements These consolidated financial statements include the financial statements of PagSeguro Digital and its subsidiaries, which are all under common control and were prepared exclusively for the purpose of presenting, on a comparative basis, operations in a consolidated manner, for the years ended December 31, 2017, 2016 and 2015. The consolidated financial statements include the carve-out From January 1, 2015 through July 31, 2015, when the PagSeguro Brazil financial statements were prepared on a carve out basis, certain assets and liabilities, revenues, costs and expenses directly related to the payment operations were controlled separately. Additionally, other indirect corporate expenses recorded at UOL were allocated to these carve-out These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements are presented in thousands of Brazilian reais, unless otherwise indicated, which is the PagSeguro Group’s functional currency. The consolidated financial statements have been prepared under the historical cost convention, which is modified for certain financial assets and liabilities (including derivative instruments) measured at fair value. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying PagSeguro Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. PagSeguro Group has adopted all pronouncements and interpretations issued by IASB that were in effect at December 31, 2017. These consolidated financial statements for the years ended December 31, 2017, 2016 and 2015 were approved by PagSeguro Group’s Board of Directors at a meeting held on March 07, 2018. |
2.2 New accounting pronoucements | 2.2 New accounting pronoucements Effective for periods beginning on or after January 1, 2018 The following new standards have been issued by IASB and are effective for the three-month ended March 31, 2018: IFRS 9—“Financial Instruments”: addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014 and is effective as from January 1, 2018. It replaces the guidance included in IAS 39 related to the classification and measurement of financial instruments. The main amendments brought by IFRS 9 are: (i) new criteria for the classification of financial assets; (ii) new impairment model for financial assets, which is based on expected losses, replacing the current model of incurred losses; and (iii) relaxation of the requirements for the adoption of hedge accounting. Management evaluated the new guidelines introduced by IFRS 9 and did not identify any material impact for the PagSeguro Group. IFRS 15—“Revenue from Contracts with Customers”: this new standard introduces the principles to be applied by an entity to determine the measurement and recognition of revenue. This standard is based on the principle that revenue is recognized when control of a good or service is transferred to a customer, and, therefore, the principle of control replace the principle of risks and benefits. This standard replace IAS 11—“Construction Contracts”, IAS 18—“Revenues” and related interpretations, and becomes effective on January 1, 2018. Management evaluated the new guidelines introduced by IFRS 15 and did not identify any material impact for the PagSeguro Group. Therefore, changes to standards or new pronouncements applicable to the years presented in the consolidated financial statements were not relevant to PagSeguro Group, for retrospective disclosure and disclosure of amounts. Effective for periods beginning on or after January 1, 2019 IFRS 16—“Leases”—this new standard requires lessees to recognize the liability of the future payments and the right of use of the leased asset for virtually all lease contracts, including operating leases. Certain short-term and low-value There are no other IFRS or IFRIC interpretations not yet effective that could have a material impact on PagSeguro Group financial statements. | |
2.2 Consolidation | 2.2 Consolidation Consolidated financial statements PagSeguro Group consolidates all entities over which it has control, when it is exposed or has rights to variable returns on its interest in the investee, and has the ability to govern the investee’s relevant activities. The subsidiaries included in the consolidation are described in Note 4. Subsidiaries Subsidiaries are all entities over which PagSeguro Digital has control. Subsidiaries are fully consolidated from the date on which control is transferred to PagSeguro Digital. They are deconsolidated from the date that control ceases. Identifiable assets acquired and liabilities and contingent liabilities assumed for the acquisition of subsidiaries in a business combination are measured initially at their fair values at the acquisition date.PagSeguro Group recognizes any non-controlling non-controlling Non-controlling Transactions, balances and unrealized gains on intercompany transactions are eliminated. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. The accounting policies of the subsidiaries are changed, where necessary, to ensure consistency with the policies adopted by PagSeguro Group. | |
2.3 Foreign currency translation | 2.3 Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or the dates of valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation at year-end | |
2.4 Cash and cash equivalents | 2.4 Cash and cash equivalents Cash and cash equivalents are held for the purpose of meeting short-term cash needs and not for investment or any other purposes. PagSeguro Group classifies as cash equivalents a financial investment that can be immediately converted into a known amount of cash and is subject to immaterial risk of change in value. PagSeguro Group classifies financial instruments with original maturities of three months or less as cash equivalents. | |
2.5 Financial instruments - initial recognition and subsequent measurement | 2.5 Financial instruments – initial recognition and subsequent measurement i) Financial assets Initial recognition and measurement Financial assets are classified in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity, available-for-sale held-to-maturity available-for-sale. Derivatives are also categorized as measured at fair value through profit or loss unless they are designated as hedges. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the statement of income. Financial assets include cash and cash equivalents, current financial investments, note receivables, receivables from related parties, and other receivables. Subsequent measurement The subsequent measurement of financial assets depends on their classification, which may be as follows: Loans and receivables Loans and receivables are carried at amortized cost using the effective interest rate method. Financial assets at fair value through profit or loss This category includes derivative financial instruments which do not meet the hedge accounting criteria defined by IAS 39. Financial assets at fair value through profit or loss are presented at fair value in the balance sheet, with the corresponding gains or losses recognized in the statement of income. PagSeguro Group values its financial assets at fair value through profit or loss, as it intends to trade them within a short period of time. Reclassification to loans and receivables, available-for-sale held-to-maturity Derecognition A financial asset or, where applicable, a part of a financial asset or part of a group of similar financial assets, is derecognized when: • The rights to receive cash flows from the asset expire; • PagSeguro Group transfers its rights to receive cash flows from the asset, or assumes an obligation to pay the received cash flows in full to a third party under a “pass-through” arrangement; and (a) transfers virtually all the risks and benefits of the asset, or (b) neither transfers nor retains virtually all the risks and benefits of the asset, but transfers control of the asset. When PagSeguro Group has transferred its rights to receive cash flows from an asset and has not transferred or retained substantially all the risks and benefits of the asset, this asset is recognized to the extent of PagSeguro Group’s continuing involvement in the asset. In such case, PagSeguro Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that PagSeguro Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of the consideration that PagSeguro Group may be required to repay. ii) Impairment of financial assets PagSeguro Group assesses, at the balance sheet date, if there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indication that the debtors are experiencing significant financial difficulty, probability that the debtor will enter bankruptcy or other financial reorganization, default or delinquency in interest or principal payments, and indication of a substantial decline in the estimated future cash flows, such as changes in maturity dates or economic conditions related to default. iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified as financial liabilities at fair value through profit or loss, other financial liabilities, or as derivatives designated used for hedge, when appropriate. PagSeguro Group determines the classification of its financial liabilities at initial recognition. Financial liabilities are initially recognized at fair value and, in the case of other financial liabilities, plus directly related transaction costs. Financial liabilities include payables to third parties, payables to third parties of related parties, trade payables, trade payables of related parties, borrowings, and other payables. Subsequent measurement The subsequent measurement of financial liabilities depends on their classification, which may be as follows: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include held-for-trading Financial liabilities are classified as held-for-trading Gains and losses on held-for-trading Other financial liabilities After initial recognition, interest-bearing borrowings are subsequently measured at amortized cost, using the effective interest rate method, and are recognized in the statement of income. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in “Financial expenses” in the statement of income. Derecognition A financial liability is derecognized when the obligation is discharged, canceled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statement of income. iv) Financial instruments – offsetting Financial assets and liabilities are presented net in the balance sheet if, and only if, there is an existing and enforceable legal right to offset the amounts recognized and an intention to offset or to realize the asset and settle the liability simultaneously. v) Fair value of financial instruments The fair value of financial instruments actively traded in organized markets is determined based on quoted market prices at the balance sheet date, without a deduction of transaction costs. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These techniques include the use of recent arm’s length transactions, reference to other similar instruments, discounted cash flow analysis or other valuation methods. | |
2.6 Note receivables | 2.6. Note receivables The amounts are mainly related to receivables from credit/debit card issuers and acquirers originated from transactions through PagSeguro Group platform, and from the sales of credit/debit card readers. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current The provision for impairment of note receivables, however based on PagSeguro Brazil’s risk assessment the need of provision is immaterial because the note receivables are mainly comprised of transactions approved by large financial institutions that have a low level risk based on ratings received from major credit rating agencies. Additionally, these financial institutions are the legal obligors to the note receivables. See Note 24. Note receivables are initially recorded at the present value of expected future cash flows. The note receivables from installment transactions is an estimate based on the present value of the future cash flows, using average appropriate terms and rates, which are in accordance with the terms of these transactions. PagSeguro Group incurs financial expenses when an election to receive early payment of note receivables from financial institutions is made. The finance expense is recognized at the time the financial institution agrees to liquidate a note receivable due in installments on a prepaid basis, and it is recorded as Financial expenses in the statement of income. | |
2.7 Inventories | 2.7 Inventories Inventories consist of debit and credit card readers. Inventories are stated at the lower of cost and net realizable value. The cost method used for inventories is the weighted moving average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. | |
2.8 Property and equipment | 2.8 Property and equipment Property and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items and may also include finance costs related to the acquisition of qualifying assets. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with these costs will flow to PagSeguro Group and they can be measured reliably. The carrying amount of replaced items or parts is derecognized. All other repairs and maintenance expenses are charged to the statement of income during the year in which they are incurred. The assets’ residual values and useful lives are reviewed at the end of each reporting period, and adjusted on a prospective basis if appropriate. Depreciation is calculated under the straight-line method, based on the estimated useful lives as shown below (in years): December 31, 2017 2016 Data processing equipment 2,5 to 5 2,5 to 5 Furniture and fittings 10 10 Facilities 10 10 Leasehold improvements 10 10 Machinery and equipment 5 to 10 10 Vehicles 5 — An asset’s carrying amount is immediately written down to its recoverable amount when the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amounts, and are recognized within “Other (expenses) income, net” in the statement of income. | |
2.9 Intangible assets | 2.9 Intangible assets Software licenses are capitalized on the basis of the costs incurred to acquire the software and bring it to use. These costs are amortized on the straight-line basis over the estimated useful life of the software (three to five years). Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by PagSeguro Group are recognized as intangible assets. Directly attributable costs, which are capitalized as part of the software product, include costs incurred with employees and expenses allocated to software development. Borrowing costs incurred during the software development period may also be capitalized. Other development expenditures that do not meet the capitalization criteria are expensed as incurred. Development costs previously recorded as an expense are not recognized as an asset in a subsequent period, and are presented within “Advisory and consulting services”. Computer software development costs recognized as assets are amortized over the estimated useful life, which does not exceed five years from the date that technological feasibility is met. | |
2.10 Impairment of non-financial assets | 2.10 Impairment of non-financial Non-financial non-financial When estimating the value in use of an asset, the future estimated cash flows are discounted to their present value using a pre-tax PagSeguro Group annually assesses whether there is any indication that a previously recognized impairment loss no longer exists or has decreased. If there is such indication, the asset’s recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the asset’s carrying amount does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognized for the asset in prior years. | |
2.11 Payables to third parties | 2.11 Payables to third parties Payables to third parties refer to funds payable and amounts due to merchants that use PagSeguro Brazil platform. PagSeguro Group recognizes the fair value of the transaction which is the transaction amount, net of the transaction cost. | |
2.12 Provisions | 2.12 Provisions Provisions are recognized when PagSeguro Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be estimated reliably. When PagSeguro Group expects the value of a provision to be reimbursed, in whole or in part, for example, due to an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. Expenses associated with any provisions are presented in the statement of income, net of any reimbursements. PagSeguro Group is a party to legal and administrative proceedings. Provisions are established for all contingencies referring to lawsuits for which it is probable that an outflow of funds will be necessary to settle the contingency/obligation and a reasonable estimate can be made. The assessment of the likelihood of loss includes the evaluation of available evidence, the hierarchy of laws, available case law, recent court decisions and their importance in the legal system, as well as the opinion of outside legal counsel. The provisions are reviewed and adjusted to reflect changes in circumstances. | |
2.13 Revenue recognition | 2.13 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of services and goods in the ordinary course of PagSeguro Group’s activities. Revenue is presented net of sales and excise taxes and returns. PagSeguro Group recognizes revenue when: (i) the amount of revenue can be reliably measured; (ii) it is probable that future economic benefits will flow to PagSeguro Group; (iii) recognized when control of a good or service is transferred to a customer; and (iv) specific criteria have been met for PagSeguro Group’s activities. PagSeguro Group’s revenue substantially comprises: • Revenue from transaction activities and other services: Revenue from fees charged for intermediation of electronic payments, and other services such as prepaid cards, which are recognized at the time the purchase is approved by the financial institution. Revenues from fees charged for intermediation of electronic payments are recognized on a gross basis and related transaction costs are recognized as Cost of sales and services, since PagSeguro Group is considered to be the principal in the intermediation transaction. PagSeguro Group has primary responsibility for providing the services to customers and also directly sets the prices for such services, independently from the related transaction costs agreed between PagSeguro Group and the card schemes or card issuers; and • Revenue from sales: Revenue from sales of credit and debit card readers and similar items, which is recognized at the time the risks and benefits are transferred and when control of a good is transferred to the customers, i.e., on delivery of the equipment. Under Brazilian consumer law, clients have seven days after ordering Point of Sale equipment (“POS devices”) in which to cancel the purchase. Returns of devices are accounted for as deductions from revenue from sales at the time the equipment is returned. • Financial income: is recognized as a result of the discount rate charged on the early payments of Payables to third parties (merchants). The income is recognized at the time the merchant agrees to receive a sale in installments on an early payment basis, and it is recorded as Financial income in the statement of income. | |
2.14 Distribution of dividends and interest on own capital | 2.14 Distribution of dividends and interest on own capital Distributions of dividends and interest on own capital to PagSeguro Brazil’s shareholders are recognized as a liability in the financial statements at year-end, The tax benefit of interest on own capital is recognized in the statement of income. | |
2.15 Current and deferred income tax and social contribution | 2.15 Current and deferred income tax and social contribution Current income tax and social contribution Tax assets and liabilities for the current year are calculated based on the expected recoverable amount or the amount payable to the tax authorities. The tax rates and tax laws used to calculate the amount are those enacted or substantively enacted at the balance sheet date in the countries where PagSeguro Group operates and generates taxable income. Current income tax and social contribution related to items recognized directly in equity are recognized in equity. PagSeguro Group periodically evaluates the tax positions involving interpretation of tax regulations and establishes provisions when appropriate. Deferred taxes Deferred taxes arise from temporary differences between the tax bases of assets and liabilities and their carrying amounts at the balance sheet date. Deferred tax liabilities are recognized for all taxable temporary differences, except in the following situations: • When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit; • On temporary tax differences related to investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; • Deferred tax assets are recognized on all deductible temporary differences and tax loss carryforwards, to the extent that it is probable that taxable profit will be available against which they can be offset, except when the deferred tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss; and • Deferred tax assets are recognized on the deductible temporary differences associated with investments in subsidiaries only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and that taxable profit will be available against which the temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each balance sheet date and a deferred tax asset is recognized to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are reviewed, at each balance sheet date, and recognized to the extent that it is probable that future taxable profit will be available to allow their utilization. Based on the local law of Cayman (The Companies Law of 1960), there is no taxation on the income earned in the companies based in this locality, therefore, we do not have tax impacts for the PagSeguro Digital. For the subsidiaries of PagSeguro Digital, deferred tax assets and liabilities are measured using the prevailing tax rates in the year in which the assets will be realized and the liabilities will be settled. The currently defined tax rates of 25% for income tax and 9% for social contribution are used to calculate deferred taxes. Deferred tax assets and liabilities are presented on a net basis when there is a legally or contractually enforceable right to offset the tax asset against the tax liability, and the deferred taxes are related to the same taxable entity and subject to the same tax authority. | |
2.16 Employee benefits - Benefits of performance | 2.16 Employee benefits – Benefits of performance PagSeguro Group recognizes a liability and an expense for benefits of performance based on a methodology that takes into consideration the target of performance attributed to PagSeguro Group’s stockholders after certain adjustments. PagSeguro Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation. | |
2.17 Business combination | 2.17 Business combination PagSeguro Group accounts for business combinations using the acquisition method. The cost of an acquisition is measured as the sum of the consideration transferred, based on its fair value on the acquisition date. Costs directly attributable to the acquisition are expensed as incurred. The assets acquired, and liabilities assumed are measured at fair value, classified and allocated according to the contractual terms, economic circumstances and relevant conditions on the acquisition date. Goodwill is measured as the excess of the consideration transferred over the fair value of net assets acquired. If the consideration transferred is smaller than the fair value of net assets acquired, the difference is recognized as a gain on bargain purchase in the statement of operations. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. | |
2.18 New standards not yet effective | 2.18 New standards not yet effective The following new standards have been issued by IASB, but are not effective for 2017: IFRS 16 – “Leases” – this new standard requires lessees to recognize the liability of the future payments and the right of use of the leased asset for virtually all lease contracts, including operating leases. Certain short-term and low-value There are no other IFRS or IFRIC interpretations not yet effective that could have a material impact on PagSeguro Group financial statements. | |
2.19 New and revised pronouncements in effect | 2.19 New and revised pronouncements in effect The following new standards have been issued by IASB: IFRS 9 – “Financial Instruments”: addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014 and is effective as from January 1, 2018. It replaces the guidance included in IAS 39 related to the classification and measurement of financial instruments. The main amendments brought by IFRS 9 are: (i) new criteria for the classification of financial assets; (ii) new impairment model for financial assets, which is based on expected losses, replacing the current model of incurred losses; and (iii) relaxation of the new requirements for the adoption of hedge accounting. Management evaluated the new guidelines introduced by IFRS 9 and did not identify any material impact for PagSeguro Group. IFRS 15 – “Revenue from Contracts with Customers”: this new standard introduces the principles to be applied by an entity to determine the measurement and recognition of revenue. This standard is based on the principle that revenue is recognized when control of a good or service is transferred to a customer, and, therefore, the principle of control will replace the principle of risks and benefits. This standard will replace IAS 11 – “Construction Contracts”, IAS 18 – “Revenues” and related interpretations, and becomes effective on January 1, 2018. Management evaluated the new guidelines introduced by IFRS 15 and did not identify any material impact for PagSeguro Group. Therefore, changes to standards or new pronouncements applicable to the years presented in the consolidated financial statements were not relevant to PagSeguro Group, for retrospective disclosure and disclosure of amounts. |
Consolidation of subsidiaries (
Consolidation of subsidiaries (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Consolidation of subsidiaries | At March 31, 2018 Company Assets Liabilities Equity Net income Ownership – % Level PagSeguro Brazil 12,158,276 7,848,351 4,309,925 57,768 99,99 Direct Net+Phone 1,101,314 1,066,680 34,634 (9,323 ) 99,99 Indirect Boa Compra 700,068 679,402 20,666 705 99,99 Indirect BCPS 1,559 291 1,268 319 99,50 Indirect R2TECH 3,188 858 2,330 764 51,00 Indirect BIVA 2,464 2,217 (247 ) (1,174 ) 74,93 Indirect FIDC 259,710 71,357 188,353 6,657 90,00 Indirect | At December 31, 2017 Company Assets Liabilities Equity Net income (loss) Ownership Level PagSeguro Brazil 7,553,504 6,686,516 866,988 478,781 99.99 Direct Net+Phone 1,018,218 974,260 43,958 (8,441 ) 99.99 Indirect Boa Compra 629,246 609,284 19,962 5,715 99.99 Indirect BCPS 1,236 251 985 429 99.50 Indirect R2TECH 2,460 894 1,566 1,307 51.00 Indirect BIVA 2,482 1,730 752 (1,569 ) 59.31 Indirect FIDC 182,163 404 181,759 1,758 100 Indirect |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Cash and cash equivalents | March 31, 2018 December 31, 2017 Short-term bank deposits 20,694 66,767 Short-term investment 2,524,695 — 2,545,389 66,767 | December 31, 2017 2016 Short-term bank deposits 66,767 79,969 66,767 79,969 |
Financial investments (Tables)
Financial investments (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Financial investments | March 31, 2018 December 31, 2017 Short-term investment — 210,103 — 210,103 | Financial investments December 31, 2017 2016 Short-term investment 210,103 131,239 210,103 131,239 |
Note receivables (Tables)
Note receivables (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Note receivables | March 31,2018 December 31,2017 Legal obligors Visa Master Hipercard Total Visa Master Hipercard Total Itaú 349,272 1,128,312 311,450 1,789,034 237,335 751,542 250,817 1,239,694 Bradesco 449,645 119,721 — 569,366 333,108 83,160 — 416,268 Banco do Brasil 364,329 103,753 — 468,082 287,334 84,504 — 371,838 CEF 95,462 118,096 — 213,558 69,974 83,684 — 153,658 Santander 164,853 468,908 — 633,761 122,614 310,946 — 433,560 Other 214,628 584,640 — 799,268 141,802 393,999 — 535,801 Total card issuers (i) 1,638,189 2,523,430 311,450 4,473,069 1,192,167 1,707,835 250,817 3,150,819 Cielo – Elo — — — 173,879 — — — 151,851 Cielo — — — 107,394 — — — 80,464 Redecard — — — 38,204 — — — 45,289 Amex — — — 49,409 — — — 39,608 Vero — — — 16,605 — — — 21,463 Other — — — 22,939 — — — 31,864 Total acquirers (ii) — — — 408,429 — — — 370,539 Other1 — — — 1,823 — — — 991 Total other — — — 1,823 — — — 991 Total note receivables 1,638,189 2,523,430 311,450 4,883,321 1,192,167 1,707,835 250,817 3,522,349 (i) Card issuers: receivables derived from transactions where the PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa, Mastercard or Hipercard. However, the PagSeguro Brazil´s contractual note receivables are with the financial institutions, which are the legal obligors on the note receivables.Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa, Mastercard or Hipercard, as applicable, in the event that the legal obligors do not make payment. PagSeguro Brazil started operating directly as a financial intermediary in 2016. (ii) Acquirers: refer to card processing transactions to be received from the acquirers, which are a third parties acting as a financial intermediaries between the issuing bank and PagSeguro Brazil. This balance also includes the receivables from sales of debit and credit card readers. | Note receivables December 31, 2017 2016 Legal obligors Visa Master Hipercard Total Visa Master Total Itaú 237,335 751,542 250,817 1,239,694 99,433 244,741 344,174 Bradesco 333,108 83,160 — 416,268 115,009 36,032 151,041 Banco do Brasil 287,334 84,504 — 371,838 91,414 29,425 120,839 CEF 69,974 83,684 — 153,658 23,837 30,979 54,816 Santander 122,614 310,946 — 433,560 48,695 79,085 127,780 Other 141,802 393,999 — 535,801 50,716 93,473 144,189 Total card issuers (i) 1,192,167 1,707,835 250,817 3,150,819 429,104 513,735 942,839 Vero — — — 21,463 — — 331,807 Cielo — — — 232,315 — — 355,949 Redecard — — — 45,289 — — 56,025 Amex — — — 39,608 — — 4,090 Other — — — 31,864 — — 24,804 Total acquirers (ii) — — — 370,539 — — 772,675 Other — — — 991 — — — Total other — — — 991 — — — Total note receivables 1,192,167 1,707,835 250,817 3,522,349 429,104 513,735 1,715,514 (i) Card issuers: receivables derived from transactions where PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa or Mastercard. However, PagSeguro Brazil’s contractual note receivables are with the financial institutions, which are the legal obligors on the note receivables. Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa or Mastercard, as applicable, in the event that the legal obligors do not make payment. PagSeguro Brazil started operating directly as a financial intermediary in 2016. (ii) Acquirers: refers to card processing transactions to be received from the acquirers, which are third parties acting as financial intermediaries between the issuing bank and PagSeguro Brazil. This balance also includes the receivables from sales of debit and credit card readers. |
The maturity analysis of note receivables | The maturity analysis of note receivables is as follows: March 31, 2018 December 31, 2017 Due within 30 days 2,647,347 2,213,929 Due within 31 to 120 days 1,763,293 1,045,825 Due within 121 to 180 days 140,265 114,953 Due within 181 to 360 days 332,416 147,642 4,883,321 3,522,349 | The maturity analysis of note receivables is as follows: December 31, 2017 2016 Due within 30 days 2,213,929 970,086 Due within 31 to 120 days 1,045,825 609,689 Due within 121 to 180 days 114,953 43,144 Due within 181 to 360 days 147,642 92,595 3,522,349 1,715,514 |
Related-party balances and tr40
Related-party balances and transactions (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Balances and transactions with related parties | i. Balances and transactions with related parties: March 31, 2018 December 31, 2017 Receivables Payables Receivables Payables Immediate parent UOL—cash management (a) 909 — 124,721 — UOL—sales of services (b) — 22,124 — 32,286 UOL—shared service costs — 11,958 — — Affiliated companies UOL Diveo Tecnologia Ltda.—cash management (a) — — 2 — UOL Diveo Tecnologia Ltda.—sales of services (b) — 3,558 — 621 UOL Diveo Tecnologia Ltda.—shared service costs — 90 — — Concurso Virtual S.A. — 1,479 — 1,522 Transfolha Transportadora e Distribuição Ltda. — 1,869 — 745 Livraria da Folha Ltda. — 1,143 — 1,078 Empresa Folha da Manhã S.A. — 1,707 — 2,320 Others — 1,045 — 529 909 44,973 124,723 39,101 (a) The receivables/payables transactions with related parties arising from cash management were ended at the date of the IPO. The remaining balance of R$ 909 was fully paid during the month of April 2018. (b) Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in hosting from UOL Diveo Tecnologia Ltda. | i. Balances and transactions with related parties: December 31, 2017 2016 Receivables Payables Receivables Payables Immediate parent UOL – cash management (a) 124,721 — 300,809 — UOL – sales of services (b) — 32,286 — 59,692 Affiliated companies UOL Diveo – cash management (a) 2 — — 1,383 UOL Diveo – sales of services (b) — 621 — 9,360 Concurso Virtual S.A. — 1,522 — 1,900 Transfolha Transportadora e Distribuição Ltda. — 745 — 1,196 Livraria da Folha Ltda. — 1,078 — 2,285 Empresa Folha da Manhã S/A — 2,320 — 21 Others — 529 — 412 124,723 39,101 300,809 76,249 (a) The receivables/payables with related parties arising from cash management are settled within one month and are free of interest. Shared service costs are offset with these balances. The receivables are unsecured in nature and no provisions are held against receivables from related parties. In April and September 2017, PagSeguro Brazil decided to settle a portion of its outstanding balance with related parties, as described below. On April 30, 2017, PagSeguro Brazil approved the settlement of R$22,149 related to interest on own capital that was distributed with respect to the year ended December 31, 2016. PagSeguro Brazil agreed with UOL that the full amount of this outstanding interest on own capital would be offset against receivables under the centralized cash management with UOL. In addition, as described in Note 19, on September 29, 2017 PagSeguro Brazil approved and distributed a total of R$238,803 in dividends, consisting of (i) dividends related to the year ended December 31, 2016 in the amount of R$96,008; and (ii) dividends related to the six-month (b) Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in computing and hosting from UOL Diveo Tecnologia Ltda. (“UOL Diveo”), which started in 2016. In addition, during 2016, an amount of R$ 63,264 (composed by R$ 26,610 and R$ 36,654) previously recorded as accounts payable was used for capital contributions, as described in Note 19. |
Balances and transactions with related parties II | March 31, 2018 March 31, 2017 Revenue Expense Revenue Expense Immediate parent UOL—shared service costs (a) — 43,041 — 12,044 UOL—sales of services (b) 468 12,921 — 12,703 Affiliated companies UOL Diveo—shared service costs (c) — 123 — 25 UOL Diveo—sales of services (d) — 6,542 — 4,748 Concurso Virtual S.A. 28 — 34 — Edgar de Abreu Ltda. 149 — 40 — Transfolha Transportadora e Distribuição Ltda. — 2,624 — 3,814 Livraria da Folha Ltda. 71 — 135 — Others 22 — 11 — 738 65,251 220 33,334 (a) Shared services costs mainly related to (i) payroll costs, (ii) IT structure / software and (iii) property rental costs are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. Such costs are included in administrative expenses. The increase in the balance refers to payroll taxes related to LTIP in the amount of R$28,400, which are paid by the parent company UOL and reimbursed by the PagSeguro Group. (b) Sale of services related to advertising services are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. (c) Shared services costs are incurred by the affiliated company UOL Diveo and are charged to PagSeguro Brazil pursuant to contractual agreements. The main costs are related to IT structure/software. (d) Sale of services from the affiliated company UOL Diveo related to technical support in hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. | 2017 2016 2015 Revenue Expense Revenue Expense Revenue Expense Immediate parent UOL – shared service costs (a) — 58,375 — 31,498 — 12,369 UOL – shared service costs – carved out (b) — — — — — 12,032 UOL – sales of services (c) 689 46,976 — 81,007 — 22,458 UOL – sales of services – carved out (d) — — — — — 36,737 Affiliated companies UOL Diveo – shared service costs (e) — 24 — 1,710 — — UOL Diveo – sales of services (f) — 28,953 — 18,069 — 25 Concurso Virtual S.A. 117 — 134 — 389 — Transfolha Transportadora e Distribuição Ltda. 39 15,405 — 5,500 — 806 Livraria da Folha Ltda. 319 — 349 — 347 — Others 316 130 261 101 121 — 1,480 149,863 744 137,885 857 84,427 (a) Shared services costs mainly related to (i) payroll costs, (ii) IT structure / software and (iii) rental costs are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. Such costs are included in administrative expenses. (b) The main costs that the UOL Group allocated to PagSeguro Brazil (based on the number of employees and/or the time worked, basis that management believes is reasonable), are (i) payroll costs, (ii) IT structure / software and (iii) rental costs. The allocated costs to the carve-out (c) Sale of services related to advertising services are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. (d) Sales of services related to advertising services were allocated based on intercompany cost, a basis that management believes is reasonable from January 2014 through July 2015. (e) Shared services costs are incurred by the affiliated company UOL Diveo and are charged to PagSeguro Brazil pursuant to contractual agreements. The main costs are related to IT structure/software. (f) Sale of services from the affiliated company UOL Diveo related to technical support in computing and hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. |
Property and equipment (Tables)
Property and equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Property and equipment is composed as follows | (a) Property and equipment is composed as follows: March 31, 2018 Cost Accumulated Net Data processing equipment 11,262 (5,647 ) 5,615 Facilities 53 (24 ) 29 Machinery and equipment 5,469 (681 ) 4,788 Furniture and fittings 397 (76 ) 321 Leasehold improvements 263 (39 ) 224 Vehicles 140 (52 ) 88 17,583 (6,518 ) 11,065 December 31, 2017 Cost Accumulated Net Data processing equipment 11,024 (5,114 ) 5,910 Facilities 53 (23 ) 30 Machinery and equipment 4,738 (444 ) 4,294 Furniture and fittings 397 (66 ) 331 Leasehold improvements 263 (29 ) 234 Vehicles 132 (42 ) 90 16,607 (5,718 ) 10,889 | (a) Property and equipment is composed as follows: December 31, 2017 Cost Accumulated Net Data processing equipment 11,024 (5,114 ) 5,910 Facilities 53 (23 ) 30 Machinery and equipment 4,738 (444 ) 4,294 Furniture and fittings 397 (66 ) 331 Leasehold improvements 263 (29 ) 234 Vehicles 132 (42 ) 90 16,607 (5,718 ) 10,889 December 31, 2016 Cost Accumulated Net Data processing equipment 7,574 (3,692 ) 3,882 Facilities 52 (19 ) 33 Machinery and equipment 548 (140 ) 408 Furniture and fittings 190 (40 ) 150 Leasehold improvements 100 (15 ) 85 8,464 (3,906 ) 4,558 |
The changes in cost and accumulated depreciation were as follows | (b) The changes in cost and accumulated depreciation were as follows: Data Facilities Machinery Furniture Leasehold Total At December 31, 2017 Cost 11,024 53 4,738 397 263 132 16,607 Accumulated depreciation (5,114 ) (23 ) (444 ) (66 ) (29 ) (42 ) (5,718 ) Net book value 5,910 30 4,294 331 234 90 10,889 At March 31, 2018 Opening balance 5,910 30 4,294 331 234 90 10,889 Additions 238 — 731 — — 7 976 Depreciation (533 ) (1 ) (237 ) (10 ) (10 ) (9 ) (800 ) Net book value 5,615 29 4,788 321 224 88 11,065 At March 31, 2018 Cost 11,262 53 5,469 397 263 139 17,583 Accumulated depreciation (5,647 ) (24 ) (681 ) (76 ) (39 ) (51 ) (6,518 ) Net book value 5,615 29 4,788 321 224 88 11,065 | (b) The changes in cost and accumulated depreciation were as follows: Data Facilities Machinery Furniture Leasehold Vehicles Total At December 31, 2016 Cost 7,574 52 548 190 100 — 8,464 Accumulated depreciation (3,692 ) (19 ) (140 ) (40 ) (15 ) — (3,906 ) Net book value 3,882 33 408 150 85 — 4,558 At December 31, 2017 Opening balance 3,882 33 408 150 85 — 4,558 Cost Purchases 3,316 1 4,171 176 94 114 7,873 Acquisition of subsidiary 134 — 19 31 69 18 271 Depreciation Depreciation (1,422 ) (4 ) (304 ) (26 ) (14 ) (42 ) (1,812 ) Net book value 5,910 30 4,294 331 234 90 10,889 At December 31, 2017 Cost 11,024 53 4,738 397 263 132 16,607 Accumulated depreciation (5,114 ) (23 ) (444 ) (66 ) (29 ) (42 ) (5,718 ) Net book value 5,910 30 4,294 331 234 90 10,889 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Intangible assets are composed as follows | (a) Intangible assets are composed as follows: March 31, 2018 Cost Accumulated Net Expenditures related to software and technology (i) 291,666 (134,293 ) 157,373 Software licenses 12,529 (2,398 ) 10,131 Customer relationships 1,981 (246 ) 1,735 Goodwill (ii) 21,399 — 21,399 327,575 (136,937 ) 190,638 December 31, 2017 Cost Accumulated Net Expenditures related to software and technology (i) 241,490 (115,665 ) 125,825 Software licenses 9,510 (2,043 ) 7,467 Customer relationships 1,981 (91 ) 1,890 Goodwill (ii) 23,686 — 23,686 276,667 (117,799 ) 158,868 (i) PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. (ii) Goodwill provided on the acquisition of the companies R2TECH and BIVA. | (a) Intangible assets are composed as follows: December 31, 2017 Cost Accumulated Net Expenditures related to software and technology (i) 241,490 (115,665 ) 125,825 Software licenses 9,510 (2,043 ) 7,467 Customer relationships 1,981 (91 ) 1,890 Goodwill (ii) 23,686 — 23,686 276,667 (117,799 ) 158,868 December 31, 2016 Cost Accumulated Net Expenditures related to software and technology (i) 143,989 (61,858 ) 82,131 Software licenses 5,393 (1,416 ) 3,977 149,382 (63,274 ) 86,108 (i) PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. (ii) Goodwill provided on the acquisition of the companies R2TECH and BIVA as described in Note 10. |
The changes in cost and accumulated amortization were as follows | (b) The changes in cost and accumulated amortization were as follows: Expenditures Software Customer Goodwill Total At December 31, 2017 Cost 241,490 9,510 1,981 23,686 276,667 Accumulated amortization (115,665 ) (2,043 ) (91 ) — (117,799 ) Net book value 125,825 7,467 1,890 23,686 158,868 At March 31, 2018 Opening balance 125,825 7,467 1,890 23,686 158,868 Cost Additions 50,176 3,019 — — 53,195 Others — — — (2,287 ) (2,287 ) Amortization Amortization (18,628 ) (355 ) (155 ) — (19,138 ) Net book value 157,373 10,131 1,735 21,399 190,638 At March 31, 2018 Cost 291,666 12,529 1,981 21,399 327,575 Accumulated amortization (134,293 ) (2,398 ) (246 ) — (136,937 ) Net book value 157,373 10,131 1,735 21,399 190,638 | (b) The changes in cost and accumulated amortization were as follows: Expenditures with Software Customer Goodwill (ii) Total At December 31, 2016 Cost 143,989 5,393 — — 149,382 Accumulated amortization (61,858 ) (1,416 ) — — (63,274 ) Net book value 82,131 3,977 — — 86,108 At December 31, 2017 Opening balance 82,131 3,977 — — 86,108 Cost Additions 97,491 1,210 971 26,184 125,856 Acquisition of subsidiary 10 1,419 — — 1,429 Transfer — 1,488 1,010 (2,498 ) — Amortization Amortization (53,807 ) (627 ) (91 ) — (54,526 ) Net book value 125,825 7,467 1,890 23,686 158,868 At December 31, 2017 Cost 241,490 9,510 1,981 23,686 276,667 Accumulated amortization (115,665 ) (2,043 ) (91 ) — (117,799 ) Net book value 125,825 7,467 1,890 23,686 158,868 |
Payables to third parties (Tabl
Payables to third parties (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Payables to third parties | March 31, 2018 December 31, 2017 Payables to third parties 2,975,297 3,080,569 2,975,297 3,080,569 | Payables to third parties December 31, 2017 2016 Payables to third parties 3,080,569 1,304,031 3,080,569 1,304,031 |
Salaries and social charges (Ta
Salaries and social charges (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Salaries and social charges | March 31, 2018 December 31, 2017 Profit sharing 4,943 15,237 Salaries payable 2,962 2,758 Social charges 4,618 5,102 Payroll accruals 12,624 9,807 Other 1,045 1,365 26,192 34,269 | Salaries and social charges December 31, 2017 2016 Profit sharing 15,237 8,696 Salaries payable 2,758 1,682 Social charges 5,102 3,225 Payroll accruals 9,807 5,877 Other 1,365 789 34,269 20,269 |
Taxes and contributions (Tables
Taxes and contributions (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Taxes and contributions | Taxes and contributions March 31, 2018 December 31, 2017 Taxes Services tax (i) 34,008 14,837 Value-added tax on sales and services (ii) 13,439 3,830 Social integration program (iii) 11,878 9,918 Social contribution on revenues (iii) 71,773 59,358 Income tax and social contribution (iv) 20,995 35,474 Other 1,501 1,264 153,594 124,681 Judicial deposits (v) Services tax (15,525) (11,375) Value-added tax on sales and services (6,685) (2,665) Social integration program (10,277) (8,188) Social contribution on revenues (63,245) (50,389) (95,732) (72,617) 57,862 52,064 (i) Refers to taxes on revenue from transaction activities. (ii) Refers to the Value-added Tax on Sales and Services (ICMS) amounts due by Net+Phone, related to tax substitution and tax rate differential, applied on sales of credit and debit card readers. (iii) Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income. (iv) Refers to the income tax and social contribution payable on current income taxes and contribution. (v) PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed initems “i”, “ii” and “iii” above. | Taxes and contributions December 31, 2017 2016 Taxes Services tax (i) 14,837 1,382 Value-added tax on sales and services (ii) 3,830 3,596 Social integration program (iii) 9,918 2,690 Social contribution on revenues (iii) 59,358 16,544 Income tax and social contribution (iv) 35,474 — Other 1,264 690 124,681 24,902 Judicial deposits (v) Services tax (11,375 ) — Value-added tax on sales and services (2,665 ) — Social integration program (8,188 ) (2,516 ) Social contribution on revenues (50,389 ) (15,475 ) (72,617 ) (17,991 ) 52,064 6,911 (i) Refers to taxes on revenue from transaction activities. (ii) Refers to the Value-added Tax on Sales and Services (ICMS) amounts due by Net+Phone, related to tax substitution and tax rate differential, applied on sales of credit and debit card readers. (iii) Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income. (iv) Refers to the income tax and social contribution payable on current income taxes and contribution. (v) PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed in items “i”, “ii” and “iii” above. |
Provision for contingencies (Ta
Provision for contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Provision for contingencies | Some companies of PagSeguro Group are party to labor and civil litigation in progress and are discussing such matters at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these matters are estimated and periodically adjusted by management, supported by the opinion of its external legal advisors. March 31, 2018 December 31, 2017 Civil 4,895 4,326 Labor 318 322 Current 5,213 4,648 | Some companies of PagSeguro Group are party to labor and civil litigation in progress and are discussing such matters at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for probable losses arising from these matters are estimated and periodically adjusted by management, supported by the opinion of its external legal advisors. December 31, 2017 2016 Civil 4,326 555 Labor 322 125 Current 4,648 680 |
Income tax and social contrib47
Income tax and social contribution (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Deferred income tax and social contribution | (a) Deferred income tax and social contribution Tax Tax Technological Other Other Total Deferred tax At December 31, 2016 1,051 3,606 (24,378 ) 3,647 — (16,074 ) Included in the statement of income (874 ) — (4,354 ) 2,759 — (2,468 ) At March 31, 2017 177 3,606 (28,732 ) 6,406 — (18,542 ) Included in the statement of income 1,310 (721 ) (12,460 ) 26,236 (1,616 ) 12,748 At December 31, 2017 1,487 2,885 (41,192 ) 32,642 (1,616 ) (5,794 ) Included in the statement of income 3,934 (180 ) (11,344 ) 23,054 (9,073 ) 6,391 At March 31, 2018 5,421 2,705 (52,536 ) 55,696 (10,689 ) 597 (i) The main temporary differences representing the balance of the deferred tax liability refers to the benefit granted by the Technological Innovation Law ( Lei do Bem | (a) Deferred income tax and social contribution: Tax losses Tax credit Technological Other Other Total Deferred tax At December 31, 2015 3,363 — (6,257 ) 3,363 — 469 Included in the statement of income (2,312 ) — (18,121 ) 284 — (20,149 ) Taken directly to equity — 3,606 — — — 3,606 At December 31, 2016 1,051 3,606 (24,378 ) 3,647 — (16,074 ) Included in the statement of income 436 (721 ) (16,814 ) 28,995 (1,616 ) 10,278 At December 31, 2017 1,487 2,885 (41,192 ) 32,642 (1,616 ) (5,794 ) (i) The main temporary differences representing the balance of the deferred tax liability refers to the benefit granted by the Technological Innovation Law ( Lei do Bem |
Estimated realization of deferred tax assets in non-current assets and liabilities | The estimated realization of deferred tax assets in non-current March 31, 2018 December 31, 2017 Assets Liability Assets Liability 2018 24,883 (24,509 ) 8,895 (20,728 ) 2019 7,974 (21,789 ) 4,040 (18,008 ) 2020 6,045 (6,235 ) 2,111 (2,454 ) 2021 982 (4,999 ) 982 (1,434 ) 2022 23,938 (5,694 ) 20,987 (185 ) 63,822 (63,226 ) 37,015 (42,809 ) | The estimated realization of deferred tax assets in non-current December 31, 2017 2016 Asset Liability Asset Liability 2017 — — 940 (8,126 ) 2018 8,895 (20,728 ) 940 (8,126 ) 2019 4,040 (18,008 ) 940 (8,126 ) 2020 2,111 (2,454 ) 940 — 2021 982 (1,434 ) 4,545 — 2022 20,987 (185 ) — — 37,015 (42,809 ) 8,305 (24,378 ) |
Reconciliation of the difference between the actual income tax and social contribution expense and the expense computed by applying the federal statutory rate | (b) Reconciliation of the income tax and social contribution expense At March 31, 2018 and 2017, the PagSeguro Group computed income tax and social contribution under the taxable income method. The following is a reconciliation of the difference between the actual income tax and social contribution expense and the expense computed by applying the Brazilian federal statutory rate for the three-month periods ended March 31, 2018 and 2017: March 31, 2018 March 31, 2017 Profit for the period before taxes 163,000 82,177 Statutory rate 34% 34% Expected income tax and social contribution (55,420 ) (27,940 ) Income tax and social contribution effect on: Permanent additions (exclusions) Gifts and other non-deductible (364 ) (37 ) Research & development and technological innovation benefit—Law 11.196/05 (i) 13,553 5,551 No taxable earnings (ii) 30,916 — Other additions (3,228 ) 874 Income tax and social contribution expense (14,544 ) (21,552 ) Effective rate 9% 26% Income tax and social contribution—current (20,935 ) (19,085 ) Income tax and social contribution—deferred 6,391 (2,468 ) (i) Refers to the benefit granted by the Technological Innovation Law ( Lei do Bem (ii) Refers to the benefit granted by based on the local law of Cayman (The Companies Law of 1960), there is no taxation on the income earned in the companies based in this locality. As a result of the local tax regulations, all the exchange variantions from dolar to reais which generates income has no tax impacts for the PagSeguro Digital. | (b) Reconciliation of the income tax and social contribution expense PagSeguro Group computed income tax and social contribution under the taxable income method. The following is a reconciliation of the difference between the actual income tax and social contribution expense and the expense computed by applying the federal statutory rate for the years ended December 31, 2017, 2016 and 2015: December, 31 2017 2016 2015 Profit for the period before taxes 683,504 155,359 40,315 Statutory rate 34% 34% 34% Expected income tax and social contribution (232,391 ) (52,822 ) (13,707 ) Income tax and social contribution effect on: Permanent additions (exclusions) Participation in the results of partners and managers (314 ) — (234 ) Gifts (375 ) — (149 ) R&D and technological innovation benefit – Law 11.196/05(i) 24,987 15,898 11,596 Interest on own capital — 8,860 — Tax Incentives – Law Rounet Art. 18 1,981 — — Other additions 1,402 485 (2,333 ) Income tax and social contribution expense (204,711 ) (27,580 ) (4,826 ) Income tax and social contribution – current (214,988 ) (7,431 ) (2,587 ) Income tax and social contribution – deferred 10,278 (20,149 ) (2,239 ) (i) Refers to the benefit granted by the Technological Innovation Law ( Lei do Bem |
Equity (Tables)
Equity (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Share capital | Share capital is composed of the following shares for the three-month periods ended March 31, 2018 and year ended December 31, 2017: December 31, 2017 shares outstanding 262,288,607 New shares were offered in PaSeguro Digital IPO process (i) 50,925,642 Shares issued related to the LTIP (i) 1,823,727 March 31, 2018 shares outstanding 315,037,976 (i) During the year 2018, shares of PagSeguro Digital were issued as a result of the initial public offering and long-term incentive plan, see details in note 1.1, and note 1.2 and 17 (c). | Share capital is composed of the following shares: December 31, 2015 shares outstanding (1) 220,808,044 Capitalization of control party related party payable (2) 13,305,204 Issuance of shares to UOL for transfer of Net+Phone and Boa Compra (3) 28,175,359 December 31, 2016 shares outstanding 262,288,607 December 31, 2017 shares outstanding 262,288,607 PagSeguro Brazil has reflected in its statement of changes in shareholders’ equity the issuance of shares during the periods that such shares were issued. For earnings per share purposes, PagSeguro Brazil has considered 262,288,607 as outstanding during each of the years ended December 31, 2017 and 2016, as shares in (1), (2) and (3) above were issued to UOL, the control party, as part of the recapitalization. (1) The shareholder UOL increased PagSeguro Brazil share capital on August 1, 2015 by the amount of R$ 329,961 (164,980,523 shares) and on December 30, 2015, by the amount of R$ 69,087 (34,543,522 shares), in the total amount of R$ 399,048, through the transfer of assets and liabilities related to payment operations which had been previously recorded in UOL, thus centralizing these activities in PagSeguro Brazil from thereon, resulting in total shares outstanding at December 31, 2015 of 220,808,044; (2) On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 26,610 (13,305,204 shares); (3) On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 36,654 (18,327,103 shares) in Net+Phone. After that, as described in Note 2, in July 2016, UOL transferred its investment in Boa Compra and Net+Phone to PagSeguro Brazil, as a capital contribution in the amount of R$ 56,351 (28,175,359 shares). |
Dividends - Pagseguro | PagSeguro Brazil bylaws establish that profit for the year and interest on own capital should be allocated, in full or in part, to the constitution of reserves. Presented below are the dividends distributed by each entity consolidated in these financial statements other than Net+Phone and BIVA which recorded accumulated losses in all periods presented: December 31, PagSeguro Brazil 2017 2016 2015 Net income for the year 478,781 115,727 37,010 Net investment — — (27,209 ) Net income 478,781 115,727 9,801 Transfer to legal reserve (5%) (23,939 ) (5,786 ) (490 ) Adjusted income for the year 454,842 109,941 9,311 Mandatory minimum dividends (1%) 4,548 — 93 Additional dividends proposed (ii) 234,255 — — Total dividends distributed 238,803 — 93 Interest on own capital (i) — 26,059 — Number of common shares 262,289 262,289 220,808 Dividends per share (in reais) 0.9105 0.0000 0.0004 Interest on own capital 0.0000 0.0994 0.0000 (i) The distribution of interest on own capital was approved in the shareholders’ meeting held on December 30, 2016. (ii) At the Extraordinary General Shareholders Meeting held on September 29, 2017, PagSeguro Brazil’s shareholders approved the distribution of (i) R$142,795 of dividends related to the six-month | |
Dividends - Boa Compra | December 31, Boa Compra 2017 2016 2015 Net income for the year 5,715 4,858 1,625 Transfer to legal reserve (5%) * — — — Adjusted income for the year 5,715 4,858 1,625 Mandatory minimum dividends (1%) — — 16 Additional dividends proposed — — 65 Total dividends distributed — — 81 Number of common shares 5,381,317 5,381,317 198,557 Dividends per share (in reais) 0,0000 0,0000 0,4079 * Allocation to legal reserve was not required because the legal reserve reached the limit of 20% of share capital. |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Weighted average number of common shares issued and outstanding | Basic earnings per share are calculated by dividing the profit attributable to shareholders of the PagSeguro Group by the weighted average number of common shares issued and outstanding during the three-month periods ended March 31, 2018 and 2017: March 31, March 31, Profit attributable to stockholders of the Company 148,378 60,624 Weighted average number of outstanding common shares (thousands) 297,454,853 262,288,607 Basic earnings per share—R$ 0.4988 0.2311 b) Diluted Diluted earnings per share is calculated by adjusting the weighted average number of common shares outstanding to assume the conversion of all potential common shares with dilutive effects. The Company has as category of potential common shares with dilutive effects only share-based long-term incentive plan. In this case, a calculation is done to determine the number of shares that could have been acquired at fair value. March 31, March 31, Profit used to determine diluted earnings per share 148,378 60,624 Weighted average number of outstanding common shares (thousands) 297,454,853 262,288,607 Number of shares under option 3,469,011 — Nmber of shares that would have been (2,339,734 ) — Weighted average number of common shares for diluted earnings per share (thousands) 298,584,130 262,288,607 Diluted earnings per share—R$ 0.4969 0.2311 | Basic and diluted earnings per share are calculated by dividing the profit attributable to shareholders of PagSeguro Group by the weighted average number of common shares issued and outstanding during the year: December 31, 2017 2016 2015 Profit attributable to owners of the Company 478,781 127,186 35,084 Weighted average number of common shares 262,288,607 262,288,607 262,288,607 Basic and diluted earnings per share – in reais 1.8254 0.4849 0.1338 |
Total revenue and income (Table
Total revenue and income (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Total revenue and income | Total revenue and income March 31, March 31, Gross revenue from transaction activities and other services 514,074 217,252 Gross revenue from sales 129,678 166,221 Gross financial income (i) 288,419 145,743 Other financial income(ii) 116,360 836 Total gross revenue and income 1,048,531 530,052 Deductions from gross revenue from transactions activities and other services (iii) (71,226 ) (26,827 ) Deductions from gross revenue from sales (iv) (35,692 ) (47,783 ) Deductions from gross financial income (v) (13,581 ) (6,934 ) Total deductions from gross revenue and income (120,499 ) (81,544 ) Total revenue and income 928,032 448,508 (i) Includes (a) interest income from early payment of notes payable to third parties and (b) interest on note receivables due in installments. (ii) The increase in the period refers to foreign exchange gain on the currency conversion of the primary offer proceeds for the three-month period ended March 31, 2018 in the amount of R$89,866, and financial income on financial investments classified as cash and cash equivalents for the three-month period ended on March 31, 2018 in the amount of R$25,694 (March 31, 2017—R$360). (iii) Deductions consist of sales taxes. (iv) The deductions are composed by sales taxes and returns. (v) Deductions consist of taxes on financial income. | 21. Total revenue and income December 31, 2017 2016 2015 Gross revenue from transaction activities and other services 1,391,381 543,818 305,298 Gross revenue from sales 655,153 371,517 238,947 Gross financial income (i) 858,410 411,413 243,566 Other financial income 8,576 5,337 10,744 Total gross revenue and income 2,913,520 1,332,085 798,556 Deductions from gross revenue from transactions activities and other services (ii) (167,120 ) (63,793 ) (37,101 ) Deductions from gross revenue from sales (iii) (183,229 ) (110,923 ) (62,430 ) Deductions from gross financial income (iv) (39,786 ) (18,984 ) (24,104 ) Total deductions from gross revenue and income (390,135 ) (193,700 ) (123,635 ) Total revenue and income 2,523,385 1,138,385 674,920 (i) Includes (a) interest from early payment related to the discount of notes payable to third parties paid in advance and (b) interest on note receivables due in installments. (ii) Deductions consist of services taxes. (iii) The deductions are composed of sales taxes and returns. (iv) Deductions consist of taxes on financial income. |
Expenses by nature (Tables)
Expenses by nature (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Expenses by nature | Expenses by nature March 31, March 31, Transactions costs (247,161 ) (104,861 ) Cost of goods sold (99,444 ) (100,402 ) Marketing and advertising (90,939 ) (69,769 ) Personnel expenses (i) (242,353 ) (20,311 ) Financial expenses (ii) (16,524 ) (19,218 ) Chargebacks (iii) (14,438 ) (17,434 ) Depreciation and amortization (iv) (18,007 ) (10,762 ) Other (36,167 ) (23,574 ) (765,033 ) (366,331 ) Classified as: Cost of services (328,806 ) (125,041 ) Cost of sales (115,956 ) (117,852 ) Selling expenses (83,614 ) (71,106 ) Administrative expenses (219,024 ) (32,520 ) Financial expenses (16,524 ) (19,218 ) Other expenses, net (1,109 ) (594 ) (765,033 ) (366,331 ) (i) The increase refers to compensation expenses related to sthe LTIP for the three-month period ended March 31, 2018 in the amount of R$ 130,303 and the respective payroll taxes in the amount of R$ 80,270. (ii) Our financial expenses include (a) Financial Operations Tax (IOF) related to the remittance of cash from Cayman to Brazil in the amount of R$ 13,135 for the three-month period ended March 31,2018 (March 31, 2017—R$0), (b) charges to obtain early payment of receivables owed to us by card issuers to finance our early payment of receivables feature in the amount of R$ 1,465 for the three-month period ended March 31,2018 (March 31, 2017—R$16,382). (iii) Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 22 (ii). (iv) The depreciation and amortization amounts incurred in the period are segregated between costs and expenses as presented below: | Expenses by nature December 31, 2017 2016 2015 Transactions costs (661,067 ) (283,630 ) (145,969 ) Cost of goods sold (451,635 ) (233,419 ) (178,608 ) Marketing and advertising (275,394 ) (204,857 ) (153,467 ) Personnel expenses (105,794 ) (63,280 ) (48,130 ) Financial expenses (i) (104,544 ) (68,301 ) (29,696 ) Chargebacks (ii) (47,854 ) (31,557 ) (27,490 ) Depreciation and amortization (iii) (51,571 ) (31,246 ) (18,580 ) Other (142,022 ) (66,737 ) (32,665 ) (1,839,881 ) (983,027 ) (634,606 ) Classified as: Cost of services (829,661 ) (357,811 ) (191,710 ) Cost of sales (494,719 ) (265,856 ) (190,773 ) Selling expenses (245,759 ) (199,937 ) (162,642 ) Administrative expenses (153,177 ) (84,461 ) (61,129 ) Financial expenses (104,544 ) (68,301 ) (29,696 ) Other (expenses) income, net (12,021 ) (6,660 ) 1,345 (1,839,881 ) (983,027 ) (634,606 ) (i) Our financial expenses include (a) the charges we incur to obtain early payment of receivables owed to us by card issuers and acquirers in order to finance our early payment of receivables feature for merchants, (b) interest expense on our other borrowings and (c) the cost of swaps relating to our foreign currency borrowings. (ii) Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 24 (iii). (iii) The depreciation and amortization amounts incurred in the period are segregated between costs and expenses as presented below: |
Depreciation and Amortization | March 31, March 31, Depreciation Cost of sales and services (511 ) (225 ) Selling expenses (1 ) (3 ) Administrative expenses (288 ) (146 ) (800 ) (374 ) Amortization Cost of sales and services (18,800 ) (11,234 ) Administrative expenses (140 ) (30 ) (18,940 ) (11,264 ) PIS and COFINS credits (*) 1,733 876 Depreciation and amortization expense, net (18,007 ) (10,762 ) (*) PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. | 2017 2016 2015 Depreciation Cost of sales and services (1,088 ) (895 ) (904 ) Selling expenses (10 ) (11 ) (27 ) Administrative expenses (714 ) (371 ) (393 ) (1,812 ) (1,277 ) (1,324 ) Amortization Cost of sales and services (54,151 ) (32,846 ) (18,377 ) Administrative expenses (375 ) (59 ) (333 ) (54,526 ) (32,905 ) (18,710 ) PIS and COFINS credits (*) 4,767 2,936 1,101 Depreciation and amortization expense, net (51,571 ) (31,246 ) (18,933 ) (*) PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses, when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. |
Financial instruments by cate52
Financial instruments by category (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Financial assets | PagSeguro Group classifies its financial instruments into the following categories: March 31, December 31, Financial assets Measured at fair value through profit or loss: Financial investments — 210,103 Amortized cost: Cash and cash equivalents 2,545,389 66,767 Note receivables 4,883,321 3,522,349 Receivables from related parties 909 124,723 Other receivables 18,834 27,956 7,448,453 3,951,898 | PagSeguro Group classifies its financial instruments into the following categories: December 31, 2017 2016 Financial assets Measured at fair value through profit or loss: Financial investments 210,103 131,239 Loans and receivables: Cash and cash equivalents 66,767 79,969 Note receivables 3,522,349 1,715,514 Receivables from related parties 124,723 300,809 Other receivables 27,956 4,495 3,951,898 2,232,026 |
Financial liabilities | March 31, December 31, Financial liabilities Amortized cost: Payables to third parties 2,975,297 3,080,569 Trade payables 119,156 92,444 Trade payables to related parties 44,973 39,101 Other payables 26,652 15,872 3,166,077 3,227,986 | December 31, 2017 2016 Financial liabilities Measured at fair value through profit or loss: Derivative financial instruments — 6,613 — 6,613 Amortized cost: Payables to third parties 3,080,569 1,304,031 Trade payables 92,444 61,719 Trade payables to related parties 39,101 76,249 Borrowings — 205,204 Dividends payable and interest on own capital — 22,243 Other payables 15,872 15,244 3,227,986 1,684,690 |
Financial risk management (Tabl
Financial risk management (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Text block1 [abstract] | ||
Contractual undiscounted cash flows | The table below shows the PagSeguro Group’s non-derivative Due within Due within 31 Due within 121 Due within 181 Due to 361 At March 31, 2018 Payables to third parties 2,759,059 150,703 35,515 30,020 — Trade payables 103,868 8,980 1,894 2,055 2,358 Trade payables to related parties — 44,973 — — — Other payables — — — 23,028 3,624 At December 31, 2017 Payables to third parties 2,890,080 133,070 31,081 26,338 — Trade payables 81,152 6,032 1,740 1,083 2,437 Trade payables to related parties — — — 39,101 — Other payables — — — 15,872 — | The amounts disclosed in the table are the contractual undiscounted cash flows. Due within Due within Due within Due within Due to 361 At December 31, 2017 Payables to third parties 2,890,080 133,070 31,081 26,338 — Trade payables 81,152 6,032 1,740 1,083 2,437 Trade payables to related parties — — — 39,101 — Other payables — — — 15,872 At December 31, 2016 Payables to third parties 1,228,922 60,396 10,152 4,561 — Trade payables 54,125 4,827 63 2,704 — Trade payables to related parties — — — 76,249 — Borrowings — 208,374 — — — Dividends payable and interest on own capital — — — 22,243 — Other payables — — — 15,244 — |
Derivative financial instruments | The amounts of derivative financial instruments are summarized as follows: December 31, 2016 Maturity Notional value Fair value Foreign exchange and interest January 2017 129,480 132,761 Interbank Deposit Certificate (CDI) January 2017 (129,480 ) (138,036 ) — (5,275 ) Foreign exchange and interest March 2017 70,000 71,537 Interbank Deposit Certificate (CDI) March 2017 (70,000 ) (72,875 ) — (1,338 ) Total — (6,613 ) |
Presentation and preparation 54
Presentation and preparation of the consolidated financial statements and significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text block1 [abstract] | |
Depreciation is calculated under the straight-line method, based on the estimated useful lives, in years | The assets’ residual values and useful lives are reviewed at the end of each reporting period, and adjusted on a prospective basis if appropriate. Depreciation is calculated under the straight-line method, based on the estimated useful lives as shown below (in years): December 31, 2017 2016 Data processing equipment 2,5 to 5 2,5 to 5 Furniture and fittings 10 10 Facilities 10 10 Leasehold improvements 10 10 Machinery and equipment 5 to 10 10 Vehicles 5 — |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text block1 [abstract] | |
Business combinations | The acquisitions described below are in accordance with PagSeguro’s Digital business strategies, as well as the products offered by them and their client portfolio. Book value of Purchase accounting adjustment Fair value of The assets and liabilities arising from the acquisition Cash and cash equivalents 51 — 51 Assets acquired 2,598 — 2,598 Liabilities assumed (1,312 ) — (1,312 ) Property, plant and equipment and intangible assets 643 2,498 3,141 Value of net assets 1,980 2,498 4,478 Goodwill 26,184 (2,498 ) 23,686 Bargain purchase gain (87 ) — (87 ) Purchase cost 28,077 — 28,077 Consideration for the purchase settled in cash 22,276 Cash and cash equivalents at the subsidiary acquired (51 ) Amount paid on acquisitions less cash and cash equivalents acquired 22,225 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text block1 [abstract] | |
Borrowings | Borrowings Type Interest rate Average Maturity December 31, December 31, Borrowings in foreign currency Bank Borrowings Fixed interest rates 2,36365 % January 2017 — 133,874 Bank Borrowings Fixed interest rates 2,86450 % March 2017 — 71,330 — 205,204 |
Capital management (Tables)
Capital management (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text block1 [abstract] | |
Capital management | During 2016, PagSeguro Group’s strategy was to maintain a gearing ratio of up to 20%. The gearing ratio at December 31, 2016 was as follows: December 31, 2016 Borrowings 205,204 (-) Cash and cash equivalents (79,969 ) Net debt 125,235 Total equity 626,862 Total capital 752,097 Gearing ratio 16.65% |
Other disclosures on cash flo58
Other disclosures on cash flows (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text block1 [abstract] | |
Non-cash investing and financing activities | Non-cash 2017 2016 2015 Transfer of assets and liabilities — 56,351 399,048 Capitalization of related party transactions — 26,610 — |
General information (Details Te
General information (Details Text) (Detail) $ / shares in Units, shares in Thousands, R$ in Millions, $ in Millions | Jan. 26, 2018BRL (R$) | Jan. 26, 2018USD ($)$ / sharesshares | Dec. 31, 2017shares | Mar. 31, 2018 |
General information (Details Text) | ||||
PagSeguro Digital has control of the shares PagSeguro Brazil | 99.99% | 99.99% | ||
Underwriting discounts and commissions | R$ 137.8 | $ 43.8 | ||
Other offering expenses | 16.7 | $ 5.2 | ||
PagSeguro Brazil carried out a reverse share split | 2:1 shares | |||
Class A common shares | ||||
General information (Details Text) | ||||
Global offering of shares | 121,193,388 | |||
Class A common shares | Shares offered by PagSeguro Digital | ||||
General information (Details Text) | ||||
Global offering of shares | 50,925,642 | |||
Initial offer price per share | $ / shares | $ 21.50 | |||
Net proceeds from issuance of new shares | 3,289.8 | $ 1,046 | ||
Gross proceeds received from issuance of new shares | R$ 3444.2 | $ 1,095.2 | ||
Class A common shares | Shares were offered by the controlling shareholder UOL | ||||
General information (Details Text) | ||||
Global offering of shares | 70,267,746 | |||
Common shares | Share capital previously represented | ||||
General information (Details Text) | ||||
Increase (decrease) in number of shares outstanding | 524,577,214 | |||
Common shares | Was reduced | ||||
General information (Details Text) | ||||
Increase (decrease) in number of shares outstanding | 262,288,607 |
Consolidation of subsidiaries60
Consolidation of subsidiaries (Details 1) (Detail) - BRL (R$) R$ in Thousands | May 02, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 29, 2018 | Dec. 31, 2014 |
Consolidation of subsidiaries | ||||||||
Assets | R$ 7795292 | R$ 4235757 | R$ 2370403 | |||||
Liabilities | 3,318,570 | 3,365,366 | ||||||
Total equity | 4,476,722 | R$ 687486 | 870,391 | 626,862 | R$ 461877 | R$ 426563 | ||
Net income (loss) for the period | 148,456 | R$ 60624 | 478,794 | 127,779 | R$ 35490 | |||
PagSeguro Brazil | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | 12,158,276 | 7,553,504 | ||||||
Liabilities | 7,848,351 | 6,686,516 | ||||||
Total equity | 4,309,925 | 866,988 | ||||||
Net income (loss) for the period | R$ 57768 | R$ 478781 | ||||||
Ownership - % | 99.99% | 99.99% | ||||||
Level | Direct | Direct | ||||||
Net+Phone | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 1101314 | R$ 1018218 | ||||||
Liabilities | 1,066,680 | 974,260 | ||||||
Total equity | 34,634 | 43,958 | 44,317 | |||||
Net income (loss) for the period | R$ 9323 | R$ 8441 | ||||||
Ownership - % | 99.99% | 99.99% | ||||||
Level | Indirect | Indirect | ||||||
Boa Compra | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 700068 | R$ 629246 | ||||||
Liabilities | 679,402 | 609,284 | ||||||
Total equity | 20,666 | 19,962 | R$ 12034 | |||||
Net income (loss) for the period | R$ 705 | R$ 5715 | ||||||
Ownership - % | 99.99% | 99.99% | ||||||
Level | Indirect | Indirect | ||||||
BCPS | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 1559 | R$ 1236 | ||||||
Liabilities | 291 | 251 | ||||||
Total equity | 1,268 | 985 | ||||||
Net income (loss) for the period | R$ 319 | R$ 429 | ||||||
Ownership - % | 99.50% | 99.50% | ||||||
Level | Indirect | Indirect | ||||||
R2TECH | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 3188 | R$ 2460 | ||||||
Liabilities | 858 | 894 | ||||||
Total equity | 2,330 | 1,566 | ||||||
Net income (loss) for the period | R$ 764 | R$ 1307 | ||||||
Ownership - % | 51.00% | 51.00% | 51.00% | |||||
Level | Indirect | Indirect | ||||||
BIVA | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 2464 | R$ 2482 | ||||||
Liabilities | 2,217 | 1,730 | ||||||
Total equity | (247) | 752 | ||||||
Net income (loss) for the period | R$ 1174 | R$ 1569 | ||||||
Ownership - % | 74.93% | 59.31% | ||||||
Level | Indirect | Indirect | ||||||
FIDC | ||||||||
Consolidation of subsidiaries | ||||||||
Assets | R$ 259710 | R$ 182163 | ||||||
Liabilities | 71,357 | 404 | ||||||
Total equity | 188,353 | 181,759 | R$ 20000 | |||||
Net income (loss) for the period | R$ 6657 | R$ 1758 | ||||||
Ownership - % | 90.00% | 100.00% | ||||||
Level | Indirect | Indirect |
Consolidation of subsidiaries61
Consolidation of subsidiaries (Details Text) (Detail) - BRL (R$) R$ in Thousands | Mar. 12, 2018 | Jan. 15, 2018 | May 02, 2017 | May 31, 2016 | Jul. 31, 2013 | Apr. 30, 2011 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 29, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 4476722 | R$ 870391 | R$ 687486 | R$ 626862 | R$ 461877 | R$ 426563 | |||||||
Net+Phone | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 34634 | R$ 43958 | 44,317 | ||||||||||
Ownership - % | 99.99% | 99.99% | |||||||||||
Boa Compra | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 20666 | R$ 19962 | R$ 12034 | ||||||||||
Ownership - % | 99.99% | 99.99% | |||||||||||
Boa Compra | UBN Internet Ltda. ("UBN"), a subsidiary of UOL, acquired equity interest | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 51.00% | ||||||||||||
Boa Compra | UBN Internet Ltda. ("UBN"), a subsidiary of UOL, acquired additional | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 24.00% | ||||||||||||
Boa Compra | UBN Internet Ltda. ("UBN"), a subsidiary of UOL, increasing its total ownership | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 75.00% | ||||||||||||
Boa Compra | UBN Internet Ltda. ("UBN"), a subsidiary of UOL, acquired the remaining | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 25.00% | ||||||||||||
Boa Compra | UBN Internet Ltda. ("UBN"), a subsidiary of UOL, has became the owner of Boa Compra | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 100.00% | ||||||||||||
Boa Compra | Subsequently, UOL transferred its equity interest in Boa Compra to PagSeguro Brazil as a capital contribution | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 100.00% | ||||||||||||
BCPS | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 1268 | R$ 985 | |||||||||||
Ownership - % | 99.50% | 99.50% | |||||||||||
R2TECH | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 2330 | R$ 1566 | |||||||||||
Ownership - % | 51.00% | 51.00% | 51.00% | ||||||||||
BIVACO Holdings SA | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 51.41% | ||||||||||||
BIVA | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 247 | R$ 752 | |||||||||||
Ownership - % | 74.93% | 59.31% | |||||||||||
Acquisition amount | R$ 4650 | ||||||||||||
BIVA | Acquired an additional | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 0.50% | 15.12% | |||||||||||
BIVA | Brazil Business Unit | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 74.93% | ||||||||||||
FIDC | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Total equity | R$ 188353 | R$ 181759 | R$ 20000 | ||||||||||
Ownership - % | 90.00% | 100.00% | |||||||||||
Rate the senior mezzanine quotes pay as a percentage of Interbank Deposit Certificate (CDI) | 107.00% | ||||||||||||
FIDC | Subordinated quotes | |||||||||||||
Consolidation of subsidiaries (Details Text) | |||||||||||||
Ownership - % | 100.00% |
Segment reporting (Details Text
Segment reporting (Details Text) (Detail) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Details Text [Abstract] | |||||
Revenue arising, customers located abroad | 2.00% | 2.00% | 2.00% | 5.00% | 8.00% |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents [abstract] | ||||||
Short-term bank deposits | R$ 20694 | R$ 66767 | R$ 79969 | |||
Short-term investment | 2,524,695 | |||||
Total | R$ 2545389 | R$ 66767 | R$ 14744 | R$ 79969 | R$ 6888 | R$ 1199 |
Financial investments (Details
Financial investments (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Investments [abstract] | |||
Short-term investment | R$ 210103 | R$ 131239 | |
Total | R$ 0 | R$ 210103 | R$ 131239 |
Financial investments (Detail65
Financial investments (Details Text) (Detail) | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Investments Details Text [Abstract] | ||
Short Term Investments Refer To Two Repurchase Agreements | 96.00% | 96.00% |
Note receivables (Details 1) (D
Note receivables (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Legal obligors | ||||
Receivables | R$ 4883321 | R$ 3522349 | R$ 1715514 | |
Itau | ||||
Legal obligors | ||||
Receivables | 1,789,034 | 1,239,694 | 344,174 | |
Bradesco | ||||
Legal obligors | ||||
Receivables | 569,366 | 416,268 | 151,041 | |
Banco do Brasil | ||||
Legal obligors | ||||
Receivables | 468,082 | 371,838 | 120,839 | |
CEF | ||||
Legal obligors | ||||
Receivables | 213,558 | 153,658 | 54,816 | |
Santander | ||||
Legal obligors | ||||
Receivables | 633,761 | 433,560 | 127,780 | |
Other | ||||
Legal obligors | ||||
Receivables | 799,268 | 535,801 | 144,189 | |
Total card issuers | ||||
Legal obligors | ||||
Receivables | [1] | 4,473,069 | 3,150,819 | 942,839 |
Vero | ||||
Legal obligors | ||||
Receivables | 16,605 | 21,463 | 331,807 | |
Cielo Total | ||||
Legal obligors | ||||
Receivables | 232,315 | 355,949 | ||
Redecard | ||||
Legal obligors | ||||
Receivables | 38,204 | 45,289 | 56,025 | |
Amex | ||||
Legal obligors | ||||
Receivables | 49,409 | 39,608 | 4,090 | |
Other | ||||
Legal obligors | ||||
Receivables | 22,939 | 31,864 | 24,804 | |
Total acquirers | ||||
Legal obligors | ||||
Receivables | [2] | 408,429 | 370,539 | 772,675 |
Other | ||||
Legal obligors | ||||
Receivables | 1,823 | 991 | ||
Total other | ||||
Legal obligors | ||||
Receivables | 1,823 | 991 | ||
Cielo - Elo | ||||
Legal obligors | ||||
Receivables | 173,879 | 151,851 | ||
Cielo | ||||
Legal obligors | ||||
Receivables | 107,394 | 80,464 | ||
Visa | ||||
Legal obligors | ||||
Receivables | 1,638,189 | 1,192,167 | 429,104 | |
Visa | Itau | ||||
Legal obligors | ||||
Receivables | 349,272 | 237,335 | 99,433 | |
Visa | Bradesco | ||||
Legal obligors | ||||
Receivables | 449,645 | 333,108 | 115,009 | |
Visa | Banco do Brasil | ||||
Legal obligors | ||||
Receivables | 364,329 | 287,334 | 91,414 | |
Visa | CEF | ||||
Legal obligors | ||||
Receivables | 95,462 | 69,974 | 23,837 | |
Visa | Santander | ||||
Legal obligors | ||||
Receivables | 164,853 | 122,614 | 48,695 | |
Visa | Other | ||||
Legal obligors | ||||
Receivables | 214,628 | 141,802 | 50,716 | |
Visa | Total card issuers | ||||
Legal obligors | ||||
Receivables | [1] | 1,638,189 | 1,192,167 | 429,104 |
Master | ||||
Legal obligors | ||||
Receivables | 2,523,430 | 1,707,835 | 513,735 | |
Master | Itau | ||||
Legal obligors | ||||
Receivables | 1,128,312 | 751,542 | 244,741 | |
Master | Bradesco | ||||
Legal obligors | ||||
Receivables | 119,721 | 83,160 | 36,032 | |
Master | Banco do Brasil | ||||
Legal obligors | ||||
Receivables | 103,753 | 84,504 | 29,425 | |
Master | CEF | ||||
Legal obligors | ||||
Receivables | 118,096 | 83,684 | 30,979 | |
Master | Santander | ||||
Legal obligors | ||||
Receivables | 468,908 | 310,946 | 79,085 | |
Master | Other | ||||
Legal obligors | ||||
Receivables | 584,640 | 393,999 | 93,473 | |
Master | Total card issuers | ||||
Legal obligors | ||||
Receivables | [1] | 2,523,430 | 1,707,835 | R$ 513735 |
Hipercard | ||||
Legal obligors | ||||
Receivables | 311,450 | 250,817 | ||
Hipercard | Itau | ||||
Legal obligors | ||||
Receivables | 311,450 | 250,817 | ||
Hipercard | Total card issuers | ||||
Legal obligors | ||||
Receivables | [1] | R$ 311450 | R$ 250817 | |
[1] | Card issuers: receivables derived from transactions where the PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa, Mastercard or Hipercard. However, the PagSeguro Brazil's contractual note receivables are with the financial institutions, which are the legal obligors on the note receivables.Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa, Mastercard or Hipercard, as applicable, in the event that the legal obligors do not make payment. PagSeguro Brazil started operating directly as a financial intermediary in 2016. | |||
[2] | Acquirers: refer to card processing transactions to be received from the acquirers, which are a third parties acting as a financial intermediaries between the issuing bank and PagSeguro Brazil. This balance also includes the receivables from sales of debit and credit card readers. |
Note receivables (Details 2) (D
Note receivables (Details 2) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Maturity analysis of note receivables | |||
Receivables | R$ 4883321 | R$ 3522349 | R$ 1715514 |
Due within 30 days | |||
Maturity analysis of note receivables | |||
Receivables | 2,647,347 | 2,213,929 | 970,086 |
Due within 31 to 120 days | |||
Maturity analysis of note receivables | |||
Receivables | 1,763,293 | 1,045,825 | 609,689 |
Due within 121 to 180 days | |||
Maturity analysis of note receivables | |||
Receivables | 140,265 | 114,953 | 43,144 |
Due within 181 to 360 days | |||
Maturity analysis of note receivables | |||
Receivables | R$ 332416 | R$ 147642 | R$ 92595 |
Related-party balances and tr68
Related-party balances and transactions (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Balances and transactions with related parties | |||||||
Receivables | R$ 909 | R$ 124723 | R$ 300809 | ||||
Payables | 44,973 | 39,101 | 76,249 | ||||
Immediate parent - UOL- cash management | |||||||
Balances and transactions with related parties | |||||||
Receivables | 909 | [1] | 124,721 | [1],[2] | 300,809 | [2] | |
Immediate parent - UOL - sales of services | |||||||
Balances and transactions with related parties | |||||||
Payables | 22,124 | [3] | 32,286 | [3],[4] | 59,692 | [4] | |
Immediate parent - UOL- shared service costs | |||||||
Balances and transactions with related parties | |||||||
Payables | 11,958 | ||||||
Affiliated companies - UOL Diveo- cash management | |||||||
Balances and transactions with related parties | |||||||
Receivables | [1],[2] | 2 | |||||
Payables | [2] | 1,383 | |||||
Affiliated companies - UOL Diveo - sales of services | |||||||
Balances and transactions with related parties | |||||||
Payables | 3,558 | [3] | 621 | [3],[4] | 9,360 | [4] | |
Affiliated companies - UOL Diveo - shared service costs | |||||||
Balances and transactions with related parties | |||||||
Payables | 90 | ||||||
Affiliated companies - Concurso Virtual S.A. | |||||||
Balances and transactions with related parties | |||||||
Payables | 1,479 | 1,522 | 1,900 | ||||
Affiliated companies - Transfolha Transportadora e Distribuicao Ltda. | |||||||
Balances and transactions with related parties | |||||||
Payables | 1,869 | 745 | 1,196 | ||||
Affiliated companies - Livraria da Folha Ltda. | |||||||
Balances and transactions with related parties | |||||||
Payables | 1,143 | 1,078 | 2,285 | ||||
Affiliated companies - Empresa Folha da Manha S/A | |||||||
Balances and transactions with related parties | |||||||
Payables | 1,707 | 2,320 | 21 | ||||
Affiliated companies - Others | |||||||
Balances and transactions with related parties | |||||||
Payables | R$ 1045 | R$ 529 | R$ 412 | ||||
[1] | The receivables/payables transactions with related parties arising from cash management were ended at the date of the IPO. The remaining balance of R$ 909 was fully paid during the month of April 2018. | ||||||
[2] | The receivables/payables with related parties arising from cash management are settled within one month and are free of interest. Shared service costs are offset with these balances. The receivables are unsecured in nature and no provisions are held against receivables from related parties. | ||||||
[3] | Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in hosting from UOL Diveo Tecnologia Ltda. | ||||||
[4] | Sale of services refers mainly to purchase of (i) advertising services from UOL and (ii) services related to technical support in computing and hosting from UOL Diveo Tecnologia Ltda. ("UOL Diveo"), which started in 2016. |
Related-Party Balances and Tr69
Related-Party Balances and Transactions (Details 2) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Balances and transactions with related parties | |||||||||||
Revenue | R$ 738 | R$ 220 | R$ 1480 | R$ 744 | R$ 857 | ||||||
Expense | 65,251 | 33,334 | 149,863 | 137,885 | 84,427 | ||||||
Immediate parent - UOL- shared service costs | |||||||||||
Balances and transactions with related parties | |||||||||||
Expense | 43,041 | [1] | 12,044 | [1] | 58,375 | 31,498 | 12,369 | ||||
Immediate parent - UOL- shared service costs - carved out | |||||||||||
Balances and transactions with related parties | |||||||||||
Expense | [2] | 12,032 | |||||||||
Immediate parent - UOL - sales of services | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | [3] | 468 | 689 | ||||||||
Expense | [3] | 12,921 | 12,703 | 46,976 | 81,007 | 22,458 | |||||
Immediate parent - UOL- sale of services - carved out | |||||||||||
Balances and transactions with related parties | |||||||||||
Expense | [4] | 36,737 | |||||||||
Affiliated companies - UOL Diveo - shared service costs | |||||||||||
Balances and transactions with related parties | |||||||||||
Expense | [5] | 123 | 25 | 24 | 1,710 | ||||||
Affiliated companies - UOL Diveo - sales of services | |||||||||||
Balances and transactions with related parties | |||||||||||
Expense | 6,542 | [6] | 4,748 | [6] | 28,953 | [7] | 18,069 | [7] | 25 | [7] | |
Affiliated companies - Concurso Virtual S.A. | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | 28 | 34 | 117 | 134 | 389 | ||||||
Affiliated companies - Transfolha Transportadora e Distribuicao Ltda. | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | 39 | ||||||||||
Expense | 2,624 | 3,814 | 15,405 | 5,500 | 806 | ||||||
Affiliated companies - Livraria da Folha Ltda. | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | 71 | 135 | 319 | 349 | 347 | ||||||
Affiliated companies - Others | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | 22 | 11 | 316 | 261 | R$ 121 | ||||||
Expense | R$ 130 | R$ 101 | |||||||||
Affiliated Companies Edgar De Abreu Ltda | |||||||||||
Balances and transactions with related parties | |||||||||||
Revenue | R$ 149 | R$ 40 | |||||||||
[1] | Shared services costs mainly related to (i) payroll costs, (ii) IT structure / software and (iii) property rental costs are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. Such costs are included in administrative expenses. The increase in the balance refers to payroll taxes related to LTIP in the amount of R$28,400, which are paid by the parent company UOL and reimbursed by the PagSeguro Group. | ||||||||||
[2] | The main costs that the UOL Group allocated to PagSeguro Brazil (based on the number of employees and/or the time worked, basis that management believes is reasonable), are (i) payroll costs, (ii) IT structure / software and (iii) rental costs. The allocated costs to the carve-out financial statements are included in administrative expenses. | ||||||||||
[3] | Sale of services related to advertising services are incurred by the parent company UOL and are charged to PagSeguro Brazil pursuant to contractual agreements. | ||||||||||
[4] | Sales of services related to advertising services were allocated based on intercompany cost, a basis that management believes is reasonable from January 2014 through July 2015. | ||||||||||
[5] | Shared services costs are incurred by the affiliated company UOL Diveo and are charged to PagSeguro Brazil pursuant to contractual agreements. The main costs are related to IT structure/software. | ||||||||||
[6] | Sale of services from the affiliated company UOL Diveo related to technical support in hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. | ||||||||||
[7] | Sale of services from the affiliated company UOL Diveo related to technical support in computing and hosting services (started in 2016) and are charged to PagSeguro Brazil pursuant to contractual agreements. |
Related-party balances and tr70
Related-party balances and transactions (Details Text) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related-party balances and transactions (Details Text) | ||||||
Payroll taxes | R$ 28400 | |||||
Key management personnel compensation, short-term employee benefits | R$ 27845 | R$ 878 | R$ 3487 | R$ 2658 | R$ 2243 | |
Settlement related to interest on own capital that was distributed | 22,149 | |||||
Distribution of dividends | R$ 142794 | 238,803 | 96,008 | |||
Offset against receivables under the centralized cash management | 184,530 | |||||
Payment the remaining balance of in cash | R$ 54273 | |||||
Capital increase | 63,264 | |||||
Share capital | ||||||
Related-party balances and transactions (Details Text) | ||||||
Capital increase | 26,610 | |||||
Share capital | ||||||
Related-party balances and transactions (Details Text) | ||||||
Capital increase | R$ 36654 | |||||
The PagSeguro Brazil Group is controlled by UOL (incorporated in Brazil) | ||||||
Related-party balances and transactions (Details Text) | ||||||
Ownership - % | 99.99% |
Business combinations (Details
Business combinations (Details Text) (Detail) - BRL (R$) R$ in Thousands | Oct. 03, 2017 | Dec. 31, 2018 | Apr. 23, 2018 | Mar. 12, 2018 | Jan. 15, 2018 | Dec. 31, 2017 | Nov. 30, 2017 | Aug. 14, 2017 | May 02, 2017 | Jan. 31, 2017 |
BCPS | ||||||||||
Business combinations (Details Text) | ||||||||||
PagSeguro Brazil acquired the share capital and obtained the control of BCPS | 99.50% | |||||||||
Amount paid in the acquisition, which was settled in cash on that date | R$ 406 | |||||||||
Fair value of the acquired assets | 568 | |||||||||
Fair value of the assumed liabilities | 75 | |||||||||
Bargain purchase gain | R$ 87 | |||||||||
R2TECH | ||||||||||
Business combinations (Details Text) | ||||||||||
Fair value of the acquired assets | R$ 348 | |||||||||
Fair value of the assumed liabilities | R$ 215 | |||||||||
PagSeguro Brazil acquired the share capital and obtained control of R2TECH | 51.00% | |||||||||
The consideration for the purchase | R$ 9200 | |||||||||
Settled in cash on the acquisition date | R$ 3500 | R$ 2300 | R$ 460 | R$ 2940 | ||||||
Goodwill | 9,067 | |||||||||
Intangible assets-Portfolio of customers | R$ 768 | |||||||||
Intangible assets-Portfolio of customers - using the real discount rate (without inflationary effects) | 15.30% | |||||||||
Intangible assets-Non-competition | R$ 242 | |||||||||
Intangible assets-Non-competition - using the real discount rate (without inflationary effects) | 15.30% | |||||||||
Intangible assets-Right-to-use software | R$ 1488 | |||||||||
Intangible assets-Right-to-use software - using the real discount rate (without inflationary effects) | 15.30% | |||||||||
R2TECH | Subsequent Event [Member] | ||||||||||
Business combinations (Details Text) | ||||||||||
Settled in cash on the acquisition date | R$ 3500 | R$ 2300 | ||||||||
BIVA | ||||||||||
Business combinations (Details Text) | ||||||||||
Fair value of the acquired assets | R$ 2350 | |||||||||
Fair value of the assumed liabilities | R$ 997 | |||||||||
The consideration for the purchase | R$ 4650 | R$ 4650 | R$ 2394 | |||||||
PagSeguro Brazil acquired control with the acquisition of interest in Bivaco Holding SA | 51.41% | 59.31% | ||||||||
The total consideration paid for the purchases, which was settled in cash on the acquisition date | R$ 18470 | |||||||||
Goodwill | 17,117 | |||||||||
Additional interest of acquired | 0.50% | 15.12% | 7.90% | |||||||
Carrying amount of non-controlling interests acquired | 221 | |||||||||
Derecognition Of Noncontrolling Interest | 221 | |||||||||
Decrease in equity attributable to owners of the parent | R$ 6823 |
Property and equipment (Details
Property and equipment (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment is composed as follows | |||
Property and equipment | R$ 11065 | R$ 10889 | R$ 4558 |
Data processing equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | 5,615 | 5,910 | 3,882 |
Facilities | |||
Property and equipment is composed as follows | |||
Property and equipment | 29 | 30 | 33 |
Machinery and equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | 4,788 | 4,294 | 408 |
Furniture and fittings | |||
Property and equipment is composed as follows | |||
Property and equipment | 321 | 331 | 150 |
Leasehold improvements | |||
Property and equipment is composed as follows | |||
Property and equipment | 224 | 234 | 85 |
Vehicles | |||
Property and equipment is composed as follows | |||
Property and equipment | 88 | 90 | |
Cost | |||
Property and equipment is composed as follows | |||
Property and equipment | 17,583 | 16,607 | 8,464 |
Cost | Data processing equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | 11,262 | 11,024 | 7,574 |
Cost | Facilities | |||
Property and equipment is composed as follows | |||
Property and equipment | 53 | 53 | 52 |
Cost | Machinery and equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | 5,469 | 4,738 | 548 |
Cost | Furniture and fittings | |||
Property and equipment is composed as follows | |||
Property and equipment | 397 | 397 | 190 |
Cost | Leasehold improvements | |||
Property and equipment is composed as follows | |||
Property and equipment | 263 | 263 | 100 |
Cost | Vehicles | |||
Property and equipment is composed as follows | |||
Property and equipment | 139 | 132 | |
Accumulated amortization | |||
Property and equipment is composed as follows | |||
Property and equipment | (6,518) | (5,718) | (3,906) |
Accumulated amortization | Data processing equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | (5,647) | (5,114) | (3,692) |
Accumulated amortization | Facilities | |||
Property and equipment is composed as follows | |||
Property and equipment | (24) | (23) | (19) |
Accumulated amortization | Machinery and equipment | |||
Property and equipment is composed as follows | |||
Property and equipment | (681) | (444) | (140) |
Accumulated amortization | Furniture and fittings | |||
Property and equipment is composed as follows | |||
Property and equipment | (76) | (66) | (40) |
Accumulated amortization | Leasehold improvements | |||
Property and equipment is composed as follows | |||
Property and equipment | (39) | (29) | R$ 15 |
Accumulated amortization | Vehicles | |||
Property and equipment is composed as follows | |||
Property and equipment | R$ 51 | R$ 42 |
Property and equipment (Detai73
Property and equipment (Details 2) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in cost and accumulated depreciation were as follows | |||
Purchases | R$ 7873 | ||
Acquisition of subsidiary | 271 | ||
Additions | R$ 976 | ||
Depreciation | (800) | (1,812) | |
Net book value | 11,065 | 10,889 | R$ 4558 |
Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 17,583 | 16,607 | 8,464 |
Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (6,518) | (5,718) | (3,906) |
Data processing equipment | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 3,316 | ||
Acquisition of subsidiary | 134 | ||
Additions | 238 | ||
Depreciation | (533) | (1,422) | |
Net book value | 5,615 | 5,910 | 3,882 |
Data processing equipment | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 11,262 | 11,024 | 7,574 |
Data processing equipment | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (5,647) | (5,114) | (3,692) |
Facilities | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 1 | ||
Depreciation | (1) | (4) | |
Net book value | 29 | 30 | 33 |
Facilities | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 53 | 53 | 52 |
Facilities | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (24) | (23) | (19) |
Machinery and equipment | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 4,171 | ||
Acquisition of subsidiary | 19 | ||
Additions | 731 | ||
Depreciation | (237) | (304) | |
Net book value | 4,788 | 4,294 | 408 |
Machinery and equipment | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 5,469 | 4,738 | 548 |
Machinery and equipment | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (681) | (444) | (140) |
Furniture and fittings | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 176 | ||
Acquisition of subsidiary | 31 | ||
Depreciation | (10) | (26) | |
Net book value | 321 | 331 | 150 |
Furniture and fittings | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 397 | 397 | 190 |
Furniture and fittings | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (76) | (66) | (40) |
Leasehold improvements | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 94 | ||
Acquisition of subsidiary | 69 | ||
Depreciation | (10) | (14) | |
Net book value | 224 | 234 | 85 |
Leasehold improvements | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 263 | 263 | 100 |
Leasehold improvements | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | (39) | (29) | R$ 15 |
Vehicles | |||
Changes in cost and accumulated depreciation were as follows | |||
Purchases | 114 | ||
Acquisition of subsidiary | 18 | ||
Additions | 7 | ||
Depreciation | (9) | (42) | |
Net book value | 88 | 90 | |
Vehicles | Cost | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | 139 | 132 | |
Vehicles | Accumulated amortization | |||
Changes in cost and accumulated depreciation were as follows | |||
Net book value | R$ 51 | R$ 42 |
Intangible assets (Details 1) (
Intangible assets (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Intangible assets are composed as follows | ||||||
Intangible assets | R$ 190638 | R$ 158868 | R$ 86108 | |||
Expenditures related to software and technology | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | [1] | 157,373 | 125,825 | 82,131 | ||
Software licenses | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 10,131 | 7,467 | 3,977 | |||
Customer relationships | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 1,735 | 1,890 | ||||
Goodwill | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 21,399 | [2] | 23,686 | [3] | ||
Cost | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 327,575 | 276,667 | 149,382 | |||
Cost | Expenditures related to software and technology | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | [1] | 291,666 | 241,490 | 143,989 | ||
Cost | Software licenses | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 12,529 | 9,510 | 5,393 | |||
Cost | Customer relationships | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 1,981 | 1,981 | ||||
Cost | Goodwill | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | 21,399 | [2] | 23,686 | [3] | ||
Accumulated amortization | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | (136,937) | (117,799) | (63,274) | |||
Accumulated amortization | Expenditures related to software and technology | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | [1] | (134,293) | (115,665) | (61,858) | ||
Accumulated amortization | Software licenses | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | (2,398) | (2,043) | R$ 1416 | |||
Accumulated amortization | Customer relationships | ||||||
Intangible assets are composed as follows | ||||||
Intangible assets | R$ 246 | R$ 91 | ||||
[1] | PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. | |||||
[2] | Goodwill provided on the acquisition of the companies R2TECH and BIVA. | |||||
[3] | Goodwill provided on the acquisition of the companies R2TECH and BIVA as described in Note 10. |
Intangible assets (Details Text
Intangible assets (Details Text) (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets Details Text [Abstract] | ||
The PagSeguro Brazil Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives | three to five years | three to five years |
Intangible assets (Details 2) (
Intangible assets (Details 2) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Changes in cost and accumulated amortization were as follows | ||||||
Opening balance | R$ 158868 | R$ 86108 | ||||
Additions | 53,195 | 125,856 | ||||
Acquisition of subsidiary | 1,429 | |||||
Others | (2,287) | |||||
Amortization | (19,138) | (54,526) | ||||
Net book value | 190,638 | 158,868 | R$ 86108 | |||
Cost | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | 327,575 | 276,667 | 149,382 | |||
Accumulated amortization | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | (136,937) | (117,799) | (63,274) | |||
Expenditures related to software and technology | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Opening balance | 125,825 | 82,131 | ||||
Additions | 50,176 | 97,491 | ||||
Acquisition of subsidiary | 10 | |||||
Amortization | (18,628) | (53,807) | ||||
Net book value | [1] | 157,373 | 125,825 | 82,131 | ||
Expenditures related to software and technology | Cost | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | [1] | 291,666 | 241,490 | 143,989 | ||
Expenditures related to software and technology | Accumulated amortization | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | [1] | (134,293) | (115,665) | (61,858) | ||
Software licenses | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Opening balance | 7,467 | 3,977 | ||||
Additions | 3,019 | 1,210 | ||||
Acquisition of subsidiary | 1,419 | |||||
Transfer | 1,488 | |||||
Amortization | (355) | (627) | ||||
Net book value | 10,131 | 7,467 | 3,977 | |||
Software licenses | Cost | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | 12,529 | 9,510 | 5,393 | |||
Software licenses | Accumulated amortization | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | (2,398) | (2,043) | R$ 1416 | |||
Customer relationships | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Opening balance | 1,890 | |||||
Additions | 971 | |||||
Transfer | 1,010 | |||||
Amortization | (155) | (91) | ||||
Net book value | 1,735 | 1,890 | ||||
Customer relationships | Cost | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | 1,981 | 1,981 | ||||
Customer relationships | Accumulated amortization | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | (246) | (91) | ||||
Goodwill | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Opening balance | 23,686 | |||||
Additions | 26,184 | |||||
Others | (2,287) | |||||
Transfer | (2,498) | |||||
Net book value | 21,399 | [2] | 23,686 | [3] | ||
Goodwill | Cost | ||||||
Changes in cost and accumulated amortization were as follows | ||||||
Net book value | R$ 21399 | [2] | R$ 23686 | [3] | ||
[1] | PagSeguro Group capitalizes the expenses incurred with the development of platforms, which are amortized over the useful lives, within a range from three to five years. | |||||
[2] | Goodwill provided on the acquisition of the companies R2TECH and BIVA. | |||||
[3] | Goodwill provided on the acquisition of the companies R2TECH and BIVA as described in Note 10. |
Payables to third parties (Deta
Payables to third parties (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Trade and other payables [abstract] | |||
Payables to third parties | R$ 2975297 | R$ 3080569 | R$ 1304031 |
Total | R$ 2975297 | R$ 3080569 | R$ 1304031 |
Disclosure - Payables to third
Disclosure - Payables to third parties (Details Text) (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2015 | |
Maximum [Member] | |||
Payables to third parties, average settlement terms | 30 months | 30 months | 30 months |
Salaries and social charges (De
Salaries and social charges (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Salaries and social charges [Abstract] | |||
Profit sharing | R$ 4943 | R$ 15237 | R$ 8696 |
Salaries payable | 2,962 | 2,758 | 1,682 |
Social charges | 4,618 | 5,102 | 3,225 |
Payroll accruals | 12,624 | 9,807 | 5,877 |
Other | 1,045 | 1,365 | 789 |
Total | R$ 26192 | R$ 34269 | R$ 20269 |
Taxes and contribution (Detail)
Taxes and contribution (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Taxes [Abstract] | ||||||
Services tax | [1] | R$ 34008 | R$ 14837 | R$ 1382 | ||
Value-added tax on sales and services | [2] | 13,439 | 3,830 | 3,596 | ||
Social integration program | [3] | 11,878 | 9,918 | 2,690 | ||
Social contribution on revenues | [3] | 71,773 | 59,358 | 16,544 | ||
Income tax and social contribution | [4] | 20,995 | 35,474 | |||
Other | 1,501 | 1,264 | 690 | |||
Total | 153,594 | 124,681 | 24,902 | |||
Judicial deposits | ||||||
Services tax | (15,525) | (11,375) | [5] | |||
Value-added tax on sales and services | (6,685) | (2,665) | [5] | |||
Social integration program | (10,277) | (8,188) | [5] | (2,516) | [5] | |
Social contribution on revenues | (63,245) | (50,389) | [5] | (15,475) | [5] | |
Total | (95,732) | (72,617) | [5] | (17,991) | [5] | |
Total | R$ 57862 | R$ 52064 | R$ 6911 | |||
[1] | Refers to taxes on revenue from transaction activities. | |||||
[2] | Refers to the Value-added Tax on Sales and Services (ICMS) amounts due by Net+Phone, related to tax substitution and tax rate differential, applied on sales of credit and debit card readers. | |||||
[3] | Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income. | |||||
[4] | Refers to the income tax and social contribution payable on current income taxes and contribution. | |||||
[5] | PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed in items "i", "ii" and "iii" above. |
Provision for contingencies (De
Provision for contingencies (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current provisions [abstract] | |||
Civil | R$ 4895 | R$ 4326 | R$ 555 |
Labor | 318 | 322 | 125 |
Total | R$ 5213 | R$ 4648 | R$ 680 |
Provision for contingencies (82
Provision for contingencies (Detils Text) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Provision For Contingencies Details Text [Abstract] | |||
Tax lawsuits classified as possible losses, for which no provision was recognized | R$ 22160 | R$ 25800 | |
Tax lawsuits classified as possible losses | R$ 29726 | R$ 25800 |
Income tax and social contrib83
Income tax and social contribution (Details 1) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Deferred tax | |||||||
Included in the statement of income | R$ 6391 | R$ 2468 | R$ 12748 | R$ 10278 | R$ 20149 | ||
Taken directly to equity | 3,606 | ||||||
Deferred tax | 597 | (18,542) | (5,794) | (16,074) | R$ 469 | ||
Tax losses | |||||||
Deferred tax | |||||||
Included in the statement of income | 3,934 | (874) | 1,310 | 436 | (2,312) | ||
Deferred tax | 5,421 | 177 | 1,487 | 1,051 | 3,363 | ||
Tax credit | |||||||
Deferred tax | |||||||
Included in the statement of income | (180) | (721) | (721) | ||||
Taken directly to equity | 3,606 | ||||||
Deferred tax | 2,705 | 3,606 | 2,885 | 3,606 | |||
Technological inovation | |||||||
Deferred tax | |||||||
Included in the statement of income | [1] | (11,344) | (4,354) | (12,460) | (16,814) | (18,121) | |
Deferred tax | [1] | (52,536) | (28,732) | (41,192) | (24,378) | (6,257) | |
Other temporary differences - ASSETS | |||||||
Deferred tax | |||||||
Included in the statement of income | 23,054 | 2,759 | 26,236 | 28,995 | 284 | ||
Deferred tax | 55,696 | R$ 6406 | 32,642 | R$ 3647 | R$ 3363 | ||
Other Temporary Differences - LIABILITY | |||||||
Deferred tax | |||||||
Included in the statement of income | (9,073) | R$ 1616 | (1,616) | ||||
Deferred tax | R$ 10689 | R$ 1616 | |||||
[1] | The main temporary differences representing the balance of the deferred tax liability refers to the benefit granted by the Technological Innovation Law (Lei do Bem), which reduces the tax charges on the capitalized amount of property and equipment. |
Income tax and social contrib84
Income tax and social contribution (Details 2) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets and liabilities | |||
Assets | R$ 63822 | R$ 37015 | R$ 8305 |
Liabilities | (63,226) | (42,809) | (24,378) |
2,017 | |||
Deferred tax assets and liabilities | |||
Assets | 940 | ||
Liabilities | (8,126) | ||
2,018 | |||
Deferred tax assets and liabilities | |||
Assets | 24,883 | 8,895 | 940 |
Liabilities | (24,509) | (20,728) | (8,126) |
2,019 | |||
Deferred tax assets and liabilities | |||
Assets | 7,974 | 4,040 | 940 |
Liabilities | (21,789) | (18,008) | (8,126) |
2,020 | |||
Deferred tax assets and liabilities | |||
Assets | 6,045 | 2,111 | 940 |
Liabilities | (6,235) | (2,454) | |
2,021 | |||
Deferred tax assets and liabilities | |||
Assets | 982 | 982 | R$ 4545 |
Liabilities | (4,999) | (1,434) | |
2,022 | |||
Deferred tax assets and liabilities | |||
Assets | 23,938 | 20,987 | |
Liabilities | R$ 5694 | R$ 185 |
Income tax and social contrib85
Income tax and social contribution (Details 3) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Reconciliation Of The Income Tax And Social Contribution Expense [Abstract] | ||||||||
Profit for the period before taxes | R$ 163000 | R$ 82177 | R$ 683504 | R$ 155359 | R$ 40315 | |||
Statutory rate | 34.00% | 34.00% | 34.00% | 34.00% | 34.00% | |||
Expected income tax and social contribution | R$ 55420 | R$ 27940 | R$ 232391 | R$ 52822 | R$ 13707 | |||
Permanent additions (exclusions) | ||||||||
Participation in the results of partners and managers | (314) | (234) | ||||||
Gifts | (364) | (37) | (375) | (149) | ||||
R&D and technological innovation benefit - Law 11.196/05 | 13,553 | [1] | 5,551 | [1] | 24,987 | 15,898 | 11,596 | |
Interest on own capital | 8,860 | |||||||
No taxable earnings | [2] | 30,916 | ||||||
Tax Incentives - Law Rounet Art. 18 | 1,981 | |||||||
Other additions | (3,228) | 874 | 1,402 | 485 | (2,333) | |||
Income tax and social contribution expense | R$ 14544 | R$ 21552 | (204,711) | (27,580) | (4,826) | |||
Effective rate | 9.00% | 26.00% | ||||||
Income tax and social contribution - current | R$ 20935 | R$ 19085 | (214,988) | (7,431) | (2,587) | |||
Income tax and social contribution - deferred | R$ 6391 | R$ 2468 | R$ 10278 | R$ 20149 | R$ 2239 | |||
[1] | Refers to the benefit granted by the Technological Innovation Law (Lei do Bem), which reduces the income tax charges, based on the amount invested by the PagSeguro Group on some specific property and equipment. | |||||||
[2] | Refers to the benefit granted by based on the local law of Cayman (The Companies Law of 1960), there is no taxation on the income earned in the companies based in this locality. As a result of the local tax regulations, all the exchange variantions from dolar to reais which generates income has no tax impacts for the PagSeguro Digital. |
Equity (Details Text) (Detail)
Equity (Details Text) (Detail) $ / shares in Units, shares in Thousands, R$ in Thousands, $ in Millions | Jan. 26, 2018BRL (R$) | Jan. 26, 2018USD ($)$ / sharesshares | Jan. 26, 2018shares$ / shares | Mar. 31, 2018BRL (R$)shares | Dec. 31, 2017BRL (R$)shares | Mar. 31, 2018$ / shares | Sep. 29, 2017BRL (R$) | Dec. 31, 2016BRL (R$)shares | Jul. 31, 2016BRL (R$)shares | May 31, 2016BRL (R$)shares | Dec. 31, 2015shares | [1] | Dec. 30, 2015BRL (R$)shares | Aug. 31, 2015BRL (R$)shares |
Equity (Details Text) | ||||||||||||||
Common Shares | shares | 315,037,976 | 262,288,607 | 262,288,607 | 220,808,044 | ||||||||||
Compensation expenses related to LTIP | R$ 155160 | |||||||||||||
Distribuition of dividends related six months de 2017 | R$ 142795 | |||||||||||||
Distribuition of dividends related year 2016 | R$ 96008 | |||||||||||||
The total dividends distributed amounted | 238,803 | R$ 238803 | ||||||||||||
Dividends distributed, offset against receivables under the centralized cash management with UOL | 184,530 | 184,530 | ||||||||||||
Dividends distributed, paid in cash by PagSeguro Brazil to UOL | 54,272 | 54,272 | ||||||||||||
Equity valuation adjustments | R$ 6701 | 55 | R$ 0 | |||||||||||
The shareholder UOL increased the PagSeguro Brazil share capital | R$ 69087 | R$ 329961 | ||||||||||||
The shareholder UOL increased the PagSeguro Brazil share capital - Shares | shares | 34,543,522 | 164,980,523 | ||||||||||||
The shareholder UOL increased the PagSeguro Brazil share capital - Total | R$ 399048 | |||||||||||||
UOL capitalized balances of related parties as a capital contribution | R$ 26610 | |||||||||||||
UOL capitalized balances of related parties as a capital contribution - Shares | shares | 13,305,204 | |||||||||||||
UOL capitalized balances of related parties as a capital contribution, in Net+Phone | R$ 36654 | |||||||||||||
UOL capitalized balances of related parties as a capital contribution, in Net+Phone - Shares | shares | 18,327,103 | |||||||||||||
UOL transferred its investment in Boa Compra and Net+Phone to PagSeguro Brazil, as a capital contribution | R$ 56351 | |||||||||||||
UOL transferred its investment in Boa Compra and Net+Phone to PagSeguro Brazil, as a capital contribution - Shares | shares | 28,175,359 | |||||||||||||
PagSeguro Brazil management is proposing the establishment of a profit retention reserve totaling | R$ 312047 | |||||||||||||
Profit of PagSeguro Brazil will be distributed as dividends to the shareholders | 1.00% | |||||||||||||
Annual profit | ||||||||||||||
Equity (Details Text) | ||||||||||||||
The legal reserve is established pursuant to the bylaws | 5.00% | |||||||||||||
Annual profit - limit of | ||||||||||||||
Equity (Details Text) | ||||||||||||||
The legal reserve is established pursuant to the bylaws | 20.00% | |||||||||||||
Long-Term Incentive Plan | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Percentage of stock | 3.00% | |||||||||||||
Shares granted | shares | 5,292,738 | |||||||||||||
Shares outstanding | shares | 3,469,011 | |||||||||||||
Common shares | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Common Shares | shares | 315,037,963 | 262,288,607 | 220,808,044 | |||||||||||
Common Shares, Par Value | $ / shares | $ 0.000025 | |||||||||||||
Increase (decrease) in number of shares outstanding | shares | 524,577,214 | |||||||||||||
Class A common shares | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Global offering of shares | shares | 121,193,388 | 121,193,388 | ||||||||||||
Class A common shares | Long-Term Incentive Plan | ||||||||||||||
Equity (Details Text) | ||||||||||||||
LTIP exercised | shares | 1,823,727 | |||||||||||||
Share price per share | $ / shares | $ 21.50 | |||||||||||||
Class A common shares | Shares offered by PagSeguro Digital | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Common Shares, Par Value | $ / shares | $ 21.50 | $ 21.50 | ||||||||||||
Global offering of shares | shares | 50,925,642 | 50,925,642 | ||||||||||||
Net proceeds from issuance of new shares | R$ 3289800 | $ 1,046 | ||||||||||||
BCPS | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Equity valuation adjustments | R$ 122 | R$ 55 | ||||||||||||
Subsidiaries BIVA | ||||||||||||||
Equity (Details Text) | ||||||||||||||
Equity valuation adjustments | R$ 6756 | |||||||||||||
[1] | The shareholder UOL increased PagSeguro Brazil share capital on August 1, 2015 by the amount of R$ 329,961 (164,980,523 shares) and on December 30, 2015, by the amount of R$ 69,087 (34,543,522 shares), in the total amount of R$ 399,048, through the transfer of assets and liabilities related to payment operations which had been previously recorded in UOL, thus centralizing these activities in PagSeguro Brazil from thereon, resulting in total shares outstanding at December 31, 2015 of 220,808,044; |
Equity (Details 1) (Detail)
Equity (Details 1) (Detail) - shares shares in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | [1] | |
Share capital | ||||||
Shares outstanding | 315,037,976 | 262,288,607 | 262,288,607 | 220,808,044 | ||
Capitalization of control party related party payable | ||||||
Share capital | ||||||
Total number of shares issued | [2] | 13,305,204 | ||||
Issuance of shares to UOL for transfer of Net+Phone and Boa Compra | ||||||
Share capital | ||||||
Total number of shares issued | [3] | 28,175,359 | ||||
New shares offered in PaSeguro Digital IPO process | ||||||
Share capital | ||||||
Total number of shares issued | [4] | 50,925,642 | ||||
Shares issued related to the LTIP | ||||||
Share capital | ||||||
Total number of shares issued | [4] | 1,823,727 | ||||
[1] | The shareholder UOL increased PagSeguro Brazil share capital on August 1, 2015 by the amount of R$ 329,961 (164,980,523 shares) and on December 30, 2015, by the amount of R$ 69,087 (34,543,522 shares), in the total amount of R$ 399,048, through the transfer of assets and liabilities related to payment operations which had been previously recorded in UOL, thus centralizing these activities in PagSeguro Brazil from thereon, resulting in total shares outstanding at December 31, 2015 of 220,808,044; | |||||
[2] | On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 26,610 (13,305,204 shares); | |||||
[3] | On May 31 2016, UOL capitalized balances of related parties as a capital contribution in the amount of R$ 36,654 (18,327,103 shares) in Net+Phone. After that, as described in Note 2, in July 2016, UOL transferred its investment in Boa Compra and Net+Phone to PagSeguro Brazil, as a capital contribution in the amount of R$ 56,351 (28,175,359 shares). | |||||
[4] | During the year 2018, shares of PagSeguro Digital were issued as a result of the initial public offering and long-term incentive plan, see details in note 1.1, and note 1.2 and 17 (c). |
Earnings per share (Detail)
Earnings per share (Detail) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings per share [abstract] | |||||
Profit attributable to owners of the Company | R$ 148378 | R$ 60625 | R$ 478781 | R$ 127186 | R$ 35084 |
Weighted average number of common shares | 297,454,853 | 262,288,607 | 262,288,607 | 262,288,607 | 262,288,607 |
Basic earnings per share-R$ | R$ 0.4988 | R$ 0.2311 | |||
Basic and diluted earnings per share - in reais | R$ 1.8254 | R$ 0.4849 | R$ 0.1338 | ||
Profit used to determine diluted earnings per share | R$ 148378 | R$ 60625 | R$ 478781 | R$ 127186 | R$ 35084 |
Weighted average number of outstanding common shares (thousands) | 297,454,853 | 262,288,607 | 262,288,607 | 262,288,607 | 262,288,607 |
Number of shares under option | 3,469,011 | ||||
Nmber of shares that would have been | (2,339,734) | ||||
Weighted average number of common shares for diluted earnings per share (thousands) | 298,584,130 | 262,288,607 | |||
Diluted earnings per share-R$ | R$ 0.4969 | R$ 0.2311 |
Total revenue and Income (Detai
Total revenue and Income (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Revenue And Income [abstract] | |||||||||||
Gross revenue from transaction activities and other services | R$ 514074 | R$ 217252 | R$ 1391381 | R$ 543818 | R$ 305298 | ||||||
Gross revenue from sales | 129,678 | 166,221 | 655,153 | 371,517 | 238,947 | ||||||
Gross financial income | 288,419 | [1] | 145,743 | [1] | 858,410 | [2] | 411,413 | [2] | 243,566 | [2] | |
Other financial income | 116,360 | [3] | 836 | [3] | 8,576 | 5,337 | 10,744 | ||||
Total gross revenue and income | 1,048,531 | 530,052 | 2,913,520 | 1,332,085 | 798,556 | ||||||
Deductions from gross revenue from transactions activities and other services | (71,226) | [4] | (26,827) | [4] | (167,120) | [5] | (63,793) | [5] | (37,101) | [5] | |
Deductions from gross revenue from sales | (35,692) | [6] | (47,783) | [6] | (183,229) | [7] | (110,923) | [7] | (62,430) | [7] | |
Deductions from gross financial income | [8] | (13,581) | (6,934) | (39,786) | (18,984) | (24,104) | |||||
Total deductions from gross revenue and income | (120,499) | (81,544) | (390,135) | (193,700) | (123,635) | ||||||
Total revenue and income | R$ 928032 | R$ 448508 | R$ 2523385 | R$ 1138385 | R$ 674920 | ||||||
[1] | Includes (a) interest income from early payment of notes payable to third parties and (b) interest on note receivables due in installments. | ||||||||||
[2] | Includes (a) interest from early payment related to the discount of notes payable to third parties paid in advance and (b) interest on note receivables due in installments. | ||||||||||
[3] | The increase in the period refers to foreign exchange gain on the currency conversion of the primary offer proceeds for the three-month period ended March 31, 2018 in the amount of R$89,866, and financial income on financial investments classified as cash and cash equivalents for the three-month period ended on March 31, 2018 in the amount of R$25,694 (March 31, 2017-R$360). | ||||||||||
[4] | Deductions consist of sales taxes. | ||||||||||
[5] | Deductions consist of services taxes. | ||||||||||
[6] | The deductions are composed by sales taxes and returns. | ||||||||||
[7] | The deductions are composed of sales taxes and returns. | ||||||||||
[8] | Deductions consist of taxes on financial income. |
Total revenue and Income (Paren
Total revenue and Income (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign currency gain on the currency conversion | R$ 89866 | |
Cash and Cash Equivalents | ||
Financial income on investments | R$ 25694 | R$ 360 |
Expenses by nature (Details 1)
Expenses by nature (Details 1) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Expenses by nature [Abstract] | |||||||||||
Transactions costs | R$ 247161 | R$ 104861 | R$ 661067 | R$ 283630 | R$ 145969 | ||||||
Cost of goods sold | (99,444) | (100,402) | (451,635) | (233,419) | (178,608) | ||||||
Marketing and advertising | (90,939) | (69,769) | (275,394) | (204,857) | (153,467) | ||||||
Personnel expenses | (242,353) | [1] | (20,311) | [1] | (105,794) | (63,280) | (48,130) | ||||
Financial expenses | (16,524) | [2] | (19,218) | [2] | (104,544) | [3] | (68,301) | [3] | (29,696) | [3] | |
Chargebacks | (14,438) | [4] | (17,434) | [4] | (47,854) | [5] | (31,557) | [5] | (27,490) | [5] | |
Depreciation and amortization | [6] | (18,007) | (10,762) | (51,571) | (31,246) | (18,580) | |||||
Other | (36,167) | (23,574) | (142,022) | (66,737) | (32,665) | ||||||
Total | (765,033) | (366,331) | (1,839,881) | (983,027) | (634,606) | ||||||
Classified as: | |||||||||||
Cost of services | (328,806) | (125,041) | (829,661) | (357,811) | (191,710) | ||||||
Cost of sales | (115,956) | (117,852) | (494,719) | (265,856) | (190,773) | ||||||
Selling expenses | (83,614) | (71,106) | (245,759) | (199,937) | (162,642) | ||||||
Administrative expenses | (219,024) | (32,520) | (153,177) | (84,461) | (61,129) | ||||||
Financial expenses | (16,524) | (19,218) | (104,544) | (68,301) | (29,696) | ||||||
Other (expenses) income, net | (1,109) | (594) | (12,021) | (6,660) | 1,345 | ||||||
Total | R$ 765033 | R$ 366331 | R$ 1839881 | R$ 983027 | R$ 634606 | ||||||
[1] | The increase refers to compensation expenses related to sthe LTIP for the three-month period ended March 31, 2018 in the amount of R$ 130,303 and the respective payroll taxes in the amount of R$ 80,270. | ||||||||||
[2] | Our financial expenses include (a) Financial Operations Tax (IOF) related to the remittance of cash from Cayman to Brazil in the amount of R$ 13,135 for the three-month period ended March 31,2018 (March 31, 2017-R$0), (b) charges to obtain early payment of receivables owed to us by card issuers to finance our early payment of receivables feature in the amount of R$ 1,465 for the three-month period ended March 31,2018 (March 31, 2017-R$16,382). | ||||||||||
[3] | Our financial expenses include (a) the charges we incur to obtain early payment of receivables owed to us by card issuers and acquirers in order to finance our early payment of receivables feature for merchants, (b) interest expense on our other borrowings and (c) the cost of swaps relating to our foreign currency borrowings. | ||||||||||
[4] | Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 22 (ii). | ||||||||||
[5] | Chargebacks refer to losses recognized in the period reflecting the risks of fraud associated with card processing operations, as detailed in Note 24 (iii). | ||||||||||
[6] | The depreciation and amortization amounts incurred in the period are segregated between costs and expenses as presented below: |
Expenses by nature (Details 192
Expenses by nature (Details 1) (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation expenses related to the LTIP | R$ 130303 | R$ 0 | ||
Payroll taxes related to LTIP | 80,270 | |||
Early payments of receivables expense | 18,834 | R$ 27956 | R$ 4495 | |
IOF [Member] | ||||
Tax on Financial Transactions | 13,135 | 0 | ||
Early payments of receivables expense | R$ 1465 | R$ 16382 |
Expenses by nature (Details 2)
Expenses by nature (Details 2) (Detail) - BRL (R$) R$ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Depreciation [Abstract] | ||||||||||
Cost of sales and services | R$ 511 | R$ 225 | R$ 1088 | R$ 895 | R$ 904 | |||||
Selling expenses | (1) | (3) | (10) | (11) | (27) | |||||
Administrative expenses | (288) | (146) | (714) | (371) | (393) | |||||
Total | (800) | (374) | (1,812) | (1,277) | (1,324) | |||||
Amortization | ||||||||||
Cost of sales and services | (18,800) | (11,234) | (54,151) | (32,846) | (18,377) | |||||
Administrative expenses | (140) | (30) | (375) | (59) | (333) | |||||
Total | (18,940) | (11,264) | (54,526) | (32,905) | (18,710) | |||||
PIS and COFINS credits | 1,733 | [1] | 876 | [1] | 4,767 | [2] | 2,936 | [2] | 1,101 | [2] |
Depreciation and amortization expense, net | R$ 18007 | R$ 10762 | R$ 51571 | R$ 31246 | R$ 18933 | |||||
[1] | PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. | |||||||||
[2] | PagSeguro Brazil has a tax benefit on PIS and COFINS that allows to reduce the depreciation and amortization expenses, when incurred. This tax benefit is recognized directly as a reduction of depreciation and amortization expense. |
Financial instruments by cate94
Financial instruments by category (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Measured At Fair Value Through Profit Or Loss [Abstract] | ||||||
Financial investments | R$ 0 | R$ 210103 | R$ 131239 | |||
Loans and receivables: | ||||||
Cash and cash equivalents | 2,545,389 | 66,767 | R$ 14744 | 79,969 | R$ 6888 | R$ 1199 |
Note receivables | 4,883,321 | 3,522,349 | 1,715,514 | |||
Receivables from related parties | 909 | 124,723 | 300,809 | |||
Other receivables | 18,834 | 27,956 | 4,495 | |||
Total | R$ 7448453 | R$ 3951898 | R$ 2232026 |
Financial instruments by cate95
Financial instruments by category (Details 2) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Measured At Fair Value Through Profit Or Loss [Abstract] | |||
Derivative financial instruments | R$ 6613 | ||
Total | 6,613 | ||
Amortized cost: | |||
Payables to third parties | R$ 2975297 | R$ 3080569 | 1,304,031 |
Trade payables | 119,155 | 92,444 | 61,719 |
Trade payables to related parties | 44,973 | 39,101 | 76,249 |
Borrowings | 0 | 205,204 | |
Other payables | 26,652 | 15,872 | |
Dividends payable and interest on own capital | 0 | 22,243 | |
Other payables | 23,028 | 15,872 | 15,244 |
Total | R$ 3166077 | R$ 3227986 | R$ 1684690 |
Financial risk management (Deta
Financial risk management (Details Text) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Financial Risk Management Details Text [Abstract] | ||||||
Cash and cash equivalents | R$ 2545389 | R$ 66767 | R$ 14744 | R$ 79969 | R$ 6888 | R$ 1199 |
Financial risk management (De97
Financial risk management (Details 2) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
At December | |||
Payables to third parties | R$ 2975297 | R$ 3080569 | R$ 1304031 |
Trade payables | 119,155 | 92,444 | 61,719 |
Borrowings | 0 | 205,204 | |
Dividends payable and interest on own capital | 0 | 22,243 | |
Other payables | 26,652 | 15,872 | |
Due within 30 days | |||
At December | |||
Payables to third parties | 2,759,059 | 2,890,080 | 1,228,922 |
Trade payables | 103,868 | 81,152 | 54,125 |
Due within 31 to 120 days | |||
At December | |||
Payables to third parties | 150,703 | 133,070 | 60,396 |
Trade payables | 8,980 | 6,032 | 4,827 |
Trade payables to related parties | 44,973 | ||
Borrowings | 208,374 | ||
Due within 121 to 180 days | |||
At December | |||
Payables to third parties | 35,515 | 31,081 | 10,152 |
Trade payables | 1,894 | 1,740 | 63 |
Due within 181 to 360 days | |||
At December | |||
Payables to third parties | 30,020 | 26,338 | 4,561 |
Trade payables | 2,055 | 1,083 | 2,704 |
Trade payables to related parties | 39,101 | 76,249 | |
Dividends payable and interest on own capital | 22,243 | ||
Other payables | 23,028 | 15,872 | R$ 15244 |
Due to 361 days or more days | |||
At December | |||
Trade payables | 2,358 | R$ 2437 | |
Other payables | R$ 3624 |
Capital management (Details Tex
Capital management (Details Text) (Detail) | Mar. 31, 2018 | Dec. 31, 2016 |
Capital Management Details Text [Abstract] | ||
PagSeguro Brazil Group's strategy was to maintain a gearing ratio | 20.00% | 20.00% |
Presentation and preparation 99
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) | |
Collection is expected | one year |
Distributions of dividends and interest on own capital to the PagSeguro Brazil Group shareholders | 1.00% |
Costs are amortized, basis over the estimated useful life - Software | |
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) | |
Intagible assets with useful life defined | three to five years |
Software licenses | |
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) | |
Intagible assets with useful life defined | five years |
Income tax | |
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) | |
Currently defined tax rates | 25.00% |
Social contribution | |
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details Text) | |
Currently defined tax rates | 9.00% |
Presentation and preparation100
Presentation and preparation of the consolidated financial statements and significant accounting policies (Details 1) (Detail) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Data processing equipment | ||
Property and equipment | ||
Years | 2.5 to 5 | 2.5 to 5 |
Furniture and fittings | ||
Property and equipment | ||
Years | 10 | 10 |
Facilities | ||
Property and equipment | ||
Years | 10 | 10 |
Leasehold improvements | ||
Property and equipment | ||
Years | 10 | 10 |
Machinery and equipment | ||
Property and equipment | ||
Years | 5 to 10 | 10 |
Vehicles | ||
Property and equipment | ||
Years | 5 |
Critical accounting estimate101
Critical accounting estimates and judgments (Details Text) (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Critical Accounting Estimates and Judgments Details Text [Abstract] | |
Deferred income tax and social contribution based on future taxable profit estimates | ten years |
Business combinations (Detai102
Business combinations (Details 1) (Detail) R$ in Thousands | 12 Months Ended |
Dec. 31, 2017BRL (R$) | |
Book value of purchased entities | |
The assets and liabilities arising from the acquisition | |
Cash and cash equivalents | R$ 51 |
Assets acquired | 2,598 |
Liabilities assumed | (1,312) |
Property, plant and equipment and intangible assets | 643 |
Value of net assets | 1,980 |
Goodwill | 26,184 |
Bargain purchase gain | (87) |
Purchase cost | 28,077 |
Purchase accounting adjustment | |
The assets and liabilities arising from the acquisition | |
Property, plant and equipment and intangible assets | 2,498 |
Value of net assets | 2,498 |
Goodwill | (2,498) |
Fair value of assets and liabilities acquired | |
The assets and liabilities arising from the acquisition | |
Cash and cash equivalents | 51 |
Assets acquired | 2,598 |
Liabilities assumed | (1,312) |
Property, plant and equipment and intangible assets | 3,141 |
Value of net assets | 4,478 |
Goodwill | 23,686 |
Bargain purchase gain | (87) |
Purchase cost | 28,077 |
Consideration for the purchase settled in cash | 22,276 |
Cash and cash equivalents at the subsidiary acquired | (51) |
Amount paid on acquisitions less cash and cash equivalents acquired | R$ 22225 |
Borrowings (Details 1) (Detail)
Borrowings (Details 1) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Borrowings | ||
Average annual interest rate% | 110.00% | |
Borrowings | R$ 205204 | R$ 0 |
Bank Borrowings (A) | Fixed interest rates | ||
Borrowings | ||
Average annual interest rate% | 2.36365% | |
Maturity | January 2,017 | |
Borrowings | R$ 133874 | |
Bank Borrowings (B) | Fixed interest rates | ||
Borrowings | ||
Average annual interest rate% | 2.8645% | |
Maturity | March 2,017 | |
Borrowings | R$ 71330 |
Borrowings (Details Text) (Deta
Borrowings (Details Text) (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jul. 31, 2016 |
Borrowings (Details Text) | ||||
Borrowings | R$ 0 | R$ 205204 | ||
Borrowings, interest rate | 110.00% | |||
Foreign currency | United States of America, Dollars | ||||
Borrowings (Details Text) | ||||
Borrowings | R$ 21766 | R$ 40000 | ||
Equivalent to approximately R$ | ||||
Borrowings (Details Text) | ||||
Borrowings | R$ 70000 | R$ 129390 |
Equity (Details 2) (Detail)
Equity (Details 2) (Detail) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Pagseguro [Abstract] | ||||
Net income for the year | R$ 478781 | R$ 115727 | R$ 37010 | |
Net investment | (27,209) | |||
Net income | 478,781 | 115,727 | 9,801 | |
Transfer to legal reserve (5%) | (23,939) | (5,786) | (490) | |
Adjusted income for the year | 454,842 | 109,941 | 9,311 | |
Mandatory minimum dividends (1%) | 4,548 | 93 | ||
Additional dividends proposed | [1] | 234,255 | ||
Total dividends distributed | R$ 238803 | R$ 93 | ||
Interest on own capital | [2] | R$ 26059 | ||
Number of common shares | 262,289 | 262,289 | 220,808 | |
Dividends per share (in reais) | R$ 0.9105 | R$ 0.0000 | R$ 0.0004 | |
Interest on own capital | R$ 0.0000 | R$ 0.0994 | R$ 0.0000 | |
[1] | At the Extraordinary General Shareholders Meeting held on September 29, 2017, PagSeguro Brazil's shareholders approved the distribution of (i) R$142,795 of dividends related to the six-month period ended June 30, 2017 and (ii) R$96,008 in additional dividends related to the year ended December 31, 2016. The total dividends distributed amounted to R$238,803, of which R$184,530 was offset against receivables under the centralized cash management with UOL and the balance of R$54,272 was paid in cash by PagSeguro Brazil to UOL. For further details, see Note 9. | |||
[2] | The distribution of interest on own capital was approved in the shareholders' meeting held on December 30, 2016. |
Equity (Details 3) (Detail)
Equity (Details 3) (Detail) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Boa Compra [Abstract] | |||
Net income for the year | R$ 5715 | R$ 4858 | R$ 1625 |
Adjusted income for the year | R$ 5715 | R$ 4858 | 1,625 |
Mandatory minimum dividends (1%) | 16 | ||
Additional dividends proposed | 65 | ||
Total dividends distributed | R$ 81 | ||
Number of common shares | 5,381,317 | 5,381,317 | 198,557 |
Dividends per share (in reais) | R$ 0.0000 | R$ 0.0000 | R$ 0.4079 |
Financial risk management (D107
Financial risk management (Details 1) (Detail) R$ in Thousands | Dec. 31, 2016BRL (R$) |
Derivative financial instruments | |
Fair value | R$ 6613 |
Maturity: Jan-2017 | |
Derivative financial instruments | |
Fair value | (5,275) |
Maturity: Mar-2017 | |
Derivative financial instruments | |
Fair value | (1,338) |
Foreign exchange and interest | Maturity: Jan-2017 | |
Derivative financial instruments | |
Notional value | 129,480 |
Fair value | 132,761 |
Foreign exchange and interest | Maturity: Mar-2017 | |
Derivative financial instruments | |
Notional value | 70,000 |
Fair value | 71,537 |
Interbank Deposit Certificate (CDI) | Maturity: Jan-2017 | |
Derivative financial instruments | |
Notional value | (129,480) |
Fair value | (138,036) |
Interbank Deposit Certificate (CDI) | Maturity: Mar-2017 | |
Derivative financial instruments | |
Notional value | (70,000) |
Fair value | R$ 72875 |
Capital management (Details 1)
Capital management (Details 1) (Detail) - BRL (R$) R$ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Capital management [abstract] | ||||||
Borrowings | R$ 0 | R$ 205204 | ||||
Cash and cash equivalents | R$ 2545389 | (66,767) | R$ 14744 | (79,969) | R$ 6888 | R$ 1199 |
Net debt | 125,235 | |||||
Total equity | R$ 4476722 | R$ 870391 | R$ 687486 | 626,862 | R$ 461877 | R$ 426563 |
Total capital | R$ 752097 | |||||
Gearing ratio | 16.65% |
Other disclosures on cash fl109
Other disclosures on cash flows (Details 1) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Noncash Investing And Financing Activities [Abstract] | ||
Transfer of assets and liabilities | R$ 56351 | R$ 399048 |
Capitalization of related party transactions | R$ 26610 |
Subsequent events (Details Text
Subsequent events (Details Text) (Detail) R$ / shares in Units, shares in Thousands, R$ in Thousands | Mar. 12, 2018 | Jan. 15, 2018BRL (R$) | Mar. 31, 2018 | Dec. 31, 2017shares | Jan. 26, 2018$ / sharesshares | Jan. 24, 2018BRL (R$)R$ / shares |
United States of America, Dollars | ||||||
Subsequent events (Details Text) | ||||||
Initial offer price per share | R$ / shares | R$ 21.50 | |||||
Proceeds received from the shares offered by PagSeguro Digital, excluding charges and underwriting fees, totaled approximately | R$ | R$ 1100000 | |||||
BIVA | ||||||
Subsequent events (Details Text) | ||||||
Ownership - % | 74.93% | 59.31% | ||||
Total amount paid for this acquisition | R$ | R$ 4600 | |||||
BIVA | Scenario, Previously Reported | ||||||
Subsequent events (Details Text) | ||||||
Ownership - % | 75.13% | |||||
BIVA | Acquired an additional | ||||||
Subsequent events (Details Text) | ||||||
Ownership - % | 0.50% | 15.12% | ||||
BIVA | Acquired an additional | Scenario, Previously Reported | ||||||
Subsequent events (Details Text) | ||||||
Ownership - % | 15.82% | |||||
Class A common shares | ||||||
Subsequent events (Details Text) | ||||||
Global offering of shares | 121,193,388 | |||||
Share-based payment arrangement | 1,821,043 | |||||
Class A common shares | Shares offered by PagSeguro Digital | ||||||
Subsequent events (Details Text) | ||||||
Global offering of shares | 50,925,642 | |||||
Initial offer price per share | $ / shares | $ 21.50 | |||||
Class A common shares | Shares were offered by the controlling shareholder UOL | ||||||
Subsequent events (Details Text) | ||||||
Global offering of shares | 70,267,746 |