StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) (“Stone” or the “Company”)
today reports its financial results for its first quarter ended
March 31, 2024.
Business Overview
1Q24 represented continuous business growth,
delivering on our strategic priorities. In financial services,
Stone performed well in all client offerings. Starting with
payments, we posted strong continued TPV growth (including PIX)
with an almost flat sequential growth rate. The quarter highlight
was the launch of instant settlement to Ton clients – fulfilling a
key request from our micro merchant clients. In banking, we
continued to show progress in onboarding new and existing clients
to our bundled banking and payments solution, and today,
approximately 80% of our payments active client base has our
bundled offering. And finally, our credit solution continues to
grow according to plan. We maintain our conservative approach but
are testing different client profiles to grow while balancing our
credit models. We have set up a specialized desk to offer credit to
larger clients, which is just getting underway.
Regarding the software business, its performance
showed progress. Revenue growth was modest, with verticals software
(priority verticals + other verticals) revenues growing two digits
purely organic, mitigated by enterprise software - which remained a
revenue detractor. Our efficiency efforts continue to increase
profitability in the segment. As discussed in our investor day, the
strategic focus continues to be cross-selling financial solutions
to our priority verticals’ clients and evolving on financial
services and software bundles. In 2024, we are focusing on retail
and gas station verticals – the latter being a highlight in the
quarter.
Operating and Financial Highlights for
1Q24
MAIN CONSOLIDATED FINANCIAL METRICS
Table 1: Main Consolidated Financial
Metrics
|
Main Consolidated Financial Metrics (R$mn) |
1Q24 |
4Q23 |
Δ q/q % |
1Q23 |
Δ y/y % |
|
Total Revenue and Income |
3,084.9 |
3,248.7 |
(5.0%) |
2,711.7 |
13.8% |
|
Adjusted EBITDA |
1,512.0 |
1,618.3 |
(6.6%) |
1,251.4 |
20.8% |
|
Adjusted EBITDA margin (%) |
49.0% |
49.8% |
(0.8 p.p.) |
46.1% |
2.9 p.p. |
|
Adjusted EBT |
567.6 |
638.2 |
(11.1%) |
324.0 |
75.2% |
|
Adjusted EBT margin (%) |
18.4% |
19.6% |
(1.2 p.p.) |
11.9% |
6.5 p.p. |
|
Adjusted Net Income |
450.4 |
563.8 |
(20.1%) |
236.6 |
90.4% |
|
Adjusted Net income margin (%) |
14.6% |
17.4% |
(2.8 p.p.) |
8.7% |
5.9 p.p. |
|
Adjusted Net Cash |
5,139.8 |
5,053.3 |
1.7% |
3,988.8 |
28.9% |
| |
|
|
|
|
|
- Total
Revenue and Income reached R$3,084.9 million in the quarter,
growing 13.8% year over year. This was primarily driven by
a 16.0% increase in financial services revenues, mainly as a result
of active client base growth and higher monetization from clients
in our MSMB segment.
- Adjusted
EBITDA in 1Q24 was R$1,512.0 million, an increase of 20.8% year
over year and a decrease of 6.6% quarter over quarter.
Adjusted EBITDA Margin decreased sequentially from 49.8% to 49.0%,
mainly due to lower seasonal revenues and to the change in our
internal accounting methodology related to membership fees,
combined with higher selling expenses as percentage of revenues.
These effects were partially compensated by lower other operating
expenses and administrative expenses as percentage of
revenues.
- Adjusted
EBT in 1Q24 was R$567.6 million, up 75.2% year over year,
with adjusted EBT margin increasing 6.5 percentage points, to
18.4%. Quarter over quarter, Adjusted EBT was down 11.1% with
adjusted EBT margin decreasing 1.2 percentage points. The
sequential margin decrease is attributed to the same factors
abovementioned for Adjusted EBITDA margin.
- Adjusted
Net Income in 1Q24 was R$450.4 million, 90.4%
higher year over year, with adjusted net margin of 14.6%.
This compares with R$563.8 million and a margin of 17.4% in 4Q23.
The quarter over quarter margin decrease was driven by the same
factors that impacted Adjusted EBT margin combined with a more
normalized effective tax rate.
- Adjusted
Net Cash position was R$5,139.8 million in 1Q24, increasing 28.9%
year over year or 1.7% quarter over quarter. The
sequential increase of R$86.5 million was mainly driven by cash
generation from our operations with the main outflows being from
capex and loans.
OUTLOOK
We continue to believe that StoneCo is uniquely
positioned to drive strong return to shareholders. With that in
mind and the results posted in the 1Q24, we remain committed to the
guidance for 2024 and 2027 provided in our Investor Day held in
November 2023.
|
Guidance |
2023 |
∆% y/y |
2024 |
∆% y/y |
1Q24 |
∆% y/y |
2027 |
CAGR 24-27 |
|
|
MSMB TPV (R$bn) |
350 |
+21% |
> 412 |
> +18% |
93 |
+18% |
> 600 |
13% |
|
|
Clients Deposits (R$bn) |
6.1 |
+52% |
> 7.0 |
> +14% |
6.0 |
+53% |
> 14.0 |
26% |
|
|
Growth ↑ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Portfolio (R$bn) |
0.3 |
n.a. |
> 0.8 |
> +2.6x |
0.5 |
n.m. |
> 5.5 |
90% |
|
|
MSMB Take Rate (%) |
2.45 |
+30bps |
> 2.49% |
> +4bps |
2.54% |
+15bps |
> 2.70% |
- |
|
|
Monetization ↑ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (R$bn) |
1.6 |
+3.8x |
> 1.9 |
> +22% |
450 |
+90% |
> 4.3 |
31% |
|
|
Adjusted Administrative Expenses (R$bn) |
1.052 |
+6% |
< 1.125 |
< +7% |
232 |
-12% |
< 1.450 |
8.8% |
|
|
Efficiency ↑ |
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q24 performance was on
track |
|
|
|
|
|
|
|
to deliver our guidance |
|
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|
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|
MAIN OPERATING METRICS
Table 2: Main Operating Metrics
|
Main Operating Metrics |
1Q24 |
4Q23 |
Δ q/q % |
1Q23 |
Δ y/y % |
|
TOTAL TPV + PIX P2M1
(R$bn) |
114.3 |
121.0 |
(5.6%) |
96.9 |
17.9% |
|
MSMB TPV + PIX P2M (R$bn) |
101.9 |
106.1 |
(3.9%) |
82.3 |
23.8% |
|
MSMB TPV (R$bn) |
93.4 |
98.5 |
(5.1%) |
78.9 |
18.4% |
|
PIX P2M TPV (R$bn) |
8.5 |
7.6 |
12.1% |
3.4 |
147.7% |
|
Key Accounts TPV |
12.3 |
15.0 |
(17.8%) |
14.6 |
(15.5%) |
|
|
|
|
|
|
|
|
Monthly Average TPV MSMB ('000) |
8.3 |
9.2 |
(10.4%) |
9.5 |
(12.7%) |
| |
|
|
|
|
|
|
TPV Overlap2 |
5.1 |
5.8 |
(13.5%) |
n.a. |
n.a. |
|
|
|
|
|
|
|
|
Active Payments Client Base
('000)3 |
3,720.6 |
3,522.1 |
5.6% |
2,818.1 |
32.0% |
|
MSMB4 |
3,676.2 |
3,471.3 |
5.9% |
2,758.1 |
33.3% |
|
Key Accounts |
51.9 |
58.3 |
(11.0%) |
67.6 |
(23.2%) |
|
|
|
|
|
|
|
|
Net Adds ('000) |
198.5 |
191.2 |
3.8% |
234.0 |
(15.2%) |
|
MSMB |
204.9 |
192.2 |
6.6% |
231.9 |
(11.7%) |
|
Key Accounts |
(6.4) |
(1.0) |
566.3% |
2.6 |
n.m |
|
|
|
|
|
|
|
|
Take Rate |
|
|
|
|
|
|
MSMB |
2.54% |
2.43% |
0.11 p.p. |
2.39% |
0.15 p.p. |
|
Key Accounts |
1.29% |
1.28% |
0.01 p.p. |
1.15% |
0.14 p.p. |
|
|
|
|
|
|
|
|
Banking5 |
|
|
|
|
|
|
MSMB Active Banking Client Base ('000) |
2,379.7 |
2,096.5 |
13.5% |
1,253.0 |
89.9% |
|
Client Deposits (R$mn) |
5,985.0 |
6,119.5 |
(2.2%) |
3,902.2 |
53.4% |
|
MSMB Banking ARPAC6 |
29.3 |
28.4 |
3.3% |
36.7 |
(20.1%) |
| |
|
|
|
|
|
|
Credit7 |
|
|
|
|
|
|
Credit Clients8 |
18,754 |
10,752 |
74.4% |
36 |
n.m. |
|
Working Capital Portfolio (R$mn)9 |
531.7 |
309.4 |
71.8% |
1.2 |
n.m. |
|
Disbursements - EOP (R$mn) |
648.5 |
353.6 |
83.4% |
1.2 |
n.m. |
|
Disbursements - Quarter (R$mn) |
294.9 |
231.7 |
27.3% |
1.2 |
n.m. |
|
Provision for expected working capital losses (R$mn) |
(44.4) |
(39.2) |
13.4% |
n.a. |
n.m. |
|
Accumulated provision for expected working capital losses
(R$mn) |
(106.3) |
(61.9) |
71.8% |
n.a. |
n.m. |
|
Loan loss provision/Portfolio |
(20.0%) |
(20.0%) |
0.01 p.p. |
n.a. |
n.m. |
|
NPL10 15-90 days |
2.2% |
2.0% |
0.24 p.p. |
n.a. |
n.a. |
|
NPL10 > 90 days |
1.5% |
0.3% |
1.17 p.p. |
n.a. |
n.a. |
|
|
-
Consolidated TPV including PIX P2M transactions grew 17.9%
year over year to R$114.3 billion in 1Q24, mostly
attributed to growth in the MSMB segment's TPV, with an 18.4% year
over year growth in TPV and a 147.7% increase in PIX P2M volumes.
These effects were partially offset by a 15.5% decrease in Key
Accounts’ TPV.
- Total
Payments Active Client base surpassed 3.7 million,
representing a total quarterly net addition of 198,500 active
clients.
MSMB (Micro and SMB
clients)
- MSMB
Active Payment Clients reached 3,676,200, representing a 33.3% year
over year growth and a net addition of 204,900 in 1Q24.
The 6.6% quarter over quarter increase in net additions can
predominantly be attributed to the success of our marketing
campaigns, as well as lower churn both in Stone and Ton.
- MSMB TPV
including PIX P2M was R$101.9 billion in 1Q24, increasing 23.8%
year over year and decreasing 3.9% quarter over quarter.
- MSMB TPV
was R$93.4 billion, up 18.4% year over year mainly driven
by an increase in our active client base in the segment. Quarter
over quarter, MSMB TPV decreased 5.1% as a result of fourth-quarter
seasonality.
- MSMB PIX
P2M TPV was R$8.5 billion in the quarter, increasing 12.1%
compared with 4Q23, as the adoption of such means of payment
continues to increase.
- TPV
Overlap is measured by the MSMB TPV overlap between
financial services and the priority verticals, being a key metric
to measure our cross sell performance. In 1Q24, TPV Overlap was
R$5.1 billion, decreasing 13.5% quarter over quarter due to
seasonality, given the relevance of the retail vertical which is
more impacted by seasonal effects.
- MSMB
Average Monthly TPV per client decreased 12.7% year over
year explained by an increase in the representativeness of
Ton in the client mix, boosted by marketing efforts focused on the
micro segment in the quarter.
- MSMB
Take Rate was 2.54%, 11bps higher quarter over quarter and 15bps on
a year over year basis. The quarter over quarter variation
is mainly attributed to (i) growth in micro and smaller clients,
which have higher take rates, (ii) an increase in credit over debit
volumes compared with the fourth quarter, and (iii) a higher
contribution from our banking and credit solutions.
- Banking
solutions
- Banking
active client base in 1Q24 reached 2.4 million active clients,
increasing 13.5% quarter over quarter. This result was
driven by an (i) increase in our payments active client base and
(ii) the continued activation of new banking accounts within our
existing Stone payments client base, in line with the execution of
our strategy of selling integrated solutions.
- Total
deposits were R$5,985.0 million in the quarter, increasing
53.4% year over year and decreasing only 2.2% quarter over quarter
despite seasonal effects in 4Q23.
- Banking
ARPAC (average revenue per active client) was R$29.3 per client per
month, decreasing 20.1% year over year and up 3.3% on a quarter
over quarter basis. The quarter over quarter evolution was
mainly attributed to (i) higher floating revenues, despite lower
average CDI, as a result of higher average deposits per client due
to the successful bundling sales approach and higher client
engagement, and (ii) revenues from the processing of PIX QR Code
transactions.
- Working
Capital (Credit) Solutions:
- Until March 31,
2024, we disbursed a total of R$648.5 million of loans
reaching 18,754 contracts, with a working capital
portfolio of R$531.7 million at month-end. Specifically in 1Q24, we
disbursed R$294.9 million. Our focus remains on disbursing credit
to SMB clients.
-
Provision for expected working capital losses totaled
R$44.4 million in the quarter, compared with R$39.2
million in 4Q23. The ratio of accumulated loan loss provision
expenses over the working capital portfolio was 20% in the
period.
- In the quarter,
NPL 15-90 days was 2.2% and NPL
over 90 days was 1.5%.
Income Statement
Table 3: Statement of Profit or Loss
(IFRS, as Reported) 11
|
Statement of Profit or Loss (R$mn) |
1Q24 |
% Rev. |
4Q23 |
% Rev. |
Δ q/q % |
1Q23 |
% Rev. |
Δ y/y% |
|
Net revenue from transaction activities and other services |
749.8 |
24.3% |
868.1 |
26.7% |
(13.6%) |
733.1 |
27.0% |
2.3% |
|
Net revenue from subscription services and equipment rental |
456.7 |
14.8% |
459.1 |
14.1% |
(0.5%) |
445.1 |
16.4% |
2.6% |
|
Financial income |
1,741.1 |
56.4% |
1,770.8 |
54.5% |
(1.7%) |
1,375.0 |
50.7% |
26.6% |
|
Other financial income |
137.3 |
4.4% |
150.7 |
4.6% |
(8.9%) |
158.4 |
5.8% |
(13.4%) |
|
Total revenue and income |
3,084.9 |
100.0% |
3,248.7 |
100.0% |
(5.0%) |
2,711.7 |
100.0% |
13.8% |
|
Cost of services |
(809.9) |
(26.3%) |
(802.7) |
(24.7%) |
0.9% |
(721.3) |
(26.6%) |
12.3% |
|
Provision for expected working capital losses11 |
(44.4) |
(1.4%) |
(39.2) |
(1.2%) |
13.4% |
0.0 |
0.0% |
n.a. |
|
Administrative expenses |
(257.0) |
(8.3%) |
(308.6) |
(9.5%) |
(16.7%) |
(298.0) |
(11.0%) |
(13.8%) |
|
Selling expenses |
(529.7) |
(17.2%) |
(454.0) |
(14.0%) |
16.7% |
(389.9) |
(14.4%) |
35.8% |
|
Financial expenses, net |
(896.5) |
(29.1%) |
(943.1) |
(29.0%) |
(4.9%) |
(923.6) |
(34.1%) |
(2.9%) |
|
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
30.6 |
1.1% |
(100.0%) |
|
Other income (expenses), net |
(108.1) |
(3.5%) |
(0.3) |
(0.0%) |
31130.1% |
(101.5) |
(3.7%) |
6.5% |
|
Loss on investment in associates |
0.3 |
0.0% |
(1.7) |
(0.1%) |
n.m. |
(1.0) |
(0.0%) |
n.m. |
|
Profit (loss) before income taxes |
484.0 |
15.7% |
738.2 |
22.7% |
(34.4%) |
306.8 |
11.3% |
57.8% |
|
Income tax and social contribution |
(110.4) |
(3.6%) |
(82.0) |
(2.5%) |
34.6% |
(81.1) |
(3.0%) |
36.1% |
|
Net income (loss) for the period |
373.6 |
12.1% |
656.2 |
20.2% |
(43.1%) |
225.7 |
8.3% |
65.5% |
|
|
|
|
|
|
|
|
|
|
Total Revenue and Income
Net Revenue from Transaction Activities
and Other Services
Net Revenue from Transaction Activities and
Other Services was R$749.8 million in 1Q24, a 2.3% year-over-year
growth. This increase can be primarily attributed to a 17.9% year
over year consolidated TPV growth including Pix. These effects were
partially offset by a change in our internal accounting methodology
in membership fees, which from this quarter onwards will be
deferred through the expected lifetime of the client, and were
before entirely recognized at the time it was acquired. In 1Q24,
considering our new internal accounting methodology, we recognized
R$10.3 million of membership fees in our transaction activities and
other services revenue. Considering our previous methodology,
membership fees would have been R$79.0 million. Revenues from TAG,
our registry business, contributed with R$9.0 million to our
transaction activities and other services revenue in the quarter,
compared with R$19.2 million in 1Q2312.
For more details about our new internal
accounting methodology for membership fee revenues, refer to our
Press Release announced on April 16th, 2024.
Net Revenue from Subscription Services
and Equipment Rental
Net Revenue from Subscription Services and
Equipment Rental increased 2.6% year over year to R$456.7 million.
This can be primarily attributed to (i) higher software revenues in
the period, being partially offset by (ii) lower revenues from our
non-allocated business segment, due to the divestment of CreditInfo
in December 2023 and PinPag in February 2024. The slight decrease
quarter over quarter, can be attributed to item (ii) abovementioned
for the year over year comparison.
Financial Income
Financial Income in 1Q24 was R$1,741.1 million,
up 26.6% year over year, explained by higher (i) prepaid volumes,
(ii) credit revenue and (iii) floating revenue from our banking
solution.
Other Financial Income
Other Financial Income was R$137.3 million in
1Q24 compared with R$158.4 million in 1Q23 mainly due to a
reduction in the base rate in Brazil in the period, combined with a
lower average cash balance. On a quarter over quarter basis, Other
Financial Income decreased 8.9% due to the same factors
aforementioned for the year over year comparison.
Costs and Expenses
Cost of Services
Cost of Services were R$809.9 million in 1Q24,
up 12.3% year over year. This increase is mainly attributed to (i)
provisions for loan losses from our new credit product, which
totaled R$44.4 million in our cost of services in the quarter and
were null in 1Q23; (ii) higher logistics costs; and (iii) higher
D&A as we continue to expand our client base. Excluding
provisions from loan losses, cost of services would have increased
6.1% year over year. As a percentage of revenues, Cost of Services
decreased slightly from 26.6% in 1Q23 to 26.3% in 1Q24.
Compared with 4Q23, Cost of Services was
flattish. Provisions for loan losses contributed with R$44.4
million to our cost of services in the quarter, compared with
R$39.2 million in 4Q23. As a percentage of revenues, Cost of
Services increased from 24.7% in 4Q23 to 26.3% in 1Q24.
Administrative Expenses
Administrative Expenses were R$257.0 million,
down 13.8% year over year. This decrease is mostly explained by
lower third party services, combined with lower amortization from
fair value adjustments. As a percentage of Total Revenue and
Income, Administrative Expenses decreased from 11.0% in 1Q23 to
8.3% in 1Q24.
Administrative Expenses in 1Q24 were 16.7% lower
than in 4Q23, primarily due to seasonally higher personnel expenses
in the fourth quarter, which no longer repeated this quarter and
lower third party services. As a percentage of revenues,
Administrative Expenses decreased from 9.5% in 4Q23 to 8.3% in
1Q24.
Selling Expenses
Selling Expenses were R$529.7 million in the
quarter, a 35.8% increase year over year, primarily attributed to
higher investments in (i) our salespeople, (ii) marketing and (iii)
partner commissions. As a percentage of revenues, Selling Expenses
increased from 14.4% in 1Q23 to 17.2% in 1Q24.
Compared with 4Q23, Selling Expenses increased
by 16.7%, due to higher marketing expenses, as a result of the
sponsorship of a reality television show. As a percentage of
revenues, Selling Expenses increased sequentially from 14.0% in
4Q23 to 17.2% in 1Q24.
Financial Expenses, Net
Financial Expenses, Net were R$896.5 million in
the quarter, 2.9% lower compared with 1Q23 mainly due to (i) a
reduction in average CDI, from 13.65% in 1Q23 to 11.29% in 1Q24,
combined with (ii) our decision to reinvest our cash generation
towards the funding of our operation. These effects were partially
offset by higher prepaid volumes in the period. As a percentage of
revenues, Financial Expenses, Net was 29.1% in 1Q24 compared with
34.1% in 1Q23.
Compared with 4Q23, Financial Expenses, Net were
4.9% lower. This decrease was mainly driven by item (i) from the
aforementioned year over year comparison, being partially offset by
higher funding needs in our prepayment and credit operations.
Mark-to-market on equity securities
designated at FVPL
In 1Q23, we divested our stake in Banco Inter.
As a result, from 2Q23 onwards, our profit & loss statement no
longer includes mark-to-market gains or losses associated with this
investment. This compares with a R$30.6 million profit in 1Q23.
Other Income (Expenses),
Net
Other Expenses, Net were R$108.1 million in
1Q24, representing an increase of R$6.6 million year over year.
This increase is mainly related to (i) the net effect from the
PinPag divestment in the amount of R$52.9 million, partially offset
by (ii) lower share based compensation expenses, which includes a
non-recurring positive impact of R$40.5 million from the net effect
of the cancellation and new grants of incentive plans.
Compared with 4Q23, Other Expenses, net were
R$107.7 million higher mostly attributed to the reversal of earnout
provisions in the previous quarter, which did not repeat in
1Q24.
Income Tax and Social
Contribution
During 1Q24, the Company recognized income tax
and social contribution expenses of R$110.4 million over a profit
before income taxes of R$484.0 million, implying an effective tax
rate of 22.8%. The difference to the statutory rate is mainly
explained by (i) gains from subsidiaries abroad subject to
different statutory tax rates and (ii) benefits from “Lei do Bem”
(Law 11,196/05). These effects were partially offset by unutilized
tax loss carryforwards generated in the sale of PinPag.
Net Income (Loss) and EPS
Net Income in 1Q24 was R$373.6 million compared
with R$225.7 million in 1Q23, mostly as a result of higher total
revenue and income combined with lower administrative expenses.
These effects were partially offset by higher selling expenses and
cost of services. IFRS basic EPS was R$1.21 per share in 1Q24,
compared with R$0.72 in the prior-year period.
Adjustments to Net Income by P&L
Line
Table 4: Adjustments to Net Income by
P&L Line
|
Adjustments to Net Income by P&L line
(R$mn) |
1Q24 |
% Rev. |
4Q23 |
% Rev. |
Δ q/q % |
1Q23 |
% Rev. |
Δ y/y% |
|
Cost of services |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
0.0 |
0.0% |
n.a. |
|
Administrative expenses |
25.0 |
0.8% |
31.3 |
1.0% |
(20.2%) |
35.6 |
1.3% |
(29.9%) |
|
Selling expenses |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
0.0 |
0.0% |
n.a. |
|
Financial expenses, net |
7.3 |
0.2% |
2.0 |
0.1% |
256.8% |
14.8 |
0.5% |
(50.5%) |
|
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
(30.6) |
(1.1%) |
(100.0%) |
|
Other operating income (expense), net |
51.3 |
1.7% |
(133.3) |
(4.1%) |
n.m |
(2.6) |
(0.1%) |
n.m |
|
Gain (loss) on investment in associates |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
0.0 |
0.0% |
n.a. |
|
Profit (loss) before income taxes |
83.6 |
2.7% |
(100.0) |
(3.1%) |
n.m |
17.2 |
0.6% |
385.9% |
|
Income tax and social contribution |
(6.8) |
(0.2%) |
7.6 |
0.2% |
n.m |
(6.3) |
(0.2%) |
7.5% |
|
Net income (loss) for the period |
76.8 |
2.5% |
(92.4) |
(2.8%) |
n.m |
10.9 |
0.4% |
604.4% |
|
|
|
|
|
|
|
|
|
|
Below we comment the adjustments in our P&L
in the quarter:
- Administrative
Expenses include R$25.0 million related to amortization of fair
value adjustments on acquisitions, mostly related to the Linx and
other software companies’ acquisitions.
- Financial
Expenses include R$7.3 million of expenses related to effects from
(i) earn out interests on business combinations, and (ii) financial
expenses from fair value adjustments on acquisitions.
- Other Expenses,
net include R$51.3 million from fair value of call options related
to acquisitions, earn-out interests, divestment of assets and fair
value adjustments on acquisitions.
- Income Tax and
Social Contribution includes -R$6.8 million related to taxes from
the adjusted items. Adjusting for those effects, our Income Tax and
Social Contribution was R$117.2 million with an effective tax rate
in 1Q24 of 20.6%.
Considering the adjustments to net income
abovementioned, our Adjusted Profit and Loss Statement is presented
below:
Table 5: Statement of Profit or Loss
(Adjusted)
|
Adjusted Statement of Profit or Loss (R$mn) |
1Q24 |
% Rev. |
4Q23 |
% Rev. |
Δ q/q % |
1Q23 |
% Rev. |
Δ y/y% |
|
Net revenue from transaction activities and other services |
749.8 |
24.3% |
868.1 |
26.7% |
(13.6%) |
733.1 |
27.0% |
2.3% |
|
Net revenue from subscription services and equipment rental |
456.7 |
14.8% |
459.1 |
14.1% |
(0.5%) |
445.1 |
16.4% |
2.6% |
|
Financial income |
1,741.1 |
56.4% |
1,770.8 |
54.5% |
(1.7%) |
1,375.0 |
50.7% |
26.6% |
|
Other financial income |
137.3 |
4.4% |
150.7 |
4.6% |
(8.9%) |
158.4 |
5.8% |
(13.4%) |
|
Total revenue and income |
3,084.9 |
100.0% |
3,248.7 |
100.0% |
(5.0%) |
2,711.7 |
100.0% |
13.8% |
|
Cost of services |
(809.9) |
(26.3%) |
(802.7) |
(24.7%) |
0.9% |
(721.3) |
(26.6%) |
12.3% |
|
Provision for expected working capital losses11 |
(44.4) |
(1.4%) |
(39.2) |
(1.2%) |
13.4% |
0.0% |
0.0% |
n.a. |
|
Administrative expenses |
(232.0) |
(7.5%) |
(277.3) |
(8.5%) |
(16.3%) |
(262.5) |
(9.7%) |
(11.6%) |
|
Selling expenses |
(529.7) |
(17.2%) |
(454.0) |
(14.0%) |
16.7% |
(389.9) |
(14.4%) |
35.8% |
|
Financial expenses, net |
(889.2) |
(28.8%) |
(941.1) |
(29.0%) |
(5.5%) |
(908.9) |
(33.5%) |
(2.2%) |
|
Other income (expenses), net |
(56.7) |
(1.8%) |
(133.7) |
(4.1%) |
(57.6%) |
(104.1) |
(3.8%) |
(45.5%) |
|
Loss on investment in associates |
0.3 |
0.0% |
(1.7) |
(0.1%) |
n.m |
(1.0) |
(0.0%) |
n.m |
|
Adj. Profit before income taxes |
567.6 |
18.4% |
638.2 |
19.6% |
(11.1%) |
324.0 |
11.9% |
75.2% |
|
Income tax and social contribution |
(117.2) |
(3.8%) |
(74.4) |
(2.3%) |
57.5% |
(87.4) |
(3.2%) |
34.1% |
|
Adjusted Net Income |
450.4 |
14.6% |
563.8 |
17.4% |
(20.1%) |
236.6 |
8.7% |
90.4% |
|
|
|
|
|
|
|
|
|
|
For the P&L lines that are adjusted, the
variations can be explained by the same factors as in the IFRS
statement apart from the ones mentioned below.
Adjusted Administrative
expenses decreased 11.6% year over year, mainly due to
lower third party services and travel expenses. The quarter over
quarter variation can be explained by the same factors as in the
IFRS statement.
Adjusted other expenses, net
decreased 45.5% year over year. This decrease can be mainly
explained by lower share based compensation expenses, which include
a non-recurring positive net impact of R$40.0 million from the net
effect of the cancellation and new grants of incentive plans.
Please refer to note 18.1.4 from our Financial Statements for more
details. Quarter over quarter, other expenses, net decreased 57.6%
as a result of the same factor aforementioned for the year over
year comparison, combined with lower contingencies.
Adjusted Net Income (Loss) and
EPS
Table 6: Adjusted Net Income
Reconciliation
|
Net Income Bridge (R$mn) |
1Q24 |
% Rev. |
4Q23 |
% Rev. |
Δ q/q% |
1Q23 |
% Rev. |
Δ y/y% |
|
Net income (loss) for the period |
373.6 |
12.1% |
656.2 |
20.2% |
(43.1%) |
225.7 |
8.3% |
65.5% |
|
Amortization of fair value adjustment (a) |
12.3 |
0.4% |
(15.8) |
(0.5%) |
n.m |
33.7 |
1.2% |
(63.5%) |
|
Mark-to-market from the investment in Banco Inter (b) |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
(30.6) |
(1.1%) |
(100.0%) |
|
Other expenses (c) |
71.3 |
2.3% |
(84.2) |
(2.6%) |
n.m |
14.1 |
0.5% |
405.6% |
|
Tax effect on adjustments |
(6.8) |
(0.2%) |
7.6 |
0.2% |
n.m |
(6.3) |
(0.2%) |
7.4% |
|
Adjusted net income (as reported) |
450.4 |
14.6% |
563.8 |
17.4% |
(20.1%) |
236.6 |
8.7% |
90.4% |
|
|
|
|
|
|
|
|
|
|
|
IFRS basic EPS (R$) (d) |
1.21 |
n.a. |
2.10 |
n.a. |
(42.4%) |
0.72 |
n.a. |
66.5% |
|
Adjusted diluted EPS (R$) (e) |
1.42 |
n.a. |
1.76 |
n.a. |
(18.9%) |
0.75 |
n.a. |
89.1% |
|
Basic Number of shares |
309.1 |
n.a. |
310.7 |
n.a. |
(0.5%) |
312.7 |
n.a. |
(1.2%) |
|
Diluted Number of shares |
316.1 |
n.a. |
318.4 |
n.a. |
(0.7%) |
316.1 |
n.a. |
(0.0%) |
(a) Related to acquisitions. Consists of
expenses resulting from the changes of the fair value adjustments
as a result of the application of the acquisition method.
(b) In 1Q23, we have sold our stake in Banco
Inter.
(c) Consists of the fair value adjustment
related to associates call option, earn-out and earn-out interests
related to acquisitions, reversal of litigation at Linx and
divestment of assets.
(d) Calculated as Net income attributable to
owners of the parent (Net Income reduced by Net Income attributable
to Non-Controlling interest) divided by basic number of shares. For
more details on calculation, please refer to Note 14 of our
Consolidated Financial Statements, March 31, 2024.
(e) Calculated as Adjusted Net income
attributable to owners of the parent (Adjusted Net Income reduced
by Adjusted Net Income attributable to Non-Controlling interest)
divided by diluted number of shares.
Adjusted Net Income was R$450.4 million in 1Q24
with a margin of 14.6%, compared with R$236.6 million reported in
1Q23 and a margin of 8.7%. This increase in Adjusted Net Income
margin is mainly explained by (i) a 21.8% year over year growth in
total revenue and income net of adjusted financial expenses,
combined with (ii) lower adjusted other expenses, net (down 45.5%
year over year), (iii) lower adjusted administrative expenses (down
11.6% year over year), and (iv) being partially offset by higher
selling expenses (up 35.8% year over year).
Adjusted Net Income was 20.1% lower quarter over
quarter, with Adjusted Net Margin decreasing 2.8 percentage points
from 17.4% in 4Q23 to 14.6% in 1Q24, mainly due to (i) lower
seasonal revenues and due to the change in our internal accounting
methodology related to membership fees, combined with (ii) higher
selling expenses as percentage of revenues and (iii) a more
normalized effective tax rate. These effects were partially
compensated by items (ii) and (iii) from the aforementioned
explanation from the year over year comparison.
Adjusted diluted EPS was R$1.42 per share in
1Q24 compared with R$0.75 per share in 1Q23 and R$1.76 per share in
4Q23, on a comparable basis.
EBITDA
EBITDA was R$1,460.6 million in the quarter,
13.7% higher than R$1,284.5 million in the prior year period,
mostly as a result of the increase in Total Revenue and Income,
excluding Other Financial Income. These effects were partially
offset by higher selling expenses and cost of services, excluding
D&A.
Table 7: Adjusted EBITDA Reconciliation
|
EBITDA Bridge (R$mn) |
1Q24 |
% Rev. |
4Q23 |
% Rev. |
Δ q/q % |
1Q23 |
% Rev. |
Δ y/y% |
|
Profit (Loss) before income taxes |
484.0 |
15.7% |
738.2 |
22.7% |
(34.4%) |
306.8 |
11.3% |
57.8% |
|
(+) Financial expenses, net |
896.5 |
29.1% |
943.1 |
29.0% |
(4.9%) |
923.6 |
34.1% |
(2.9%) |
|
(-) Other financial income |
(137.3) |
(4.4%) |
(150.7) |
(4.6%) |
(8.9%) |
(158.4) |
(5.8%) |
(13.4%) |
|
(+) Depreciation and amortization |
217.3 |
7.0% |
221.0 |
6.8% |
(1.7%) |
212.5 |
7.8% |
2.3% |
|
EBITDA |
1,460.6 |
47.3% |
1,751.6 |
53.9% |
(16.6%) |
1,284.5 |
47.4% |
13.7% |
|
(+) Mark-to-market related to the investment in Banco Inter |
0.0 |
n.a. |
0.0 |
n.a. |
n.a. |
(30.6) |
(1.1%) |
(100.0%) |
|
(+) Other Expenses (a) |
51.3 |
1.7% |
(133.3) |
(4.1%) |
n.m |
(2.6) |
(0.1%) |
n.m |
|
Adjusted EBITDA |
1,512.0 |
49.0% |
1,618.3 |
49.8% |
(6.6%) |
1,251.4 |
46.1% |
20.8% |
(a) Consists of the fair value
adjustment related to associates call option, earn-out and earn-out
interests related to acquisitions, reversal of litigation at Linx
and divestment of assets.
Adjusted EBITDA was R$1,512.0 million in the
quarter, compared with R$1,251.4 million in 1Q23. This increase is
mostly explained by higher Total Revenue and Income, excluding
Other Financial Income, due to the growth of our operations.
Adjusted EBITDA Margin was 49.0% in the quarter, compared with
46.1% in 1Q23 and 49.8% in 4Q23. The sequential decrease in
Adjusted EBITDA margin is mainly a result of lower seasonal
revenues and due to the change in our internal accounting
methodology related to membership fees, combined with higher
selling expenses as percentage of revenues. These effects were
partially compensated by lower other operating expenses and
administrative expenses as percentage of revenues.
SEGMENT REPORTING
Below, we provide our main financial metrics
broken down into our two reportable segments and non-allocated
activities.
Table 8: Financial metrics by
segment
|
Segment Reporting (R$mn Adjusted) |
1Q24 |
% Rev |
4Q23 |
% Rev |
Δ q/q % |
1Q23 |
% Rev |
Δ y/y % |
|
Total Revenue and Income |
3,084.9 |
100.0% |
3,248.7 |
100.0% |
(5.0%) |
2,711.7 |
100.0% |
13.8% |
|
Financial Services |
2,710.3 |
100.0% |
2,870.6 |
100.0% |
(5.6%) |
2,335.9 |
100.0% |
16.0% |
|
Software |
369.1 |
100.0% |
363.2 |
100.0% |
1.6% |
358.2 |
100.0% |
3.0% |
|
Non-Allocated |
5.5 |
100.0% |
14.9 |
100.0% |
(63.1%) |
17.5 |
100.0% |
(68.6%) |
|
Adjusted EBITDA |
1,512.0 |
49.0% |
1,618.3 |
49.8% |
(6.6%) |
1,251.4 |
46.1% |
20.8% |
|
Financial Services |
1,444.0 |
53.3% |
1,557.2 |
54.2% |
(7.3%) |
1,209.0 |
51.8% |
19.4% |
|
Software |
65.8 |
17.8% |
58.7 |
16.2% |
12.1% |
39.9 |
11.1% |
64.9% |
|
Non-Allocated |
2.2 |
40.3% |
2.4 |
16.3% |
(8.8%) |
2.5 |
14.2% |
(11.2%) |
|
Adjusted EBT |
567.6 |
18.4% |
638.2 |
19.6% |
(11.1%) |
324.0 |
11.9% |
75.2% |
|
Financial Services |
528.6 |
19.5% |
603.8 |
21.0% |
(12.5%) |
306.0 |
13.1% |
72.7% |
|
Software |
37.2 |
10.1% |
33.0 |
9.1% |
12.6% |
16.9 |
4.7% |
120.4% |
|
Non-Allocated |
1.9 |
34.2% |
1.4 |
9.5% |
32.4% |
1.2 |
6.7% |
60.1% |
| |
|
|
|
|
|
|
|
|
-
Financial Services segment Adjusted EBT was R$528.6 million
in 1Q24, up 72.7% year over year and 12.5% lower quarter
over quarter. Adjusted EBT margin reached 19.5%, a decrease of 1.5
percentage points from 21.0% in 4Q23. This sequential decrease was
driven by lower revenues from the segment as a result of
seasonality and due to the change in the internal accounting
methodology in our membership fee revenues, combined with higher
selling expenses and cost of services as percentage of revenues.
These effects were partially compensated by lower other operating
and administrative expenses as percentage of revenues.
- Software
Segment Adjusted EBITDA was R$65.8 million in 1Q24, with a
margin of 17.8%. This compares with R$39.9 million and a margin of
11.1% in 1Q23. The year over year increase in Adjusted EBITDA was
mainly due to higher software revenues, combined with lower
administrative expenses, mainly due to lower expenses with third
party services.
Adjusted Net Cash
Our Adjusted Net Cash, a non-IFRS metric,
consists of the items detailed in Table 9 below:
Table 9: Adjusted Net Cash
|
Adjusted Net Cash (R$mn) |
1Q24 |
4Q23 |
1Q23 |
|
Cash and cash equivalents |
4,988.3 |
2,176.4 |
1,855.6 |
|
Short-term investments |
463.7 |
3,481.5 |
3,257.3 |
|
Accounts receivable from card issuers(a) |
26,552.2 |
23,977.1 |
18,940.0 |
|
Financial assets from banking solution |
6,620.3 |
6,397.9 |
4,026.5 |
|
Derivative financial instrument (b) |
0.2 |
0.6 |
13.1 |
|
Adjusted Cash |
38,624.6 |
36,033.5 |
28,092.5 |
|
|
|
|
|
|
Obligations with banking customers(c) |
(5,985.0) |
(6,119.5) |
(3,902.2) |
|
Accounts payable to clients |
(19,044.4) |
(19,199.1) |
(15,568.6) |
|
Loans and financing (d) |
(5,203.2) |
(4,840.3) |
(3,756.5) |
|
Obligations to FIDC quota holders |
(2,901.8) |
(505.2) |
(634.7) |
|
Derivative financial instrument (b) |
(350.5) |
(316.2) |
(241.8) |
|
Adjusted Debt |
(33,484.9) |
(30,980.3) |
(24,103.6) |
|
|
|
|
|
|
Adjusted Net Cash |
5,139.8 |
5,053.3 |
3,988.8 |
(a) Accounts Receivable from Card Issuers are
accounted for at their fair value in our balance sheet.
(b) Refers to economic hedge.
(c) Includes deposits from banking
customers and values transferred by our banking clients to third
parties but not yet settled.
(d) Loans and financing were reduced by the effects
of leases liabilities recognized under IFRS 16.
As of March 31, 2024, the Company’s Adjusted Net
Cash was R$5,139.8 million, R$86.5 million higher compared with
4Q23, mostly explained by:
-
+R$756.8 million of cash net income, which is our net income plus
non-cash income and expenses as reported in our statement of cash
flows;
-
-R$306.6 million of capex;
-
-R$193.1 million from loans operations portfolio which is net of
provision expenses and interest;
-
-R$116.1 million from labor and social securities liabilities;
-
-R$22.1 million from M&A;
-
-R$14.0 million from prepaid expenses;
-
-R$18.5 million from other effects.
Cash Flow
Table 10: Cash Flow
|
Cash Flow (R$mn) |
1Q24 |
1Q23 |
|
Net income for the period |
|
373.6 |
225.7 |
|
|
|
|
|
|
Adjustments on Net Income: |
|
|
|
|
Depreciation and amortization |
|
217.3 |
212.5 |
|
Deferred income tax and social contribution |
|
4.6 |
37.6 |
|
Gain (loss) on investment in associates |
|
(0.3) |
1.0 |
|
Accrued interest, monetary and exchange variations, net |
|
4.6 |
(131.6) |
|
Provision for (reversal) contingencies |
|
16.1 |
(2.4) |
|
Share-based payments expense |
|
25.8 |
70.1 |
|
Allowance for expected credit losses |
|
54.2 |
10.9 |
|
Loss on disposal of property, equipment and intangible assets |
|
6.1 |
14.9 |
|
Effect of applying hyperinflation accounting |
|
1.3 |
1.2 |
|
Loss on sale of subsidiary |
|
53.0 |
0.0 |
|
Fair value adjustment in financial instruments at FVPL |
|
(16.8) |
85.8 |
|
Fair value adjustment in derivatives |
|
17.4 |
4.6 |
|
|
|
|
|
|
Working capital adjustments: |
|
|
|
|
Accounts receivable from card issuers |
|
(1,963.0) |
2,616.0 |
|
Receivables from related parties |
|
10.3 |
2.0 |
|
Recoverable taxes |
|
(63.4) |
(50.7) |
|
Prepaid expenses |
|
(14.0) |
26.8 |
|
Trade accounts receivable, banking solutions and other assets |
|
(184.1) |
(18.4) |
|
Loans operations portfolio |
|
(193.1) |
0.0 |
|
Accounts payable to clients |
|
(1,778.7) |
(2,367.4) |
|
Taxes payable |
|
156.1 |
74.1 |
|
Labor and social security liabilities |
|
(116.1) |
(74.9) |
|
Payment of contingencies |
|
(7.4) |
(15.6) |
|
Trade Accounts Payable and Other Liabilities |
|
80.5 |
1.2 |
|
Interest paid |
|
(51.2) |
(133.4) |
|
Interest income received, net of costs |
|
958.2 |
606.8 |
|
Income tax paid |
|
(64.2) |
(28.4) |
|
|
|
|
|
|
Net cash provided by (used in) operating
activity |
|
(2,473.1) |
1,168.4 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
Purchases of property and equipment |
|
(180.6) |
(340.3) |
|
Purchases and development of intangible assets |
|
(126.0) |
(76.1) |
|
Sale of subsidiary, net of cash disposed of |
|
(4.2) |
0.0 |
|
Proceeds from (acquisition of) short-term investments, net |
|
3,029.2 |
253.5 |
|
Proceeds from disposal of long-term investments - equity
securities |
|
0.0 |
218.1 |
|
Proceeds from the disposal of non-current assets |
|
0.0 |
0.2 |
|
Payment for interest in subsidiaries acquired |
|
(17.9) |
(3.8) |
|
|
|
|
|
|
Net cash provided by investing activities |
|
2,700.4 |
51.6 |
|
|
|
|
|
|
Financing activities |
|
|
|
|
Proceeds from borrowings |
|
1,017.9 |
1,050.0 |
|
Payment of borrowings |
|
(790.1) |
(1,580.6) |
|
Payment to FIDC quota holders |
|
(33.3) |
(332.5) |
|
Proceeds from FIDC quota holders |
|
2,406.5 |
0.0 |
|
Payment of principal portion of leases liabilities |
|
(13.6) |
(21.8) |
|
Acquisition of non-controlling interests |
|
0.0 |
(0.9) |
|
Dividends paid to non-controlling interests |
|
(2.7) |
(1.4) |
|
|
|
|
|
|
Net cash provided by (used in) financing
activities |
|
2,584.6 |
(887.3) |
|
|
|
|
|
|
Effect of foreign exchange on cash and cash equivalents |
|
(0.1) |
10.2 |
|
|
|
|
|
|
Change in cash and cash equivalents |
|
2,811.9 |
343.0 |
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
2,176.4 |
1,512.6 |
|
Cash and cash equivalents at end of period |
|
4,988.3 |
1,855.6 |
|
|
|
|
|
Our cash flow in the quarter was explained
by:
Net cash used in operating
activities was R$2,473.1 million in 1Q24, explained by
R$756.8 million of Net Income after non-cash adjustments and
R$3,229.9 million outflow from working capital variation. Working
capital is composed of (i) R$2,783.5 million outflow from changes
related to accounts receivable from card issuers, accounts payable
to clients and interest income received, net of costs; (ii) R$193.1
million outflow from loans operations portfolio; (iii) R$116.1
million outflow from labor and social security liabilities; (iv)
R$115.3 million outflow from interest paid and income tax paid; (v)
R$14.0 million outflow from prepaid expenses and (vi) R$7.9 million
outflow from other working capital changes.
Net cash provided by investing
activities was R$2,700.4 million in 1Q24, explained by (i)
R$3,029.2 million from proceeds of short-term investments, which
was partially offset by; (ii) R$306.6 million capex, of which
R$180.6 million related to property and equipment and R$126.0
million related to purchases and development of intangible assets
and (iii) R$22.1 million from M&A.
Net cash provided by financing
activities was R$2,584.6 million, explained by (i)
R$2,587.4 million net proceeds from borrowings and FIDCs, mostly
related to the securitization facility from the United States
International Development Finance Corporation (DFC), and the
issuance of new CCBs (“Cédula de Crédito Bancário”) and (ii) R$2.7
million cash outflow from capital events related to non-controlling
interests.
Consolidated Balance Sheet
Statement
Table 11: Consolidated Balance Sheet
Statement
|
Balance Sheet (R$mn) |
1Q24 |
4Q23 |
|
Assets |
|
|
|
|
Current assets |
|
39,937.7 |
37,152.6 |
|
Cash and cash equivalents |
|
4,988.3 |
2,176.4 |
|
Short-term investments |
|
463.7 |
3,481.5 |
|
Financial assets from banking solution |
|
6,620.3 |
6,397.9 |
|
Accounts receivable from card issuers |
|
26,470.5 |
23,895.5 |
|
Trade accounts receivable |
|
448.9 |
459.9 |
|
Recoverable taxes |
|
216.1 |
146.3 |
|
Loans operations portfolio |
|
342.4 |
210.0 |
|
Derivative financial instruments |
|
3.3 |
4.2 |
|
Other assets |
|
384.2 |
380.9 |
|
|
|
|
|
|
Non-current assets |
|
11,674.7 |
11,541.0 |
|
Trade accounts receivable |
|
25.5 |
28.5 |
|
Loans operations portfolio |
|
90.3 |
40.8 |
|
Accounts receivable from card issuers |
|
81.7 |
81.6 |
|
Receivables from related parties |
|
2.2 |
2.5 |
|
Deferred tax assets |
|
681.3 |
664.5 |
|
Other assets |
|
171.4 |
137.5 |
|
Long-term investments |
|
46.3 |
45.7 |
|
Investment in associates |
|
86.4 |
83.0 |
|
Property and equipment |
|
1,698.4 |
1,661.9 |
|
Intangible assets |
|
8,791.2 |
8,794.9 |
|
|
|
|
|
|
Total Assets |
|
51,612.4 |
48,693.6 |
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
29,282.3 |
29,142.7 |
|
Deposits from banking customers |
|
5,985.0 |
6,119.5 |
|
Accounts payable to clients |
|
19,009.0 |
19,163.7 |
|
Borrowings and financing |
|
1,663.5 |
1,374.8 |
|
Obligations to FIDC quota holders |
|
567.7 |
505.2 |
|
Labor and social security liabilities |
|
397.0 |
515.7 |
|
Taxes payable |
|
612.0 |
514.3 |
|
Derivative financial instruments |
|
350.5 |
316.2 |
|
Other liabilities |
|
187.3 |
119.5 |
|
|
|
|
|
|
Non-current liabilities |
|
7,325.5 |
4,874.9 |
|
Accounts payable to clients |
|
35.4 |
35.5 |
|
Borrowings and financing |
|
3,720.7 |
3,639.2 |
|
Obligations to FIDC quota holders NC |
|
2,334.1 |
0.0 |
|
Deferred tax liabilities |
|
559.4 |
546.5 |
|
Provision for contingencies |
|
225.8 |
208.9 |
|
Labor and social security liabilities |
|
39.0 |
34.3 |
|
Other liabilities |
|
411.0 |
410.5 |
|
|
|
|
|
|
Total liabilities |
|
36,607.8 |
34,017.6 |
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
14,951.9 |
14,622.3 |
|
Issued capital |
|
0.1 |
0.1 |
|
Capital reserve |
|
14,065.9 |
14,056.5 |
|
Treasury shares |
|
(279.3) |
(282.7) |
|
Other comprehensive income |
|
(376.6) |
(320.4) |
|
Retained earnings |
|
1,541.8 |
1,168.9 |
|
|
|
|
|
|
Non-controlling interests |
|
52.7 |
53.7 |
|
|
|
|
|
|
Total equity |
|
15,004.6 |
14,676.0 |
|
|
|
|
|
|
Total liabilities and equity |
|
51,612.4 |
48,693.6 |
|
|
|
|
|
Other
Information
Conference Call
Stone will discuss its 1Q24 financial results
during a teleconference today, May 13, 2024, at 5:00 PM ET / 6:00
PM BRT.
The conference call can be accessed live over
the Zoom webinar (ID: 819 7276 5380 | Password: 819157). It can
also be accessed over the phone by dialing +1 646 931 3860 or +1
669 444 9171 from the U.S. Callers from Brazil can dial +55 21 3958
7888. Callers from the UK can dial +44 330 088 5830.
The call will also be webcast live and a replay
will be available a few hours after the call concludes. The live
webcast and replay will be available on Stone’s investor relations
website at https://investors.stone.co/.
About Stone Co.
Stone Co. is a leading provider of financial
technology and software solutions that empower merchants to conduct
commerce seamlessly across multiple channels and help them grow
their businesses.
Investor Contact
Investor Relations investors@stone.co
Glossary of Terms
- “Adjusted Net
Cash”: is a non-IFRS financial metric and consists of the following
items: (i) Adjusted Cash: Cash and cash equivalents, Short-term
investments, Accounts receivable from card issuers, Financial
assets from banking solution and Derivative financial instrument;
minus (ii) Adjusted Debt: Obligations with banking customers,
Accounts payable to clients, Loans and financing, Obligations to
FIDC quota holders and Derivative financial instrument.
- “Banking”:
refers to our digital banking solution and includes insurance
products.
- “Credit”: credit
metrics refer to our working capital loan only, not considering
credit cards, which are still not representative.
- “Financial
Services” segment: this segment is comprised of our financial
services solutions serving both MSMBs and Key Accounts. Includes
mainly our payments solutions, digital banking and credit.
- “Key Accounts”:
refers to operations in which Pagar.me acts as a fintech
infrastructure provider for different types of clients, especially
larger ones, such as mature e-commerce and digital platforms,
commonly delivering financial services via APIs. It also includes
clients that are onboarded through our integrated partners program,
regardless of client size.
- “Membership
fees”: refer to the upfront fee paid by merchants for all Ton
offerings and specific ones for Stone when they join our client
base.
- “MSMBs”: the
combination of SMBs (small and medium business) and micro-merchant
clients, from our Stone, Pagar.me and Ton products.
- “MSMB Active
Payments Client Base”: refers to SMBs – small and medium business
(online and offline) and micro-merchants, from our Stone, Pagar.me
and Ton products. Considers clients that have transacted at least
once over the preceding 90 days, except for Ton active clients
which consider clients that have transacted once in the preceding
12 months. As from 3Q22, does not consider clients that use only
TapTon.
- “Non-allocated”:
comprises other smaller businesses which are not allocated in our
Financial Services or Software segments.
- “PIX P2M (Person
to Merchant)”: includes the volume of MSMB PIX P2M (Person to
Merchant), transactions from dynamic POS QR Code and static QR Code
from Stone and Ton merchants, unless otherwise noted.
- “Revenue”:
refers to Total Revenue and Income.
- “Software”
segment: composed of our Strategic Verticals (Retail, Gas Stations,
Food, Drugstores and horizontal software), Enterprise and Other
Verticals. The Software segment includes the following solutions:
POS/ERP, TEF and QR Code gateways, reconciliation, CRM, OMS,
e-commerce platform, engagement tool, ads solution, and marketplace
hub.
- “Take Rate
(MSMB)”: managerial metric that considers the sum of revenues from
financial services solutions offered to MSMBs, excluding Ton’s
membership fee, TAG revenues and other non-allocated revenues,
divided by MSMB TPV.
- “Take Rate (Key
Accounts)”: managerial metric that considers revenues from
financial services solutions offered to Key Account clients,
excluding non-allocated revenues, divided by Key Accounts TPV.
- “Total Active
Payment Clients”: refers to MSMBs and Key Accounts. Considers
clients that have transacted at least once over the preceding 90
days, except for Ton product active clients which consider clients
that have transacted once in the preceding 12 months. As from 3Q22,
does not consider clients that use only TapTon.
- “TPV”: Total
Payment Volume. Up to the fourth quarter of 2020, refers to
processed TPV. From the first quarter of 2021 onwards, reported TPV
figures consider all volumes settled by StoneCo.
Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are made as of the date they were first
issued and were based on current expectations, estimates, forecasts
and projections as well as the beliefs and assumptions of
management. These statements identify prospective information and
may include words such as “believe”, “may”, “will”, “aim”,
“estimate”, “continue”, “anticipate”, “intend”, “expect”,
“forecast”, “plan”, “predict”, “project”, “potential”,
“aspiration”, “objectives”, “should”, “purpose”, “belief”, and
similar, or variations of, or the negative of such words and
expressions, although not all forward-looking statements contain
these identifying words.Forward-looking statements are subject to a
number of risks and uncertainties, many of which involve factors or
circumstances that are beyond Stone’s control.Stone’s actual
results could differ materially from those stated or implied in
forward-looking statements due to a number of factors, including
but not limited to: more intense competition than expected, lower
addition of new clients, regulatory measures, more investments in
our business than expected, and our inability to execute
successfully upon our strategic initiatives, among other
factors.
About Non-IFRS Financial
Measures
To supplement the financial measures presented
in this press release and related conference call, presentation, or
webcast in accordance with IFRS, Stone also presents non-IFRS
measures of financial performance, including: Adjusted Net Income,
Adjusted EPS (diluted), Adjusted Net Margin, Adjusted Net Cash /
(Debt), Adjusted Profit (Loss) Before Income Taxes, Adjusted
Pre-Tax Margin, EBITDA and Adjusted EBITDA.A “non-IFRS financial
measure” refers to a numerical measure of Stone’s historical or
future financial performance or financial position that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with IFRS in Stone’s financial statements.
Stone provides certain non-IFRS measures as additional information
relating to its operating results as a complement to results
provided in accordance with IFRS. The non-IFRS financial
information presented herein should be considered in conjunction
with, and not as a substitute for or superior to, the financial
information presented in accordance with IFRS. There are
significant limitations associated with the use of non-IFRS
financial measures. Further, these measures may differ from the
non-IFRS information, even where similarly titled, used by other
companies and therefore should not be used to compare Stone’s
performance to that of other companies.Stone has presented Adjusted
Net Income to eliminate the effect of items from Net Income that it
does not consider indicative of its continuing business performance
within the period presented. Stone defines Adjusted Net Income as
Net Income (Loss) for the Period, adjusted for (1) amortization of
fair value adjustment on acquisitions, (2) mark-to-market of equity
investments, and (3) unusual income and expenses. Adjusted EPS
(diluted) is calculated as Adjusted Net income attributable to
owners of the parent (Adjusted Net Income reduced by Net Income
attributable to Non-Controlling interest) divided by diluted number
of shares. Stone has presented Adjusted Profit Before Income Taxes
and Adjusted EBITDA to eliminate the effect of items that it does
not consider indicative of its continuing business performance
within the period presented. Stone adjusts these metrics for the
same items as Adjusted Net Income, as applicable.Stone has
presented Adjusted Net Cash metric in order to adjust its Net Cash
/ (Debt) by the balances of Accounts Receivable from Card Issuers
and Accounts Payable to Clients, since these lines vary according
to the Company’s funding source together with the lines of (i) Cash
and Cash Equivalents, (ii) Short-term Investments, (iii) Debt
balances and (iv) Derivative Financial Instruments related to
economic hedges of short term investments in assets, due to the
nature of Stone’s business and its prepayment operations. In
addition, it also adjusts by the balances of Financial Assets from
Banking Solutions and Deposits from Banking Customers.
1 Includes the volume of MSMB PIX P2M (Person to Merchant),
transactions from dynamic POS QR Code and static QR Code from Stone
and Ton merchants, unless otherwise noted.2 MSMB TPV Overlap in
Software installed base within the priority verticals - Gas
Station, Retail, Drugstores, Food and horizontal software.3 Refers
to MSMBs and Key Accounts. Considers clients that have transacted
at least once over the preceding 90 days, except for Ton product
active clients which consider clients that have transacted once in
the preceding 12 months. As from 3Q22, does not consider clients
that use only TapTon.4 MSMB is composed of TON, Stone and Pagar.me
products. Does not include clients that use only TapTon.5 Except
for Total Accounts Balance, banking metrics do not include clients
of Pagar.me and those Ton clients who do not have the full banking
solution "Super Conta Ton”.6 ARPAC means Average Revenue Per Active
Client. Banking ARPAC considers banking revenues, such as card
interchange fees, floating, insurance and transactional fees, as
well as PIX P2M revenues.7 Credit metrics refer to our working
capital loan only, not considering credit cards, which are still
not representative.8 Credit clients consider merchants who have an
active working capital loan contract with Stone on March 31st,
2024.9 The working capital portfolio is gross of provisions for
losses, but net of amortizations.10 NPL (Non-Performing Loans) is
the total outstanding of the contract whenever the clients default
on an installment. More information on the total overdue by aging
considering only the individual installments can be found in Note
5.4.1 of the Financial Statements.11 In 2Q23, credit revenues were
recognized net of provision for expected credit losses in Financial
Income. From 3Q23 onwards, provision for expected losses is
allocated in Cost of services.12 Revenues from TAG were adjusted to
exclude the effect from revenues generated within the group. This
does not have any impact on reported total revenue and income for
the company.
A PDF accompanying this announcement is available
at
http://ml.globenewswire.com/Resource/Download/1eb028f8-8487-4734-a705-e770ac879e40
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