XP - Earnings call transcript Q1 2024

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Operator

Good evening, everyone. I'm Andre Parize, Head of Investor Relations at XP Inc. It's a pleasure to be here with you today. On behalf of the company, I would like to thank you all for the interest and welcoming to our '24 First Quarter Earnings Call.

This quarter's results will be presented by our CEO, Thiago Maffra and our CFO, Bruno Constantino, who will both be available for the Q&A session right after the presentation. Instructions]. [Operator

can begin X refer forward-looking in on information forward-looking we disclaimers our statements, our presentation, on on Page found on which statements IR our website. before filings to please legal additional the And SEC be section also we clarify

So turn to it Thiago Maffra. Go evening, now I'll over Maffra.

Thiago Maffra

be Good Thank joining for first you evening, here XXXX a tonight. call. earnings It's us quarter everyone. pleasure today to on our

floods important we homes. impacted that foot review XP devastating our in acknowledge Before square loss It's and small [indiscernible]. journey a as have it's resulting lives to tragic results, heartbreaking in began [indiscernible], its of XXX the financial of particularly

During we the committed communities. this supporting to are time, difficult affected

Our out hearts go to affected. all those

proud and performance the growth our continue to quarterly our commitment during us cycles with service. service view steps our and tool. are our want our provides high-quality technology and serving implemented to stakeholders discuss by we our clients' us This of commitment scalable financial announce conversation our offerings. sophisticated this let and as taking continued reiterate to I a to innovative all a ensure have enhancing to quarter, our we I planning delivering am financial we today, Now clients that clear

seamlessly to shortly it at rates topic and better details open integrates investments I to alternatives investment revisit initiative more with this functions. launched it our recently on ability lower Additionally, diverse which broadens present our provide will how price.

we address remains crucial the to into macroeconomic performance, which financial challenging. it's Before environment, delve our

real year, X% interest terminal fiscal rates situation. controlled quarter nearing first The with managed began inflation appreciating and a XXXX per and of expectations

of an interest quarter slightly progressed, to real we ongoing and as the adjust a rates challenges. the However, saw XX%, fiscal depreciation

has trend attention why terms fixed the of previous appetite focused slightly with turnover, remains activity, continued from our quarters lower for equities on market the In income.

ecosystem. grow continues with complete from our competitive benefiting Credit our notes, Despite portfolio Tax-Exempt to competing

quarter, strong our and the gains during remain narrowing instance, credit book debt a saw for from quarter. corporate For flow credit our first markets spreads capital

we ourselves of the in of prepared we side, would in terms expenses another flip year On in can tough that terms and expect also revenues. what both say we to

in worsening for our conditions much overall recent expectations didn't the So change market year.

our in Despite in challenging achieved bottom to performance. now XX% the growth a scenario, a growth we Turning line financial macroeconomic line. year-over-year and top XX%

expanded Our approximately XX points. EBITDA by basis margin

This an presented points basis also lower discipline of a XXX as marked quarter is was operations which focus cost year-over-year. by efficiency on by and strong all efficiency ratio across XX.X%,

per per year-over-year, increased earnings XX% BRL share diluted reaching X.XX by Our share.

Lastly, I our would increase of like business. running our more return measure XXX accurate year-over-year. which on to consider a at XX.X% equity, marked stood for points highlight It an basis tangible we

Moving the to next on slide.

for discussions an XXXX tracker our provide Investor last me December. strategy on up on our on update Day Let following

in regarding This Firstly, CEO appointment announce relevant the and seen of pleased enhancements [indiscernible] has division. leadership Banking division offerings new in our retained the our to Private investments, of process levels. are service as product we

one of to the in as top Brazil. again country, are once we best service. our the Also, as to ourselves Follett Paulo by have path our adviser a we in recognized toward banks in [indiscernible], private testament With platform Sao establishing client commitment, the confident in been excellence

achievable the slides. the next the Our strategic pillar industry specifics a goal. into aim will this investment in dominate of to vision deeper Brazil, clear. but dive is I We big in

extensive products our how platform financial for we X tool distribution serve Last our advisers, clients. important third quarter, differentiation network. of for architecture XP, an we our milestone and introduced following our wave represents in the third-party planning These for marking open

XXXX. of retail our cross-sell ranking the second, are service in proud we banking, to to be the ranked for [indiscernible] strategy, on Moving in best particularly banking

relatively red though is game account, incredible a new digital rapid recognition. ratifying. Our This recognition has

grown XX% model. banking first our Beyond total unique segments position represent larger share continues in investments, corporate and the of to revenue, gross wholesale resilience In a the the our our of have quarter in business to of SMB new our almost virtual XXXX, enhancing strengthen.

our role proved once This retail distribution in and distributing and quarter, clients has investor structuring our underscoring credit channel. competitive corporate prominent, again large advantage been sophisticated a

of Our total revenue corporate SME and was X% revenue.

with advisers of for X weeks over the Lastly, execution, strategic platform and in launch. all financial within rapid the tool on X,XXX the a and of planning quality with our launched active we advisers have only top adoption

costs risk a Artur allocation good This We have open Wichmann which also coincides across opportunity we and centralized launch been the Officer provide client which as have with us. reviewed. with for investment to profiles, role consistent see all initiatives, Investment Chief recently

have phase will the previously for growth their driven our be quality ability next financial by provide I of As to our throughout journeys. mentioned, XP's experience clients higher

clients' market engage optimizing enhancements the by ongoing to precise with to to and it financial high-quality goals are we its we Our in closely to advice are the advisers raising investment solutions what for to individual means deliver offer planning. empower align portfolios more bar our designed

premium to We our of but committed exceed and alternatives. are efforts curated meet service only objectives and are These expectations. a offer to to not investment proactively clients' set client designed democratizing broadening perspective complete access to meet

translates our strategy our opportunities simplifying This on This our for banks increasing value. further lifetime incumbent revenue years. business. strengthens to and the benefits and tangible how for resource leadership continued distinguishes clients It's great us allocation generation for from our new approach into position coming quality emphasis in presents and both

open planning This investments quarter, loop. we have regulations, a introduced creating integrate financial new with features that our feedback positive platform

their tools enabling into and planning even visibility we across servicing service. data, are to financial and provide entire better gain other share incentives, portfolio client With clients permission, to encouraged us their platforms. financial our XP With

our across coming expect We we base entire training capabilities complete on advisers new quarters. these adviser begun in have training already to our and the

competitors. by financial allowing similar in third planning and view implementing an us for and that present leveraging both the the integrated apart I to to tools are Granting compare XP process aware a like investment marking comprehensive opportunities, and differentiator clients. as options other big financial player XP modern to to access we strategy represents advice of not step a to already highlight we provide ours market their portfolio on to straightforward market. Currently, important This is our differentiator across want any XP investment offer same differentiation. a platform, forward with sets this in holistic within for we wave their what of the full an initiative advisers us a call the scale. of

industry more and continuously to channel of IFAs. ahead commitment architecture complete a open underscore network distribution our the improving our and This to establishment sophisticated follows offer value we and our development in platform clients. of the our of the staying to innovations product be the These

I quarter's Now this financials. will can it discuss you. hand over Bruno so Thank to he

Bruno Constantino dos Santos

to Good a pleasure here again. It's Maffra. everyone. you Thanks, evening, be with

or a Two, next trillion, as Moving dominant at core advisers, we wealth growth right total a advisers and in year-over-year. at already includes BXCs at BXB, investments internal first on Total investment client the we our Starting total by clients investments. among XX% registered XX,XXX, previously for and advisers a disclosed year-over-year. it, operating of XX% consultants record quarter total path or active main X,XXX,XXX, One, be hit our 'XX, in on three, to as XX% slide. growth signaling, our assets added X X.XXX goal RIAs, numbers advisers, our with core BRL quarters, on growth right KPIs, all to and KPIs are towards number year-over-year; which others. call our IFAs managers, the includes

disclose other in number We decided distribution this channels IFAs. these XXXX because to the better growth of We numbers starting capability. total our beyond believe represents of

From investment growth evolved leading with Brazil different and to advisers, and has present you in presented As appeared the going number advisory recent XP the to this including in serve now all on, relevant the are profession total movement we channels. of client have channels years. know,

at better net size improve private the the quarter banking will powerful we planning mentioned from considering quarter quarter-over-quarter, important XX KPI money, a our net mentioned, the due growing in lower keep XX ecosystem, fourth left, actual XX as in financial banks tax-exempt billion incumbent our we BRL in expect believe especially as than new BRL net from moving plus retail new with money its credit experience regulation. 'XX, in new total while already money road with plus Maffra billion down our 'XX to another the of in On we the that client segment see to BRL notes retail already tool, slightly is quarter and potential, can stood less total 'XX, billion first change improve first advisers, also invest

resilient towards and better there is than don't forward positive net we to which help. trend still macro inflation, interest with the slower initially a probably component a for money a rates, high acknowledging But we considering Of coupled new thought. are pace be even moving going is investments, see impacts going cycle course,

comp closer market of are due Brazil. and credit year-over-year, the in quarter helped gross revenue. XX% strong to first take when at had to a Moving revenue problems easy 'XX look on to diversification gross slide, activity next grew with dysfunctional the our we a Total DCM going our a we by corporate ecosystem,

retail both is representing and total our in continued corporate the revenue highlight the slide, services from and our the is reflected of at can side gross XX% see Issuer of breakdown. especially issuer markets income still main in revenue. majority A and retail, total performance where XX%. and of corporate The of at On we right-hand capital Services. the revenue strong fixed is relevance

Let's focus move which to retail the verticals. next new slide, on

the main remembering international the our verticals add with million evolution If a less verticals growth BRL to quarter. New quarter platform remained to a them an only consistent flat, deliver importantly, XP. year-over-year. efforts accounts, that revenue retirement almost in basis, insurance at contributor cards, FX, stood due of QX, to seasonality first in number company the other would previous year-over-year. the enhance we in verticals plans, XXX included new million, new in main is XXX highlight and In The new and at retail strong growth cards verticals have experience we investor worth revenue be and approximately all make cyclical to our is underscores here first credit the disclosure. to additional BRL continued this more revenue digital of revenue. On the revenue, XX% of 'XX, mainly verticals It new quarter-over-quarter includes

Brazil talk to sequentially. quarter and next 'XX, XX% will in in we of our a decrease XXX BRL Starting on side with by left-hand revenue institutional first institutional a million activity the displayed on market the Moving quarter-over-quarter, Issuer have year-over-year Institutional lower by the mainly slide, growth incorporate we and slide, about revenue. X% revenue Services impacted clients

north the to In side X turning Corporate 'XX, quarters, revenue and and Issuer Brazil. million positioned in diversify activity BRL growth BRL stream continue sequentially, last XX% to of Services reached Issuer the million, XP the our slide, first strategy revenue Now Corporate of from Services reinforcing flat through presented XXX also is XXX strong benefiting right-hand well to the year-over-year of demonstrating quarter our wholesale and bank quarter-over-quarter. a revenue and in our DCM

we next explore Now SG&A and where slide let's move on efficiency ratios. to the our will

and we to quarter of in quarter-over-quarter quarters, have reached continuous year-over-year comp by: and a first a some XP. low mainly event, in cost facts: of year-over-year like is 'XX, The Modal implemented one, two, due example. quarter-over-quarter. when incentives first XX% billion marketing priority our BRL period; expert focus explained tough SG&A compensation SG&A expenses discipline 'XX. didn't is by had stated be one, As and quarter and two, we at growth very with in decrease X growth first that can previous of the efficiency; explained X% ex decrease The layoffs for seasonality 'XX in quarter a X.XXX in share-based

ratios The which can XX.X% IPO continue benefit efficiency EBT at This business. to on the and expenses stability operating years efficiency as the the our lowest line, come. since ratio the our XX.X%. is should bottom with graph to of our its at in ratio right, leverage you positive comp underscores ratios levels in see be that in to next close our

year-over-year ratios improvement a X.XXX Moving quarter-over-quarter. pretax and on we to This efficiency profit bps to EBT. leverage at XX% brings XX.X%, improvement first and a quarter XX have for record EBT BRL Thanks margin growth number the achieved a year-over-year growth to billion, XXX and X% our our quarter-over-quarter. bps operating

these our per goal our midterm moving levels. underscores margin pretax the ahead, Looking to commitment between we reach This XXXX. guidance, public as and XX% end of XX% progressively profit aim towards to by a

we of it's to expect in service our from at keep 'XX, we incorporates last in to keep a will to we to its costs see saw focus may quarterly our leverage. on basis annual performance our aspects basis, And we the seasonality there, control To XX-month some which operating business. While see volatility and important core our years on example, quarter or our on doing as a the better under we for results the come, believe of get and better enhance to quality homework then, until clients. experience benefiting fourth

quarter Moving stayed We on year-over-year EBT at also X.XX to growth Net first And for see BRL our reached a 'XX levels representing billion in have healthy historical XX% to first margin and with first record a in what flat almost net net at quarter quarter income. improvement similar quarter-over-quarter. income discussed XX.X%. we XX, numbers.

We on fourth able at return quarter evolution our our underscores macro tangible equity. our equity levels we consistency equity on tangible ecosystem model. of Finally, XX.X%. the our 'XX on the business tangible are demonstrating of independently the to annualized similar generate kept the and environment, return of returns This in

going diligent budget the be semester done we we allocate how in usually how are decide the capital capital. analyze our This to year. shareholders. is for to our to excess capital about much of year, liquidated, when of our needs, next to second the continue return year also have Every We we

to is shareholders excess cash, to point distribution company leveraged of in a year. capital generates semester a this under capital some that As of it second and profitable, at is assume is has the reasonable

the we important have final remarks, on the corporate I touch to from call before want I governance CFO change transition implemented hand for back And well Maffra his perspective. to a our as that as

become finance my Board that transition effective joined with XXXX. will He's call August to same member last Victor our me CFO this has the excited a his in in CFO at Board, a with CFO. our of the governance firm I'm Executive XP, finance Committee lead earnings doubt Deputy has will XXXX recently great the as also leaving successor have natural I'm the organization. we have capabilities experience as did a mind to long-term I year role. my corporate the He's strong and since as team First, pleased structure. I'm announced the be member the I of hands. role with X. in the to that together behalf I already no Mansur He's and partner worked of On changes made

meeting, line annual independent governance practice. upcoming the Following of in have will a Directors, Board corporate best-in-class majority we with

thrilled to dynamic independent new risk critical management, and business as we in a Board, are X in grow sets our skill directors to credit that to especially continue and add the financial We landscape. bring diversify banking

the are We growth Performance credit areas Strategy for also oversight important XP. committee have committees, board X we will to strengthen risk in and formed that and chapter next two, one, Committee new and ESG of that

his that to will remarks. it for I now very Thank Maffra final said, much. you With over turn

Thiago Maffra

go I a remarks, Bruno want final I a my moment service for thank Before his to take to as outstanding CFO. to

grateful profoundly new and for continued are to his look Bruno, We contributions you we in the all wish best Board this dedication forward of the contributions. Directors role. on and your

quarter, up, things strong So had have to considering seasonality. especially a wrap we

we throughout to our and control the our kept ability under are have the manage company expense effectively We confident in year.

market us arise. whenever on This disciplined improvements well they approach in capitalize positions any to the conditions

wave differentiation is particularly opportunity quality, the lives an clients' financial make open of as in the XP. about optimistic something third of enhancing financial planning integration our are our for overall to catalyst we service better, investments tool Additionally, a creating

to let's session. Q&A the Now proceed

Operator

Batista, first is from the one And Thiago UBS.

make your you Now can question.

Thiago Bovolenta Batista

in view, scenario BRL question, a first ago. of about now that you Maffra, months improvement have a now. the [indiscernible] your couple What no the about post are, times in mentioned likely My several more main net of also, in new the And BRL the EPS right more quarter tough least ever that one XX total The than we alternatives billion has the new million the lowest at probably X bit [indiscernible] retail to the money. for only, XP net was the a seems speech this in last of years. second lowest of or scenario billion, that this with new XX it's Bruno's higher that XX case positive in of the money money, BRL or outlook

sense of in with idea the but So only months, not net can improvement last an you evolution new in thanks years. us finally, to wanted the lot money the of new money. And the necessarily net numbers, this a give see the of couple to couple trends, in of the for last for partnership Bruce, the this of possible

Thiago Maffra

continue Thank will with Bruno us you, And forever Thiago. here.

So [indiscernible].

question, first EPS. your about So

the X at we been and As for company growth that the we and compared we the been past more -- growing pillars. okay? investments, the our And we are like wholesale part, on very to about but it's wholesale been banking, X slow cross-sell have investments, okay? growing pillars pace how talking cross-sell have of we the talking, environment, on have future, been and and a these So to the I'd think strategy have because course, the think macro of about the

costs. been So been It's have have have lower the the of we these wholesale because diversifying And growing that, on besides business. but to the verticals and environment. part been that's despite investing the how XXXX, that we XXXX, growing have managing have we keep levels been been macro controlling at new growing, we in course, we

internally, another in had tough XXXX, we So year have -- at is for or point, any prepared macro course, expectations of better market. for XXXX, as we we X have the market planned the So despite math very past okay? company will have for okay? years, expecting some sure, we but what the improvement, a So not

for operational doesn't the have But on grow okay? investments at leverage. sure, a will the will We change, macro first slower pace pillar, if

a can have So improving not, verticals, But in environment we we been a growth deliver good my new view. that's spectacular or investing believe okay? macro we the not and despite growth,

I said, net we new Bruno what you worst the more money. Yes, about But than we behind today is mentioned, as And that are like is about were optimistic are ago, have us. we years seeing we that worst X or in behind, to it time XXXX, ago year been to a will some I levels XXXX. recover believe the like take again but believe

a about diversifying mentioned to lot wealth managers, what the I keep growing. so and have what channels, doing here, we been on internal the advisors

on We planning lot clients. of financial delivering have another level investing a to on our been services

the we see in see some And okay? So that's we also have So we a the net call in our view. been we third that tax the and our investing differentiation pay already that the notes, -- some improvement we new exempt believe numbers. So okay? recover okay? money, And what we we from of again, because will will on of change believe off, lot wave that's way

Operator

is from Morgan Kuri, Jorge Next question Stanley.

Jorge Kuri

I rate. wanted to ask to something tax -- I the about ask wanted

come tax going Given or that from environment more the environment, the our macro Anything look get booking affect of a deployment rather we to to because can that around not. of us the your rate? and the going that centers us does than you capital how be business can arms tax capital profit it's and excess was that that How over does with the the the slower before of rates does if sort view effective at benefit locally you're earlier changes equities the described that how XX help this like you for play that If change years environment we rate to business a XX% consensus X next be to at have date. stock does landscape in -- versus seems out that type is the you next maybe which thought months, indeed, your the Selic sluggish understand to business help year. how -- going

Bruno Constantino dos Santos

sure. Yes, Yes.

tax effective funds. tax withholdings higher Regarding 'XX a in example, XX% quarter, to we back rate year. It we quarter quarter we was rate the in tax last come tax rate, first this and have compared -- XX% XX% if with in that saw for fourth the

years, because of So to if the revenue, know tax we the depends what going depends more environment and say with on it quarter guess. not so the there mix right? the to do hard capital macro, a in 'XX continue first market on be. now, mix part is are living a lot good and like forth. But the I activity is if one forecast it's So X is -- It would we we next the the the right rate an

that's but hard honestly. a So forecast, -- it's

Operator

is from Research. Your next question Renato Autonomous Meloni,

Renato Meloni

can quarter. rate. maybe give more So take on and mine shift? if you're this here declines mix competitive the the environment rate the same. is seeing this some if decline on us is in a the equity a in wonder I tougher expectation clarity Was on equity the you some Or take bit some then trends the the scenario fees? And continues here

Bruno Constantino dos Santos

the rate marginal basis decrease, -- take denominator rate, it's revenues Again, that's total it take the right, client and the was few numerator. of normal and assets because function a points, a in in a The is

been the if normal believe at is in or bit a is that So years it. of but quarters, in we there range it's you mix, little look past the

Thiago Maffra

any answer there you okay. mentioned in There just here. price, was no I've because got no if price So was had price okay? change we change the pressure, in any

Renato Meloni

Okay.

equity you year rest So expect of stable this for scenario? the in rates take the

Bruno Constantino dos Santos

take the retail. Equity equity in Yes. that in rates. bucket, Remember

We futures, example, have, funds. have listed brokerage we for not also only but

as have the then can where quarters is if structured it activity. doing structured up. and we rate we So of compared that or don't, listed There even there also If a depending of quarter have we be notes that less well. a finance with funds kind go the bucket favorable could take follow-ons lot in IPOs, on to

the and mix more the equities. it's again, turnover of So in than the turnover, mix about

the year-over-year has decreased. debt that, You saw

whenever then negative a the it's markets in a else in weak, equal, So rate. take picks equity turnover, positive rate. the negative it's a take Everything capital impact the impact. up, turnover velocity If activity it's in impact in

Operator

Huet, of Antonio from America. Bank is question Next

Unknown Analyst

So like Thiago's up clients. to I would follow on question on

if this serve from my little bit more NPS. could the question in you client So to explore on comes because a decline how

inflows, declining additions So see client NPS. and weak of we continue to we see on top

the it monetization So of your to you much the So own this reflect clients also, more also, opinion? gains? commissions and that what expansion in or Do how have in my scenario, a question. IFA your it share outside little And this does you should first your And you would you say is forward, the have explore come tends performance come still seen market if Or okay? from revenue could in going inside? outflows quarter. bit this of from

Thiago Maffra

I decline will the point. was about The first NPS. Okay. question the take X

strategical So high like relevant, a But okay. probably it's not yes, a even very at level.

So decline we don't see on any relevant NPS.

the financial a as And quality, been have investing of here. and lot our And don't tools, level the should service so any on see increasing planning customers, we I on. we problem to so

see expect the an We in term increase NPS, okay? medium on to

money it's gaining have investments, revenues. increase market When or we again, both the So but recover a it's, will also first talk it's we we to externally, about make internally pillar, expect share, it's of how we here, about about market them. if if

fees also, Bruno from as products. have kept the recovery, We moving if the here. environment, we catalysts mentioned, will main okay? X like And low see people and are products past to despite macro market share years we in keep we'll there growing on risk more a growing, So

investments. So So okay? see we increase take growing an should on we're that's how rate,

okay? been that about on can explicitly. clients, So verticals, then cross-sell some we have new been investor have not products how basically, we cross-sell dozens have included we to basically the other have on that And have here we them sell but our course, reporting products That's verticals the part. we new Now okay? products, talking the we of what of are we

share And internally increase market okay? next the in both and ARPU so externally, we quarters, cross-sell. So the plus should

Bruno Constantino dos Santos

example. the expected, commission number question revenue, second in percentage a costs, about considering say would of your for Regarding it's net a I

it's So we have oscillations nothing but among quarters, relevant.

If first net the example, XX% you represented commission our costs quarter 'XX, of for take total revenue.

quarter of If at 'XX, represented you it quarter, XX% last revenue in this quarter, look fourth XX%. net

one what So inside that natural is band. it's a thing, explains mix. And fluctuation

the net it mix. revenue we have percentage on can lower of revenue. or percentage So depends higher of net

Operator

Neha from Agarwala is question HSBC. from Next

Neha Agarwala

mentioned a be base more that that quickly the you with you in to with of so to most And see client But dynamics mentioned seem do they persuade just your trying that. open that? open Just how the on for the you once don't see hindrance traction investments, your much you platform, open a finance that you do, that making utilizing received initiative you as competitors discussing bit the from investments? have

done here, cost-to-income level this you Like to are kind And ratio? expect more we and second costs. on the down but is should we forward? going the is cost of question maintain continue discipline, continue, are that any should there pulling we Or levers for

Bruno Constantino dos Santos

You up, broke sorry, Neha.

So is planning. the about the question financial first

Neha Agarwala

we is And is expect cost on Open revenue of and the you this how should continue kind behaving. investments. costs. ratio fact other lever? Do have any Yes, forward? In of the X competition to that kind Or of second cost the going

Thiago Maffra

released we the Yes RIFs advisers X just open internal about and investment, clients.

replicated at a ultra-high about early financial level we So the very But it's have stage. we that what service for we is doing of when and high beauty only planning us been have the is talk for past been have investments have have system financial We usually developing we banking released planning all -- together. okay? system clients, this and at the open So we created year. just and our clients private to

sell or goals, see get their so different clients because all product they really it's and to where the their with the all sell to a here but not help service, on, conversation a and only because go allow So to a a have much beauty a we objectives your trying you us the conversation selling portfolio, is get you there, broader they okay? -- them or So to their are it's banks product So a the you their you give, lifetime, then okay? completely okay? here trying needs, you're understand get once and information portfolio, and open investments to

a been [indiscernible] stream would optimistic I that the with quite to But the weeks level we and to are achieve X So or providing about tools results about soon that to And with it's have we are the give too now. we the very or and services any the especially they are But doing of engagement clients. our X say, for, conversation okay, impressive, new number clients. something. the

Neha Agarwala

on up, and you I kind to is have closed And that is than And quality expenditure this this the superior that make no you you follow incumbents this service, have of if there's gap service incumbents still of the in service that level or think extra digital, provide? terms service. better much the provide your service do can to

Thiago Maffra

we like that have waves differentiation X I'd XP. to say at of here

was in back first one first The the product platform. open XXXX,

is The second have one distribution. differentiation huge that we still a

first banks, I products, selling the but would a much have here, on a okay? the the differentiation say sales not investments, there, X but incumbent different force are to that better that's So completely working big selling are trying on differentiation we replicate investments, bigger they the we of service, have third banks We still to XXX% wave waves. dedicated trained, a okay? focused

creating trying they But the course, wave specialized already Of are okay? sell distribution, they on we of people on products the believe and people their investments. the XX% again opening XX%, But training here. differentiation the client's portfolio, platform, on are replicate third again, gap still I open own okay? to the they And of

costs have that training mentioned. about We been you the

IFA train to the cost the is advisers. The here or have internal all we network, retrain

a here. invested because technology have it's business scaled in a We lot

very to it's worth clients, individuals, job you not X for on with do you're very only but good easy financial that. million net working so planning high So when of easy. when that do course, A it's

we So training of have a been people. lot

in developed have recreate just planning, So segments it's can the and is Wichmann, a [indiscernible] figure incumbent our they planning again, technology. And investments, the so financial and banks. completely company we Artur all for and the on CIO to what open giving you financial they centralized services the on okay? We rebalance different the segments all call all We the calls example. from correct Artur these portfolios give the allocation, get what plus on, allocation the tools

you you thousand client, okay? if if if you net in -- other only you are bank, if worth this service, okay, don't this Again, you sure, place than affluent have have have are high in But have for a you dollars few or any XP. a service U.S.

Bruno Constantino dos Santos

believe about investments, Here in We is scale. just at have you service complex especially going do and happen. advisers, we tools scale challenge. financial into is at are quarter, the we it we the planning with that main challenge, topic, a explained XX,XXX achieve, but to if our make that all of Maffra want the advisers released That's number which Neha to that's total than more quality and what talking this make the to

SG&A semester We more Yes, the semester. at being And second you -- about year, the last Modal the your We look, second first of have look mainly question, we semester, semester. Modal. because the costs. had this that second in first should didn't was it it mentioned for the year, we

only mentioned now. as among speech. his integrated. will everything throughout Maffra of when there you in expectation be in our the the look we costs And the But to quarters. under that XP It's level volatility is SG&A year, is course, Now keep quarter, first saw of control,

works. the during is slide I that mentioned just also presentation. which have this seasonality, we how our some In company

events So quarter. will have for the example, we in third expert

first to year throughout compared forward efficiency lowest there We well. levels the But be is to will the going because close have should the as overall, higher there. marketing quarter ratio seasonality expenses the

Operator

is question JPMorgan. from Glen Next [indiscernible],

Unknown Analyst

Two your side. questions on

value. The asset net one to related first is

fourth BRL printed you you the profit. billion guys in billion X from departed quarter, I BRL X.X think

BRL So was quarter. to million. go to supposed see billion BRL X.X to this it this actually up XX.X NAV But I decline in number

select the IFAs, still close being we probably So but billion a BRL BRL look IFA, notes. it's here here of something million that close burned. in BRL We the NAV that billion to X.X I gap. in taking were know brokerage X to a missing on spent XXX

to declining drove understand has the actually want this What Just breach. NAV.

second question the then related And is energy. to

here be energy precise. billion growing an X.X lot that is a to the quarter-over-quarter, financial published has adjustment to assets BRL You related been on

what understand context what in there just X.X you booked sure exactly the If you you make to explain want trading can Just billion the of energy mean means the BRL business. by what you I energy assets? and

Bruno Constantino dos Santos

Yes, sure. questions. X those I can take

variation it's as of is the and NAV, quarter well, that this in there the most tax remember because So part of bonuses payments. quarter, basically seasonality, especially but -- in first explained first by that is the quarter third first

first BRL made NAV, you to million of quarter we bonuses the million XXX highlighted and had that in the with in payments So net almost XXX the deduction 'XX close cash investments to disbursement. that a tax close BRL that, coupled presented right? that So

investment. of this the anymore, cash quarter The because not as it year, change you becomes lines, were That's the in the an right? asset year. well disbursement the the last financial made end NAV a So first at from but investments happened it's

BRL in [indiscernible], So you asked X bonuses, the variation this and altogether, for. those investments, tax are to billion X.X the components mainly they explains close so quarter, that

basically it's energy, prepayment. the Regarding energy

desk Most it's loan AAA accounting it's a it's because We -- it's it's book the have that merchant. financial the prepayment the yes. a is loan corporate and that not It's we energy asset, way -- considered in a operations, not by so standards. clients XP. in It's loan But against right, not resell, basically book. a a of have

basically that's it. So

Operator

Goldman Labarta, question Our Daer next is Sachs. from

Daer Labarta

lower Just on you're Brazil? Does probably longer gave EBT the rates guidance? on way? in expecting XX% A dependent kind kind the first that going you us higher down you these were how it rates that any gave when closer margin about One, XX% of couple the think guidance that Just rates. of Would questions lower for midterm to guidance. to was lead also. impact back when of of thinking be to guidance, coming about of what to you macro end potentially in the

should the the revenues, seasonality sign bit know just mature then a in to but required it and forward there, there's in cards some question, is And slight is industry? beginning growth see growth take you're to that in to the going be a I little and quarter. then on revenues? we second seasonality down the decline, the a a closer future potential how first could Just vertical quarter that think that bit you where that

Bruno Constantino dos Santos

margin straight here. the Remember, in we Day, the the Yes. it said we probably be take gave I line. a said, can and Investor we EBT not will guidance for XXXX,

our guidance So of operating track worse expected it's the at Maybe than to be, to we don't that should our expectation, sure. that, bit like So that bit give Q&A, in tough early for mentioned is That's as margin. leverage There another in XXXX. It's know, it's beginning little an this year I assumptions the more better. too exponential, our right? it's with little far, Maffra is embedded going EBITDA of that tell. help a But plan. part so kicking to on a

scenario, the we So assumptions. a bit different to and continue we we have X, are But scenario where many XX% the year, how we environment really to That's same of to by the our last that's activity, normalized have going if booming, you achieve. more It's of having expect capital little not until a markets tough macro low doesn't in this IPOs IPOs, X. to had many be XX% a with embedded today, just markets, equities rates How capital to year? XXXX very have sure. XXXX, be as interest for have it's

environment the So not stay going like believe [indiscernible]. years, next we right to couple we for that are a is in of that an

of there macro environment, assumption is aggressive. an nothing really but So better

Thiago Maffra

Just complement here. to Bruno

of So year. We the going going plan according so good to for And are far. are the are course, visibility year a have the confident that to deliver X, okay? XXXX, we we of we rest the

that [indiscernible] was are we low showed okay? the the when especially if okay? at look that XX%, the you you numbers this okay? if So deliver Investor And number, is curve right the Imagine going to okay? at are it you XX%, that interest was we for already on It's the confident look investments, So X%, Day, look a okay, now. -- plus, period, XXXX, for CAGR very rate XX we

will AUC some share, So market that Selic market rate we the means we okay, because it to the share. average and gain grow have to have gain on some

So be doesn't if for macro me, the plan. than environment, good change course, the it's but -- macro harder a going environment, the to it of

delivering. XX% If cross-sell and other banking. go wholesale percent, to X to XX% and are BRL XX% pillars XX%, okay, Then to CAGR the you XX% we have we

confident. are we So

in customers, the But we not you year, quarter we if first million that have, the point I penetration as growing same been that about at on mentioned, have have the okay? that big growing million you the here. rounding cards, we okay? probably would are And okay, for pace every cards, years we say we the to a And have sure. at Going number your past you look have X seasonality

still you to the good of to So a have to profiles. But market, course, have we we lot open when compare penetrate, clients. season, X very different of million clients risk

going good are right the so penetrate at pool at have here still a time, to the penetrate like house but right like the So very we -- inside we point, to clients, card. these

of growth, not the grow at end at than okay? the pace will the but very So beginning, we lower it's a

Operator

Bruno. Maffra. Thank Thank you, you,

came session Our to Q&A an end.

or teams so our there are further have in attending questions, evening call the you If you. and talk this earnings much any Thank Thank for to see available. we you next we you all you of one.

XP (XP) 21 May 242024 Q1 Earnings call transcript