STNE - Earnings call transcript Q3 2024

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Operator

Good evening, everyone. Thank you for standing by. Welcome to StoneCo's Third 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. found investors.stone.co. be can material online at All Throughout non-IFRS income financial call, the and be presenting company will information, net this cash. conference adjusted including adjusted net financial the These but measures important defined for are are IFRS. financial not measures as by company, financial company's information release. to the Reconciliations appears non-IFRS IFRS today's in of information the press financial

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

In XX-F Commission, addition, company's is www.sec.gov. the the many and regarding Exchange Securities risks of disclosed at which business in are the filed available the with Form

CFO Pedro Noronha. I would Joining the Matos; Pedro to Roberta host, Head IR, call to the Officer, of Marketing Strategy and proceed. today Mateus CEO, Zinner. your the Lia now is Zinner; the and Please Scherer; the and over conference turn Stone's like IRO,

Pedro Zinner

a state maintain our we segment. achieving and of the an to annual meeting of the of across key milestones will some Financial performance strategies can operator, everyone. marked quarter, begin reviewing our and third some improvements, already of that not highlighting areas period our committed quarter, to by solid by targets, outlook them. our if good closer you, business. we business the evening, Service for our XXXX us results confidently our for significant executing various bringing Upon to I Thank updated present provide Today, quarter and I'd third like from

clients, previous is achieve strides demand in we amounted representing serving total banking reaching focus all environment. being clients' initial to MSMB client made the scaling by observe engagement. billion X.X on current bundles product, X On to BRL additional our XXX and healthy we and savings to volume priority side, the payment already a for unit positive a shown healthy trends enhancing deposits clients, experience despite for year. are year-over-year, in improving its our economics, BRL which solutions MSMB In To a compared increase as payments developing this, by million such payment in stages, key encouraging has banking, our while XX% our results. significant grew maintaining Having continue competitive XX% us. billion,

to Regarding XXX surpassed a the an expected terms appetite. of This credit, announce portfolio with BRL our risk ending million, annual aligned we our indicating NPL levels, offerings credit pleased of are better that of nearly our portfolio are XX% have in quarter-over-quarter. growth that and is with performing impressive expectations quarter than we guidance, internal

specialized credit operations at enhancing beginning and Our in delivered new has distribution. our deals year, results the promising of the desk, generating commenced which

Giro Facil, have for road facility. revolving cards advancements launching a making credit map we products, Additionally, in our and credit executed loan successfully

We proud sustained of towards quarter, results and I'm setting also of in just their payments. MSMB achieving to has take us. clients guidance report X.XX% our experience our of record refine credit indicating a rate light annual our the in throughout with have X.XX% performances continue In the trajectory I a outlined, the have that to reached cycle positive strong

basis. observed on to financial in software, exceeded service quarter-over-quarter in MSMB cross a terms we solutions twice selling continue among our Card significant the In see volumes TPV growth clients. has software to these our progress of clients growth

to addition, In cash are committed our initiatives. generating executing we fully and efficiency

XX%. surpassing by our points margin As EBITDA X.X percentage now sequentially, result, increased a

shareholders, evaluating the we end our our Given options which will interest further maximize value, to commitment call. acting are to this I in best currently of of in discuss the

adjusted by seen like efficiency XXXX program structured the well in position. We have We returns expenses use guidance, repurchase with in growth. administrative on to share would balance a BRL us we decrease X we us nearly maximize meet X% our X% I excess which year-to-date consultation shareholder last capital a Board. the quarter. front, strong that billion the implies highlight we optimal to also Finally, and have now a third have developing currently of decision-making recognize evaluate completed our leaving our that framework year, compared to with positioning more our sheet capital, are continuously to

provide quarters. the to visibility expect We coming over further

As XX% share increased a year-over-year. per adjusted of of significantly result our earnings execution the buyback of our growth XX% and basic adjusted our by net program, income

to over will the like who our for discuss XXXX. the floor performance quarter I'd to Now third turn Lia, Lia? of

Lia de Matos

Pedro, you, evening, Thank good and everyone.

with our happy third we've in value clients As with with performance the been our service. Pedro and drive solutions mentioned, we're to quarter able to and how

good we Slide consolidated results. As presented saw in X, traction on our financial

total for revenues growth accounting increase we client of fees revenue our 'XX. base grow is a performance mainly held grew result or in when we where continue to methodology membership change internal income the segment, Our in X% year-over-year in monetization. This and the the MSMB and of X% quarter our disregard first

XX.X%. per lower BRL of income driven year-over-year and and percentage with repurchase of respectively, growth percentage growth XX% points and our to the margin quarter, Combining share. basic income with points, expenses. combination line our in adjusted significant financial both grew by in net improvement X.X the adjusted mainly EPS EBT shares and reach top X.XX our XX.X% to XX% margins the Our up This adjusted net grew X.X was year-over-year

client growth with reached Financial in results X, further dive clients, of let's base in Slide segment the net into a quarter factors. payments performance. on from Now MSMB our the active Services year-over-year. Starting deceleration X implied almost million our The clients different addition XX%

with and unit second, of as economics, our to due bigger of the allocating as than client year; well the of rather engagement focus the the capital clients First, phasing first out to purely increasing investments on in base. made marketing a towards healthy onboarded half quality

products from our with our relationship have with engagement such our and ago the We're our us. credit we clients with on consistently, focus and results As users and products our the solutions. that to bundle, heavy start with user to has improving than driven of proud you XX% with higher a shows positive payments clients this which might banking X growing year opens clients also for see to Heavy multiple which door bundles illustrated been going XX% metric, MSMB payments, remember, the a quarter. by usually percentage more banking

XX% to economic reach XXX code composed our is card as ground and billion grew continues a and in for us clients. TPV to in MSMB for positive with quarter. This QR volumes, in BRL TPV of the benefits X.Xx volumes, PIX year-over-year payment gain growth and Regarding growth net on growth PIX cannibalize debit XX.X% a volumes,

the As growing third a stable solutions, with we engagement unit competitive higher of X have payments, and with MSMBs reached X in higher the a points healthy 'XX. record good basis of environment for the a our our economics year-over-year take allowing quarter clients increased quarter, focus of result second than rate X.XX% of and points more basis on for take rates, in

the performance our highlight we banking X, Slide to quarter. in Moving

grew Our client X.X banking million base year-over-year clients. to active XX%

clients As solutions and level new maturity focus has onboard achieved payment bundled a since to within engagement new Pedro good clients ecosystem. mentioned, with towards our Thus, our has offer. and majority efforts to a banking our shifted banking of today the sell payments increasing

year-over-year. XX% clients higher As X.X billion in the from a result, quarter, BRL reached total deposits

solutions received time been new ecosystem. in between haven't that Financeira deposits relates products, billion from a accretive retail deposits clients Our savings on-platform to deposits of our offering still alternative their results, demand and year license have carefully and balance to our at XXX clients. demand the Though can the array we to to stage, BRL offer refer yet. deposits us manage has in BRL quarter, BRL Of billion which money its the the time while marketed the allowed of deposits managing the within we've X.X and seen million to beginning expand our early X.X total our actively we

In our the third-party time distributed addition deposits. for strong our calling the off-platform shown time are to clients, deposits on-platform in we're X.X BRL company. outside we're have quarter, to in reaching growth in deposits, which which deposits directed time ecosystem, funding platforms Those also issuing billion

to move credit on let's Slide Now X.

this BRL have the outstanding left XXX capital facility in Giro BRL with quarter. currently our already X is Out We Solutions, this Facil, which comprises to million still in above XX% working related XXX our of beginning credit million solution, revolving credit our with launched and which our solution annual portfolio, of to go. is clients, Merchant quarter guidance

focusing at currently we relate The the our to Thus, in for credit of other part XX from decreasing an value to capital expected micro in the is on within the beginning our closer the related provision as to the million third quarter. provisions, of the offer, working models. been the has we're it provision been levels in capital reach clients, year to working important segment. When this card XX% scaling loss credit portfolio we converging look slowly of solution to which proposition the have XX% BRL

ago with [ convergence far, quarter credit and XX BRL of since results previous million second X expenses compared have million our is when total the periods. this by X working our still As provision XX a BRL 'XX, this and quarter to year virtually solution positively to contributing relevant compared most result capital in reduced to of ]

NPL was reaching increase the the in with in with Solutions previous second quarter. quarter the quarter. matures, the XX the quarter to due in X.X% XX XX NPLs, X.X% expected, the NPL days observed to decrease continues The to Merchant vintages the while compared better for the Regarding portfolio when for as compared

we drivers, led with of our environment Finally, The summarize competitive of the in has main evolution payments Financial a segment. solid strategic performance. stable on financial performance a strong to Slide Services our X, coupled

percentage revenue Services Financial over with XX.X%, reached period. same an such, higher higher X of margin year-over-year billion, points the X.X As BRL EBT X%

positive than to X. driving more reached team, was our result software in that has to our segment. boosted of growing strategic great briefly by card both our software our cross-selling for the job our Now our twice software client has solutions focus doing financial X.X MSMB about TPV in TPV. services let's trends the strategic initiative our clients which which talk base, within a solutions, software quarter, the be This our use the financial cross-sell Software card seen We and by been on services this growth from services This performance seen offering sequential financial the can billion specialist BRL verticals of Slide segment. see

stable have X.X% year-over-year, relatively performance Regarding we seen growing sequentially. software revenues,

XX.X%, of bottom percentage the X.X manage quarter-over-quarter, On margin line, to EBITDA the for XX BRL cash million with reached quarter adjusted business continue we the efficiency software points in and higher generation. a as

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

Mateus Schwening

everyone. Thank quarter costs you, of basis. of where a would in the of loss Cost and to on we Slide 'XX revenue evening, loan Lia, quarter 'XX I decreased start from quarter-over-quarter to good the to like and an services adjusted provisions. XX, expenses reduction evolution XX.X% of XX.X% in of our third the discuss percentage in due second on as the

provisions effects second stable, or a compensation, as expenses, marketing XX% XXX credit a revenues. X% which decreased variable was of as revenues. resulting increase increased quarter-over-quarter This or sequential a driven are revenue. Administrative the This by points, X% increase in the reduced mainly relatively bps, remained of X% higher of in expenses as basis the decline provisions, Excluding XX percentage year-over-year mainly XX% of the a year, increased in a of percentage X% attributed for were driven cost percentage by first buybacks higher considering was and to higher year. Selling seasonally quarter-over-quarter, the year-over-year half expenses The our and working increase due as this funding increased a lower of sequentially XX share percentage which half share mix a higher needs decreased funding partially in quarter. Financial quarter spreads. year-over-year funding days. offset was we following expenses show, lower average by significant of in basis the number of revenues. sequential equity points, reality TV to or growth, sponsored of second and These that TPV ended

of funding XX% our liability through most a debt we expensive optimizing as bills. bond quarter, our issuance significantly our new XXXX our This refinanced at in lower and key proactive instrument management repurchased played issuance, financial of spreads the role costs,

year-over-year, remained line other Our stable sequentially. relatively expenses increased by but XX%

revenues revenues as percentage our other As basis grew, points. XX expenses, a decreased of by

had repurchase This the QX. the XX.X% Finally, to from expense. transfer a to from portion impact quarter, was the entity, our This of benefit bonds primarily in allowing interest and on in tax QX to and the the rate due in is associated company approximately XX% partial the reduction us down local to QX further operation our remaining tax of shield XX% expected a benefit onwards. was a from of

reached quarter Turning the of reason to cash net XXX million and a Slide billion X.X XXX billion execution BRL of in a outflow an with the the BRL The quarter, program XX, of X was X.X reduction BRL decrease main billion buyback BRL position share the our end adjusted million basis. by third the our sequential BRL on of year-to-date. for

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

in pleased these our with We months very performance are X XXXX. of

like decision buyback, internal P&L are deliver methodology the fees headwinds yield we On that unexpected of well curve. the positioned a I front, rise share sizable guidance our with of the factors membership despite changes our make in the and to the to impacted financial our macroeconomic feel

side, the that excited for completely or control credit while I'm have and our already our operating expectations we On even better. share maintaining under to guidance the within portfolio, met NPLs

reach On their clients ecosystem, with within to and with front, us on the placing engaging target. solutions expected deposits keeping the the our evolving as right is also banking business our path our

Payments CTPV side, the to the challenging most continues KPI. On be MSMB

a volumes. the than anticipated, our are As at still debit PIX to seeing pace faster impact continues grow we on

our is impact shows CTPV this negative metric. on a While our to accretive it P&L,

versus the we outlook growth. of changed as quarter, on interest prioritize Additionally, significantly to profitability the side for rates this decided

market strengthen may short-term our While to our we CTPV term, grow growth, we believe continue to continue clients. complete a proposition above in our ability to to value longer penalize as this our towards solution

significant we the continue see opportunities Brazilian industry growth in Regarding growth, market. to

see expanding We a dynamic consumption. have payment well methods beyond environment, and private very and electronic innovative we

achieving with broader end, our X.XX% and of long-term monetization, reflect banking pace of a of contributions an previous payments. exceeding suite year-to-date in results rate healthy particularly differ by we significant of our solid for credit guidance engaging our the years, clients establish targets. To While a that solutions, continued may from growth and from our pricing, foundation take MSMB on X.XX%, with

With that to maintained products solutions increase of banking our engage in successfully bundled our consistent our already P&L, yet level have and providing strategy, with relationship Day. forth solutions, the the returns. It's said, another and important and note role quarter We pricing on the us our to in engagement set strategic dynamic credit with focus playing more that monetize while are our we posted results Investor the tools clients. improving us with our priorities our target to of allowing and continue to important an

what to discuss over Before hand I software would up, we we it Pedro for see like wrap to business ahead. to the

Pedro Zinner

Mateus. you, Thank

move business, by strategic forward. to the into address move our session, take we on I for we perspective to a as want and software recent Before some developments Q&A moment our our decisions, asset our sharing this outlook

consistently our in verticals. our focused executing cross-selling priority have on to communicated, software we As clients strategy we financial services fully are

and Our only drives cash believe strategy, committed are approach track to value its this creates that success us. We not firmly execution. and for we report pleased on and but efficiency also we our to I'm generation, steadfastly for long-term remain emphasizes also substantial this with clients, strategy

client critical strategic and that in resulting software Our of growth efforts address pain services solutions financial verticals. key within bundled are the points

asset remain in our we is While acknowledge opportunity made financial Linx execution The significant and further engagement maximize services of of value, for whether end, is time who is exploring our predetermined set of shareholder place. At to the owning can no A software have advisers, would towards that software a want stage. are with channel, allocation potential strategies. our guidance exploring engaged the our this we partnership the approach core assets. for or emphasize and innovative the approach we are is frame a business. force. success cross-selling area commercial with Investor sales have allow instead open-minded strategic our objectives analyzing This lighter capital. To with an both we to at alternatives our strides of key framework in this for during Day, objective better specialist unwavering outcome the reflected of we we diligently firmly I directly there that mission distribution our our achieve which we and the footprint established through and

considering top We are our all interest, thoughtfully options best shareholders' with our as priority.

progress, are to as assessment. this you we We informed keep about our committed navigate

to want gratitude sincere Q&A, begin express you your our we to my support. for each ongoing Before I of

could are the goals operator, delivering We open questions. to about please long-term commitment our our value call that, you for and our shareholders. With excited for

Operator

question first Sachs. Goldman Our Instructions] Tito [Operator with Labarta from comes

Daer Labarta

questions, of couple if I may. A

the First, just very on the you a for. QR your slower to QR growth the Because had on maybe on TPV card TPV We the nice growth TPV, code had continuing as growth think the lower strong in than evolve guided to and should QR the bit take rate. offsetting the you QR PIX rate. -- do improvement a code in you think that very take the also, about both a have code, PIX on PIX would think originally card How code?

take us then understand after that's So second have rate. And that. just impacting a question I help the how

Lia de Matos

your Tito, for Thank here. question. you Lia

PIX TPV that. trends impacts regarding and how So

now So us times see many because we've physical PIX we continue debit debit substitutes can growth And for say of substitutes and there we PIX to ahead that's money. said as volumes. But visible from before, is that expected. accretive cannibalization

within deposits both more accretive So payments money ecosystem. from but increased also and monetization, it's the perspective the of

continue. trend We expect this to

our improve within even adoption this the in probably But be So if it's ground, that of were TPV, take as impact Central in debit, physical continue because overall again, is future. believe Bank PIX but this for -- incremental to because we us the important substitutes won't you gain it's accretive improve will of to consider money. as also PIX efforts PIX roadmap rates naturally no smaller. to usability especially only the all highlight But reason to is would even not substitutes it to that

Daer Labarta

loan you're near Thank expected think credit the the I but NPLs it's improved, want up. losses And you, XX-day growth. understand growing XX% portfolio you ]. still Great. and just the I the see you Lia. credit to just second mean, NPLs maybe that because X then the are mentioned quite my early improved, like provisioning mentioned on quarter-over-quarter going And question, a know we the I I bit. portfolio [

sure not go I'm type So in if ] [ the of you're growth the doing I understand be to improving? provisions would even completely expected losses may why that quarter X when

Mateus Schwening

Tito, question. Mateus for here. the Thanks

What So I expectations, even provision provisioning. are evolving results resumed couple our offering, to think excess but of losses credit expectations terms we we this we're seeing though we've started expected reducing in ago, in right XX% were the are to mentioned in quarters according range. of as that is our a the XX%, this now when we for credit our

of is with losses. And So way that and this to is this we're that XX% look ] last the we're our an the level now ongoing basically [ the process. and credit of provisioned, at expected to quarter, converging we provisions going XX% quarter, portfolio had

this quarter. coming to in the to that's and the why we're you both models, have see over low convergence provision So a of quarters, continue going

Daer Labarta

Okay.

get to level you probably continue to continue, low closer adjust as this XX%? that So to should

Mateus Schwening

Yes, that's correct.

Operator

Safra. Our comes Daniel Vaz with from question next

Daniel Vaz

to the data kind to September month-over-month. like looks results. looking I I October, your the is into index and struggling physical for the it TPV for show of card XXXX. and Stone get retail wanted on growth view on new Congrats relevant was

breakdown digital have that growing your your is lower concern but side? I any revenues. on on the a So probably well, see

cross for from TPV index your card, So how we on expectations XXXX? the especially to data for the the can that XXXX on Stone card

Lia de Matos

Daniel, here. Lia

an this of thank what point in this you at volumes going right growth debit clients for as as maintain is question. mentioned 'XX us now important Naturally, perspective as healthy. highlight we've say to trends, Not is growth and for at volumes this pace are as can accretive, times can long shift for is, this that But in of PIX healthy and between and TPV, solid at several economics and growth to we drives only So for levels the before. And is we're we that monetization what's not credit. the point. business, -- is banking we engagement see the numbers and also payments force we within there shift terms that XX% not from really with us deposit monetization, it our for the cycle driving out but very and our overall as

just because we away, set industry. talk into guidance we when see that penetration to that's this as much continue will we debits, that of as going a the we different in and shift were about go as don't terms take between So the place mentioned. And year we think I very to for guidance XXXX PIX last that, we TPV TPV, PIX overall -- in at remember when account

is stay. here to PIX So

that's take but that talk account ahead, We that's say we what about -- we will and now. into our right when in can XXXX,

Daniel Vaz

if may the of we in shift up, And panorama a you in have I mentioned penetration, a shift PIX Okay. the also environment. macroeconomic but follow

that are a impact that level. your like So added marketing does expenses high still sales force you on maybe capacity how

due in you Brazil? way deterioration changes any business run the your XXXX to in want in to the So macroeconomic

Pedro Zinner

the Thanks question, for Daniel.

change force doesn't force terms internally in plan is bottoms-up that So towards it way the more outlook. sales we The planning, of approach. sales really a

gradually to emphasizing in and curve making that and address. But we new of this sure evaluate market the talk TAM evaluate clients. that level side well, our is we're as has through yield to in the change at the couple think new our of the we dynamic very passing of accordingly. And decision-making the adjust the a end, we curve, but granular the I the lot with economics the it at meaning more pricing yield a have profitability about other cohorts we this shifts we're pricing become looking I is our And and quarters to we've think these going a of in that to do side. what been So to rate within company, prices going interest incorporate then the basically continuously environment, when

So in should make seasonality. tend the Q not to is price progress. only first here natural a The big given it strong be note that important we movements the

through curve these stronger new think from should onwards. yield passing 'XX of be the I quarter waves the first of So

Operator

Our next question comes Bank America. from of with Mario Pierry

Mario Pierry

quarter. Congratulations I to a exactly basically, bit take has on weaker on explore take that given rates, little in part guiding I right, look than rate. the think been PIX. were of answered X.XX%, question wanted -- the more MSMB you But when your And you the like we the running you expected at for previous mix at question. X.XX%, were

your a banking is implement profitable is than started lot, that to because the clients? for higher it you? rate because expecting? it already you Is more your very prices competitive were why So product environment the rational. right, what higher you said is You Or for take is

Mateus Schwening

question, Mateus the for thanks Mario, here.

guidance. guidance, of also deposits, to look of at have But deposits. curve we're you met the credit, is rates in you third that penetration the are at going we already that delta of the level between when of ahead and Basically, by whole was yield the in Banking, actual the guidance, start X.XX% the terms of a again, So look reporting, impact take the to the the when the course, both we over higher right? And we're Q, X.XX% of banking. delta the explained credit the and

in we're the what is contribution the P&L seeing bigger that we So than anticipated.

it the do do the think less of has and with TPV versus new PIX So company. with I mix of to the more solutions to penetration in card

Mario Pierry

Okay. clear. That's

Brazil we're even seeing yield based still curve. that your could then shift to a reflect higher on to you going previous answer, rates in we're and in -- right, So implement your though higher this see, pricing that

what you're higher rate is from that correct? levels, the be take should these saying basically So going

Mateus Schwening

that's Yes, right.

Q, So to curve don't see at QX a because the repricing expected yet onwards. rise from from when third is big you impact you look yield

from quarter will the this correct. take first And of place onwards. So 'XX that's probably then

waves. So should take of the up, repricing as a rate go result the

Mario Pierry

a And Perfect. credit We let second you ask portfolio a unrelated. at right growing the is pace. card me that saw faster question,

said increased changes somewhere credit do card what the I you you card explain that mean you Can think that you product. by the attractiveness credit made that? to I What you read product? the have of

Lia de Matos

Hi. Lia Here.

we're Ton credit credit product. We've So both still essentially, is and the scaling card message do at now card launched Stone. that for proposition strong We a beginning of has for the the it micro believe according here our observe similar performance, terms of conservative taking here regards our increasing segment. we we're maintain that approach we in sure risk. approach a in making a what And of terms to offer carefully with value to

pretty So beginning the did solution. of capital at our of we what to working similar scaling the

of We the the perspective are still fine-tuning offer. from

different segments behave basically, different. So needs. is the are for is that proposition it know They have differently. SMBs different what right value These within credit cards versus micro. We

provide beginning here is evolve, scale. that of we're naturally, to and growth learning we we And more So it's kind product, at as with of of continue much message these early the this stages. as very will visibility, the the still we

Operator

from Our with HSBC. Agarwala next comes question Neha

Neha Agarwala

results. the on Congratulations

a debit dive you mentioned you can Right to what bit that the take from you get is PIX. cards. rate have that you similar now, pretty If into on PIX the

leads So technically, a PIX which would makes you you would see it pricing expect you an less rate. are pricing on does your could lower impact for the -- recurring PIX cannibalization gains that, products prevalence, are your payments. So see ways peers, just to really and and you new impact these new of cannibalize with debit What take attractive? And in And that Would automatic well? overall launched of so, We right? cards features this the not bit change? expectation, as could on can terms PIX, your as expect is dynamic that as it cards to among think on competition first. more if you this PIX what have Do we credit have if start coming and that your the adopted, business? have

Lia de Matos

Neha, Lia here.

further bit little our perspectives on So QR elaborate PIX me monetization. on a code and let

very So big of PIX clients machine reconciliation. terms QR dynamic fraud. or in to they much different POS There's clear the a have especially are the difference methods user it fraud. it to static higher allows a of dynamic, integrated because a We QR tend is know other so code, level PIX is for SMB PIX capture very code that code that of not the PXP, QR that in types experience,

especially new to firmly So terms value is and We this that a in another as that believe direction. of add We going likely not experience, on on stay, that's trend, see credit that kind that here of accelerate the believe just offering right? So where payment is NFC to do cannibalizes is the volumes. PIX NFC volumes. consumer, we side of debit improves solution do PIX in on a our the clients, cannibalizing PIX step the for PIX user

card especially all we cannibalizing of of nature our data to not base, credit base. ABEX kind the trend do think that this, installments, seen haven't healthy We as within we growth right? any our relevant So on credit evidence because the I see of growth within TPV -- points PIX at volumes, of see right? a continue on direction, to TPV. in We card

because picture But to how deposits of very and important payment likely PIX. scenario is it of then, PIX its case I've all we us of And monetization But substitutes really that offer that's Our terms adoption summarizes the to already accretive, any terms that change. within right? a see aspect that value-added kind volumes. this is grow the said. more continuing that don't all cash, for is in we So of our we versus features everything method, ecosystem, in debit in again, a to is PIX believe base clients associated solution

Neha Agarwala

pressure seeing in any And not peers of for you're pricing from PIX your terms processing?

Lia de Matos

news that no around No, [indiscernible].

Mateus Schwening

And on MDRs now And cover distribution market. forth. the it so was features pricing fee a a quite nowadays transaction, I costs, that for you if to supposed of that and debit closer Lia, and on reconciliation is that so front, the while was remember add we pricing that dynamics think about if is in stable how the price to of may And to debit. the net PIX the

pricing about or So these of trends in we're worried not PIX. terms challenges for really these

a stable think nowadays. I it's quite environment

Neha Agarwala

more Two questions.

quarter-on-quarter key the the there on XX points take was rate a big in First, basis segment, jump. account

So question for accounts? And credit you rate just on in my to is improvement the take that second the what could explain book. key if led

mentioned your and that loan to XX% about currently want a as at I around look XX%. expect you you expected book loss, of You percentage a that's bring the which why on some is XX%, When reserves, and around platform, Mercado segment, credit their instance, reserves, a and who book for XX%, loan merchants, breaks like, by down of XX%. it they of off both players Libre, to is percentage as do to kind

expect you provisioning I that is why -- you Brazil the What not -- a and some seeing ] safeguard? great, mean, that a what difficult think in doing XX% of to difference first than higher kind are you So makes your of level reserves to merchants? why there a time that not market just have given have of [ is maintain it's

Lia de Matos

Neha, the and Okay. accounts pass -- to dynamics. to then take quickly elaborate over the it on NPL Mateus key I'll question

in there segment. that volume an reduction accounts, sequential was lost within because basically is key our -- XX.X% That's concentration TPV. remember the we within So there

one significant mix So with player terms counts from this specific happened XX this volume because positively sub-acquirer. rate take of so towards we an rates, is a also And large move take points. observed was a that improvement basis in evidently, shift lost of

a mix effect. So it's simply

elaborate on So you want bit Mateus, little do a to NPLs?

Mateus Schwening

Yes, for sure.

XX% talking level XX% the different about why a of peers talking level, credit we're here. we're other the question a losses think So when of on on reporting mix clients of I as about are expected

our So in we're BRL if about talking size. average credit of you portfolio, XX,XXX the ticket loan average current at look

look maybe similar the merchant are you these peers, If SMB about we're lower. And at targeting, of profile a micro other the you would that players if be to talking to XXx not at I it clients think look and an merchant. more were

we when our targets talk and offering, capital Of current working on segment. about test within initiatives to course, we have learn SMB. mostly it's But that

So that's the difference.

Operator

SIG. Next Friedman with from question Jamie

James Friedman

for one Lia. for Congratulations, and guys. I Mateus one have

should bundling anticipating one Lia, strategy going bundling terms bit then and the financial strategy, a merchant about how impacting were of that in on growth, The we because sequential first what a below is Mateus, think growth? basis. And those merchant we is little expenses potentially forward were

Mateus Schwening

Lia. pass Jamie, so I'll and it to start question with over the financial expenses then

of expenses, about basically line, X terms in are main you drivers think when of financial So the there factors. that

first Our financial you facts. mix given X% right? When of at by rose the sources, are the funding the third one, the interest the basically funding expenses versus look funding equity, quarter-over-quarter, Q, and needs the funding parties third following from level rates spreads, of

in which we the working So days of first, increase an quarter, X% were higher. had number in the

piece. related funding it's needs Second, the to

and in well. had quarter And third, needs. we sizable buyback therefore, TPV bigger a we growing funding did So the as

So of was of our equity lower. mix course, versus debt,

because that hand, the the lot the is other new license. what instruments about talking issuing a And the we're overall funding in of our On in a seeing reduction financial we're we're expenses Financeira spreads. financial

offsetting the that factor bridges gap. that's So here the

look starting the the yield to according to rise, we're going rates should in ahead, think right, the that ] difference only fourth we [ when Now that to curve. I interest see is Q start

So when in big dynamics revenues, the think to I relation of the that's financial we think about expenses shift.

should more are I to we yield the a solely all other positive trend. financial But a the they terms expense think in due So scenario factors, of curves. on have challenging

So spreads we're to trend growth. positive also funding continue and a showing going are Funding cash. to basically are a needs of TPV result generate

there. So those factors main the are Lia?

Lia de Matos

bundling how strategies taking client just and growth. base and -- affected your bundling on Yes. Jamie, has question that so

relationship. there's So direct a not

is result adds, net dynamics growth a of our and X base of main really So the factors. client

happened investments and out. the sponsorship show sponsorship that First, the what marketing and the effect of the is in first half year our of reality Mateus phasing that in the the mentioned,

growth. terms in second, impact weigh decision growth. seasonal of of really our a the versus there's client profitability to side So base on And

attention paying really the So we on onboard. the quality number clients versus the actual that of clients of

when We disclosed one about cross-sell when financial TPV the clients. bundling, bundling broadly, our there's software different think cross-selling dynamics about is slightly to I more Number we services talk there. we Speaking X think metric.

clients I doesn't impact software are so client of think that's mix The larger nature a good right? guide of because medium within much base a that is Basically, of It growth SMBs. clients, those effect. clients those evolution.

in actual channel is TPV of it but performance growth. significant good it's software financial within our to terms our in financial sales cross-selling of pretty services relevant, And we're clients, not clients. software number So specialist to bundled services, seeing that of

maturity, So already about payments we the majority really that's point would one offerings, That's part reality that with of banking for of I the vast we're there. And past. deposit that, relative big payments and a of of the bundling now strategy. with been driven and and client strategy basically bundle. think We're the that the already SMB and the evolutions growth micro part while. a part both reached our happy a base, say that's and that's the onboard clients with Ton at of in Stone when banking, the

of what's Now the with naturally, et would engaging evolves, strategies, that's dynamics to those bundling client road growth. as in cetera. banking driving not say will but terms naturally going and evolve about be the map our further that credit, continue more But that's I the they base to

Operator

Grespan JPMorgan. Guilherme Next question with from

Guilherme Grespan

allocation. My be question capital is going to on

studying cash. And discussion. you think discussed business guys the think Zinner of more are I excess We bit a a allocation and call the bit to lot. requirements you little maybe little talking I fair a have the that a it's started

-- you're distribution. BRL see cash net discuss think, here, X BRL capital I X And to billion per the sitting X we year. cash, billion almost You at excess basically we restrictions, you basically when generate

would in But fairly funding already are first working ratio need, here, Brazil, developed. And capital. in market we the estimates our when be our that would than which securitization the The sitting more Brazil. in math impression second already you do XX% our the is be capital one capital it's

that is out X analysis how the BRL you generate much to cash of the billion are of think So incentive net year, can the excess to question my that you carrying, you internal X basically billion second cash, per the sitting out in guys that. distribute is we're you can management the much how you you question that or basically BRL distribute? And

from I KPIs. of think the alignment part here come the

nominal share. to ROE planning change the you're management profit profit from per or If KPI EPS least at to

Mateus Schwening

Grespan. you, Thank

the of part first the capital take the question framework regarding I'll So allocation. of

right So I think is your one. in general, the view

shape develop mindset credit for have the on cash is not we the each book. framework factors, company. of in what those So accounting level sources, the of capitalization The in that good position when to think can or judge that we to excess growth are If by we the look room And distribute conservative have think one company here the at mentioned, see our some that the you of cash based think net capital a quarter, and to within And excess execute not the in I even company way after we nowadays. Like the of mentioned, again, funding of diversification to to the think think you that also structure we structure we idea the in to And capital. is optimization. solid capital but continues for maintaining accumulate generate our I other. capital adjusted that that you we when a about we with capital shareholders only a we're levels we need and plan. nowadays,

this sharing so is on how be are finishing to for not that coming framework, now specific mentioned they market forth. think to the we this billions are provide As visibility given we and Pedro the the But call, many in be the going think to available still so figures, idea we're distributed to like right in I the or quarters.

now. And this do on question, the working Pedro? one, we're that to take So right want incentive on you

Pedro Zinner

Yes.

we're fair terms framework discussion and side, a the incentive I whole over think time. of point, to going think the capital and of on decisions raised in the how part it's make you allocate I On the

But EPS first think part we're think be the the visibility I it's more centered, discussion of that on I to whole as providing you than today mentioned, side on framework And going having. the is, we're on of discussion itself. is as of the next year. really ROE quarter more that rather

Operator

comes Our Renato with Research. next question Autonomous Meloni from

Renato Meloni

convicted say, to thinking So still, on seemed on opportunities. comments was would cross-selling here the from business, last assets that more owning he Pedro's I was the the question benefit my first call, of software it and

a just you the what potential quick if the to some have then So I second drove that that here expect you And repurchase. here allow rate on benefits for strategy a might recurring sale now you wonder now change of be question, wondering what the me here bond the asset? tax considering effective you're

Pedro Zinner

thank for question. the Renato, you

confident think we Day Investor that that remain we what owning presentation. as strategy, asset. partnerships is in think I our call. in established, of the to offering a through I believe But can now pillar without I necessarily opportunities integrations highlight And is this we the commercial tried highlighted our the the to clients are we product key cross-selling software drive

our in confident there's that will shareholder strategy only very we're strategy sorry, way, ability in we believe And believe change add if value. execute to terms we that while our pursued transaction of that no So any the at it [indiscernible] big be all. --

ways balance using I some think our improve commercial to sheet revamp in terms contracts the really more is way move we want to our strategy capital a asset-light of and in actually allocation.

same. the strategy So pretty remains the much

Mateus Schwening

for And that our between has in we've mentioned see rate been past question, XX%. to in I the tax XX% we of terms the tax rate think range the

that this ahead, a that us with range, think we big end is bond that in the the lower basically expectations right? remains of change quite same. I range. think going now the But of what have to buyback does course, terms is I Of take the

rate. have may you course, tax seasonality on also that remember the some we Of

as So XX% [ that. the tends the XQ benchmark, ] XX% place, remains be to I year. remainder on lower in the end should think than but But we the of lower be a range of to

Pedro Zinner

Yes.

owning to come But that really in have just right? is our wanted core the believe asset, we belief we to execute on that asset, the And might to would without that message confident the our I think shareholder software while I back, transaction a necessarily the if value. we I Sorry. convey are unique add reinforce, strategy ability

Operator

comes from Da question Prato next Our Kaio with UBS.

Kaio Penso Da Prato

have on side, I please. my X

the for your The touch But ago. from growth and to your look at on a TPV quarter-on-quarter, shift PIX. cards that if the out days the one, the again MSMBs. below industry understand growth slightly to few especially first we cards base was cards want I I was

about market one especially have would industry your in probably we your understand, second question the market like following saw capital implied share, some as or expectation thinking of forward, to just share it why related specific what's in the largest And I segment was if salesforce loss, So this you MSMB view, one, just no? up nowadays? And on the going Grespan's from to software the given allocation. for that last we if for assume to about the engagement fair one, business, evaluation your potential on. And the with decide and Is option advisers so it you a or to be main project, if exactly or in capital this sale, distributing a are the shareholder allocation option for specific specific maximize value product looking today any would please?

Lia de Matos

Lia Kaio, here.

our your industry. me TPV versus a talk little dynamics question about regarding and bit Let growth

time we longer at market only horizon when look share prefer on share, our in a than dynamics a basis. think So about market we quarter-over-quarter to

because of dynamics clients quarter, share ability to market right? Given long at of business, share on of changes market lose last than that. differently PIX throughout our terms in for to other slightly differently because So for the TPV, and a That lower past we Investor guidance than does of albeit right, even the pace the our for face longer the imply gains may We XXXX over talk to we TPV long consistent in gains and in this What's pace that's naturally year. anticipated the had and our to that continue market one just is Day. that run, for do continued to out and in the growth gain maintain scale the investments we the but out But also overall we a and played sales need about compensate we the pointed nothing marketing share long-term our year, guidance mean important implied we win run. target had us that of gain overall. share consider term, in when is perspective

we different what quarter right, shorter dynamics, recent Regarding than this growth other the nothing structurally term, happened TPV have said. already

ahead volumes. cannibalization growth visible debit with PIX expected of from So

in may a in And side card there's negative profitability Our the since some with which Saturdays of on September Mateus to TPV. prioritize seasonality have an impact we the decision, growth, as mentioned, usual. quarter short-term had versus than also less

the of and And change year-over-year, PIX credit through on clients. our cycle through quarter term, the shorter I that and in So as levels monetization perspective dynamics. longer-term third X future life these the the driving very growth possibilities were our throughout effects see overall main mean, we XX% doesn't it but considering the our at banking healthy

on take our that's overall the of dynamics TPV. yes, So

Mateus Schwening

of a the And not think I take a or evaluating potential all, a Pedro software on will of on and options. first yet place question have like transaction we We're whether around even the second business not. proceeds, mentioned, use decision made

think in But it's like premature capital our of mentioned discuss we proceeds. in I potential general, nowadays. allocation, to comfortable So in terms regarding my use end, I to answer of feel feel good. that We capital structure

a that excess possible option we're going transaction, that So to of evaluate. back potential course, if either excess or we have cash would a distributing cash from buying be

Operator

question Next William from Barranjard BBA. with Itau

William Buonsanti Barranjard

My frankly. question quite is here fast,

ask the it. possible which wanted regarding be I slide players software bit just into your little you looking at regarding a sell the to could asset, sales to So of

you mentioned are that looking you sales partnership happen. So if into commercial -- a as really the

has has capabilities acquiring the that buyers So on partners can every already player potential I exclude as acquiring or space?

Mateus Schwening

the question. for Thanks

part first the take agreements. I'll commercial the So regarding

And days, through have well. some that is those we currently here collaborate exclusivity you the partnerships of our partner software our we look think idea operational with I agreements when as under So various at companies program.

those be decide into course, with maintaining if transaction, condition. the we're would So important decision-making agreements And of any that a going to proceed indeed we very factor to process.

you I second repeat. if question, think could the

William Buonsanti Barranjard

one it's regarding automatically it's guess, But really already exclude just if like that players potential have and automatically, buyers like on. No, so I payments you and capabilities I question think like if clear.

Pedro Zinner

Yes.

at this the stage, we really specific cannot details. think share I

asset can group that a companies. financial of that both is strong from players, been diverse interest and a XX and has there However, strategic more confirm what we in the includes than investors

an it's discussion. at this it's So point, -- really open

Operator

comes with Our from John Barclays. Coffey question next

John Coffey

one you for impact pricing. in had is the I SELIC guess of I rate This John. of on the questions the is

that of made back was I concern think actually years SELIC look climbing that price. number started maybe the And think your started think I a would there of reduce ago pricing there some changes we to was in to were competitors when later rates that some to, decline the as well. have it some I you when you XX.XX%,

going we that are be Brazil, forward, in thoughts get So have on in seem a now bit you've a done we in as and of done what your any to interest into changing maybe if environment QX, rate XXXX? prices, raising rising what you already particularly prices, maybe

Mateus Schwening

the for question, John. Thanks

touched this other the the emphasis the So really a I I is I nowadays. on that here within upon question. dynamic is But company becoming pricing think think process

on of whether we're usage evaluate conditions. every judgment of month. to literally that economics prices the And macroeconomic the adjust we both into a going factors single base So the we And we client of whole lot a unit take calculation, product then make or and course, not.

Of of that calculation is seeing forward. course, rising in have to ends goes repricing the level happening that interest adjustments curve, we're the most going what that into and now and a higher rates going implied we're likely up

and some think question, I This takes process the to we're So a is see. pass going your that some is idea to while. increase to the through answer lag indeed a of has usually that

So at indeed through increases. from Q, goes the by, Q repricing as shouldn't we the a if expectation some also But waves. those to numbers third I pass look from fourth big you is and impact think time see of

Operator

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

Pedro Zinner

you. very you and to you see everyone much in thank quarter. for Well, for call, the next the participating Thank in hope

Operator

today's conclude This does presentation.

disconnect. now may You

StoneCo (STNE) 12 Nov 242024 Q3 Earnings call transcript