STNE - Earnings call transcript Q2 2024

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Operator

Good evening, everyone. Thank you for standing by. Welcome to StoneCo Second Quarter 2024 Earnings Conference Call. By now everyone should have access to our earnings release. The company also posted a presentation to go along with its call. All material can be found online at investors.Stone.co. Throughout this conference call, the company will be presenting non-IFRS financial information, including adjusted net income and adjusted net cash. measures defined company, by financial financial are important as measures IFRS. are for but the not These Reconciliations of the IFRS financial company's non-IFRS financial appear today's information in press release. information to the

to would begin should undue formal today's we not may statements. from guarantees put are numerous results forward-looking forward-looking include on remind company's risks and uncertainties release. are of them. reliance before to cause materially Finally, future These discussion remarks, I that performance, disclosure everyone company's refer like to Please our subject differ statements that in the statements expectations. statements could not These forward-looking to therefore earnings and you the the press

Form XX-F with and many Please is at Roberta Commission, proceed. over Securities of available Relations filed which risks of Exchange host, your StoneCo. addition, conference would Noronha, turn business the the Head to company's Investor now are to like www.sec.gov. I the the In the regarding disclosed in at

Roberta Noronha

operator, you, and Thank everyone. good evening,

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

Pedro Zinner

market XXXX more and quarter believe goals. our our you, take continue performance everyone. progress Roberta, second and schedule strategic reviewing midyear, results the our win priorities in we on payments, share. we to our Thank I and evening, MSMB to pleased across good and at In our market are am meet with After

over year, increased XX%, grew base card TPV TPV grew client Our XX% over XX%. and year

to engagement, enhance are executing we strategies during our and Day. on our as Investor discussed client also bundling We pricing

to results continue reach rates arrive banking, our We believe result, a take year strong to to X these service, MSMB similar solutions competitive our distribution, and more advantages X.XX%. making year in points increasing growing over comprehensive to superior progress. clients. In also provide from ability are expand, our As basis we our

Our effectively. to have year active BRL client now as and X.X year sell XXXX banking continues deposits, cross our our XX% X.X grew base team We clients which client million deposits in XX% targets. billion are approaching over and increased

products, area We us. In interest-bearing new such which goals, our be above credit, towards set as could well well targets. even deposits, exciting believe by have is I also to our for clients we're evolving started time received being and pilot an also

quarter reaching with portfolio total increased XXX XXX XX quarter still portfolio as Our shown grew capital Within underway. XX% our BRL also over over line much very our X.X%, at credit million. in NPL with quarter, with XX%, expectations. I'm strong days quality this to initiatives that, with excited our million new reach over BRL working some

a but improving capital desk, which software business, progress credit the completed Giro initiatives, is short-term revenues. Software modest, and within revenue mix designed signs our specialized our the our addressing overdraft which SMB making the on Total first underlying towards is is quarter, launch clients, its the are recurring we seeing our third we're software the more to needs structuring growth set of we and improvement. Our disbursement vertical past we focused remained in cross-sell Facil of product. base, address are quarter. In business successfully our quality opportunity and finalized our of to this client of solution larger immediate This on

clients growth have generated in I I'm business MSMB Software of still our do a For verticals, term, our TPV card our software over from stronger have work to card our as than encouraging in example, trends better seeing but rates. We in the mentioned, efforts. some verticals we're retail from lot growth cross-sell station getting gas priority traction overall we and TPV our and long

also have reduction maintained year. in achieved efficiency by gains the a the quarter, the XXX In focus expenses compared decreased on basis of year percentage We we administrative XXXX. revenues in administrative as our XX% over streamlining to a expenses, second which quarter when of point of

a As X.XX. strong EPS developments, positive of reaching result basic these our BRL growth, demonstrated adjusted

short-term us to share As Day. announced I our mentioned closer In earlier, program shares, targets XXXX. established light business million and the we during BRL repurchase of capital plan completing the additional commitment X.XX to allocated to November totally Investor billion XXX X repurchase million, we considering our bringing remain market committed fluctuations, this an and BRL in

Additionally, for and our of the to the satisfied offer summary, XX% management nearly liability tender of strategy, I'm our as allocated XXXX million XXXX, I our we very the with for execution. In XXX of team's part second achieving in trajectory full participation. our results quarter confidence bonds, BRL have

the pass performance will who discuss XXXX to our strategic Lia? floor quarter second Now, updates. and I like Lia, to would

Lia de Matos

Pedro, and everyone. good you, Thank evening,

As Pedro long-term think quarter, progress our I the positions XXXX goals. pleased the to mentioned, see which our initiatives well priorities us strategic were in second and and we meet across to

second we adjusted and year would line by for a growth our stream driven the quarter see growth XXXX, revenue It important change growth our year, first this accounting change, of increased to internal revenue XX% in this combination effect, we than also you can If the year our XX% our expected This BRL X% Slide revenues, time total the the around on rather higher the our our at remember merchant, it methodology consolidated consistent As over over was fees mainly monetization. and as been grew recognizing deferring life result over of in This top TPV benefits that a EBT in administrative X, by have of acquisition. of quarter. Despite year. reported membership is of efficiencies. changed this revenues client the ongoing reduced expenses and exclude of financial the revenue million XX quarter.

income adjusted result, over year adjusted net reaching year and our increased EPS XX% basic XX% our increased year, BRL a over year, As X.XX.

X. segment Slide Services X. into on Starting further dive to on X performance Slides Financial payments let's our with Now

impacted Micro the adds which TV higher Our grow this We on a effect were benefited MSMB X.X in in clients. generated the segment. show sponsorship year, over clients over of quarter. up from addition net levels a [ growth On reality basis, have the XXX,XXX XX% to in year-over-year year increased was the ] impacted the our a net that first reaching adds almost client the quarter the caught million base growth of during we of our And basis, active by fact quarter popular a net over by quarter, period.

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

on Slide this can resulted in see gains more and you the growth As MSMB X, has segment. profitable TPV share approach in market

codes. transactions with cards on, we transactions talk card will we about be QR and deeper TPV settled transactional When point that would PIX the QR will to payments, disclosure dive like TPV, whenever about of we due PIX only. in we to volumes. increasing settled dynamic I now our we have through in out to performance the our relevance refer talk in we Before into referring our market codes cards of refined and From TPV, TPV to

which also strong Now code, results. increased in volumes, which a over of by and increase transactions. On duration moving XX.X% our partially a higher growth to offset by of MSMB increasing TPV billion reached lower X, reached shift as year from the fold X year-over-year basis quarter. XX% take while year performance. prepaid prepayment achieved X.X volume and result take credit this points QR year a PIX over banking in rates XX.X X.XX% Slide in let's rate TPV a card a We as higher result to banking revenues growth MSMB and discuss and BRL year,

increase million result penetration and using both of payments the clients the billion XX.X as BRL base banking active growth also year growth This BRL decreased a and in base month, in of clients lower ARPAC deposits, drive as client the X.X client with to XX% X.X increased per an deposits, Despite banking growth mainly in over a our base of X.X% result year-over-year period. XX% average Our active helped in client quarter. client a in sequential in increase in to which payment Stone Ton bundles. reached year CDI

Moving to Slide X.

performance. Let me highlights on give our some credit

with Ton alone of results the products, Our the capital of increasing both portfolio XX% The metrics and very quality over days quarter. XXX vintages, million, Stone. Because cohorts highlight increased credit early very of NPLs and our and NPLs the working in capital remainder is page this XXX days reach portfolio the credit slightly NPLs the our XX sequentially within alone. to loan million X.X%. between result BRL we the X.X% initial reaching card reaching to such on quarter, portfolio increased XX the working credit are XX BRL product of with

the before, the This XX% XX% portfolio quarters. capital expected increase to down were they past quarter. levels from due of of are new, also reflects million significantly with losses As representing continue period, loss working the a reduction provisions the quarter previous XX the cohorts of levels BRL now ratio provision beginning capital over for as decreasing matures, as relatively expenses should of portfolio, highlighted conversion Provision in in to these loans because mature. working expected

adjusted was marked points the up These to strong the and increase our million and by year-over-year, year-over-year performance XXX revenue billion summarize basis XX%, TPV credit EBT development banking of our the adjusted our in of growth EBT and Services reach respectively, of segment, of to BRL quarter, in second segment and XX.X%. initiatives. again in Finally, margin X.X BRL of resulted successful Financial quarter and an the XX% XXX

Moving to XX. Slide

solutions driven the retail from station verticals, our Financial cross-selling X%, about Services performance Services evolutions. have been Financial priority use focus since clients of distribution talk card the Software cross-selling clients. both to which strategic Let's has been its driven result by mostly quarter, and gas by bundles and Software the TPV year. over Software last This primarily team, increased specialist Quarter that efforts our and

the sell quality growth, software Services offset you Page revenue Software standalone seeing we're by an XX, the X% revenue year verticals. Financial due see our vertical our have priority cross-sell software channels in improvements in X. of increase bundles. On a of a execution of Vertical up gear revenues. nonrecurring revenues some mentioned, to decrease believe room year performance to a grow, cross-selling we of but growth our MSMB the factor I We're with outperformed software quarter in to still to volumes by happy our enable so we Pedro particularly initiatives as of of lot XXXX, TPV in Linx As card grew almost far also where over recurring the can and in business, in

As year. In XXX by improving, a points quality software. consolidated believe our as we revenue verticals of more a percentage priority of Slide basis revenues of year the over than result, is revenue recurring with we performance XX, present the increasing total

million, for driven segment focus by BRL over impact As of year, should software you long a recurring quarter, by decision revenues, reached short impacted revenues year flattish the can nonrecurring has nonrecurring our business negative offset business. versus the described accretive million million, trends see, to over EBITDA our but Software growing year, over and in Software in business, enterprise in BRL quarter, term, remaining vertical and X.X severance down by total the run. be the XX the X% in slower decreased in BRL segment by the quarter just X% which a to the expense on year growth Adjusted XXX in I

we Day. continue presented to in our our efforts strategy Investor implement that the We software

Financial Software our with software on gas and we're retail to happy evolution bundles commercial sell station working channels learning initiatives how best and the we're distribution enable incentives via While in still systems and integrations. to cross-selling in verticals, our Services

approach also capital a to continue within and Software disciplined We efficiency our more pursue initiatives allocation segments.

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

Mateus Schwening

XX% decrease of by of loan services XX efficiency by Slide in an Software in quarter Lia, decreased XX adjusted expenses as of and gains, a would expenses services year I but a by year, of quarter-over-quarter expenses increasing increased in the revenues. on a a reduction on of cost as basis percentage in declined year reached year, due basis compared XXX from percentage the of lower and was by revenues XX% million, solutions. Administrative as was process point expenses quarter quarter to percentage XX points to you, as representing basis. Cost of over and as the the of banking reduced evening, by provisions, the quarter by Thank This X% administrative over XX we by working capital portfolio. increased provisions losses now second first marketing in due by the divestment like revenues and by X.X%, PinPag decreased to driven quarter, mentioned, million 'XX. to like over expenses resulting Non-Allocated over segment down segment. Selling to Sequentially, higher evolution reduction expected XX% quarter approximately due discuss where reduction first quarter well to points, million partially in of 'XX. This over credit sales sequentially of and which a were decrease BRL investments the is a our BRL revenues. losses for the costs XX% primarily points percentage XXX increased offset basis reality of the loss eliminated This as everyone. matures, sponsorship of BRL in good expenses this of the provision reduction with 'XX, basis in TV quarter. of portfolio XX Sequentially, begin decreased This in reflects of the million acquiring on provision which beginning our levels the BRL XX year show, of related XX X.X% aligning with offset teams. year quarter to the primarily expenses a Lia as

operations, over expenses decreased investments anticipate sequentially, This the year a lower X.X% decrease XX% as expenses XXX basis ahead, these to mature. Financial leading average dilution teams Looking a and result percentage selling sales year we points reduction decreased a gradual of of higher our CDI operation. as funding our revenues. in in days of was of prepayment towards as reinvest in by effects reduction our for a higher and our funding by partially quarter. decision offset in were These needs well our and the number as period, credit the generation spreads, to working a cash of funding

percentage nonrecurring other expenses XX% XX.X included of year XXX plans. expenses, sequentially, positive result the more basis from over cancellation revenues. variation first normalized increased 'XX or and of new incentive share-based This a of of as effect BRL a impact levels million quarter compensation of as Lastly, the and year XX% was the a net of points grants of

of have as these a been other expenses effects, would Excluding net flattish percentage revenues.

Turning to Slide XX.

BRL quarter, end million almost was the of reflecting BRL year position X.X an cash at year the X adjustment over increase BRL Our billion quarter. billion by of and XXX for the

to and share continued deploy amount portfolio towards capital in XXX the program our We BRL of our quarter. this on buyback credit million executed the expansion of

I X to we an like BRL completing X.X As repurchase million, in capital to in XXX July, repurchase mentioned, amounting buyback that BRL additional Pedro the to highlight XXXX. allocated billion million shares, program nearly November announced would

XXXX we bonds, million $XXX spreads the forward. for Additionally, further funding our our optimize we as allocated in July which offer move tender to will

discuss guidance. to Slide to our move XX let's Finally,

in markets far than our TPV our the guidance been and codes our these exceeded track penetration has the TPV. are BRL but towards client we in full half reduction perspective, to year-end in initial volume performance year. area has the the solutions, key to volume fee favorably first most so higher growth, positioned environment The first banking MSMB PIX our when From recognition several despite mix meet quality. in areas. guidance achieved has curve. In long-term and challenging year. to This strong drivers of QR TPV. card more base guidance, may of revenues expectations, includes November in anticipated and changes of been PIX on we put of have higher our profitability half performance our QR card last challenging million a our We overall in very our in in 'XX year pleased our are This revenues This credit with XXX setting the the due affected us within for us in only a not headwinds. and also code surpass membership less which a with yield has my macroeconomic

Although We our it this expected second half on achieve with are favorably, and of efforts for our exactly XX% believe means call the guidance. a 'XX, quarter are goals. With that results a little to card our business, of that is TPV track ended Overall, up 'XX open long-term our we guidance. range. the positive on within challenging you meet trend remain Despite the to second line trending laser-focused in to please first operator, the more this questions? growth, can also we growing with said, is half tighter comparable in base our I

Operator

Mario [Operator Instructions] with comes from Our America. Pierry first question Bank of

Mario Pierry

competition. to incumbent you changes competitive the seen months, did your at last bit some seeing a Let rates about Why Because any ask think about notice the making team. competitive sales more you environment? talked sales you're seeing you're increased, better. trending. especially disadvantage, Cielo? you coming take a how you're banks, X you can competitive in discuss changes I you higher question in from or Have wanted a understand you in over like investing a catching environment, me up, that a And maybe you that if or team? seeing environment you Do have any investments we the little and of are if you're

Pedro Zinner

evaluate cohorts, think the you it I dynamic the prices is within see we and to company, we make question. adjust way I pass our the continuously process Mario, on that piece, for we has I'll then profitability jumpstart, it Lia and a to Pedro I'll comments. further Thank here. pricing meaning accordingly. really Well, the become over of the think

core incorporate competition the direction, into we'll in the continue the yield And will on and curve to making. returns. clients. But rate of profitability and passing our interest I'm think think I new not behaving the competition, I I right? changes the evaluate through address decision think terms the and more payments, economics more a a clients prioritize Just I through And Still and So is as a price environment the software. levers piece, other way, piece, credit, relationship have we the that highlight to of another banking, similar more I wanted I evolved competition with new our shifts to we'll have players and going environment Cielo and we the in has lot. think based the gradually strategy in on as specifically the been bundles our to I market point between of in think price but to think on

think some dynamics, this to the ways I in rate competition extent, some a to selling. against to pass side. So and hedge is over Lia I'll interest about talk short-term on

Lia de Matos

Mario, Lia here.

to a little there's I selling, talking highlight. dynamics So dynamics X around about bit relevant think

is BRL as the short-term expenses is selling more we've given sponsored of in first million XX percentage in of Brother a First as a which decrease, Mateus reduction a due already quarter. mentioned, Big that a Brasil to discussion, seen we revenue,

a SMB talked our of is this, up in we within we distribution, which move there's term, especially know, dynamics, continue we distribution short-term dynamics the it's selling, more throughout onboard regarding scaling as specialist sales. and you about the we that's So frontload our investments to expenses segment. larger in impact selling And as continue continue regarding SMBs to going and longer invest, to year. But to positively to

of the continue those frontload results to a and there's will as clients. come OpEx So onboard we

a bring sales going dilution are do gradual matures, see as more but a expenses selling we the this we few clients. quarters, in longer-term, those we and more in anticipate force So for impact to

Mateus Schwening

Mateus Mario, if And add, here. I may

our upmarket that anything of reaction terms these we're I bottom-up of is type summary, doing. decision economics, within the a that short a hiring a very of much term. more because decision profitable think a we're clients, unit the basically in in sort not in terms to to on good environment and doing is specialists any reacting huge It's to go reaction opportunity competitive seeing the any of not and with is in player investments SMBs

Mario Pierry

Can of are the talking clear. sense give just size That's like people us a how many you about? we of

Lia de Matos

the call density So We proportional the Mario. the larger see there way perspective, always attractive see allocate to breakdown, larger very of is, economics, don't this specific are terms the what TAM, country, TAM. of credit. talk the SMBs, naturally disclose I sales lot of clients right? them of locally within region, TPV. teams to to from a throughout it's clients a hub opportunity have are the opportunity we about right? the medium there although within these that They upsell clients, we But we less or in right? specific When medium spread have distribution less so we think in And There's a a of the terms

from addressable smaller this see sales line and that the of think the addressable you markets. force, perspective the with if we of about percentage overall a of And the distribution specialists in market. So the are much pretty

Operator

next Our comes question Rosman BTG. from Eduardo with

Eduardo Rosman

I questions here. have X

asked during least verticals a Why is about from the first The one more given with consider what right? large. not number to the at Stone to I last of that division, follow-up Software it, synergies conference that divesting And have call. part likely it's the of not is

one in a surge on in see the the acquirers be room of do is front. competitive the We So second terms on the for would recent years. in second the question. sector? What M&As market number this first think Do as about well So follow-up a one. And you that you big the of that's saw consolidation?

Pedro Zinner

question. here. the Rosman, Pedro Thank you for

the one, at strategy executing we remain focused think, unveiled Day. we Investor our first on I On the

efficiencies. I you business the cross-sell priority think Software, and that from improving results our And think are concentrated we see presented. that our I can on really in efforts verticals driving in overall

selling I'd I made that think both still pleased be work on we done we are while we that so asset. potential So to recognize there sale, do like the not right? And with progress to we're fronts, the is the emphasize far, regarding

on all the been time have said second allocate have at we continually ways really point the rumors on company. please our out. laid But value maximize focus our executing assets evaluate in some And the and apologize, you there is some to options I really but is capital can this that and question, in from within strategy we we think what repeat? I

Eduardo Rosman

Yes.

terms to companies of in are acquirers payment the We recent which probably coming and of big don't number becoming In ones market years. consolidation, to of big like linked scale. saw cost them a Many have naturally the do center. the the banks, we have

do room guys see So how for you the market consolidation? evolving? Do see you

Lia de Matos

Rosman, environment Pedro answer. our number the let me then highlight and view over the it complete players regarding of on competitive pass to to

dynamic So, segment if been years, markets anything, couple of see market. more the different relevant players players right? over the each I last this we is less see intense What the in much the I do past. think being think we of entering within has

think And want there's [ out trends clear the playing with Micro, move up. players But evolution, overall competitive gain does new market very it's share don't think key less of that been So I coming new players X entrants players recently. I If a But change. more Pedro, we think in fronts, the landscape. I intense and group that of compete a consistent. terms incumbents. other been like see competitive think a you I do so which are. dynamics more has of to group. share ] consistently lot as the of Yes, complete difference more different don't think anything, Naturally, ABEX the SMBs I who in calls on...? we see or into market as you that we lot there's from less a those

Pedro Zinner

really there agree believe other don't the news I highlight. Lia environment. big points I there. competitive with Not to that regarding many No, are any

think quarters it's big the changes I front. over on past couple of quite been this stable and no

Operator

question from Agarwala Neha Our HSBC. next with comes

Neha Agarwala

the delivery to there far strong On are make the The looking you're been guidance? to as saw your expenses. my is one-off are upside The directed that half could investments Or down on you quarter. or originations weigh Is line? bottom of some capital, uptake in costs more that the slightly of have could type despite costs disbursements on ratio so about quarter, you drive particular can has you comfortable more and or it that merchants book. Could quite I there second on share better the are the SMBs, increasing any second other this were to color who question any the the your book dynamics the OpEx side, you year? And the willing quarter Any are the towards whom willing expected, would working take NPL but be with risk? Any lend credit there? more of is particular color is helpful. credit more to If the loan, on very to?

Mateus Schwening

Mateus Neha. Thanks by question, I'll credit the we'll for here. the start OpEx. then addressing one, and talk about

portfolio basically What when doing the linear for the it's over we're guidance, of series in quality, million half the whatsoever. the a at already BRL year in But XXX well. And above of of of we guided growth worries that as I now million to I new we performance happy roll whenever about not disbursements, ends. here we're be is message going time. we been behavior no really the So experiments think the when first of we cohorts. unlock criteria a has quarters tests year. the the the And then out the BRL are XXX to offerings, those a making test We're in new in of the with is we're look results portfolio, with terms we growth, positive, bigger of so disbursements. from the regarding terms credits, think past and think wave that That by

our above said, to we little smaller say this economics for ahead, plan. And bit a plan, product, when we're terms I'd of we quarter actually of the actually, look disbursement than comfortable initial the compare one, becoming we're time. the was previous though So the even the when increasingly in that over

but the the in conversion of from the mind the increasing the clients those also terms increasing at low conversion line Keep ] we future. in improving credit penetration participation be lot extend a very a now challenge that of done it's key and much still there distribution look pool, is and with result is when a terms think of digital, [ pretty of that which I so as percentage fully nowadays, the tests. in product to the opportunity the we of which to is in approved channels,

that's around much So credits. the pretty message

Q, the administrative On the of the XX% year. actually the growth, you're right? it's a more half correct. we upside message year, OpEx When that down year expenses, going We've we in performance a that here So when twofold. it's I on clear we we're operational line. good the administrative in looking becoming think I at look the side, look But more ahead, is especially probably land had second leverage, with at about we think to expenses. for think first guided on When broadly,

within specifically, operation, next should you leverage see serve I at quarter. So the continue think when in the to expenses selling operational and costs look we to

still XX% the there. We're tax to towards more going XX% we that range the range. provided also the of there's probably see be converging So done to to rates work bottom on

simply also going increase the which become expenses, to interest P&L. impact second fact negative think to is EPS decrease is half expected time, has I over it's rates we the accretive but to buyback, in in a look that at challenging half versus place And when given financial to we half. going probably sizable first short-term a the the where second are more the in be did

going ahead. the pretty main those that So movements are we much see

Operator

comes Our next Tiago with question from Goldman Sachs. Binsfeld

Tiago Binsfeld

on My PIX. first one is

area mentioned think this of an I you has that been challenge.

see you evolution So news of PIX how We're agenda. tap-to-pay. I of the PIX following wonder the

some banking We initiatives. open know the within direct see agenda also payments. We

how you [ to there impact ask changes? those are be think ]? can preparing I question meaningful my you a can And second for that. So do TPV And after

Lia de Matos

Tiago, I around believe dynamics, was PIX The whole a little question it chopping bit. correct? is

Tiago Binsfeld

Yes, that's right, Lia.

Lia de Matos

Perfect.

the PIX me and PIX. then let regarding an we dynamics performance in the give So overview terms outlook of how see of

figures. right? we -- we see That's markets So QR on code within a which penetration think from central I continue growth to the both a as is is true increased PIX of message been QR see method, the the our PIX based first bank dynamic strong and code, banks payment that

So at beyond that's evolution year. expectations been an the of beginning the our

is expected. we initially penetration now PIX So higher than

overall for think see as we being times many number to before, our we is positive, a as incremental us, volumes. net this PIX said one, I because

look So to the if illustrate I way following. the overall, this you the think is at

If you even on that the year, and look credit year past remained over or of less has at consumption percentage how electronics evolved penetration penetration as of year. household that stable, slightly see has we more increasing a

this volumes, XX% look debit PIX significantly, sum has right? year you plus prepaid to So if XX% While around the ago at increased of from today. the around plus

but this what So it's that from there volume -- taking volume means slight is this taking to debit, us cannibalization overall of a is is cash.

overall in MDRs reason we us because from the engagement is deposits. monetize banking our naturally cash it for accretive with more So why in this solutions but line of and for more with it's accretive net is the debits, more perspective and

performance around PIX's there's And guess evolution I NFC. so around put PIX I an our So a that big There's out. central bank that's following. we think the far. When take that is message we look the the has roadmap on know this ahead,

of to our experience, All this evolve us PIX opens around for for opportunities us the client improve rails. product to evolution roadmap development up

But is as into rails, that described, better think accretive NFC a experience volumes, we paying on that products of do. We have stay for there's the it's continue lot as here because us. to around that regulatory the may going user can PIX So will just to already cannibalization evolution we debit that accelerate there's the I greatly a this through sure developed clients. PIX. PIX our we this and I of just turn roadmap, improve for we to bank's solutions and central better I ahead our anticipating mission how is think And make said, lot

by the better I open clients. with is more from access we experience true and data solutions banking. ability that think create that can to an giving Naturally, we product same experience, also regarding expect to and gain our to better

So that's overall think the message. I

Tiago Binsfeld

to may margins do some in the you KPIs think should I And in have you plan? is guidance the segment. follow according on if past, question to think Software, up. on if are provided a I may, execution just second that going main follow What we

be well, If that would you could an as update helpful. on provide

Lia de Matos

Sure, Tiago.

So good question.

the of we So I in that how with X is out evolving X Linx strategy metrics which communicated number main in are Investor Day, the are pieces the to think for, we to one, in line look the services financial cross-selling clients.

we increase message regarding So cross-selling this to part out our Services strategy. And for opportunity second But advance the Software we TPV an story, software is, Financial at is traction course, overlap the also part opportunity. banking the clients, of indicator credit disclosed because I want on on we to as only big of is this better the the think tracking to efficiency metric we the of within the segments. TPV TPV and now, of the of one get that brought overlap.

aspect within But this monitoring this, long effect was see run, quarter. the so, margins margin one-off improve continue to did about And in to Software still restructuring naturally. talk important is There the margin a of behavior costs. We evolution opportunity segment. an from we

So I things -- main track. to those X think that's the main

Operator

question comes with Kaio next UBS. Our Prato from

Kaio Penso Da Prato

I please, related on your X have mostly cash. side, my to

in tax of end Or this bond The probably cost? remainder the issuance bond also of we operation about offer quarters, the the new own tender shield the for the first savings usage a and that cash of your for as type P&L your lower probably bought. could potential current coming is given in expect we the think cash Should of day, we by we the your third will rates of to and and terms impacts in of we generation? And should of one was expect a also bond. expect the not Q the with interest what the when see related

If could one be generation, understand would more you could cash? Where as we please. And your plan one, the last you credit what at the program, prepayment help in [ to August. If it to to almost just of next the go or could usage a good, also the completed product looking could year you new us ]. walk announced here. would through be buyback see like open if steps And cash the impacts second

Mateus Schwening

here. Mateus Kaio,

tender about first, the of the bonds. talk let's So

in terms itself impact a bonds a when you the upfront. of we In a indeed of the look there's debt is CDI buyback first to running terms X%, relevant swap that at of the ahead, because the which bonds. plus impact But neutral was savings financial P&L, expenses had going ahead

be lower much sheet, For to balance are that other spreads. with our loans in going

your a these entity. have financial we lower of of that with also run the of the provision issuances the tax we're also itself, new instruments. on It's be at shield with the savings of of basically in you switch now instruments, local to offer to debt like in the a And besides having tender the much we the a spread. And balance these bonds terms the included were expenses associated the on the lower to onshore, because bonds, part happening both in and are So going debtholder bonds first mentioned, new bond question, sheet other financial because debt the to a bonds, swapping not they terms expenses issuance.

that P&L impact together, have a ahead. add you the when to moving positive you So

in question, do what part I forward, to of second going the generation The right? think, terms was going of around we're cash the

Kaio Penso Da Prato

you program to new Right. well. as a if plan And buyback open

Mateus Schwening

Yes.

considering buybacks the initial capital our in of expectations But need capital. we also view, of additional we allocation, we for future growth remain the share when we the first, plan outlined that in opening in So plan, fast. is business mindful consider very avenues new that And that require may Day. to growing lot have as very a buybacks, our we Investor terms attractive view still a are, outperforming especially in new buyback additional

we're we yet coming on on decision something certainly I updates a whether not. made that So, a in But think program on quarters. new to provide announce or evaluate going we will buyback it's half short, second and haven't the

the opportunity the we net want the the to within there maximize of the to to given think business same. after can discounted versus feel cash billion a think pretty the to ensure we in we how industry, We structure the And Xst and is of generation, X BRL have again position. for had is to X we generating, if returns. half, July, do is shares, firepower I plan, it's We and we even at the strong we cash to are company very at Now, uses generation its need the has position, so. we're in that message evaluate of much the still first terms good What business that cash going the our you simply a this buy fact opportunity best around cash really flow company grow of deploy what company the position billion opportunities and repurchasing especially with been capital our should when The look here for in have, for use to credit. to itself. that to around look company buybacks. we're capital in prior that you pursue strong. And think order the the the in When the we increase huge from capital in terms given the industry, adjusted is do I continuously that net an a that balance company, shareholder back BRL cash

the much pretty message that's So here.

Operator

from Morgan comes Jorge question next with Kuri Stanley. Our

Jorge Kuri

year I selling at the expenses. you're given how ask know about [ I'm year wanted if a for to growth investments year-on-year to at a we get to them your just are a on sorry, marketing year to revenue But go expenses in of I the basis. but back, looking better long on on X% year. quarter-on-quarter people on look basis, ] results, they take and it and it's question I XX% up think

around to TPV. that's is revenues TPV Xx and relative Xx So

and last year, better. went necessarily I getting it's so, at relationship looked not And that any back and

of just clients. revenues, the same on pool the more and it's So for getting is the I extent -- need maybe the maybe on that order getting getting the wanted on companies in it's and more competitive of there's you infrastructure to what because looking go to business productivity more back ability more prices, generate more just to competitive, competitive and but ask not

year, to quarter-on-quarter So basis, down quarter, up exploded, float, think it And X% rates was ARPAC, average year basis. were really on trend. And quarter were quarter on if you why your going bit a a on XX% then a only of my quarter. loan question us can is lower even just I the book on like on year-on-year negative look It's more rates this banking But you on on at manyfold which XX% confidence has see second lower. on little if right? give your reversal though lower, meaningfully we're

through quarter why can was XX% ARPAC quarter? you us on walk your down banking just So

Mateus Schwening

Yes, Jorge.

about I'll question the then talk selling. and last from we'll So start

of credits terms banking are ARPAC. the banking It's ARPAC, banking from revenues the not plus the revenues floating. In the basically included in transactional

explains ARPAC that driver main is mainly why banking went quarter quarter the CDI. down So on

down went So the CDI pretty that And quarter covers X.X% gap. much quarter. actually on

Now, in terms of selling...

Jorge Kuri

there Is not included revenues are banking ARPAC? any why credit reason the the in

Mateus Schwening

standalone piece. we transactional piece. see we banking business, then look on we decided about and when to and the that a include the Yes, we floating credits reporting, talk the way only at segmentation on And our

disclose the numbers. So decision on a basically it's we how

Lia de Matos

make include answer this. Remember to clients credit that to just we cohort in Mateus' amount huge a we if a small a you're very average banking base, penetration that of Jorge, our complement credit it So only be reason. a to high sense of to have whereas has right? extend ARPAC, there to include big banking, were also, clients revenues of doesn't small So on credit diluting this because And effect we right? would us in for that

on maybe So selling. Mateus

Mateus Schwening

Yes.

about with selling as then start and relationship on and competition. expect of revenues, your add I'll dynamics maybe between selling, the that a percentage can on So piece the Lia we

of the same for expenses, marketing. the selling in nature the resulting upfront there's terms benefits. given investments way teams And and lag is between true the of it, business, see the sales in a So we the

as time we of percentage sales we in a So build recurring the a of time, takes the over time nature a dilute or increase then given the portfolio and of and hire that it campaign, this new it marketing an selling every business. sales do clients upfront, new get either generates and to team to OpEx revenues

really business, the that the same Brother different due revenues also way we Q where building to So increase force. see, Big out Brasil we and first spend the from it's the transactional specialist the did investments in you sales because an a dynamic a at money. The we're that you in get time

coming So expenses, see it's at that But we're comparison I to happening. think true the it dilution annual confident the that quarters selling the going for when because you increases. look why we're reason in it's really is already

of XX.X% So you revenues. selling first Q, percentage a the was when as look at

and hired, we're Second relationship environment? coming dilution XX.X%. on investments down from we in the confident that add the personnel you will follow. sales do that Q, to the we're the numbers going Lia, TPV, competitive we're it's to produce client want as the the and to versus at bigger then base, that productivity And we investments, are looking the mature the the those bigger

Lia de Matos

Sure.

bit acquiring talked specifically about what will times the think last we growth, assessment So you about over I years. terms, saw when next competitive the dynamics we see out years than little in think industry a general the see right? in differently the from mentioned. in X growth we X less I going big on regarding this, play evolve But So, acquiring a you is, of we've how with we to right? few industry So we're think message agree the Jorge,

we've a So, around Financial And and something is more So players clear still the to the seen trend emphasize is, payments. this Services complete right? for Investor room us not offering all first then, in a message since solutions, of exclusive there's beyond lot Day grow we as Stone. important to in

investments the monetization overall selling in that opportunity away right? So given we and moved that solutions fewer drive make, will this still from better and beyond on the our selling term. on to more banking has in think large is how the industry have returns on financial this acquiring player long see more credit, investments I we in improve offerings. we penetrate a complete And to payments

we how that's So see the equation.

what as we be we acquiring those is of their within already will players I be around revolves recent well, observed answer trend as market, of talked believe of what continue clients the is, think one quarters, which within where focus to the second in piece the specific specific the about tiers or we've niches that regions. have specific growth

example, and competitive group, regional incumbents regional a as key where So, of account Also, we losing share though the pockets for more dynamics in dynamics incumbents group see gaining playing out. as space, even are a growth share.

not that we better yes, continue future, model, have force in of I one this, think an evolve about are. the growth in assessing and that pockets it's as but at better the only as is, where we So specialist to of the sales the be less to industry our talked example and message one. we But operating grows

that continue continue and ahead within and understand stay really where make are and within is MSMBs, sure We growth to our of these we to pockets grow focus, can which serving gain share MSMBs.

a X implied already growth Day. be as factors, in Investor long-term think future guidance I that the we lower in these our acquiring TPV So result and is will in overall, of gave rates this

Just XX% towards in to acquiring XXXX. remember, we TPV CAGR of terms talked about

lot into built on that to more is is monetization evolution from But our we a a the a of more clients focus we what the result ecosystem. to our industry this So be. as of understand onboard growth coming dynamics

Operator

Bradesco comes question from BBI. next Schroden with Our Gustavo

Gustavo Schroden

It also this assuming explore if a the to it in the maybe the growth. for net to billion I'd running will quarter, Credit were me to TPV, quarter, be assuming is that point very you is Most like this take And fast. little is but that for portfolio seasonality is rate XX% fourth be is BRL running, year. seems I'm above that bit healthy. of Deposit income example, seasonality little conservative my fourth also your above there the a at a running X.X the you And the as this because very questions expected. is in analyze, it guidance. easily is answered, bit X.XX% above growing

approach? minimum? indeed X.X still expect Should is something conservative are it billion reasonable? year? for think that you BRL would BRL question. That we this a X.X above Do billion a That's like my you the X BRL keeping billion or why So as be

Pedro Zinner

here. Pedro for Gustavo, Thank the you question.

policy I I when whole in macroenvironment, guidance providing extremely I floor annual as And the I year, we unless of And believe guidance our you provided we indicators. at business by we mentioned, Investor the a key in think to think anticipate guidance, revisiting So the emphasize look numbers, our think the concept. midyear. for we there don't also change the an guidance, is right? I'll the think to for the I in set material that Day, provide the they transition our try or

most indeed are these, of for we seeing positive more So trends.

you're we game. exceed I do it's to think And I think but the part targets, expect our right. of

MDRs line the only with TPV, may the provided we're more challenging really that in transactions. net stronger PIX you despite as card for as in included metric, monetized debit witnessing metric we for transactions, So really in mentioned, prove were growth is being guidance, a which TPV not

So higher PIX last our within penetration QR and November than code our when market anticipated in has been client in we the set we base guidance year.

as code. more I think affect volume general before. to address debit mix card on this overall I TPV, on in So and would terms, specifically mentioned the we're PIX But our QR keeping guidance,

Gustavo Schroden

potential Okay, impacts up about very here, clear interest about and your card to just the very rates. And TPV points and PIX the follow clear.

here that a anything that for impact rates, different different see guidance, you you we could have or environment could great. could anything here our now would change So be or that expectations comment as

Mateus Schwening

here. Mateus Gustavo,

on when the guidance So a increase When to we they was need that now, keep when we November, and expectation second be the did in look not Again, well. first half. Day drag the mind we rate the decrease. provided think Investor rates curve would about to interest in as think half. on that But I you rates, low that they are are was interest interest going expected second to half, the

there, really enough change So it's not there and material is but to a the guidance. not headwind negative

Operator

Morgan. J.P. Fernandes Our next Yuri question comes with from

Yuri Fernandes

Rio Sul. one do Quick on Grande

quarter. a in this topic the think to was past I discuss

to What Rio do grace you were clients. the here? if is number for the put Lia already a some impact earnings know Grande That's one. And you're explored just Any second to the But think And Sul, was for You I on periods, subscription your testing final how release. the quarter? would on initiatives. a -- I one on these exclude this first free deposits on, remuneration lot, giving have test pilot deposits, behaved? bank your your these

risks yields can you nowadays. plan your free If what to on deposits cannibalization the color timing, of of do, you more of provide

So color on just deposit the of here. some remuneration strategy

Pedro Zinner

Rio this is the happy Grande the smaller that with question. off Well, I the kick I'll than speaking. affected I'm impact think in recovery to anticipated. do thanks And the say Sul Pedro of to we really was TPV swift initially region.

numbers when was took really on this it this not that time the we over But good impact on our series our BRL support most overall, that pass to of only because note they quick So Mateus. really actions just impact to And a XX clients on but around approximately news experienced BRL TPV, side. the that ballpark our we of due a during also overall XXX results. And negative million million reduction, critical to in TPV needed us. I'll of

Mateus Schwening

Yes.

deposits, remuneration In the of we're terms testing. still of

to current And offering. disclose think basically that really still cannibalize We're we with testing balance on going don't that that's the to economics have we immaterial we're started deposit yet. with merchants. time banking I see to of the amounts sheet ensure the we the

next I next the in gradually difference terms to But it the the start So to results sheet only timing, that a larger make in quarters, the and base. pilots should of during we'll year. in extend think a balance

I for on that XXXX expect front. shouldn't think big we anything

Operator

Our next Meloni from Renato question comes Research. Autonomous with

Renato Meloni

had first the that XXXX maybe also, the and so in your the you far second expenses. you went way to provided. My think years that to is to my related be at what but to for well the or guidance one could guidance, is some upcoming a success explore large it's And ahead financial somewhat it'd expectation KPI credit to here. was at looking some of related look the what bit this, interesting given I you So the portfolio, if provide up about growth question

there But to You've opportunities and do happen? cash keep then been the relatively you then potential able usage by expect if lot them of a you generation. large is that's of And that that financial timeline comments to expenses cash your low a on have own for the further? case, using back to going that your growth that, you growing the see

Mateus Schwening

Renato, financial first on the expenses so piece.

it's look rates. after is change still generate to is to position when I cash you company, I dynamics of I year, factor going financial going in effect to continue positive like first naturally, we decision think, naturally capital share be our elsewhere, and where allocate billion, really net a we're continue X the think And keep When interest that we expenses. rates substantially, a think at interest be I effect for the said, this decreased you unless to look for half, of buyback the BRL that to cash. an going have we financial at on the generation even look reinvesting, helps we're of adjusted to to additional and the expenses. That especially the big said, second going of the half when the

half, is the now increase. to that probably think, I Second expectation it's going

think main dynamic rates. there, that's the I So interest

terms are trending In and also I think reinvest cash well. spreads, of really dynamics, they in the other generation

Lia went the it a of pass to over bit the terms went wrong, in talk kick-start Now, right and about versus little what about talking credit, I'll future. to what then

the I at profitability in products, we're credit the becoming confident economics product. the of of mentioned the increasingly when the beginning, really I like look with you So think

in we that we where had area results given that's the think the an cautious wave. really I beginning, the were first at

going when look it to say and would you have So at time, we you from as provisions comfortable. we're That's our when I continue towards and XX%, over started credit look converge the offering at SMBs, to has it's core levels to well, to that it's come models. and the down, trending XX% of why the that more within becoming more really well,

around at this the is what offering tests. times, look of you series running BRL but portfolio But portfolio, course, think call we've embedded few of this vast a SMBs. the a when we're I million portfolio, number, mentioned on that we core of the XXX majority this really in

SMBs, tests effort, we're many would message of different on and continuous things the And Micro, So that learn profiles a a net-net, tests is got really There mistakes economics kinds on credit within say are around ratings. running we're that the test different optimistic right. of that I this many is really where But we that main we the did, product. we here lot.

therefore, much still add, digital, to low this at ahead, the opportunities we and lot terms the and think it's know grow want going have nowadays, when improve, moving is and don't probably a portfolio. key offering challenges really very of in I channels. penetration pretty terms a huge you because, where Lia. a In participation like so in if of distribution it is to fully opportunity, conversion said, there's future, to And and look we I distribution, from the be to I place increase

Lia de Matos

No.

credit I long-term core consider which portfolio. think guidance, the SMBs. add a loans capital is perspectives not guidance restricted Mateus bit it's Naturally, the on little offer, calling for to regarding what perhaps, when longer-term this our we the Renato, is just on working

credit talked Stone, for to cards about started and that there's credit extensive within both SMBs, product Facil so pilot, solution. around which is solutions. We products we of Giro roadmap the other So an Ton have some overdraft an kind

So the there's opportunity. message is a big

year well. We long-term do the our and we're capabilities as the we more that this us will confident guidance in terms of product to that the of work enable offer guidance clients. But to offering, types so building solutions the credit with relevant expand have

Operator

Our comes Citi. Gusan with next from Gabriel question

Gabriel Gusan

with competition, that associated you're debit far, similar we that. One were from seeing guys less But to quick You do that hear seeing debit We any or better that on question rates charging? than pressure much about do understand to peer-to-merchant you PIX Are too. something pricing. pressure are costs so envision levels. the in probably you saying the economics

to on that share anything front? So

Lia de Matos

here. Lia Gabriel,

of It client with net the terms it price tier. MDRs. line naturally debit PXM, we depends in pricing PIX basically, So on in

pay lower for And think prices a for So our it's naturally because think message. higher for smaller accretive and will same, We less. banking bigger merchants, engagement. our that's I I message. But that's be the gain to and for It's win-win the us they the merchants. essentially, clients

to So And a our ability PIX greatly were method. because there's to that's codes PIX a as challenge. PXP-type QR that around transfer, within value-add a payment dynamic use SMBs. very If reconcile client's would it offering this relevant they facilitates be a

this around see that's pricing. and dynamics. don't the there's pressure any on clear value-add So And offer, we a

Operator

session. this by concludes the that answered for at StoneCo questions Questions Pedro Zinner, were will to no turn later not StoneCo, at are be time. There addressed question-and-answer considerations. team. now This will final CEO over I the

Pedro Zinner

Well, quarter. the in and call, you. want you thank I for all see participating the in to again next just I Thank to hope you

Operator

This concludes StoneCo presentation.

disconnect. may now You

StoneCo (STNE) 14 Aug 242024 Q2 Earnings call transcript