Net Income of Approximately R$ 228
Million, up 178% Compared to 2Q17 or R$242
Million after Non-GAAP Adjustments to 2Q18, up
195% Compared to 2Q17
PagSeguro Digital Ltd., or (“PagSeguro” or “we”) (NYSE:PAGS),
today announced preliminary operational and financial results for
2Q18. PagSeguro expects to report Total Payment Volume (TPV) of
approximately R$16.9 billion, Net Income of approximately R$228
million and Non-GAAP Net Income of approximately R$242 million.
Operational and Financial Metrics (R$mn) 2Q18
(1) 1Q18 2Q17
Variation
2Q18 X 1Q18 (1)
Variation
2Q18 X 2Q17 (1)
TPV 16.9 14.4 8.1 17% 109% Net
Income 228 149 82 53% 178%
Non-GAAP Net Income
(2) (3) 242 213 82
14% 195%
[1] Numerical figures are preliminary and
approximate.
[2] The reconciliation of GAAP measures to Non-GAAP
measures are presented at the end of this announcement and it
includes (i) foreign exchange gain on IPO primary share proceeds,
(ii) foreign exchange gain on follow-on primary share proceeds,
(iii) share-based long-term incentive plan (LTIP), (iv) tax related
to remittance of IPO primary share proceeds (IOF tax), (v) tax
related to remittance of follow-on primary share proceeds (IOF
tax), and (vi) income tax on Non-GAAP measures.
[3] The presentation of Non-GAAP Net Income is aligned
with the Non-GAAP Net Income reported under the Form 6-K/A
furnished to the SEC on July 20, 2018, which replaced the previous
Form 6-K furnished to the SEC on May 30, 2018, and aligned the
presentation of non-GAAP financial measures with the presentation
included in PagSeguro’s Registration Statement on Form F-1
originally filed with the SEC on June 18, 2018. Therefore, Non-GAAP
Net Income for 2Q18 does not include the net adjustment of notes
receivable at present value of approximately R$8 million (or
Non-GAAP Net Income of approximately R$ 250 million).
“Our second quarter results show the strength of our unique
ecosystem. Being an independent fintech allows us to think
exclusively on our clients’ financial needs, delivering growth and
profitability while creating a higher stickiness with our clients
by offering a unique ecosystem through our digital account. Being
the first mover, with an unreplicable online distribution through
UOL and mobile first, brings a natural advantage to PagSeguro. We
believe that following this strategy we will deliver long-term
shareholder value through an increasingly attractive and growing
ecosystem,” said Ricardo Dutra, CEO of PagSeguro.
PagSeguro will provide full second quarter results and host a
conference call and earnings webcast on the following days and
time, respectively:
- Thursday, August 30, 2018, after market
close.
- Friday, August 31, 2018, at 10:00 AM
ET.
Event Details
Dial–in in the US and International: 1-800-492-3904 (Toll Free)
or +1 646 828-8246
Dial–in with connections in Brazil: +55 11 3193-1001 or + 55 11
2820-4001
Password: PagSeguro
Webcast: http://choruscall.com.br/pagseguro/2q18.htm
Forward Looking Statements
This press release includes “forward-looking statements” within
the meaning of the U.S. federal securities laws. Statements
contained herein that are not clearly historical in nature are
forward-looking, and the words “anticipate,” “believe,”
“continues,” “expect,” “estimate,” “intend,” “project” and similar
expressions and future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” “may,” or similar
expressions are generally intended to identify forward-looking
statements. These forward-looking statements speak only as of the
date hereof and are based on PagSeguro’s current plans, estimates
of future events, expectations and trends that affect or may affect
our business, financial condition, results of operations, cash
flow, liquidity, prospects and the trading price of our Class A
common shares, and are subject to several known and unknown
uncertainties and risks, many of which are beyond PagSeguro’s
control. As a consequence, current plans, anticipated actions and
future financial position and results of operations may differ
significantly from those expressed in any forward-looking
statements in this press release. You are cautioned not to unduly
rely on such forward-looking statements when evaluating the
information presented and we do not intend to update any of these
forward-looking statements.
Reconciliation of Net Income to Non-GAAP Net Income
This press release includes certain non-GAAP measures. We
present non-GAAP measures when we believe that the additional
information is useful and meaningful to investors. These non-GAAP
measures are provided to enhance investors’ overall understanding
of our current financial performance and its prospects for the
future. Specifically, we believe the non-GAAP measures provide
useful information to both management and investors by excluding
certain expenses, gains and losses, as the case may be, that may
not be indicative of our core operating results and business
outlook.
These measures may be different from non-GAAP financial measures
used by other companies. The presentation of this non-GAAP
financial information, which is not prepared under any
comprehensive set of accounting rules or principles, is not
intended to be considered separately from, or as a substitute for,
our financial information prepared and presented in accordance with
International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board. Non-GAAP measures
have limitations in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with IFRS. These measures should only be used to
evaluate our results of operations in conjunction with the
corresponding GAAP measures.
Reconciliation of Net Income to Non-GAAP Net
Income: 1Q18 2Q18 (1) Net income
149 228 Foreign exchange gain on IPO
primary share proceeds
[2] (90 ) - Foreign exchange gain on
Follow on proceeds
[3] - (27 ) Share-based long-term
incentive plan (LTIP)
[4] 211 62 New shares issued (new
hires/ additions to LTIP/ others) - 31
Recurrent quarterly provision
- 31 Tax related to remittance of IPO primary share proceeds (IOF
tax)
[5] 13 - Tax related to remittance of Follow on
proceeds (IOF tax)
[6] - 1 Income tax on non-GAAP
adjustments
[7] (70 ) (21 ) Total non-GAAP net income
adjustments 64 15
Non-GAAP Net Income
213 242 Share-based long-term
incentive plan (LTIP) 1Q18 2Q18 (1)
Stock-based compensation expenses (non-cash) 131 40 Related
Employer Payroll Taxes 80 22
[1] Numerical figures are preliminary and
approximate
[2] Foreign exchange gain on IPO primary share
proceeds: financial income in the amount of R$90 million
related to the impact of exchange rate variation on the conversion
from U.S. dollars into Brazilian reais of the proceeds from our
sale of new shares in the IPO. We exclude this foreign exchange
variation from our non-GAAP measures primarily because it is an
unusual income.
[3] Foreign exchange gain on Follow on proceeds:
financial income in the approximate amount of R$27 million
related to the impact of exchange rate variation on the conversion
from U.S. dollars into Brazilian reais of the proceeds from our
sale of new shares in the follow-on offer completed on June 22,
2018. We exclude this foreign exchange variation from our non-GAAP
measures primarily because it is an unusual income.
[4] Share-based long-term incentive plan (LTIP):
Stock-based compensation expenses and related employer payroll
taxes. This amount consists of expenses for equity awards under our
long-term incentive plan (LTIP). We exclude stock-based
compensation expenses from our non-GAAP measures primarily because
they are non-cash expenses. The related employer payroll taxes
depend on our stock price and the timing and size of exercises and
vesting of equity awards, over which management has limited to no
control, and as such management does not believe these expenses
correlate to the operation of our business. In the 2Q18 the total
approximate amount of R$31 million is mainly related to new
shares issued for new employees and employee additions to the
long-term incentive plan. The total approximate amount of R$31
million is related to the recurrent quarterly provision.
[5] Tax related to remittance of IPO primary share
proceeds (IOF tax): R$13 million related to the impact
of Brazilian IOF tax (currency remittance tax) payable when we
remitted the proceeds from our sale of new shares in the IPO from
the Cayman Islands to Brazil. We exclude this IOF tax on the
remittance of IPO primary share proceeds from our non-GAAP measures
primarily because it is an unusual expense.
[6] Tax related to remittance of follow-on proceeds (IOF
tax): approximately R$1 million related to the impact of
Brazilian IOF tax (currency remittance tax) payable when we
remitted the proceeds from our sale of new shares in the follow-on
offer completed on June 22, 2018, from the Cayman Islands to
Brazil. We exclude this IOF tax on the remittance of follow-on
proceeds from our non-GAAP measures primarily because it is an
unusual expense.
[7] Income tax and on Non-GAAP adjustments: consists of
income tax effect related to the Non-GAAP adjustments mentioned
above, excluding the foreign exchange gain on IPO primary share
proceeds of R$90 million and the foreign exchange gain on
follow on proceeds of approximately R$27 million, which are
not taxable, and the tax benefits related to other Non-GAAP
adjustments.
About PagSeguro:
PagSeguro is a disruptive provider of financial technology
solutions focused primarily on micro-merchants, small companies and
medium-sized companies in Brazil. PagSeguro's business model covers
all of the following five pillars:
- Multiple digital payment
solutions;
- In-person payments via point of sale
(POS) devices that PagSeguro sells to merchants;
- Free digital accounts;
- Issuer of prepaid cards to clients for
spending or withdrawing account balances; and
- Operating as an acquirer.
PagSeguro is an UOL Group Company that provides an easy, safe
and hassle-free way of accepting payments, where its clients can
transact and manage their cash, without the need to open a bank
account. PagSeguro’s end-to-end digital ecosystem enables its
customers to accept a wide range of online and in-person payment
methods, including credit cards, debit cards, meal voucher cards,
boletos, bank transfers, bank debits and cash deposits.
PagSeguro's mission is to disrupt and democratize financial
services in Brazil, a concentrated, underpenetrated and high
interest rate market, by providing an end-to-end digital ecosystem
that is safe, affordable, simple and mobile-first for both
merchants and consumers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180731005440/en/
PagSeguro Digital Ltd.André Cazotto, +55 (11)
3914-9403ir@pagseguro.com
PagSeguro Digital (NYSE:PAGS)
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