Pagbank (PAGS) Q1 2025 earnings summary

Executive summary

• Achieved strong and sustainable growth in Q1 2025, with 32 million clients, net revenue up 13%, and non-GAAP net income up 6% year-over-year, despite challenging macroeconomic conditions.

• Payments TPV reached R$129.2 billion, up 16% year-over-year, and banking business now contributes over 22% of total gross profit.

• Diluted GAAP EPS grew 14.4% year-over-year to R$1.72, and non-GAAP net income rose to R$554 million.

• Launched first-ever cash dividend of US$0.14 per share and canceled 23.9 million treasury shares, enhancing shareholder value.

• On track to deliver 2025 guidance, focusing on repricing, operating leverage, and financial cost efficiency.

Financial highlights

• Net revenues reached R$4.9 billion, up 13% year-over-year; gross profit was R$1.9 billion, up 7% year-over-year.

• Non-GAAP net income was R$554 million (+6% YoY); GAAP net income was R$525 million (+8.9% YoY).

• Gross profit margin was 38.0%-39%, with banking segment margin at 70%.

• Return on average equity improved to 15% (LTM), with Q1 2025 at 14.2%.

• Total funding increased 27% YoY to R$40.4 billion; deposits grew 11% YoY to R$33.9 billion.

Outlook and guidance

• Q1 results align with full-year 2025 guidance, expecting gross profit growth of 7%-11% and continued EPS improvement.

• Focus remains on profitability, capital structure improvement, and shareholder value creation.

• Plans to maintain conservative risk approach and enhance monetization of the digital ecosystem.