StoneCo Ltd. (Nasdaq: STNE) (“Stone” or the “Company”), a leading
provider of financial technology and software solutions that
empowers merchants to conduct commerce seamlessly across multiple
channels, today reports its financial results for its first quarter
ended March 31, 2022.“Dear Shareholders,
We are encouraged by the results through the
first quarter of 2022. As we highlighted during our year-end
results, in 2022 we are committed to execute on our core growth
engine, simplify our business and start to show proof of our
profitability recovery.
The first quarter results are the first step on
this journey. Our growth engine, the central pillar of how we
onboard and serve our clients, remains strong and we started to see
margin recovery as evidenced by our first quarter Adjusted EBT
margin of 7.9% up from 0.9% in the fourth quarter of 2021. The
prudent price initiatives we implemented during the fourth quarter
have continued to gain traction and the quality of our client base
is improving, as expected. On the leadership front, we have brought
on new talents that provide a wealth of knowledge and experience to
our team. I would also like to highlight that we continue to evolve
both in management capabilities and governance.
As you will see, effective in the first quarter
of 2022, we have implemented segment reporting around our Financial
Services and Software businesses. This reporting change aligns with
the way we manage our business and, we believe, provides greater
clarity and transparency to the drivers of performance. As we look
to the rest of the year, we will build on the achievements of the
first quarter and demonstrate a pattern of consistency. We are
energized by our recent results and remain focused on our central
purpose of serving Brazilian Entrepreneurs.”
– Thiago Piau, CEO
Operating and Financial Highlights for 1Q22
MAIN CONSOLIDATED FINANCIAL METRICS
Table 1: Main Consolidated Financial
Metrics
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Main Consolidated Financial Metrics |
1Q22 |
4Q21 |
1Q21 |
|
Δ y/y % |
Δ q/q % |
|
Total Revenue and Income (R$mn) |
2,070.3 |
1,873.0 |
867.7 |
|
138.6% |
10.5% |
|
Adjusted EBITDA (R$mn) |
817.3 |
684.7 |
377.0 |
|
116.8% |
19.4% |
|
Adjusted EBT (R$mn) |
163.1 |
17.2 |
247.6 |
|
(34.1%) |
850.5% |
|
Adjusted Net Income (R$mn) |
132.2 |
33.7 |
187.4 |
|
(29.4%) |
292.5% |
|
Adjusted Net Cash (R$mn) |
2,406.9 |
2,146.9 |
11,849.5 |
|
(79.7%) |
12.1% |
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- Total
Revenue and Income was R$2,070.3 million, up 138.6% year
over year (87.2% pro-forma for Linx) and 10.4% above the mid-range
of our guidance of between R$1,850.0 and R$1,900.0 million. This
increase was mainly a result of (i) 107.8% growth in our financial
services platform revenues, that reached R$1,721.3 million and (ii)
11x growth in our software platform revenues, that reached R$326.6
million. Non-Allocated revenue represented the remaining R$22.4
million in revenue. Financial services revenue growth was mostly a
result of our performance in the MSMB segment, with strong TPV
growth combined with increasing take rates, as we successfully
adjusted our pricing policy amid a higher interest rate environment
in Brazil. Our year-over-year software revenue growth was driven
mostly by the consolidation of Linx into our results beginning in
3Q21. Software revenue pro-forma for Linx grew 26.9% year over
year, mainly driven by the Core POS/ERP revenue growth.
- Adjusted
EBITDA in 1Q22 was R$817.3 million, up 116.8% year over
year and 19.4% quarter over quarter. EBITDA Margin increased 2.9
percentage points sequentially to 39.5%, mainly due to efficiency
gains in Cost of Services and Administrative Expenses.
- Adjusted
EBT in 1Q22 was R$163.1 million, 16.5% above our guidance
of R$140.0 million and significantly above 4Q21 Adjusted Pre-tax
Income of R$17.2 million.
- Adjusted
Net Income in 1Q22 was R$132.2 million, with a 6.4% net
margin, representing a sequential increase from adjusted net income
of R$33.7 million and a 1.8% margin in 4Q21. This improvement was
mostly related to the successful implementation of our new pricing
policy and efficiency gains in costs and expenses. We expect to
continue to actively manage our pricing policy throughout 2022,
with focus on balancing growth and profitability in our core MSMB
payments operation.
- Adjusted
Net Cash was R$2,406.9 million in 1Q22, R$260.0 million
higher quarter over quarter, mostly explained by: (i) R$132.2
million Adjusted Net Income; (ii) R$392.7 million of working
capital variations excluding AR/AP1, mainly driven by R$253.5
million of net collections from our credit business; (iii) -R$241.8
million of capex; (iv) - R$41.9 million of M&A and (v) R$18.7
million of other factors and non-cash items that affect our
Adjusted Net Cash position.
SEGMENT REPORTING
As we announced in 4Q21 earnings release, from
1Q22 onwards, we will report our financial and operating metrics in
two segments, Financial Services and Software, and non-allocated
activities comprised of non-strategic businesses. Note that our
segment reporting is performed on an Adjusted basis, adjusting for
items such as the mark-to-market and the bond financial expenses
related to Banco Inter investment, amortization of fair value
adjustments on acquisitions, among other factors.
Financial Services: comprised
of our financial services solutions serving both MSMBs and Key
Accounts, which includes mainly our payments solutions, digital
banking, credit, insurance solutions and our registry business
TAG.
Software: comprised of two main
fronts, namely: (i) Core, which includes POS/ERP solutions, TEF and
QR Code gateways, reconciliation and CRM and (ii) Digital, which
includes OMS, e-commerce platform, engagement tools, Ads solution
and Marketplace Hub. The results of the Linx Pay legacy business
are accounted for in both Core and Digital revenues and costs.
Despite having concluded the client base migration to the Stone
platform, we still incurred expenses related to such legacy
business during 1Q22.
Below, we provide our main financial metrics
broken down into our two reportable segments.
Table 2: Financial metrics by
segment
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Segment Reporting (R$mn Adjusted) |
1Q22 |
% Rev2 |
4Q21 |
% Rev2 |
1Q21 |
% Rev2 |
|
Δ y/y % |
Δ q/q % |
|
|
Total Revenue and Income |
2,070.3 |
100.0% |
1,873.0 |
100.0% |
867.7 |
100.0% |
|
138.6% |
10.5% |
|
|
Financial Services |
1,721.3 |
100.0% |
1,545.9 |
100.0% |
828.4 |
100.0% |
|
107.8% |
11.3% |
|
|
Software |
326.6 |
100.0% |
311.4 |
100.0% |
30.9 |
100.0% |
|
955.6% |
4.9% |
|
|
Non-Allocated |
22.4 |
100.0% |
15.7 |
100.0% |
8.3 |
100.0% |
|
168.8% |
42.9% |
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Adjusted EBITDA |
817.3 |
39.5% |
684.7 |
36.6% |
377.0 |
43.4% |
|
116.8% |
19.4% |
|
|
Financial Services |
771.8 |
44.8% |
664.3 |
43.0% |
375.1 |
45.3% |
|
105.8% |
16.2% |
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|
Software |
40.3 |
12.3% |
26.9 |
8.6% |
6.0 |
19.4% |
|
570.3% |
49.6% |
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|
Non-Allocated |
5.2 |
23.3% |
(6.5) |
(41.4%) |
(4.1) |
(49.3%) |
|
n.m |
n.m |
|
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Adjusted Profit Before Income Taxes |
163.1 |
7.9% |
17.2 |
0.9% |
247.6 |
28.5% |
|
(34.1%) |
850.5% |
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|
Financial Services |
146.4 |
8.5% |
35.2 |
2.3% |
250.2 |
30.2% |
|
(41.5%) |
316.3% |
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|
Software |
12.3 |
3.8% |
(15.2) |
(4.9%) |
0.6 |
1.9% |
|
1972.4% |
n.m |
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|
Non-Allocated |
4.3 |
19.3% |
(2.8) |
(18.1%) |
(3.2) |
(38.7%) |
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n.m |
n.m |
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FINANCIAL SERVICES PERFORMANCE
HIGHLIGHTS
Table 3: Financial Services Main Operating and Financial
Metrics
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Main Financial Services Metrics |
1Q22 |
4Q21 |
1Q21 |
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Δ y/y % |
Δ q/q % |
Financial Metrics (R$mn) |
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Total Revenue and Income |
1,721.3 |
1,545.9 |
828.4 |
|
107.8% |
11.3% |
Adjusted EBITDA |
771.8 |
664.3 |
375.1 |
|
105.8% |
16.2% |
Adjusted EBT |
146.4 |
35.2 |
250.2 |
|
(41.5%) |
316.3% |
Adjusted EBT Margin |
8.5% |
2.3% |
30.2% |
|
(21.7 p.p.) |
6.2 p.p. |
Adjusted Net Income |
125.9 |
53.2 |
191.4 |
|
(34.2%) |
136.7% |
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TPV (R$bn) |
83.2 |
89.0 |
51.0 |
|
63.1% |
(6.6%) |
MSMB |
63.4 |
66.7 |
32.8 |
|
93.3% |
(5.0%) |
Key Accounts |
19.8 |
22.3 |
18.2 |
|
8.4% |
(11.4%) |
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Monthly Average TPV MSMB ('000) |
11.8 |
14.6 |
13.8 |
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(14.6%) |
(19.2%) |
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Active Payments Client Base ('000) |
1,926.2 |
1,766.1 |
909.3 |
|
111.8% |
9.1% |
MSMB |
1,870.9 |
1,703.4 |
857.8 |
|
118.1% |
9.8% |
Key Accounts |
60.2 |
67.4 |
54.4 |
|
10.8% |
(10.6%) |
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Net Adds ('000) |
160.1 |
377.7 |
134.8 |
|
18.7% |
(57.6%) |
MSMB |
167.5 |
367.3 |
138.0 |
|
21.3% |
(54.4%) |
Key Accounts |
(7.1) |
11.3 |
(2.0) |
|
256.3% |
n.m |
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Take Rate |
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MSMB |
2.06% |
1.71% |
1.87% |
|
0.19 p.p. |
0.35 p.p. |
Key Accounts |
0.84% |
0.82% |
0.80% |
|
0.04 p.p. |
0.02 p.p. |
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MSMB Banking |
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Active Banking Client Base ('000) |
509.9 |
491.5 |
237.4 |
|
114.8% |
3.7% |
Total Accounts Balance (R$mn) |
1,972.7 |
1,953.3 |
614.5 |
|
221.0% |
1.0% |
Stone Card TPV (R$mn) |
514.5 |
498.7 |
218.8 |
|
135.1% |
3.2% |
Insurance Clients ('000) |
50.0 |
29.2 |
0.5 |
|
9846.5% |
71.5% |
Banking ARPAC3 |
33.3 |
25.3 |
11.8 |
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183.0% |
31.6% |
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MSMB Credit |
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Portfolio (R$mn) |
722.2 |
1,201.6 |
1,900.6 |
|
(62.0%) |
(39.9%) |
Credit Clients ('000) |
55.3 |
85.4 |
102.3 |
|
(46.0%) |
(35.3%) |
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- Total
Revenue and Income for Financial Services
segment in 1Q22 was R$1,721.3 million, a 107.8%
increase year over year. This growth was mostly a result of our
performance in the MSMB segment, with strong year over year TPV and
client base growth, in addition to increasing take rates, as we
successfully adjusted our pricing policy amid a higher interest
rate environment in Brazil.
- Adjusted
EBT for Financial Services segment in 1Q22 was R$146.4
million, a decrease of 41.5% year over year, with a margin of 8.5%
compared with 30.2% for the prior-year period. This margin
variation is explained by higher cost of funds in our operation as
a result of the higher base rate in the country. Compared with
4Q21, Adjusted EBT increased 4.2x, up from R$35.2 million, with
adjusted EBT margins increasing from 2.3% in 4Q21 to 8.5% in 1Q22,
mainly as a result of our new pricing policy and increased
efficiency in Cost of Services, Administrative Expenses and
Financial Expenses as a percentage of revenue.
- Adjusted
Net Income for Financial Services segment was R$125.9
million, 34.2% lower year over year and 136.7% higher quarter over
quarter.
-
Consolidated TPV was R$83.2 billion in 1Q22, a
63.1% increase year over year.
- Total
Payments Active Client base reached 1.9 million, with
total quarterly net addition of 160,100 clients.
- MSMB –
Balancing Growth and Profitability
- MSMB
active payment clients reached 1,870,900, representing a net
addition of clients of 167,500 in the quarter. As
anticipated, this lower net addition compared with previous
quarters resulted from the significant pricing adjustments we have
strategically implemented since November 2021 to compensate for the
higher levels of funding costs amid CDI increase in Brazil. Such
higher-than-usual price increases tend to have a negative
short-term impact in our client base, but are accretive to the
business, increasing our overall contribution margin and improving
the quality of our client base. Stone and Pagar.me SMB products
reached 836,100 clients, decreasing 15,000 quarter over quarter,
while TON product added 184,400 clients to surpass the 1 million
mark, reaching 1,041,700 clients.
- MSMB TPV
was R$63.4 billion, up 93.3% year over year, above our
guidance of between R$58.5 and R$60.0 billion, accelerating from
4Q21 year over year growth of 87.0%. This increase was mainly a
result of the 118.1% growth in our MSMB active client base compared
to 1Q21. Stone and Pagar.me SMB TPV was R$56.2 billion, an increase
of 74.0% year on year; TON TPV was R$7.2 billion, a year over year
increase of 14.5x.
- Average
TPV per client in MSMB decreased 14.7% year over year to
11,800, due to the faster growth of our TON solution, which has
lower average TPV compared to Stone and Pagar.me SMB products.
TPV per client in Stone and Pagar.me SMBs was 32% higher
year over year while TPV per client in TON solution increased
2.3x over the same period. The increase in both metrics
stems from our continued commercial focus to drive smaller SMBs to
use the TON product, which better attends to their needs while
driving our Hub operations to the onboarding of SMB clients with
larger average TPV.
- MSMB
Take Rate rose to 2.06% in 1Q22 from 1.71% in 4Q21 mainly
a result of the pricing initiatives as previously mentioned.
- Our
banking ecosystem4 continued to
grow in 1Q22:
- Our
banking client base continues to increase sequentially.
Active Digital Banking Accounts reached 509,900, up 3.7% quarter
over quarter and 2.1x year over year, despite a slightly lower SMB
payments active client base compared with 4Q21. This implies a
higher activation of banking accounts in our current payments base.
At the same time, average revenue per active client (ARPAC)5 has
increased 2.8x year over year and 32% quarter over quarter.
- Total
Accounts Balance was R$2.0 billion, growing 1.0% quarter over
quarter or 3.2x year over year, which, combined with a
higher CDI rate, contributed to an increase in the ARPAC of our
banking platform.
- Stone
Card TPV grew 3.2% quarter over quarter and 2.4x year over
year to reach R$514.5 million.
- The
number of insurance clients6
increased from approximately 29,200 in 4Q21 to 50,000 in
1Q22.
- Update
on our Credit Business:
- Our
Legacy credit portfolio reached R$722.2 million in 1Q22,
decreasing R$479.4 million from 4Q21. The decrease is mainly a
result of a net positive cash flow of R$253.5 million in
the quarter in addition to the sale of a distressed
portion of our legacy portfolio to a third party in January, as
mentioned in our 4Q21 earnings results. Those effects were
partially offset by interest accruals.
- Of the R$722.2
million portfolio in 1Q22, we have a balance of R$496.9 million
provisioned for bad debt. The fair value of the credit portfolio in
our balance sheet in March was R$267.7 million, given that we
expect to receive back interest still to be accrued. The R$496.9
million provisioned for bad debt compares with an NPL of R$510.3
million, which implies a coverage ratio of 97%.
- Key
Accounts – Growth in Platform Services with Deprioritization of
Sub-Acquiring Business
- Platform
Services TPV increased 113.6% year over year. Key Accounts
TPV was R$19.8 billion, an 8.6% year over year increase. This
increase resulted from our focus on Platform Services clients,
which grew 114.1% year over year to R$10.3 billion. This growth was
partially offset by the deprioritization of sub-acquirers, for
which volumes decreased 29.5% year over year to R$9.4 billion.
- Increase
in Key Accounts Take Rate. Key Accounts take rate was
0.84% in 1Q22, higher than 0.82% in 4Q21 as a result of (i) higher
CDI rates, which directly affect prepayment prices from larger
clients and (ii) lower representativeness of sub-acquirers, which
have lower take rates compared to platform clients. Those factors
were partially compensated by lower take rates within our
sub-acquiring clients.
SOFTWARE PERFORMANCE
HIGHLIGHTS
Table 4: Software Main Operating and Financial
Metrics
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Main Software Metrics |
1Q22 |
4Q21 |
1Q21 |
|
Δ y/y % |
Δ q/q % |
|
Software Revenue (Pro-forma for Linx) |
326.6 |
311.4 |
257.4 |
|
26.9% |
4.9% |
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Financial Metrics (R$mn) |
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Total Revenue and Income |
326.6 |
311.4 |
30.9 |
|
955.6% |
4.9% |
|
Adjusted EBITDA |
40.3 |
26.9 |
6.0 |
|
570.3% |
49.6% |
|
Adjusted EBITDA Margin |
12.3% |
8.6% |
19.4% |
|
(7.1 p.p.) |
3.7 p.p. |
|
Adjusted EBT |
12.3 |
(15.2) |
0.6 |
|
1972.4% |
n.m |
|
Adjusted Net Income |
2.2 |
(15.6) |
(0.7) |
|
n.m |
n.m |
|
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- Total
Revenue and Income for Software in 1Q22 was R$326.6
million. Pro-forma for Linx, Total Revenue and Income for Software
grew 26.9% year over year, mostly from organic growth, driven by
higher number of POS/ERP locations and higher average ticket.
- Adjusted
EBITDA for the Software division was R$40.3 million in
1Q22, with a margin of 12.3%, compared with R$6.0 million and a
margin of 19.4% in 1Q21, or R$38.8 million and a margin of 15.1%
pro-forma for Linx. The lower pro-forma margin is a result of (i)
higher investments in customer service and R&D to improve our
clients’ experience and fulfill our strategic roadmap, (ii) low
maturity of our Digital business, with higher cloud costs and
investments in personnel and (iii) legacy costs and expenses from
LinxPay infrastructure, for which the revenue was fully migrated to
the Stone Platform by 1Q22. Compared with 4Q21, Adjusted EBITDA
Margin increased 3.7 percentage points as we dilute fixed costs and
promote G&A efficiencies.
- Adjusted
EBT was R$12.3 million, compared with R$0.6 million for
the prior year period or -R$0.6 million pro-forma for Linx,
impacted by lower D&A expenses and lower net financial
result.
- Adjusted
Net Income was R$2.2 million in 1Q22, compared with a loss
of R$0.7 million for 1Q21 (-R$7.5 million pro-forma for Linx) and a
loss of R$15.6 million for 4Q21.
- Our
Core7 Software business revenue
(pro-forma for Linx) increased 32% year over year. This
growth was mainly driven by an increase in average ticket and
number of locations. Revenue retention rate in Linx POS/ERP
business was 99%.
- We have
concluded the migration of Linx
sub-acquiring business to the Stone Platform, but still
incurred in expenses related to such legacy business during
1Q22.
- Our
Digital8 business revenue decreased 2% year over year,
mainly because of lower results in our social commerce platform and
slower growth in Linx Commerce and OMS due to tougher comps and the
impact of the reopening of brick-and-mortar stores with the easing
of pandemic-related restrictions.
RECENT DEVELOPMENTS
Management and Board changes
- As announced in
our press release April 26th, 2022, two new members of the Board of
Directors joined the company, both of whom have the experience to
support the next stage of our growth. As a result, our Board of
Directors is currently composed of 10 people, nine of which are
independent. The new board members are:
- Patricia
Verderesi Schindler, the former CRO (Chief Risk Officer) of JP
Morgan for Brazil, who has over 30 years of experience with risk
management; and
- Mauricio
Luchetti, an experienced Board Member with 19 years at Ambev and
deep expertise in Human Resources and Management.
- In addition to
those changes, we are further strengthening our team:
- Marcus Fontoura
will join our team as Chief Technology Officer. He was previously a
Technical Fellow and Corporate VP at Microsoft, where he was chief
architect for Azure compute and led the Azure efficiency team. He
has also worked and led important projects at Google, Yahoo! and
IBM.
- Osmar Castellani
was appointed as the VP of Finance for our Software Division. He
has long experience in investment banking, having worked for Credit
Suisse and Goldman Sachs.
- Gregor Ilg will
join our team as Head of Credit Business, after his garden leave
period. He has been engaged in financial services for more than 30
years and was the Head of Santander Brasil SMEs Retail Risks, with
more than 15 years of experience in Credit.
New Incentive Plan
On June 2nd we announced a new incentive plan
pool as an important step towards attracting and retaining talent
to support the execution of our strategy. For more details refer to
our S-8 filling with the SEC.
Partial Sale of Banco Inter shares
During 2Q22, we have sold 21.5% of our stake in
Banco Inter through the cash-out option offered in their corporate
restructuring. As a result of such transaction, we decided, from
2Q22 onwards, to stop adjusting in our Adjusted Statement of Profit
or Loss the financial expenses related to our bond, which was
raised to fully fund the acquisition of our stake in Banco
Inter.
OUTLOOK FOR 2Q22
The outlook below constitutes forward-looking
information within the meaning of applicable securities laws and is
based on a number of assumptions and subject to a number of risks.
Actual results could vary materially as a result of numerous
factors, including certain risk factors, many of which are beyond
StoneCo´s control. Please see “Forward-looking Statements” below.
In view of these factors, we expect the following:
- Total Revenue
and Income is expected to be between R$2,150 million and R$2,200
million in 2Q22, or a year over year growth of between 148.3% and
154.1% pro-forma for Linx;
- Adjusted EBT
(excluding bond financial expenses, as reported until 1Q22) is
expected to be above R$185.0 million in 2Q22, compared with R$163.1
million in 1Q22;
- Adjusted EBT
(including bond financial expenses, as will be reported from 2Q22
onwards) is expected to be above R$90.0 million in 2Q22, compared
with R$82.5 million in 1Q22;
- MSMB TPV is
expected to be between R$67.0 billion and R$68.0 billion in 2Q22
(up 70.7% to 73.2% year over year).
Income Statement
Table 5: Statement of Profit or Loss
(IFRS, as Reported)
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Statement of Profit or Loss (R$mn) |
1Q22 |
% Rev. |
1Q21 |
% Rev. |
Δ % |
|
|
Net revenue from transaction activities and other services |
554.9 |
26.8% |
318.3 |
36.7% |
74.3% |
|
|
Net revenue from subscription services and equipment rental |
432.2 |
20.9% |
139.9 |
16.1% |
208.8% |
|
|
Financial income |
949.8 |
45.9% |
368.8 |
42.5% |
157.5% |
|
|
Other financial income |
133.4 |
6.4% |
40.6 |
4.7% |
228.3% |
|
|
Total revenue and income |
2,070.3 |
100.0% |
867.7 |
100.0% |
138.6% |
|
|
Cost of services |
(674.4) |
(32.6%) |
(239.7) |
(27.6%) |
181.4% |
|
|
Administrative expenses |
(238.2) |
(11.5%) |
(117.6) |
(13.6%) |
102.6% |
|
|
Selling expenses |
(383.7) |
(18.5%) |
(162.8) |
(18.8%) |
135.8% |
|
|
Financial expenses, net |
(708.2) |
(34.2%) |
(92.5) |
(10.7%) |
665.7% |
|
|
Mark-to-market on equity securities designated at FVPL |
(323.0) |
(15.6%) |
0.0 |
0.0% |
n.a. |
|
|
Other income (expenses), net |
(31.8) |
(1.5%) |
(41.5) |
(4.8%) |
(23.3%) |
|
|
Loss on investment in associates |
(0.7) |
(0.0%) |
(3.6) |
(0.4%) |
(81.2%) |
|
|
Profit before income taxes |
(289.8) |
(14.0%) |
210.0 |
24.2% |
n.m |
|
|
Income tax and social contribution |
(23.2) |
(1.1%) |
(51.7) |
(6.0%) |
(55.1%) |
|
|
Net income for the period |
(313.0) |
(15.1%) |
158.3 |
18.2% |
n.m |
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income |
132.2 |
6.4% |
187.4 |
21.6% |
(29.4%) |
|
|
|
|
|
|
|
|
|
Table 6: Statement of Profit or Loss
(Adjusted9)
|
|
|
|
|
|
|
|
|
Adjusted Statement of Profit or Loss (R$mn) |
1Q22 |
% Rev. |
1Q21 |
% Rev. |
Δ % |
|
|
Net revenue from transaction activities and other services |
554.9 |
26.8% |
318.3 |
36.7% |
74.3% |
|
|
Net revenue from subscription services and equipment rental |
432.2 |
20.9% |
139.9 |
16.1% |
208.8% |
|
|
Financial income |
949.8 |
45.9% |
368.8 |
42.5% |
157.5% |
|
|
Other financial income |
133.4 |
6.4% |
40.6 |
4.7% |
228.3% |
|
|
Total revenue and income |
2,070.3 |
100.0% |
867.7 |
100.0% |
138.6% |
|
|
Cost of services |
(674.4) |
(32.6%) |
(239.7) |
(27.6%) |
181.4% |
|
|
Administrative expenses |
(214.8) |
(10.4%) |
(108.3) |
(12.5%) |
98.2% |
|
|
Selling expenses |
(383.7) |
(18.5%) |
(162.8) |
(18.8%) |
135.8% |
|
|
Financial expenses, net |
(621.5) |
(30.0%) |
(88.3) |
(10.2%) |
603.8% |
|
|
Other income (expenses), net |
(12.1) |
(0.6%) |
(17.4) |
(2.0%) |
(30.3%) |
|
|
Loss on investment in associates |
(0.7) |
(0.0%) |
(3.6) |
(0.4%) |
(81.2%) |
|
|
Adj. Profit before income taxes |
163.1 |
7.9% |
247.6 |
28.5% |
(34.1%) |
|
|
Income tax and social contribution |
(30.8) |
(1.5%) |
(60.2) |
(6.9%) |
(48.8%) |
|
|
Adjusted Net Income |
132.2 |
6.4% |
187.4 |
21.6% |
(29.4%) |
|
|
|
|
|
|
|
|
|
Total Revenue and Income
Total Revenue and Income in 1Q22 was R$2,070.3
million, an increase of 138.6% from R$867.7 million in 1Q21, with
R$267.9 million contribution from the consolidation of Linx’s
results. Pro-forma for Linx, Total Revenue and Income grew 87.2%
year over year.
Total Revenue and Income is composed of (i)
R$1,721.3 million from our Financial Services segment, (ii) R$326.6
million from our Software segment and (iii) R$22.4 million
non-allocated.
Financial Services segment revenue grew 107.8%,
mainly a result of our performance in MSMBs, with strong year over
year TPV and client base growth, in addition to a higher take rate
of 2.06% in 1Q22 compared with 1.87% for the prior year-period, as
we successfully adjusted our pricing policy amid a higher interest
rate environment in Brazil. In Key Accounts, revenue grew double
digits as a result of higher take rates and volumes from platform
services, and despite significantly lower volumes from
sub-acquirers.
Software revenue growth comes primarily from the
consolidation of Linx results, which added R$256.3 million to our
software segment in the quarter. Pro-forma for Linx, Software
revenue growth was 26.9%, mainly driven by growth in our core
POS/ERP solutions. This was partially offset by a decrease in
revenue from sub-acquiring business, as its migration to the Stone
Platform was concluded in 1Q22.
Net Revenue from Transaction Activities
and Other Services
Net Revenue from Transaction Activities and
Other Services was R$554.9 million in 1Q22, an increase of 74.3%
compared with 1Q21. Pro-forma for Linx, Net Revenue from
Transaction Activities and Other Services increased 60.2%. This
increase was mostly due to (i) 63.1% year over year consolidated
TPV growth; (ii) higher revenue from TON, including its membership
fee and (iii) new revenue streams, including banking and PIX and
our registry business TAG. The latter contributed with revenue of
R$22.7 million in 1Q22, compared to virtually zero in the
prior-year period.
Net Revenue from Subscription Services
and Equipment Rental
Net Revenue from Subscription Services and
Equipment Rental was R$432.2 million in 1Q22, 208.8% higher than
1Q21, with R$236.0 million revenue coming from Linx. Pro-forma for
Linx, Net Revenue from Subscription Services and Equipment Rental
increased 26.0%, primarily due to (i) a higher SMB active client
base; (ii) higher POS/ERP revenue, driven by both an increase in
number of locations and average ticket and (iii) the contribution
from our insurance solutions. These effects were partially offset
by lower POS average subscription per client, which is mainly a
result of additional new-client subscription exemptions.
Financial Income
Financial Income in 1Q22 was R$949.8 million, an
increase of 157.5% year over year or 155.3% pro-forma for Linx.
This increase is mostly a result of higher prepaid volumes and the
effect from higher prices as we started to adjust our commercial
policy in November 2021, following CDI increases.
Other Financial Income
Other Financial Income was R$133.4 million in
1Q22 compared with R$40.6 million in 1Q21 (R$44.5 million pro-forma
for Linx). This increase was mainly due to higher yield on cash
& equivalents which was a result of the higher base rate in the
country year over year. This effect was partially compensated by a
lower average cash balance.
Costs and Expenses
Cost of Services
Cost of Services were R$674.4 million in 1Q22,
181.4% higher year over year or 87.8% higher pro-forma for Linx.
This increase was mainly due to (i) investments in TAG, which
amounted to R$31.8 million in the quarter compared with R$3.6
million in 1Q21 and higher expenses with datacenter and cloud; (ii)
higher investments in technology, customer support and logistics;
(iii) higher D&A costs, as we continue to expand our client
base and (iv) higher provisions and losses.
Compared with 4Q21, Cost of Services increased
4.4%, lower than revenue growth, as we (i) improved our efficiency
in TAG, decreasing our costs with TAG from R$64.5 million in 4Q21
to R$31.8 million in 1Q22 and (ii) gained efficiency in our
logistics.
Administrative Expenses
Administrative Expenses were R$238.2 million,
102.6% higher year over year or 33.3% pro-forma for Linx. This
increase was mainly explained by (i) higher personnel expenses and
(ii) higher amortization of fair value adjustments due to the Linx
acquisition and other software acquisitions. As a percentage of
Total Revenue and Income, Administrative Expenses decreased from
13.6% in 1Q21 to 11.5% in 1Q22, especially due to gains of
operating leverage with the growth of our business.
Administrative Expenses in 1Q22 were 11.3%
higher than in 4Q21, mainly explained by higher amortization of
fair value adjustments on acquisitions, partially offset by lower
expenses with third-party services, facilities, travel and courses
and training in 1Q22.
Administrative Expenses in 1Q22 include R$23.5
million 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 15 in Appendix for the Adjustments by P&L line).
Adjusting for those effects and pro-forma for Linx, Administrative
Expenses were R$214.8 million in 1Q22, compared with R$159.3
million in 1Q21 and R$230.5 million in 4Q21. We realized operating
leverage in Administrative Expenses both on a sequential basis and
year over year, with Administrative Expenses as a percentage of
Total Revenue and Income reducing from 14.4% in 1Q21 and 12.3% in
4Q21 to 10.4% in 1Q22. This efficiency gain was mainly driven by
dilution of expenses amid the growth in our business.
Selling Expenses
Selling Expenses were R$383.7 million in the
quarter, an increase of 135.8% year over year or 86.4% pro-forma
for Linx. Such increase was mainly explained by (i) higher expenses
related to usage of credits from prepaid marketing expenses with
Globo, as well as TON marketing investments and (ii) expenses with
our salespeople, mostly related to our hubs personnel.
Compared with 4Q21, Selling Expenses increased
20.5%, mostly due to item (i) mentioned above.
Financial Expenses, Net
Financial Expenses, Net were R$708.2 million,
665.7% higher compared with 1Q21 or 559.3% pro-forma for Linx. This
variation is mainly because of (i) higher prepayment volumes; (ii)
increased cost of funds, mainly due to the higher base rate in the
country over the period, which increased from an average of 2.02%
in 1Q21 to 10.27% in 1Q22 and (iii) financial expenses related to
our bond, which totaled R$80.6 million in the quarter.
Compared with the previous quarter, Financial
Expenses, net were 2.9% higher, mainly explained by the higher base
rate in the country quarter over quarter, partially offset by lower
prepaid volumes due to seasonality in 1Q22 and lower duration of
receivables assignment.
Financial Expenses include R$86.7 million that
are adjusted in our Adjusted Income Statement, including R$80.6
million cost from our bond and R$6.1 million from one-off effects
related to (i) earn out interests on business combinations and (ii)
financial expenses from fair value adjustments on acquisitions
related to acquisitions (see table 15 in Appendix for the
Adjustments by P&L line). Adjusting for those effects and
pro-forma for Linx, Financial Expenses, net were R$103.2 million in
1Q21, R$610.6 million in 4Q21 and R$621.5 million in 1Q22 or 9.3%,
32.6% and 30.0% as a percentage of Total Revenue and Income,
respectively. The year over year increase was mainly due to items
(i) and (ii) from the accounting explanation above.
Mark-to-market on equity securities
designated at FVPL
In 1Q22, we have recognized R$323.0 million in
mark-to-market losses in our investment in Banco Inter.
Mark-to-market on equity securities designated
at FVPL is fully adjusted in our Adjusted Income Statement (see
table 15 in Appendix for the Adjustments by P&L line).
Other Income (Expenses),
Net
Other Expenses, Net were R$31.8 million in 1Q22,
23.3% lower year over year or 28.4% lower pro-forma for Linx,
mostly explained by (i) lower civil and tax contingencies and (ii)
gains on property and equipment sale, partially offset by (iii)
higher share-based compensation expenses year over year, as in 1Q21
we had unusually low share-based expenses related to lower tax and
social charges provisions due to high depreciation of our shares in
1Q21.
Compared with 4Q21, Other Expenses, net were
R$19.3 million lower, mostly because of lower civil and tax
contingencies and lower provisions for POS losses.
Other Expenses, net include R$19.7 million that
are adjusted in our Adjusted Income Statement, including earn-out
and call options related to acquisitions and share-based
compensation expenses related to the one-time IPO grant (see table
15 in Appendix for the Adjustments by P&L line). Adjusting for
those effects and pro-forma for Linx, Other expenses, net, were
R$17.6 million in 1Q21, R$49.0 million in 4Q21 and R$12.1 million
in 1Q22 or 1.6%, 2.6% and 0.6% as a percentage of Total Revenue and
Income, respectively. The year over year decrease was mainly
explained by the same reasons as for the accounting explanation
above.
Income Tax and Social
Contribution
During 1Q22, the Company recognized income tax
and social contribution expense of R$23.2 million, compared with
R$51.7 million in the prior-year period (R$55.3 million pro-forma
for Linx). This difference is a result of (i) lower taxable income
in the period and (ii) temporary differences in some of our
subsidiaries, which resulted in the creation of deferred tax
assets.
Income Tax and Social Contribution include R$7.6
million that are adjusted in our Adjusted Income Statement,
relating to taxes from the adjusted items (see table 15 in Appendix
for the Adjustments by P&L line).
EBITDA
Adjusted EBITDA was R$817.3 million in the
quarter, 116.8% higher than in 1Q21. This higher figure is mainly
explained by higher Total Revenue and Income excluding Other
Financial Income, which grew 134.2% year over year, partially
compensated by higher costs and expenses excluding D&A.
Adjusted EBITDA Margin was 39.5% in the quarter, compared with
43.4% in 1Q21 and 36.6% in 4Q21. The sequential improvement in
EBITDA margin in 1Q22 compared with 4Q21 was mainly due to
efficiency gains in Cost of Services and Administrative
Expenses.
Table 7: Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
EBITDA Bridge (R$mn) |
1Q22 |
% Rev. |
1Q21 |
% Rev. |
Δ % |
|
|
Profit before income taxes |
(289.8) |
(14.0%) |
210.0 |
24.2% |
n.m |
|
|
(+) Financial expenses, net |
708.2 |
34.2% |
92.5 |
10.7% |
665.7% |
|
|
(-) Other financial income |
(133.4) |
(6.4%) |
(40.6) |
(4.7%) |
228.3% |
|
|
(+) Depreciation and amortization |
184.9 |
8.9% |
84.4 |
9.7% |
118.9% |
|
|
EBITDA |
469.8 |
22.7% |
346.3 |
39.9% |
35.7% |
|
|
(+) Non-recurring share-based compensation expenses (a) |
13.7 |
0.7% |
20.7 |
2.4% |
(33.8%) |
|
|
(+) Mark-to-market related to the investment in Banco Inter |
323.0 |
15.6% |
0.0 |
0.0% |
n.a. |
|
|
(+) Other Expenses (b) |
10.8 |
0.5% |
10.0 |
1.2% |
7.6% |
|
|
Adjusted EBITDA |
817.3 |
39.5% |
377.0 |
43.4% |
116.8% |
|
|
|
|
|
|
|
|
|
(a) Consists of expenses related to the vesting of one-time
pre-IPO pool of share-based compensation.
(b) Consists of the fair value adjustment related to associates
call option, M&A expenses and earn-out interests related to
acquisitions.
EBITDA was R$469.8 million in the quarter mostly
as a result of the (i) increase in revenue excluding Other
Financial Income, and partially offset by (ii) higher costs and
expenses, excluding D&A and (iii) the R$323.0 million pre-tax
loss effect from mark-to-market from our investment in Banco
Inter.
Net Income (Loss) and EPS
Adjusted Net Income was R$132.2 million in 1Q22,
compared with R$187.4 million of Adjusted Net Income in 1Q21. This
lower Adjusted Net Income is mainly explained by (i) higher base
rate (CDI) in Brazil, which increased our Financial Expenses
significantly; and (ii) higher costs and expenses. These include
(i) resources to expand and improve our distribution and service to
our clients; (ii) investments in the development and improvement of
different financial solutions beyond payments, such as banking,
credit, and more recently, insurance; (iii) expenses with software
solutions that are not yet in a mature stage, (iv) marketing
expenses, (v) investments in technology, (vi) expenses with TAG,
our registry business, which contributed with a R$12.1 million loss
in the period, (vii) personnel expenses, among others. Adjusted Net
Margin for the Company was 6.4% in the quarter.
Compared with 4Q21 our Adjusted Net Income was
R$98.6 million higher, mostly due to the successful repricing of
clients given the new CDI environment in Brazil and efficiency
gains in costs and expenses. As a result, our Adjusted Net Margin
increased sequentially from 1.8% in 4Q21 to 6.4% in 1Q22.
Net Loss in 1Q22 was R$313.0 million, compared
with a Net Income of R$158.3 million in 1Q21, mostly as a result of
mark-to-market effects from the investment in Banco Inter and the
same factors explained above for the variation in Adjusted Net
Income.
Adjusted diluted EPS for the Company was R$0.43
per share in 1Q22, compared with R$0.60 per share in 1Q21, mostly
explained by the lower Adjusted Net Income. On a sequential basis,
Adjusted diluted EPS increased from R$0.13 per share in 4Q21 to
R$0.43 per share in 1Q22. IFRS basic EPS was a negative R$1.01 per
share, compared with a positive R$0.51 in the prior-year period.
This difference was mainly due to the lower Net Income, with
R$403.6 million negative impact from mark-to-market and cost of
funds from the investment in Banco Inter.
Table 8: Adjusted Net Income Reconciliation
|
|
|
|
|
|
|
Net Income Bridge (R$mn) |
1Q22 |
% Rev. |
1Q21 |
% Rev. |
Δ % |
|
Net income for the period |
(313.0) |
(15.1%) |
158.3 |
18.2% |
n.m |
|
Non-recurring share-based compensation expenses (a) |
13.7 |
0.7% |
20.7 |
2.4% |
(33.8%) |
|
Amortization of fair value adjustment (b) |
24.9 |
1.2% |
6.9 |
0.8% |
260.3% |
|
One-time impairment charges |
0.0 |
0.0% |
0.0 |
0.0% |
n.a. |
|
Mark-to-market and Cost of Funds from the investment in Banco
Inter |
403.6 |
19.5% |
0.0 |
0.0% |
n.a. |
|
Other expenses (c) |
10.8 |
0.5% |
10.0 |
1.2% |
7.6% |
|
Tax effect on adjustments |
(7.6) |
(0.4%) |
(8.5) |
(1.0%) |
(10.1%) |
|
Adjusted net income |
132.2 |
6.4% |
187.4 |
21.6% |
(29.4%) |
|
|
|
|
|
|
|
|
IFRS basic EPS (d) |
(1.01) |
n.a. |
0.51 |
n.a. |
n.m |
|
Adjusted diluted EPS (e) |
0.43 |
n.a. |
0.60 |
n.a. |
(28.5%) |
|
Basic Number of shares |
310.3 |
n.a. |
309.6 |
n.a. |
0.2% |
|
Diluted Number of shares |
310.3 |
n.a. |
314.8 |
n.a. |
(1.4%) |
|
|
|
|
|
|
|
|
(a) Consists of expenses related to the vesting of one-time
pre-IPO pool of share-based compensation.
(b) 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.
(c) Consists of the fair value adjustment related to associates
call option, M&A expenses, earn-out interests related to
acquisitions.
(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 16 of our
Unaudited Interim Condensed Consolidated Financial Statements,
March 31st, 2022.
(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) |
1Q22 |
4Q21 |
|
|
|
|
Cash and cash equivalents |
4,169.6 |
4,495.6 |
|
|
|
|
Short-term investments |
2,524.0 |
1,993.0 |
|
|
|
|
Accounts receivable from card issuers |
18,425.3 |
19,286.6 |
|
|
|
|
Derivative financial instrument (b) |
28.9 |
210.3 |
|
|
|
|
Adjusted Cash |
25,147.8 |
25,985.6 |
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to clients |
(14,997.4) |
(15,726.5) |
|
|
|
|
Loans and financing (a) |
(5,426.5) |
(5,861.8) |
|
|
|
|
Obligations to FIDC quota holders |
(1,916.3) |
(2,227.2) |
|
|
|
|
Derivative financial instrument (b) |
(400.7) |
(23.2) |
|
|
|
|
Adjusted Debt |
(22,741.0) |
(23,838.7) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Cash |
2,406.9 |
2,146.9 |
|
|
|
|
|
|
|
|
|
|
(a) Loans and financing were reduced by the effects
of leases liabilities recognized under IFRS 16.
(b) Refers to economic hedge.
Accounts Receivable from Card Issuers are
accounted for at their fair value in our balance sheet.
As of March 31, 2022, the Company’s Adjusted Net
Cash was R$2,406.9 million in 1Q22, R$260.0 million higher quarter
over quarter, mostly explained by:
-
R$132.2 million Adjusted Net Income;
-
R$392.7 million of working capital variations excluding AR/AP10,
mainly driven by R$253.5 million of net collections from our credit
business;
-
R$241.8 million of capex;
- R$41.9
million of M&A and;
- R$18.7
million of other factors and non-cash items that affect our
Adjusted Net Cash position.
Cash Flow
In 1Q22 we are simplifying our reporting and
will no longer disclose Adjusted Free Cash Flow metric, focusing
instead on IFRS Cash Flow metrics as well as the Adjusted Net Cash
metric above. Our cash flow in the quarter was explained by:
- Net cash
provided by operating activities was R$795.2 million in 1Q22,
explained by R$315.7 million of Net Income after non-cash
adjustments and R$479.5 million from working capital variation.
Working capital is composed of (i) R$253.5 million of cash net
inflows from our credit business; (ii) R$229.6 million from the
following working capital changes: prepaid expenses (R$68.7
million), taxes payable (R$93.4 million) and labor and social
security liabilities (R$67.5 million); (iii) R$86.8 million of
changes related to accounts receivable from card issuers, accounts
payable to clients and interest income received net of costs; (iv)
-R$153.5 million from payment of interest and taxes and (iv) R$63.0
million of other working capital changes.
- Net cash used in
investing activities was R$751.1 million in 1Q22, explained by (i)
R$480.7 million of acquisition of short-term investments, (ii)
R$241.8 million capex, (iii) R$41.9 million in M&A expenses and
(iv) an inflow of R$13.3 million from other effects. As we advanced
the purchase of a significant amount of POS terminals in 4Q21 to
de-risk 2022 growth amid uncertainty with supply chain and
microchip shortage, our capex in 1Q22 was lower. From the R$241.8
million capex, R$136.8 million relates to the purchase of property
& equipment and R$105.0 million to the purchase of intangible
assets.
- Net cash used in
financing activities was R$356.1 million, explained by R$408.4
million payment of borrowings, net, mostly related to amortization
of part of our FIDC AR and partially compensated by R$52.3 million
from capital events, mainly from sale of treasury shares related to
the acquisition of Reclame Aqui.
Other
Information
Conference Call
Stone will discuss its 1Q22 financial results
during a teleconference today, June 2, 2022, at 5:00 PM ET / 6:00
PM BRT. The conference call can be accessed at +1 (412) 317 6346 or
+1 (844) 204 8586 (US), or +55 (11) 3181 8565 (Brazil), or +44 (20)
3795 9972 (UK).
The call will also be broadcast simultaneously
on Stone’s Investor Relations website at
https://investors.stone.co/. Following the completion of the call,
a recorded replay of the webcast will be available on Stone’s
Investor Relations website at https://investors.stone.co/.
About Stone Co.
Stone Co. is a leading provider of financial
technology and software solutions that empower merchants to conduct
commerce seamlessly across multiple channels and help them grow
their businesses.
Investor Contact
Investor Relationsinvestors@stone.co
Consolidated Statement of Profit or Loss
Table 10: Consolidated Statement of Profit or
Loss
|
|
|
|
Statement of Profit or Loss (R$mn) |
1Q22 |
1Q21 |
|
Net revenue from transaction activities and other services |
554.9 |
318.3 |
|
Net revenue from subscription services and equipment rental |
432.2 |
139.9 |
|
Financial income |
949.8 |
368.8 |
|
Other financial income |
133.4 |
40.6 |
|
Total revenue and income |
2,070.3 |
867.7 |
|
Cost of services |
(674.4) |
(239.7) |
|
Administrative expenses |
(238.2) |
(117.6) |
|
Selling expenses |
(383.7) |
(162.8) |
|
Financial expenses, net |
(708.2) |
(92.5) |
|
Mark-to-market on equity securities designated at FVPL |
(323.0) |
0.0 |
|
Other income (expenses), net |
(31.8) |
(41.5) |
|
Loss on investment in associates |
(0.7) |
(3.6) |
|
Profit before income taxes |
(289.8) |
210.0 |
|
Income tax and social contribution |
(23.2) |
(51.7) |
|
Net income for the period |
(313.0) |
158.3 |
|
|
|
|
|
Consolidated Balance Sheet Statement
Table 11: Consolidated Balance Sheet
Statement
|
|
|
|
Balance Sheet (R$mn) |
31-Mar-22 |
31-Dec-21 |
|
Assets |
|
|
|
Current assets |
28,916.6 |
29,944.5 |
|
Cash and cash equivalents |
4,169.6 |
4,495.6 |
|
Short-term investments |
2,524.0 |
1,993.0 |
|
Financial assets from banking solution |
2,498.8 |
2,346.5 |
|
Accounts receivable from card issuers |
18,412.1 |
19,286.6 |
|
Trade accounts receivable |
658.8 |
886.1 |
|
Recoverable taxes |
202.7 |
214.8 |
|
Prepaid expenses |
147.0 |
169.6 |
|
Derivative financial instruments |
60.8 |
219.3 |
|
Other assets |
242.7 |
332.9 |
|
|
|
|
|
Non-current assets |
11,938.1 |
12,128.5 |
|
Trade accounts receivable |
43.8 |
59.6 |
|
Accounts receivable from card issuers |
13.2 |
0.0 |
|
Receivables from related parties |
4.9 |
4.7 |
|
Deferred tax assets |
498.1 |
580.5 |
|
Prepaid expenses |
167.9 |
214.1 |
|
Other assets |
140.9 |
141.7 |
|
Long-term investments |
915.5 |
1,238.5 |
|
Investment in associates |
65.6 |
66.5 |
|
Property and equipment |
1,641.8 |
1,569.5 |
|
Intangible assets |
8,446.5 |
8,253.5 |
|
|
|
|
|
Total Assets |
40,854.6 |
42,073.0 |
|
|
|
|
|
Liabilities and equity |
|
|
|
Current liabilities |
23,281.2 |
22,789.8 |
|
Deposits from banking customers |
2,367.8 |
2,201.9 |
|
Accounts payable to clients |
14,990.5 |
15,723.3 |
|
Trade accounts payable |
353.6 |
372.5 |
|
Loans and financing |
3,144.4 |
2,578.8 |
|
Obligations to FIDC quota holders |
1,294.5 |
1,294.8 |
|
Labor and social security liabilities |
353.6 |
273.3 |
|
Taxes payable |
202.9 |
176.5 |
|
Derivative financial instruments |
400.7 |
23.2 |
|
Other liabilities |
173.2 |
145.5 |
|
|
|
|
|
Non-current liabilities |
4,190.7 |
5,680.3 |
|
Accounts payable to clients |
6.9 |
3.2 |
|
Loans and financing |
2,522.2 |
3,556.5 |
|
Obligations to FIDC quota holders |
621.8 |
932.4 |
|
Deferred tax liabilities |
486.0 |
628.5 |
|
Provision for contingencies |
180.9 |
181.8 |
|
Labor and social security liabilities |
22.2 |
32.7 |
|
Other liabilities |
350.7 |
345.1 |
|
|
|
|
|
Total liabilities |
27,471.9 |
28,470.1 |
|
|
|
|
|
Equity attributable to owners of the parent |
13,268.8 |
13,512.1 |
|
Issued capital |
0.1 |
0.1 |
|
Capital reserve |
13,851.0 |
14,516.8 |
|
Treasury shares |
(191.7) |
(1,065.2) |
|
Other comprehensive income |
(173.6) |
(35.8) |
|
Retained earnings |
(217.0) |
96.2 |
|
|
|
|
|
Non-controlling interests |
114.0 |
90.8 |
|
|
|
|
|
Total equity |
13,382.7 |
13,602.9 |
|
|
|
|
|
Total liabilities and equity |
40,854.6 |
42,073.0 |
|
|
|
|
|
Consolidated Statement of Cash Flows
Table 12: Consolidated Statement of Cash
Flows
|
|
|
|
|
|
Cash Flow (R$mn) |
|
1Q22 |
1Q21 |
|
|
Net income (loss) for the period |
|
(313.0) |
158.3 |
|
|
|
|
|
|
|
|
Adjustments on Net Income: |
|
|
|
|
|
Depreciation and amortization |
|
184.9 |
84.4 |
|
|
Deferred income tax and social contribution |
|
(44.6) |
(11.1) |
|
|
Loss on investment in associates |
|
0.7 |
3.6 |
|
|
Interest, monetary and exchange variations, net |
|
(108.4) |
(269.7) |
|
|
Provision for contingencies |
|
(3.0) |
1.7 |
|
|
Share-based payments expense |
|
37.9 |
22.1 |
|
|
Allowance for expected credit losses |
|
22.4 |
8.4 |
|
|
Loss on disposal of property, equipment and intangible assets |
|
(4.5) |
10.3 |
|
|
Effect of applying hyperinflation |
|
1.1 |
0.0 |
|
|
Fair value adjustment in financial instruments at FVPL |
|
470.3 |
227.2 |
|
|
Fair value adjustment in derivatives |
|
72.0 |
31.7 |
|
|
|
|
|
|
|
|
Working capital adjustments: |
|
|
|
|
|
Accounts receivable from card issuers |
|
1,257.2 |
978.1 |
|
|
Receivables from related parties |
|
3.9 |
(1.7) |
|
|
Recoverable taxes |
|
(13.0) |
(4.2) |
|
|
Prepaid expenses |
|
68.7 |
(241.0) |
|
|
Trade accounts receivable, banking solutions and other assets |
|
318.0 |
(332.0) |
|
|
Accounts payable to clients |
|
(1,659.2) |
(1,115.8) |
|
|
Taxes payable |
|
93.4 |
64.9 |
|
|
Labor and social security liabilities |
|
67.5 |
21.7 |
|
|
Provision for contingencies |
|
(1.9) |
(0.2) |
|
|
Trade Accounts Payable and Other Liabilities |
|
9.5 |
46.8 |
|
|
Interest paid |
|
(108.8) |
(46.5) |
|
|
Interest income received, net of costs |
|
488.8 |
318.8 |
|
|
Income tax paid |
|
(44.6) |
(45.0) |
|
|
Income tax paid |
|
|
|
|
|
Net cash provided by (used in) operating
activity |
|
795.2 |
(89.2) |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchases of property and equipment |
|
(136.8) |
(334.4) |
|
|
Purchases and development of intangible assets |
|
(105.0) |
(42.1) |
|
|
Acquisition of subsidiary, net of cash acquired |
|
(41.9) |
0.0 |
|
|
Sale of subsidiary, net of cash disposed of |
|
0.0 |
0.0 |
|
|
Proceeds from (acquisition of) short-term investments, net |
|
(480.7) |
0.0 |
|
|
Acquisition of equity securities |
|
0.0 |
0.0 |
|
|
Disposal of short and long-term investments - equity
securities |
|
0.0 |
(213.7) |
|
|
Proceeds from the disposal of non-current assets |
|
20.4 |
0.1 |
|
|
Acquisition of interest in associates |
|
(7.1) |
(35.7) |
|
|
Proceeds from the disposal of assets held for sale |
|
0.0 |
0.0 |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(751.1) |
(625.9) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from borrowings |
|
1,500.0 |
1,109.0 |
|
|
Payment of borrowings |
|
(1,569.8) |
(360.0) |
|
|
Payment to FIDC quota holders |
|
(312.5) |
(810.0) |
|
|
Proceeds from FIDC quota holders |
|
0.0 |
247.9 |
|
|
Payment of leases |
|
(26.1) |
(32.1) |
|
|
Capital increase, net of transaction costs |
|
0.0 |
0.0 |
|
|
Repurchase of own shares |
|
0.0 |
(232.1) |
|
|
Sale of own shares |
|
53.4 |
0.0 |
|
|
Acquisition of non-controlling interests |
|
(0.3) |
(0.3) |
|
|
Transaction with non-controlling interests |
|
0.0 |
230.5 |
|
|
Dividends paid to non-controlling interests |
|
(0.8) |
0.0 |
|
|
Cash proceeds from non-controlling interest |
|
0.0 |
0.9 |
|
|
Acquisition of non-controlling interests |
|
|
|
|
|
Net cash provided by (used in) financing
activities |
|
(356.1) |
153.9 |
|
|
|
|
|
|
|
|
Effect of foreign exchange on cash and cash equivalents |
|
(14.1) |
(22.4) |
|
|
|
|
|
|
|
|
Change in cash and cash equivalents |
|
(326.0) |
(583.5) |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
4,495.6 |
2,447.0 |
|
|
Cash and cash equivalents at end of period |
|
4,169.6 |
1,863.5 |
|
|
|
|
|
|
|
|
Stone and Linx Proforma Historical P&L
Table 13: Stone and Linx Pro-forma Historical P&L
(Accounting)
|
|
|
|
|
|
|
|
|
|
Accounting P&L - Stone and Linx Proforma
(R$mn) |
1Q20 |
2Q20 |
3Q20 |
4Q20 |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Net revenue from transaction activities and other services |
259.2 |
255.6 |
383.5 |
368.3 |
346.4 |
390.3 |
436.7 |
512.7 |
554.9 |
Net revenue from subscription services and equipment rental |
270.0 |
266.0 |
284.7 |
323.4 |
343.1 |
365.0 |
371.0 |
408.1 |
432.2 |
Financial income |
361.1 |
328.0 |
462.3 |
504.1 |
372.0 |
43.5 |
607.7 |
861.2 |
949.8 |
Other financial income |
41.6 |
38.8 |
31.9 |
48.6 |
44.5 |
66.9 |
54.3 |
91.1 |
133.4 |
Total revenue and income |
931.9 |
888.3 |
1,162.4 |
1,244.4 |
1,106.0 |
865.7 |
1,469.6 |
1,873.0 |
2,070.3 |
Cost of services |
(260.3) |
(299.6) |
(317.3) |
(363.7) |
(359.2) |
(454.9) |
(525.6) |
(646.1) |
(674.4) |
Administrative expenses |
(132.6) |
(146.9) |
(171.4) |
(207.1) |
(178.7) |
(237.8) |
(359.8) |
(214.1) |
(238.2) |
Selling expenses |
(148.8) |
(155.7) |
(181.1) |
(183.6) |
(205.9) |
(269.8) |
(308.2) |
(318.4) |
(383.7) |
Financial expenses, net |
(163.9) |
(73.9) |
(84.5) |
(83.5) |
(107.4) |
(173.8) |
(330.7) |
(688.2) |
(708.2) |
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
841.2 |
(1,341.2) |
(764.2) |
(323.0) |
Other income (expenses), net |
(5.4) |
(44.3) |
(47.8) |
(104.9) |
(44.4) |
(100.9) |
(29.1) |
(51.1) |
(31.8) |
Loss on investment in associates |
(1.3) |
(1.5) |
(1.1) |
(3.0) |
(3.6) |
(2.8) |
(2.8) |
(1.2) |
(0.7) |
Profit before income taxes |
219.7 |
166.4 |
359.2 |
298.6 |
206.7 |
466.8 |
(1,427.8) |
(810.4) |
(289.8) |
Income tax and social contribution |
(70.2) |
(40.0) |
(117.9) |
(58.4) |
(55.3) |
(48.0) |
167.6 |
8.9 |
(23.2) |
Net income for the period |
149.6 |
126.4 |
241.2 |
240.2 |
151.4 |
418.8 |
(1,260.2) |
(801.5) |
(313.0) |
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income |
159.8 |
160.9 |
298.2 |
352.9 |
182.7 |
(153.7) |
132.7 |
33.7 |
132.2 |
|
|
|
|
|
|
|
|
|
|
Table 14: Stone and Linx Pro-forma Historical P&L
(Adjusted11)
|
|
|
|
|
|
|
|
|
|
Adjusted P&L - Stone and Linx Proforma
(R$mn) |
1Q20 |
2Q20 |
3Q20 |
4Q20 |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Net revenue from transaction activities and other services |
259.2 |
255.6 |
383.5 |
368.3 |
346.4 |
390.3 |
436.7 |
512.7 |
554.9 |
Net revenue from subscription services and equipment rental |
270.0 |
266.0 |
284.7 |
323.4 |
343.1 |
365.0 |
371.0 |
408.1 |
432.2 |
Financial income |
361.1 |
328.0 |
462.3 |
504.1 |
372.0 |
43.5 |
607.7 |
861.2 |
949.8 |
Other financial income |
41.6 |
38.8 |
31.9 |
48.6 |
44.5 |
66.9 |
54.3 |
91.1 |
133.4 |
Total revenue and income |
931.9 |
888.3 |
1,162.4 |
1,244.4 |
1,106.0 |
865.7 |
1,469.6 |
1,873.0 |
2,070.3 |
Cost of services |
(259.9) |
(300.0) |
(318.5) |
(329.0) |
(366.6) |
(436.3) |
(525.6) |
(646.1) |
(674.4) |
Administrative expenses |
(120.5) |
(136.3) |
(135.9) |
(162.7) |
(159.3) |
(175.2) |
(193.8) |
(230.5) |
(214.8) |
Selling expenses |
(148.7) |
(155.8) |
(181.1) |
(183.6) |
(205.9) |
(269.8) |
(308.2) |
(318.4) |
(383.7) |
Financial expenses, net |
(163.9) |
(73.9) |
(79.7) |
(80.4) |
(103.2) |
(164.6) |
(281.0) |
(610.6) |
(621.5) |
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Other income (expenses), net |
(3.3) |
(3.8) |
(12.9) |
(52.6) |
(17.6) |
(23.2) |
(29.6) |
(49.0) |
(12.1) |
Loss on investment in associates |
(1.3) |
(1.5) |
(1.1) |
(3.0) |
(3.6) |
(2.8) |
(2.8) |
(1.2) |
(0.7) |
Adj. Profit before income taxes |
234.3 |
217.0 |
433.2 |
433.1 |
249.8 |
(206.2) |
128.7 |
17.2 |
163.1 |
Income tax and social contribution |
(74.5) |
(56.1) |
(135.0) |
(80.2) |
(67.1) |
52.5 |
4.0 |
16.5 |
(30.8) |
Adj. Net income for the period |
159.8 |
160.9 |
298.2 |
352.9 |
182.7 |
(153.7) |
132.7 |
33.7 |
132.2 |
|
|
|
|
|
|
|
|
|
|
Adjustments to Net Income by P&L Line
Table 15: Adjustments to Net Income by P&L
Line
|
|
|
|
|
|
|
|
|
|
Adjustments to Net Income by P&L line
(R$mn) |
1Q20 |
2Q20 |
3Q20 |
4Q20 |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Cost of services |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Administrative expenses |
3.4 |
3.4 |
15.5 |
23.2 |
9.3 |
9.7 |
166.0 |
(16.4) |
23.5 |
Selling expenses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Financial expenses, net |
(0.0) |
0.0 |
4.8 |
3.1 |
4.2 |
9.2 |
49.8 |
77.6 |
86.7 |
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
(841.2) |
1,341.2 |
764.2 |
323.0 |
Other operating income (expense), net |
2.1 |
36.6 |
30.8 |
42.8 |
24.2 |
42.0 |
(0.5) |
2.1 |
19.7 |
Gain (loss) on investment in associates |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Profit before income taxes |
5.5 |
40.0 |
51.2 |
69.0 |
37.6 |
(780.3) |
1,556.4 |
827.5 |
452.9 |
Income tax and social contribution |
(1.8) |
(13.3) |
(12.5) |
(17.4) |
(8.5) |
103.8 |
(163.6) |
7.6 |
(7.6) |
Net income for the period |
3.6 |
26.7 |
38.8 |
51.7 |
29.1 |
(676.5) |
1,392.9 |
835.1 |
445.3 |
|
|
|
|
|
|
|
|
|
|
Historical Segment Reporting
Table 16: Adjusted Historical Financial Services
P&L
|
|
|
|
|
|
Segment Reporting - Financial Services (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Total revenue and income |
828.4 |
564.2 |
1,152.5 |
1,545.9 |
1,721.3 |
Cost of services |
(224.9) |
(279.6) |
(358.7) |
(465.1) |
(499.0) |
Administrative expenses |
(89.8) |
(91.4) |
(112.9) |
(145.6) |
(131.1) |
Selling expenses |
(159.7) |
(215.3) |
(248.6) |
(263.5) |
(323.0) |
Financial expenses, net |
(88.8) |
(153.9) |
(257.0) |
(591.6) |
(612.5) |
Other operating income (expense), net |
(14.6) |
(21.3) |
(23.4) |
(45.0) |
(9.3) |
Gain (loss) on investment in associates |
(0.5) |
(0.4) |
(0.1) |
0.0 |
0.0 |
Profit before income taxes |
250.2 |
(197.5) |
151.7 |
35.2 |
146.4 |
Income tax and social contribution |
(58.9) |
49.3 |
8.7 |
18.0 |
(20.5) |
Net income for the period |
191.4 |
(148.2) |
160.4 |
53.2 |
125.9 |
|
|
|
|
|
|
Table 17: Adjusted Historical Software
P&L
|
|
|
|
|
|
Segment Reporting - Software (R$mn Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Total revenue and income |
30.9 |
42.8 |
301.1 |
311.4 |
326.6 |
Cost of services |
(12.3) |
(19.5) |
(162.4) |
(176.7) |
(172.5) |
Administrative expenses |
(14.9) |
(17.5) |
(72.4) |
(76.1) |
(74.5) |
Selling expenses |
(1.2) |
(6.0) |
(55.5) |
(51.8) |
(56.6) |
Financial expenses, net |
(0.2) |
(0.3) |
(17.6) |
(18.9) |
(8.6) |
Other operating income (expense), net |
(1.8) |
(0.2) |
(4.9) |
(3.1) |
(1.8) |
Gain (loss) on investment in associates |
0.0 |
(0.1) |
(0.0) |
0.0 |
(0.4) |
Profit before income taxes |
0.6 |
(0.7) |
(11.6) |
(15.2) |
12.3 |
Income tax and social contribution |
(1.3) |
(2.2) |
(3.1) |
(0.4) |
(10.1) |
Net income for the period |
(0.7) |
(3.0) |
(14.8) |
(15.6) |
2.2 |
|
|
|
|
|
|
Table 18: Adjusted Historical Non-Allocated
P&L
|
|
|
|
|
|
Segment Reporting - Non-Allocated (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
Total revenue and income |
8.3 |
6.5 |
16.0 |
15.7 |
22.4 |
Cost of services |
(2.5) |
(3.3) |
(4.6) |
(4.3) |
(2.9) |
Administrative expenses |
(3.7) |
(3.3) |
(8.5) |
(8.9) |
(9.2) |
Selling expenses |
(1.9) |
(1.9) |
(4.1) |
(3.1) |
(4.2) |
Financial expenses, net |
0.7 |
5.7 |
(6.4) |
(0.1) |
(0.5) |
Other operating income (expense), net |
(1.0) |
(0.7) |
(1.3) |
(0.9) |
(1.0) |
Gain (loss) on investment in associates |
(3.2) |
(2.4) |
(2.6) |
(1.2) |
(0.2) |
Profit before income taxes |
(3.2) |
0.6 |
(11.4) |
(2.8) |
4.3 |
Income tax and social contribution |
(0.0) |
0.1 |
(1.6) |
(1.1) |
(0.2) |
Net income for the period |
(3.2) |
0.7 |
(13.0) |
(3.9) |
4.2 |
|
|
|
|
|
|
Glossary of Terms
- “Banking”:
refers to our digital bank 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, credit and
insurance solutions.
- “Integrated
Financial Platform”: integrated financial platform including our
acquiring, banking and credit solutions in a single interface.
- “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. We breakdown Key
Accounts into sub-acquirer clients and platform clients.
- “MSMB Active
Payments Client Base”: refers to SMBs (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.
- “MSMBs”: the
combination of SMBs and micro-merchant clients, from our Stone,
Pagar.me and TON products.
- “Omni
OMS”: our OMS solution offers multi-channel purchasing processes
that integrate stores, franchisees, and distribution centers,
thereby providing a single channel for retailers.
- “Non-allocated”:
Comprises other smaller businesses which are not allocated in our
Financial Services or Software segments.
- “Revenue”:
refers to Total Revenue and Income
- “Software”
segment: This segment is comprised of three main fronts, namely:
(i) Core, comprised of POS/ERP solutions, TEF and QR Code gateways,
reconciliation and CRM, (ii) Digital, which includes OMS,
e-commerce platform, engagement tool, Ads solution and Marketplace
Hub and (iii) Financial Services, comprised of Linx’s sub-acquiring
business and the result of financial solutions to our Software
client base.
- “Take Rate
(MSMB)”: Sum of revenues from financial services solutions offered
to MSMBs, excluding TON’s membership fee, divided by MSMB TPV.
- “Take Rate (Key
Accounts)”: Revenues from financial services solutions offered to
Key Account clients, divided by Key Accounts TPV.
- “Total Account
Balance”: accounts balance from our SMBs (online and offline) and
micro-merchants in their stone accounts.
- “Total Active
Payment Clients”: refers to SMBs (online and offline),
micro-merchants 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.
- “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. Does not include
volumes from Linx Pay.
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.
In particular, due to the high level of uncertainty with respect to
the duration and scope of the COVID-19 crisis, the quantification
of impacts on our financial and operating results cannot be
reasonably estimated at this time.
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 the following
non-IFRS measures of financial performance: 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) non-cash
expenses related to the grant of share-based compensation and the
fair value (mark-to-market) adjustment for share-based compensation
classified as a liability, (2) amortization of intangibles related
to acquisitions, (3) one-time impairment charges, (4) unusual
income and expenses and (5) 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 Provided by/ (Used in) Operating Activities, in
order to provide an additional view of cash flow from operations
without the effect of funding decisions related to our financial
solutions. 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.
1 Working capital adjustments in our
Consolidated Statement of Cash Flows excluding the following items:
(i) Accounts receivable from card issuers; (ii) accounts payable to
clients and (iii) interest income received, net of costs, as those
three items are directly related to changes in accounts receivable
from card issuers (“AR”) and accounts payable to clients (“AP”) in
our balance sheet.2 Margins are calculated by dividing by the
revenue of each segment. 3 ARPAC means average revenue per active
client and considers our banking and insurance revenues divided by
our active banking client base.4 Does not consider banking accounts
from Pagar.me or TON. 5 Banking ARPAC includes card interchange
fees, floating revenue, insurance and transactional fees.6 From
4Q21 onwards, comprised of clients with store, life (regular or
whole life) and/or health insurance products.7 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.8 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.9 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.10 Working capital adjustments in our
Consolidated Statement of Cash Flows excluding the following items:
(i) Accounts receivable from card issuers; (ii) accounts payable to
clients and (iii) interest income received, net of costs, as those
three items are directly related to changes in accounts receivable
from card issuers (“AR”) and accounts payable to clients (“AP”) in
our balance sheet.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.
A PDF accompanying this announcement is available
at http://ml.globenewswire.com/Resource/Download/2a8c11c4-677b-4063-a9d5-5db977080d8d
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