StoneCo Ltd. (NASDAQ:STNE) Q2 2024 Results Conference Call August 14, 2024 5:00 PM ET Company Participants Roberta Noronha - Head of IR Pedro Zinner - CEO Lia Matos - Chief Strategy Officer and Chief Marketing Officer Mateus Scherer - CFO and IR Officer Conference Call Participants Mario Pierry - Bank of America Eduardo Rosman - BTG Neha Agarwala - HSBC Tiago Binsfeld - Goldman Sachs Kaio Da Prato - UBS Jorge Kuri - Morgan Stanley Gustavo Schroden - Bradesco BBI Yuri Fernandes - JP Morgan Renato Meloni - Au ...

Loans and Provisions - Loans to associates decreased significantly from R$2,512 in December 2023 to R$714 in June 2024, a reduction of 71.6%[3] - Provisions for probable losses in the acquiring business increased from R$18,556 in December 2023 to R$20,978 in June 2024, a 13.1% increase[5] - Provisions for probable losses in the banking business increased from R$12,559 in December 2023 to R$16,545 in June 2024, a 31.7% increase[5] - The updated amount recorded as a probable loss for tax debits increased from R$27,937 in December 2023 to R$29,395 in June 2024, a 5.2% increase[8] - Allowance for expected credit losses for loans operations increased to 124,989 thousand Brazilian Reais in June 2024 from 62,061 thousand Brazilian Reais in December 2023, up 101%[143] Judicial and Tax-Related Items - Judicial deposits decreased from R$22,507 in December 2023 to R$13,402 in June 2024, a 40.5% reduction[9] - Withholding income tax on financial income rose from 101,579 to 155,115[199] - Income tax and social contribution increased from 9,584 to 12,807[199] - Other withholding income tax decreased from 19,710 to 2,342[199] Revenue and Income - Net revenue from transaction activities and other services decreased from R$41,039 in June 2023 to R$24,183 in June 2024, a 41.1% decrease[20] - Adjusted net income for the Financial Services segment increased from R$532,901 in June 2023 to R$871,896 in June 2024, a 63.6% increase[34] - Net income for the period increased to 871,896 thousand Brazilian Reais in 2024 from 532,901 thousand Brazilian Reais in 2023[57] - Total comprehensive income for the period was 721,530 thousand Brazilian Reais in 2024, compared to 681,667 thousand Brazilian Reais in 2023[56] - Total revenue and income for the six months ended June 30, 2024, reached 6,290,784 thousand Brazilian Reais, compared to 5,666,439 thousand Brazilian Reais in the same period of 2023[73] - Net income for the six months ended June 30, 2024, was 871,896 thousand Brazilian Reais, a significant increase from 532,901 thousand Brazilian Reais in the same period of 2023[73] - Financial income for the six months ended June 30, 2024, was 3,567,776 thousand Brazilian Reais, up from 2,837,639 thousand Brazilian Reais in the same period of 2023[73] - Total comprehensive income for the six months ended June 30, 2024, was 723,502 thousand Brazilian Reais, compared to 681,667 thousand Brazilian Reais in the same period of 2023[74] Expenses - Personnel expenses increased from R$1,351,287 in June 2023 to R$1,407,992 in June 2024, a 4.2% increase[21] - Marketing expenses and sales commissions increased from R$361,945 in June 2023 to R$516,854 in June 2024, a 42.8% increase[21] - Total expenses increased from R$2,968,597 in June 2023 to R$3,407,368 in June 2024, a 14.8% increase[21] - Marketing expenses and sales commissions include costs related to marketing, advertising, and commissions paid to sales-related partnerships[36] - Cost of services for the six months ended June 30, 2024, increased to 1,651,300 thousand Brazilian Reais from 1,406,579 thousand Brazilian Reais in the same period of 2023[73] - Selling expenses for the six months ended June 30, 2024, rose to 1,054,605 thousand Brazilian Reais from 801,819 thousand Brazilian Reais in the same period of 2023[73] - Depreciation and amortization expenses were 441,559 thousand Brazilian Reais in 2024, slightly up from 434,182 thousand Brazilian Reais in 2023[57] - Share-based payments expense decreased to 90,156 thousand Brazilian Reais in 2024 from 120,525 thousand Brazilian Reais in 2023[57] Cash Flow and Investments - Net cash provided by operating activities was negative 3,189,129 thousand Brazilian Reais in 2024, compared to positive 2,000,899 thousand Brazilian Reais in 2023[57] - Net cash provided by investing activities improved to 2,633,580 thousand Brazilian Reais in 2024 from negative 456,449 thousand Brazilian Reais in 2023[57] - Proceeds from other debt instruments, except lease, increased to 4,007,264 thousand Brazilian Reais in 2024 from 2,798,229 thousand Brazilian Reais in 2023[57] - Cash and cash equivalents at end of period grew to 4,743,236 thousand Brazilian Reais in 2024 from 2,202,713 thousand Brazilian Reais in 2023[57] - Short and Long-term investments increased to R$ 138,985 thousand as of June 30, 2024, compared to R$ 3,527,198 thousand as of December 31, 2023[172] - Financial assets from banking solutions grew to R$ 6,967,814 thousand as of June 30, 2024, up from R$ 6,397,898 thousand as of December 31, 2023[177] - Accounts receivable from card issuers rose to R$ 27,556,238 thousand as of June 30, 2024, compared to R$ 23,977,109 thousand as of December 31, 2023[172] - Retail deposits increased to R$ 6,471,970 thousand as of June 30, 2024, from R$ 6,119,455 thousand as of December 31, 2023[173] - The subsidiary Stone SCFI raised R$ 750,000 thousand through its first issuance of financial bills with a two-year maturity at CDI + 0.75% p.a.[179] - FIDC ACR I issued quotas for R$ 2,325,984 thousand, funded by a revolving facility with a US$ 467.5 million investment from DFC[180] Assets and Liabilities - Total assets as of June 30, 2024, were 52,699,743 thousand BRL, up from 48,693,561 thousand BRL in 2023[50] - Total liabilities increased to 37,480,944 thousand BRL as of June 30, 2024, compared to 34,017,601 thousand BRL in 2023[52] - Equity attributable to controlling shareholders rose to 15,163,623 thousand BRL as of June 30, 2024, from 14,622,264 thousand BRL in 2023[52] - Retained earnings increased to 2,037,957 thousand BRL as of June 30, 2024, compared to 1,168,862 thousand BRL in 2023[52] - Total financial liabilities increased to 5,301,918 thousand Brazilian Reais in June 2024 from 3,971,078 thousand Brazilian Reais in December 2023, up 34%[136] - Accounts payable to clients decreased slightly from 19,199,127 to 18,512,856[197] - Customer deferred acquisition costs increased from 190,239 to 197,234[198] Shareholder and Equity Information - VCK Investment Fund Limited SAC, owned by co-founder Mr. Andre Street, holds approximately 31% of the company's voting shares through HR Holdings LLC[58] - The Group holds a 100% equity interest in its subsidiaries, including Stone Pagamentos, Pagar.me, Stone SCD, and FIDC TAPSO, as of June 30, 2024[86] - The equity interest in Pinpag was sold on February 7, 2024, resulting in the Group ceasing to hold equity interest in Pinpag[86] - The Group incorporated four new wholly-owned companies in Q2 2024: Linx People, Linx Saúde, Linx Commerce, and Linx Enterprise[87] - The Group's equity interest in associates remained stable, with Alpha-Logo Serviços de Informática S.A. at 25.00%, APP Sistemas S.A. at 19.80%, Agilize Tecnologia S.A. at 33.33%, and Dental Office S.A. at 20.00%[89] - The Group holds call options to acquire additional interests in some of its associates, including Trinks Serviços de Internet S.A. (19.90%) and Delivery Much Tecnologia S.A. (29.50%)[90] Financial Instruments and Derivatives - Derivative financial instruments showed a net liability of 40,951 thousand Brazilian Reais as of June 30, 2024, improving from 311,989 thousand in December 2023[159] - Cross-currency interest rate swaps used as cash flow hedges decreased to a liability of 33,218 thousand Brazilian Reais by June 30, 2024, from 311,445 thousand in December 2023[159] - Interest rate swaps used as fair value hedges were initiated in 2024, showing a liability of 25,355 thousand Brazilian Reais as of June 30, 2024[159] - The company paid 116,486 thousand Brazilian Reais for cross-currency swap coupons in 2024, down from 305,990 thousand in 2023[163] - NDF Dollar notional amount increased to 32,470 thousand Brazilian Reais by June 30, 2024, from 6,460 thousand in December 2023[168] - The cash flow hedge reserve showed a loss of R$ 327,971 thousand as of June 30, 2024, compared to a loss of R$ 197,188 thousand as of December 31, 2023[184] - The Group paid R$ 92,982 thousand in interest rate swap coupon payments during the second quarter of 2024[187] - Interest rate swaps (Fixed rate to CDI) had a notional value of R$ 13,810,303 thousand as of June 30, 2024, with a gain of R$ 13,997 thousand[189] - The Group's financial risk management is conducted by the Risk Management Area, addressing market, liquidity, credit, and counterparty risks[190] Loans and Credit Operations - Working capital loans in Stage 1 increased to R$635,084 thousand in June 2024, up from R$296,282 thousand in December 2023[129] - Credit card receivables in Stage 1 grew to R$29,744 thousand in June 2024, compared to R$3,131 thousand in December 2023[129] - Working capital loan increased to 681,573 thousand Brazilian Reais in June 2024 from 309,677 thousand Brazilian Reais in December 2023, representing a 120% growth[143] - Credit card loans surged to 30,209 thousand Brazilian Reais in June 2024 from 3,131 thousand Brazilian Reais in December 2023, marking an 864% increase[143] - Total loans operations portfolio grew to 711,782 thousand Brazilian Reais in June 2024 from 312,808 thousand Brazilian Reais in December 2023, a 128% rise[143] - Working capital loan increased to 23,483 thousand Brazilian Reais as of June 30, 2024, up from 1,200 thousand in December 2023[154] - Credit card liabilities rose to 118 thousand Brazilian Reais by June 30, 2024, compared to zero in December 2023[154] - Total financial liabilities, including working capital loans and credit cards, reached 711,782 thousand Brazilian Reais by June 30, 2024, up from 312,808 thousand in December 2023[154] Bonds and Debt Instruments - Bonds increased to 2,764,271 thousand Brazilian Reais in June 2024 from 2,402,698 thousand Brazilian Reais in December 2023, a 15% growth[136] - Debentures, financial bills, and commercial papers rose to 1,874,437 thousand Brazilian Reais in June 2024 from 1,116,252 thousand Brazilian Reais in December 2023, a 68% increase[136] - Time deposits were introduced in Q2 2024, reaching 112,084 thousand Brazilian Reais by June 30, 2024[136] - Other debt instruments under liabilities were recorded at 2,276,133 as of June 30, 2024, compared to none in December 2023[193] Accounts Receivable and Payable - Accounts receivable from card issuers increased to R$27,020,694 thousand in June 2024, up from R$23,364,806 thousand in December 2023[94] - Accounts receivable from subscription services decreased to 283,163 thousand Brazilian Reais in June 2024 from 293,304 thousand Brazilian Reais in December 2023, a 3% decline[142] - Total trade accounts receivable decreased to 460,256 thousand Brazilian Reais in June 2024 from 488,480 thousand Brazilian Reais in December 2023, down 6%[142] - Financial assets Loans operations portfolio showed a notable increase from 250,747 to 586,793[197] Retail and Client Deposits - Retail client deposits grew to 6,471,970 thousand Brazilian Reais by June 30, 2024, from 6,119,455 thousand in December 2023[157] - The company issued its first interest-bearing time deposits in Q2 2024, with maturities up to December 2024[158] Seasonal and Operational Trends - The Group's revenues are subject to seasonal fluctuations, with historically stronger revenues during the last quarter of the year due to higher sales during the Brazilian holiday season[81] Share-Based Payments and Incentives - The Group granted RSUs to key employees under the LTIP with a weighted average vesting period of 2.9 years, subject to service conditions[38] - PSUs have a weighted average vesting period of 2.7 years and are granted based on achieving minimum levels of total shareholder return (TSR)[39] Property and Equipment - Property and equipment acquired through lease amounted to 38,279 thousand BRL as of June 30, 2024, compared to 58,610 thousand BRL in 2023[42] Interest Income and Costs - Interest income received, net of costs, was 2,038,931 thousand BRL for the six months ended June 30, 2024, up from 1,145,657 thousand BRL in 2023[42] Acquisitions and Investments - The acquisition of Trinks involved a consideration of 50,159 thousand BRL, with contingent payments conditioned on achieving financial and operational goals in 2025 and 2027[44][45] - The Group sold its remaining stake in Cloudwalk INC for R$57,540 thousand, recognizing a gain of R$35,647 thousand in other comprehensive income[117] Earnings Per Share - Basic earnings per share for the six months ended June 30, 2024, were R$2.82, up from R$1.70 in the same period of 2023[73] Financial Risk Management - The Group's financial risk management is conducted by the Risk Management Area, addressing market, liquidity, credit, and counterparty risks[190] Short and Long-Term Investments - Short and Long-term investments increased significantly from 138,985 to 3,527,198 between June 30, 2024, and December 31, 2023[193] - Derivative financial instruments under assets increased from 4,182 to 71,275[193]

StoneCo (STNE) is slated to release second-quarter 2024 results on Aug 14. The consensus mark for earnings is pegged at 34 cents per share, down by a penny in the past 30 days. The company reported earnings of 19 cents in the year-ago quarter. StoneCo beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 11.3%. The consensus mark for revenues is pegged at $590.7 million, indicating a decline of 1.1% from the year-ago quarter. Let's see how things hav ...

StoneCo Ltd. (STNE) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on August 14, 2024, might help the stock move higher if these key numbers are better than ex ...

StoneCo Ltd. (STNE) closed the latest trading day at $12.11, indicating a -0.9% change from the previous session's end. The stock fell short of the S&P 500, which registered a gain of 1.04% for the day. Elsewhere, the Dow saw an upswing of 0.76%, while the tech-heavy Nasdaq appreciated by 1.03%. The the stock of company has fallen by 6.22% in the past month, leading the Computer and Technology sector's loss of 13.91% and the S&P 500's loss of 6.74%. The upcoming earnings release of StoneCo Ltd. will be of g ...

GEORGE TOWN, Cayman Islands, July 30, 2024 (GLOBE NEWSWIRE) -- StoneCo Ltd. (NASDAQ:STNE, B3: STOC31))) ("Stone" or the "Company") announces the release of its 2023 Sustainability Report, prepared based on indicators of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). The Company also started reporting climate information according to the recommendations from the Task Force on Climate Related Financial Disclosures (TCFD). Click here to access the document. Abou ...

In the latest market close, StoneCo Ltd. (STNE) reached $13.58, with a +1.12% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily loss of 0.16%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.06%. Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for StoneCo Ltd. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations ...

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Brokerage Recommendation Trends for STNE The ABR suggests buying StoneCo, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommenda ...

The price-to-book (P/B) ratio is widely favored by value investors for identifying low-priced stocks with exceptional returns. The ratio is used to compare a stock's market value/price to its book value. P/B ratio = market price per share/book value of equity per share The P/B ratio helps to identify low-priced stocks with high growth prospects. General Motors Company (GM) , Park Hotels & Resorts (PK) , StoneCo (STNE) , EnerSys (ENS) and PayPal (PYPL) are some such stocks. What is Book Value? It is calculat ...

GEORGE TOWN, Grand Cayman, July 17, 2024 (GLOBE NEWSWIRE) -- StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) ("Stone") today announces that it will host a conference call to discuss its second quarter 2024 financial results on Wednesday, August 14th, 2024 at 5:00pm ET (6:00pm BRT). A press release with second quarter 2024 financial results will be issued after the market closes that same day. About Stone Investor Relations investors@stone.co The Company also hereby informs that it will initiate its Quiet Period rel ...