StoneCo Ltd. Q4 FY2025 earnings call

• Pedro Zinner concluded his tenure as CEO, highlighted selling Linx, expanding credit book, adjusted EPS growth, ROE expansion, and handed over to Mateus Scherer. - Mateus Scherer discussed full year performance, adjusted gross profit, adjusted basic EPS, consolidated profitability and ROE, top line performance of continuing operations, key operating metrics of MSMB payments, banking operations, and credit operations. - Diego Salgado reviewed adjusted consolidated P&L for continuing operations, adjusted net cash position, capital allocation, and presented guidance for 2026 and 2027.

Continuing operations: Total revenue and income increased 13% year-over-year to BRL 3.7 billion. Adjusted gross profit from continuing operations grew 9% year-over-year to BRL 1.7 billion in Q4. MSMB payments: Client base increased 15% to 4.7 million, 41% are heavy users. MSMB TPV growth decelerated to 5.3% YoY. Banking operations: Active client base increased 21% to 3.7 million, deposits grew 27% YoY and 23% QoQ to BRL 11.1 billion. Credit operations: Portfolio reached BRL 2.8 billion in Q4, growing 23% sequentially. Credit revenues reached BRL 238 million, up 33% sequentially, provisions totaled BRL 110 million, increasing 27%.

• 2026: Adjusted gross profit range BRL 6.6 - 7 billion, adjusted basic EPS range BRL 10.8 - 11.4 per share. - 2027: Adjusted gross profit range BRL 7.2 - 8.3 billion, adjusted basic EPS range BRL 11.8 - 13.4 per share. Guidance considers capital distribution of BRL 2 billion to be returned through buybacks in 2026, and no additional capital distribution considered for 2027 initially.

• Q: Clarification on guidance and share count, A: Mateus and Diego explained capital distributions, EPS guidance, and growth differentials. - Q: How to change merchant perception, A: Mateus mentioned repositioning through selling expenses and marketing investments. - Q: Selic rate in guidance and credit operating numbers, A: Diego explained Selic rate assumptions, and Mateus discussed NPL trends and credit portfolio. - Q: Volume growth, competition, and profitability, A: Mateus discussed TPV growth drivers, competitive environment, and execution initiatives. - Q: Credit business guidance, expenses, and AI, A: Diego explained credit guidance discontinuance, expense trends, and AI productivity gains. - Q: 2027 guidance and priorities, A: Mateus discussed priorities of deepening client relationships, accelerating credit and banking execution, and driving efficiency through AI. - Q: AI and employee base, A: Mateus discussed AI application and productivity gains. - Q: OpEx and strategy, A: Mateus discussed OpEx dynamics and focus on financial services monetization. - Q: Execution initiatives for volume, A: Mateus discussed new onboarding reviews and churn management initiatives. - Q: Credit performance by product line, A: Diego discussed working capital and other credit product performances.