Financial Performance - Total revenue and income for 2024 reached R$ 13,257,454 thousand, an increase from R$ 12,055,003 thousand in 2023, representing a growth of approximately 10%[17] - The company reported a net loss of R$ 1,507,050 thousand for 2024, compared to a net income of R$ 1,600,420 thousand in 2023, indicating a significant decline in profitability[17] - Goodwill impairment loss related to the Software cash generating unit amounted to R$ 3,558,049 thousand, impacting overall financial performance[17] - Other comprehensive income for the year, net of tax, was BRL 32,795 thousand in 2024, down from BRL 111,427 thousand in 2023[20] - Total comprehensive income (loss) for the year, net of tax, was BRL (1,474,255) thousand in 2024, compared to BRL 1,711,847 thousand in 2023[20] - The company experienced a loss of BRL 1,481,821 thousand attributable to controlling shareholders in 2024, compared to a gain of BRL 1,704,317 thousand in 2023[20] Assets and Liabilities - Total assets grew to R$ 54,813,463 thousand in 2024, up from R$ 48,693,561 thousand in 2023, indicating a robust asset base[14] - The company’s total liabilities increased to R$ 42,986,181 thousand in 2024 from R$ 34,017,601 thousand in 2023, reflecting higher financial obligations[14] - The company's equity attributable to controlling shareholders decreased to R$ 11,775,984 thousand in 2024 from R$ 14,622,264 thousand in 2023, showing a decline in shareholder value[15] Cash Flow and Liquidity - Cash and cash equivalents increased to R$ 5,227,654 thousand in 2024 from R$ 2,176,416 thousand in 2023, reflecting improved liquidity[14] - Net cash provided by operating activities was negative at 3,621,382 thousand Brazilian Reais in 2024, a decline from 1,647,708 thousand in 2023[27] - The total cash and cash equivalents at the end of 2024 were 5,227,654 thousand Brazilian Reais, up from 2,176,416 thousand in 2023, indicating a change of 3,051,238 thousand[27] Financial Operations - Financial income for 2024 was R$ 7,676,204 thousand, an increase from R$ 6,229,303 thousand in 2023, highlighting growth in financial operations[17] - Retail deposits rose to R$ 8,704,809 thousand in 2024, compared to R$ 6,119,455 thousand in 2023, indicating increased customer trust and deposits[14] - The average annual growth rate used in the impairment test was sensitive, affecting the valuation of the Software cash generating unit[10] Investments and Subsidiaries - The Group incorporated several new companies in 2024, including Stone SCFI, Sponte Educação, Linx Auto, and Linx Impulse, all of which are wholly owned[103] - The Group's equity interest in Agilize decreased from 33.33% to 28.70% following a corporate reorganization in November 2024[104] - The Group holds a 50% equity interest in Questor, which acquired a 75.60% equity interest in Hubcount[95] Financial Instruments and Risk Management - Derivative financial instruments are used by the Group as part of its risk management strategy to hedge against fluctuations in exchange rates and interest rates[149] - The Group applies cash flow hedge accounting to protect against future cash flow fluctuations, with gains or losses recognized in equity and profit or loss as appropriate[155] - Financial instruments are measured at fair value at each reporting date, categorized within a fair value hierarchy based on the inputs used for measurement[146] Credit and Allowances - The allowance for expected credit losses for accounts receivable from card issuers was R$ 60,888 in 2024, compared to R$ 55,619 in 2023, reflecting an increase of approximately 9.1%[176] - The net credit portfolio after allowance for expected credit losses reached R$ 1,063,119 in 2024, a substantial rise from R$ 250,747 in 2023, marking an increase of around 323.5%[179] - The Group calculates expected credit losses (ECL) for its loans based on statistical models considering internal and external historical data, with a three-stage approach for credit risk assessment[161] Funding and Debt - The company raised 6,585,937 thousand Brazilian Reais from institutional deposits and marketable debt securities in 2024, a substantial increase from 1,608,162 thousand in 2023[27] - The total debentures, financial bills, and commercial papers increased to R$ 4,079,266,000 in 2024 from R$ 1,116,252,000 in 2023, showing a growth of approximately 267%[188] - The company issued bonds in 2021, raising USD 500 million in seven-year notes with a final yield of 3.95%, and repurchased approximately 60% of the outstanding bonds during 2024[194] Regulatory and Compliance - The Group's consolidated financial statements are prepared in accordance with IFRS Accounting Standards, ensuring compliance with international financial reporting standards[38] - The Group is subject to a corporate tax surcharge (Additional CSLL) starting January 1, 2025, affecting multinational companies with annual revenue exceeding €750 million, with a minimum effective tax rate of 15% on adjusted income[77] - The Group has adopted IAS 29 for its Argentine subsidiary Napse S.R.L. due to the hyperinflationary economy, impacting the financial reporting of non-monetary assets and liabilities[58]

Financial Data and Key Metrics Changes - In 2024, the company achieved a net income of BRL2.2 billion, exceeding the guidance of BRL1.9 billion, despite macroeconomic challenges and over BRL100 million negative impacts from accounting changes [10] - Adjusted net income grew 18% year over year, with adjusted basic EPS increasing by 26% compared to Q4 2023 [12] - Adjusted administrative expenses were BRL994 million, lower than the guidance of BRL1.125 billion, reflecting ongoing efficiency improvements [10][12] Business Line Data and Key Metrics Changes - The MSMB car TPV reached BRL403 billion, a 15% year-over-year growth, while total MSMB TPV exceeded expectations at BRL454 billion, a 22% increase [6][10] - The MSNB take rate was 2.55%, surpassing the guidance of 2.49%, driven by disciplined pricing and increased contributions from banking and credit solutions [8][10] - The credit portfolio grew to BRL1.2 billion, significantly exceeding the target of BRL800 million, with non-performing loans over ninety days remaining controlled at 3.61% [9][20] Market Data and Key Metrics Changes - The active client base for MSMB payments increased by 19% year over year to 4.1 million clients, with a notable acceleration in client additions [15] - Retail deposits reached BRL8.7 billion, exceeding the guidance of BRL7 billion, reflecting strong performance in bundled payments and banking offerings [7][18] - The banking active client base grew by 46% year over year to 3.1 million, outpacing the payments client base growth [18] Company Strategy and Development Direction - The company aims to establish Stone accounts as the primary financial hub for clients, focusing on enhancing the value proposition through a comprehensive ecosystem beyond payments [8] - Key initiatives for 2025 include investment products and workflow tools to accelerate deposit growth [8] - The company is committed to maximizing long-term intrinsic business value growth, emphasizing disciplined execution and prudent capital allocation [40] Management Comments on Operating Environment and Future Outlook - Management acknowledged potential macroeconomic challenges but expressed confidence in delivering sustainable long-term value creation [40] - The company plans to continue outpacing market growth and expanding its share in the MSMB payments market [6] - Management highlighted the importance of evolving client engagement and the successful execution of strategic priorities [5][10] Other Important Information - The company recognized a goodwill impairment charge of BRL3.6 billion for the software cash-generating units, which is a non-cash accounting adjustment [27] - The adjusted net cash position was BRL4.7 billion at quarter end, reflecting ongoing share repurchase activity [32] - The company expects to return excess capital to shareholders over time when value-accretive growth opportunities are not immediately available [35] Q&A Session Summary Question: Performance of banking solutions and room for improvement - Management noted that deposits are growing ahead of TPV due to successful bundling of payments and banking solutions, with expectations for continued growth as more solutions are developed [45][46] Question: View on dividends and capital structure - Management emphasized a commitment to returning capital to shareholders through share buybacks, with no specific targets for dividends at this time [50][51] Question: Pricing strategy and impact - Management confirmed that a substantial repricing initiative was implemented at the beginning of Q1 2025, with expectations for effective adjustments across the client base [58][61] Question: Guidance on basic vs. diluted EPS - Management explained the decision to guide basic EPS due to accounting volatility and the potential for double counting with share-based compensation [62][64] Question: Potential sale of software business - Management stated that no offers met the intrinsic value for the software assets, and they will focus on maximizing value through cross-selling financial services [75][76]

Core Insights - StoneCo Ltd. reported its financial results for the fourth quarter and fiscal year ended December 31, 2024, highlighting its performance in the financial technology sector [1]. Financial Results - The company will discuss its 4Q24 and Fiscal Year financial results during a teleconference on March 18, 2025, at 5:00 PM ET [2]. - The teleconference can be accessed via Zoom and will also be available for replay on the company's investor relations website [3]. Company Overview - Stone Co. is recognized as a leading provider of financial technology and software solutions, enabling merchants to conduct commerce seamlessly across various channels and supporting their business growth [4].

Core Insights - The bullish investment thesis on Brazilian fintech StoneCo (STNE) is primarily based on its role as the main financial ecosystem for small and medium-sized enterprises in Brazil [1] Company Overview - StoneCo is positioned as a leading fintech company in Brazil, focusing on providing financial services to small and medium-sized businesses [1] Analyst Background - The analysis is conducted by a researcher and operations manager at DM Martins Research, with previous contributions to platforms like TheStreet, TipRanks, and GuruFocus, emphasizing a focus on foreign equities and emerging markets [1]

Core Insights - The article highlights the investment strategies and achievements of Paul Franke, a seasoned investor with 38 years of trading experience, emphasizing his contrarian stock selection style and algorithmic analysis for identifying investment opportunities [1]. Group 1: Investment Strategies - Paul Franke developed a system called "Victory Formation," which focuses on supply/demand imbalances indicated by specific stock price and volume movements [1]. - The "Bottom Fishing Club" articles target deep-value stocks or those showing significant positive technical momentum reversals [1]. - The "Volume Breakout Report" articles analyze positive trend changes supported by strong price and volume trading actions [1]. Group 2: Performance and Recognition - Franke was consistently ranked among the top investment advisors nationally during the 1990s and achieved the 1 position in the Motley Fool® CAPS stock picking contest in 2008 and 2009, out of over 60,000 portfolios [1]. - As of September 2024, he is ranked in the Top 3% of bloggers by TipRanks® for 12-month stock picking performance over the last decade [1]. Group 3: Risk Management - Franke advises investors to implement stop-loss levels of 10% or 20% on individual stock choices and to maintain a diversified portfolio of at least 50 well-positioned stocks to enhance regular stock market outperformance [1].

Core Points - StoneCo Ltd. will announce its fourth quarter and fiscal year 2024 financial results on March 18th, 2025, after market close [1] - A conference call to discuss the results will take place on the same day at 5:00 PM ET [1] - The company will enter a Quiet Period starting February 28th, 2025, in relation to its financial results [3] Company Overview - Stone is a leading provider of financial technology and software solutions that enable merchants to conduct commerce seamlessly across multiple channels and support their business growth [4]

Core Viewpoint - The recommendation for StoneCo (NASDAQ: STNE) has been raised from hold to buy, indicating a positive outlook based on recent developments and market conditions [1]. Group 1: Company Analysis - The analyst has over 5 years of experience in equity analysis specifically in Latin America, which adds credibility to the insights provided [1]. - There are several signs indicating that an investment opportunity is emerging for StoneCo, suggesting a shift in market sentiment [1].

Core Viewpoint - StoneCo Ltd. is experiencing a decline in stock price and earnings projections, indicating potential challenges ahead for the company Group 1: Stock Performance - StoneCo Ltd. shares closed at $9.22, reflecting a -1.28% change from the previous day, underperforming the S&P 500 which gained 0.36% [1] - Over the past month, StoneCo Ltd. shares have increased by 17.19%, outperforming the Computer and Technology sector which saw no change and the S&P 500's gain of 2.11% [1] Group 2: Earnings Projections - StoneCo Ltd. is expected to report earnings of $0.32 per share, representing an 11.11% decline year-over-year [2] - Revenue is projected to be $581.37 million, indicating an 11.36% decrease compared to the same quarter of the previous year [2] Group 3: Analyst Estimates - Recent changes to analyst estimates for StoneCo Ltd. suggest a focus on short-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] Group 4: Zacks Rank and Valuation - StoneCo Ltd. currently holds a Zacks Rank of 4 (Sell), with the consensus EPS projection moving 3.89% lower in the past 30 days [5] - The company is trading at a Forward P/E ratio of 8.1, significantly lower than the industry's average Forward P/E of 31.23, and has a PEG ratio of 0.37 compared to the industry's average of 2.34 [6] Group 5: Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 73, placing it in the top 30% of over 250 industries [7]

Company Performance - StoneCo Ltd. closed at $8.84, reflecting a -0.79% change from the previous trading day's closing, underperforming the S&P 500's daily gain of 0.92% [1] - Over the past month, shares of StoneCo Ltd. gained 13.07%, outperforming the Computer and Technology sector, which saw a loss of 2.99%, and the S&P 500's gain of 0.81% [2] Earnings Expectations - The upcoming earnings report for StoneCo Ltd. is anticipated to show an EPS of $0.32, which is an 11.11% decrease from the same quarter last year [3] - Revenue is expected to be $585.02 million, down 10.8% from the prior-year quarter [3] Analyst Estimates and Rankings - Recent changes to analyst estimates for StoneCo Ltd. indicate a shifting business landscape, with positive revisions reflecting optimism about the company's profitability [4] - The Zacks Rank system currently rates StoneCo Ltd. as 4 (Sell), with a 3.89% decline in the Zacks Consensus EPS estimate over the past month [6] Valuation Metrics - StoneCo Ltd. is trading at a Forward P/E ratio of 7.73, significantly lower than the industry average of 31.2, indicating a discount relative to its peers [7] - The company has a PEG ratio of 0.36, compared to the Internet - Software industry's average PEG ratio of 2.19, suggesting favorable growth expectations relative to its valuation [8] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 44, placing it in the top 18% of over 250 industries [9]

Group 1: Company Performance - StoneCo Ltd. ended the latest trading session at $8.58, reflecting a +1.66% adjustment from the previous day's close, outperforming the S&P 500's gain of 0.61% [1] - The company's shares gained 4.46% over the previous month, surpassing the Computer and Technology sector's gain of 1.24% and the S&P 500's gain of 2.08% [1] Group 2: Upcoming Financial Results - StoneCo Ltd.'s upcoming EPS is projected at $0.32, indicating an 11.11% decline compared to the same quarter of the previous year [2] - The Zacks Consensus Estimate for revenue is projecting net sales of $585.02 million, down 10.8% from the year-ago period [2] Group 3: Analyst Forecasts and Rankings - Recent revisions to analyst forecasts for StoneCo Ltd. are important as they reflect short-term business trends, with upward revisions indicating analysts' positivity towards the company's operations [3] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks StoneCo Ltd. at 4 (Sell), with a 12.41% fall in the Zacks Consensus EPS estimate over the past month [5] Group 4: Valuation Metrics - StoneCo Ltd. is trading with a Forward P/E ratio of 7.32, which is a discount compared to the industry's average Forward P/E of 29.01 [6] - The company has a PEG ratio of 0.34, significantly lower than the average PEG ratio of 2.19 for Internet - Software stocks [6] Group 5: Industry Context - The Internet - Software industry, which includes StoneCo Ltd., has a Zacks Industry Rank of 41, placing it in the top 17% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]