UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN
PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2024
Commission File Number: 001-38714
STONECO LTD.
(Exact name of registrant as specified in its
charter)
4th Floor, Harbour Place
103 South Church Street, P.O. Box 10240
Grand Cayman, KY1-1002, Cayman Islands
+55 (11) 3004-9680
(Address of principal executive office)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
INCORPORATION BY REFERENCE
This report on Form 6-K shall be deemed to be incorporated
by reference into the registration statement on Form S-8 (Registration Number: 333-265382) of StoneCo Ltd. and to be a part thereof from
the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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StoneCo Ltd. |
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By: |
/s/ Mateus Scherer Schwening |
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Name: |
Mateus Scherer Schwening |
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Title: |
Chief Financial Officer and Investor Relations Officer |
Date: May 13, 2024
EXHIBIT INDEX
Exhibit 99.1
StoneCo
Reports First Quarter 2024 Results
Adjusted EBT
reaching R$568 million, up 75% year over year, on MSMB TPV growth including PIX P2M of 24%, resulting in Adjusted Net income of R$450
million, up 90% year over year
George
Town, Grand Cayman, May 13, 2024 – StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) (“Stone” or the “Company”) today
reports its financial results for its first quarter ended March 31, 2024.
Business
Overview
1Q24 represented
continuous business growth, delivering on our strategic priorities. In financial services, Stone performed well in all client offerings.
Starting with payments, we posted strong continued TPV growth (including PIX) with an almost flat sequential growth rate. The quarter highlight was the launch of instant settlement to Ton clients – fulfilling a key request from our
micro merchant clients. In banking, we continued to show progress in onboarding new and existing clients to our bundled banking and payments
solution, and today, approximately 80% of our payments active client base has our bundled offering. And finally, our credit solution
continues to grow according to plan. We maintain our conservative approach but are testing different client profiles to grow while balancing
our credit models. We have set up a specialized desk to offer credit to larger clients, which is just getting underway.
Regarding
the software business, its performance showed progress. Revenue growth was modest, with verticals software (priority verticals + other
verticals) revenues growing two digits purely organic, mitigated by enterprise software - which remained a revenue detractor. Our efficiency
efforts continue to increase profitability in the segment. As discussed in our investor day, the strategic focus continues to be cross-selling
financial solutions to our priority verticals’ clients and evolving on financial services and software bundles. In 2024, we are
focusing on retail and gas station verticals – the latter being a highlight in the quarter.
Operating
and Financial Highlights for 1Q24
MAIN
CONSOLIDATED FINANCIAL METRICS
Table
1: Main Consolidated Financial Metrics
Main Consolidated Financial Metrics (R$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$86.5 million was mainly driven by cash generation from our operations with the main outflows being
from capex and loans. |
OUTLOOK
We
continue to believe that StoneCo is uniquely positioned to drive strong return to shareholders. With that in mind and the results posted
in the 1Q24, we remain committed to the guidance for 2024 and 2027 provided in our Investor Day held in November 2023.
MAIN
OPERATING METRICS
Table
2: Main Operating Metrics
Main
Operating Metrics |
1Q24 |
4Q23 |
Δ
q/q % |
1Q23 |
Δ
y/y % |
TOTAL TPV + PIX P2M1
(R$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$bn) |
8.5 |
7.6 |
12.1% |
3.4 |
147.7% |
Key Accounts TPV |
12.3 |
15.0 |
(17.8%) |
14.6 |
(15.5%) |
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Monthly Average TPV MSMB ('000) |
8.3 |
9.2 |
(10.4%) |
9.5 |
(12.7%) |
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TPV Overlap2 |
5.1 |
5.8 |
(13.5%) |
n.a. |
n.a. |
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Active Payments Client Base ('000)3 |
3,720.6 |
3,522.1 |
5.6% |
2,818.1 |
32.0% |
MSMB4 |
3,676.2 |
3,471.3 |
5.9% |
2,758.1 |
33.3% |
Key Accounts |
51.9 |
58.3 |
(11.0%) |
67.6 |
(23.2%) |
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Net Adds ('000) |
198.5 |
191.2 |
3.8% |
234.0 |
(15.2%) |
MSMB |
204.9 |
192.2 |
6.6% |
231.9 |
(11.7%) |
Key Accounts |
(6.4) |
(1.0) |
566.3% |
2.6 |
n.m |
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Take Rate |
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MSMB |
2.54% |
2.43% |
0.11 p.p. |
2.39% |
0.15 p.p. |
Key Accounts |
1.29% |
1.28% |
0.01 p.p. |
1.15% |
0.14 p.p. |
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Banking5 |
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MSMB Active Banking Client Base ('000) |
2,379.7 |
2,096.5 |
13.5% |
1,253.0 |
89.9% |
Client Deposits (R$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%) |
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Credit7 |
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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. |
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.
MSMB
(Micro and SMB clients)
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | 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. |
| o | Working Capital (Credit) Solutions: |
| o | 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. |
| o | Provision for expected working capital losses totaled R$44.4
million in the quarter, compared with R$39.2 million in 4Q23. The ratio of accumulated loan loss provision
expenses over the |
working
capital portfolio was 20% in the period.
| o | In the quarter, NPL
15-90 days was 2.2% and NPL over 90 days was 1.5%. |
Income
Statement
Table
3: Statement of Profit or Loss (IFRS, as Reported)
Statement of Profit or Loss (R$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) above
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.
mentioned
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:
| i. | +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; |
| ii. | -R$306.6 million of capex; |
| iii. | -R$193.1 million from loans operations portfolio which is
net of provision expenses and interest; |
| iv. | -R$116.1 million from labor and social securities liabilities; |
| v. | -R$22.1 million from M&A; |
| vi. | -R$14.0 million from prepaid expenses; |
| vii. | -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 |
Trade accounts payable |
510.4 |
513.9 |
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.
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