STNE - Earnings call transcript Q1 2024

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Roberta Noronha

Thank you, operator, and good evening, everyone.

Joining me today on the call is our CEO, Pedro Zinner, our Chief Financial and Investor Relations Officer, Mateus Schwening, our Chief Strategy and Marketing Officer, Lia Matos, and our Head of Credit, Gregor Ilg. Today, we will present our first quarter 2021 results and provide an updated outlook for our business. I will now pass it over to Pedro, so he can share some highlights of our performance. Pedro?

Pedro Zinner

good and Roberta, you, evening, everyone. Thank us. like first quarter would kick to ahead to believe begin our about off of year great talking briefly a XXXX the by are I results, I which

the delivering same Our business continued our shopping well priorities. including grow holiday strong strongly, client performed and volumes offerings. Financial we matched all payments. PIX our We TPV the kept Services, posted in while In across fourth strategic we to from on the of Starting nearly season with growth, quarter.

today, the around different of solution banking profiles clients grow payments employees. [indiscernible] credit highlights plan. to start model. we launched we to client cards active Ton, quarter, I'd such we simplify with evolution the our in to PIX finally, making request with approach, maintain our the payment conservative of And SMBs while We of clients This our approximately their key as show bundled in according are base And from to micro-merchant instant workflows onboarding offering. solution credit like their XX% in for testing to banking, in as In sure our continues features Stone paying of and our A but fulfilling existing credit our make couple tone and and pilot grow through clients. our a to bundled new for progress our banking continue solutions. client balance our

getting month, and clients to underway. credit just larger per TPV a with above desk specialized We is R$XXX,XXX up offer have set this to

in quarter, results previous line quarter our and versus business, Now priorities. which let software our to me performed progress strategic well with in this shift so our

XX%, grew software first with increase well organic. revenue annual of was vertical purely in quarter which Our an the

that remains detractor, emphasizing our of considering we're business. Our total software growth, enterprise software the moderating not part revenue a this

continue efforts our this profitability vertical to performance in software, in efficiency the combined segment. our strong drive However, with total

highlight areas software XXXX, in and As base of and evolve our we on and we pleased for Investor gas continue the In station quarter. direction discussed the In will Day, by software I focusing are a of being with the we I quarter XXXX into and was the our retail summary, client year. in deliver the think [indiscernible]. creating to on remain latter solutions our guidance our first verticals, financial results, services financial track cross-selling on we

strategic Lia it to Lia? like to I'd first updates. pass discuss Now performance our XXXX to and over quarter

Lia de Matos

everyone. Pedro, you, and evening, good Thank

our goals. the we As progress in critical our XXXX strategic towards Pedro mentioned, quarter on and first areas made long-term we across priorities, as advancing progress

methodology start Before I deferred The of life throughout of this as the quarter accounting being the would 'XX. from of recognized on, membership accounting From acquisition we're our of the have discussing now we changed materials internal quarter we merchant for new financial of our the methodology first presenting that to internal incorporate onwards, the at merchant. the of revenues. the will remind 'XX fees fees membership time instead first expected revenues highlights, like main you be entirely

this first For the quarter. and is most growth also since methodology metrics this we using the quarter, previous will impacted present

an of administrative due expenses EBIT our As XX% consolidated combined expenses XX% despite on and year-over-year, by almost for lower to net XX% can with adjusted which income increase marketing the points. seasonality reaching in provisions see and other net These of to losses. XXX X, in investments margin of increasing basis up adjusted an selling led in you Slide revenues grew resulted increase factors XX.X%, in around adjusted loan year-over-year, an

business for with Now Slide performance X on X X, our to on the Slide segment Financial Services MSMBs. starting payments let's look a take performance at our of

compared we client payments have addition net that micro lower to previous almost of the growth caught of of XX% up increased clients. a XXX,XXX segment. reaching fact clients the the levels is result base million The the Our clients. in addition this active active a represented to X.X year-over-year, year Sequentially, primarily

pages with As besides new for cohorts, market older strategy you and will optimizing Stone offerings banking as cohorts gains, focus see more and also on that a well commercial share our growth payments lot and of as Ton in both of our the bundle for solutions client driving follow, our engagement we're clients. improving putting to on

We can PXM segments. this Slide MSMB quarter, share has billion X, XX% services you solutions. rates gains were including achieved growth TPV excluding on PXM market volumes, in year-over-year. see increasing material year-over-year, all points strong more As more which PIX a year-over-year increased take from reach MSMBTPV, increased X.XX% financial profitable the the also of than and while MSMBTPV XX with approach XX% resulted by to than our contributions basis growth PIX in in R$X

strategy advantages distribution, solutions offer pricing engagement, these bundle of achieve continuously to our clients. and of evolving increasing in our believe are competitive are and client our service more numbers to levels we result We our complete the superior and strong higher to ability

Moving to Slide X.

discuss Let's our performance. banking

was rates of year-over-year Our launch activation of in the around through due Ton banking of clients Ton XXXX full This in Conta decrease to base to clients Stone client completion compared beginning our and our is the a the bundle continued doubled to for banking growth X.X result migration solution. of million active offers. our quarters active The previous of Super nearly to growth clients. banking the mainly of

seasonal helped with in more gross as CDI client R$XX.X result solutions. bundle payments billion as and client to quarter payments in average ARPC the effectively by effects which Despite continue lower active expect of also driven we Going reached higher increased adds growth average per our and deposits R$X growth the base with per forward, period, the grow-over deposits, This banking. increased a drive client banking our in from base in grow the the we quarter. line our increase in to XX% year-over-year the fourth sequential in a to banking client month, engagement

starting progress for as and such good Ton simplify clients features quarter, as paying our SMB to to workflows, this suppliers mentioned, their launching well map, cards our road in product made management cash that as clients employees. help credit Pedro we pilot As

to X. I our Moving Slide will talk about credit performance.

in R$XXX in expected quarter, of portfolio. XX% the capital disbursed million reaching almost of This a totaled roughly million, resulting amount the expenses are of as we constituting increase for of R$XX R$XXX portfolio period, around expenses million, still XX% we in Provision an accumulated provisions working quarter-over-quarter. our provision losses million of R$XXX

the of our is and XX NPLs XX above this days and conservatively, Although with NPLs our vintages over XX expectations of doing performance we X.X%. are X.X% between of days

market recently disbursements growth of in of was a our higher evaluation we've conditions. towards so our quarter billion. strong resulting increase and loans of continue take without again monitoring before, financial as launched first approach the by To in services As rates, the portfolio, summarize this R$X.X will reaching performance should highlighted our risk year-over-year cohorts XX% and TPV quarter, mature. segment, changing [indiscernible] growth marked the Financial Services first revenue we is with the ratio of This still close year,

a XXX XX.X%, margin more year-over-year. result, increased an adjusted our of reached which million EBITDA than points As R$XXX adjusted basis with EBIT

Moving to Slide XX.

primarily financial evolutions. that season XX%, Let's to use the payments performance TPV is the seasonal and strongly fourth of the Quarter-over-quarter, services strategic the clients talk about of both shopping retail by quarter. solutions our our in software the decreased due higher volumes vertical, software and in which impacted effect holiday

clients and you has the Page which can a vertical, These been that SMB payments the management last station highlights combines gas provide of positive to On end-to-end our efforts a to However, see receptive focus priority XX, been our software, year an software have increasingly our business. has banking. vertical of performance performance quarter-over-quarter. solution since

where As The grew you now XX% focusing to initial software year-over-year. of efforts software services see, strategic verticals integrate revenue XX% financial for our revenues. we're account can vertical total priority

strong solutions software other verticals had products. across Our different a quarter in also

our software total revenue revenues Software grew million, because XX% our more Slide our see result, R$XXX accounts mature segment XX, a can reached that enterprise include lower our As software is for This software. revenues. now overall In you vertical business. vertical of than total but software

focus as in and EBITDA on our segment R$XX vertical to year-over-year, in increased million EBITDA of basis our over improving the our software adjusted adjusted our the in by a margin reach XX% up efficiency XX.X% initiatives, XXX Software to result However, quarter, the points quarter.

our As beginning quarter Pedro marked strategic year trajectory. an the for business advancement important mentioned, the of of first

it our financial key Now Mateus? over some detail to discuss of pass I to more in to want metrics. Mateus

Mateus Schwening

cost in revenues guidance X.X% services points percentage our percentage X.X% expenses XXX to our when higher costs the adjusted of an cost Cost a Slide percentage committed and the as you, million revenues. remained grow R$XX basis as quarter-on-quarter, Administrative of first a basis R$XXX leading XXX sales begin with and XX%, seasonally planned a a than as in higher as expenses This administrative for reality investments and quarter and year-on-year, to compared for and expenses increasing which of Financial amounted of XX, I'd staying due 'XX. 'XX Selling in attributed decreased expenses percentage first lower less as evening, We quarter-on-quarter. everyone. G&A market a Thank good than of spending a expenses basis. XXX flattish of R$X.XX of quarter-on-quarter client for of quarter to losses, XX% million a to a the R$XX first base where television reduction implies financial decreased our of XXX first as basis to first in combined basis transaction a revenues. quarter decreased show, administrative evolution the of is XX% revenues like Sequentially, investments as remain expenses expenses flattish quarter. percentage increased in point of third-party increased our points for provision decreased personnel revenues to revenues on result loan to to X% reached sequentially point of sponsorship percentage year. and of revenues. down we year-on-year team. year-on-year result expenses which we on 'XX. of discuss the bps a up reduction services percentage as year-on-year, XX% increase as a versus XX% growth services logistics higher mainly higher less quarter of million in as million, and the leading higher of a Quarter-on-quarter, Sequentially, expenses Leah, and the of a a XXX XXXX,

incentive a XXX impact positive plans nonrecurring and effect share-based of lower Lastly, other of as of expenses XX% net basis and decreased percentage million a includes contingencies. compensation R$XX sequentially points of the a lower which as new of result and revenues cancellation expenses, rents from

to Turning Slide XX.

Our the continue quarters increase social adjusted deploy labor year-on-year R$X.X and of was R$X.X seasonally to for R$XX consumption a an as reflecting position the billion in expansion to and cash and as capital when we towards quarter. net Lower higher of billion, previous the cash our also in result liabilities of credit portfolio million quarter. compared

starting to With deliver our believe quarter plan, demonstrate kick are up first can the open our we our operator, well questions. and I we XXXX on to guidance. results said, the track As executing that remain you year, please call we on

Operator

this At instructions]. for up we open questions to it [Operator time, answers. going and Okay. are

comes BTG. question from first Our with Rosman Eduardo

Eduardo Rosman

X I do here. questions have

exposure still you verticals have The you one lot, are know a software, We a right? right? to that a With allocation, is many not that capital priority. already first but of on lot did

trying from seasonality you And right? quarters? quarter have seeing there you which stakes the [Tag], for keep other your good, potentially billion, one, a the deposits, if here here as to own billion just So very from with which the cash wanted the for But wanted right, the position you second quarter capital your ended You instance, weak and in big thoughts other of allocation the have year. just expectations a understand year. for first given room guidance which R$X if a I is R$X looking You the well, right? first [indiscernible] So the stake conservative view, revenues for a hear right? companies are to in big the is a understand decline in it's improving now point That's as and is the usually, above -- is to following question. to that's expectations -- just also

Mateus Schwening

question, Mateus the and it part thank you first for capital on Rosman, the the to I'll allocation over pass take then banking here. Lia regarding side.

capital allocation, to on think So in question parts. I fair X divide it's the

shares plan buyback at R$X any not we place. did right, in Day, mentioned have it's do billion think we for Investor I buy we but First, At a program, yet. this a which moment,

think and that good therefore, remain capital believe long-term alternative committed to to we we our the for message a continue this is I here is that targets allocation.

a So a of new process. that execution solid for matter place in it's product framework the the so we basically decision playing in have

first the that's piece. So

the you second right, companies think M&A, mentioned piece I regarding [Hikone], that we other is and also the have.

the are see focused those on efficiency making And Here, still message But the we I a we've business in whole urgency performing from you that options is always no shareholder I progress I order assets. cash of mean, currently, can and the margins to quarter-by-quarter. think regards different maximize as businesses. have the to selling X analyzed value, this those EBITDA on to generating that well so software is we is in think improving assets, but

to So direct be here.

optionality is that's focus assets not think The indeed an exit as on moment. we for strategic, I at but the focus which efficiency. some see to there is this don't

Pedro Zinner

might I with line Mateus. think If I it's last add, Yes. comment the just in on

were I prioritized think trying we're in to plan. to the do verticals along that cost not efficiency really maximize initiatives improve is value these business what

terms comes, when we'll ourselves. position provide going we're more of think visibility to how in I time

Lia de Matos

talk Great. Rosman, a trends bit just to Lia here, in deposits. about little

results performance quarter above indeed, our some were a deposits the extent and expectations. strong in first So we saw in to

banking of so leads main mentioned, [indiscernible]. of higher leaving As as bundle penetration banking payments banking a clients for So this that we many to we to money sales, levels with within new factors, been growth longer we're which continue clients driven high and the has right? the successfully our [indiscernible] And our and to seeing solution also ecosystem go. as by Pedro engagement period

the you expectation us So very the if to with to we're consistent. beyond you That talk early and further to our thus monitor throughout that keep trend It year reviewing and need guidance going course, We're is, for a said, point then it's think we of the happy to we we year. this mentioned, bit but little bit evolution. surpassing naturally this like about gave remains updated, guidance. this a

Operator

Kaio question with Next Prato UBS. from

Kaio Penso Da Prato

please. my questions X have side, I on

line. The one first related to is expenses your other

a because from other please And that. like had lower of R$XX the this better please, nonrecurring if bid of reversal quarter? in this seasonal divestment what net that is actually had quarter we may, share You Even composition why MDRs consolidated reduced MDRs. like understand see adjustment million the to your I related line, if usually And is like we just would quarter I question, effect to the where membership explain can to my quarter. a it the could about effect. on in is that expenses a this adjustment than exactly considering you we second because opposite still remodel,

order or moving the here could to discount of So we would pressure type in pricing And what this can like expect I any forward? reflecting incentivize to going understand be just parts if deposits?

Mateus Schwening

Thank you.

up and first we then the question pick to revenues. move me the on let So

you're basically X So in to have other right, FX. expenses, regard we

[Hecla]. other And companies which put don't have The the of not have of is which the that, million. negative than first the options derived, [indiscernible], that we example, IFRS one right, here, on amounts revaluation on impact basically have and we we to P&L, Other from RXXX for coal we around the a divestments adjust.

our new effect which So income. on adjusted And M&A that piece, about basically talking it's the share nothing base it's then same the net side. here, actions the of is adjusted impacts

also big basically on line, effects the a we positive And number. the contributed right, on million, around X have we which effect, to had quarter. you're to the Here, one-off R$XX

is movement first where effect, related quarter. the to X,XXX that first had board second to one our recurring employees. annual related than SUs our more we a The one bonus, in the of includes which announced some equity is changes basically one-off which was the we the And

at we look you effects a had of basically So grant of X.XX together, shares. million shares million when conciliation but X.XX a these was what X

also So is the instruments and outstanding by recurring, piece is million. a had to you reduction And which is that instruments have in again, a net less the share-based have fact that another one-off around which the P&L now. quarter, outstanding, piece we contributed right share-based in we R$XX that

and Now the general, pieces related I MBRs in Here, question. there second was question, to think I X also pricing think it right? to the are

point you year-on-year basis The also that saw down first the basically point related these revenue. basically increase break piece contribution our a the rates in to when whole, Both as year-on-year, XX were a to at you basis take of the increase contributing could rate a and sizable a banking it's of so solutions, changes products XX increase function and we of basically quarter-on-quarter. had more new we evolution take a look

is On on seasonality CPV. think the side, I MDR month-over-month the basically the variation attributed to

You're membership matter it's right that that the when had fees the seasonality. we were from which impacted a but exclude of we basically from calculation, [indiscernible]. effect

Kaio Penso Da Prato

Okay.

seasonality you like of follow-up So of a on? I like and terms Q-on-Q because so more Just this in that MDRs shouldn't it in understand of part. the terms just the card to be positive your mentioned, would mix

Lia de Matos

positive, the the salon quarter first we more of lower answers as in on also a I terms question. Yes, and have of the that positive. client a decrease And right? in result the is but mix debit the seasonality then had now Again, it's mix, you seasonality [BRP] think

Operator

of comes with question from next Bank Our America. Ruette Antonio

Antonio Gregorin Ruette

results. the on Congrats

on credit. So I like to would focus

different you restarted is the first, So what if you product. explore could since on

reach portfolio second guidance could could in you bit as that. the a the what possible could a explore million and a guess be since of revision been the -- you has credit Also, or close if if growth, Also, asset so quarter less guidance explore R$XXX quality, bit in I but quarter-over-quarter. terms you in could a than to far? added the So you little competition. surprise credit you little more

So how we other do to conclude you you loan provision expect getting banks finally, we see And book? going more down corporate to so we that see peers credit, focused provisions XX% see you acquirers focusing the to see increasingly here, pyramid continue the competition your on? rebate, competition segment are intense of also the segment, on SME on if

Pedro Zinner

for with the Well, Thank off the you Pedro I'll question, speaking. kick guidance.

for better see guidance. likely results trends we If the said, mostly indeed our were be expected, premature said, lower year, on changing you especially a guidances consistent we bound to think talk as in it's initially these and think the first land above what will credit. of throughout banking set were the Q But about we I already to than that first quarter the still our year. and as I the

pass will talk over I'll Mateus. the and credit, move Greg, we'll to and to who So about it Lia then

Gregor Ilg

did we capital And Antonio. to believe year we happened is year. first what we of With years. our lot. XX tell in accomplished this your the I and what last since explored launch our a regards backwards, Well, differently, facilities completed really Investors the what working question, can soft last quite I we Day now X extensively over you looking

only On the point credit the structure I were that entire phase. to and we not would out able positive side, the concession cycle

reflecting and controls customers. manner. test has policies, managed mode, challenging and to size, also reason a unlock to This our offers on to release timely lot monitor the us and a of improve test always step-like improve are new amongst efficiency in a react perspective all we on others. allowed nonlinear place to monitoring prepare from process cohorts. a the policies which ourselves of curve, adjusted the risk, a models growth a quite to variety to very pricing to new the have and is close strategy, and growing almost also Besides we is still on This why models, We

pretty challenges the features. beginning to parameters faced the We much complete within The our the major of also form any the and road. by without the we we process, of managed keep and succeeded portfolio in and of acquiring the test practically risk appetite bundling and one is on major performance banking bumps team

say have to hubs. extract On the we still value I that huge improvement our opportunity from more opportunities, would a

improve this So and overall. are is far, focused the also many growth of our has by channel a be understand app, our there we more communication on credit using unlocked to huge potential opportunities more There that been efficiently. portfolio to

that to in We journey will we this of are this with will a and we clients on matter, way, accelerate. and conversion still our deeper beginning is in less-than-expected and We rates. our the in believe reflected evolve can interact strongly

not and bundling, that we believe believe the understand begun we we that surface the we yet. could be. clients, different last product platforms, here customers performance we strengthening combining potential relationship, that our already the tested huge. advance more have link not Although with also barely earlier our here. will the The least, better of we over is interact the did the portfolio but scratch we Besides And

new to in a time. implementing these are increase opportunities lead We that significant to processes share should capture over

Lia de Matos

believe was Great. me with which on you Antonio, thoughts complement your questions. I of let one competition, some

new So really the think environment. regarding competition, competitive nothing I regarding

to X.X with continue And more and the this our percentage fact the benefit is medium from reduction much with in decreasing in benefits revenue to consistent competitive percentage interest over view, term, the that rational will year-over-year. see We expenses stable our as from and players rates P&L interest points is financial short rates. the decreasing environment a of in

important the the impact tangible about clients. executing beyond We're see, other of a with message that and with last strengthen that building services So saving coming in software focused monetize we're the our financial to over Investor term, talked road going is at us for the a execution product beginning levers anything, our the seen of environment. our our do still in rates evolve -- much map. way payments. as portfolio, going year, And continue at from on to more the Mateus work Day. already the we've we bundles this to that mentioned, look we to if to to our another trajectory, message. take we're banking, rational first But That's longer relationship of competitive only remain credit from in this in is lot monetization But better evolution there's strategy

each differentiation to we're in right MSMBs. believe really finalize track essentially, on to step the only So serving is [indiscernible], the going our we strengthen and

total this think a is competition. I So

Mateus Schwening

last risk-based I around end, or the was is And provisioning think And It's third that we probably to XX% to the second XXXX, end the message will model. piece to in converge or to we're right? approach. [overlay], the the going going think Whether of provision to start the Q I the towards we that either have our but year, risk converge the should conversion in keep Q to models.

Lia de Matos

them, think I Antonio questions Many we covered right?

Operator

question Neha HSBC. with Agarwala Next from

Neha Agarwala

Hello, quick can Just a me? one. you hear

be the been the operational data of would very of update in have been receivables? improvement? from How And receivables, there Regarding to you terms there helpful. use more Any has is the registry registry underwriting? it of able how helping

Mateus Schwening

Neha, Mateus here.

sides are question. to So X there the

operations. that registry regarding a this. First, the To end, I that but the And has end, working think credit in then mostly of no right? for changes been there stand-alone I message [indiscernible] the big terms business to on a is that [indiscernible] piece is side, basis. think And the it's on profitable on

providers when for collateral We important business. all the are have collateral the and been very that's access a main to to underwriting, we able our

Neha Agarwala

Okay.

players from other volume is the So of collateral access working have the you as well now? and able to been

Mateus Schwening

it Yes, is. Yes.

Neha Agarwala

collateral use so that that any been far? there you made Has of instance

Mateus Schwening

Yes.

first So the field renegotiation accessing as in move towards And actually that the step in think we against only have that we our credits. the process I we is collateral. receivables clients the where then the renegotiate basically general, afterwards

would of say, terms credit the it's So it now. fully first, collecting in has operational and been I the gatekeep

Operator

Yuri Next with question JPMorgan. Fernandes from

Yuri Fernandes

a income. your I have follow-up adjustments net question on the on Kaio's on

those compensation, there. R$XX Just also of the share-based it's compensation, both net where PPAC, are there the the and the R$XX the items that for me clear million not lower is Table I the million. When effect lower checked X X, confirming

So your I making the They be that out would it's know first adjustment? on administrative my expenses. was your down here just negative a question of lot. is And of good. but the positive even sure there really the on second removed result That's year-over-year, one. -- were some seasonality recurring

you. third-party think helping I you mentioned services

So if services like more line this provide you can forward. which how should color, going those are behave

Mateus Schwening

Thank you your for question.

adjustments. piece, on the So the about first let's talk

adjust only adjust M&A We we to related basically transactions. base don't share whatsoever. compensation mark-to-market So

it's positive had was And one-off the is loss of that the to the in right. keep opposite the only therefore, gain is of So adjusted, first we EBITDA, as fully quarter the in that We well. end amount a not in adjusted is and The on quarter, expensed. divestment that mind thing this adjusted not [impact] on which the effect. had

piece. first the that's So

look at quarter-on-quarter mostly piece, reduction think think, year-on-year. expenses. we related sizable the second was a quarter-on-quarter, The evolution, it's seasonality. but also I is administrative to When due And here, I to you're right, there

at on the lower the initiatives But [indiscernible] the budgeting the have and center. are to in our place shared functions third-party seasonally been implementation then, here, namely now. and of administrative over way we And the related to macro time, general. right doing is initiative expenses of expenses processes then from higher look leads I company, the back the when zero-based level, administrative in to in on it's corporate this unifying related also we're and vocal comparison, and basically, a The most opposite first benefits the an annual think fall was quarter. we've in the that expenses you what services

line. the main on the that's trend So

Operator

with question Next from Stanley. is Kuri Morgan Jorge

Jorge Kuri

the Hi, for to selling everyone. to Thanks about opportunity ask ask wanted questions. expenses. I

the at the the TPV are if expenses, a this to look show. quarter, in TV in growth, partly quarter-over-quarter it, over to show, of TV much I business possible for was a XX XX% revenue months, a due that. asking about quarter, just of grow sales And that and or marketing going million that the I'm for to it be jump, growth than TV you you most last in XX% year-on-year not marketing marketing more revenues XX if to look show actually last XX the much actually if over at because of where pace. a underlying a your a marketing XX% sponsorship up XX% of expense the as is much just the which concerning for mentioned quantify having it's I how forget of less team. order was a XX% to you're R$XXX yourself even You right, TPV it's Would and And at of XX this for spend expenses growth related look months investments months, at XX% months lower for

think out market to expenses. marketing this those know, pace I'm it what so that I do to marketing And of the is think about to also hear pace, competition evolve SMBs, of of at but posed you rational, to much should I you considering revenue order questions think how this And expenses lower a going to these especially XX% you industry. incremental -- the couple XX%, to going to a going we did in business that? And growth, of continue XX%. that response of of that we're level grow have, all extent do remains for core competitive growth share more in that's How just in a question a wondering things? some before maybe the How just your you see about forward Lia keep don't business

Mateus Schwening

question, the Jorge. for Thanks

let start and the about increase marketing me of talk the [indiscernible]. with So we then expense, explanation

compensation selling first from first, we a have and I of reallocation yearly related to 'XX, had selling So year-over-year one-offs quarter sequential evolution think variable evolution. to on segregate look we When in the you admin. perspective, between the some expense on of the

So less here. this a year-on-year relevant makes evolution

number the sequential to at on think I the Now indeed to which at looking that XX%. look our the And [indiscernible]. best basically, is way the front, evolution, is in was everything investments related

the in well. quarter function as a lesser second increase is which basically extent, a that, sequential and mostly to So first selling quarter impacts of

to so. return to some hurdles, But I to that we vocal as year. Now line long I the look this operational channels should when we invest see ahead, said, fitting continue we'll as still that and we've think distribution with been we do in, revenues, we a leverage see throughout think opportunities start in say see in of as percentage to healthy

the selling first to referring the that's general. in So evolution piece

some growth, I mentioned, seeing look the we think of little link being second selling that to effect not and between have the key and in from I you is way competition opportunistic. the do think is those we've mentioned think we investments top do at the to line the of first all, whether with which are are piece at the in end, And that kind investments accounts, very best growth TPV, consolidated the the to we looking I right? number

message that. So I the when we more it think TPV, on lower is look actually. you it MSMB at can on can go go But other evolution quarters parts, decelerating that the not of are

the in and monetize key third the So basically, XX% the if PIX, grew at we you in quarter look of which quarter, evolution was XXs. first XX% TPVs, we low including [indiscernible], this above

or So the accelerating but not stable either decelerating. message here is

much investments in terms did. numbers of that's in again, Jorge? we know volumes answered and proper all by [visual] look that explained line. at general. TPV not pretty to the questions at indeed we see So the evolution MSMB And [into] don't looking I growth, is the the think I if The mostly reality I how way your

Jorge Kuri

on John, very clear. lot. be some adjust just XX-month but Mateus. basis it. the I Appreciate mean for adjust was expenses, to if Thank you leverage that there not yes, much of I yes, I for this if -- selling seems a last operating Yes, your quarterly,

I'm guess the we be share given the business, relate that So view have? big you does anything to how just And you the think to needed of I expenses helpful. any competition? that put about And that that should how so market amount you around would into still have that wondering --

Mateus Schwening

Yes, sure. yes, for

much. I So sequential mostly I due grow to we think reality increase investment. was like going that basis, the Show that nominal on said, a it the had And TV shouldn't forward,

I important had I investments is leverage factor baseline the operational which you from that leverage continuing to line, of first we about So it's quarter, [Alec] think at the of excluding the line right, in there. a side, selling. of when that the grow to negative especially talking also that the from And remind top terms membership having one-off then in looking this the see clear in piece, change When the operational R$XX to it's million and leverage fees. think [indiscernible], revenue in of then the the in was more recognition in you look kicking most

Operator

from Vaz Next Daniel question Safra. with

Unknown Analyst

question credit. a have regarding I

mainly know of upper in limited offering right, base, you're of your client we So portion a solution part the the so capital your for SMB. working

you some the this doing this been wanted in to if expand you good at clients? pilots And been Have hear how already smaller will it -- base you year? this are testing been that? willing far? in point have I ask be the you. to of So have from So outcome So you so to eligible testing

Gregor Ilg

also on Yes. initiating working business. test the lower Ton we we facility customers, now Daniel, our credit yes, our have both a offer to capital expanded cards are on and with

are we So a bases evolving credit with client entire on offer. the covering

been far, out have I successful, to and customers. opportunity think and the mean, And expand we reaching more is that here for tests so there

Mateus Schwening

Yes.

the Daniel, Gregor here. one it on test think I phase like is here, caveat still mentioned,

we wouldn't to yet. out I So say are roll right

more going good. But micro I is then even merchants, cautious early know think approach cautious. a again, we're we more right, especially and risky, general nature, by that indicators and the on which are credit the message to be volatile are in it's in taking

expect about wouldn't I this already year. and So contributing learning evolution most big year. testing this results It's to a

Unknown Analyst

may, one I quick on accounting of change a just if the And the method.

XX-month?. us? a a are base, how refresh XX-month you for little give revenues you at Could it's recognizing just It's So now?

Mateus Schwening

Yes.

client So was the were recognized the open quarter, soon upfront. it to onboarded, fees as so last basically as was membership

of how throughout deferred many market disclose clients. the specifics to We the basically in mean, it's of close I don't standards. terms are Now lifetime very it's But using. the we months

benchmark if peers, should you you the a think look that. good for have I at So

Operator

Binsfeld Tiago from Sachs. question with Next Goldman

Unknown Analyst

one expenses. just on financial have I

strategy [SELIC]. main could your could finally, to any remind you us also, financial expectations are for And And any discuss has you you what initiatives your expenses here? by year-end? deposits, terminal to if lower have If plans what been remunerate discuss have if if you

Mateus Schwening

question, Thanks the for [indiscernible].

start our [indiscernible]. perspective let's first, with terminal our So for

here, be perspective a have don't here. we to honest really think I

look then accordingly. think I we approach our adjust the market is and at that our to have pricing basically data we

mentioned we I times, a a more pricing this become think lot has our but few dynamic nowadays.

So basically, we are that client. a that we But using. we're time, the have adjusted according to seeing, we to clients solutions the over that the volumes downwards upwards use or the onboard trends

think to become that allows has in manner. phones I adjust to quick it process. dynamic see whatever And it very a end, we us So in our slip a

number that's So one. piece

in the over Secondly conservative. a piece has regarding done of a initiatives being to also quarters not only our being years, lower great of that but financial expenses, efficient we have, and the team job past lot think terms I spreads more more

profile So credit longer you the the longer look and at which company, term, is having if good. of we're

retail But access really that look credit. allows that, we don't a you cautious basically, sure as the anything. to the is end and our testing. of we deposit what right? without initiatives us fronts, think of I base the for funding also we the license, is by to it's which now when year. want you results, one doing which these prepayments place, because that traction current access remunerate Now So And base to we fund have our on we at to that make we're got of the lot is have basically structural in that see finance can right main And mention cannibalize last deposit we to both don't approach quite getting and

remunerating expect testing in small it? movements the the big what on terms you the in balance can of of final the deposits. remind retail very a pretty have We in funding, waters terms And mode any question, me also much the sheet wouldn't XXXX. that's We're pilot of and year. was I

Unknown Analyst

deposits question What's was for paying on strategy remuneration for the final My your or deposits. eventually?

Mateus Schwening

banking But is capital Well, We good banking we're we needs for base covered and basically that. I following: of clients, the message solution deposit our right? So remunerated to basically, think space in but clients. side, here very offer have our our of on we upon without a the get is advance which remunerating, a built working on business to the able the taking single them, so pocket we also savings the see basically this products,

where was basically redirecting the we If the basically that look an feature the you at shared but the same that have Day, which approach a Investor clients automated engine creating get using that we we are towards percentage credit, is product, TPV, think I savers. that in back of savings

product, goals. cautious clients that our really remunerate the product So But to the we're to is to the their place. help have again, basically in that cannibalize not towards on base. to being save able we And idea deposit here

that's So there. basically the strategy

Operator

with SIG. from question Next Friedman Jamie

James Friedman

key XX Let points wanted me It basis ask on XX about basis I up congratulations. to echo the was points the sequentially. take rate accounts. year-on-year and

there. wondering, the how it good So go? very a high part cadence this I'm can though, understand -- that's Because and of got you've strategy. seems just like I I'm

Lia de Matos

here. Lia Jamie,

regarding think I trends So take rate in accounts. key

product of is the and of increase basis our So point prepayments basically debit credit the repricing strategy point offering some increase XX spot really clients. terms year-over-year a for mix, is versus X in and quarter-on-quarter consequence basis

for message an accounts here the key is, sort overall I opportunistic that remember So let's of as strategy. accounts think [indiscernible]

-- relationship that account us not broad find a a good product focus where execution. we do profitable pricing So terms have if more and will in of returns the our key relationship, a really discussions or we we so, of can sort clients good to have of that's but a enabled more even

lot there. the what to So we're a opportunistic hard It's been we've pinpoint trend be. will more --

tends and on less But with the kind is we take that to positive volatile. rates seeing think be are it I profitability effect or trend more from what So of a line this on that right? side, emphasis we repricing. expect, in the higher PPC slightly of

to hard trends. and see it's So point

I think those are the takeaways.

James Friedman

don't And the understanding question, addressed the be you into had is lend base, Linx think I in merchant to my you'd believe gone. which your opportunity answer I to previous

So you how are could that If on and elaborate about you opportunity? that? thinking when

Lia de Matos

Yes.

was Is Jamie. that question, So [indiscernible] we it, lending we disclosed this on the metric -- mix

James Friedman

I what meant right. it if That's sorry, I didn't say, I'm yes. to say Yes,

Lia de Matos

Okay, yes.

right, starting the opportunities So like Linx Gregor in to just the at base. look credit client mentioned, for we're

to it is of sort of beginning higher is the the what said of priority what those process to clients big very within be So we a implement Even today line overall. in and for that a month. with it's tends a CPV somewhere because the around is average of TPV Linx R$XXX,XXX clients average those call know opportunity, specific Pedro verticals, the clients that profile R$XXX,XXX, at

very opportunity provide of So do these within order whole overall so fall space. clients -- clients to in to is in a the significant And [some] context into medium offer right? We lending a initiative, context the where there. cross-selling want are we we there will that the to those software. know So the SMB the integrated this actually solution full

to that early that the So focus us enable days. really it's clients. the financial to organize point, opportunity. We to But know opportunity to big. services, starting at more this actually the around is very initiatives ourselves start lot is structural really go-to-market software solutions on We're a cross-selling offer

that. any So in give yes, early we precise credit client very figures to Linx excited days are it's but on base, more opportunity with the

Operator

from Next BBA. ItaÃº with Leduc Pedro is question

Pedro Leduc

seen Good guys, the early side Gap] it in wallet is the bringing churn, [Audio on question. -- you credit seeing that? the that other your of credit, that it credit financial second, looking higher maybe on the how be And funding helping you positive have portfolio on clients is benefits those early on manage you side, things. on side, the the already new revenues have side on guys from out if you're believe share or Two, but effects through you, bet have thoughts the document at are and for had or around for you first, the can Thank you, evening. what recently

Lia de Matos

your not we first I'm of question. understood sure the part

please If you repeat could it? Sorry.

can where better little a there's I a a don't to us. little think if go you for spot you're chopping connection. bit know I

Operator

While we wait Pedro. for

Renato from question Next Miloni.

Unknown Analyst

the the numbers? My what quality you're here can a but that you you the your I an first I if on seeing in forward? a Or if using shift space wonder industry here? that own your at you credit to second of -- expect funding cash margin where the of to portfolio. here question as if going to is continue have And seeing then maybe I And NPLs, and will do bit and compare early what expectation asset we're question NPLs how know look it's to if to see the source you funding stabilize have NY. strategy a -- you on mix then generation

Mateus Schwening

Thank you, Renato.

me latter Let the on start question.

have credit we So a our fund capital in notes we using net structure, basically, So right? that. equity

I risk think out we're factoring it's like not credit, [indiscernible], because instrument too a looking towards specific expensive basically having in for Brazil.

consider. think I asset So then right it's by NPLs if an But that affected the basically same. sure, there have that at And alone, for growth, will, think on really the likely it's continue for right. looking speed in we rate, is attractive an of the you're Brazil, may option the we I quality, given at structure [indiscernible] that strategy

we what pointing XX% so I towards first, in of threshold. two are terms can models basically nowadays expected the losses, is things, share from our think

credit shouldn't level right? should over It below X% be when expected So it you about that. at loss think area. should NPLs this increase, towards move slightly or 'XX, X.X% and It stay

message. first the of the that's So piece

second, The looking at I is think, cohort data.

and for X And the in I Investor nowadays. we portfolio. time So that I XX the much same the X% we X% pretty shared the for think think the Day, between month and over remains that at disclosed cohort

the for many you has performance per mentioned past return, months. credit. really is consistent so point, the the the over margin think the portfolio And remained I I around final So think

terms margin to rates, not can I charge X% we the itself, month. of say X% what between disclosing usually we in but we're think per

the the if we the better think We risk the that expected at XX% [indiscernible], in lower month, the X% end should because choosing basically I that pretty then you of general. clients range arrive for margin are are combine have easy. profile with And product credit on losses, a you per

there. message that's the So

Operator

from question Coffey Next Barclays. with John

John Coffey

questions for X I you. just had

TPV includes your one, your it For now like PIX. TPV, top line on number seems

MSMB floor. and should And that metric, PIX? take about to the how Is about MSMB question. be XXX primary had, considered TPV rate, the that your think that's the tying excluding? TPV, I PIX your just especially just so case, would And if that's the think without including then TPV that I question TPV kind again, guidance, your we likewise, of last the with when second or And of

For payment Stone if cadence reaching, quarter bit the we said MSMB for Or on that's should is remarks I adds net net prepared range her about understood Lia because I think, MSMBs, in think a that little of correctly, going think mean this -- market we that am forward? rates, XXX like adds, growth like that now that? decline I saw a a good off to kind of that I does in

Lia de Matos

so here, Lia both going questions. I'm to take

to more we've more important it's we So right? and both. clients. considering both the important incrementally PXM cards, both, TPV only PXM note So think -- I TPV always our method become on that PIX and relevant First, considering right? TPV disclosed disposing reason why a acceptance disclose we're But for PIX has and

that clients remember with to PXM we our also method. monetized in and we Let's line payment as reconcile debit PIX PX a net allow MDR,

little to this think answering just of start So question. a context is the bit I

on it's for with volumes, gets payment only positively of positive is the that strongly trends we're PXM sequential it considering So with in seeing in that solution because of seeing is regarding us behind said, TPV net we [indiscernible] a we PIX card guidance we're MDR in and strong not fact, And going acceptance them, instantaneously. TPV, volumes terms for with like close are because I cheaper and for prepared positive clients debit a it But very we're line monetize our basis. guidance. our performance money where the in additionally,

to So growth, for guidance while our the year with XX% PXM, the exclude give and grew line we if XX% again, very is PIX XX%, just -- the including PIX what TPV implied. we in growth the in saw numbers much year

considering we with PXM the figures, cards. the only remain message committed with we're continue both is PIX going TPV disclose So to TPV guidance. And to and TPV right?

was part right? adds, of net question second the The

John Coffey

Yes.

Lia de Matos

Yes.

forward in going expect -- less in quarter. more with saw what adds more is net this we of we line levels what that right are terms you or So

since with So our is over increased the quarter. strongly penetration It That year, growth last with the in smaller. associated is not we in surprising said, we're performance segment. commercial our incremental happy [indiscernible]. that really micro the It's participation in the

we brand a good the It's also recognition, effect quarter, But important stronger with right? of we think happy be to the trend, investment with of the have we communication tail positive with that us consistency net did is profitability. earlier grow to also that us this healthy with level. year. very seeing, I hurdles that throughout we single the a communication that as in net payback value call. objective it's the at we always what line are we this in assets for expect don't to looking and really positive that all remember, we're impact so because maintain it broader discussed expect can but organs, we and in May in the have function [indiscernible] terms quarter, we're for regarding and in see a So capture that of can more we importantly, But adds important

big the that's think John. I message, So

Operator

turn time. this concludes There for question-and-answer questions Zinner, final StoneCo will CEO This no are at at to I over now the session. considerations. it Pedro

Pedro Zinner

you very thank much. Well,

provide just [indiscernible]. an the before I to think I end terms update of in we tragedy the in wanted call,

series committed a and think initiatives. with to and the I communities supporting employees of local clients, are we situation, engaged programs and our

an support at all front who people. Brazilian Our partnered the floods which has have of to commitment above And is to the for needed that been Japanese time. is a we lines Brazil, commitment this with to those NGO at most months Union on

terms the the and of question and is regarding TPV our other impact think guidance so forth. I in

exposure impact significant our cities TPV up TPV by a X% about seen to we've our But within So X% with said, TPV. some in to XX%. the is region to [indiscernible] of reducing that

the our not be will should guidance. So most and impact impact limited likely

the only not because and P&L, we terms in fully of quarter, will supporting region. as clients a are a there impact committed result the within to of also second but our impact, the be employees TPV negative the In

of We in the the fees region. already clients accepted our have subscription

reduced We in fees, repayments actions. have provided of the great a XX days among payment period other many credit

to guidance effects the it's still to quarter, those committed for the and early much. country. the tragedy the With that that our too said, the despite call of results. quantify I'd all we very here think the message I about were in quarter but see actually for considered is participating Thank next to has you impact that the in happened and in like remain thank you you

Operator

presentation. Thank you. today's This does conclude

StoneCo (STNE) 13 May 242024 Q1 Earnings call transcript