XP - Earnings call transcript Q2 2024

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Andre Parize

Good evening, everyone. I'm Andre Parize, our [indiscernible] at [ XP ]. 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 welcome me to our 2024 Second Quarter earnings call.

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

begin the below translation turn the SEC on website. if translation. can before found have is Portuguese. on be Page of refer also information And button please section on we filings IR a you we statements, X option on also legal the clarify to simultaneous of There the to which We our presentation, forward-looking disclaimers additional our on want statements to forward-looking

it to Thiago turn evening, will Good I Maffra. now So over Maffra.

Thiago Maffra

you, Good joining pleasure Second call. Thank Andre. I evening appreciate a us Quarter to everyone It's to all. tonight. XXXX be here for our earnings

all our warm as we performance ensure call this growth Mansur, to to shareholders. I delve discuss the earnings with like us. to Victor CFO, continued quarterly to extend would are into welcome our also a undertaking is strategic steps new our first Let's education his and and

have contributions look to and him board financial excited operations. our are and to We on his to forward strategy

quarter been positive This for XP. has

showcased ability several achieve managing [ with generate from growth our to alpha by and levers challenging ] conditions. profitability independently the business have We

Our have BRL trillion. XX% increased year-over-year, total X.X reaching by assets client

a quarter, observed will have our we inflow in this importantly, More on during net details client we which presentation. of reacceleration elaborate the

set expand largest investment Brazil's also the total force, XX,XXX to continue XX% number record year-over-year. have a We in [ specialized new and of advisers ] reaching growing sales

EBITDA that income us guidance X.X EBITDA up margin clients, in million BRL X.X and an Gross results with XX%. BRL high ended are we revenue XX% deliver revenue track a XXXX. year-over-year of with year-over-year, income. to quarter, comfort on reinforce BRL and achieved revenue, XX% for X.X gross of a net in had the and billion our higher increase and Finally, billion in margin all-time marking These year-over-year. We XX% EBITDA net gives X.X our we billion, was

more later details on the go on. financials will into We

X.X [ we XXXX in was equity XX.X% our closed for a base highest XP's years. profitability, XX% the return and balance completed value quarter, of past the level, a on BRL with tangible ] the increase Managerial aligned XX.X%, the of the terms have In EPS share X.XX quarter year-over-year, return reflecting second the that to at buyback share, plan to we with QX partially capital shareholders. create was per in

On that levers as half. second the we are control been the so and for back many the we for expecting been with strict has implementing have results growth, case, do cost of it improving

to on the slide. next Moving

at of here strategy look reminding main our will the levers tracker, We business growth.

We will and highlight margin. gross each in deeper revenue to we EBITDA of Also, like our dig them. would

If since Day to have last back XX% revenue implied CAGR. you on, our 'XX. CAGR we now we In XQ XX% BRL order remember XX.X from months BRL XX.X Investor at then, shown December, revenue gross we reach gross in of billion. guidance a XX the need in And the LTM top our increased billion our have an to with

compared to expansion in range margin, third in figures, that are bps XX% our indicating our XXXX. XX% to the we place reached XX.X%, target right we EBIT XXXX a Regarding quarter LTM reach have to XXX LTM the

to business. with slide, core establish In starting goal in our is this our investments Now investments. is as retail which ourselves leaders

quarter of in net retail, levers quarter-over-quarter. this we nearly in this billion was We we with new the the effectively is retail. to the the differentiator factors, record major BRL from doubled its constant XX through in in XX Brazil, maintain net improvement related This We the means several our first, to edge a improvement improvement attribute money. environment, These believe result include, but BRL primarily, innovation. coming of this that wholesale we of a key executing first quarter new billion and banking. for part platform money highlighted As our slide, is distribution this in [ product our efforts fixed the And assets platform, platform expected competitive in market. warehousing control. And be largest protagonism income a retail new continues is ] our for investment through levers to achievement to this in structuring which

internal the channel the we moved a and And been years digital expansion X,XXX distribution our ago, IFAs, diversification channel, have of today, through multichannel time channel we dual business. as Second, advisers already advisers channel. we [ IFA have model, the and advisers, we channels. around internal RIAs. distribution with and ] RIA growing that internal consultants Few At our same to we X,XXX a becoming speak, launched have

Our represent around XX% RIA of our red ] client more BRL at represents than billion or assets. client example, combined the ] XX% XXX total All channel, [ [ for total new assets. of channels retail our

the such and Third, ] and of long-term empowering as to their XP [ sales our ensuring focus Academy the on intelligence Hub, advisers productivity tools force, provision success. the data for through

the to we're areas, it's transitioning initiatives. open mentioning permeates firm product catalyzed planning investments, the entire with including to sales our cross-selling shift distribution the continuous from evolution all and a a mindset, Lastly, quality financial by company's worth and force of initiatives now aligning service provider

an leading ahead are another business is Gap] presents that opportunity insurance. [Audio We

over and ] XX% XXX a penetrated, BRL to We the Xx increase year-over-year, next we written the quarter. have grow It's total X% our to Xx seen million in than [ reaching are less years. premiums currently true expect

clear market also Our account keep investments [ and retirement in presenting and global growing. And digital each keep this penetration. a X% and grew our share plan for them year-over-year effects, gains, of and Combined revenues to plans client quarter XX% by million market we a assets X% one we with XXX growing the BRL ]. year-over-year, have finally, corporate share with XX% a SMB

and our been by investment advisers able of corporate leveraging banking and [ the ] business. our We maximize our with built SMB network have relationship to clients

corporate position improved active And [ highlight And ] position worth years. base tenth last during client we year-over-year. We important we improved, last fifth XX% to and ] SMB years. have that and in derivatives than moving XX,XXX during more with penetration improve reached continue clients. to also [ ranking loans. that we grew to It's two It's XXth from the derivatives, to on FX, X mentioning XXst from the FX

held quarter have As corporate a when able gross Investor to result, quarter second by last months grow CAGR, we months been 'XX, XX versus 'XX XX we XX% Day. last our revenue third

account will revenue growth. launch will Victor the just about we We corporate the our next opportunities more details have the cross-sell years. August, launched for in digital reinforcing Finance soon, and Trade give

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

Victor Mansur

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

second this years before interest quarter I As would for to is be go of to are numbers, I call, share first the think it come. on three the pillars to my earnings focused we

objective, restructuring. our short-term our corporate First,

have of in completed last a the banking is time, by expected, corporate know, year. Brazil products. and having we lower the capital is lower a the higher you debt. the X started process X To At us when have ecosystem, structure As get the completed. to end we the it a [ Bank provide we reorganization ] all if new The same as company This and banking year have we provide and should can and benefits ecosystem Tier in the banking have having XP flowing costs. cost leverage the issue ability by Tier to Central of parent increasing our will Bank of

and of combination harming as returns through capital for increasing delivery. our a returning should profitability a goals. key allocation third, long-term profitability profitable and decisions to company, profit a are its capital of forward. should come Second, on Capital reinvest grow. allocation continuous disciplined they capital higher not evolve our which to innovation, management these cash new The of through margin our midterm initiatives strategy. EBITDA XP discipline having lead products, to shareholders allocation. part objective, long-term We based that XXX% and without coupled our connection with objective, cost going ecosystem, capital to is is our ROE, expansion understand does in need in long-term generates is the guidance a DNA. And strict

we years services. let's to reflected X% revenue quarter-over-quarter. the in slightly fixed go be Capital I Once X and retail think year-over-year pillars positive again, was XP on Markets, XX% it both focusing would gross grew interesting specialty come. now for And are industry lower numbers. Total performance the corporate to share new and quarter-over-quarter. Institutional to posted income revenue

gross we On increased last side revenue breakdown is the same of on the trend corporate our services the and still as revenues. total gross when their see quarter can participation the right-hand slide,

income driven XX% a achieved was XX% capacity slide XX% move credit more in of Let's to offerings and securities. in liquid [ growth XX% share considering structure which Retail growth X.X most in growth quarter-over-quarter. was main X% and provide our higher the market our the Fixed the and details to a if next by ] BRL highlight year-over-year quarter-over-quarter, a and corporate new market, including year-over-year growth secondary billion, develop a notes our through products, than revenue on the capacity to retail. primary

the Corporate million, our if about XX% the and the sense, Moving of posting than and Issuer quarter, quarter-over-quarter. pace is that transactional in million of and last next back XX% solid services and reach in BRL a [ X% revenue, on high can consolidated represents cross-sell. million we growth services quarter-over-quarter. growth Corporate growth posted revenues is corporate year-over-year and presented will year-over-year credentials, XX% the a posted on business the and revenue BRL growth fast banking derivatives and we talk clients BRL achieving XXX year-over-year to Issuer quarter corporate slide, same continue ] quarter a a a trend all-time quarter, In investment up XXX% growth XXX revenue. quarter-over-quarter. last an growth services reaching of XXX% which to Corporate growing to By having the activity, facts, XXX present DCM Issuer higher

better as and supporting to I'm book which is our to our we're our On expand fixed those In way loan revenue the securities it's be of warehouse will sure securities and referring distribution. this business making time, warehouses investment business. corporate this balance banking the retail In right-hand retail focused billion originated show our connects new sheet. both will to side the sold XP in income. this cycle a on clients primarily little we retail slide, and paving quarter, corporate our XX

we ] of the balance liquidity Finally, capabilities, can market-making return the risk also provide and this types our by recycle to of sheet. different maximizing our [ having clients,

XX% discipline, achieved points priorities the in mind, highest basis will [ in we financials. better This XX have to initiatives, last basis margin on bearing margin quarter our strict and and the a basis, business ratio points a billion. we incentives efficiency your reached our reaching basis quarter-over-quarter. are of achieved Cost ecosystem revenues will a of of us With a billion quarter XX.X%. expanding of keep driving X.X of to slide, and combination basis XX if of and control, best efficiency and ] the EBITDA we cost BRL margin XXXX, second our level year-over-year along ratios. quarter-over-quarter. expense EBITDA the didn't since flattish year that next on allow in our and we a discipline BRL the for our guidance. EBITDA S&A [ ex the a year-over-year points X.X mind represents in On Moving direction EBITDA history, to second XXX quarter-over-quarter, year-over-year a XXX points competitive. XXXX, growth innovation XX.X%, rising in efficiency XP ] XX% Bear quarter-over-quarter. in and explore IPO, S&A strict XXX our year-over-year growth Modal SG&A growth months growth reached that XX.X%, to XX% This keep in

margin We towards expected on XXXX. guidance our to annual in basis EBITDA our improve an

net see our slide. income the Let's on next

year-over-year in XX.X% quarter-over-quarter. also the X.X of quarter-over-quarter. decrease posted our in points of the an achieved the growing X% Net in basis a XX% quarter BRL and basis points We quarter, XXX second net XXX second XXXX, and history, highest income increase margin year-over-year billion of

and Day, rate. the effective SMB on Cross-sell in and a time to expect Investor and higher XX-month last evolving doing corporate over we rate present mentioned since tax keep our revenue basis gradually business we increase As tax mix

to capital the Let's move management. talk to slide about next on

to As objectives. mentioned, key management achieve is efficient capital our I already long-term an

share base and keeping X.X are the [ over Inc. at we shareholders ]. last During buybacks. dividends return X.X strategy distributed while our have conservative part the of index BRL years, of to through excess connected distributions Those capital a level billion to to XP

Day, Investor ] are growth intend [ forward going our before net in to initiatives returns a years going in result as we mentioned Those we XX% to the reduce see between higher income As in the slide. it together across to XX%. next we

the per earnings and X.XX, XX% see can growth a year-over-year of posting at evolution quarter-over-quarter. BRL X% achieving You and our share of solid

an comparison the and [ and presents During due be our quarter in to XX.X% peers posted XXX believe quarter-over-quarter. XXX that basis increase second points GAAP year-over-year of of a better ROTE, basis to XXXX, ROTE ] points We Brazil in IFRS differences. XP

Now over his I for turn Maffra remarks. final to

Thiago Maffra

money had our revenue We we that to initiatives to a that we to direction diversification growth track quarter on from compared year. of expansion deliver net gives level distribution proving leverage. new deliver are confidence XXXX channel are our This the in to solid higher guidance. sales with operating and right are us last combination All force

that keeping our and we enhancing most Finally, we [ are buy. believe ]

the product in our have to offering best country, range First, unmatched customers an ensuring of that solutions. the platform access

empowering and Second, industry. force sales largest in trained the the best

Third company's and our sophisticated approach a last, planning. and financial value level distribution far evolving beyond of the product a excellence, value-driven traditional service to more new model moving to through proposition

start session. will our Parize Andre Now Q&A

Andre Parize

Please ], Zoom and Kuri the Mr. going Hatch got more [ two from session, the Difficulties] Okay. here first Antonio, Bank Q&A coming is question we still Jorge the you minutes. back start the are we fixing next One, Q&A us? [Technical Stanley. Apologies, question for Morgan believe We're We of can to our from in connection. hear hold America. Tony

we're proceed. first question may believe for the back is America. from of and Antonio, Bank [indiscernible] I you Antonio Okay.

Unknown Analyst

So from my two questions side.

So on first, inflows. net

do if inflows. And from on it in please it Is terms a break of little money? and second consistency Thank great. explore could you gross here how quarter. players? So [ the new outflows you a terms in is bit little these ], net headcount. of And on dive you coming in We explore and increased here it If the mix? bit my be the of inflows? quality that And you. count inflows down a noticed also deep other question net head team this could would So

Thiago Maffra

is Hello, This Antonio. Thiago.

the that to problems of all, have. first the is everyone So on we sorry here for call

we comes -- outflows So open demand okay, inflows, and not even never from. and our

not organically what here is the So there I can in tell you, nothing number.

in we quarters the money. and mentioned, more past maturing been we that net bring have related they as And organically. XXX% it's So starting it's to are to levers more that on working the new

believe So yes, we the worst is behind us.

next going quarters. say not the numbers quarter But short-term give to can XX We XX are do to for BRL billion next the back BRL to we billion, I or expect as last go is what quarter. not

what So we that's basically believe.

net So we retail forward. expect new of levels money good going

advisers. last is For especially have headcounts, have hiring basically, we people opened we what we X,XXX as quarter almost internal been that

per So XX, okay? we have XXX been, month, around the internal I would number So advisers. say, increasing

number So the that part of a good explains here.

interns. We had like some have other internship hirings. program course, we Of with XXX

the So that's number.

Andre Parize

is question Morgan Kuri from next from Stanley. Jorge The

Jorge Kuri

the I again, think do but previous it's to question important. Sorry re-ask

feels network. And the months your multichannel there digital on net any certainly inflows, were Maffra of don't that a you three component you I recovery there mean, back like capabilities, inflows. advantages things to that items. robust explanation ago, cyclical to gave show I difference me the the that some On of it quarter and competitive and product year any that a the feels you capabilities, I next on a me maybe of these I distribution, your that your material of ago that it to here the in last inflows, those mean, to about place if go IFA your those where is know slide is have them in all appreciate

they something And better the and volatility so market to again, the picked then I to June can the quarter. maybe -- understand in extent what that extent, in mean is you us off up sold help there that aggressively the currency indeed, happened value. cyclical, the

on notable helpful. more very in increase color and think any this inflows would I So be important

Thiago Maffra

were for if place, go these Yes, mature they of levers back. they sure, we Most but not in were Jorge.

] Of have and we XX.X% XX.XX% okay? QX you the from changing compare paying that [ of helps. When if than instead all of rates CGs been going course, a levers example, QX, we for normal quarter something the not And they're you like everything ] interest have some environment, we we us helped the attribute banks, that the it's from that would So -- value today QX you are they other like of have more to level. more instead didn't maturing. from increase from I that month other everything this and to stuff, that doing, macro But or compare have REITs a like month. the to to we [ then number, back it other, course, that they're one like mature one -- to course, it's to quarter, So and control regulation, this XX% again, specifically okay? a to XX%, of in X%

is be money are good to organically there next net retail lower, we that higher there course, not deliver behind next volatility, but Of going worst here, so slightly in is can expect new the are slightly the in nothing us we it okay, that quarters, quarters. the

Andre Parize

Meloni Renato Next question from comes [indiscernible]. ] from [

Unknown Analyst

So just like up money. on net new following

said, On much fact, the that similar numbers in time the at last last quarter, year. normalized Maffra, some return organically least to And money year. it of new any levels to today would the better than to call, what take you've net previous were

money say, quick would sustainable question. the just effective wondering And your [indiscernible] the rate level the, the was that drove deal of from this what the in changed What from quarter? tax quarter? quarters? And second I increase new net coming here for what's So a past

Thiago Maffra

Okay. and take first I Victor can the the ] [ take then HR part question.

now not again, That in that doing time from have and the been So believe past, QX. point I [ has no. with the BRL year. have levels, level say guys billion still point, believe happy was they deliver now. in BRL to or okay, the in XXXX what advantage XXXX, normal like XX we ] the more gaps, have that QX all we next the in not investors And with everything of XX lost to XX almost that At that's XX QX course, talking I competitor question per the we our that competitors, and not XXXX BRL go competitive back of are we been the early normalized in from a say, doing that So XX, we we delivering always, would to right like moment. [ okay? that's I XX, the have it's That's for closed okay, It's years When going billion, to was some [indiscernible] what billion level are 'XX, beginning, go or normal, the That's the some you take this to are at are we that. referred because more we again, okay? banks time we we But new the advantage. back ]. more been may normalized said, something The doing, always levels, temporary. there. back we -- is That's it the working hard little place. a a little some be I But that we very again, the levels what to XX said more, can less, now quarter. a right XX-plus that are against --

to some move take We levels, hard, to but like are time. very may working back it higher

Unknown Analyst

just on stay point. But -- sorry, to that

question the previous like of in is your maybe view changed? quarter? the part from think nothing what changed Or I

Thiago Maffra

doing the the All changed. past nothing have work Yes, been we quarters. in

Victor Mansur

quarterly of revenue Moving ] considered they expect a this because tax normalized the the I year. to look a we paid, was and [ be [ corporation is XX and about revenue as [ moves are can and variation. bank. that, the HR the rate over the you question. the this that rate months the in that be of And the highlights we mix quarter, is higher this the better should of expect it's The the Basically, around in mix recommend one commented that the ] to this business [ quarter of impact was year. as ] this can at number highest tax the And from funds, metric what before. quarter, HR tax number result ETR are XX.X I But the last [indiscernible] of of that we services quarter they say ] this

Andre Parize

question from Next Daniel is Vaz [indiscernible].

Daniel Vaz

So indeed yes, are your capabilities strong. distribution very

competitive have So this advantages. you

right? still this right? organically. think of net quarter, organically, very So money probably key a So capable driver, it with changed, nothing issuances was new strong DCM I raising you're this has So

new So funding to in growth how these understand profit helped has this I robust the numbers taxes quarter? this instruments in here credit. or wanted in money net this more distribution, concentrated the So bank is and

new money, a this bit distribution it you. the us corporate, net give to more just hear on right? can? And that good would strong, not the very So from second the context little and about to you question it mature, a can be So was as bit because is you and if if qualify

Victor Mansur

as retail, As can it's in if business. it's that helps quarter. income we course, a point. the highlight relation the your this don't new fixed main it ] fixed and to you If the fixed and the activity. revenues, in answers of money. if And lot DCM to see sheet, originated a can move And does, we next net close income in have income the we know this fee fixed of balance generate us the And the if question. new helps And a our the [ retail lot [ we ] I come -- was basically, retail the instruments over income

Thiago Maffra

we broader was move GCM you just the between platform, mentioned, the the [indiscernible] back retail ] size, integration we -- we my here. get point distribution, okay? the money, said [ that's and the okay? that, about to But first net if go new when So beyond okay? if Victor slide public.

that would you we So okay? the we we first been this in what the and quarter almost So CGs is diversified offering are products get for, last BRL that if REITs did billion, CGs the compare in more I offer, like appetite a raise the also -- on saw able only all to banks, the from say, year, second to one X for year people tax-exempt have single okay? looking

Daniel Vaz

corporate side, the Regarding any comments here, please?

Victor Mansur

I half to years think [ the this our And grow ago. product. Maffra client about corporate in corporate derivatives giving two the if to cross-sell, at if right those our ] on to didn't do at you clients capabilities the [ and sides basically, years ] ranks, user what products you a ago. reflect until we and FX offer look relationship, two and And of didn't as business in ] we of [the right more SMB products have three basically, those ranking, have the new talked also of are our platform have clients. the introduce capable And half we we to look

be So our those the base growing business in guidance. of lines should

Andre Parize

Labarta next Sachs. the question Daer from Goldman is So from

Daer Labarta

said a your about think revenues translate that you of margin? that? the see But just that How in of We you I further that big to -- going retail going forward? nice your revenues one-off forward? does on And that to pickup another question are did EBIT How improvement how forward? past, margin, not you quarter. think inflows. how can think revenues pickup you X%. inflows. in the Just improvement this inflows in see do right? acceleration Another bit a was do mean think of it you revenues quarter But question do that how Anything correlated then the maybe I big a about sustainability see there. in can this on how more, just in you was the get benefit do a But going a

Thiago Maffra

first and one. the I will take Victor the second one

So net with about money. the revenue correlation new and

and we you we Of is it that outflows, Because the But to when is see a way have. whole course, small okay? there imagine that pickup, like inflows compare have small you okay?

almost today, much that retail net portfolio the have So is larger we money. have than trillion any okay? we clients, BRL whole new X.X And of

So we correlation proves of of growth, don't But new the is future the it's in big mode we net the yes, that the because both -- company them. that money so see here. why and a growth what important

So or a that's revenue why the this it's quarter. because the net dictates that how More company down new main going is money road, be the than years for the okay? few KPI next us to quarter

Victor Mansur

I think rationale months the XX ]. margin margin look XX% last same EBITDA currently is [ the the you at of should is [indiscernible] that at

HR ]. how a see improvement business or Looking to that mix at should you quarter-over-quarter variance levels margin, our [ the towards slight guidance over And time. any do will eliminate

Daer Labarta

just revenues, of on we just the are you the cycle revenue more just with of the comfortable -- in outlook the revenue catalyst from your feeling accelerate the in of [indiscernible]? potential thinking to sort where Any terms maybe just And interest outlook, of are in here?

Thiago Maffra

understood if I for the sure your not [indiscernible]? I'm revenue Yes, question,

Daer Labarta

revenues. On retail

Thiago Maffra

Can repeat question? the you

Daer Labarta

Sure. Yes, sorry.

for quarter. the see this you I have How I extent, some retail do on mean revenues, that outlook was the right? Just rates. still pickup maybe there [indiscernible]? the do high you mean improving outlook think we is to

Thiago Maffra

Yes.

is And the the metrics. numbers, top better guidance XXXX we in still you in so start the expect the the the mind The we to quarter giving the the on [ year, again, of XX pick increase revenues, EBITDA and presentation, deliver be range is in second all of for going of again, to XX%. revenue because, the guidance we these but better the in than net for that half terms for are should or of half to -- not the ] like next if So okay? on to you at to place, mentioned should changed. year, have the first up for in the look can be we half CAGRs second of have in As guidance year the income XX margin nothing we

we But would otherwise, on are go -- mentioned there, that So just and not we okay? track.

So quarters. you like all improve numbers to in the expect can these next

there expect down year So the upwards, We one. first go some quarters end the are trend volatility. of you of course, of the the be better to half can than the Of XXXX. is until can But the second okay?

Andre Parize

UBS. next is from The from question Arthuzo Olavo

Olavo Arthuzo Duarte

I quarter. for But questioning change explanation I also have have my this And policy the is effect understand this the one rate in on question two, taxes some a been on had this and It the to in but on. leverage new the instruments on money. totally as my just some working you a decrease well. performance move follow-up way colleague's had effect, I was even net first small the understand of related other

could question. XX% over my the just And please impacts to X go of new give just over if flow magnitude then So a helpful. that I'll magnitude, these effect basically second like us effects those than the this had net be would -- you two less quarter money, the

Thiago Maffra

because a The always to some interest or need to different environment, most bring important of like like factor, we are many, are one. don't to it's point, not new all net exempt say understand back we money okay? the one of to macro like we almost not that, again, to factors. most need from questions So we percentage less here need a go regulation levers, is It's issue the So the that for that impact is banks type there find because understand Yes, [indiscernible] expectation, or one in Many the of sure, stock that of that don't exchange new net products. for this okay? money. trying the in perform much it's just is capacity positive impossible that of There of don't interest XX.X% combined better to okay? them to We a them always well other they what's one market. XX.XX%. from coming said like we it's the said the increasing there's control, rate to tax was some sure, but and that change they to have not rates X%, I go

So not macro we are dependent.

one And point. have we explanation. that's the not will So only

Olavo Arthuzo Duarte

So sort that if solely other of backdrop related I if the are related fintechs the base, credit a other but to be moving my the continue you credit ], back be credit know the what is this its consecutive to guys quarter here. cash to we dropped understand the question to that monthly that think leaving this card to so to your X% benefits. credit or if may, now I'll will clients I macroeconomic discussion for card several spend similar I business. because active wanted that offers just card second second the that color I helpful. saw on banks or card shift on use [ expand could Any

Thiago Maffra

about two credit Yes, cards. Basically, levers work have here to we on.

to eligible get all clients, brands it's the have First So million So X XX% the million of of a issued of around out all, credit if number from okay? today, almost card, cards, you So okay? eligible X only million are cards, credit penetration. clients the have we million X clients, our X okay?

So here, we two have levers.

just The first benefits that for one -- give we we okay? credit points miles the improve So we customers, is the cards. to our choice the released or

value we perceive believe on invest capture we can only clients So back. points that more added than

is the eligible. we the other make X And million second one one. that's how clients So

course, right Of right absorption with with the working the level of loss risk.

been clients. have of So working increasing the we eligible number on

more to on track believe credit back So next cards we on that quarters. go the can growth on we capture

Andre Parize

HSBC. from Next is from question Neha Agarwala

Neha Agarwala

cost you I think correct which control is such sustainable bit for about down a that What portfolio credit of numbers, On that? is? the control my services, talk expansion. is XX% on on quite profit led a impressive, pull services? And to Could over leverage the did book. COGS also How the the loan there you good gross went at of the question actually If looking I'm quarter-on-quarter. the second the cost

credit the portfolio. could explain decline you if So the in just why

Thiago Maffra

costs. question, towards the I COGS, and both of that's a loan to in book risk moved of to did, basically, rep corporate ecosystem. this our that if see your securitize I should trend without our And our SG&A, think and bonds our operations our against this to we those may for inventory we should do a sell you effects use and as reflection the portfolio those corporate go is of recycled COGS loan can collateral go And eventually, ] operations process, we part and bonds about First part more year. and [ and of capacity financial operational to in as clients what those business our and leverage increasing the

Neha Agarwala

in quarters. this done right? not this If I You understand, prior new, is have the

So this? what regarding doing motivation was the

Thiago Maffra

that first recycle that. It's risk the in in that sorry. idea to seen did see first to keep that loan future -- future, the our process new. time we we and This time, a is should you've we the create the And -- And in the book. is the

Neha Agarwala

was So reason was loan recycling the the expected? of for What asset quality the book? this worse than

Thiago Maffra

the products we originate to can same distribution. assets we our portfolio. at risk, the the to doing is retail for here that is same that same new our idea the time clients. good low that, we assets good The time as to at provide always, of capacity recycle that quality The can No. And clients, the And new idea. our products instruments risk new increase create are basically, a by create

Neha Agarwala

was also And this quarter Is low. recycling? this this related the to provision

Thiago Maffra

from partially some we related It's recycling, operations periods. cover related to recovered that this to other partially [indiscernible]

Andre Parize

hour. the are Okay, on up we

we apologize each talk once thank we or IR again, you, Maffra, and and questions. available once thank to participants the quarter. again you. Thank other you for Thank of connections, troubling see you, Thank I for So today. you, any on next all Victor. our the you teams further

XP (XP) 13 Aug 242024 Q2 Earnings call transcript