StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) (“Stone” or the “Company”)
today reports its financial results for its third quarter ended
September 30, 2023.
Operating and Financial Highlights for 3Q23
Note about our non-IFRS Adjusted P&L
metrics: as anticipated in our 4Q22 Earnings announcement,
from 1Q23 onwards we no longer adjust the expenses related to
share-based compensation, which may affect the comparability of our
current Adjusted results to our Adjusted numbers prior to 1Q23. To
allow for better understanding of our business performance trends,
the tables in this Earnings Release will make reference to our
Adjusted P&L metrics including share-based compensation
expenses (i.e. not adjusting those expenses out), both in 1Q23 and
in prior periods for comparability purposes.
MAIN CONSOLIDATED FINANCIAL METRICS
Table 1: Main Consolidated Financial
Metrics
Main Consolidated Financial Metrics (R$mn) |
3Q23 |
2Q23 |
3Q22 |
Δ y/y % |
Δ q/q % |
|
9M23 |
9M22 |
y/y % |
Total Revenue and Income |
3,139.9 |
2,954.8 |
2,508.4 |
25.2% |
6.3% |
|
8,806.3 |
6,882.8 |
27.9% |
Adjusted EBITDA |
1,590.4 |
1,498.8 |
1,109.3 |
43.4% |
6.1% |
|
4,340.5 |
2,939.4 |
47.7% |
Adjusted EBITDA margin (%) |
50.7% |
50.7% |
44.2% |
6.4 p.p. |
(0.1 p.p.) |
|
49.3% |
42.7% |
6.6 p.p. |
Adjusted EBT |
544.8 |
447.0 |
166.3 |
227.5% |
21.9% |
|
1,315.8 |
311.0 |
323.1% |
Adjusted EBT margin (%) |
17.3% |
15.1% |
6.6% |
10.7 p.p. |
2.2 p.p. |
|
14.9% |
4.5% |
10.4 p.p. |
Adjusted Net Income |
435.1 |
322.0 |
108.3 |
301.6% |
35.1% |
|
993.7 |
206.7 |
380.7% |
Adjusted Net income margin (%) |
13.9% |
10.9% |
4.3% |
9.5 p.p. |
3.0 p.p. |
|
11.3% |
3.0% |
8.3 p.p. |
Adjusted Net Cash |
4,857.5 |
4,327.2 |
3,104.2 |
56.5% |
12.3% |
|
4,857.5 |
3,104.2 |
56.5% |
- Total
Revenue and Income reached R$3,139.9 million, growing 25.2% year
over year. This was primarily driven by a 29.0% increase
in financial services platform revenues, as a result of an increase
in the active client base and continued improvements in our
commercial policy.
- Adjusted
EBITDA in 3Q23 was R$1,590.4 million, up 43.4% year over year and
6.1% quarter over quarter. Adjusted EBITDA Margin stayed
flat sequentially at 50.7% mainly due to an increase in cost of
services and selling expenses excluding D&A, partially
offsetting the increase in total revenue and income, excluding
other financial income.
- Adjusted
EBT in 3Q23 was R$544.8 million, up 227.5% year over year
and 21.9% quarter over quarter, with adjusted EBT margin increasing
2.2 percentage points sequentially to 17.3%. This higher margin was
primarily driven by consolidated revenue growth and lower
administrative and financial expenses. These effects were partially
offset by higher cost of services.
- Adjusted
Net Income in 3Q23 was R$435.1 million, 301.6%
higher year over year, with adjusted net margin of 13.9%.
This compares with R$322.0 million and a margin of 10.9% in 2Q23.
The quarter over quarter margin improvement was driven by the same
factors that impacted Adjusted EBT margin combined with a lower
effective tax rate.
- Adjusted
Net Cash position was R$4,857.5 million in 3Q23, increasing 56.5%
year over year or 12.3% quarter over quarter. The
sequential increase of R$530.3 million was driven by (i) R$726.7
million of cash net income (net income plus non-cash income and
expenses as reported in our statement of cash flows), (ii) plus a
R$20.1 million inflow from prepaid expenses. These effects were
partially offset by (iii) R$176.4 million of capex and (iv) R$32.7
million of trade accounts payables and other liabilities. Other
effects contributed negatively with R$7.4 million.
SEGMENT REPORTING
Below, we provide our main financial metrics
broken down into our two reportable segments and non-allocated
activities.
Table 2: Financial metrics by
segment
Segment Reporting (R$mn Adjusted) |
3Q23 |
2Q23 |
3Q22 |
Δ y/y % |
Δ q/q % |
|
9M23 |
9M22 |
y/y% |
Total Revenue and Income |
3,139.9 |
2,954.8 |
2,508.4 |
25.2% |
6.3% |
|
8,806.3 |
6,882.8 |
27.9% |
Financial Services |
2,737.7 |
2,551.2 |
2,121.5 |
29.0% |
7.3% |
|
7,624.8 |
5,775.3 |
32.0% |
Software |
387.9 |
382.9 |
366.2 |
5.9% |
1.3% |
|
1,129.0 |
1,043.5 |
8.2% |
Non-Allocated |
14.3 |
20.7 |
20.8 |
(31.4%) |
(31.0%) |
|
52.5 |
64.0 |
(18.0%) |
Adjusted EBITDA |
1,590.4 |
1,498.8 |
1,109.3 |
43.4% |
6.1% |
|
4,340.5 |
2,939.4 |
47.7% |
Financial Services |
1,506.1 |
1,427.5 |
1,056.0 |
42.6% |
5.5% |
|
4,142.6 |
2,804.1 |
47.7% |
Software |
79.4 |
66.5 |
53.0 |
49.9% |
19.5% |
|
185.8 |
146.4 |
26.9% |
Non-Allocated |
4.9 |
4.9 |
0.3 |
n.m |
0.1% |
|
12.2 |
(11.1) |
n.m |
Adjusted EBT |
544.8 |
447.0 |
166.3 |
227.5% |
21.9% |
|
1,315.8 |
311.0 |
323.1% |
Financial Services |
485.5 |
398.2 |
135.0 |
259.5% |
21.9% |
|
1,189.6 |
240.6 |
394.5% |
Software |
55.5 |
45.5 |
31.9 |
74.0% |
22.0% |
|
117.8 |
84.1 |
40.1% |
Non-Allocated |
3.8 |
3.4 |
(0.6) |
n.m |
14.0% |
|
8.4 |
(13.6) |
n.m |
FINANCIAL SERVICES SEGMENT PERFORMANCE
HIGHLIGHTS
Table 3: Financial Services Main Operating and Financial
Metrics1234
5
Main Financial Services Metrics |
3Q23 |
2Q23 |
3Q22 |
Δ y/y % |
Δ q/q % |
Financial Metrics (R$mn) |
|
|
|
|
|
Total Revenue and Income |
2,737.7 |
2,551.2 |
2,121.5 |
29.0% |
7.3% |
Adjusted EBITDA |
1,506.1 |
1,427.5 |
1,056.0 |
42.6% |
5.5% |
Adjusted EBT |
485.5 |
398.2 |
135.0 |
259.5% |
21.9% |
Adjusted EBT margin (%) |
17.7% |
15.6% |
6.4% |
11.4 p.p. |
2.1 p.p. |
|
|
|
|
|
|
TPV (R$bn) |
103.9 |
97.4 |
93.3 |
11.3% |
6.7% |
MSMB |
89.6 |
83.3 |
74.7 |
19.9% |
7.5% |
Key Accounts |
14.4 |
14.1 |
18.6 |
(22.8%) |
2.1% |
|
|
|
|
|
|
MSMB Pix QR code1 |
5.5 |
4.3 |
2.0 |
169.7% |
27.4% |
|
|
|
|
|
|
Monthly Average TPV MSMB ('000) |
9.0 |
9.2 |
11.2 |
(19.2%) |
(1.4%) |
|
|
|
|
|
|
Active Payments Client Base
('000)2 |
3,330.9 |
3,014.7 |
2,372.1 |
40.4% |
10.5% |
MSMB2 |
3,279.1 |
2,962.0 |
2,314.4 |
41.7% |
10.7% |
Key Accounts |
59.3 |
62.6 |
64.3 |
(7.8%) |
(5.2%) |
|
|
|
|
|
|
Net Adds ('000)2 |
316.2 |
196.6 |
249.8 |
26.6% |
60.8% |
MSMB2 |
317.2 |
203.9 |
248.0 |
27.9% |
55.5% |
Key Accounts |
(3.3) |
(5.0) |
3.1 |
n.m |
(34.6%) |
|
|
|
|
|
|
Take Rate |
|
|
|
|
|
MSMB |
2.49% |
2.48% |
2.21% |
0.28 p.p. |
0.01 p.p. |
Key Accounts |
1.13% |
1.14% |
0.95% |
0.18 p.p. |
(0.02 p.p.) |
|
|
|
|
|
|
Banking |
|
|
|
|
|
MSMB Active Banking Client Base ('000) |
1,931.6 |
1,672.0 |
561.2 |
244.2% |
15.5% |
Client Deposits (R$mn) |
4,450.8 |
3,918.6 |
2,944.7 |
51.1% |
13.6% |
MSMB Banking ARPAC3 |
25.5 |
25.3 |
43.6 |
(41.6%) |
0.6% |
|
|
|
|
|
|
Credit |
|
|
|
|
|
Credit Clients4 |
3,747.0 |
672.0 |
n.a. |
n.a. |
457.6% |
Portfolio (R$mn)5 |
113.5 |
18.7 |
n.a. |
n.a. |
506.5% |
-
Financial Services segment Revenue reached
R$2,737.7 million in 3Q23, 29.0% higher year over year.
Segment growth was driven by the strong performance in our MSMB
client segment, attributed mainly to (i) consistently strong TPV
growth, increasing 19.9% year over year and more than twice the
industry rate, and (ii) a higher take rate of 2.49% in the quarter,
up 28 basis points year over year.
-
Financial Services segment Adjusted EBT was R$485.5 million
in 3Q23, up 259.5% year over year and 21.9% quarter over
quarter. Adjusted EBT margin reached 17.7%, an improvement of 2.1
percentage points from 15.6% in 2Q23. This sequential increase was
driven by strong revenue growth in the segment, combined with lower
administrative and financial expenses. These effects were partially
offset by an increase in cost of services.
-
Consolidated TPV grew 11.3% year over year to
R$103.9 billion in 3Q23, as a result of 19.9% growth in the MSMB
segment and partially offset by a decrease of 22.8% in Key
Accounts’ TPV.
- Total
Payments Active Client base reached 3.3
million6 representing a total quarterly
net addition of 316,200 active clients.
- MSMB
(Micro and SMB clients)
- MSMB
Active Payment Clients reached
3,279,1007, representing a 41.7%
year over year growth and a net addition of 317,200 in the
quarter. Our investments in marketing performance supported the
increase in gross adds while we continue to experience better
levels of churn. We continued to see positive trends in all tiers
of clients.
- MSMB TPV
was R$89.6 billion, up 19.9% year over year mainly driven
by the growth in our MSMB active payment client base. The MSMB TPV
increased more than twice above the industry rate.
- MSMB TPV
from PIX QR Code was R$5.5 billion in the quarter and
includes transactions from dynamic POS QR Code and static QR Code
from Stone and Ton merchants. Both types of PIX can be monetized.
Including this volume in the MSMB TPV, the total year over year
growth would have been 23.9%. The PIX QR Code MSMB TPV is not
included in the take rate calculation.
- MSMB
Average Monthly TPV per client decreased 19.2% year over
year. This decrease is in line with the previous quarters
and is a result of the growth of our Ton solution, mainly used by
micro-merchants, which have lower average TPV compared to our SMB
merchants, which predominantly use our Stone and Pagar.me
solutions.
- MSMB
Take Rate was up 1bp sequentially
to 2.49%, mainly explained by (i) changes in the
client mix towards smaller clients; (ii) marginal improvements in
our pricing policy; and (iii) increased penetration of new
products, especially banking. These effects were partially offset
by (iv) a change in TPV mix, with slightly more debit volumes. Year
over year, MSMB take rate increased 28 bps mainly explained by
items (i), (ii) and (iii) aforementioned for the quarter over
quarter comparison.
- Banking
solutions8
- Banking
client base increased 244.2% year over year and 15.5% quarter over
quarter, with more than 1.9 million active clients. This
result was driven by (i) a larger number of Ton clients with “Super
Conta Ton”, our full banking solution and (ii) the continued
activation of new banking accounts within our Stone payments client
base.
- Total
deposits were R$4,450.8 million in the quarter, increasing
51.1% year over year and 13.6% quarter over quarter. This year over
year growth is explained by (i) a larger number of Ton clients with
our full banking solution as well as new Stone clients, both
engaging with new features launched during the period; and (ii) a
19.9% increase in MSMB TPV, which increases the amount of deposits
in banking account. In the quarter, total deposits represented 5.0%
of MSMB TPV versus 3.9% in 3Q22.
- Banking
ARPAC (average revenue per active client)
decreased 41.6% year over year and remained flat
quarter over quarter to reach R$25.5 per client per month. Our
ARPAC evolution was positively impacted by (i) sequential growth in
client deposits; and (ii) revenues from the processing of PIX QR
Code transactions. These trends were offset by (iii) the effect of
client mix, as we are growing our banking solution within Ton
clients, which are mostly micro-merchants; and (iv) lower yield
over deposits following the sequential decline in the overnight
rate.
- Credit
Solutions:
- New
Credit Offering - As of September 30, 2023, we disbursed a
total of R$121.9 million of the new credit product to 3,747
clients, with a credit portfolio of R$113.5 million at month-end.
Specifically, in 3Q23, we disbursed R$101.7 million to 3,075
clients.
- Main
highlights - Developments of the credit offering are in
line with our roadmap, and delinquency of disbursed vintages are
in-line or better than our expectations, with NPL 15-90 days of
0.40% and NPL over 90 days of 0.03%. We are gradually accelerating
disbursement amounts, by extending the credit offering to a larger
number of clients, without changing our risk standard, while
closely monitoring market conditions.
- Key
Accounts Clients
- Key
Accounts TPV was R$14.4 billion, 22.8% lower year over
year, in line with our expectations as we continue to deprioritize
and offboard low margin clients. Quarter over quarter Key Accounts
TPV was slightly higher.
- Key
Accounts take rate was 1.13% in 3Q23, slightly decreasing
on a quarter over quarter basis and 18 basis points higher than in
3Q22. The year over year variation is attributed to higher prices
and a positive mix shift due to the roll-off of lower margin
clients. These positive effects were partially offset by lower
prepayment volumes in key account clients.
SOFTWARE PERFORMANCE
HIGHLIGHTS
Table 4: Software Main Operating and Financial
Metrics
Main Software Metrics (R$mn) |
3Q23 |
2Q23 |
3Q22 |
Δ y/y % |
Δ q/q % |
|
9M23 |
9M22 |
y/y % |
Financial Metrics |
|
|
|
|
|
|
|
|
|
Total Revenue and Income |
387.9 |
382.9 |
366.2 |
5.9% |
1.3% |
|
1,129.0 |
1,043.5 |
8.2% |
Adjusted EBITDA |
79.4 |
66.5 |
53.0 |
49.9% |
19.5% |
|
185.8 |
146.4 |
26.9% |
Adjusted EBITDA Margin |
20.5% |
17.4% |
14.5% |
6.0 p.p. |
3.1 p.p. |
|
16.5% |
14.0% |
2.4 p.p. |
Adjusted EBT |
55.5 |
45.5 |
31.9 |
74.0% |
22.0% |
|
117.8 |
84.1 |
40.1% |
Adjusted EBT Margin |
14.3% |
11.9% |
8.7% |
5.6 p.p. |
2.4 p.p. |
|
10.4% |
8.1% |
2.4 p.p. |
- Software
segment Revenue and Income grew 5.9% year over year in 3Q23 to
R$387.9 million. This growth was driven by the continued
organic active store expansion in our Core POS and ERP business,
especially in the SMB segment. The main reasons for the
deceleration in revenue growth in software compared with previous
quarters were: (i) weaker performance of transactional revenues
within our digital business, and (ii) lower average inflation (e.g.
average IGPM of -7.0% in 3Q23, compared with -4.5% in 2Q23 and 9.0%
in 3Q22), which affects annual price adjustments in software.
- Software
Segment Adjusted EBITDA reached R$79.4 million in 3Q23, up
49.9% year over year, with a margin of 20.5%. This
compares with R$53.0 million and a margin of 14.5% in 3Q22, and
R$66.5 million and 17.4% margin for 2Q23. The 3.1 percentage points
margin growth over 2Q23 can be attributed to higher revenue in the
period and lower administrative expenses, especially as a result of
more normalized levels of personnel expenses after a reduction in
headcount executed during 2Q23, aligned with our integration
efforts within StoneCo.
- Software
Segment Adjusted EBT was R$55.5 million in 3Q23, up 74.0%
year over year. Compared with 2Q23, Adjusted EBT increased 22.0%,
with Adjusted EBT Margin increasing from 11.9% to 14.3%. The
increase in Adjusted EBT quarter over quarter is a result of the
combination of higher revenues and lower administrative expenses as
explained above for Adjusted EBITDA.
- Our
Core9 Software business revenue
increased 9.0% year over year, mainly driven by an
increase in the average ticket and number of active stores,
especially in SMB clients.
- Our
Digital10 business revenue
decreased 17.5% year over year mainly due to lower
transactional revenues.
SUBSEQUENT EVENTS
Share repurchase
On September 21st, the Board approved a
repurchase program in the amount of R$ 300 million in outstanding
Class A common shares, considering the current level of our share
price and the value we believe for the business. We inform that we
had already concluded the repurchase of the whole program in
November.
For more details please refer to the 6-K
published on October 3rd, 2023.
Reorganization of management structure
On October 9th, the Company issued a press
release announcing organizational changes in the management
structure to better align the Company around specific go-to-market
strategies per client segment and to accelerate the integration of
its segments.
For more details please refer to the 6-K
published on October 10th, 2023.
Impact and Sustainability
On October 10th, 2023, the Company has published
its first Sustainability report. As we take on greater
responsibility towards society, we decided to refine our
sustainability focus, investing in the enhancement and adoption of
ESG principles and practices.
Click here to access the report.
Income Statement Table
5: Statement of Profit or Loss (IFRS, as Reported)
Statement of Profit or Loss (R$mn) |
3Q23 |
% Rev. |
3Q22 |
% Rev. |
Δ % |
|
9M23 |
% Rev. |
9M22 |
% Rev. |
Δ % |
Net revenue from transaction activities and other services |
868.5 |
27.7% |
677.8 |
27.0% |
28.1% |
|
2,441.7 |
27.7% |
1,839.6 |
26.7% |
32.7% |
Net revenue from subscription services and equipment rental |
463.4 |
14.8% |
426.4 |
17.0% |
8.7% |
|
1,365.9 |
15.5% |
1,296.3 |
18.8% |
5.4% |
Financial income |
1,620.9 |
51.6% |
1,251.6 |
49.9% |
29.5% |
|
4,458.6 |
50.6% |
3,306.4 |
48.0% |
34.8% |
Other financial income |
187.0 |
6.0% |
152.7 |
6.1% |
22.5% |
|
540.2 |
6.1% |
440.5 |
6.4% |
22.6% |
Total revenue and
income |
3,139.9 |
100.0% |
2,508.4 |
100.0% |
25.2% |
|
8,806.3 |
100.0% |
6,882.8 |
100.0% |
27.9% |
Cost of services |
(773.5) |
(24.6%) |
(671.3) |
(26.8%) |
15.2% |
|
(2,180.1) |
(24.8%) |
(1,971.8) |
(28.6%) |
10.6% |
Administrative expenses |
(278.3) |
(8.9%) |
(283.9) |
(11.3%) |
(2.0%) |
|
(880.3) |
(10.0%) |
(794.2) |
(11.5%) |
10.8% |
Selling expenses |
(442.4) |
(14.1%) |
(385.4) |
(15.4%) |
14.8% |
|
(1,244.3) |
(14.1%) |
(1,105.1) |
(16.1%) |
12.6% |
Financial expenses, net |
(1,058.9) |
(33.7%) |
(940.3) |
(37.5%) |
12.6% |
|
(3,056.4) |
(34.7%) |
(2,603.2) |
(37.8%) |
17.4% |
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0% |
111.5 |
4.4% |
(100.0%) |
|
30.6 |
0.3% |
(738.6) |
(10.7%) |
n.m |
Other income (expenses), net |
(82.6) |
(2.6%) |
(91.3) |
(3.6%) |
(9.5%) |
|
(240.9) |
(2.7%) |
(193.5) |
(2.8%) |
24.5% |
Loss on investment in associates |
(0.6) |
(0.0%) |
(1.2) |
(0.0%) |
(52.1%) |
|
(2.4) |
(0.0%) |
(3.2) |
(0.0%) |
(24.7%) |
Profit before income
taxes |
503.5 |
16.0% |
246.5 |
9.8% |
104.3% |
|
1,232.6 |
14.0% |
(526.7) |
(7.7%) |
n.m |
Income tax and social contribution |
(92.2) |
(2.9%) |
(49.4) |
(2.0%) |
86.5% |
|
(288.4) |
(3.3%) |
(78.5) |
(1.1%) |
267.4% |
Net income for the period |
411.3 |
13.1% |
197.1 |
7.9% |
108.7% |
|
944.2 |
10.7% |
(605.2) |
(8.8%) |
n.m |
Table 6: Statement of Profit or Loss
(Adjusted11)From 1Q23
onwards, we stopped adjusting share-based compensation expenses in
our adjusted results. Those changes may affect the comparability of
our adjusted results between different quarters. For that reason,
we have included below our historical numbers on a comparable
basis, not adjusting for share-based compensation expenses,
according to our current adjustment criteria.
Adjusted Statement of Profit or Loss (R$mn) |
3Q23 |
% Rev. |
3Q22 |
% Rev. |
Δ % |
|
9M23 |
% Rev. |
9M22 |
% Rev. |
Δ % |
Net revenue from transaction activities and other services |
868.5 |
27.7% |
677.8 |
27.0% |
28.1% |
|
2,441.7 |
27.7% |
1,839.6 |
26.7% |
32.7% |
Net revenue from subscription services and equipment rental |
463.4 |
14.8% |
426.4 |
17.0% |
8.7% |
|
1,365.9 |
15.5% |
1,296.3 |
18.8% |
5.4% |
Financial income |
1,620.9 |
51.6% |
1,251.6 |
49.9% |
29.5% |
|
4,458.6 |
50.6% |
3,306.4 |
48.0% |
34.8% |
Other financial income |
187.0 |
6.0% |
152.7 |
6.1% |
22.5% |
|
540.2 |
6.1% |
440.5 |
6.4% |
22.6% |
Total revenue and
income |
3,139.9 |
100.0% |
2,508.4 |
100.0% |
25.2% |
|
8,806.3 |
100.0% |
6,882.8 |
100.0% |
27.9% |
Cost of services |
(773.5) |
(24.6%) |
(671.3) |
(26.8%) |
15.2% |
|
(2,180.1) |
(24.8%) |
(1,971.8) |
(28.6%) |
10.6% |
Administrative expenses |
(243.5) |
(7.8%) |
(251.8) |
(10.0%) |
(3.3%) |
|
(775.1) |
(8.8%) |
(698.2) |
(10.1%) |
11.0% |
Selling expenses |
(442.4) |
(14.1%) |
(385.4) |
(15.4%) |
14.8% |
|
(1,244.2) |
(14.1%) |
(1,105.1) |
(16.1%) |
12.6% |
Financial expenses, net |
(1,044.5) |
(33.3%) |
(932.2) |
(37.2%) |
12.0% |
|
(3,013.1) |
(34.2%) |
(2,579.9) |
(37.5%) |
16.8% |
Other income (expenses), net |
(90.6) |
(2.9%) |
(100.2) |
(4.0%) |
(9.6%) |
|
(275.6) |
(3.1%) |
(213.6) |
(3.1%) |
29.0% |
Loss on investment in associates |
(0.6) |
(0.0%) |
(1.2) |
(0.0%) |
(52.1%) |
|
(2.4) |
(0.0%) |
(3.2) |
(0.0%) |
(24.7%) |
Adj. Profit before
income taxes |
544.8 |
17.3% |
166.3 |
6.6% |
227.5% |
|
1,315.8 |
14.9% |
311.0 |
4.5% |
323.1% |
Income tax and social contribution |
(109.7) |
(3.5%) |
(58.0) |
(2.3%) |
89.1% |
|
(322.1) |
(3.7%) |
(104.3) |
(1.5%) |
208.9% |
Adjusted Net Income |
435.1 |
13.9% |
108.3 |
4.3% |
301.6% |
|
993.7 |
11.3% |
206.7 |
3.0% |
380.7% |
Total Revenue and Income
Net Revenue from Transaction Activities
and Other Services
Net Revenue from Transaction Activities and
Other Services was R$868.5 million in 3Q23, a 28.1% year-over-year
growth. This increase was mostly due to (i) 11.3% year over year
consolidated TPV growth; (ii) higher net MDRs, as a result of our
commercial policy adjustment efforts; (iii) revenue streams from
other solutions, mainly PIX; and (iv) higher revenue from
membership fees12, which contributed with R$81.0 million to our
transaction activities and other services revenue in the quarter,
compared with R$63.3 million in 3Q22. Revenues from TAG, our
registry business, contributed R$31.3 million to our transaction
activities and other services revenue in the quarter, compared with
R$46.8 million in 3Q22.
Net Revenue from Subscription Services
and Equipment Rental
Net Revenue from Subscription Services and
Equipment Rental was R$463.4 million in 3Q23, 8.7% higher than 3Q22
primarily due to higher software revenues from our Core POS and ERP
solutions.
Financial Income
Financial Income in 3Q23 was R$1,620.9 million,
an increase of 29.5% year over year, mostly due to (i) higher
prepaid volumes, (ii) adjustments in our commercial policy amid
changes in Brazilian interest rate curve; and (iii) floating
revenue from our banking solution.
Other Financial Income
Other Financial Income was R$187.0 million in
3Q23 compared with R$152.7 million in 3Q22 mainly due to a higher
average cash balance in the period. On a quarter over quarter
basis, Other Financial Income decreased 4.0% explained mostly by
(i) the lower base rate in Brazil in the period and (ii) a lower
average cash balance, as we used more own cash to fund our
prepayment operations.
Costs and Expenses
Cost of Services
Cost of Services were R$773.5 million in 3Q23, a
15.2% increase year over year. This increase was primarily
attributed to (i) provisions for losses; (ii) D&A costs as we
continue to expand our client base; and (iii) investments in
technology and logistics. As a percentage of revenues, Cost of
Services reduced from 26.8% in 3Q22 to 24.6 % in 3Q23.
Compared with 2Q23, Cost of Services increased
by 12.9%, primarily due to items (i), and (iii) from the
explanation aforementioned for the year over year comparison. As a
percentage of revenues, Cost of Services increased sequentially
from 23.2% to 24.6%.
Administrative Expenses
Administrative Expenses were R$278.3 million, a
2.0% decrease year over year. This decrease was primarily
attributed to lower expenses in our Software segment, as a result
of (i) more normalized levels of personnel expenses following a
reduction in headcount in 2Q23, aligned with our integration
efforts within StoneCo and (ii) changes in the allocation between
costs and expenses lines from the Software segment. Partially
offsetting these effects were higher provisions for variable
compensation. As a percentage of Total Revenue and Income,
Administrative Expenses fell from 11.3% in 3Q22 to 8.9% in
3Q23.
Administrative Expenses in 3Q23 were 8.4% lower
than in 2Q23, primarily due to item (i) mentioned above for the
year over year comparison, combined with (ii) a higher than usual
provision for variable compensation in 2Q23, as detailed in our
2Q23 Earnings Release. As a percentage of total revenues,
Administrative Expenses decreased from 10.3% in 2Q23 to 8.9% in
3Q23.
Administrative Expenses in 3Q23 include R$34.8 million of expenses
that are adjusted in our Adjusted Income Statement, related to
amortization of fair value adjustments on acquisitions, mostly
related to the Linx and other software companies’ acquisitions (see
table 13 in Appendix for the Adjustments by P&L line).
Adjusting for those effects, Administrative Expenses were R$251.8
million in 3Q22, R$269.1 million in 2Q23 and R$243.5 million in
3Q23. As a percentage of Total Revenue and Income, Administrative
Expenses were 10.0% in 3Q22, 9.1% in 2Q23 and 7.8% in 3Q23. Such
year over year and quarter over quarter variations are explained by
the same reasons mentioned above for the accounting numbers. |
Selling Expenses
Selling Expenses were R$442.4 million in the
quarter, up 14.8% year over year. This increase was primarily due
to higher investments in our distribution channels, including
increased expenses for partner commissions. As a percentage of
revenues, Selling Expenses decreased from 15.4% in 3Q22 to 14.1% in
3Q23.
Compared with 2Q23, Selling Expenses increased
by 7.4%, primarily due to the explanation aforementioned for the
year-over-year comparison, combined with increased investments in
performance marketing. As a percentage of revenues, Selling
Expenses saw a slight sequential increase from 13.9% in 2Q23 to
14.1% in 3Q23.
Financial Expenses, Net
Financial Expenses, Net were R$1,058.9 million
in 3Q23, a 12.6% increase compared with 3Q22, attributed to higher
prepaid volumes.
Compared with the previous quarter, Financial
Expenses, Net were 1.4% lower. This sequential decline was driven
by (i) the reduction from 13.65% to 13.27% in average CDI in the
period, and (ii) our decision to reinvest our cash generation
towards the funding of our operation, slightly offset by quarterly
TPV growth.
Financial Expenses include R$14.4 million of expenses that are
adjusted in our Adjusted Income Statement related to effects from
(i) earn out interests on business combinations and (ii) financial
expenses from fair value adjustments on acquisitions (see table 13
in Appendix for the Adjustments by P&L line). Adjusting for
those effects, Financial Expenses, net were R$932.2 million in
3Q22, R$1,059.7 million in 2Q23 and R$1,044.5 million in 3Q23 or
37.2%, 35.9% and 33.3% as a percentage of Total Revenue and Income,
respectively. Such year over year and quarter over quarter
variations are explained by the same reasons mentioned above for
the accounting numbers. |
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$111.5 million gains in 3Q22.
Mark-to-market on equity securities designated at FVPL is fully
adjusted in our Adjusted Income Statement (see table 13 in Appendix
for the Adjustments by P&L line). |
Other Income (Expenses),
Net
Other Expenses, Net were R$82.6 million in 3Q23,
representing a decrease of R$8.7 million year over year. This
decline was primarily due to (i) benefits from the divestment of
assets and (ii) lower POS write off. These effects were partially
offset by (iii) higher expenses with fair value adjustments related
to call options in acquired entities.
Compared with 2Q23, Other Expenses, net were
45.6% higher. This increase can mostly be attributed to normalized
levels of share-based compensation (SBC) expenses, as in 2Q23 we
incurred in a positive effect of R$19.6 million mainly as a result
of lower SBC tax provisions.
Other Expenses, net include R$8.0 million gains that are excluded
in our Adjusted Income Statement, including call options related to
acquisitions, earn-out interests, loss of control of subsidiary,
reversal of litigation of Linx and divestment of assets (see table
13 in Appendix for the Adjustments by P&L line). Until 4Q22, we
used to also adjust our numbers for share-based compensation
expenses related to the one-time IPO grant and non-recurring long
term incentive plans, which we stopped doing from 1Q23 onwards. For
comparability purposes, based on adjustments criteria adopted from
1Q23 onwards, in which we do not adjust our results for share-based
compensation expenses, and adjusting for the factors above, Other
Expenses, net, were R$100.2 million in 3Q22, R$81.0 million in 2Q23
and R$90.6 million in 3Q23 or 4.0%, 2.7% and 2.9% as a percentage
of Total Revenue and Income, respectively. The year over year
variation is mostly explained by item (ii) from the accounting
explanation above combined with lower provisions related to social
contribution taxes from share-based compensation due to a negative
variation in our share price. |
Income Tax and Social
Contribution
During 3Q23, the Company recognized income tax
and social contribution expenses of R$92.2 million over a profit
before income taxes of R$503.5 million, implying an effective tax
rate of 18.3%. The difference to the statutory rate is mainly
explained by (i) gains from subsidiaries abroad subject to
different statutory tax rates, as well as (ii) the constitution of
R$23.5 million on deferred tax assets related to subsidiaries with
unrecognized retained losses.
The Income Tax and Social Contribution in our Adjusted Income
Statement includes an additional R$17.4 million relating to taxes
from the adjusted items (see table 13 in Appendix for the
Adjustments by P&L line). Adjusting for those effects our
Income Tax and Social Contribution was R$109.7 million with an
effective tax rate in 2Q23 of 20.1%, lower than the statutory rate
mostly as a result of the aforementioned for the accounting
explanation. |
EBITDA
Adjusted EBITDA was R$1,590.4 million in the
quarter, compared with R$1,109.3 million in 3Q22. This increase is
primarily explained by higher Total Revenue and Income, excluding
Other Financial Income, driven mainly by the growth of our
operations and adjustments in our commercial policy throughout
2022. Adjusted EBITDA Margin was 50.7% in the quarter, compared
with 44.2% in 3Q22 and 50.7% in 2Q23. The flattish Adjusted EBITDA
margin in the quarter compared to 3Q23 is mainly explained by an
increase in cost of services and selling expenses excluding
D&A, which partially offset the sequential growth of Total
Revenue and Income, excluding Other Financial Income in the
period.
Table 7: Adjusted EBITDA Reconciliation
EBITDA Bridge (R$mn) |
3Q23 |
% Rev. |
3Q22 |
% Rev. |
Δ % |
|
9M23 |
% Rev. |
9M22 |
% Rev. |
Δ % |
Profit (Loss) before income taxes |
503.5 |
16.0% |
246.5 |
9.8% |
104.3% |
|
1,232.6 |
14.0% |
(526.7) |
(7.7%) |
n.m |
(+) Financial expenses, net |
1,058.9 |
33.7% |
940.3 |
37.5% |
12.6% |
|
3,056.4 |
34.7% |
2,603.2 |
37.8% |
17.4% |
(-) Other financial income |
(187.0) |
(6.0%) |
(152.7) |
(6.1%) |
22.5% |
|
(540.2) |
(6.1%) |
(440.5) |
(6.4%) |
22.6% |
(+) Depreciation and amortization |
223.0 |
7.1% |
203.8 |
8.1% |
9.4% |
|
657.1 |
7.5% |
585.6 |
8.5% |
12.2% |
EBITDA |
1,598.3 |
50.9% |
1,237.9 |
49.4% |
29.1% |
|
4,405.9 |
50.0% |
2,221.5 |
32.3% |
98.3% |
(+) Mark-to-market related to the investment in Banco Inter |
0.0 |
0.0% |
(111.5) |
(4.4%) |
(100.0%) |
|
(30.6) |
(0.3%) |
738.6 |
10.7% |
n.m |
(+) Other Expenses (a) |
(8.0) |
(0.3%) |
(17.2) |
(0.7%) |
(53.6%) |
|
(34.8) |
(0.4%) |
(20.8) |
(0.3%) |
67.5% |
Adjusted EBITDA |
1,590.4 |
50.7% |
1,109.3 |
44.2% |
43.4% |
|
4,340.5 |
49.3% |
2,939.4 |
42.7% |
47.7% |
(a) Consists of the fair value adjustment related to
associates call option, earn-out and earn-out interests related to
acquisitions, loss of control of subsidiaries, reversal of
litigation at Linx and divestment of assets.
EBITDA was R$1,598.3 million in the quarter,
higher than R$1,237.9 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
cost of services and selling expenses, excluding
D&A.
Net Income (Loss) and EPS
Adjusted Net Income was R$435.1 million in 3Q23
with a margin of 13.9%, compared with R$108.3 million of Adjusted
Net Income reported in 3Q22 and a margin of 4.3% on a comparable
basis (not adjusting for share based compensation expenses). This
increase in Adjusted Net Income can primarily be attributed to (i)
a 32.9% year over year growth in total revenue and income net of
financial expenses, in conjunction with (ii) operating leverage in
cost of services (up +15.2% year over year) and selling expenses
(up +14.8% year over year) and lower (iii) administrative expenses
(down 3.3% year over year), and (iv) other operating expenses (down
9.6% year over year).
Adjusted Net Income was up 35.1% quarter over
quarter, with Adjusted Net Margin improving 3.0 percentage points
sequentially from 10.9% in 2Q23 to 13.9% in 3Q23, mainly as a
result of higher total revenue and income, as well as lower
administrative and financial expenses.
Net Income in 3Q23 was R$411.3 million, compared
with R$197.1 million in 3Q22, mostly as a result of the same
factors explained above for the variation in Adjusted Net
Income.
On a comparable basis (not adjusting for share
based compensation expenses), Adjusted diluted EPS was R$1.32 per
share in 3Q23, compared with R$0.35 per share in 3Q22, and R$0.98
per share in 2Q23, mostly explained by the higher Adjusted Net
Income.
IFRS basic EPS was R$1.30 per share in 3Q23,
compared with R$0.65 in the prior-year period. This difference was
mainly due to the higher Net Income, driven by the growth of our
operations and operating leverage across all costs and expenses
line items compared with 3Q22.
Table 8: Adjusted Net Income
Reconciliation From 1Q23 onwards, we stopped adjusting
share-based compensation expenses in our adjusted results. Those
changes may affect the comparability of our adjusted results
between different quarters. For that reason, we have included below
our historical numbers on a comparable basis, not adjusting for
share-based compensation expenses, according to our current
adjustment criteria.
Net Income Bridge (R$mn) |
3Q23 |
% Rev. |
3Q22 |
% Rev. |
Δ % |
|
9M23 |
% Rev. |
9M22 |
% Rev. |
Δ % |
Net income for the period |
411.3 |
13.1% |
197.1 |
7.9% |
108.7% |
|
944.2 |
10.7% |
(605.2) |
(8.8%) |
n.m |
Amortization of fair value adjustment (a) |
38.8 |
1.2% |
32.2 |
1.3% |
20.5% |
|
108.2 |
1.2% |
103.6 |
1.5% |
4.4% |
Mark-to-market from the investment in Banco Inter (b) |
0.0 |
0.0% |
(111.5) |
(4.4%) |
(100.0%) |
|
(30.6) |
(0.3%) |
738.6 |
10.7% |
n.m |
Other expenses (c) |
2.4 |
0.1% |
(0.9) |
(0.0%) |
n.m |
|
5.6 |
0.1% |
(4.5) |
(0.1%) |
n.m |
Tax effect on adjustments |
(17.5) |
(0.6%) |
(8.5) |
(0.3%) |
104.5% |
|
(33.7) |
(0.4%) |
(25.8) |
(0.4%) |
30.8% |
Adjusted net income (as reported) |
435.1 |
13.9% |
108.3 |
4.3% |
301.6% |
|
993.7 |
11.3% |
206.7 |
3.0% |
380.7% |
|
|
|
|
|
|
|
|
|
|
|
|
IFRS basic EPS (d) |
1.30 |
n.a. |
0.65 |
n.a. |
101.1% |
|
3.00 |
n.a. |
(1.92) |
n.a. |
n.m |
Adjusted diluted EPS (as reported) (e) |
1.32 |
n.a. |
0.35 |
n.a. |
277.2% |
|
3.04 |
n.a. |
0.94 |
n.a. |
221.8% |
Basic Number of shares |
313.8 |
n.a. |
312.4 |
n.a. |
0.5% |
|
313.2 |
n.a. |
311.6 |
n.a. |
0.5% |
Diluted Number of shares |
326.9 |
n.a. |
323.9 |
n.a. |
0.9% |
|
326.1 |
n.a. |
311.6 |
n.a. |
4.6% |
(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, loss of control of subsidiaries, reversal
of litigation of 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 13 of our Consolidated Financial Statements,
September 30, 2023.(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 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) |
3Q23 |
2Q23 |
4Q22 |
Cash and cash equivalents |
3,693.1 |
2,202.7 |
1,512.6 |
Short-term investments |
2,042.5 |
3,493.4 |
3,453.8 |
Accounts receivable from card issuers(a) |
21,105.4 |
18,573.4 |
20,748.9 |
Financial assets from banking solution |
4,576.7 |
4,099.3 |
3,960.9 |
Derivative financial instrument (b) |
0.4 |
7.6 |
12.4 |
Adjusted Cash |
31,418.0 |
28,376.5 |
29,688.5 |
|
|
|
|
Obligations with banking customers(c) |
(4,450.8) |
(3,918.6) |
(4,023.7) |
Accounts payable to clients |
(17,252.3) |
(15,555.8) |
(16,614.5) |
Loans and financing (d) |
(4,191.3) |
(3,916.5) |
(4,375.7) |
Obligations to FIDC quota holders |
(324.0) |
(318.0) |
(975.2) |
Derivative financial instrument (b) |
(342.1) |
(340.2) |
(209.7) |
Adjusted Debt |
(26,560.5) |
(24,049.2) |
(26,198.9) |
|
|
|
|
Adjusted Net Cash |
4,857.5 |
4,327.2 |
3,489.6 |
(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 September 30, 2023, the Company’s Adjusted
Net Cash was R$4,857.5 million, R$530.3 million higher compared
with 2Q23, mostly explained by:
-
R$726.7 million of cash net income, which is our net income plus
non-cash income and expenses as reported in our statement of cash
flows;
- R$20.1
million from prepaid expenses;
-
-R$176.4 million of capex;
-
-R$32.7 million from trade accounts payable and other
liabilities;
- -R$7.4
million from other effects.
Cash Flow
Our cash flow in the quarter was explained
by:
- Net cash
provided by operating activities was R$63.4 million in 3Q23,
explained by R$726.7 million of Net Income after non-cash
adjustments and R$663.3 million outflow from working capital
variation. Working capital is composed of (i) R$881.0 million
outflow of changes related to accounts receivable from card
issuers, accounts payable to clients and interest income received,
net of costs; (ii) R$32.7 million outflow from trade accounts
payable and other liabilities; (iii) R$190.4 million from
recoverable taxes and taxes payable; (iv) R$74.2 million from labor
and social security liabilities and (v) R$14.2 million outflow of
other working capital changes.
- Net cash
provided by investing activities was R$1,316.4 million in 3Q23,
explained by (i) R$176.4 million capex, of which R$55.3 million
related to property and equipment and R$121.1 million related to
purchases and development of intangible assets; (ii) R$1,494.0
million from acquisition of short-term investments and (iii) R$1.5
million outflow from acquisition of interest in associates and (v)
R$0.3 million from proceeds from disposal of non-current
assets.
- Net cash
provided by financing activities was R$111.0 million, explained by
(i) R$113.0 million net proceeds from borrowings, mostly related to
the issuance of new CCBs (“Cédula de Crédito Bancário”), which more
than offset the amortization of FIDC AR III and maturing CCBs and
(ii) R$2.0 million cash outflow from capital events related to
non-controlling interests.
Other
Information
Conference Call
Stone will discuss its 3Q23 financial results
during a teleconference today, November 10, 2023, at 5:00 PM ET /
7:00 PM BRT. The conference call can be accessed at +1 646 931 3860
or +1 669 444 9171 (US), or +55 21 3958 7888 (Brazil), or +44 330
088 5830 (UK).
The call will also be broadcast simultaneously
on Stone’s Investor Relations website at
https://investors.stone.co/. Following the completion of the call,
a recorded replay of the webcast will be available on Stone’s
Investor Relations website at https://investors.stone.co/.
About Stone Co.
Stone Co. is a leading provider of financial
technology and software solutions that empower merchants to conduct
commerce seamlessly across multiple channels and help them grow
their businesses.
Investor Contact
Investor Relationsinvestors@stone.co
Consolidated Statement of Profit or
LossTable 10: Consolidated Statement of Profit or
Loss
Statement of Profit or Loss (R$mn) |
3Q23 |
3Q22 |
|
9M23 |
9M22 |
Net revenue from transaction activities and other
services |
868.5 |
677.8 |
|
2,441.7 |
1,839.6 |
Net revenue from subscription services and equipment
rental |
463.4 |
426.4 |
|
1,365.9 |
1,296.3 |
Financial income |
1,620.9 |
1,251.6 |
|
4,458.6 |
3,306.4 |
Other financial income |
187.0 |
152.7 |
|
540.2 |
440.5 |
Total revenue and
income |
3,139.9 |
2,508.4 |
|
8,806.3 |
6,882.8 |
Cost of services |
(773.5) |
(671.3) |
|
(2,180.1) |
(1,971.8) |
Administrative expenses |
(278.3) |
(283.9) |
|
(880.3) |
(794.2) |
Selling expenses |
(442.4) |
(385.4) |
|
(1,244.3) |
(1,105.1) |
Financial expenses, net |
(1,058.9) |
(940.3) |
|
(3,056.4) |
(2,603.2) |
Mark-to-market on equity securities designated at FVPL |
0.0 |
111.5 |
|
30.6 |
(738.6) |
Other income (expenses), net |
(82.6) |
(91.3) |
|
(240.9) |
(193.5) |
Loss on investment in associates |
(0.6) |
(1.2) |
|
(2.4) |
(3.2) |
Profit before income
taxes |
503.5 |
246.5 |
|
1,232.6 |
(526.7) |
Income tax and social contribution |
(92.2) |
(49.4) |
|
(288.4) |
(78.5) |
Net income for the period |
411.3 |
197.1 |
|
944.2 |
(605.2) |
Consolidated Balance Sheet
StatementTable 11: Consolidated Balance Sheet
Statement
Balance Sheet (R$mn) |
30-Sep-23 |
31-Dec-22 |
Assets |
|
|
Current assets |
32,423.0 |
30,659.2 |
Cash and cash equivalents |
3,693.1 |
1,512.6 |
Short-term investments |
2,042.5 |
3,453.8 |
Financial assets from banking solution |
4,576.7 |
3,960.9 |
Accounts receivable from card issuers |
21,029.5 |
20,694.5 |
Trade accounts receivable |
559.2 |
484.7 |
Recoverable taxes |
118.4 |
151.0 |
Prepaid expenses |
119.9 |
129.3 |
Derivative financial instruments |
11.7 |
36.4 |
Other assets |
272.2 |
236.1 |
|
|
|
Non-current assets |
11,410.4 |
11,586.2 |
Trade accounts receivable |
38.9 |
37.3 |
Accounts receivable from card issuers |
75.8 |
54.3 |
Receivables from related parties |
4.8 |
10.1 |
Deferred tax assets |
608.9 |
680.0 |
Prepaid expenses |
44.1 |
101.4 |
Other assets |
87.6 |
105.1 |
Long-term investments |
47.1 |
214.8 |
Investment in associates |
114.5 |
109.8 |
Property and equipment |
1,655.9 |
1,641.2 |
Intangible assets |
8,732.8 |
8,632.3 |
|
|
|
Total Assets |
43,833.4 |
42,245.4 |
|
|
|
Liabilities and equity |
|
|
Current liabilities |
25,527.8 |
25,174.1 |
Deposits from banking customers |
4,450.8 |
4,023.7 |
Accounts payable to clients |
17,221.2 |
16,578.7 |
Trade accounts payable |
450.2 |
596.0 |
Loans and financing |
1,645.4 |
1,847.4 |
Obligations to FIDC quota holders |
324.0 |
975.2 |
Labor and social security liabilities |
552.6 |
468.6 |
Taxes payable |
436.8 |
329.1 |
Derivative financial instruments |
342.1 |
209.7 |
Other liabilities |
104.7 |
145.6 |
|
|
|
Non-current liabilities |
4,136.8 |
4,121.3 |
Accounts payable to clients |
31.1 |
35.8 |
Loans and financing |
2,729.0 |
2,728.5 |
Obligations to FIDC quota holders |
0.0 |
0.0 |
Deferred tax liabilities |
506.9 |
500.2 |
Provision for contingencies |
230.3 |
210.4 |
Labor and social security liabilities |
16.6 |
35.8 |
Other liabilities |
622.9 |
610.6 |
|
|
|
Total liabilities |
29,664.6 |
29,295.4 |
|
|
|
Equity attributable to owners of the
parent |
14,113.3 |
12,893.9 |
Issued capital |
0.1 |
0.1 |
Capital reserve |
13,930.6 |
13,818.8 |
Treasury shares |
(15.2) |
(69.1) |
Other comprehensive income |
(319.7) |
(432.7) |
Retained earnings |
517.6 |
(423.2) |
|
|
|
Non-controlling interests |
55.5 |
56.1 |
|
|
|
Total equity |
14,168.8 |
12,950.0 |
|
|
|
Total liabilities and equity |
43,833.4 |
42,245.4 |
Consolidated Statement of Cash
FlowsTable 12: Consolidated Statement of Cash
Flows
Cash Flow (R$mn) |
3Q23 |
3Q22 |
9M23 |
9M22 |
Net income (loss) for the period |
411.3 |
197.1 |
944.2 |
(605.2) |
|
|
|
|
|
Adjustments on Net Income: |
|
|
|
|
Depreciation and amortization |
223.0 |
203.8 |
657.1 |
585.6 |
Deferred income tax and social contribution |
(43.0) |
(44.4) |
35.4 |
(167.7) |
Loss on investment in associates |
0.6 |
1.2 |
2.4 |
3.2 |
Interest, monetary and exchange variations, net |
(31.3) |
(138.5) |
(207.2) |
(359.9) |
Provision for contingencies |
21.4 |
6.8 |
26.5 |
8.4 |
Share-based payments expense |
61.1 |
70.2 |
181.6 |
143.7 |
Allowance for expected credit losses |
67.2 |
23.8 |
99.6 |
75.2 |
Loss on disposal of property, equipment and intangible assets |
8.2 |
1.4 |
53.2 |
25.4 |
Effect of applying hyperinflation |
1.3 |
1.0 |
2.4 |
2.5 |
Loss on sale of subsidiary |
(1.2) |
0.0 |
0.0 |
0.0 |
Fair value adjustment in financial instruments at FVPL |
2.6 |
(16.3) |
96.6 |
1,120.8 |
Fair value adjustment in derivatives |
4.5 |
103.5 |
13.1 |
168.4 |
Others |
1.2 |
0.0 |
1.2 |
0.0 |
|
|
|
|
|
Working capital adjustments: |
|
|
|
|
Accounts receivable from card issuers |
(1,713.7) |
(632.2) |
2,187.1 |
2,007.6 |
Receivables from related parties |
0.4 |
9.0 |
12.0 |
15.3 |
Recoverable taxes |
216.5 |
(58.4) |
156.5 |
(95.6) |
Prepaid expenses |
20.1 |
32.8 |
66.7 |
146.8 |
Trade accounts receivable, banking solutions and other assets |
55.4 |
160.5 |
44.8 |
625.5 |
Accounts payable to clients |
153.3 |
(1,042.6) |
(3,641.3) |
(4,181.0) |
Taxes payable |
(26.1) |
259.5 |
66.5 |
443.4 |
Labor and social security liabilities |
74.2 |
73.4 |
66.6 |
169.8 |
Provision for contingencies |
(10.9) |
(2.2) |
(27.8) |
(5.1) |
Trade Accounts Payable and Other Liabilities |
(32.7) |
223.3 |
(34.8) |
239.5 |
Interest paid |
(43.1) |
(72.8) |
(480.2) |
(324.9) |
Interest income received, net of costs |
679.4 |
538.3 |
1,825.0 |
1,452.9 |
Income tax paid |
(36.0) |
(67.5) |
(83.3) |
(154.1) |
|
|
|
|
|
Net cash provided by (used in) operating
activity |
63.4 |
(169.1) |
2,064.3 |
1,340.6 |
|
|
|
|
|
Investing activities |
|
|
|
|
Purchases of property and equipment |
(55.3) |
(47.0) |
(591.8) |
(352.6) |
Purchases and development of intangible assets |
(121.1) |
(62.2) |
(333.2) |
(215.3) |
Acquisition of subsidiary, net of cash acquired |
0.0 |
(7.5) |
0.0 |
(69.8) |
Proceeds from (acquisition of) short-term investments, net |
1,494.0 |
(152.1) |
1,600.4 |
(557.0) |
Acquisition of equity securities |
0.0 |
0.0 |
0.0 |
(15.0) |
Disposal of short and long-term investments - equity
securities |
0.0 |
2.9 |
218.1 |
183.5 |
Proceeds from the disposal of non-current assets |
0.3 |
2.5 |
0.5 |
23.1 |
Acquisition of interest in associates |
(1.5) |
(13.3) |
(34.0) |
(34.9) |
|
|
|
|
|
Net cash used in investing activities |
1,316.4 |
(276.7) |
860.0 |
(1,038.1) |
|
|
|
|
|
Financing activities |
|
|
|
|
Proceeds from borrowings |
1,137.7 |
500.0 |
3,935.9 |
3,250.0 |
Payment of borrowings |
(1,000.5) |
(1,143.1) |
(3,981.7) |
(4,741.7) |
Payment to FIDC quota holders |
(317.5) |
(312.5) |
(962.5) |
(937.5) |
Proceeds from FIDC quota holders |
323.6 |
0.0 |
323.6 |
0.0 |
Payment of leases |
(30.4) |
(34.7) |
(71.2) |
(80.2) |
Repurchase of own shares |
0.0 |
0.0 |
0.0 |
53.4 |
Acquisition of non-controlling interests |
(0.2) |
(0.3) |
(1.4) |
(1.0) |
Dividends paid to non-controlling interests |
(1.8) |
(1.2) |
(3.7) |
(2.1) |
|
|
|
|
|
Net cash provided by (used in) financing
activities |
111.0 |
(991.9) |
(760.9) |
(2,459.1) |
|
|
|
|
|
Effect of foreign exchange on cash and cash equivalents |
(0.5) |
(6.0) |
17.0 |
4.0 |
|
|
|
|
|
Change in cash and cash equivalents |
1,490.4 |
(1,443.7) |
2,180.5 |
(2,152.5) |
|
|
|
|
|
Cash and cash equivalents at beginning of period |
2,202.7 |
3,786.8 |
1,512.6 |
4,495.6 |
Cash and cash equivalents at end of period |
3,693.1 |
2,343.2 |
3,693.1 |
2,343.2 |
Adjustments to Net Income by P&L
LineTable 13: Adjustments to Net Income by P&L
Line
Adjustments to Net Income by P&L line
(R$mn) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Cost of services |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Administrative expenses |
9.3 |
9.7 |
166.0 |
(16.4) |
23.5 |
40.4 |
32.1 |
30.6 |
35.6 |
34.8 |
34.8 |
Selling expenses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Financial expenses, net |
4.2 |
4.2 |
2.4 |
11.4 |
6.1 |
9.1 |
8.0 |
8.1 |
14.8 |
14.2 |
14.4 |
Mark-to-market on equity securities designated at FVPL |
0.0 |
(841.2) |
1,341.2 |
764.2 |
323.0 |
527.1 |
(111.5) |
114.5 |
(30.6) |
0.0 |
0.0 |
Other operating income (expense), net |
3.5 |
(4.5) |
1.2 |
0.6 |
6.0 |
(17.3) |
(8.9) |
(17.1) |
(2.6) |
(24.2) |
(8.0) |
Gain (loss) on investment in associates |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Profit before income taxes |
16.9 |
(831.7) |
1,510.8 |
759.8 |
358.7 |
559.3 |
(80.2) |
136.1 |
17.2 |
24.7 |
41.2 |
Income tax and social contribution |
(1.9) |
119.3 |
(163.9) |
8.1 |
(3.1) |
(14.2) |
(8.5) |
(11.1) |
(6.3) |
(10.0) |
(17.5) |
Net income for the period |
15.0 |
(712.4) |
1,346.9 |
767.9 |
355.6 |
545.1 |
(88.7) |
125.0 |
10.9 |
14.8 |
23.7 |
Table 14: Adjusted EBT and Adjusted Net Income with and
without share-based compensation adjustmentsFollowing the
partial sale of our stake in Banco Inter, from 2Q22 onwards we no
longer adjust the financial expenses related to our bond in our
adjusted numbers. In addition, from 1Q23 onwards, we also stopped
adjusting share-based compensation expenses in our adjusted
results. Those changes may affect the comparability of our adjusted
results between different quarters. For that reason, we have
included below our historical numbers on a comparable basis, not
adjusting for both the bond and share-based compensation expenses,
according to our current adjustment criteria.
Profitability with and without share-based
compensation adjustments (R$mn) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
247.6 |
(202.7) |
81.3 |
(49.1) |
82.5 |
106.7 |
210.7 |
316.5 |
324.0 |
447.0 |
544.8 |
Adjusted Net Income |
187.4 |
(155.5) |
85.3 |
(32.5) |
51.7 |
76.5 |
162.5 |
234.8 |
236.6 |
322.0 |
435.1 |
Not Adjusting for Share-based Compensation |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
226.9 |
(249.1) |
83.0 |
(50.6) |
68.8 |
75.8 |
166.3 |
275.6 |
324.0 |
447.0 |
544.8 |
Adjusted Net Income |
173.3 |
(186.4) |
86.7 |
(33.5) |
42.6 |
55.8 |
108.3 |
203.8 |
236.6 |
322.0 |
435.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services |
|
|
|
|
|
|
|
|
|
|
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
250.2 |
(202.6) |
104.3 |
(31.0) |
65.9 |
84.0 |
177.6 |
285.6 |
306.0 |
398.2 |
485.5 |
Adjusted Net Income |
191.4 |
(153.2) |
113.1 |
(13.0) |
45.4 |
66.9 |
148.1 |
214.2 |
226.9 |
279.7 |
394.7 |
Not Adjusting for Share-based Compensation |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
229.6 |
(248.7) |
105.7 |
(32.6) |
52.2 |
53.3 |
135.0 |
246.1 |
306.0 |
398.2 |
485.5 |
Adjusted Net Income |
177.3 |
(183.9) |
114.1 |
(14.0) |
36.3 |
46.3 |
95.1 |
184.1 |
226.9 |
279.7 |
394.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Software |
|
|
|
|
|
|
|
|
|
|
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
0.6 |
(0.7) |
(11.6) |
(15.2) |
12.3 |
40.0 |
33.7 |
31.8 |
16.9 |
45.5 |
55.5 |
Adjusted Net Income |
(0.7) |
(3.0) |
(14.8) |
(15.6) |
2.2 |
26.9 |
15.4 |
22.4 |
8.5 |
39.0 |
37.6 |
Not Adjusting for Share-based Compensation |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
0.6 |
(1.0) |
(11.4) |
(15.2) |
12.3 |
39.9 |
31.9 |
30.5 |
16.9 |
45.5 |
55.5 |
Adjusted Net Income |
(0.7) |
(3.2) |
(14.6) |
(15.6) |
2.2 |
26.8 |
14.2 |
21.5 |
8.5 |
39.0 |
37.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Allocated |
|
|
|
|
|
|
|
|
|
|
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
(3.2) |
0.6 |
(11.4) |
(2.8) |
4.3 |
(17.3) |
(0.6) |
(1.0) |
1.2 |
3.4 |
3.8 |
Adjusted Net Income |
(3.2) |
0.7 |
(13.0) |
(3.9) |
4.2 |
(17.3) |
(1.0) |
(1.8) |
1.2 |
3.4 |
2.8 |
Not Adjusting for Share-based Compensation |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
(3.3) |
0.6 |
(11.3) |
(2.8) |
4.3 |
(17.4) |
(0.6) |
(1.0) |
1.2 |
3.4 |
3.8 |
Adjusted Net Income |
(3.3) |
0.7 |
(12.9) |
(3.9) |
4.1 |
(17.3) |
(1.0) |
(1.8) |
1.2 |
3.4 |
2.8 |
Historical Adjusted
Reporting
Following the partial sale of our stake in Banco
Inter, from 2Q22 onwards we no longer adjust the financial expenses
related to our bond in our adjusted numbers. In addition, from 1Q23
onwards, we also stopped adjusting share-based compensation
expenses in our adjusted results. Those changes may affect the
comparability of our adjusted results between different quarters.
For that reason, we have included below our historical numbers on a
comparable basis, not adjusting for both the bond and share-based
compensation expenses, according to our current adjustment
criteria.
Table 15: Adjusted Historical Financial Services
P&L
Segment Reporting - Financial Services (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Total revenue and income |
828.4 |
564.2 |
1,152.5 |
1,545.9 |
1,721.3 |
1,932.6 |
2,121.5 |
2,308.2 |
2,335.9 |
2,551.2 |
2,737.7 |
Cost of services |
(224.9) |
(279.6) |
(358.7) |
(465.1) |
(499.0) |
(468.6) |
(495.9) |
(524.0) |
(555.3) |
(520.0) |
(603.0) |
Administrative expenses |
(89.8) |
(91.4) |
(112.9) |
(145.6) |
(131.1) |
(145.5) |
(160.2) |
(204.0) |
(170.9) |
(180.4) |
(171.2) |
Selling expenses |
(159.7) |
(215.3) |
(248.6) |
(263.5) |
(323.0) |
(267.3) |
(318.8) |
(336.2) |
(314.8) |
(324.3) |
(358.3) |
Financial expenses, net |
(88.8) |
(158.9) |
(304.4) |
(657.8) |
(693.0) |
(931.0) |
(917.2) |
(884.9) |
(895.0) |
(1,047.8) |
(1,030.2) |
Other operating income (expense), net |
(35.1) |
(67.4) |
(22.0) |
(46.6) |
(23.0) |
(66.9) |
(94.3) |
(112.6) |
(92.6) |
(78.8) |
(88.4) |
Gain (loss) on investment in associates |
(0.5) |
(0.4) |
(0.1) |
0.0 |
0.0 |
0.0 |
0.0 |
(0.4) |
(1.3) |
(1.7) |
(1.0) |
Profit before income taxes |
229.6 |
(248.7) |
105.7 |
(32.6) |
52.2 |
53.3 |
135.0 |
246.1 |
306.0 |
398.2 |
485.5 |
Income tax and social contribution |
(52.3) |
64.8 |
8.4 |
18.6 |
(16.0) |
(7.0) |
(39.9) |
(61.9) |
(79.1) |
(118.5) |
(90.7) |
Net income for the period |
177.3 |
(183.9) |
114.1 |
(14.0) |
36.3 |
46.3 |
95.1 |
184.1 |
226.9 |
279.7 |
394.7 |
Table 16: Adjusted Historical Software
P&L
Segment Reporting - Software (R$mn Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Total revenue and income |
30.9 |
42.8 |
301.1 |
311.4 |
326.6 |
350.7 |
366.2 |
376.3 |
358.2 |
382.9 |
387.9 |
Cost of services |
(12.3) |
(19.5) |
(162.4) |
(176.7) |
(172.5) |
(154.5) |
(171.9) |
(171.2) |
(164.2) |
(164.8) |
(170.4) |
Administrative expenses |
(14.9) |
(17.5) |
(72.4) |
(76.1) |
(74.5) |
(75.0) |
(81.3) |
(83.5) |
(83.5) |
(79.5) |
(65.1) |
Selling expenses |
(1.2) |
(6.0) |
(55.5) |
(51.8) |
(56.6) |
(63.5) |
(61.2) |
(63.8) |
(69.0) |
(79.4) |
(80.9) |
Financial expenses, net |
(0.2) |
(0.3) |
(17.6) |
(18.9) |
(8.6) |
(14.6) |
(14.9) |
(18.1) |
(13.6) |
(11.6) |
(14.1) |
Other operating income (expense), net |
(1.8) |
(0.4) |
(4.7) |
(3.1) |
(1.8) |
(3.0) |
(4.8) |
(8.7) |
(11.0) |
(2.6) |
(2.2) |
Gain (loss) on investment in associates |
0.0 |
(0.1) |
(0.0) |
0.0 |
(0.4) |
(0.3) |
(0.2) |
(0.4) |
(0.1) |
0.5 |
0.2 |
Profit before income taxes |
0.6 |
(1.0) |
(11.4) |
(15.2) |
12.3 |
39.9 |
31.9 |
30.5 |
16.9 |
45.5 |
55.5 |
Income tax and social contribution |
(1.3) |
(2.2) |
(3.1) |
(0.4) |
(10.1) |
(13.1) |
(17.7) |
(9.0) |
(8.4) |
(6.5) |
(17.9) |
Net income for the period |
(0.7) |
(3.2) |
(14.6) |
(15.6) |
2.2 |
26.8 |
14.2 |
21.5 |
8.5 |
39.0 |
37.6 |
Table 17: Adjusted Historical Non-Allocated
P&L
Segment Reporting - Non-Allocated (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Total revenue and income |
8.3 |
6.5 |
16.0 |
15.7 |
22.4 |
20.8 |
20.8 |
21.6 |
17.5 |
20.7 |
14.3 |
Cost of services |
(2.5) |
(3.3) |
(4.6) |
(4.3) |
(2.9) |
(3.0) |
(3.5) |
(2.7) |
(1.8) |
(0.5) |
(0.0) |
Administrative expenses |
(3.7) |
(3.3) |
(8.5) |
(8.9) |
(9.2) |
(11.2) |
(10.3) |
(9.0) |
(8.1) |
(9.2) |
(7.2) |
Selling expenses |
(1.9) |
(1.9) |
(4.1) |
(3.1) |
(4.2) |
(5.1) |
(5.4) |
(6.1) |
(6.1) |
(8.2) |
(3.2) |
Financial expenses, net |
0.7 |
5.7 |
(6.4) |
(0.1) |
(0.5) |
(0.1) |
(0.1) |
(0.4) |
(0.2) |
(0.2) |
(0.2) |
Other operating income (expense), net |
(1.1) |
(0.8) |
(1.2) |
(0.9) |
(1.1) |
(17.8) |
(1.1) |
(4.8) |
(0.4) |
0.5 |
0.0 |
Gain (loss) on investment in associates |
(3.2) |
(2.4) |
(2.6) |
(1.2) |
(0.2) |
(1.0) |
(1.1) |
0.5 |
0.4 |
0.4 |
0.2 |
Profit before income taxes |
(3.3) |
0.6 |
(11.3) |
(2.8) |
4.3 |
(17.4) |
(0.6) |
(1.0) |
1.2 |
3.4 |
3.8 |
Income tax and social contribution |
0.0 |
0.2 |
(1.6) |
(1.1) |
(0.2) |
0.0 |
(0.4) |
(0.8) |
0.0 |
(0.0) |
(1.1) |
Net income for the period |
(3.3) |
0.7 |
(12.9) |
(3.9) |
4.1 |
(17.3) |
(1.0) |
(1.8) |
1.2 |
3.4 |
2.8 |
Table 18: Adjusted Historical Consolidated
P&L
Consolidated P&L (R$mn Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
2Q23 |
3Q23 |
Total revenue and income |
867.7 |
613.4 |
1,469.6 |
1,873.0 |
2,070.3 |
2,304.1 |
2,508.4 |
2,706.1 |
2,711.7 |
2,954.8 |
3,139.9 |
Cost of services |
(239.7) |
(302.4) |
(525.6) |
(646.1) |
(674.4) |
(626.2) |
(671.3) |
(698.0) |
(721.3) |
(685.3) |
(773.5) |
Administrative expenses |
(108.3) |
(112.2) |
(193.8) |
(230.5) |
(214.8) |
(231.6) |
(251.8) |
(296.5) |
(262.5) |
(269.1) |
(243.5) |
Selling expenses |
(162.8) |
(223.2) |
(308.2) |
(318.4) |
(383.7) |
(335.9) |
(385.4) |
(406.1) |
(389.9) |
(411.9) |
(442.4) |
Financial expenses, net |
(88.3) |
(153.4) |
(328.3) |
(676.8) |
(702.1) |
(945.6) |
(932.2) |
(903.4) |
(908.9) |
(1,059.7) |
(1,044.5) |
Other operating income (expense), net |
(38.0) |
(68.6) |
(27.9) |
(50.5) |
(25.8) |
(87.6) |
(100.2) |
(126.1) |
(104.1) |
(81.0) |
(90.6) |
Gain (loss) on investment in associates |
(3.6) |
(2.8) |
(2.8) |
(1.2) |
(0.7) |
(1.3) |
(1.2) |
(0.3) |
(1.0) |
(0.8) |
(0.6) |
Profit before income taxes |
226.9 |
(249.1) |
83.0 |
(50.6) |
68.8 |
75.8 |
166.3 |
275.6 |
324.0 |
447.0 |
544.8 |
Income tax and social contribution |
(53.6) |
62.7 |
3.6 |
17.1 |
(26.3) |
(20.0) |
(58.0) |
(71.7) |
(87.4) |
(125.0) |
(109.7) |
Net income for the period |
173.3 |
(186.4) |
86.7 |
(33.5) |
42.6 |
55.8 |
108.3 |
203.8 |
236.6 |
322.0 |
435.1 |
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.
- “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 QR Code”:
Considers transactions from dynamic POS QR Code and static QR Code
from Stone and Ton merchants. Both types of PIX can be
monetized.
- “Revenue”:
refers to Total Revenue and Income.
- “Software”
segment: This segment includes: (i) Core, comprised of POS/ERP
solutions, TEF and QR Code gateways, reconciliation and CRM and
(ii) Digital, which includes 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 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
intangibles related to acquisitions, (2) one-time impairment
charges, (3) unusual income and expenses and (4) tax expense
relating to the foregoing adjustments. Adjusted Net Margin is
calculated by dividing Adjusted Net Income by Total Revenue and
Income. Adjusted EPS (diluted) is calculated as Adjusted Net income
attributable to owners of the parent (Adjusted Net Income reduced
by Net Income attributable to Non-Controlling interest) divided by
diluted number of shares. Stone has presented Adjusted Profit
Before Income Taxes and Adjusted EBITDA to eliminate the effect of
items that it does not consider indicative of its continuing
business performance within the period presented. Stone adjusts
these metrics for the same items as Adjusted Net Income, as
applicable.Stone has presented Adjusted Net Cash metric in order to
adjust its Net Cash / (Debt) by the balances of Accounts Receivable
from Card Issuers and Accounts Payable to Clients, since these
lines vary according to the Company’s funding source together with
the lines of (i) Cash and Cash Equivalents, (ii) Short-term
Investments, (iii) Debt balances and (iv) Derivative Financial
Instruments related to economic hedges of short term investments in
assets, due to the nature of Stone’s business and its prepayment
operations. In addition, it also adjusts by the balances of
Financial Assets from Banking Solutions and Deposits from Banking
Customers.
________________________1 Considers transactions
from dynamic POS QR Code and static QR Code from Stone and Ton
merchants. Both types of PIX can be monetized.2 From 3Q22 onwards,
does not include clients that use only TapTon.3 ARPAC means average
revenue per active client and considers our banking and insurance
revenues divided by our active banking client base.4 Credit clients
consider merchants who have a loan contract with Stone until
September 30th, 2023.5 The credit portfolio of R$23.5 million
disclosed in 2Q23 earnings release’ refers to July 31st. 2023.6
From 3Q22 onwards, does not include clients that use only TapTon.7
From 3Q22 onwards, does not include clients that use only TapTon.8
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”.9 Comprises (i) our POS/ERP
solutions across different retail and service verticals, which
includes Linx and the portfolio of POS/ERP solutions in which we
invested over time; (ii) our TEF and QR Code gateways; (iii) our
reconciliation solution, and (iv) CRM.10 Comprises (i) our
omnichannel platform (OMS); (ii) our e-commerce platform (Linx
Commerce), (iii) engagement tools (Linx Impulse and MLabs); (iv)
our ads solution and (v) marketplace hub.11 Our adjusted P&L
includes the same adjustments made for our Adjusted Net Income but
broken down into each P&L line. The purpose of showing it is to
make it easier to understand the underlying evolution of our Costs
& Expenses, disregarding some non-recurring events associated
with each line item. 12 Membership fees refer to the upfront fee
paid by merchants for all Ton offerings and specific ones for
Stone.
A PDF accompanying this announcement is available
at: http://ml.globenewswire.com/Resource/Download/7c4f6cd1-5a98-4c29-811a-2567e6ccac4a
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