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 November 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): ☐
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:
November 12, 2024
EXHIBIT INDEX
Exhibit 99.1
StoneCo Reports Third Quarter 2024
Results
George Town, Grand
Cayman, November 12, 2024 – StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) (“Stone” or the “Company”) today reports
its financial results for its third quarter ended September 30, 2024.
| Adjusted EBT |
MSMB TPV (including PIX QR Code) |
| R$733 million |
R$114.0 billion |
| +34.6% year over year |
+19.9% year over year |
| |
|
| Adjusted Net income |
Adjusted Basic EPS |
| R$587 million |
R$1.97 |
| +34.9% year over year |
+42.6% year over year |
Business
Overview
In 3Q24, we continued
to advance in our strategic goals, already delivering on some annual guidance metrics and remaining well-positioned to achieve our long-term
targets.
Profitability in
Financial Services remained the highlight, with MSMB take rate reaching a record 2.58%, given the increase in credit portfolio and banking
revenues, combined with a stable competitive environment in payments. Our core segment volumes continued to show stronger growth in PIX
QR Code, with some impact on debit card volumes – resulting in 16% and 23% annual growth YTD for MSMB Card TPV and MSMB TPV,
respectively.
Our banking solutions
continued to gain traction with clients, not only in the transactional features that have been launched over the last quarters but
also in the recently released savings products, our time deposits offering, which reached at the end of the quarter R$ 121 million with
our client base.
Specifically for
credit, we are very pleased to have already delivered the guidance for the year, reaching a portfolio of R$923 million. In addition to
the volume, the quality of the portfolio continues to be a highlight, with vintage indicators corroborating our credit models. We
have also delivered on the roadmap of products, launching credit cards and revolving credit facilities. Though other products will be
developed in the future, among the three already available – working capital, credit cards and revolving credit, we understand most
of our clients' requirements are addressed. Going forward, we will focus on improving the offerings, mainly credit card, in which we identified
possibilities to increase attractiveness.
Regarding our software
business, we have made progress in the main goal to cross-sell financial services to our software clients. In 3Q24, our indicator that
shows Stone’s CTPV volume with software clients, the CTPV overlap has reached R$ 5.8 billion, growing twice the overall MSMB CTPV
volume on a sequential basis. In the software segment, we continue to gain efficiency, with adjusted EBITDA margins further expanding
to reach more than 18% in 3Q24. Since defining our strategy towards software, we have learned and challenged different approaches.
As we’ve consistently
communicated, we are fully executing our strategy focused on cross-selling financial services to our software clients in priority verticals.
Our approach also emphasizes efficiency and cash generation, and we firmly believe this strategy not only creates substantial value for
our clients but also drives long-term success for us. We remain steadfastly committed to this strategy, and I’m pleased to report that we are on track with its execution. Our efforts
are resulting in the growth of bundled software and financial services solutions that address critical client pain points within key strategic
verticals. While we have made significant strides with our financial services specialist distribution channel, we acknowledge the opportunity
for further engagement with the Linx salesforce.
Finally, gaining
efficiency remains core. Our administrative expenses decreased by almost 7% year over year in the YTD, on track to beat our 2024 guidance.
In the quarter, lower selling expenses led the way to a 150bps increase in our adjusted pre-tax margin, reaching 21.8%.
As a result of another
positive quarter, with 35% year over year Adjusted Net Income growth, and the execution of R$742.5 million in buyback of our stock in
the quarter, our adjusted basic EPS reached R$1.97, up 43% from R$1.38 in 3Q23. We remain committed to our business plan and are confident
in our execution to deliver the targets presented during our Investor Day.
Operating and
Financial Highlights for 3Q24
MAIN CONSOLIDATED ADJUSTED FINANCIAL
METRICS
Table 1: Main Consolidated Financial Metrics
Main
Consolidated Financial Metrics (R$mn) |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
9M24 |
9M23 |
y/y
% |
| Total Revenue and Income |
3,357.2 |
3,205.9 |
4.7% |
3,139.9 |
6.9% |
9,648.0 |
8,806.3 |
9.6% |
| Adjusted EBT |
733.2 |
652.2 |
12.4% |
544.8 |
34.6% |
1,953.0 |
1,315.8 |
48.4% |
| Adjusted EBT margin (%) |
21.8% |
20.3% |
1.5 p.p. |
17.3% |
4.5 p.p. |
20.2% |
14.9% |
5.3 p.p. |
| Adjusted Net Income |
586.8 |
497.1 |
18.0% |
435.1 |
34.9% |
1,534.4 |
993.7 |
54.4% |
| Adjusted Net income margin (%) |
17.5% |
15.5% |
2.0 p.p. |
13.9% |
3.6 p.p. |
15.9% |
11.3% |
4.6 p.p. |
| Adjusted basic EPS (R$) |
1.97 |
1.61 |
22.2% |
1.38 |
42.6% |
5.02 |
3.16 |
58.7% |
| Adjusted Net Cash |
4,923.8 |
5,256.9 |
(6.3%) |
4,857.5 |
1.4% |
4,923.8 |
4,857.5 |
1.4% |
| · | Total
Revenue and Income reached R$3,357.2 million in 3Q24, an year over year increase of 6.9%.
This expansion was primarily driven by an increase of 8.3% in financial services segment
revenues, mostly due to growth in our active client base and higher client monetization,
reflected in record take rates for both MSMBs and Key Accounts. |
| · | Adjusted
EBT was R$733.2 million in the quarter, up 34.6% year over year,
with an adjusted EBT margin of 21.8%, a 4.5 percentage points increase over 3Q23. Adjusted
EBT increased 12.4% quarter over quarter, with an increase in margin of 1.5
percentage point. The sequential margin increase is mainly attributed
to consolidated revenue growth, combined with a decrease in selling expenses and cost of
services as a percentage of revenues, being partially offset by higher financial and administrative
expenses. |
| · | Adjusted
Net Income reached R$586.8 million in 3Q24, a 34.9% growth compared with 3Q23, with
an adjusted net margin of 17.5% versus 13.9% in 3Q23 and 15.5% in 2Q24. The sequential margin
increase was primarily driven by the same factors that impacted Adjusted EBT margin, combined
with a lower effective tax rate. Adjusted Basic EPS increased
42.6% year over year and 22.2% sequentially to R$ 1.97 in the quarter. |
| · | Adjusted
Net Cash position was R$4,923.8 million in the quarter, a 1.4% increase year over year and
6.3% decrease quarter over quarter. The Company consumed
R$333.1 million of adjusted net cash sequentially mostly due to the repurchase of R$742.5
million in STNE shares in the quarter. |
OUTLOOK
We continue on track
to deliver our 2024 guidance. As of 3Q24, we have already delivered on our credit portfolio guidance with some margin, and continue optimistic
on the delivery of our Client Deposits, MSMB take rate and Efficiency guidances for the year, despite yield curve headwinds that directly
affect our business.
MAIN OPERATING METRICS
Table 2: Payments
Payments
Operating Metrics |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
| |
|
|
|
|
|
| Total TPV (R$bn) |
128.9 |
126.1 |
2.3% |
111.8 |
15.3% |
| CTPV (Card TPV) |
112.3 |
110.9 |
1.3% |
103.9 |
8.0% |
| PIX QR Code |
16.7 |
15.2 |
9.6% |
7.9 |
112.0% |
| |
|
|
|
|
|
| MSMB TPV |
114.0 |
109.3 |
4.3% |
95.1 |
19.9% |
| CTPV (Card TPV) |
100.7 |
97.8 |
2.9% |
89.6 |
12.4% |
| PIX QR Code |
13.3 |
11.5 |
16.5% |
5.5 |
141.9% |
| |
|
|
|
|
|
| Key Accounts TPV |
14.9 |
16.8 |
(11.3%) |
16.7 |
(10.8%) |
| CTPV (Card TPV) |
11.6 |
13.1 |
(11.3%) |
14.4 |
(19.3%) |
| PIX QR Code |
3.3 |
3.8 |
(11.3%) |
2.3 |
41.7% |
| |
|
|
|
|
|
| Active Client Base (‘000) |
4,012.1 |
3,904.1 |
2.8% |
3,330.9 |
20.4% |
| MSMB |
3,968.3 |
3,860.2 |
2.8% |
3,279.1 |
21.0% |
| Key Accounts |
51.7 |
51.8 |
(0.2%) |
59.3 |
(12.8%) |
| |
|
|
|
|
|
| Net Adds (‘000) |
107.9 |
183.6 |
(41.2%) |
316.2 |
(65.9%) |
| MSMB |
108.1 |
184.0 |
(41.2%) |
317.2 |
(65.9%) |
| Key Accounts |
(0.1) |
(0.1) |
3.9% |
(3.3) |
(96.7%) |
| |
|
|
|
|
|
| · | Total
TPV reached R$128.9 billion in the quarter, up 15.3% year over year. This
increase can be mainly attributed to (i) the sustained growth in the MSMB segment’s
CTPV of 12.4% in the same period and (ii) the continuous increase in the consolidated PIX
QR Code volumes which grew 112.0% compared with 3Q23. |
| · | Total
Payments Active Client base surpassed 4.0 million with
a net addition of 107,900 active clients in the quarter. Going forward, we will no longer
disclose the net adds metric, although it can still be calculated, as our focus will shift
more towards healthy unit economics and driving engagement. In this context, new adds, which
are purely associated with growth, become less relevant. |
MSMB
(Micro and SMB clients)
| o | MSMB
Active Payment Clients were 4.0 million in 3Q24, growing 21.0% on a year over year basis.
The quarterly net addition was 108,100, lower than the
184,000 from last quarter, mainly explained by the phase-out of the effects from the sponsorship
of a reality television show, which positively impacted net adds in the first half of the
year. |
| o | MSMB
TPV was R$114.0 billion in the quarter, up 19.9% year over year and 4.3% sequentially,
with PIX continuing to outgrow card TPV and gain some share from debit transactions. As a
result, MSMB TPV growth composition was as follows: |
| o | MSMB
CTPV was R$100.7 billion, a 12.4% year over year increase and 2.9% quarter over quarter.
The annual growth was mostly driven by the ongoing increase
in our active payments client base within the segment. |
| o | MSMB
PIX QR Code reached R$13.3 billion in 3Q24, 2.4x higher
year over year and a 16.5% growth sequentially as the adoption of such means of payment continues
to increase. |
Table 3: Banking
Banking Operating
Metrics |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
| |
|
|
|
|
|
| MSMB Active Client Base (‘000) |
2,842.1 |
2,704.2 |
5.1% |
1,931.6 |
47.1% |
| |
|
|
|
|
|
| Retail Deposits (R$mn) |
6,816.8 |
6,472.0 |
5.3% |
4,450.8 |
53.2% |
| Demand Deposits |
6,695.8 |
6,471.6 |
3.5% |
4,450.8 |
50.4% |
| Time Deposits (on-platform) |
121.0 |
0.3 |
35378.0% |
0.0 |
n.a. |
| |
|
|
|
|
|
| MSMB ARPAC (R$) |
28.6 |
25.7 |
11.3% |
25.5 |
12.1% |
| o | Banking
active client base reached 2.8 million active clients in the quarter, 47.1% higher year over
year or 5.1% quarter over quarter. The sequential growth
was largely attributed to the expansion of our active payments client base. |
| o | Total
retail deposits achieved R$6.8 billion in 3Q24, increasing
53.2% year over year and 5.3% quarter over quarter. The sequential evolution is mainly explained
by the growth in our banking active client base, and higher client engagement.
As of 3Q24, the composition of our retail
deposits is as follows: |
| o | Demand
deposits were R$6.7 billion, growing 50.4% year over year and 3.5% quarter over quarter. |
| o | Time
deposits (on-platform) were R$121.0 million, up from R$0.3 million in the previous quarter,
as we started engaging our clients with our savings solutions. |
| o | Banking
ARPAC was R$28.6 per client per month, representing a 12.1% increase year over year and an
11.3% quarter over quarter. The quarter over quarter growth
can be mainly explained by (i) higher PIX QR Code revenues, (ii) higher average CDI, which
increases floating revenue and (ii) sequential growth in client deposits mainly as a result
of higher client engagement. The ARPAC calculation currently includes PIX QR Code revenues,
which we categorize under payments revenue. As a result, we believe this metric does not
accurately represent our banking solution. Therefore, going forward, we will no longer disclose
this KPI. |
Table 4: Credit
Credit
Metrics |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
| |
|
|
|
|
|
| Consolidated credit metrics |
|
|
|
|
|
| Portfolio (R$mn) |
923.1 |
711.8 |
29.7% |
113.5 |
713.4% |
| Merchants1 |
864.0 |
681.6 |
26.8% |
113.5 |
661.4% |
| Credit Card |
59.1 |
30.2 |
95.5% |
n.a. |
n.a. |
| Provisions for losses (R$mn) |
(0.3) |
(18.1) |
(98.5%) |
(19.0) |
(98.5%) |
| Merchants1 |
2.8 |
(16.9) |
n.m. |
(19.0) |
n.m. |
| Credit Card |
(3.1) |
(1.2) |
154.0% |
n.a. |
n.m. |
| |
|
|
|
|
|
| Working capital loans metrics |
|
|
|
|
|
| Active contracts |
28,960 |
24,264 |
19.4% |
3,747 |
672.9% |
| |
|
|
|
|
|
| Portfolio (R$mn) |
859.3 |
681.6 |
26.1% |
113.5 |
657.2% |
| Disbursements (R$mn) |
352.0 |
275.6 |
27.7% |
101.7 |
245.9% |
| |
|
|
|
|
|
| Provision for losses (R$mn) |
3.2 |
(16.9) |
n.m. |
(19.0) |
n.m. |
| Accumulated provision for losses (R$mn) |
(120.0) |
(123.1) |
(2.6%) |
(22.7) |
428.4% |
| Provisions ratio |
(14.0%) |
(18.1%) |
4.1 p.p. |
(20.0%) |
6.0 p.p. |
| |
|
|
|
|
|
| NPL 15-90 days |
1.93% |
2.85% |
(0.92 p.p.) |
0.45% |
1.49 p.p |
| NPL> 90 days |
3.70% |
2.60% |
1.10 p.p. |
0.20% |
3.51 p.p |
| |
|
|
|
|
|
| o | In
3Q24 we reached a total portfolio of R$923.1 million,
which includes both our merchants solutions (working capital and revolving credit) and credit
cards, already surpassing our guidance for the metric. |
Working Capital
loans:
| o | In
3Q24 we disbursed R$352.0 million in working capital
loans to our clients, reaching 28,960 contracts and a portfolio
of R$859.3 million at month-end. |
| o | Provisions
for expected working capital losses was + R$3.2 million in the quarter compared
with - R$16.9 million in 2Q24. This reversion is a result of the continued convergence of
the provision levels to the expected loss levels from our models, which have been confirmed
in the different vintages. As a result, the ratio of accumulated loan loss provision expenses
over the working capital portfolio was 14.0% in the quarter compared with 18.1% in 2Q24.
|
| o | Working
capital NPL 15-90 days was 1.93% and NPL over 90 days was 3.70% in
3Q24 compared with 2.85% and 2.60% in the previous period, respectively. The decrease observed
in the NPL 15-90 days of the quarter was due to better vintages when compared to 2Q24. Regarding
NPLs over 90 days, the increase is due to the expected maturation process of the portfolio. |
Table 5: Monetization
Take
Rate |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
| |
|
|
|
|
|
| MSMB |
2.58% |
2.54% |
0.03 p.p. |
2.49% |
0.09 p.p |
| Key Accounts |
1.47% |
1.33% |
0.14 p.p. |
1.13% |
0.35 p.p |
| |
|
|
|
|
|
1 Consists of the sum of (i) working capital and (ii)
revolving credit.
| o | MSMB
Financial Services Take Rate was 2.58% up 3 basis points from 2.54% in 2Q24. This
sequential increase can be mainly attributed to a higher contribution from new revenue streams
such as PIX QR Code, banking and credit, and continued healthy pricing, particularly in payments.
For more information about reconciling our reported take rates with our financial services
revenue, please refer to the “Build-up Take Rate” tab in our Results Spreadsheet. |
Table 6: Software
Software Operating
Metrics (R$bn) |
3Q24 |
2Q24 |
▲
q/q % |
3Q23 |
▲
y/y % |
| |
|
|
|
|
|
| CTPV (Card TPV) Overlap |
5.8 |
5.5 |
6.0% |
4.9 |
18.4% |
| |
|
|
|
|
|
| o | CTPV
Overlap is measured by the MSMB CTPV overlap between financial
services and the priority verticals, being a key metric to measure our cross sell performance.
In 3Q24, CTPV Overlap was R$5.8 billion, representing an 18.4% increase year over year and
6.0% on a quarter over quarter basis, 2.0x higher than MSMB CPTV growth of 2.9% over the
same period. This growth can be mainly attributed to the Gas Station vertical, which is the
one we are mostly focused on at the moment. |
Income Statement
Table 7: Statement of Profit or Loss (IFRS, as
Reported)
Statement of
Profit or Loss (R$mn) |
3Q24 |
%
Rev. |
2Q24 |
%
Rev. |
▲
q/q % |
3Q23 |
%
Rev. |
y/y
% |
| Net revenue from transaction activities and other services |
828.9 |
24.7% |
807.5 |
25.2% |
2.6% |
868.5 |
27.7% |
(4.6%) |
| Net revenue from subscription services and equipment rental |
465.6 |
13.9% |
453.3 |
14.1% |
2.7% |
463.4 |
14.8% |
0.5% |
| Financial income |
1,918.8 |
57.2% |
1,826.7 |
57.0% |
5.0% |
1,620.9 |
51.6% |
18.4% |
| Other financial income |
143.9 |
4.3% |
118.4 |
3.7% |
21.5% |
187.0 |
6.0% |
(23.0%) |
| Total revenue and income |
3,357.2 |
100.0% |
3,205.9 |
100.0% |
4.7% |
3,139.9 |
100.0% |
6.9% |
| Cost of services |
(859.0) |
(25.6%) |
(841.4) |
(26.2%) |
2.1% |
(773.5) |
(24.6%) |
11.1% |
| Provision expenses for expected
credit losses2 |
(0.3) |
(0.0%) |
(18.1) |
(0.6%) |
(98.5%) |
(22.7) |
(0.7%) |
(98.8%) |
| Administrative expenses |
(314.7) |
(9.4%) |
(255.5) |
(8.0%) |
23.2% |
(278.3) |
(8.9%) |
13.1% |
| Selling expenses |
(501.8) |
(14.9%) |
(524.9) |
(16.4%) |
(4.4%) |
(442.4) |
(14.1%) |
13.4% |
| Financial expenses, net |
(910.5) |
(27.1%) |
(851.1) |
(26.5%) |
7.0% |
(1,058.9) |
(33.7%) |
(14.0%) |
| Other income (expenses), net |
(101.6) |
(3.0%) |
(80.9) |
(2.5%) |
25.6% |
(82.6) |
(2.6%) |
23.0% |
| Loss on investment in associates |
0.4 |
0.0% |
(0.4) |
(0.0%) |
n.m. |
(0.6) |
(0.0%) |
n.m. |
| Profit (loss) before income taxes |
669.9 |
20.0% |
651.7 |
20.3% |
2.8% |
503.5 |
16.0% |
33.0% |
| Income tax and social contribution |
(127.0) |
(3.8%) |
(153.4) |
(4.8%) |
(17.2%) |
(92.2) |
(2.9%) |
37.8% |
| Net income (loss) for the
period |
542.9 |
16.2% |
498.3 |
15.5% |
8.9% |
411.3 |
13.1% |
32.0% |
Total Revenue and Income
Net Revenue from
Transaction Activities and Other Services
Net Revenue from Transaction Activities
and Other Services was R$828.9 million in 3Q24, a 4.6% decrease year over year.
This decrease is primarily due
to lower membership fee revenues, following a change in our internal accounting method. Since 1Q24, these revenues have been deferred
over the expected client lifetime rather than recognized upfront upon signing the service agreement. This effect was partially offset
by the growth of our transactional acquiring revenues, with total TPV growing 15.3% year over year.
2 From 3Q23 onwards, provision for expected credit losses
is allocated in Cost of services.
In 3Q24, considering our new internal
accounting methodology, membership fees contributed R$38.1 million to our transaction activities and other services revenue, compared
with R$81.0 million in 3Q23.
Quarter over quarter, Net Revenue
from Transaction Activities and Other Services increased 2.6% mainly due to (i) higher membership fee revenues, which increased from R$25.2
million in 2Q24 to R$38.1 million in 3Q24, combined with (ii) growth in PIX revenues, with PIX TPV increasing 9.6% quarter over quarter.
Net Revenue from
Subscription Services and Equipment Rental
Net Revenue from Subscription Services
and Equipment Rental increased 0.5% year over year to R$465.6 million in 3Q24.
This can be primarily attributed
to higher subscription revenues from software and equipment rental in the period, partially offset by the divestment of Creditinfo (4Q23)
and PinPag (1Q24), which were in the non-allocated business segment.
Quarter over quarter, this revenue
line increased 2.7%, mainly attributed to (i) an increase in subscription software revenues, combined with (ii) higher equipment rental
revenues, partly due to the exemptions for merchants affected by the floods in Rio Grande do Sul in the 2Q24.
Financial Income
Financial Income was R$1,918.8
million in the quarter, an 18.4% year over year growth, explained by (i) higher prepayment revenues,
due to an increase in prepaid volumes, (ii) higher credit revenues, which grew from R$14.2 million in 3Q23 to R$61.5 million in 3Q24 and
(iii) higher floating revenues from our banking solution.
Quarter over quarter, financial
income increased 5.0% as a result of the same items aforementioned for the year over year comparison. Credit revenues increased from R$50.6
million in 2Q24 to R$61.5 million in 3Q24.
Other Financial
Income
Other Financial Income was R$143.9
million in 3Q24 compared with R$187.0 million in 3Q23 primarily due to a (i) lower average
cash balance, combined with (ii) a reduction in the Brazilian base rate in the period from an average of 13.27% in 3Q23 to 10.43% in 3Q24.
Compared with the previous quarter,
Other Financial Income increased 21.5%, mainly due to (i) a higher number of working days in the period, combined with (ii) monetary adjustments
on recoverable taxes, related to the previous year tax assessment. These revisions are recurring and performed annually.
Costs
and Expenses
Cost of Services
Cost of Services were R$859.0
million in 3Q24, 11.1% higher year over year. This increase can be primarily attributed to (i) higher
investments in technology and (ii) higher logistics and D&A costs as we continue to expand our client base. These effects were partially
offset by lower provisions for loan losses from our credit products, which contributed with R$0.3 million to our Cost of Services in the
quarter, compared with R$22.7 million in 3Q23. This decrease is mainly due to the beginnining of the process of converging our working
capital provision levels to our expected loss levels, with working capital provisions now representing 14.0% of the respective portfolio,
down from 20.0% in the same period last year. As a percentage of revenues, Cost of Services was 25.6%, up from 24.6%
in 3Q23.
Compared with 2Q24, Cost of Services
were 2.1% higher, mainly as a result of the same items above mentioned for the year over year explanation.
Provisions for loan losses from
our credit products contributed with R$0.3 million to our Cost of Services in the quarter, compared with R$18.1 million in 2Q24. As mentioned,
working capital provisions now represent 14.0% of the respective portfolio, down from 18.1% in the previous quarter. As a percentage of
revenues, Cost of Services decreased from 26.2% in 2Q24 to 25.6% in 3Q24.
Administrative
Expenses
Administrative Expenses were R$314.7
million, representing a 13.1% increase year over year, mainly explained by (i) higher amortization
of fair value adjustments from acquisitions, as a result of a non-recurring effect of approximately R$23 million of expenses from previous
quarters, combined with (ii) higher personnel expenses. These effects were partially offset by the divestment of Creditinfo (4Q23) and
PinPag (1Q24), which were booked in the non-allocated business segment. As a percentage of revenues, Administrative Expenses increased
from 8.9% in 3Q23 to 9.4% in 3Q24.
Compared with the previous quarter,
Administrative Expenses were 23.2% higher. The increase can be mainly explained by items (i) and (ii) from the aforementioned explanation
for the year over year comparison. As a percentage of revenues, Administrative Expenses increased from 8.0% in 2Q24 to 9.4% in 3Q24.
Selling Expenses
Selling
Expenses were R$501.8 million in 3Q24, up 13.4% year over year, primarily explained by higher investments in (i) our salespeople, (ii)
partner commissions, and (iii) marketing. As a percentage of revenues, Selling Expenses were 14.9% compared with 14.1% in 3Q24.
Compared with 2Q24, Selling Expenses
decreased 4.4%. This reduction was mainly a result of lower marketing expenses in the period. As a percentage of revenues, Selling Expenses
decreased from 16.4% in 2Q24 to 14.9% in 3Q24.
Financial Expenses,
Net
Financial Expenses, Net were R$910.5
million in 3Q24, a 14.0% decrease compared with the prior-year period. This decrease can be mainly attributed to (i) a reduction
in average CDI, from 13.27% in 3Q23 to 10.43% in 3Q24, combined with (ii) our decision to reinvest our cash generation towards the funding
of our operation and (iii) a reduction in our average funding spreads. These effects were partially offset by higher funding needs for
our prepayment and credit operations in the period. As a percentage of Total Revenue and Income, Financial Expenses, Net decreased from
33.7% in 2Q23 to 27.1% in 2Q24.
Compared with 2Q24, Financial
Expenses, Net were 7.0% higher. This increase was mainly driven by (i) a higher number of working days in the quarter, (ii) higher funding
needs for our prepayment and credit operations, and (iii) lower own cash deployed in our operations due to the execution of buybacks of
our stock in the market. These effects were partially offset by lower average funding spreads. As a percentage of revenues, Financial
Expenses, net increased from 26.5% in the previous quarter to 27.1% in 3Q24.
Other Income (Expenses),
Net
Other Expenses, Net were R$101.6
million in the quarter, representing an increase of R$19.0 million on a year over year basis. This increase is mainly explained by (i)
higher contingencies expenses in the period, combined with (ii) higher share-based compensation expenses.
Compared with the previous quarter,
Other Expenses, net were R$20.7 million higher. This increase is mostly attributed to items (i) and (ii) aforementioned for the year over
year explanation, in addition to higher earnout expenses.
Income Tax and
Social Contribution
The
Company recognized R$127.0 million of income tax and social contribution expenses during 3Q24 over
a profit before income taxes of R$669.9 million, implying an effective tax rate of 19.0%
in the quarter. The difference to the statutory rate is mainly explained by gains from subsidiaries abroad subject to different statutory
tax rates and benefits from “Lei do Bem” (Law 11,196/05) incentives.
Net
Income (Loss) and EPS
In
3Q24 Net Income was R$542.9 million, representing a 32.0% year over year growth compared with R$411.3 million in 3Q23. This was mostly
a result of higher Total Revenue and Income combined with lower Financial Expenses. These effects were partially offset by higher Cost
of Services, Selling and Administrative Expenses, combined with a slightly higher effective tax rate.
IFRS
basic EPS was R$1.82 per share in 3Q24, compared with R$1.30 in 3Q23.
Adjusted Profit
and Loss Statement and EPS
Table 8: Conciliation between IFRS and Adjusted Profit
and Loss Statement and EPS
Income Statement
of Profit or Loss (R$mn) |
3Q24
IFRS |
Adjustments |
Rationale |
3Q24
Adjusted |
2Q24
Adjusted |
▲
q/q % |
3Q23
Adjusted |
▲
y/y % |
| Total revenue and income |
3,357.2 |
|
— |
3,357.2 |
3,205.9 |
4.7% |
3,139.9 |
6.9% |
| Cost of services |
(859.0) |
|
— |
(859.0) |
(841.4) |
2.1% |
(773.5) |
11.1% |
| Administrative expenses |
(314.7) |
58.5 |
PPA (Purchase Price Allocation) amortization of
acquired software companies.
From the R$58.5mn, R$23.0mn are from nonrecurring
expenses from previous quarters.
|
(256.3) |
(235.2) |
9.0% |
(243.5) |
5.2% |
| Selling expenses |
(501.8) |
|
— |
(501.8) |
(524.9) |
(4.4%) |
(442.4) |
13.4% |
| Financial expenses, net |
(910.5) |
4.6 |
R$1.7mn from earn-out interests on business combinations;
R$2.9mn of financial expenses from fair value adjustments
on acquisitions.
|
(905.9) |
(849.5) |
6.6% |
(1,044.5) |
(13.3%) |
| Other income (expenses), net |
(101.6) |
0.2 |
R$0.5mn from fair value adjustments and fair value
of call options;
-R$0.3mn from divestments of assets and fair value
adjustments on acquisitions.
|
(101.4) |
(102.3) |
(0.8%) |
(90.6) |
12.0% |
| Loss on investment in associates |
0.4 |
|
|
0.4 |
(0.4) |
n.m. |
(0.6) |
n.m. |
| Adj. Profit before income taxes |
669.9 |
63.3 |
— |
733.2 |
652.2 |
12.4% |
544.8 |
34.6% |
| Income tax and social contribution |
(127.0) |
(19.3) |
Taxes related to the adjustments items. |
(146.4) |
(155.0) |
(5.6%) |
(109.7) |
33.5% |
| Adjusted Net Income |
542.9 |
44.0 |
— |
586.8 |
497.1 |
18.0% |
435.1 |
34.9% |
| Basic Number of shares (R$mn) |
297.0 |
— |
— |
297.0 |
307.8 |
(3.5%) |
313.8 |
(5.3%) |
| Basic EPS (R$) |
1.82 |
— |
— |
1.97 |
1.61 |
22.2% |
1.38 |
42.6% |
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
increased 5.2% year over year, mainly due to higher personnel expenses, partially offset by the divestment
of Credit Info (4Q23) and PinPag (1Q24), which were in the non-allocated business segment. The quarter over quarter increase of 9.0% can
be explained by expenses with our personnel.
Adjusted other expenses, net
increased 12.0% year over year. This increase can be mainly explained by higher share-based compensation
expenses. Quarter over quarter, other expenses, net increased 0.8%, remaining relatively flat on a sequential basis.
Adjusted Net Income was
R$586.8 million in the quarter with a margin of 17.5%, compared
with R$435.1 million in 3Q23 and a margin of 13.9%. The year over
year increase in Adjusted Net Income of 34.9% can be primarily attributed to (i) a 17.0% year over year growth in Total Revenue and Income
net of adjusted Financial Expenses, combined with controlled costs and expenses, with Cost of Services up 11.1% year over year, Selling
Expenses up 13.4% year over year, and adjusted Administrative Expenses up 5.2% year over year, while effective tax rate remained flattish
on a year over year basis.
Compared with the previous quarter,
Adjusted Net Income was 18.0% higher, with Adjusted Net Margin increasing 2.0 percentage points
from 15.5% in 2Q24 to 17.5% in 3Q24. This margin growth was mostly a result of consolidated revenue
growth, combined with lower Selling Expenses as a percentage of revenues. These effects were partially offset by higher Financial and
Administrative expenses as a percentage of revenues.
Adjusted basic EPS was R$1.97
in 3Q24 compared with R$1.38 in 3Q23 and R$1.61 in 2Q24, on a comparable basis.
SEGMENT
REPORTING
Below,
we provide our main financial metrics broken down into our two reportable segments and non-allocated activities.
Table
9: Financial metrics by segment
Segment Reporting
(R$mn Adjusted) |
3Q24 |
%
Rev. |
2Q24 |
%
Rev. |
▲ q/q
% |
3Q23 |
%
Rev. |
y/y % |
| Total Revenue and Income |
3,357.2 |
100.0% |
3,205.9 |
100.0% |
4.7% |
3,139.9 |
100.0% |
6.9% |
| Financial Services |
2,963.9 |
100.0% |
2,822.2 |
100.0% |
5.0% |
2,737.7 |
100.0% |
8.3% |
| Software |
393.4 |
100.0% |
383.7 |
100.0% |
2.5% |
387.9 |
100.0% |
1.4% |
| Non-Allocated |
0.0 |
n.m. |
0.0 |
n.m. |
n.a. |
14.3 |
100.0% |
(100.0%) |
| Adjusted EBITDA |
1,700.5 |
50.7% |
1,587.2 |
49.5% |
7.1% |
1,590.4 |
50.7% |
6.9% |
| Financial Services |
1,628.2 |
54.9% |
1,523.5 |
54.0% |
6.9% |
1,506.1 |
55.0% |
8.1% |
| Software |
71.8 |
18.3% |
63.9 |
16.7% |
12.3% |
79.4 |
20.5% |
(9.6%) |
| Non-Allocated |
0.5 |
n.m. |
(0.2) |
n.m. |
n.m. |
4.9 |
34.0% |
(89.0%) |
| Adjusted EBT |
733.2 |
21.8% |
652.2 |
20.3% |
12.4% |
544.8 |
17.3% |
34.6% |
| Financial Services |
676.0 |
22.8% |
607.8 |
21.5% |
11.2% |
485.5 |
17.7% |
39.2% |
| Software |
56.7 |
14.4% |
44.6 |
11.6% |
27.2% |
55.5 |
14.3% |
2.3% |
| Non-Allocated |
0.5 |
n.m. |
(0.2) |
n.m. |
n.m. |
3.8 |
26.8% |
(86.1%) |
| · | Financial
Services segment Adjusted EBT was R$676.0 million in the quarter, representing a 39.2% year over year
increase and 11.2% on a quarter over quarter basis. Adjusted EBT margin was 22.8%, an increase of 5.1 percentage points from 17.7% in
3Q23. This year over year margin increase was mainly driven by higher revenues net of Financial Expenses from the segment. These effects
were partially offset by higher Cost of Services and Selling Expenses as a percentage of revenues. |
| · | Software
Segment Adjusted EBITDA was R$71.8 million in 3Q24, with a margin of 18.3%, compared with R$79.4 million
and a margin of 20.5% in the prior-year period. Sequentially, Software Adjusted EBITDA margin increased 1.6 percentage points as a result
of higher revenues, combined with efficiency gains in all our costs and expenses lines. |
Adjusted
Net Cash
Our Adjusted Net
Cash, a non-IFRS metric, consists of the items detailed in Table 10 below:
Table 10: Adjusted Net Cash
Adjusted Net
Cash (R$mn) |
3Q24 |
2Q24 |
3Q23 |
| Cash and cash equivalents |
4,013.3 |
4,743.2 |
3,693.1 |
| Short-term investments |
373.7 |
106.6 |
2,042.5 |
| Accounts receivable from card issuers(a) |
26,310.2 |
27,556.2 |
21,105.4 |
| Financial assets from banking solution |
7,558.5 |
6,967.8 |
4,576.7 |
| Derivative financial instrument(b) |
50.7 |
69.1 |
0.4 |
| Adjusted Cash |
38,306.3 |
39,443.0 |
31,418.0 |
| Retail deposits(c) |
(6,816.8) |
(6,472.0) |
(4,450.8) |
| Accounts payable to clients |
(16,603.4) |
(18,512.9) |
(17,252.3) |
| Institutional deposits and marketable debt securities |
(6,704.4) |
(5,301.9) |
(2,881.2) |
| Other debt instruments |
(3,172.7) |
(3,787.2) |
(1,634.0) |
| Derivative financial instrument(b) |
(85.3) |
(112.2) |
(342.1) |
| Adjusted Debt |
(33,382.5) |
(34,186.1) |
(26,560.5) |
| Adjusted Net Cash |
4,923.8 |
5,256.9 |
4,857.5 |
| (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 time deposits
from retail clients. For more information on retail deposits, please refer to note 5.6.1 in our Financial Statements. |
As of September 30, 2024, the Company’s
Adjusted Net Cash was R$4,923.8 million, R$333.1 million lower
compared with 2Q24, explained by:
| i. | R$1,188.3 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$88.7 million from labor and social security liabilities; |
| iii. | -R$742.5 million from buyback of shares; |
| iv. | -R$394.0 million from recoverable taxes and taxes payable; |
| v. | -R$298.0 million of capex; |
| vi. | -R$149.2 million from loans operations portfolio which is
net of provision expenses and interest; |
| vii. | -R$26.4 million from other effects. |
Cash Flow
Table 11: Cash Flow
Cash Flow (R$mn) |
3Q24 |
3Q23 |
| Operating activities |
|
|
| Net income (loss) for the period |
542.9 |
411.3 |
| |
|
|
| Adjustments to reconcile net income for the period to net cash flows: |
|
|
| Depreciation and amortization |
263.8 |
223.0 |
| Deferred income tax expenses |
14.4 |
(43.0) |
| Gain (loss) on investment in associates |
(0.4) |
0.6 |
| Accrued interest, monetary and exchange variations, net |
26.6 |
(31.3) |
| Provision (reversal) for contingencies |
24.5 |
21.4 |
| Share-based payment expense |
68.2 |
61.1 |
| Allowance for expected credit losses |
16.5 |
67.2 |
| Loss on disposal of property, equipment and intangible assets |
(8.5) |
8.2 |
| Effect of applying hyperinflation accounting |
1.0 |
1.3 |
| Fair value adjustments in financial instruments at FVPL |
(4.3) |
2.6 |
| Fair value adjustment to derivatives |
245.4 |
4.5 |
| Remeasurement of previously held interest in subsidiary acquired |
(1.8) |
(0.0) |
| |
|
|
| Working capital adjustments: |
|
|
| Accounts receivable from card issuers |
1,853.4 |
(1,713.7) |
| Receivables from related parties |
15.8 |
0.4 |
| Recoverable taxes |
(19.2) |
216.5 |
| Prepaid expenses |
19.4 |
20.1 |
| Trade Accounts Receivable, banking solution and other assets |
(14.1) |
55.4 |
| Loans operations portfolio |
(149.2) |
0.0 |
| Accounts payable to clients |
(3,682.1) |
153.3 |
| Taxes payable |
(374.8) |
(26.1) |
| Labor and social security liabilities |
88.7 |
74.2 |
| Payment of contingencies |
(15.3) |
(10.9) |
| Trade accounts payable and other liabilities |
64.0 |
(32.7) |
| Interest paid |
(266.3) |
(43.1) |
| Interest income received, net of costs |
1,203.8 |
679.4 |
| Income tax paid |
(44.0) |
(36.0) |
| Net cash used in (provided by) operating activity |
(131.5) |
63.4 |
| |
|
|
| Investing activities |
|
|
| Purchases of property and equipment |
(170.1) |
(55.3) |
| Purchases and development of intangible assets |
(127.9) |
(121.1) |
| Proceeds from (acquisition of short-term investments, net |
(258.6) |
1,494.0 |
| Proceeds from the disposal of non-current assets |
0.2 |
0.3 |
| Payment for interest in subsidiaries acquired |
(10.3) |
(1.5) |
| Net cash used in investing activities |
(566.8) |
1,316.4 |
| |
|
|
| Financing activities |
|
|
| Proceeds from institutional deposits and marketable debt securities |
3,178.7 |
371.4 |
| Payment of institutional deposits and marketable debt securities |
(1,834.0) |
(5.0) |
| Payment to other debt instruments |
(999.5) |
(1,313.0) |
| Proceeds from other debt instruments |
480.0 |
1,090.0 |
| Payment of principal portion of leases liabilities |
(25.0) |
(30.4) |
| Payment of derivative financial instruments |
(112.8) |
0.0 |
| Repurchase of own shares |
(742.5) |
0.0 |
| Acquisition of non-controlling interests |
0.0 |
(0.2) |
| Dividends paid to non-controlling interests |
(3.1) |
(1.8) |
| Net cash provided by financing activities |
(58.3) |
111.0 |
| |
|
|
| Effect of foreign exchange on cash and cash equivalents |
26.6 |
(0.5) |
| |
|
|
| Change in cash and cash equivalents |
(730.0) |
1,490.4 |
| |
|
|
| Cash and cash equivalents at beginning of period |
4,743.2 |
2,202.7 |
| Cash and cash equivalents at end of period |
4,013.3 |
3,693.1 |
Our cash flow in the quarter was
explained by:
Net cash used in operating
activities was R$131.5 million in 3Q24, explained by R$1,188.3 million of Net Income after
non-cash adjustments and R$1,319.8 million outflow from working capital variation. Working capital is composed of (i) R$624.8 million
outflow from changes related to accounts receivable from card issuers, accounts payable to clients and interest income received, net of
costs; (ii) R$ 394.0 million outflow from recoverable taxes and taxes payable; (iii) R$310.3 million outflow from interest paid and income
tax paid; (iv) R$149.2 million outflow from our credit product; (v) R$88.7 million inflow from labor and social security liabilities;
(vi) R$64.0 million inflow from trade accounts payable and other liabilities; and (vii) R$5.8 million inflow from other working capital
changes.
Net cash used in investing
activities was R$566.8 million in 3Q24, explained by (i) R$298.0 million in capex, of which
R$170.1 million related to property and equipment and R$127.9 million related to purchases and development of intangible assets; (ii)
R$258.6 million acquisition of short-term investments, and (iii) R$10.3 million from M&A. These effects were partially offset by (iv)
R$0.2 million from the disposal of non-current assets.
Net cash used in financing
activities was R$58.3 million, explained by (i) R$742.5 million in repurchase of our own shares;
(ii) R$519.5 million from payment of other debt instruments, net of proceeds; (iii) R$112.8 million from payment of derivative financial
instruments; (iv) R$25.0 million of payment of leases liabilities and (v) R$3.1 million cash outflow from capital events related to non-controlling
interests. These effects were partially offset by R$1,344.7 million from proceeds from institutional
deposits and marketable debt securities, net of payments. For more information on institutional deposits and marketable debt securities
please refer to note 5.6.2 from our Financial Statements.
Consolidated Balance
Sheet Statement
Table 12: Consolidated Balance Sheet Statement
Balance
Sheet (R$mn) |
3Q24 |
4Q23 |
| Assets |
|
|
| Current assets |
39,990.1 |
37,152.6 |
| Cash and cash equivalents |
4,013.3 |
2,176.4 |
| Short-term investments |
373.7 |
3,481.5 |
| Financial assets from banking solution |
7,558.5 |
6,397.9 |
| Accounts receivable from card issuers |
26,207.9 |
23,895.5 |
| Trade accounts receivable |
381.4 |
459.9 |
| Loans operations portfolio |
653.7 |
210.0 |
| Recoverable taxes |
376.0 |
146.3 |
| Derivative financial instruments |
51.8 |
4.2 |
| Other assets |
373.9 |
380.9 |
| |
|
|
| Non-current assets |
11,935.5 |
11,541.0 |
| Long-term investments |
32.6 |
45.7 |
| Accounts receivable from card issuers |
102.3 |
81.6 |
| Trade accounts receivable |
26.0 |
28.5 |
| Loans operations portfolio |
144.1 |
40.8 |
| Derivative financial instruments |
0.3 |
0.0 |
| Receivables from related parties |
0.6 |
2.5 |
| Deferred tax assets |
692.8 |
664.5 |
| Other assets |
145.0 |
137.5 |
| Investment in associates |
79.1 |
83.0 |
| Property and equipment |
1,760.4 |
1,661.9 |
| Intangible assets |
8,952.1 |
8,794.9 |
| |
|
|
| Total Assets |
51,925.7 |
48,693.6 |
| |
|
|
| Liabilities and equity |
|
|
| Current liabilities |
28,072.7 |
28,831.1 |
| Retail deposits |
6,816.8 |
6,119.5 |
| Accounts payable to clients |
16,550.1 |
19,163.7 |
| Trade accounts payable |
564.3 |
513.9 |
| Institutional deposits and marketable debt securities |
1,763.5 |
475.3 |
| Other debt instruments |
1,053.5 |
1,404.7 |
| Labor and social security liabilities |
603.2 |
515.7 |
| Taxes payable |
431.5 |
514.3 |
| Derivative financial instruments |
1.5 |
4.6 |
| Other liabilities |
288.4 |
119.5 |
| |
|
|
| Non-current liabilities |
8,524.0 |
5,186.5 |
| Accounts payable to clients |
53.3 |
35.5 |
| Institutional deposits and marketable debt securities |
4,940.9 |
3,495.8 |
| Other debt instruments |
2,277.7 |
143.5 |
| Derivative financial instruments |
83.8 |
311.6 |
| Deferred tax liabilities |
600.4 |
546.5 |
| Provision for contingencies |
247.6 |
208.9 |
| Labor and social security liabilities |
33.3 |
34.3 |
| Other liabilities |
287.0 |
410.5 |
| |
|
|
| Total liabilities |
36,596.7 |
34,017.6 |
| |
|
|
| Equity attributable to owners of the parent |
15,275.1 |
14,622.3 |
| Issued capital |
0.1 |
0.1 |
| Capital reserve |
14,107.2 |
14,056.5 |
| Treasury shares |
(1,205.7) |
(282.7) |
| Other comprehensive income (loss) |
(204.2) |
(320.4) |
| Retained earnings (accumulated losses) |
2,577.6 |
1,168.9 |
| |
|
|
| Non-controlling interests |
53.9 |
53.7 |
| |
|
|
| Total equity |
15,329.0 |
14,676.0 |
| |
|
|
| Total liabilities and equity |
51,925.7 |
48,693.6 |
Other
Information
Conference Call
Stone will discuss
its 3Q24 financial results during a teleconference today, November 12, 2024, at 5:00 PM ET / 7:00 PM BRT.
The conference
call can be accessed live over the Zoom webinar (ID: 851 7712 3588 | 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
Glossary of Terms
| · | "ARPAC”
(Average Revenue Per Active Client)”: Banking ARPAC considers banking
revenues, such as floating from demand deposits, card interchange fees, insurance and transactional fees, as well as PIX QR Code revenues. |
| · | “Active
Payments Client Base”: refers to MSMBs and Key Accounts. 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. |
| · | “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: Retail deposits, Accounts payable to clients, Institutional
deposits and marketable debt securities, Other debt instruments and Derivative financial instrument. |
| · | “Banking”:
refers to our digital banking solution and includes insurance products. |
| · | “Banking
Active Clients”: clients who have transacted at least R$1 in the
past 30 days. |
| · | "Consolidated
Credit Metrics”: refer to metrics for credit cards and merchants,
the latter including the sum of working capital and revolving credit. |
| · | "Credit
Clients”: consider merchants who have an active working capital
loan contract with Stone at the end of the period. |
| · | "Credit
Revenues”: In 2Q23, credit revenues were recognized net of provision
for expected credit losses in Financial Income. From 3Q23 onwards, credit revenues are recognized gross of provision for expected losses,
which are allocated in Cost of Services. |
| · | “CTPV”:
Means Card Total Payment Volume and refers only to transactions settled
through cards. Does not include PIX QR Code volumes. |
| · | “Financial
Services” segment: this segment is comprised of our financial services
solutions serving both MSMBs and Key Accounts. Includes mainly our payments, digital banking and credit solutions. |
| · | “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. Until December 31, 2023, membership fees revenues were recognized fully at
the time of acquisition. From January 1, 2024 onwards, the Group recognizes revenues from membership fees deferred through the expected
lifetime of the client. |
| · | “MSMB
segment”: refer 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. |
| · | “MSMB
CTPV Overlap”: refers to the MSMB CTPV in Software installed base
within the priority verticals - Gas Station, Retail, Drugstores, Food and horizontal software. |
| · | ”Merchants
solution (credit)”: consists of the sum of (i) working capital and
(ii) revolving credit. |
| · | “Non-allocated”:
comprises other smaller businesses which are not allocated in our Financial
Services or Software segments. From 2Q24 onwards, revenues in the non-allocated business segment are inexistent, since we divested assets
within the segment. |
| · | “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. |
| · | “Off-platform
time deposits”: refers to time deposits raised in third-party platforms
outside of our ecosystem. |
| · | “PIX
QR Code”: includes the volume of PIX QR Code transactions from dynamic
POS QR Code and static QR Code from MSMB and Key Accounts merchants, unless otherwise noted. |
| · | “Provisions
ratio”: calculated as accumulated provisions for expected credit
losses divided by the total portfolio amount in the period. |
| · | “Revenue”:
refers to Total Revenue and Income net of taxes, interchange fees retained
by card issuers and assessment fees paid to payment schemes. |
| · | “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 (Key Accounts)”: managerial metric that considers the sum of
revenues from financial services solutions offered to Key Account clients, excluding non-allocated revenues, divided by Key Accounts CTPV.
|
| · | “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 CTPV. |
| · | “Total
Retail Deposits”: includes time deposits and demand deposits from
banking customers, including MSMB and Key Account clients. |
| · | “TPV”:
Total Payment Volume. Reported TPV figures consider all card volumes settled
by StoneCo, including PIX QR Code transactions from dynamic POS QR Code and static QR Code from MSMB and Key Accounts merchants, unless
otherwise noted. |
| · | “Working
Capital Portfolio”: is gross of provisions for losses, but net of
amortizations. |
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 (basic), Adjusted Net Margin, Adjusted Net Cash / (Debt),
Adjusted Profit (Loss) Before Income Taxes, Adjusted Pre-Tax Margin 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) unusual income and expenses. Adjusted EPS (basic) 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 basic 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 Retail Deposits.
StoneCo (NASDAQ:STNE)
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StoneCo (NASDAQ:STNE)
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