StoneCo (STNE) Q2 2024 earnings summary

Executive summary

• Achieved strong growth in MSMB segment with client base up 30.3% year-over-year, MSMB TPV up 24.6% to R$98bn, and card TPV up 17.4%, positioning well for 2024 goals.

• Adjusted net income rose 54.4% year-over-year to R$497.1 million, with adjusted basic EPS up 57.2% to R$1.61.

• Banking client base expanded 62% year-over-year to 2.7 million, with deposits up 65.2% to R$6.5 billion.

• Credit portfolio reached R$712 million, up 32% quarter-over-quarter, with working capital loans at R$682 million and NPLs over 90 days at 2.6%.

• Share buyback program nearly completed, with 9.67 million shares repurchased for R$724 million and $295 million allocated to a tender offer for 2028 bonds.

Financial highlights

• Total revenue and income reached R$3.2 billion, up 8.5% year-over-year, mainly from a 10.6% increase in financial services revenues.

• Adjusted EBT was R$652.2 million, up 45.9% year-over-year, with a margin of 20.3%.

• Adjusted net income margin rose to 15.5% from 10.9% year-over-year.

• Financial services segment revenue reached R$2.8 billion, up 11% year-over-year; adjusted EBT margin improved to 21.5%.

• Software segment revenue up 3% year-over-year in priority verticals, with recurring revenue mix improving by 450 bps.

Outlook and guidance

• On track to meet or exceed 2024 guidance: MSMB Card TPV expected to exceed R$412 billion (+18% y/y), client deposits above R$7 billion (+14% y/y), credit portfolio above R$0.8 billion, and adjusted net income above R$1.9 billion (+22% y/y).

• Guidance maintained despite R$120 million revenue reduction from membership fee recognition changes and a challenging macro environment.

• Card TPV growth at 18% in H1 2024, in line with guidance, but PIX QR code volumes are growing faster than anticipated, shifting volume mix.

• Interest rates expected to be a headwind in H2, but not material enough to change guidance.