XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading
tech-enabled platform and a trusted pioneer in providing low-fee
financial products and services in Brazil, reported today its
financial results for the fourth quarter of 2023.
To our shareholders
As we reflect on the journey of 2023, it's evident that the year
was both challenging and transformative for XP Inc. In an
environment marked by ongoing macroeconomic uncertainties and the
evolving needs of our clients, we kept our commitment to
innovation, quality, and growth. This year was a demonstration of
our resilience, agility, and the enduring strength of our business
model.
Business Model
Resilience
Despite the still challenging macroeconomic environment
mentioned beforehand, 2023 was a year of significant achievements
that continued to prove the resilience of our business model. On
the second quarter of 2023, we were happy to celebrate the
monumental milestone of surpassing R$1 trillion in Client Assets, a
clear indicator of our growing market presence and the trust our
clients place on us. This achievement underscores our position as a
leader in the Brazilian financial services industry and highlights
our potential for further growth, given our market share of less
than 12% in investments for individuals.
Our resilience was further demonstrated through our financial
performance. Despite the macroeconomic headwinds, we reported
record quarterly revenues and profitability, showcasing our ability
to capitalize on market opportunities and maintain cost discipline.
Our Earnings Before Tax (EBT) and Net Income saw year-over-year
growth, reflecting our operational efficiency and the successful
execution of our strategic initiatives.
Execution of Strategic
Initiatives
Throughout the year, we continued to focus on our three key
strategic pillars: 1. Leadership in investments, 2. Enhancement of
our ability to cross-sell superior products and 3. Wholesale
synergies. Central to these pillars is our commitment to a culture
of quality – our third wave of differentiation. Also, during
the year, we had the acquisition and subsequent integration of
Banco Modal, which marked a significant step in our journey,
expanding our capabilities and enhancing our product suite. This
integration is almost complete by now, delivering revenue synergies
and cost efficiencies.
Our New Verticals and Corporate & SMB initiatives continued
to thrive, contributing significantly to our revenue
diversification efforts, already contributing to more than 17% of
our total gross revenue for the year, if we consider all the New
Verticals, as we did on our Investor Day – including Retirement
Plans, Cards, Credit, Insurance, FX, Global Investments and Digital
Account. The recognition of our credit card as the Best in Brazil,
recognized by Melhores Cartões, is evidence of our commitment to
offer superior products and services.
Also, 2023 was marked by a strong focus on efficiency and cost
discipline throughout the whole company, as we achieved an
Efficiency Ratio of 36.3%, the lowest level since our IPO.
Distribution Channels
Evolution
In our efforts to expand and diversify, we have positioned
ourselves as a hub for entrepreneurs, consistently pioneering in
our distribution channel efforts. Our strategy encompasses a broad
spectrum of distribution channels, including B2B, B2C, wealth
managers, broker as a service, and consultants, enabling us to
reach a diverse client base and cater to their unique needs. This
diversification allows us to be at the forefront of the financial
services industry, adapting to changes and seizing opportunities
with agility and foresight.
Democratizing Access to Premium Quality
Services
A cornerstone of our mission this year has been to focus more on
the quality of what we offer to our clients. We are dedicated to
democratizing access to premium services which were previously
available only to private clients. By extending these high-quality
offerings to affluent clients, we are breaking down barriers and
creating a more inclusive financial ecosystem with scalability.
This initiative mirrors our past successes in making top-tier
investment products accessible to a broader audience, underscoring
our commitment to excellence in financial services.
Investing in Our People and
Culture
Our success is linked to the dedication and talent of our team.
In 2023, we focused on nurturing our culture of excellence and
innovation. We made significant strides in expanding and empowering
our network of Financial Advisors. Our commitment to providing our
advisors with the best tools and technology has not only enhanced
our service quality but also reinforced XP Inc. as the premier
platform for financial advisors in Brazil.
While we are proud of our accomplishments, we acknowledge that
there is still much to be done. Our efforts to increase penetration
and provide the best banking experience to our clients and advisors
continue to be a top priority. We are committed to enhancing our
offerings and services to meet and exceed the expectations of those
we serve.
Looking Forward
As we look to the future, we remain optimistic about our growth
trajectory and the opportunities that lie ahead. While we recognize
that there may be a delay for retail investors to shift their
behavior in a more favorable market environment, we are confident
that this positive cycle will come eventually. In the meantime, we
will maintain our cost discipline and stay focused on delivering
the quality and service excellence that our clients expect from
us.
The initiation of the monetary easing cycle by the Central Bank
and the improving market conditions are positive signals for our
core investments business. We remain committed to driving our
Return on Equity (ROE) growth through strategic earnings expansion
and capital distributions to our shareholders.
In closing, I extend my deepest gratitude to our clients,
executive partners, team members, and you, our shareholders, for
your continued trust and support. Together, we are not only
navigating the complexities of the present but also shaping a
promising future for XP Inc. and the financial services industry in
Brazil.
Thiago Maffra CEO, XP Inc.
Summary
Operating Metrics (unaudited)
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Total Client Assets (in R$
bn)
1,122
946
19%
1,080
4%
1,122
946
19%
Total Net Inflow (in R$ bn)
19
31
-40%
48
-61%
104
155
-33%
Annualized Retail Take Rate
1.27%
1.22%
5 bps
1.34%
-7 bps
1.28%
1.29%
-1 bps
Active Clients (in '000s)
4,531
3,877
17%
4,413
3%
4,531
3,877
17%
Headcount (EoP)
6,669
6,928
-4%
6,699
0%
6,669
6,928
-4%
IFAs (in '000s)
14.3
12.3
16%
14.3
0%
14.3
12.3
16%
Retail DATs (in mn)
2.2
2.7
-19%
2.1
3%
2.4
2.4
0%
Retirement Plans Client Assets
(in R$ bn)
73
61
21%
68
8%
73
61
21%
Cards TPV (in R$ bn)
11.8
8.2
44%
10.7
10%
40.9
24.9
64%
Credit Portfolio (in R$ bn)
21.0
17.1
23%
19.9
6%
21.0
17.1
23%
Financial Metrics (in R$ mn)
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Gross revenue
4,309
3,337
29%
4,364
-1%
15,726
14,036
12%
Retail
3,152
2,549
24%
3,179
-1%
11,791
10,157
16%
Institutional
413
357
16%
386
7%
1,516
1,919
-21%
Corporate & Issuer
Services
508
275
85%
519
-2%
1,576
1,295
22%
Other
236
156
52%
281
-16%
842
666
27%
Net Revenue
4,046
3,177
27%
4,132
-2%
14,860
13,348
11%
Gross Profit
2,753
2,067
33%
2,896
-5%
10,100
9,382
8%
Gross Margin
68.1%
65.1%
299 bps
70.1%
-202 bps
68.0%
70.3%
-232 bps
EBT
995
738
35%
1,157
-14%
3,936
3,445
14%
EBT Margin
24.6%
23.2%
136 bps
28.0%
-341 bps
26.5%
25.8%
68 bps
Net Income
1,040
783
33%
1,087
-4%
3,899
3,580
9%
Net Margin
25.7%
24.6%
107 bps
26.3%
-59 bps
26.2%
26.8%
-58 bps
Basic EPS (in R$)
1.90
1.43
33%
1.99
-4%
7.22
6.44
12%
Diluted EPS (in R$)
1.88
1.39
36%
1.96
-4%
7.16
6.25
15%
ROAE¹
21.1%
18.1%
293 bps
22.6%
-152 bps
21.4%
22.8%
-139 bps
ROAA²
2.4%
2.4%
5 bps
2.6%
-19 bps
2.5%
3.2%
-66 bps
________________________
1
– Annualized Return on Average
Equity.
2
– Annualized Return on Average Adjusted
Assets. Adjusted Assets excludes Retirement Plans Liabilities and
Float Balance.
Discussion of Results
Total Gross Revenue Gross Revenue was R$4.3 billion in
4Q23, down 1% QoQ and up 29% YoY, primarily driven by growth in our
Retail revenue year-over-year. In 2023, Gross Revenue totaled
R$15.7 billion, up 12% YoY, also led by Retail.
Retail Revenue
(in R$ mn)
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Retail Revenue
3,152
2,549
24%
3,179
-1%
11,791
10,157
16%
Equities
1,180
995
19%
1,131
4%
4,444
4,276
4%
Fixed Income
690
393
76%
718
-4%
2,318
1,886
23%
Funds Platform
334
311
7%
323
3%
1,311
1,259
4%
Retirement Plans
94
93
1%
98
-4%
365
333
10%
Cards
306
234
30%
259
18%
1,001
593
69%
Credit
46
47
-4%
49
-8%
180
160
12%
Insurance
46
31
46%
36
28%
149
97
53%
Other Retail
457
443
3%
565
-19%
2,023
1,553
30%
Annualized Retail Take Rate
1.27%
1.22%
5 bps
1.34%
-7 bps
1.28%
1.29%
-1 bps
Retail revenue was R$3.2 billion in 4Q23, down 1% QoQ and up 29%
YoY. Sequential Retail revenue was impacted by a positive
seasonality in Cards revenue, which increased 18% QoQ, partially
offset by sequential decline in the quarter in Fixed Income
revenue, and lack of Expert event related revenue in the
quarter.
In 2023, Retail revenue totaled R$11.8 billion, up 16% YoY.
Annual growth was mainly led by:
1) Other Retail Revenue, especially due to
Float and Digital Account revenue; 2) Fixed Income, after a strong
recovery in DCM activity in the second semester; and 3) Cards, with
a 69% revenue growth YoY.
Retail-related revenue in 4Q23 represented 76% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement. For 2023, Retail-related revenue represented 76% of
consolidated Net Income from Financial Instruments, as per the
Accounting Income Statement.
Take Rate Annualized Retail Take Rate was 1.27% in 4Q23,
down 7bps QoQ. Retail Take Rate for 2023 was 1.28%, down 1bps
YoY.
Institutional Revenue Institutional revenue was R$413
million in 4Q23, up 7% QoQ and 16% YoY. For 2023, Institutional
revenue decreased 21% to R$1.5 billion, mainly driven by lower
trading volumes in B3.
Institutional revenue in 4Q23 accounted for 6% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement. For 2023, Institutional revenue accounted for 8% of
consolidated Net Income from Financial Instruments, as per the
Accounting Income Statement.
Corporate & Issuer Services Revenue Corporate &
Issuer Services revenue totaled R$508 million in 4Q23, down 2% QoQ
and up 85% YoY, supported by another strong quarter of DCM activity
and also a strong contribution of M&A.
In 2023, Corporate and Issuer Services revenue increased 22% YoY
to R$1.6 billion. Year-over-year growth was led by a strong pick-up
in DCM activity in the second half of the year, and the continuous
expansion of our Corporate franchise.
Corporate and Issuer Services related revenues in 4Q23
represented 7% of consolidated Net Income from Financial
Instruments, as per the Accounting Income Statement. In 2023,
Corporate and Issuer Services related revenues represented 7% of
consolidated Net Income from Financial Instruments, as per the
Accounting Income Statement.
Other Revenue Other revenue was R$236 million in 4Q23,
down 16% QoQ and up 52% YoY.
Other revenue in 4Q23 accounted for 11% of consolidated Net
Income from Financial Instruments, as per the Accounting Income
Statement. In 2023, Other revenue accounted for 10% of consolidated
Net Income from Financial Instruments, as per the Accounting Income
Statement.
Costs of Goods Sold and Gross Margin Gross Margin was
68.1% in 4Q23 versus 70.1% in 3Q23 and 65.1% in 4Q22. Sequential
decrease in gross margin was mainly related to revenue mix between
products and channels in the quarter. In 2023, Gross Margin was
68.0%, a 232bps decrease YoY mainly related to change in revenue
mix between products and channels and relative increase in expected
credit losses due to ongoing growth of our Cards business.
SG&A Expenses2
(in R$ mn)
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Total SG&A
(1,553)
(1,377)
13%
(1,547)
0%
(5,391)
(5,602)
-4%
People
(1,022)
(892)
15%
(1,048)
-2%
(3,728)
(3,943)
-5%
Salary and Taxes
(393)
(337)
17%
(396)
-1%
(1,510)
(1,432)
5%
Bonuses
(462)
(379)
22%
(486)
-5%
(1,705)
(1,764)
-3%
Share Based Compensation
(166)
(176)
-6%
(166)
0%
(513)
(747)
-31%
Non-people
(532)
(485)
10%
(499)
7%
(1,663)
(1,659)
0%
LTM Compensation Ratio
25.1%
29.5%
-446 bps
25.7%
-63 bps
25.1%
29.5%
-446 bps
LTM Efficiency Ratio
36.3%
42.0%
-569 bps
37.3%
-99 bps
36.3%
42.0%
-569 bps
Headcount (EoP)
6,669
6,928
-4%
6,699
0%
6,669
6,928
-4%
________________________
3
– Total SG&A and non-people SG&A
exclude revenue from incentives from Tesouro Direto, B3.
4
– Compensation ratio is calculated as
People SG&A (Salary and Taxes, Bonuses and Share Based
Compensation) divided by Net Revenue.
5
– Efficiency ratio is calculated as
SG&A ex-revenue from incentives from Tesouro Direto, B3, and
others divided by Net Revenue.
SG&A3 expenses totaled R$1.6 billion in 4Q23, relatively
flat QoQ and up 13% YoY. Total SG&A³ for 2023 stood at R$5.4
billion, within our annual guidance from R$5.0 to 5.5 billion, even
after Modal’s inclusion in the second half of the year.
Our last twelve months (LTM) compensation ratio4 in 4Q23 was
25.1%, an improvement from 29.5% and 25.7% in 4Q22 and 3Q23,
respectively. Also, our LTM efficiency ratio5 reached 36.3% in
4Q23, the lowest level since IPO, reinforcing once again our focus
on cost discipline.
Earnings Before Taxes EBT, a good proxy for earnings
power, was R$995 million in 4Q23, down 14% QoQ and up 35% YoY. EBT
Margin was 24.6%, down 341bps QoQ and up 136 bps YoY. In 2023, EBT
stood at R$3.9 billion, up 14% YoY, and annual EBT Margin stood at
26.5%, in line with our medium-term annual guidance of 26% to 32%
between 2023 and 2025.
Net Income and EPS In 4Q23, Net Income was R$1.0 billion,
down 4% QoQ and up 33% YoY. Basic EPS was R$1.90, down 4% QoQ and
up 33% YoY. Fully diluted EPS was R$1.88 for the quarter, down 4%
QoQ and up 36% YoY.
In 2023, Net Income totaled R$3.9 billion, up 9% YoY. Basic EPS
was R$7.22, up 12% YoY, while fully diluted EPS was R$7.16, up 15%
YoY.
ROTE6 and ROAE7 Starting this quarter, we now present
Return on Tangible Equity, which excludes Intangibles and Goodwill.
We believe this is a more accurate reflection of our company’s true
operations, allowing investors more meaningful comparisons with our
peers.
In 4Q23, ROTE6 was 25.5%, down 19bps QoQ and up 570bps YoY. Our
ROTE6 for 2023 stood at 25.0%, down 23bps YoY. Our ROAE7 in 4Q23
was 21.1%, down 152bps QoQ and up 293bps YoY. Our ROAE7 for 2023
stood at 21.4%, down 139bps YoY.
________________________
6
– Annualized Return on Tangible Common
Equity, calculated as Annualized Net Income over Tangible Common
Equity, which excludes Intangibles and Goodwill, net of deferred
taxes.
7
– Annualized Return on Average
Equity.
Other Information
Webcast and Conference Call Information The Company will
host a webcast to discuss its fourth quarter financial results on
Tuesday, February 27th, 2024, at 5:00 pm ET (7:00 pm BRT). To
participate in the earnings webcast please subscribe at 4Q23
Earnings Web Meeting. The replay will be available on XP’s investor
relations website at https://investors.xpinc.com/.
Important Disclosure In reviewing the information
contained in this release, you are agreeing to abide by the terms
of this disclaimer. This information is being made available to
each recipient solely for its information and is subject to
amendment. This release is prepared by XP Inc. (the “Company,” “we”
or “our”), is solely for informational purposes. This release does
not constitute a prospectus and does not constitute an offer to
sell or the solicitation of an offer to buy any securities. In
addition, this document and any materials distributed in connection
with this release are not directed to, or intended for distribution
to or use by, any person or entity that is a citizen or resident or
located in any locality, state, country or other jurisdiction where
such distribution, publication, availability or use would be
contrary to law or regulation or which would require any
registration or licensing within such jurisdiction.
This release was prepared by the Company. Neither the Company
nor any of its affiliates, officers, employees or agents, make any
representation or warranty, express or implied, in relation to the
fairness, reasonableness, adequacy, accuracy or completeness of the
information, statements or opinions, whichever their source,
contained in this release or any oral information provided in
connection herewith, or any data it generates and accept no
responsibility, obligation or liability (whether direct or
indirect, in contract, tort or otherwise) in relation to any of
such information. The information and opinions contained in this
release are provided as at the date of this release, are subject to
change without notice and do not purport to contain all information
that may be required to evaluate the Company. The information in
this release is in draft form and has not been independently
verified. The Company and its affiliates, officers, employees and
agents expressly disclaim any and all liability which may be based
on this release and any errors therein or omissions therefrom.
Neither the Company nor any of its affiliates, officers, employees
or agents makes any representation or warranty, express or implied,
as to the achievement or reasonableness of future projections,
management targets, estimates, prospects or returns, if any.
The information contained in this release does not purport to be
comprehensive and has not been subject to any independent audit or
review. Certain of the financial information as of and for the
periods ended of December 31, 2021 and December 31, 2020, 2019,
2018 and 2017 has been derived from audited financial statements
and all other financial information has been derived from unaudited
interim financial statements. A significant portion of the
information contained in this release is based on estimates or
expectations of the Company, and there can be no assurance that
these estimates or expectations are or will prove to be accurate.
The Company’s internal estimates have not been verified by an
external expert, and the Company cannot guarantee that a third
party using different methods to assemble, analyze or compute
market information and data would obtain or generate the same
results.
Statements in the release, including those regarding the
possible or assumed future or other performance of the Company or
its industry or other trend projections, constitute forward-looking
statements. These statements are generally identified by the use of
words such as “anticipate,” “believe,” “could,” “expect,” “should,”
“plan,” “intend,” “estimate” and “potential,” among others. By
their nature, forward-looking statements are necessarily subject to
a high degree of uncertainty and involve known and unknown risks,
uncertainties, assumptions and other factors because they relate to
events and depend on circumstances that will occur in the future
whether or not outside the control of the Company. Such factors may
cause actual results, performance or developments to differ
materially from those expressed or implied by such forward-looking
statements and there can be no assurance that such forward-looking
statements will prove to be correct. These risks and uncertainties
include factors relating to: (1) general economic, financial,
political, demographic and business conditions in Brazil, as well
as any other countries we may serve in the future and their impact
on our business; (2) fluctuations in interest, inflation and
exchange rates in Brazil and any other countries we may serve in
the future; (3) competition in the financial services industry; (4)
our ability to implement our business strategy; (5) our ability to
adapt to the rapid pace of technological changes in the financial
services industry; (6) the reliability, performance, functionality
and quality of our products and services and the investment
performance of investment funds managed by third parties or by our
asset managers; (7) the availability of government authorizations
on terms and conditions and within periods acceptable to us; (8)
our ability to continue attracting and retaining new
appropriately-skilled employees; (9) our capitalization and level
of indebtedness; (10) the interests of our controlling
shareholders; (11) changes in government regulations applicable to
the financial services industry in Brazil and elsewhere; (12) our
ability to compete and conduct our business in the future; (13) the
success of operating initiatives, including advertising and
promotional efforts and new product, service and concept
development by us and our competitors; (14) changes in consumer
demands regarding financial products, customer experience related
to investments and technological advances, and our ability to
innovate to respond to such changes; (15) changes in labor,
distribution and other operating costs; (16) our compliance with,
and changes to, government laws, regulations and tax matters that
currently apply to us; (17) other factors that may affect our
financial condition, liquidity and results of operations.
Accordingly, you should not place undue reliance on forward-looking
statements. The forward-looking statements included herein speak
only as at the date of this release and the Company does not
undertake any obligation to update these forward-looking
statements. Past performance does not guarantee or predict future
performance. Moreover, the Company and its affiliates, officers,
employees and agents do not undertake any obligation to review,
update or confirm expectations or estimates or to release any
revisions to any forward-looking statements to reflect events that
occur or circumstances that arise in relation to the content of the
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.
Market data and industry information used throughout this
release are based on management’s knowledge of the industry and the
good faith estimates of management. The Company also relied, to the
extent available, upon management’s review of industry surveys and
publications and other publicly available information prepared by a
number of third-party sources. All of the market data and industry
information used in this release involves a number of assumptions
and limitations, and you are cautioned not to give undue weight to
such estimates. Although the Company believes that these sources
are reliable, there can be no assurance as to the accuracy or
completeness of this information, and the Company has not
independently verified this information.
The contents hereof should not be construed as investment,
legal, tax or other advice and you should consult your own advisers
as to legal, business, tax and other related matters concerning an
investment in the Company. The Company is not acting on your behalf
and does not regard you as a customer or a client. It will not be
responsible to you for providing protections afforded to clients or
for advising you on the relevant transaction.
This release includes our Float, Adjusted Gross Financial
Assets, Net Asset Value, and Adjustments to Reported Net Income,
which are non-GAAP financial information. We believe that such
information is meaningful and useful in understanding the
activities and business metrics of the Company’s operations. We
also believe that these non-GAAP financial measures reflect an
additional way of viewing aspects of the Company’s business that,
when viewed with our International Financial Reporting Standards
(“IFRS”) results, as issued by the International Accounting
Standards Board, provide a more complete understanding of factors
and trends affecting the Company’s business. Further, investors
regularly rely on non-GAAP financial measures to assess operating
performance and such measures may highlight trends in the Company’s
business that may not otherwise be apparent when relying on
financial measures calculated in accordance with IFRS. We also
believe that certain non-GAAP financial measures are frequently
used by securities analysts, investors and other interested parties
in the evaluation of public companies in the Company’s industry,
many of which present these measures when reporting their results.
The non-GAAP financial information is presented for informational
purposes and to enhance understanding of the IFRS financial
statements. The non-GAAP measures should be considered in addition
to results prepared in accordance with IFRS, but not as a
substitute for, or superior to, IFRS results. As other companies
may determine or calculate this non-GAAP financial information
differently, the usefulness of these measures for comparative
purposes is limited. A reconciliation of such non-GAAP financial
measures to the nearest GAAP measure is included in this
release.
For purposes of this release:
“Active Clients” means the total number of retail clients served
through our XP Investimentos, Rico, Clear, XP Investments and XP
Private (Europe) brands, with Client Assets above R$100.00 or that
have transacted at least once in the last thirty days. For purposes
of calculating this metric, if a client holds an account in more
than one of the aforementioned entities, such client will be
counted as one “active client” for each such account. For example,
if a client holds an account in each of XP Investimentos and Rico,
such client will count as two “active clients” for purposes of this
metric.
“Client Assets” means the market value of all client assets
invested through XP’s platform and that is related to reported
Retail Revenue, including equities, fixed income securities, mutual
funds (including those managed by XP Gestão de Recursos Ltda., XP
Advisory Gestão de Recursos Ltda. and XP Vista Asset Management
Ltda., as well as by third-party asset managers), pension funds
(including those from XP Vida e Previdência S.A., as well as by
third-party insurance companies), exchange traded funds, COEs
(Structured Notes), REITs, and uninvested cash balances (Float
Balances), among others. Although Client Assets includes custody
from Corporate Clients that generate Retail Revenue, it does not
include custody from institutional clients (asset managers, pension
funds and insurance companies).
Rounding
We have made rounding adjustments to some of the figures
included in this release. Accordingly, numerical figures shown as
totals in some tables may not be an arithmetic aggregation of the
figures that preceded them.
Unaudited Managerial Income Statement (in R$ mn)
Managerial Income Statement
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Total Gross Revenue
4,309
3,337
29%
4,364
-1%
15,726
14,036
12%
Retail
3,152
2,549
24%
3,179
-1%
11,791
10,157
16%
Equities
1,180
995
19%
1,131
4%
4,444
4,276
4%
Fixed Income
690
393
76%
718
-4%
2,318
1,886
23%
Funds Platform
334
311
7%
323
3%
1,311
1,259
4%
Retirement Plans
94
93
1%
98
-4%
365
333
10%
Cards
306
234
30%
259
18%
1,001
593
69%
Credit
46
47
-4%
49
-8%
180
160
12%
Insurance
46
31
46%
36
28%
149
97
53%
Other
457
443
3%
565
-19%
2,023
1,553
30%
Institutional
413
357
16%
386
7%
1,516
1,919
-21%
Corporate & Issuer
Services
508
275
85%
519
-2%
1,576
1,295
22%
Other
236
156
52%
281
-16%
842
666
27%
Net Revenue
4,046
3,177
27%
4,132
-2%
14,860
13,348
11%
COGS
(1,292)
(1,110)
16%
(1,236)
5%
(4,760)
(3,965)
20%
Gross Profit
2,753
2,067
33%
2,896
-5%
10,100
9,382
8%
Gross Margin
68.1%
65.1%
299 bps
70.1%
-202 bps
68.0%
70.3%
-232 bps
SG&A
(1,539)
(1,135)
36%
(1,541)
0%
(5,368)
(5,317)
1%
People
(1,022)
(892)
15%
(1,048)
-2%
(3,728)
(3,943)
-5%
Non-People
(517)
(243)
112%
(493)
5%
(1,639)
(1,374)
19%
D&A
(82)
(46)
81%
(71)
16%
(252)
(206)
23%
Interest expense on debt
(167)
(150)
12%
(135)
23%
(617)
(402)
53%
Share of profit in joint ventures
and associates
30
1
n.a.
9
102%
74
(12)
-704%
EBT
995
738
35%
1,157
-14%
3,936
3,445
14%
EBT Margin
24.6%
23.2%
136 bps
28.0%
-341 bps
26.5%
25.8%
68 bps
Tax Expense (Accounting)
45
44
1%
(71)
-163%
(37)
136
-127%
Tax expense (Tax Withholding in
Funds)6
(175)
(192)
-9%
(169)
4%
(659)
(754)
-13%
Effective tax rate
(Normalized)
(11.1%)
(15.8%)
470 bps
(18.1%)
693 bps
(15.1%)
(14.7%)
-41 bps
Net Income
1,040
783
33%
1,087
-4%
3,899
3,580
9%
Net Margin
25.7%
24.6%
107 bps
26.3%
-59 bps
26.2%
26.8%
-58 bps
Adjustments
109
110
-2%
92
18%
309
494
-37%
Adjusted Net Income7
1,149
893
29%
1,179
-3%
4,209
4,075
3%
Adjusted Net Margin
28.4%
28.1%
28 bps
28.5%
-14 bps
28.3%
30.5%
-221 bps
________________________
6
– Tax adjustments are related to tax
withholding expenses that are recognized net in gross revenue.
7
– See appendix for a reconciliation of
Adjusted Net Income.
Accounting Income Statement (in R$ mn)
Accounting Income Statement
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Net revenue from services
rendered
1,881
1,565
20%
1,822
3%
6,532
5,940
10%
Brokerage commission
485
544
-11%
525
-8%
1,992
2,103
-5%
Securities placement
687
361
90%
637
8%
1,979
1,631
21%
Management fees
414
412
0%
414
0%
1,628
1,581
3%
Insurance brokerage fee
48
47
2%
43
12%
175
153
14%
Commission Fees
220
237
-7%
206
7%
790
564
40%
Other services
214
108
98%
169
26%
589
476
24%
Sales Tax and contributions on
Services
(187)
(145)
29%
(173)
9%
(622)
(568)
9%
Net income from financial
instruments at amortized cost
311
14
n.a.
142
119%
1,573
1,146
37%
Net income from financial
instruments at fair value through profit or loss
1,854
1,598
16%
2,168
-14%
6,756
6,261
8%
Total revenue and
income
4,046
3,177
27%
4,132
-2%
14,860
13,347
11%
Operating costs
(1,169)
(1,071)
9%
(1,122)
4%
(4,399)
(3,871)
14%
Selling expenses
(59)
(48)
25%
(50)
19%
(169)
(139)
22%
Administrative expenses
(1,547)
(1,368)
13%
(1,544)
0%
(5,461)
(5,641)
-3%
Other operating revenues
(expenses), net
(14)
235
n.a.
(18)
-21%
11
257
n.a.
Expected credit losses
(124)
(38)
n.a.
(115)
8%
(361)
(94)
n.a.
Interest expense on debt
(167)
(150)
12%
(135)
23%
(617)
(402)
53%
Share of profit or (loss) in
joint ventures and associates
30
1
n.a.
9
215%
74
(12)
n.a.
Income before income
tax
995
738
35%
1,157
-14%
3,936
3,445
14%
Income tax expense
45
44
1%
(71)
n.a.
(37)
136
n.a.
Net income for the
period
1,040
783
33%
1,087
-4%
3,899
3,580
9%
Balance Sheet (in R$ mn)
Assets
4Q23
3Q23
Cash
3,943
3,822
Financial assets
229,197
214,838
Fair value through profit or
loss
127,016
120,854
Securities
103,282
101,039
Derivative financial
instruments
23,733
19,815
Fair value through other
comprehensive income
44,063
38,486
Securities
44,063
38,486
Evaluated at amortized
cost
58,119
55,498
Securities
6,855
6,175
Securities purchased under
agreements to resell
14,889
12,252
Securities trading and
intermediation
2,932
3,569
Accounts receivable
681
620
Loan Operations
28,552
26,645
Other financial assets
4,209
6,236
Other assets
7,812
7,586
Recoverable taxes
245
302
Rights-of-use assets
282
204
Prepaid expenses
4,418
4,401
Other
2,867
2,679
Deferred tax assets
2,104
2,023
Investments in associates and
joint ventures
3,109
2,261
Property and equipment
373
348
Goodwill & Intangible
assets
2,502
2,551
Total Assets
249,041
233,427
Liabilities
4Q23
3Q23
Financial liabilities
171,237
158,537
Fair value through profit or
loss
45,208
32,888
Securities
20,423
14,342
Derivative financial
instruments
24,785
18,546
Evaluated at amortized
cost
126,029
125,649
Securities sold under repurchase
agreements
33,341
39,517
Securities trading and
intermediation
16,944
17,062
Financing instruments payable
60,366
53,094
Accounts payables
948
604
Borrowings
2,199
1,260
Other financial liabilities
12,231
14,112
Other liabilities
58,266
54,793
Social and statutory
obligations
1,146
711
Taxes and social security
obligations
560
488
Retirement plans liabilities
56,409
53,280
Provisions and contingent
liabilities
98
110
Other
54
204
Deferred tax
liabilities
86
74
Total Liabilities
229,590
213,404
Equity attributable to owners
of the Parent company
19,449
20,014
Issued capital
0
0
Capital reserve
19,190
18,745
Other comprehensive income
376
107
Treasury
(117)
(117)
Retained earnings
-
1,279
Non-controlling
interest
1
9
Total equity
19,451
20,023
Total liabilities and
equity
249,041
233,427
Float, Adjusted Gross Financial Assets and Net Asset Value
(in R$ mn)
We present Adjusted Gross Financial Assets because we believe
this metric captures the liquidity that is, in fact, available to
us, net of the portion of liquidity that is related to our Float
Balance (and therefore attributable to clients). We calculate
Adjusted Gross Financial Assets as the sum of (1) Cash and
Financial Assets (comprised of Cash plus Securities – Fair value
through profit or loss, plus Securities – Fair value through other
comprehensive income, plus Securities – Evaluated at amortized
cost, plus Derivative financial instruments, plus Securities
(purchased under agreements to resell), plus Loans and Foreign
exchange portfolio (assets) less (2) Financial Liabilities
(comprised of the sum of Securities loaned, Derivative financial
instruments, Securities sold under repurchase agreements and
Private pension liabilities), Deposits, Structured Operation
Certificates (COE), Financial Bills, Foreign exchange portfolio
(liabilities), Credit cards operations and (3) less Float
Balance.
It is a measure that we track internally daily, and it more
intuitively reflects the effect of the operational profits we
generate and the variations between working capital assets and
liabilities (cash flows from operating activities), investments in
fixed and intangible assets and investments in the IFA Network
(cash flows from investing activities) and inflows and outflows
related to equity and debt securities in our capital structure
(cash flows from financing activities). Our management treats all
securities and financial instrument assets, net of financial
instrument liabilities, as balances that compose our total
liquidity, with subline items (such as, for example, “securities at
fair value through profit and loss” and “securities at fair value
through other comprehensive income”) expected to fluctuate
substantially from quarter to quarter as our treasury manages and
allocates our total liquidity to the most suitable financial
instruments.
In order to explain how we measure our cash position or
generation internally, we are introducing the Net Asset Value
concept. Since we are a financial institution, we hold several
types of financial instruments with different characteristics,
hence the definition of net cash that makes more sense from a
business perspective is the Net Asset Value. It is basically the
adjusted gross financial assets net of debt instruments.
Adjusted Gross Financial
Assets
4Q23
3Q23
Assets
231,903
216,300
(+) Cash
3,943
3,822
(+) Securities - Fair value
through profit or loss
103,282
101,039
(+) Securities - Fair value
through OCI
44,063
38,486
(+) Securities - Evaluated at
amortized cost
6,855
6,175
(+) Derivative financial
instruments
23,733
19,815
(+) Securities purchased under
agreements to resell
14,889
12,252
(+) Loans and credit card
operations
28,552
26,645
(+) Foreign exchange
portfolio
1,022
4,240
(+) Energy
2,606
2,105
(+) Central Bank Deposits
2,957
1,722
Liabilities
(198,386)
(183,729)
(-) Securities
(20,423)
(14,342)
(-) Derivative financial
instruments
(24,785)
(18,546)
(-) Securities sold under
repurchase agreements
(33,341)
(39,517)
(-) Retirement Plans
Liabilities
(56,409)
(53,280)
(-) Deposits
(27,494)
(22,635)
(-) Structured Operations
(18,015)
(16,241)
(-) Financial Bills
(9,020)
(7,812)
(-) Foreign exchange
portfolio
(1,362)
(4,562)
(-) Credit card operations
(7,234)
(6,442)
(-) Other Funding
(303)
(352)
(-) Float
(14,011)
(13,493)
(=) Adjusted Gross Financial
Assets
19,506
19,078
Net Asset Value
4Q23
3Q23
(=) Adjusted Gross Financial
Assets
19,506
19,078
Gross Debt
(9,575)
(9,428)
(-) Borrowings
(2,199)
(1,260)
(-) Debentures
(2,212)
(2,656)
(-) Structured financing
(1,842)
(2,114)
(-) Bonds
(3,322)
(3,398)
(=) Net Asset Value
9,931
9,650
Float (=net uninvested clients'
deposits)
4Q23
3Q23
Assets
(2,932)
(3,569)
(-) Securities trading and
intermediation
(2,932)
(3,569)
Liabilities
16,944
17,062
(+) Securities trading and
intermediation
16,944
17,062
(=) Float
14,011
13,493
Reconciliation of Adjusted Net Income (in R$ mn)
Adjusted Net Income
4Q23
4Q22
YoY
3Q23
QoQ
2023
2022
YoY
Net Income
1,040
783
33%
1,087
-4%
3,899
3,580
9%
(+) Share Based Compensation
181
181
0%
151
20%
541
793
-32%
(+/-) Taxes
(72)
(71)
2%
(59)
23%
(232)
(299)
-22%
Adj. Net Income
1,149
893
29%
1,179
-3%
4,209
4,075
3%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227927454/en/
Investor Relations Contact ir@xpi.com.br
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