StoneCo Ltd. (Nasdaq: STNE) (“Stone” or the “Company”) today
reports its financial results for its third quarter ended September
30, 2022.
“Dear Shareholders,
I am pleased to report to you that this quarter
we had strong growth with market share gains, doubled our profits
sequentially, accelerated net addition of clients and generated
strong liquidity with improving Adjusted Net Cash balance. Our
profitability recovery continues to gain more momentum.
On the top-line, we continued to perform well
with nearly 71% year over year growth in our Total Revenue and
Income, which was driven by 84% annual growth in our Financial
Services segment and nearly 22% in our Software segment. We
expected our growth to remain strong because we continue to see
solid sales execution in our HUBs and Digital channels, successful
cross-sales of new banking accounts and a rebound in our take
rates. We were able to beat our top line guidance by about 4.5%,
which I believe indicates that we had a good line of sight on our
performance, and we were able to execute on our plan for the
quarter.
On the bottom-line our earnings grew materially
faster than we were expecting for the quarter because our repricing
initiatives proved to be a little more successful than we were
conservatively expecting internally, we gained some incremental
operating leverage and our financial expenses as a percentage of
our Total Revenue and Income began to normalize after an uptick in
the second quarter (a positive trend we continue to see going
forward). As a result, our Adjusted EBT of R$210.7 million was well
ahead of our guidance for the quarter and our Adjusted EBT margin
increased 380 basis points quarter-over-quarter to reach 8.4% in
3Q22. We expect to continue to increase our margins.
We keep focused and working hard to balance
strong growth with increasing profitability, grow our banking
platform, expand and integrate our Software business and rebuild
our credit products. Overall, I think we had a good quarter and I
am pleased with our results, but we still have plenty to do. Our
performance so far in the fourth quarter continues to trend
favorably and we expect our results to continue to improve as we
position the business for 2023 and turn to a new chapter in Stone’s
journey.
As we previously announced, I will become a
Board member of StoneCo next year to focus my attention on
developing key strategic and financial initiatives to drive the
future expansion of the Company, and Pedro Zinner will join Stone’s
executive team no later than March 31st, 2023 and will begin
working closely with me and the management team in a transition
period before taking on the CEO role. I have a deep trust in Pedro
and I am excited to work with him and the team as we continue to
evolve the business. I remain strongly committed to Stone as a
partner and look forward to supporting the team in this new part of
our journey”.
– Thiago Piau, CEO
Operating and Financial Highlights for 3Q22
Note about our non-IFRS Adjusted P&L
metrics: following the partial sale of our stake in Banco
Inter, from 2Q22 onwards we no longer adjust the financial expenses
related to our bond, which may affect the comparability of our
current adjusted results to our adjusted numbers prior to 2Q22. To
allow for better understanding of our business performance trends,
the tables in this Earnings Release make reference to our adjusted
P&L metrics not adjusting for the bond expenses for all periods
for comparability purposes. See table 16 for historical metrics
with and without the bond adjustment.
MAIN CONSOLIDATED FINANCIAL METRICS
Table 1: Main Consolidated Financial
Metrics
Main Consolidated Financial Metrics |
3Q22 |
2Q22 |
3Q21 |
|
Δ y/y % |
Δ q/q % |
Total Revenue and Income (R$mn) |
2,508.4 |
2,304.1 |
1,469.6 |
|
70.7% |
8.9% |
Adjusted EBITDA (R$mn) |
1,153.7 |
1,057.4 |
473.3 |
|
143.7% |
9.1% |
Adjusted EBT (R$mn) |
210.7 |
106.7 |
81.3 |
|
159.0% |
97.4% |
Adjusted Net Income (R$mn) |
162.5 |
76.5 |
85.3 |
|
90.5% |
112.4% |
Adjusted Net Cash (R$mn) |
3,104.2 |
2,754.4 |
2,802.7 |
|
10.8% |
12.7% |
|
|
|
|
|
|
|
- Total
Revenue and Income reached R$2,508.4 million in the quarter, 4.5%
above our guidance of more than R$2,400.0 million. This
represents an increase of 70.7% from R$1,469.6 million in the
prior-year period. The increase in revenues was mainly a result of
(i) 84.1% growth in our financial services platform revenues, that
reached R$2,121.5 million and (ii) 21.6% growth in our software
platform revenues, that reached R$366.2 million. Non-Allocated
represented the remaining R$20.8 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. Our year over year software revenue growth was driven
mostly by our software Core business performance.
- Adjusted
EBITDA up 9.1% quarter over quarter. Adjusted EBITDA in
3Q22 was R$1,153.7 million, up from R$473.3 million in 3Q21 and
9.1% higher quarter over quarter. Adjusted EBITDA Margin was
slightly up sequentially to 46.0%, mainly due to efficiency gains
in our costs and expenses, despite higher salesforce and marketing
expenses.
- Adjusted
EBT1 of R$210.7 million was ahead
of our guidance of over R$125.0 million for the quarter,
with adjusted EBT margin increasing 3.8 percentage points
sequentially and reaching 8.4% in 3Q22. The better result compared
to our guidance is mainly due to better-than-expected performance
from our financial services solutions.
- Adjusted
Net Income2 in 3Q22 was R$162.5 million
with adjusted net margin of 6.5%, compared with R$76.5 million and
a margin of 3.3% in 2Q22. This improvement was mostly related to
(i) higher monetization of our MSMB clients, with a successful
implementation of our pricing policy amid a changing interest rate
environment, (ii) operating leverage in cost of services and (iii)
lower financial expenses mainly as a result of a lower and more
normalized duration of receivables sold to fund the prepayment
business and the use of our own cash to pay down debt, which
reduces financial expenses.
- Adjusted
Net Cash was R$3,104.2 million in 3Q22, R$349.8 million
higher compared with 2Q22, mostly explained by: (i) a cash net
income of R$391.9 million, which is our net income plus non-cash
income and expenses as reported in our statement of cash flows;
(ii) R$67.8 million of net collections from our credit business and
(iii) R$201.1 million of taxes payable and recoverable taxes. These
factors were partially offset by (iv) -R$109.3 million of capex,
(v) -R$140.3 million of interest and income tax paid, and (vi)
-R$20.8 million from M&A. Other effects negatively contributed
with R$40.6 million.
SEGMENT REPORTING
Starting 1Q22, we report our financial and
operating metrics in two segments, Financial Services and Software,
and non-allocated activities comprised of non-strategic businesses.
Note that our segment reporting is performed on an adjusted basis,
adjusting for items such as the mark-to-market expenses related to
Banco Inter investment, amortization of fair value adjustments on
acquisitions, among other factors.
Financial Services: comprised
of our financial services solutions serving both MSMBs and Key
Accounts, which includes mainly our payments solutions, digital
banking, credit and our registry business TAG.
Software: comprised of two main
fronts, namely: (i) Core, which includes POS/ERP solutions, TEF and
QR Code gateways, reconciliation and CRM and (ii) Digital, which
includes OMS, e-commerce platform, engagement tools, ads solution
and marketplace hub. The remaining results of the Linx Pay legacy
business are accounted for in both Core and Digital revenues and
costs.
Below, we provide our main financial metrics
broken down into our two reportable segments.
Table 2: Financial metrics by
segment
Segment Reporting (R$mn Adjusted) |
3Q22 |
% Rev3 |
2Q22 |
% Rev3 |
3Q21 |
% Rev |
|
Δ y/y % |
Δ q/q % |
Total Revenue and Income |
2,508.4 |
100.0% |
2,304.1 |
100.0% |
1,469.6 |
100.0% |
|
70.7% |
8.9% |
Financial Services |
2,121.5 |
100.0% |
1,932.6 |
100.0% |
1,152.5 |
100.0% |
|
84.1% |
9.8% |
Software |
366.2 |
100.0% |
350.7 |
100.0% |
301.1 |
100.0% |
|
21.6% |
4.4% |
Non-Allocated |
20.8 |
100.0% |
20.8 |
100.0% |
16.0 |
100.0% |
|
29.8% |
0.2% |
Adjusted EBITDA |
1,153.7 |
46.0% |
1,057.4 |
45.9% |
473.3 |
32.2% |
|
143.7% |
9.1% |
Financial Services |
1,098.6 |
51.8% |
1,020.6 |
52.8% |
457.4 |
39.7% |
|
140.2% |
7.6% |
Software |
54.8 |
15.0% |
53.2 |
15.2% |
20.0 |
6.6% |
|
174.4% |
3.0% |
Non-Allocated |
0.3 |
1.4% |
(16.5) |
(79.1%) |
(4.1) |
(25.3%) |
|
n.m |
n.m |
Adjusted EBT |
210.7 |
8.4% |
106.7 |
4.6% |
81.3 |
5.5% |
|
159.0% |
97.4% |
Financial Services |
177.6 |
8.4% |
84.0 |
4.3% |
104.3 |
9.1% |
|
70.2% |
111.3% |
Software |
33.7 |
9.2% |
40.0 |
11.4% |
(11.6) |
(3.9%) |
|
n.m |
(15.7%) |
Non-Allocated |
(0.6) |
(2.7%) |
(17.3) |
(83.0%) |
(11.4) |
(70.9%) |
|
n.m |
n.m |
|
|
|
|
|
|
|
|
|
|
FINANCIAL SERVICES SEGMENT PERFORMANCE
HIGHLIGHTS
Table 3: Financial Services Main
Operating and Financial Metrics
Main Financial Services Metrics |
3Q22 |
2Q22 |
3Q21 |
|
Δ y/y % |
Δ q/q % |
Financial Metrics (R$mn) |
|
|
|
|
|
|
Total Revenue and Income |
2,121.5 |
1,932.6 |
1,152.5 |
|
84.1% |
9.8% |
Adjusted EBITDA |
1,098.6 |
1,020.6 |
457.4 |
|
140.2% |
7.6% |
Adjusted EBT |
177.6 |
84.0 |
104.3 |
|
70.2% |
111.3% |
Adjusted EBT margin (%) |
8.4% |
4.3% |
9.1% |
|
(0.7
p.p.) |
4.0
p.p. |
|
|
|
|
|
|
|
TPV
(R$bn) |
93.3 |
90.7 |
75.0 |
|
24.5% |
2.9% |
MSMB |
74.7 |
69.9 |
51.6 |
|
44.7% |
6.9% |
Key Accounts |
18.6 |
20.9 |
23.4 |
|
(20.3%) |
(10.7%) |
|
|
|
|
|
|
|
Monthly Average TPV MSMB ('000) |
11.2 |
11.8 |
14.4 |
|
(22.6%) |
(5.5%) |
|
|
|
|
|
|
|
Active Payments Client Base
('000)5 |
2,372.1 |
2,122.3 |
1,388.4 |
|
70.9% |
11.8% |
MSMB5 |
2,314.4 |
2,066.4 |
1,336.1 |
|
73.2% |
12.0% |
Key Accounts |
64.3 |
61.2 |
56.1 |
|
14.7% |
5.1% |
|
|
|
|
|
|
|
Net
Adds ('000)5 |
249.8 |
196.1 |
293.8 |
|
(15.0%) |
27.4% |
MSMB5 |
248.0 |
195.5 |
290.3 |
|
(14.6%) |
26.8% |
Key Accounts |
3.1 |
1.0 |
4.4 |
|
(30.2%) |
206.9% |
|
|
|
|
|
|
|
Take
Rate |
|
|
|
|
|
|
MSMB |
2.21% |
2.09% |
1.66% |
|
0.54
p.p. |
0.11
p.p. |
Key Accounts |
0.95% |
0.86% |
0.62% |
|
0.33
p.p. |
0.09
p.p. |
|
|
|
|
|
|
|
MSMB
Banking |
|
|
|
|
|
|
Active Banking Client Base ('000) |
561.2 |
526.1 |
422.5 |
|
32.8% |
6.7% |
Total Accounts Balance (R$mn) |
2,653.1 |
2,317.8 |
1,287.1 |
|
106.1% |
14.5% |
Stone Card TPV (R$mn) |
542.8 |
531.6 |
415.8 |
|
30.5% |
2.1% |
Banking ARPAC4 |
43.6 |
39.0 |
18.3 |
|
139.2% |
11.8% |
|
|
|
|
|
|
|
MSMB
Credit |
|
|
|
|
|
|
Portfolio (R$mn) |
522.3 |
603.9 |
1,591.4 |
|
(67.2%) |
(13.5%) |
Credit Clients ('000) |
35.5 |
44.7 |
102.4 |
|
(65.3%) |
(20.4%) |
|
|
|
|
|
|
|
- Total Revenue and Income for Financial
Services segment rose 84.1% year over
year in 3Q22 to R$2,121.5 million. 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.
Furthermore, we continue to grow our banking solutions revenue,
driven by both active client base growth and increase in
ARPAC.
- Adjusted EBT for Financial Services segment
more than doubled sequentially in 3Q22 to R$177.6 million from
R$84.0 million reported in 2Q22. Adjusted EBT margin for the
segment was 8.4% in 3Q22, 4.0 percentage points higher sequentially
from 4.3% in 2Q22. This margin improvement is mainly explained by
(i) higher monetization of our MSMB clients, with a successful
implementation of our pricing policy amid a changing interest rate
environment, (ii) operating leverage in cost of services, and (iii)
lower financial expenses, mainly as a result of a lower and more
normalized duration of receivables sold to fund the prepayment
business and the use of our own cash to pay down debt, which
reduces financial expenses.
-
Consolidated TPV grew 24.5% year over year to
R$93.3 billion in 3Q22, mainly related to growth in the MSMB
segment.
- Total
Payments Active Client base reached 2.4 million6, with
total quarterly net addition of 249,800, higher than 196,100 in the
previous quarter. In 3Q22, we continued to see positive addition of
clients in all client tiers. We are not considering in our client
base numbers clients that use exclusively our TapTon solution.
a. MSMB – Balancing Growth and
Profitability
- MSMB
active payment clients reached
2,314,4007, representing client
net additions of 248,000 in the quarter. Net additions
were higher than 195,500 in the previous quarter. In 3Q22, we
continued to see positive addition of clients in all MSMB client
tiers.
- MSMB TPV
was R$74.7 billion, up 44.7% year over year, and above our
guidance of between R$73.0 and R$74.0 billion. This increase was
mainly a result of the growth in both MSMB active client base and
average TPV per client within all client tiers.
- Average
monthly TPV per client in MSMB decreased 22.6% year over
year and 5.5% quarter over quarter to R$11,200, due to the faster
growth of our Ton product, which has lower average TPV compared to
Stone and Pagar.me SMB products. Nevertheless, TPV per client grew
in all client tiers.
- MSMB
Take Rate rose to 2.21% in 3Q22 from 2.09% in 2Q22, mainly
a result of our continuous efforts in adjusting our commercial
policy amid a changing interest rate environment, with stronger
adjustments in 3Q22 compared with 2Q22, as well as continued growth
in our banking business.
- As a result of
stronger adjustments in our commercial policy in 3Q22 after mild
adjustments in 2Q22, both Stone and Ton products saw an
increase in their revenues net of funding costs per client on a
quarter over quarter and year over year basis.
- Our
banking ecosystem8 continued to
grow in 3Q22:
- Our
banking client base continues to increase sequentially,
accelerating growth compared to 2Q22. Active Digital Banking
Accounts reached 561,200, up 6.7% quarter over quarter and 32.8%
year over year, as we continue to increase the activation of
banking accounts within our payments client base. Meanwhile,
average revenue per active client (ARPAC)9 has increased 139.2%
year over year and 11.8% quarter over quarter to reach R$43.6 per
client per month. As we sell more banking into our Ton client base
we expect to see a significant increase in our number of accounts,
total accounts balance and overall banking revenues, although the
average revenue per client should decrease, as micro-merchants have
naturally smaller revenue contribution.
- Total
Accounts Balance reached R$2.7 billion, up 106.1% year
over year or 14.5% quarter over quarter. The quarter over quarter
growth is mainly due to an increase in the number of clients with
balance and in average balance per client, which, combined with a
higher CDI rate, contributed to an increase in the ARPAC of our
banking platform.
- Stone
Card TPV10 grew 30.5% year over
year and 2.1% quarter over quarter to reach R$542.8
million.
- Update
on our Credit Business:
- Our Legacy
credit portfolio reached R$522.3 million in 3Q22, decreasing R$81.6
million from 2Q22. The decrease is mainly a result of a cash inflow
of R$67.8 million in the quarter.
- Of the R$522.3
million portfolio in 3Q22, we have a balance of R$472.7 million
provisioned for bad debt. The fair value of the credit portfolio in
our balance sheet in September was R$61.4 million, given that we
expect to receive back interest still to be accrued. The R$472.7
million provisioned for bad debt compares with an NPL of R$480.5
million, implying a coverage ratio of 98%.
- We have started
testing our new credit product and more recently, in November 2022,
Gregor Ilg, our new Head of Credit, has effectively joined our
team. Our focus with the new credit product is to enhance our
understanding of clients’ ability to pay on one hand, and, at the
same time, enable our clients to better manage their cash flows
when they use our credit solutions. Some examples of the elements
we are currently testing in order to achieve this are: (i) we have
increased the set of variables within our credit decision models,
leveraging both internal and external data; (ii) we created a
seamless and fully automated process that we expect
to greatly improve our clients experience and provide them
with the possibility to restructure their payment schedule whenever
necessary; (iii) we are testing the ways in which we can leverage
our proximity with clients through our agents in the hubs and
customer relationship team to improve the overall credit lifecycle.
We will start with a Working Capital and a Credit Card related
product, but we expect to expand our portfolio to provide a broader
set of products in the future. We will take a conservative approach
given the credit cycle we are facing and expect to ramp up our
credit client base in 2023.
b. Key Accounts – Growth in Platform Services with
Deprioritization of Sub-Acquiring Business
- Platform
Services TPV grew 63.2% year over year. Total Key Accounts
TPV was R$18.6 billion, 20.3% lower year over year. This expected
reduction resulted from the ongoing deprioritization of
sub-acquirers, for which volumes decreased 56.2%, partially offset
by a 63.2% increase in TPV from Platform Services, which reached
R$11.5 billion and includes volumes from the upsell of our payments
offering to the Linx client base.
- Key
Accounts Take Rate of 0.95%. Key Accounts take rate was
0.95% in 3Q22, higher than 0.86% in 2Q22. This increase is mainly a
result of (i) lower representation of sub-acquirers, which have
lower take rates compared to platform clients and (ii) higher
prices from both MDRs and the effect of higher CDI rates, which
directly affect prepayment prices from larger clients. These
factors were partially compensated by lower take rates within our
sub-acquiring clients.
SOFTWARE PERFORMANCE
HIGHLIGHTS
Table 4: Software Main Operating and Financial
Metrics
Main Software Metrics |
3Q22 |
2Q22 |
3Q21 |
|
Δ y/y % |
Δ q/q % |
Financial Metrics (R$mn) |
|
|
|
|
|
|
Total Revenue and Income |
366.2 |
350.7 |
301.1 |
|
21.6% |
4.4% |
Adjusted EBITDA |
54.8 |
53.2 |
20.0 |
|
174.4% |
3.0% |
Adjusted EBITDA Margin |
15.0% |
15.2% |
6.6% |
|
8.3
p.p. |
(0.2
p.p.) |
Adjusted EBT |
33.7 |
40.0 |
(11.6) |
|
n.m |
(15.7%) |
|
|
|
|
|
|
|
- Total
Revenue and Income for Software grew 21.6% year over year
in 3Q22 to R$366.2 million. This growth is mainly a result of our
Core business performance, which was driven by both (i) organic
growth from higher number of POS/ERP locations and higher average
ticket as well as (ii) inorganic growth.
- Adjusted
EBITDA for the Software division grew to
R$54.8 million in 3Q22, with a margin of 15.0%, a strong growth
compared with R$20.0 million and a margin of 6.6% in 3Q21. Compared
with 2Q22, Adjusted EBITDA Margin for Software was broadly in line,
due to non-recurring higher cloud costs which we expect to
normalize in 4Q22. We continue to expect Adjusted EBITDA Margin
improvements over time.
- Adjusted
EBT for Software was R$33.7 million in 3Q22, compared with
-R$11.6 million for the prior year period. Compared with 2Q22,
Adjusted EBT decreased 15.7% from R$40.0 million to R$33.7 million
in 3Q22, with Adjusted EBT Margin decreasing from 11.4% to 9.2%.
This reduction is a result of lower levels of amortization in 2Q22,
which normalized this quarter. Going forward, we expect Adjusted
EBT margin improvement over time.
- Our
Core11 Software business revenue
increased 23.3% year over year. This increase was driven
by increases in average ticket and number of locations, in addition
to the consolidation of recent investments.
- Our
Digital12 business revenue
increased 10.0% year over year mainly due to the
consolidation of Plugg.to, a solution focused on helping merchants
to sell online through the integration with different
marketplaces.
RECENT DEVELOPMENTS
Transition in Leadership Roles and Management changes
As per our press release on November 3rd, 2022
and following the evolution of the Company’s management and Board,
the Company announced that:
- Thiago Piau, our
current CEO, will become a Board member of the Company, where he
will focus his attention on developing key strategic and financial
initiatives to help drive the future expansion of StoneCo;
- Pedro Zinner, a
current Board member of StoneCo, will step-down from the Board and
succeed Mr. Piau as CEO. Mr. Zinner, who has over 25 years of
experience in strategy, risk management and finance, was most
recently the CEO of Eneva, one of the leading power-generation
companies in Brazil, from 2017 to November 2022. He will join
Stone’s executive team no later than March 31st, 2023 and will
begin working closely with Mr. Piau and the management team in a
transition period before taking on the CEO role.
In addition, the Company also announces
that:
- André Monteiro
was appointed as our Chief Risk Officer, a newly created position.
Before joining Stone, Mr. Monteiro was XP Inc.’s CRO for financial
risks between May/2021 and Aug/2022. From Sep/2013 to Mar/2021, he
has served as CRO at B3, the Brazilian Exchange and OTC. He was
partner with Gávea Investments from 2004 to 2013, being CRO and
quantitative portfolio manager. Previously, he was Chief-Economist
for the buy-side at Icatu Bank (1998-2002), artificial intelligence
analyst at IBM Brazil’s Business Intelligence Unit (1997) and
macroeconomic analyst at Galanto Consulting (1996). From 2018 to
2020, he served as independent member of the Brazilian Development
Bank (BNDES) Board of Directors Risk Committee. Mr. Monteiro has
the following academic degrees: post-doc in Finance from The
Bendheim Center for Finance at Princeton University (2003), Ph.D.
in Decision Support Methods (2002) and M.Sc. in Finance and
Investment Analysis (1997) from Catholic University of Rio de
Janeiro and BA in Chemical Engineering from University of São Paulo
(1995).
OUTLOOK FOR 4Q22
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. While the World Cup and the macroeconomic
environment may have some negative impact in our results, we
continue to expect strong core growth and improving profitability
in our business. Please see “Forward-looking Statements” below. In
view of these factors, we expect the following:
- Total Revenue
and Income is expected to be above R$2,600.0 million in 4Q22, or a
year over year growth of above 38.8%;
- Adjusted EBT is
expected to be above R$250.0 million in 4Q22, compared with R$210.7
million in 3Q22;
- MSMB TPV is
expected to be between R$78.0 billion and R$79.0 billion in 4Q22,
compared with R$74.7 billion in 3Q22. This guidance reflects
an estimated negative impact in this fourth quarter of between
R$2.0 billion to R$3.0 billion in MSMB TPV from the World Cup.
Income Statement
Table 5: Statement of Profit or Loss
(IFRS, as Reported)
Statement of Profit or Loss (R$mn) |
3Q22 |
% Rev. |
3Q21 |
% Rev. |
Δ % |
|
9M22 |
% Rev. |
9M21 |
% Rev. |
Δ % |
Net revenue from transaction activities and other services |
677.8 |
27.0% |
436.7 |
29.7% |
55.2% |
|
1,839.6 |
26.7% |
1,114.2 |
37.8% |
65.1% |
Net revenue from subscription services and equipment rental |
426.4 |
17.0% |
371.0 |
25.2% |
14.9% |
|
1,296.3 |
18.8% |
663.8 |
22.5% |
95.3% |
Financial income |
1,251.6 |
49.9% |
607.7 |
41.4% |
106.0% |
|
3,306.4 |
48.0% |
1,016.5 |
34.4% |
225.3% |
Other financial income |
152.7 |
6.1% |
54.3 |
3.7% |
181.4% |
|
440.5 |
6.4% |
156.2 |
5.3% |
182.0% |
Total revenue and income |
2,508.4 |
100.0% |
1,469.6 |
100.0% |
70.7% |
|
6,882.8 |
100.0% |
2,950.7 |
100.0% |
133.3% |
Cost of services |
(671.3) |
(26.8%) |
(525.6) |
(35.8%) |
27.7% |
|
(1,971.8) |
(28.6%) |
(1,067.7) |
(36.2%) |
84.7% |
Administrative expenses |
(283.9) |
(11.3%) |
(359.8) |
(24.5%) |
(21.1%) |
|
(794.2) |
(11.5%) |
(599.2) |
(20.3%) |
32.5% |
Selling expenses |
(385.4) |
(15.4%) |
(308.2) |
(21.0%) |
25.0% |
|
(1,105.1) |
(16.1%) |
(694.1) |
(23.5%) |
59.2% |
Financial expenses, net |
(940.3) |
(37.5%) |
(330.7) |
(22.5%) |
184.3% |
|
(2,603.2) |
(37.8%) |
(580.8) |
(19.7%) |
348.2% |
Mark-to-market on equity securities designated at FVPL |
111.5 |
4.4% |
(1,341.2) |
(91.3%) |
n.m |
|
(738.6) |
(10.7%) |
(500.0) |
(16.9%) |
47.7% |
Other income (expenses), net |
(91.3) |
(3.6%) |
(29.1) |
(2.0%) |
213.7% |
|
(193.5) |
(2.8%) |
(134.8) |
(4.6%) |
43.5% |
Loss on investment in associates |
(1.2) |
(0.0%) |
(2.8) |
(0.2%) |
(55.5%) |
|
(3.2) |
(0.0%) |
(9.2) |
(0.3%) |
(64.8%) |
Profit before income taxes |
246.5 |
9.8% |
(1,427.8) |
(97.2%) |
n.m |
|
(526.7) |
(7.7%) |
(635.2) |
(21.5%) |
(17.1%) |
Income tax and social contribution |
(49.4) |
(2.0%) |
167.6 |
11.4% |
n.m |
|
(78.5) |
(1.1%) |
59.3 |
2.0% |
n.m |
Net income for the period |
197.1 |
7.9% |
(1,260.2) |
(85.7%) |
n.m |
|
(605.2) |
(8.8%) |
(575.9) |
(19.5%) |
5.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Table 6: Statement of Profit or Loss
(Adjusted13) Following
the partial sale of our stake in Banco Inter, from 2Q22 onwards we
no longer adjust the financial expenses related to our bond, which
may affect the comparability of our Adjusted results between our
numbers from 2Q22 onwards and our numbers from prior periods. For
that reason, we have included below our historical numbers
according to adjustment criteria adopted as from 2Q22. See table 16
for historical metrics with and without the bond adjustment.
Adjusted Statement of Profit or Loss (R$mn) |
3Q22 |
% Rev. |
3Q21 |
% Rev. |
Δ % |
|
9M22 |
% Rev. |
9M21 |
% Rev. |
Δ % |
Net revenue from transaction activities and other services |
677.8 |
27.0% |
436.7 |
29.7% |
55.2% |
|
1,839.6 |
26.7% |
1,114.2 |
37.8% |
65.1% |
Net revenue from subscription services and equipment rental |
426.4 |
17.0% |
371.0 |
25.2% |
14.9% |
|
1,296.3 |
18.8% |
663.8 |
22.5% |
95.3% |
Financial income |
1,251.6 |
49.9% |
607.7 |
41.4% |
106.0% |
|
3,306.4 |
48.0% |
1,016.5 |
34.4% |
225.3% |
Other financial income |
152.7 |
6.1% |
54.3 |
3.7% |
181.4% |
|
440.5 |
6.4% |
156.2 |
5.3% |
182.0% |
Total revenue and income |
2,508.4 |
100.0% |
1,469.6 |
100.0% |
70.7% |
|
6,882.8 |
100.0% |
2,950.7 |
100.0% |
133.3% |
Cost of services |
(671.3) |
(26.8%) |
(525.6) |
(35.8%) |
27.7% |
|
(1,971.8) |
(28.6%) |
(1,067.7) |
(36.2%) |
84.7% |
Administrative expenses |
(251.8) |
(10.0%) |
(193.8) |
(13.2%) |
29.9% |
|
(698.2) |
(10.1%) |
(414.3) |
(14.0%) |
68.5% |
Selling expenses |
(385.4) |
(15.4%) |
(308.2) |
(21.0%) |
25.0% |
|
(1,105.1) |
(16.1%) |
(694.1) |
(23.5%) |
59.2% |
Financial expenses, net |
(932.2) |
(37.2%) |
(328.3) |
(22.3%) |
184.0% |
|
(2,579.9) |
(37.5%) |
(570.0) |
(19.3%) |
352.6% |
Other income (expenses), net |
(55.8) |
(2.2%) |
(29.6) |
(2.0%) |
88.7% |
|
(124.7) |
(1.8%) |
(69.1) |
(2.3%) |
80.3% |
Loss on investment in associates |
(1.2) |
(0.0%) |
(2.8) |
(0.2%) |
(55.5%) |
|
(3.2) |
(0.0%) |
(9.2) |
(0.3%) |
(64.8%) |
Adj.
Profit before income taxes |
210.7 |
8.4% |
81.3 |
5.5% |
159.0% |
|
399.9 |
5.8% |
126.2 |
4.3% |
216.8% |
Income tax and social contribution |
(48.2) |
(1.9%) |
4.0 |
0.3% |
n.m |
|
(109.2) |
(1.6%) |
(9.0) |
(0.3%) |
1119.4% |
Adjusted Net Income |
162.5 |
6.5% |
85.3 |
5.8% |
90.5% |
|
290.8 |
4.2% |
117.3 |
4.0% |
147.9% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue and Income
Total Revenue and Income in 3Q22 was R$2,508.4
million, an increase of 70.7% from R$1,469.6 million year over
year.
Total Revenue and Income is composed of (i)
R$2,121.5 million from our Financial Services segment, (ii) R$366.2
million from our Software segment and (iii) R$20.8 million
non-allocated.
Financial Services segment revenue grew 84.1%
year over year. This revenue growth is 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 2.21% in 3Q22
compared with 2.09% in 2Q22 and 1.66% in 3Q21. The higher take rate
year over year is a result of the successful adjustment in our
pricing policy amid a changing interest rate environment in Brazil,
in addition to the growth of our banking solution. 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 was 21.6% year over
year, due to our Core business performance, which grew 23.3% over
the same period. The growth in our Core software business was
driven by both (i) organic growth from a higher number of POS/ERP
locations and higher average ticket as well as (ii) inorganic
growth.
Net Revenue from Transaction Activities
and Other Services
Net Revenue from Transaction Activities and
Other Services was R$677.8 million in 3Q22, an increase of 55.2%
compared with 3Q21. This increase was mostly due to (i) 24.5% year
over year consolidated TPV growth; (ii) higher revenue from Ton and
(iii) new revenue streams, including banking, PIX and our registry
business TAG.
Net Revenue from Subscription Services
and Equipment Rental
Net Revenue from Subscription Services and
Equipment Rental was R$426.4 million in 3Q22, 14.9% higher than
3Q21 primarily due to (i) higher POS/ERP revenue, driven by both an
increase in number of locations and average ticket, (ii)
consolidation of new software companies and (iii) additional
revenue from companies in our non-allocated segment. These factors
were partially compensated by a negative impact from a downward
revision of client lifetime assumptions related to our payments POS
rental revenue14, which is accounted over the expected life of
merchants on a linear basis. The downward revision is a result of
impacts in our client base during 2022 as a result of adjustments
in our commercial policy amid the changing interest rate
environment.
Financial Income
Financial Income in 3Q22 was R$1,251.6 million,
an increase of 106.0% year over year, mostly due to (i) higher
prepaid volumes, (ii) higher prices due to continued adjustments in
our commercial policy amid changes in CDI; and (iii) floating
revenue from our banking solution.
Other Financial Income
Other Financial Income was R$152.7 million in
3Q22 compared with R$54.3 million in 3Q21 mainly due to higher
yield on cash & equivalents which was a result of the higher
base rate in the country year over year, and partially compensated
by a lower average cash balance. Compared with 2Q22, Other
Financial Income decreased by R$1.8 million, mainly due to lower
average cash balance as we took the decision to use cash to pay
down debt. Although this decision has led to a decrease in Other
Financial Income, it has also contributed to a decrease in the
levels of our Financial Expenses, Net.
Costs and Expenses
Cost of Services
Cost of Services were R$671.3 million in 3Q22,
27.7% higher year over year. This increase was mainly due to (i)
higher investments in technology and logistics, (ii) higher
expenses with our customer support team and (iii) higher D&A
costs, as we continue to expand our client base. As a percentage of
revenues, Cost of Services reduced from 35.8% in 3Q21 to 26.8% in
3Q22.
Compared with 2Q22, Cost of Services increased
7.2%, mostly explained by (i) higher costs with cloud and
datacenter, (ii) higher investments in technology, (iii) higher
logistics costs, (iv) higher D&A costs, as we continue to
expand our client base and (v) higher D&A in our software
segment due to lower than usual amortization in 2Q22. As a
percentage of revenues, Cost of Services reduced sequentially from
27.2% to 26.8%.
Cost of Services reduced as a percentage of
revenues both year over year and quarter over quarter, despite
strong growth in our client base, which has a direct impact in Cost
of Services, as this line includes upfront costs related to
acquisition of new clients.
Administrative Expenses
Administrative Expenses were R$283.9 million,
21.1% lower year over year. This decrease was mainly explained by
(i) lower amortization of fair value adjustments related to
acquisitions and (ii) lower third party services, as in 3Q21 we
incurred one-off fees paid to advisors relative to the Linx and
Banco Inter transactions. These effects were partially compensated
by higher personnel expenses and the consolidation of new software
companies. As a percentage of Total Revenue and Income,
Administrative Expenses decreased significantly from 24.5% in 3Q21
to 11.3% in 3Q22, as a result of the abovementioned effects, in
addition to efficiency gains in our operation.
Administrative Expenses in 3Q22 were 4.4% higher
than in 2Q22, mainly explained by higher personnel expenses. As a
percentage of revenues, Administrative Expenses decreased from
11.8% in 2Q22 to 11.3% in 3Q22, as we gain efficiency in G&A
with the growth of our business.
Administrative Expenses in 3Q22 include -R$32.1 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, Administrative Expenses were R$193.8 million in 3Q21,
R$231.6 million in 2Q22 and R$251.8 million in 3Q22. 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 13.2% in 3Q21
and 10.1% in 2Q22 to 10.0% in 3Q22. This efficiency gain was mainly
driven by dilution of back-office expenses with the growth of our
business. |
Selling Expenses
Selling Expenses were R$385.4 million in the
quarter, an increase of 25.0% year over year. Such increase was
mainly explained by (i) higher expenses with our salespeople,
mostly related to our hub operations; (ii) higher expenses with
partners commissions and (iii) higher marketing expenses. As a
percentage of revenues, Selling Expenses decreased from 21.0% in
3Q21 to 15.4% in 3Q22.
Compared with 2Q22, Selling Expenses increased
14.7%, mostly due to the same factors explained above for the year
over year variation. As a percentage of revenues, Selling Expenses
increased sequentially from 14.6% in 2Q22 to 15.4% in 3Q22 as we
continue to invest in the expansion of our distribution channels
and marketing.
Financial Expenses, Net
Financial Expenses, Net were R$940.3 million,
184.3% higher compared with 3Q21. This variation is mainly because
of (i) increased cost of funds, mainly due to the higher interest
rate in the country over the period, which increased from an
average of 4.86% in 3Q21 to 13.47% in 3Q22; and (ii) higher
prepayment volumes.
Compared with the previous quarter, Financial
Expenses, net were 1.5% lower, mainly explained by (i) a lower and
more normalized duration of receivables sold to fund the prepayment
business; and (ii) the use of our own cash to pay down debt,
reducing our debt level from R$6.8 billion in 2Q22 to R$6.0 billion
in 3Q22. Those two factors more than offset the higher prepayment
volumes and higher interest rates quarter over quarter.
Financial Expenses include -R$8.0 million that are adjusted in our
Adjusted Income Statement related to one-off effects from (i) earn
out interests on business combinations and (ii) financial expenses
from fair value adjustments on acquisitions (see table 15 in
Appendix for the Adjustments by P&L line). Until 1Q22, we used
to also adjust our bond expenses in our adjusted figures, which we
stopped doing from 2Q22 onwards. |
|
For comparability purposes, based on adjustments criteria adopted
from 2Q22 onwards, in which we do not adjust our results for bond
expenses, Financial Expenses, net were R$328.3 million in 3Q21,
R$945.6 million in 2Q22 and R$932.2 million in 3Q22 or 22.3%, 41.0%
and 37.2% as a percentage of Total Revenue and Income,
respectively. Such year over year and quarter over quarter
variations are explained by the same reasons mentioned above for
the accounting numbers. |
Mark-to-market on equity securities
designated at FVPL
In 3Q22, we recognized R$111.5 million in
mark-to-market gains 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$91.3 million in 3Q22,
R$62.2 million higher year over year, mainly due to share-based
compensation expenses. The majority of the year over year increase
in share-based compensation expenses is related to higher social
contribution taxes, due to a positive variation in our share price
in 3Q22, compared with a negative variation in 3Q21. There was also
a smaller effect from additional grants.
Compared with 2Q22, Other Expenses, net were
R$21.0 million higher, also mostly explained by share-based
compensation expenses. The majority of the sequential increase in
share-based compensation expenses quarter over quarter relates to
higher social contribution taxes due to the positive variation in
our share price in 3Q22.
Other Expenses, net include -R$35.5 million that are adjusted in
our Adjusted Income Statement, including call options related to
acquisitions and share-based compensation expenses related to the
one-time IPO grant and non-recurring long-term incentive plans (see
table 15 in Appendix for the Adjustments by P&L line).
Adjusting for those effects, Other expenses, net, were R$29.6
million in 3Q21, R$56.8 million in 2Q22 and R$55.8 million in 3Q22
or 2.0%, 2.5% and 2.2% as a percentage of Total Revenue and Income,
respectively. The year over year increase is mainly explained by
(i) higher non-adjusted share-based compensation expenses, (ii)
higher loss on sale of non-current assets and (iii) higher civil
contingencies. On a quarter over quarter basis, Other expenses were
broadly flat. |
Income Tax and Social
Contribution
During 3Q22, the Company recognized income tax
and social contribution expenses of R$49.4 million over a profit
before taxes of R$246.5 million, implying an effective tax rate of
20.1%. The difference to the statutory rate is mainly explained by
positive mark-to market on the investment in Banco Inter that is
not subject to income taxes and positive results from our
operations subject to different tax rates.
Income Tax and Social Contribution include -R$1.3 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). Adjusting for those effects, our effective tax rate
in 3Q22 was 22.9%, lower than the statutory rate mostly as a result
of our operations subject to different tax rates. |
EBITDA
Adjusted EBITDA was R$1,153.7 million in the
quarter, compared with R$473.3 million in 3Q21. This higher figure
is mainly explained by higher Total Revenue and Income due to the
growth of our operations. Adjusted EBITDA Margin was 46.0% in the
quarter, compared with 32.2% in 3Q21 and 45.9% in 2Q22. The
sequential improvement in EBITDA margin in 3Q22 compared with 2Q22
was mainly due to efficiency gains in our costs and expenses,
despite an increase in salesforce and marketing expenses.
Table 7: Adjusted EBITDA Reconciliation
EBITDA Bridge (R$mn) |
3Q22 |
% Rev. |
3Q21 |
% Rev. |
Δ % |
|
9M22 |
% Rev. |
9M21 |
% Rev. |
Δ % |
Profit before income taxes |
246.5 |
9.8% |
(1,427.8) |
(97.2%) |
n.m |
|
(526.7) |
(7.7%) |
(635.2) |
(21.5%) |
(17.1%) |
(+) Financial expenses, net |
940.3 |
37.5% |
330.7 |
22.5% |
184.3% |
|
2,603.2 |
37.8% |
580.8 |
19.7% |
348.2% |
(-) Other financial income |
(152.7) |
(6.1%) |
(54.3) |
(3.7%) |
181.4% |
|
(440.5) |
(6.4%) |
(156.2) |
(5.3%) |
182.0% |
(+) Depreciation and amortization |
203.8 |
8.1% |
214.0 |
14.6% |
(4.7%) |
|
585.6 |
8.5% |
395.8 |
13.4% |
47.9% |
EBITDA |
1,237.9 |
49.4% |
(937.3) |
(63.8%) |
n.m |
|
2,221.5 |
32.3% |
185.2 |
6.3% |
1099.4% |
(+) Non-recurring share-based compensation expenses (a) |
44.4 |
1.8% |
(1.7) |
(0.1%) |
n.m |
|
88.9 |
1.3% |
65.4 |
2.2% |
36.0% |
(+) Gain on previously held interest in associate |
0.0 |
0.0% |
(3.8) |
(0.3%) |
(100.0%) |
|
0.0 |
0.0% |
(15.8) |
(0.5%) |
(100.0%) |
(+) Mark-to-market related to the investment in Banco Inter |
(111.5) |
(4.4%) |
1,341.2 |
91.3% |
n.m |
|
738.6 |
10.7% |
500.0 |
16.9% |
47.7% |
(+) Other Expenses (b) |
(17.2) |
(0.7%) |
75.0 |
5.1% |
n.m |
|
(20.8) |
(0.3%) |
97.7 |
3.3% |
n.m |
Adjusted EBITDA |
1,153.7 |
46.0% |
473.3 |
32.2% |
143.7% |
|
3,028.3 |
44.0% |
832.5 |
28.2% |
263.8% |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Consists of expenses related to
grants in connection to one-time pre-IPO pool of share-based
compensation as well as non-recurring long term incentive plans.
For additional details, please refer to our press release “StoneCo
Announces New Incentive Plan Pool” as of June 2, 2022.
(b) Consists of the fair value adjustment
related to associates call option, M&A and Bond issuance
expenses, earn-out interests related to acquisitions, gains/losses
in the sale of companies, dividends from Linx and organizational
restructuring expenses.
EBITDA was R$1,237.9 million in the quarter,
higher than -R$937.3 in the prior year period, mostly as a result
of (i) the increase in revenue excluding Other Financial Income and
(ii) a positive pre-tax effect from mark-to-market from our
investment in Banco Inter of R$111.5 million in 3Q22 compared with
a negative effect of R$1,341.2 million in 3Q21. These effects were
partially offset by higher costs and expenses, excluding
D&A.
Net Income (Loss) and EPS
Adjusted Net Income was R$162.5 million in 3Q22,
compared with R$85.3 million15 in 3Q21 on a comparable basis (not
adjusting for bond expenses). This variation in Adjusted Net Income
is mainly explained by our revenue growth of 70.7% year over year
combined with more efficiency in cost of services (up +27.7% year
over year), administrative expenses (up +29.9%16 year over year)
and selling expenses (up +25.0% year over year). These were
partially offset by a year over year increase of 184.0% in
financial expenses, which was mainly due to higher interest rates
in Brazil.
Adjusted Net Income was 112.4% higher than 2Q22
Adjusted Net Income of R$76.5 million, with Adjusted Net Margin
improving from 3.3% to 6.5% sequentially, mainly as a result of (i)
higher monetization of our MSMB clients, with the successful
implementation of our pricing policy amid a changing interest rate
environment, (ii) operating leverage in cost of services and (iii)
lower financial expenses mainly as a result of a lower and more
normalized duration of receivables sold to fund the prepayment
business and the use of our own cash to pay down debt, which
reduces financial expenses.
Net Income in 3Q22 was R$197.1 million, compared
with a Net Loss of R$1,260.2 million in 3Q21, mostly as a result of
mark-to-market effects from the investment in Banco Inter, which
contributed R$111.5 million positively to 3Q22 and R$1,341.2
million negatively to 3Q21, as well as the same factors explained
above for the variation in Adjusted Net Income.
On a comparable basis (not adjusting for bond
expenses), Adjusted diluted EPS for the Company was R$0.52 per
share in 3Q22, compared with R$0.30 per share in 3Q21, mostly
explained by the higher Adjusted Net Income. On a sequential basis,
Adjusted diluted EPS increased from R$0.25 per share in 2Q22 to
R$0.52 per share in 3Q22. IFRS basic EPS was R$0.65 per share,
compared with a negative R$4.05 in the prior-year period. This
difference was mainly due to the higher Net Income, with R$111.5
million positive impact from mark-to-market from Banco Inter in
3Q22 compared with a negative impact of R$1,341.2 million in
3Q21.
Table 8: Adjusted Net Income Reconciliation
Following the partial sale of our stake in Banco
Inter, from 2Q22 onwards we no longer adjust the financial expenses
related to our bond, which may affect the comparability of our
adjusted results between our numbers from 2Q22 onwards and our
numbers from prior periods. For that reason, we have included below
our historical numbers according to adjustment criteria adopted as
from 2Q22. See table 16 for historical metrics with and without the
bond adjustment.
Net Income Bridge (R$mn) |
3Q22 |
% Rev. |
3Q21 |
% Rev. |
Δ
% |
|
9M22 |
% Rev. |
9M21 |
% Rev. |
Δ
% |
Net
income for the period |
197.1 |
|
7.9 |
% |
(1,260.2 |
) |
(85.7 |
%) |
n.m |
|
(605.2 |
) |
(8.8 |
%) |
(575.9 |
) |
(19.5 |
%) |
5.1 |
% |
Non-recurring share-based compensation expenses (a) |
44.4 |
|
1.8 |
% |
(1.7 |
) |
(0.1 |
%) |
n.m |
|
88.9 |
|
1.3 |
% |
65.4 |
|
2.2 |
% |
36.0 |
% |
Amortization of fair value adjustment (b) |
32.2 |
|
1.3 |
% |
98.5 |
|
6.7 |
% |
(67.3 |
%) |
|
103.6 |
|
1.5 |
% |
114.2 |
|
3.9 |
% |
(9.2 |
%) |
Gain on previously held interest in associate |
0.0 |
|
0.0 |
% |
(3.8 |
) |
(0.3 |
%) |
(100.0 |
%) |
0.0 |
|
0.0 |
% |
(15.8 |
) |
(0.5 |
%) |
(100.0 |
%) |
Mark-to-market from the investment in Banco Inter (c) |
(111.5 |
) |
(4.4 |
%) |
1,341.2 |
|
91.3 |
% |
n.m |
|
738.6 |
|
10.7 |
% |
500.0 |
|
16.9 |
% |
47.7 |
% |
Other expenses (d) |
(0.9 |
) |
(0.0 |
%) |
75.0 |
|
5.1 |
% |
n.m |
|
(4.5 |
) |
(0.1 |
%) |
97.7 |
|
3.3 |
% |
n.m |
Tax effect on adjustments |
1.3 |
|
0.1 |
% |
(163.6 |
) |
(11.1 |
%) |
n.m |
|
(30.7 |
) |
(0.4 |
%) |
(68.2 |
) |
(2.3 |
%) |
(55.0 |
%) |
Adjusted net income (as reported) |
162.5 |
|
6.5 |
% |
85.3 |
|
5.8 |
% |
90.5 |
% |
|
290.8 |
|
4.2 |
% |
117.3 |
|
4.0 |
% |
147.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
IFRS basic
EPS (e) |
0.65 |
|
n.a. |
(4.05 |
) |
n.a. |
n.m |
|
(1.92 |
) |
n.a. |
(1.83 |
) |
n.a. |
5.1 |
% |
Adjusted
diluted EPS (as reported) (f) |
0.52 |
|
n.a. |
0.30 |
|
n.a. |
70.5 |
% |
|
0.96 |
|
n.a. |
0.42 |
|
n.a. |
128.8 |
% |
Basic Number
of shares |
312.4 |
|
n.a. |
308.9 |
|
n.a. |
1.1 |
% |
|
311.6 |
|
n.a. |
308.9 |
|
n.a. |
0.9 |
% |
Diluted Number of shares |
323.9 |
|
n.a. |
308.9 |
|
n.a. |
4.9 |
% |
|
311.6 |
|
n.a. |
308.9 |
|
n.a. |
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Consists of expenses related to grants in
connection to one-time pre-IPO pool of share-based compensation as
well as non-recurring long term incentive plans. For additional
details, please refer to our press release “StoneCo Announces New
Incentive Plan Pool” as of June 2, 2022.
(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) From 2Q22 onwards we no longer adjust the
financial expenses related to our bond, which may affect the
comparability of our Adjusted results between our numbers from 2Q22
onwards and our numbers from prior periods. For comparability
purposes, we have included in this line only the mark-to-market
from the investment in Banco Inter in both our current and
historical numbers, thus not adjusting the bond expenses.
(d) Consists of the fair value adjustment
related to associates call option, M&A and Bond issuance
expenses, earn-out interests related to acquisitions, gains/losses
in the sale of companies, dividends from Linx and organizational
restructuring expenses.
(e) 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,
September 30th, 2022.
(f) 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) |
3Q22 |
2Q22 |
4Q21 |
Cash and cash equivalents |
2,343.2 |
3,786.8 |
4,495.6 |
Short-term investments |
2,716.1 |
2,488.0 |
1,993.0 |
Accounts receivable from card issuers |
18,887.5 |
17,667.7 |
19,286.6 |
Financial assets from banking solution |
3,074.1 |
2,856.9 |
2,346.5 |
Derivative financial instrument (b) |
5.0 |
1.5 |
210.3 |
Adjusted Cash |
27,025.8 |
26,801.0 |
28,332.0 |
|
|
|
|
Obligations with banking customers (c) |
(3,144.1) |
(2,705.0) |
(2,201.9) |
Accounts payable to clients |
(14,779.5) |
(14,608.2) |
(15,726.5) |
Loans and financing (a) |
(4,456.1) |
(4,935.0) |
(5,861.8) |
Obligations to FIDC quota holders |
(1,291.8) |
(1,605.7) |
(2,227.2) |
Derivative financial instrument (b) |
(250.1) |
(192.8) |
(23.2) |
Adjusted Debt |
(23,921.6) |
(24,046.6) |
(26,040.5) |
|
|
|
|
Adjusted Net Cash |
3,104.2 |
2,754.4 |
2,291.5 |
(a) Loans and financing were reduced by the effects of leases
liabilities recognized under IFRS 16.
(b) Refers to economic hedge.
(c) Includes deposits from banking customers and values
transferred by our banking clients to third parties but not yet
settled, which from 3Q22 onwards are recognized in Other
Liabilities in our Balance Sheet.
Starting this quarter, we have adjusted our
Adjusted Net Cash metric to include our Financial Assets from
Banking Solution in our Adjusted Cash and our Obligations with
Banking Customers in our Adjusted Debt. This change was done
retrospectively for comparability purposes.
Accounts Receivable from Card Issuers are
accounted for at their fair value in our balance sheet.
As of September 30, 2022, the Company’s Adjusted
Net Cash was R$3,104.2 million, R$349.8 million higher compared
with 2Q22, mostly explained by:
-
R$391.9 million of cash net income, which is our net income plus
non-cash income and expenses as reported in our statement of cash
flows;
-
-R$140.3 million of interest and income tax paid;
- R$67.8
million of net collections from our credit business;
-
R$201.1 million from changes in taxes payable and recoverable
taxes;
-
-R$109.3 million of capex;
-
-R$20.8 million of M&A; and
-
-R$40.6 million from other effects.
In the nine months ended 2022, the Company
increased its Adjusted Net Cash position by R$812.7 million.
Cash Flow
Our cash flow in the quarter was explained
by:
- Net cash used in
operating activities was R$169.1 million in 3Q22, explained by
R$391.9 million of Net Income after non-cash adjustments and
-R$561.0 million from working capital variation. Working capital is
composed of (i) R$67.8 million of cash net inflows from our credit
business; (ii) R$666.7 million from the following working capital
changes: taxes payable (R$259.5 million), labor and social security
liabilities (R$91.2 million), trade accounts receivable, banking
solutions and other assets excluding cash inflow from credit
product (R$92.7 million) and trade accounts payable and other
liabilities (R$223.3 million); (iii) -R$1,136.4 million of changes
related to accounts receivable from card issuers, accounts payable
to clients and interest income received, net of costs; (iv)
-R$140.3 million from payment of interest and taxes and (iv)
-R$18.8 million of other working capital changes.
- Net cash used in
investing activities was R$276.7 million in 3Q22, explained by (i)
R$109.3 million capex, of which R$47.0 million related to property
and equipment and R$62.2 million related to development of
intangible assets; (ii) R$20.8 million of M&A and (iii) R$152.1
million of acquisition of short-term investments. These were
partially offset by R$5.4 million from disposal of non-current
assets and equity securities.
- Net cash used in
financing activities was R$991.9 million, explained by (i) R$990.4
million payment of debt mostly related to the full amortization of
the Company’s debenture, partial amortization of FIDC AR III and
amortization of CCBs (“Cédula de Crédito Bancário”); and (ii) R$1.5
million cash outflow from capital events related to non-controlling
interests.
Other
Information
Conference Call
Stone will discuss its 3Q22 financial results
during a teleconference today, November 17, 2022, at 5:00 PM ET /
7:00 PM BRT. The conference call can be accessed at +1 (412) 317
6346 or +1 (844) 204 8586 (US), or +55 (11) 3181 8565 (Brazil), or
+44 (20) 3795 9972 (UK).
The call will also be broadcast simultaneously
on Stone’s Investor Relations website at
https://investors.stone.co/. Following the completion of the call,
a recorded replay of the webcast will be available on Stone’s
Investor Relations website at https://investors.stone.co/.
About Stone Co.
Stone Co. is a leading provider of financial
technology and software solutions that empower merchants to conduct
commerce seamlessly across multiple channels and help them grow
their businesses.
Investor Contact
Investor Relationsinvestors@stone.co
Consolidated Statement of Profit or
Loss
Table 10: Consolidated Statement of
Profit or Loss
Statement of Profit or Loss (R$mn) |
3Q22 |
3Q21 |
|
9M22 |
9M21 |
Net revenue from transaction activities and other services |
677.8 |
436.7 |
|
1,839.6 |
1,114.2 |
Net revenue from subscription services and equipment rental |
426.4 |
371.0 |
|
1,296.3 |
663.8 |
Financial income |
1,251.6 |
607.7 |
|
3,306.4 |
1,016.5 |
Other financial income |
152.7 |
54.3 |
|
440.5 |
156.2 |
Total revenue and income |
2,508.4 |
1,469.6 |
|
6,882.8 |
2,950.7 |
Cost of services |
(671.3) |
(525.6) |
|
(1,971.8) |
(1,067.7) |
Administrative expenses |
(283.9) |
(359.8) |
|
(794.2) |
(599.2) |
Selling expenses |
(385.4) |
(308.2) |
|
(1,105.1) |
(694.1) |
Financial expenses, net |
(940.3) |
(330.7) |
|
(2,603.2) |
(580.8) |
Mark-to-market on equity securities designated at FVPL |
111.5 |
(1,341.2) |
|
(738.6) |
(500.0) |
Other income (expenses), net |
(91.3) |
(29.1) |
|
(193.5) |
(134.8) |
Loss on investment in associates |
(1.2) |
(2.8) |
|
(3.2) |
(9.2) |
Profit before income taxes |
246.5 |
(1,427.8) |
|
(526.7) |
(635.2) |
Income tax and social contribution |
(49.4) |
167.6 |
|
(78.5) |
59.3 |
Net income for the period |
197.1 |
(1,260.2) |
|
(605.2) |
(575.9) |
|
|
|
|
|
|
Consolidated Balance Sheet Statement
Table 11: Consolidated Balance Sheet
Statement
Balance Sheet (R$mn) |
30-Sep-22 |
31-Dec-21 |
Assets |
|
|
Current assets |
27,999.7 |
29,944.5 |
Cash and cash equivalents |
2,343.2 |
4,495.6 |
Short-term investments |
2,716.1 |
1,993.0 |
Financial assets from banking solution |
3,074.1 |
2,346.5 |
Accounts receivable from card issuers |
18,842.2 |
19,286.6 |
Trade accounts receivable |
469.1 |
886.1 |
Recoverable taxes |
144.3 |
214.8 |
Prepaid expenses |
109.0 |
169.6 |
Derivative financial instruments |
51.4 |
219.3 |
Other assets |
250.4 |
332.9 |
|
|
|
Non-current assets |
11,729.6 |
12,152.6 |
Trade accounts receivable |
38.7 |
59.6 |
Accounts receivable from card issuers |
45.3 |
0.0 |
Receivables from related parties |
6.0 |
4.7 |
Deferred tax assets |
742.6 |
580.5 |
Prepaid expenses |
127.8 |
214.1 |
Other assets |
124.3 |
141.7 |
Long-term investments |
329.8 |
1,238.5 |
Investment in associates |
73.4 |
66.5 |
Property and equipment |
1,642.8 |
1,569.5 |
Intangible assets |
8,598.9 |
8,277.5 |
|
|
|
Total Assets |
39,729.3 |
42,097.0 |
|
|
|
Liabilities and equity |
|
|
Current liabilities |
22,070.2 |
22,789.8 |
Deposits from banking customers |
2,944.7 |
2,201.9 |
Accounts payable to clients |
14,760.3 |
15,723.3 |
Trade accounts payable |
459.6 |
372.5 |
Loans and financing |
1,833.9 |
2,578.8 |
Obligations to FIDC quota holders |
666.8 |
1,294.8 |
Labor and social security liabilities |
466.1 |
273.3 |
Taxes payable |
303.1 |
176.5 |
Derivative financial instruments |
250.1 |
23.2 |
Other liabilities |
385.5 |
145.5 |
|
|
|
Non-current liabilities |
4,896.8 |
5,679.9 |
Accounts payable to clients |
19.2 |
3.2 |
Loans and financing |
2,828.0 |
3,556.5 |
Obligations to FIDC quota holders |
625.0 |
932.4 |
Deferred tax liabilities |
578.9 |
629.9 |
Provision for contingencies |
198.9 |
181.8 |
Labor and social security liabilities |
27.2 |
32.7 |
Other liabilities |
619.7 |
343.4 |
|
|
|
Total liabilities |
26,967.0 |
28,469.8 |
|
|
|
Equity attributable to owners of the parent |
12,682.8 |
13,536.4 |
Issued capital |
0.1 |
0.1 |
Capital reserve |
13,659.2 |
14,541.1 |
Treasury shares |
(69.1) |
(1,065.2) |
Other comprehensive income |
(405.3) |
(35.8) |
Retained earnings |
(502.1) |
96.2 |
|
|
|
Non-controlling interests |
79.5 |
90.8 |
|
|
|
Total equity |
12,762.3 |
13,627.2 |
|
|
|
Total liabilities and equity |
39,729.3 |
42,097.0 |
|
|
|
Consolidated Statement of Cash Flows
Table 12: Consolidated Statement of Cash
Flows
Cash Flow (R$mn) |
3Q22 |
3Q21 |
|
9M22 |
9M21 |
Net income (loss) for the period |
197.1 |
(1,260.2) |
|
(605.2) |
(575.9) |
|
|
|
|
|
|
Adjustments on Net Income: |
|
|
|
|
|
Depreciation and amortization |
203.8 |
214.0 |
|
585.6 |
395.8 |
Deferred income tax and social contribution |
(44.4) |
(210.2) |
|
(167.7) |
(186.5) |
Loss on investment in associates |
1.2 |
2.8 |
|
3.2 |
9.2 |
Interest, monetary and exchange variations, net |
(138.5) |
(151.7) |
|
(359.9) |
(643.2) |
Provision for contingencies |
6.8 |
1.4 |
|
8.4 |
4.8 |
Share-based payments expense |
52.4 |
40.7 |
|
129.3 |
91.9 |
Allowance for expected credit losses |
23.8 |
20.5 |
|
75.2 |
39.4 |
Loss on disposal of property, equipment and intangible assets |
1.4 |
44.7 |
|
25.4 |
84.2 |
Effect of applying hyperinflation |
1.0 |
1.3 |
|
2.5 |
1.3 |
Loss on sale of subsidiary |
0.0 |
0.0 |
|
0.0 |
12.7 |
Fair value adjustment in financial instruments at FVPL |
(16.3) |
1,566.5 |
|
1,120.8 |
1,642.7 |
Fair value adjustment in derivatives |
103.5 |
90.2 |
|
168.4 |
85.4 |
Remeasurement of previously held interest in subsidiary
acquired |
0.0 |
(3.8) |
|
0.0 |
(15.8) |
|
|
|
|
|
|
Working capital adjustments: |
|
|
|
|
|
Accounts receivable from card issuers |
(632.2) |
(1,867.9) |
|
2,007.6 |
(2,423.4) |
Receivables from related parties |
9.0 |
0.2 |
|
15.3 |
(0.4) |
Recoverable taxes |
(58.4) |
(27.2) |
|
(95.6) |
(71.2) |
Prepaid expenses |
32.8 |
(42.6) |
|
146.8 |
(274.4) |
Trade accounts receivable, banking solutions and other assets |
160.5 |
94.8 |
|
625.5 |
(37.8) |
Accounts payable to clients |
(1,042.6) |
2,915.6 |
|
(4,181.0) |
3,878.4 |
Taxes payable |
259.5 |
27.3 |
|
443.4 |
123.3 |
Labor and social security liabilities |
91.2 |
43.6 |
|
184.2 |
28.8 |
Provision for contingencies |
(2.2) |
(2.6) |
|
(5.1) |
(7.9) |
Trade Accounts Payable and Other Liabilities |
223.3 |
(42.3) |
|
239.5 |
0.2 |
Interest paid |
(72.8) |
(91.8) |
|
(324.9) |
(180.9) |
Interest income received, net of costs |
538.3 |
436.8 |
|
1,452.9 |
1,121.7 |
Income tax paid |
(67.5) |
(21.4) |
|
(154.1) |
(90.6) |
|
|
|
|
|
|
Net cash provided by (used in) operating
activity |
(169.1) |
1,778.9 |
|
1,340.6 |
3,011.9 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Purchases of property and equipment |
(47.0) |
(86.3) |
|
(352.6) |
(611.0) |
Purchases and development of intangible assets |
(62.2) |
(63.7) |
|
(215.3) |
(140.0) |
Acquisition of subsidiary, net of cash acquired |
(7.5) |
(4,727.9) |
|
(69.8) |
(4,737.4) |
Proceeds from (acquisition of) short-term investments, net |
(152.1) |
1,920.8 |
|
(557.0) |
5,078.3 |
Acquisition of equity securities |
0.0 |
0.0 |
|
(15.0) |
(2,480.0) |
Disposal of short and long-term investments - equity
securities |
2.9 |
0.0 |
|
183.5 |
209.3 |
Proceeds from the disposal of non-current assets |
2.5 |
(1.4) |
|
23.1 |
(1.3) |
Acquisition of interest in associates |
(13.3) |
(2.9) |
|
(34.9) |
(41.5) |
|
|
|
|
|
|
Net cash used in investing activities |
(276.7) |
(2,961.4) |
|
(1,038.1) |
(2,723.6) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from borrowings |
500.0 |
700.0 |
|
3,250.0 |
5,985.4 |
Payment of borrowings |
(1,143.1) |
(1,581.1) |
|
(4,741.7) |
(3,089.4) |
Payment to FIDC quota holders |
(312.5) |
(733.3) |
|
(937.5) |
(2,353.3) |
Proceeds from FIDC quota holders |
0.0 |
0.0 |
|
0.0 |
584.2 |
Payment of leases |
(34.7) |
(17.6) |
|
(80.2) |
(62.8) |
Repurchase of own shares |
0.0 |
0.0 |
|
53.4 |
(988.8) |
Acquisition of non-controlling interests |
(0.3) |
(0.3) |
|
(1.0) |
(0.9) |
Transaction with non-controlling interests |
0.0 |
0.0 |
|
0.0 |
230.5 |
Dividends paid to non-controlling interests |
(1.2) |
(0.7) |
|
(2.1) |
(1.7) |
Cash proceeds from non-controlling interest |
0.0 |
0.0 |
|
0.0 |
0.9 |
|
|
|
|
|
|
Net cash provided by (used in) financing
activities |
(991.9) |
(1,633.1) |
|
(2,459.1) |
304.1 |
|
|
|
|
|
|
Effect of foreign exchange on cash and cash equivalents |
(6.0) |
(15.1) |
|
4.0 |
2.4 |
|
|
|
|
|
|
Change in cash and cash equivalents |
(1,443.7) |
(2,830.8) |
|
(2,152.5) |
594.9 |
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
3,786.8 |
5,872.7 |
|
4,495.6 |
2,447.0 |
Cash and cash equivalents at end of period |
2,343.2 |
3,041.9 |
|
2,343.2 |
3,041.9 |
|
|
|
|
|
|
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) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Net revenue from transaction activities and other services |
346.4 |
390.3 |
436.7 |
512.7 |
554.9 |
606.9 |
677.8 |
Net revenue from subscription services and equipment rental |
343.1 |
365.0 |
371.0 |
408.1 |
432.2 |
437.8 |
426.4 |
Financial income |
372.0 |
43.5 |
607.7 |
861.2 |
949.8 |
1,105.0 |
1,251.6 |
Other financial income |
44.5 |
66.9 |
54.3 |
91.1 |
133.4 |
154.4 |
152.7 |
Total revenue and income |
1,106.0 |
865.7 |
1,469.6 |
1,873.0 |
2,070.3 |
2,304.1 |
2,508.4 |
Cost of services |
(359.2) |
(454.9) |
(525.6) |
(646.1) |
(674.4) |
(626.2) |
(671.3) |
Administrative expenses |
(178.7) |
(237.8) |
(359.8) |
(214.1) |
(238.2) |
(272.0) |
(283.9) |
Selling expenses |
(205.9) |
(269.8) |
(308.2) |
(318.4) |
(383.7) |
(335.9) |
(385.4) |
Financial expenses, net |
(107.4) |
(173.8) |
(330.7) |
(688.2) |
(708.2) |
(954.7) |
(940.3) |
Mark-to-market on equity securities designated at FVPL |
0.0 |
841.2 |
(1,341.2) |
(764.2) |
(323.0) |
(527.1) |
111.5 |
Other income (expenses), net |
(44.4) |
(100.9) |
(29.1) |
(51.1) |
(31.8) |
(70.3) |
(91.3) |
Loss on investment in associates |
(3.6) |
(2.8) |
(2.8) |
(1.2) |
(0.7) |
(1.3) |
(1.2) |
Profit before income taxes |
206.7 |
466.8 |
(1,427.8) |
(810.4) |
(289.8) |
(483.4) |
246.5 |
Income tax and social contribution |
(55.3) |
(48.0) |
167.6 |
8.9 |
(23.2) |
(5.9) |
(49.4) |
Net income for the period |
151.4 |
418.8 |
(1,260.2) |
(801.5) |
(313.0) |
(489.3) |
197.1 |
|
|
|
|
|
|
|
|
Table 14: Stone and Linx Pro-forma
Historical P&L
(Adjusted17) Following
the partial sale of our stake in Banco Inter, from 2Q22 onwards we
no longer adjust the financial expenses related to our bond, which
may affect the comparability of our adjusted results between our
numbers from 2Q22 onwards and our numbers from prior periods. For
that reason, we have included below our historical numbers
according to adjustment criteria adopted as from 2Q22. See table 16
for historical metrics with and without the bond adjustment.
Adjusted P&L - Stone and Linx Proforma
(R$mn) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Net revenue from transaction activities and other services |
346.4 |
390.3 |
436.7 |
512.7 |
554.9 |
606.9 |
677.8 |
Net revenue from subscription services and equipment rental |
343.1 |
365.0 |
371.0 |
408.1 |
432.2 |
437.8 |
426.4 |
Financial income |
372.0 |
43.5 |
607.7 |
861.2 |
949.8 |
1,105.0 |
1,251.6 |
Other financial income |
44.5 |
66.9 |
54.3 |
91.1 |
133.4 |
154.4 |
152.7 |
Total revenue and income |
1,106.0 |
865.7 |
1,469.6 |
1,873.0 |
2,070.3 |
2,304.1 |
2,508.4 |
Cost of services |
(366.6) |
(436.3) |
(525.6) |
(646.1) |
(674.4) |
(626.2) |
(671.3) |
Administrative expenses |
(159.3) |
(175.2) |
(193.8) |
(230.5) |
(214.8) |
(231.6) |
(251.8) |
Selling expenses |
(205.9) |
(269.8) |
(308.2) |
(318.4) |
(383.7) |
(335.9) |
(385.4) |
Financial expenses, net |
(103.2) |
(169.6) |
(328.3) |
(676.8) |
(702.1) |
(945.6) |
(932.2) |
Mark-to-market on equity securities designated at FVPL |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Other income (expenses), net |
(17.6) |
(23.2) |
(29.6) |
(49.0) |
(12.1) |
(56.8) |
(55.8) |
Loss on investment in associates |
(3.6) |
(2.8) |
(2.8) |
(1.2) |
(0.7) |
(1.3) |
(1.2) |
Adj.
Profit before income taxes |
249.8 |
(211.2) |
81.3 |
(49.1) |
82.5 |
106.7 |
210.7 |
Income tax and social contribution |
(67.1) |
52.5 |
4.0 |
16.5 |
(30.8) |
(30.2) |
(48.2) |
Adj. Net income for the period |
182.7 |
(158.8) |
85.3 |
(32.5) |
51.7 |
76.5 |
162.5 |
|
|
|
|
|
|
|
|
Adjustments to Net Income by P&L Line
Table 15: Adjustments to Net Income by P&L Line (as
reported)
Adjustments to Net Income by P&L line
(R$mn) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Cost of services |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Administrative expenses |
9.3 |
9.7 |
166.0 |
(16.4) |
23.5 |
40.4 |
32.1 |
Selling expenses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Financial expenses, net |
4.2 |
9.2 |
49.8 |
77.6 |
86.7 |
9.1 |
8.0 |
Bond expenses |
0.0 |
5.0 |
47.3 |
66.2 |
80.6 |
0.0 |
0.0 |
Other Financial Expenses adjustments |
4.2 |
4.2 |
2.4 |
11.4 |
6.1 |
9.1 |
8.0 |
Mark-to-market on equity securities designated at FVPL |
0.0 |
(841.2) |
1,341.2 |
764.2 |
323.0 |
527.1 |
(111.5) |
Other operating income (expense), net |
24.2 |
42.0 |
(0.5) |
2.1 |
19.7 |
13.5 |
35.5 |
Gain (loss) on investment in associates |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Profit before income taxes |
37.6 |
(780.3) |
1,556.4 |
827.5 |
452.9 |
590.1 |
(35.8) |
Income tax and social contribution |
(8.5) |
103.8 |
(163.6) |
7.6 |
(7.6) |
(24.3) |
1.3 |
Net income for the period |
29.1 |
(676.5) |
1,392.9 |
835.1 |
445.3 |
565.8 |
(34.5) |
|
|
|
|
|
|
|
|
Table 16: Adjusted EBT and Adjusted Net Income with and
without the bond adjustment
Following the partial sale of our stake in Banco
Inter, from 2Q22 onwards we no longer adjust the financial expenses
related to our bond, which may affect the comparability of our
adjusted results between our numbers from 2Q22 onwards and our
numbers from prior periods. For that reason, we have included below
our historical numbers according to adjustment criteria adopted as
from 2Q22. See table 16 for historical metrics with and without the
bond adjustment.
Profitability with and without bond adjustments
(R$mn) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
|
9M21 |
9M22 |
Consolidated |
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
|
|
|
|
|
|
|
|
|
|
Reported |
247.6 |
(197.7 |
) |
128.7 |
17.2 |
|
163.1 |
106.7 |
210.7 |
|
178.6 |
480.5 |
Not Adjusting for the bond |
247.6 |
(202.7 |
) |
81.3 |
(49.1 |
) |
82.5 |
106.7 |
210.7 |
|
126.2 |
399.9 |
Adjusting for the bond |
247.6 |
(197.7 |
) |
128.7 |
17.2 |
|
163.1 |
202.1 |
315.7 |
|
178.6 |
680.8 |
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
Reported |
187.4 |
(150.5 |
) |
132.7 |
33.7 |
|
132.2 |
76.5 |
162.5 |
|
169.6 |
371.3 |
Not Adjusting for the bond |
187.4 |
(155.5 |
) |
85.3 |
(32.5 |
) |
51.7 |
76.5 |
162.5 |
|
117.3 |
290.8 |
Adjusting for the bond |
187.4 |
(150.5 |
) |
132.7 |
33.7 |
|
132.2 |
171.9 |
267.6 |
|
169.6 |
571.7 |
Adjusted Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Reported |
0.60 |
(0.47 |
) |
0.46 |
0.13 |
|
0.43 |
0.25 |
0.52 |
|
0.59 |
1.21 |
Not Adjusting for the bond |
0.60 |
(0.48 |
) |
0.30 |
(0.08 |
) |
0.17 |
0.25 |
0.52 |
|
0.42 |
0.96 |
Adjusting for the bond |
0.60 |
(0.47 |
) |
0.46 |
0.13 |
|
0.43 |
0.56 |
0.84 |
|
0.59 |
1.86 |
|
|
|
|
|
|
|
|
|
|
|
Financial Services Segment |
|
|
|
|
|
|
|
|
|
|
Adjusted EBT |
|
|
|
|
|
|
|
|
|
|
Reported |
250.2 |
(197.5 |
) |
151.7 |
35.2 |
|
146.4 |
84.0 |
177.6 |
|
204.3 |
408.1 |
Not Adjusting for the bond |
250.2 |
(202.6 |
) |
104.3 |
(31.0 |
) |
65.9 |
84.0 |
177.6 |
|
152.0 |
327.5 |
Adjusting for the bond |
250.2 |
(197.5 |
) |
151.7 |
35.2 |
|
146.4 |
179.4 |
282.6 |
|
204.3 |
608.4 |
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
Reported |
191.4 |
(148.2 |
) |
160.4 |
53.2 |
|
125.9 |
66.9 |
148.1 |
|
203.5 |
340.9 |
Not Adjusting for the bond |
191.4 |
(153.2 |
) |
113.1 |
(13.0 |
) |
45.4 |
66.9 |
148.1 |
|
151.2 |
260.4 |
Adjusting for the bond |
191.4 |
(148.2 |
) |
160.4 |
53.2 |
|
125.9 |
162.2 |
253.1 |
|
203.5 |
541.3 |
|
|
|
|
|
|
|
|
|
|
|
Bond Expenses |
0.0 |
5.0 |
|
47.3 |
66.2 |
|
80.6 |
95.3 |
105.0 |
|
52.3 |
280.9 |
|
|
|
|
|
|
|
|
|
|
|
Historical Segment Reporting
Following the partial sale of our stake in Banco
Inter, from 2Q22 onwards we will no longer adjust the financial
expenses related to our bond, which may affect the comparability of
our adjusted results between our numbers from 2Q22 onwards and our
numbers from prior periods. For that reason, we have included below
our historical numbers according to adjustment criteria adopted as
from 2Q22. See table 16 for historical metrics with and without the
bond adjustment.
Table 17: Adjusted Historical Financial Services
P&L
Segment Reporting - Financial Services (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Total revenue and income |
828.4 |
564.2 |
1,152.5 |
1,545.9 |
1,721.3 |
1,932.6 |
2,121.5 |
Cost of services |
(224.9) |
(279.6) |
(358.7) |
(465.1) |
(499.0) |
(468.6) |
(495.9) |
Administrative expenses |
(89.8) |
(91.4) |
(112.9) |
(145.6) |
(131.1) |
(145.5) |
(160.2) |
Selling expenses |
(159.7) |
(215.3) |
(248.6) |
(263.5) |
(323.0) |
(267.3) |
(318.8) |
Financial expenses, net |
(88.8) |
(158.9) |
(304.4) |
(657.8) |
(693.0) |
(931.0) |
(917.2) |
Other operating income (expense), net |
(14.6) |
(21.3) |
(23.4) |
(45.0) |
(9.3) |
(36.2) |
(51.8) |
Gain (loss) on investment in associates |
(0.5) |
(0.4) |
(0.1) |
0.0 |
0.0 |
0.0 |
0.0 |
Profit before income taxes |
250.2 |
(202.6) |
104.3 |
(31.0) |
65.9 |
84.0 |
177.6 |
Income tax and social contribution |
(58.9) |
49.3 |
8.7 |
18.0 |
(20.5) |
(17.1) |
(29.5) |
Net income for the period |
191.4 |
(153.2) |
113.1 |
(13.0) |
45.4 |
66.9 |
148.1 |
|
|
|
|
|
|
|
|
Table 18: Adjusted Historical Software
P&L
Segment Reporting - Software (R$mn Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Total revenue and income |
30.9 |
42.8 |
301.1 |
311.4 |
326.6 |
350.7 |
366.2 |
Cost of services |
(12.3) |
(19.5) |
(162.4) |
(176.7) |
(172.5) |
(154.5) |
(171.9) |
Administrative expenses |
(14.9) |
(17.5) |
(72.4) |
(76.1) |
(74.5) |
(75.0) |
(81.3) |
Selling expenses |
(1.2) |
(6.0) |
(55.5) |
(51.8) |
(56.6) |
(63.5) |
(61.2) |
Financial expenses, net |
(0.2) |
(0.3) |
(17.6) |
(18.9) |
(8.6) |
(14.6) |
(14.9) |
Other operating income (expense), net |
(1.8) |
(0.2) |
(4.9) |
(3.1) |
(1.8) |
(2.9) |
(3.0) |
Gain (loss) on investment in associates |
0.0 |
(0.1) |
(0.0) |
0.0 |
(0.4) |
(0.3) |
(0.2) |
Profit before income taxes |
0.6 |
(0.7) |
(11.6) |
(15.2) |
12.3 |
40.0 |
33.7 |
Income tax and social contribution |
(1.3) |
(2.2) |
(3.1) |
(0.4) |
(10.1) |
(13.1) |
(18.3) |
Net income for the period |
(0.7) |
(3.0) |
(14.8) |
(15.6) |
2.2 |
26.9 |
15.4 |
|
|
|
|
|
|
|
|
Table 19: Adjusted Historical Non-Allocated
P&L
Segment Reporting - Non-Allocated (R$mn
Adjusted) |
1Q21 |
2Q21 |
3Q21 |
4Q21 |
1Q22 |
2Q22 |
3Q22 |
Total revenue and income |
8.3 |
6.5 |
16.0 |
15.7 |
22.4 |
20.8 |
20.8 |
Cost of services |
(2.5) |
(3.3) |
(4.6) |
(4.3) |
(2.9) |
(3.0) |
(3.5) |
Administrative expenses |
(3.7) |
(3.3) |
(8.5) |
(8.9) |
(9.2) |
(11.2) |
(10.3) |
Selling expenses |
(1.9) |
(1.9) |
(4.1) |
(3.1) |
(4.2) |
(5.1) |
(5.4) |
Financial expenses, net |
0.7 |
5.7 |
(6.4) |
(0.1) |
(0.5) |
(0.1) |
(0.1) |
Other operating income (expense), net |
(1.0) |
(0.7) |
(1.3) |
(0.9) |
(1.0) |
(17.7) |
(1.0) |
Gain (loss) on investment in associates |
(3.2) |
(2.4) |
(2.6) |
(1.2) |
(0.2) |
(1.0) |
(1.1) |
Profit before income taxes |
(3.2) |
0.6 |
(11.4) |
(2.8) |
4.3 |
(17.3) |
(0.6) |
Income tax and social contribution |
(0.0) |
0.1 |
(1.6) |
(1.1) |
(0.2) |
0.0 |
(0.4) |
Net income for the period |
(3.2) |
0.7 |
(13.0) |
(3.9) |
4.2 |
(17.3) |
(1.0) |
|
|
|
|
|
|
|
|
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 and credit.
- “Key
Accounts”: refers to operations in which Pagar.me acts as
a fintech infrastructure provider for different types of clients,
especially larger ones, such as mature e-commerce and digital
platforms, commonly delivering financial services via APIs. We
breakdown Key Accounts into sub-acquirer clients and platform
service 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. Does
not consider TapTon clients starting 3Q22.
-
“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.
-
“Platform Services”: Included in Key Accounts,
encompasses a wide range of business models, including
marketplaces, e-commerce platforms, software companies and
omnichannel retailers.
-
“Revenue”: refers to Total Revenue and
Income.
-
“Software” segment: This segment is comprised of:
(i) Core, comprised of POS/ERP solutions, TEF and QR Code gateways,
reconciliation and CRM and (ii) Digital, which includes OMS,
e-commerce platform, engagement tool, ads solution and marketplace
hub.
- “Take
Rate (MSMB)”: Managerial metric that considers the
sum of revenues from financial services solutions offered to MSMBs,
excluding Ton’s membership fee and other non-allocated revenues,
divided by MSMB TPV.
- “Take
Rate (Key Accounts)”: Managerial metric that
considers revenues from financial services solutions offered to Key
Account clients, excluding non-allocated revenues, divided by Key
Accounts TPV.
- “Total
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. Does not consider
TapTon clients starting 3Q22.
-
“TPV”: Total Payment Volume. Up to the fourth
quarter of 2020, refers to processed TPV. From the first quarter of
2021 onwards, reported TPV figures consider all volumes settled by
StoneCo.
Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are made as of the date they were first
issued and were based on current expectations, estimates, forecasts
and projections as well as the beliefs and assumptions of
management. These statements identify prospective information and
may include words such as “believe”, “may”, “will”, “aim”,
“estimate”, “continue”, “anticipate”, “intend”, “expect”,
“forecast”, “plan”, “predict”, “project”, “potential”,
“aspiration”, “objectives”, “should”, “purpose”, “belief”, and
similar, or variations of, or the negative of such words and
expressions, although not all forward-looking statements contain
these identifying words.
Forward-looking statements are subject to a
number of risks and uncertainties, many of which involve factors or
circumstances that are beyond Stone’s control.
Stone’s actual results could differ materially
from those stated or implied in forward-looking statements due to a
number of factors, including but not limited to: more intense
competition than expected, lower addition of new clients,
regulatory measures, more investments in our business than
expected, and our inability to execute successfully upon our
strategic initiatives, among other factors.
About Non-IFRS Financial
Measures
To supplement the financial measures presented
in this press release and related conference call, presentation, or
webcast in accordance with IFRS, Stone also presents non-IFRS
measures of financial performance, including: Adjusted Net Income,
Adjusted EPS (diluted), Adjusted Net Margin, Adjusted Net Cash /
(Debt), Adjusted Profit (Loss) Before Income Taxes, Adjusted
Pre-Tax Margin, EBITDA and Adjusted EBITDA.
A “non-IFRS financial measure” refers to a
numerical measure of Stone’s historical or future financial
performance or financial position that either excludes or includes
amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance
with IFRS in Stone’s financial statements. Stone provides certain
non-IFRS measures as additional information relating to its
operating results as a complement to results provided in accordance
with IFRS. The non-IFRS financial information presented herein
should be considered in conjunction with, and not as a substitute
for or superior to, the financial information presented in
accordance with IFRS. There are significant limitations associated
with the use of non-IFRS financial measures. Further, these
measures may differ from the non-IFRS information, even where
similarly titled, used by other companies and therefore should not
be used to compare Stone’s performance to that of other
companies.
Stone has presented Adjusted Net Income to
eliminate the effect of items from Net Income that it does not
consider indicative of its continuing business performance within
the period presented. Stone defines Adjusted Net Income as Net
Income (Loss) for the Period, adjusted for (1) non-cash expenses
related to the grant of share-based compensation in connection to
one-time pre-IPO pool as well as non-recurring long term incentive
plans 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 metric in
order to adjust its Net Cash / (Debt) by the balances of Accounts
Receivable from Card Issuers and Accounts Payable to Clients, since
these lines vary according to the Company’s funding source together
with the lines of (i) Cash and Cash Equivalents, (ii) Short-term
Investments, (iii) Debt balances and (iv) Derivative Financial
Instruments related to economic hedges of short term investments in
assets, due to the nature of Stone’s business and its prepayment
operations. In addition, it also adjusts by the balances of
Financial Assets from Banking Solutions and Deposits from Banking
Customers.
A PDF accompanying this release is available
at:
1 See table 16 for historical metrics with and without the bond
adjustment.2 See table 16 for historical metrics with and without
the bond adjustment.3 Margins are calculated by dividing by the
revenue of each segment. 4 ARPAC means average revenue per active
client and considers our banking and insurance revenues divided by
our active banking client base.5 From 3Q22 onwards, does not
include clients that use only TapTon.6 From 3Q22 onwards, does not
include clients that use only TapTon.7 From 3Q22 onwards, does not
include clients that use only TapTon.8 Does not consider banking
accounts from Pagar.me or Ton, except for Total Accounts Balance
metric and Stone Card TPV.9 Banking ARPAC includes card interchange
fees, floating revenue, insurance and transactional fees.10 Volumes
related to prepaid cards issued by Stone.11 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.12 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.13 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. 14 According to IFRS 15, subscription revenue
is accounted over the expected life of merchants on a linear basis.
As part of the annual assessment of assumptions for linearization
of subscription revenue, life of merchants was revised downwards,
having a negative impact on subscription revenue in the quarter.15
Following the partial sale of our stake in Banco Inter, from 2Q22
onwards we no longer adjust the financial expenses related to our
bond, which may affect the comparability of our Adjusted results
between our numbers from 2Q22 onwards and our numbers from prior
periods. See table 16 for historical metrics with and without the
bond adjustment.16 Evolution of Administrative according to our
Adjusted P&L (please refer to Table 6). IFRS Administrative
expenses have decreased 21.1% year over year in 3Q22.17 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.
PDF
available: http://ml.globenewswire.com/Resource/Download/8fc62095-ea1c-4bfb-b14e-138782fdeeb1
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