[Presentation of Financial and Other Information](index=8&type=section&id=Presentation%20of%20Financial%20and%20Other%20Information) [Financial Statements and Reporting Currency](index=8&type=section&id=Financial%20Statements%20and%20Reporting%20Currency) The company's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB, with the Brazilian real (R$) as the presentation and functional currency - The company maintains its books and records in Brazilian reais (R$), which is the presentation and functional currency for its main operations[18](index=18&type=chunk) - Financial statements are prepared in accordance with IFRS as issued by the IASB[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) The report includes the non-GAAP financial measure 'Adjusted Net Income', which for 2024 excludes non-recurring or non-cash items to better reflect core operating performance - The company presents Adjusted Net Income, which for 2024 excludes non-recurring/non-cash items like charges and tax assets from expired PSUs to better reflect core operating performance[25](index=25&type=chunk) - For the year ended December 31, 2023, Adjusted Net Income was the same as Net Income as no such adjustments were made[25](index=25&type=chunk) [PART I](index=14&type=section&id=PART%20I) [ITEM 3. KEY INFORMATION](index=14&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details the company's primary risks, encompassing intense industry competition, cybersecurity threats, Brazilian macroeconomic instability, and share-related issues like the dual-class voting structure [Risk Factors](index=14&type=section&id=D.%20Risk%20Factors) The company faces significant risks from intense industry competition, cybersecurity threats, Brazilian macroeconomic instability, and its dual-class share structure concentrating voting power - **Business and Industry Risks:** Key risks include intense competition from traditional and non-traditional financial services providers, the need for constant investment in technology to keep pace with industry changes, potential client attrition, and reliance on the B3 exchange[47](index=47&type=chunk)[54](index=54&type=chunk)[63](index=63&type=chunk) - **Cybersecurity Risks:** The company is exposed to cybersecurity breaches and computer viruses which could lead to liability, litigation, and reputational damage. A recent incident involved unauthorized access to a company database hosted by a third-party vendor[71](index=71&type=chunk)[73](index=73&type=chunk) - **Brazil-Related Risks:** Significant influence of the Brazilian federal government over the economy, political and economic instability, high inflation, and exchange rate volatility could harm the company's business and share price[48](index=48&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk) - **Share-Related Risks:** The dual-class share structure concentrates voting control with XP Control, limiting other shareholders' influence. As a Cayman Islands company, shareholder rights differ from those under U.S. laws. The company's status as a foreign private issuer results in different disclosure requirements[49](index=49&type=chunk)[208](index=208&type=chunk)[223](index=223&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=71&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details XP Inc.'s history, business model, market environment, and organizational structure as a leading technology-driven financial platform in Brazil [History and Development of the Company](index=71&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) XP Inc. was incorporated in 2019, completed its IPO, and has since expanded through mergers, acquisitions, and significant corporate governance enhancements - The company completed its Initial Public Offering on December 13, 2019[243](index=243&type=chunk) - In 2021, XP consummated a merger with XPart, a company created from the segregation of Itaú Unibanco Holding's investment in XP[246](index=246&type=chunk) - The acquisition of Banco Modal S.A. was completed on July 1, 2023, in exchange for **18.7 million XP BDRs**[267](index=267&type=chunk) - In 2024, the company implemented significant corporate governance enhancements, including creating a majority-independent board and two new board committees[250](index=250&type=chunk)[254](index=254&type=chunk) [Business Overview](index=79&type=section&id=B.%20Business%20Overview) XP Inc. operates as a technology-driven financial services platform in Brazil, leveraging an omni-channel distribution network and diversified product offerings to disrupt traditional banking Key Performance Indicators (as of Dec 31, 2024) | Metric | Value | | :--- | :--- | | Client Assets | R$1.2 trillion | | Active Clients | 4.7 million | | Independent Financial Advisors (IFAs) | ~14,000 | | Net Promoter Score (NPS) | 70 | - The company operates an omni-channel distribution network including XP Direct, Rico, Clear, and a network of approximately **14,000 IFAs** across Brazil[288](index=288&type=chunk)[341](index=341&type=chunk) - XP's business model is asset-light and scalable, with new business lines (credit cards, digital accounts, etc.) representing close to **21.6% of total revenues** in 2024, making the business less cyclical[295](index=295&type=chunk)[296](index=296&type=chunk) - The company's growth strategy is based on four pillars: Leadership in Investments, Retail cross-sell, Corporate & SMB, and a foundational quality initiative[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk) [Organizational Structure](index=109&type=section&id=C.%20Organizational%20Structure) XP Inc. is a Cayman Islands holding company operating through 42 subsidiaries across Brazil, USA, and UK, covering diverse financial services - As of December 31, 2024, the group is composed of XP Inc. and **42 subsidiaries**, with **36 incorporated in Brazil** and **8 in other countries**[251](index=251&type=chunk) - The report provides a detailed list of subsidiaries, joint ventures, and associated companies, along with their principal activities and the company's ownership interest for 2024, 2023, and 2022[506](index=506&type=chunk) [Property, Plants and Equipment](index=111&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The company's intellectual property includes trademarks but no patents, with principal offices leased in São Paulo and data centers outsourced in Brazil - The company owns valuable trademarks such as XP, XP Investimentos, Rico, Clear, and Infomoney, but does not own any patents[509](index=509&type=chunk) - Principal executive offices are located in São Paulo, Brazil, under a lease agreement expiring in December 2027[510](index=510&type=chunk) - The company uses a third-party data center service provider with facilities in Barueri and Santana do Parnaíba, São Paulo[511](index=511&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=112&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes XP's financial performance, highlighting **15% revenue growth** to **R$17.0 billion** and **16% net income increase** to **R$4.5 billion** in 2024, alongside liquidity and macroeconomic influences [Operating Results](index=112&type=section&id=A.%20Operating%20Results) XP Inc. reported **15% revenue growth** to **R$17.0 billion** and **16% net income increase** to **R$4.5 billion** in 2024, driven by strong Retail and Corporate & Issuer Services performance Financial Performance (2024 vs. 2023) | Metric | 2024 (R$ millions) | 2023 (R$ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue and Income | 17,031 | 14,860 | 15% | | Income Before Income Tax | 4,986 | 3,936 | 27% | | Net Income | 4,515 | 3,899 | 16% | | Adjusted Net Income | 4,544 | 3,899 | 17% | - Retail revenue increased by **14% to R$13.5 billion** in 2024, driven by growth in client base and assets, and strong performance in fixed income and credit cards[528](index=528&type=chunk) - Corporate & Issuer Services revenue grew **45% to R$2.3 billion** in 2024, mainly due to strong performance in Debt Capital Markets (DCM) and higher M&A advisory fees[530](index=530&type=chunk) - Institutional revenue decreased by **9% to R$1.4 billion** in 2024, attributed to lower trading activity[529](index=529&type=chunk) [Liquidity and Capital Resources](index=122&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2024, XP Inc. maintained **R$12.9 billion** in cash, with net cash from operations increasing to **R$11.2 billion**, and total indebtedness including **R$9.4 billion** in loans, debentures, and senior notes Cash Flow Summary (in R$ millions) | Cash Flow | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from operating activities | 11,179 | 8,127 | | Net cash from (used in) investing activities | (1,667) | 539 | | Net cash from (used in) financing activities | (5,784) | (4,395) | - As of December 31, 2024, the company had **R$12.9 billion** in cash and cash equivalents[611](index=611&type=chunk) - Total indebtedness as of December 31, 2024, included **R$1.7 billion** in loans, **R$1.9 billion** in debentures, and **R$5.8 billion** in senior notes[618](index=618&type=chunk) - Capital expenditures in 2024 amounted to **R$330 million**, representing **1.9% of total net revenue and income**[633](index=633&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=124&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details XP Inc.'s leadership, compensation, and employee base, highlighting its nine-member board with a majority of independent directors and **7,442 employees** as of year-end 2024 [Directors and Senior Management](index=124&type=section&id=A.%20Directors%20and%20Senior%20Management) As of December 31, 2024, XP Inc.'s board comprises nine members, with five independent, chaired by Guilherme Benchimol, and Thiago Maffra as CEO - The board is composed of **nine directors**, with Guilherme Dias Fernandes Benchimol as Chairman[639](index=639&type=chunk)[641](index=641&type=chunk) - Key executive officers include Thiago Maffra (CEO), Victor Andreu Mansur Farinassi (CFO), and Fabrício Cunha de Almeida (General Counsel)[651](index=651&type=chunk)[652](index=652&type=chunk)[653](index=653&type=chunk) - The Shareholders' Agreement with key investors, including Itaú Unibanco, was terminated on July 6, 2023, strengthening corporate governance[656](index=656&type=chunk) [Compensation](index=132&type=section&id=B.%20Compensation) Aggregate compensation for directors and executive officers was **R$34 million** in 2024, with a Long-Term Incentive Plan (LTIP) authorizing up to **5% of outstanding common shares** for equity awards Aggregate Compensation of Directors and Executive Officers | Year | Compensation (R$ millions) | | :--- | :--- | | 2024 | 34 | | 2023 | 33 | | 2022 | 69 | - The company implemented a Long-Term Incentive Plan (LTIP) in December 2019, authorizing the issuance of up to **5% of its outstanding common shares** as equity awards[660](index=660&type=chunk) [Board Practices](index=132&type=section&id=C.%20Board%20Practices) As a foreign private issuer, XP Inc. follows Cayman Islands governance practices, maintaining an Audit Committee with independent directors and additional committees for compensation, risk, and strategy - The company leverages its foreign private issuer status to follow home country (Cayman Islands) practices instead of certain Nasdaq rules, such as the requirement for a compensation committee composed solely of independent directors[663](index=663&type=chunk)[666](index=666&type=chunk) - The Audit Committee consists of **three independent directors**: Jose Luiz Acar Pedro (Chair), Oscar Rodríguez Herrero, and João Roberto Gonçalves Teixeira[665](index=665&type=chunk) - The board has established three other committees: Compensation, People, Nominating and Governance; Risks, Credit and ESG; and Strategy and Performance[670](index=670&type=chunk)[671](index=671&type=chunk)[672](index=672&type=chunk) [Employees](index=134&type=section&id=D.%20Employees) As of December 31, 2024, XP Inc. employed **7,442 people**, primarily in Sales and Marketing (**55%**) and Technology (**18%**), across offices in Brazil and the US Employee Headcount by Function (as of Dec 31, 2024) | Function | Number of employees | % of Total | | :--- | :--- | :--- | | Management | 50 | 1% | | Technology | 1,372 | 18% | | Sales and Marketing | 4,113 | 55% | | Customer Support | 336 | 5% | | General and Administrative | 1,571 | 21% | | **Total** | **7,442** | **100%** | [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=134&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details XP Inc.'s ownership structure, where XP Control LLC holds **70.43% of voting power**, and outlines its policy for related party transactions following the termination of the Itaú Unibanco shareholder agreement [Major Shareholders](index=134&type=section&id=A.%20Major%20Shareholders) As of April 15, 2025, XP Control LLC holds **100% of Class B shares**, representing **70.43% of total voting power**, with other major institutional investors holding significant Class A stakes Major Shareholders as of April 15, 2025 | Shareholder | Class A Shares (%) | Class B Shares (%) | Total Voting Power (%) | | :--- | :--- | :--- | :--- | | XP Control LLC | — | 100.00% | 70.43% | | Dodge & Cox | 9.94% | — | 2.94% | | Mawer Investment Management Ltd. | 8.45% | — | 2.50% | | Capital World Investors | 7.05% | — | 2.09% | | General Atlantic (XP) Bermuda, L.P. | 6.82% | — | 2.02% | | Blackrock, Inc. | 6.65% | — | 2.98% | [Related Party Transactions](index=136&type=section&id=B.%20Related%20Party%20Transactions) The company conducts ordinary course related party transactions, now excluding Itaú Unibanco after their shareholder agreement termination, with all such dealings requiring audit committee ratification - The shareholder agreement with Itaú Unibanco was terminated on July 10, 2023, and as a result, Itaú Unibanco is no longer considered a related party[686](index=686&type=chunk) - The company has a related party transaction policy that requires ratification of such transactions by the audit committee[689](index=689&type=chunk) - XP entered into a Registration Rights Agreement with major shareholders, granting them rights to demand registration for public resale of their shares[690](index=690&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=137&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section covers XP Inc.'s dividend policy, including **US$350 million** paid in 2024, and legal proceedings, for which **R$146 million** in provisions were recorded as of December 31, 2024 [Consolidated Statements and Other Financial Information](index=137&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) XP Inc. paid **US$350 million** in dividends in 2024 and provisioned **R$146 million** for probable legal losses, while facing **R$2.5 billion** in possible contingent liabilities - The company paid a cash dividend of **US$350.0 million** (approx. **US$0.65 per share**) on December 18, 2024[698](index=698&type=chunk) - As of December 31, 2024, the company recorded provisions of **R$146 million** for legal proceedings where loss is considered probable[702](index=702&type=chunk) Provisions for Legal Proceedings (as of Dec 31, 2024) | Contingency Type | Provision Amount (R$ million) | | :--- | :--- | | Civil | 59 | | Labor | 86 | | Tax | 1 | | **Total** | **146** | - The company has identified contingent liabilities with a 'possible' risk of loss amounting to **R$2.5 billion**, for which no provision has been recorded. These relate mainly to tax (**R$1.3 billion**), civil (**R$0.97 billion**), and labor (**R$0.17 billion**) matters[1320](index=1320&type=chunk)[1322](index=1322&type=chunk) [ITEM 9. THE OFFER AND LISTING](index=142&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section outlines XP Inc.'s securities listings, including Class A common shares on Nasdaq ('XP'), Brazilian Depositary Receipts on B3 ('XPBR31'), and senior notes on the Singapore and Luxembourg exchanges - Class A common shares are listed on the Nasdaq Global Select Market under the symbol 'XP'[723](index=723&type=chunk) - Brazilian Depositary Receipts (BDRs) trade on the B3 exchange under the symbol 'XPBR31'[724](index=724&type=chunk) - The company has two series of senior notes listed: **3.250% notes due 2026** on the Singapore Exchange and **6.750% notes due 2029** on the Luxembourg Stock Exchange[723](index=723&type=chunk)[724](index=724&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=143&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section details XP Inc.'s corporate structure as a Cayman Islands exempted company, highlighting its dual-class share structure, anti-takeover provisions, and favorable tax implications [Memorandum and Articles of Association](index=143&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) The company's governance is defined by its dual-class share structure, granting Class B shares **ten votes per share** and including preemptive rights and anti-takeover provisions - The company has a dual-class share structure: Class A common shares (**1 vote per share**) and Class B common shares (**10 votes per share**)[730](index=730&type=chunk)[736](index=736&type=chunk) - Holders of Class B shares have preemptive rights to maintain their proportional ownership and voting interest in the event of new share issuances[740](index=740&type=chunk) - Anti-takeover provisions include the dual-class structure and the board's ability to issue preferred shares with special rights[781](index=781&type=chunk)[784](index=784&type=chunk) - As of December 31, 2024, the company had **434,047,695 Class A** and **103,375,726 Class B shares** issued and outstanding[681](index=681&type=chunk) [Taxation](index=154&type=section&id=E.%20Taxation) This subsection details tax considerations, noting XP Inc.'s tax-exempt status in the Cayman Islands with a **20-year concession**, and discusses potential Passive Foreign Investment Company (PFIC) implications for U.S. Holders - The Cayman Islands currently levy no taxes on corporate profits, income, gains, or appreciation, and there are no withholding taxes on dividends paid to shareholders[795](index=795&type=chunk) - The company has obtained a **20-year tax concession undertaking** from the Cayman Islands government, effective September 2, 2019[796](index=796&type=chunk) - For U.S. Holders, there is a risk that the company could be classified as a Passive Foreign Investment Company (PFIC), which would result in adverse U.S. federal income tax consequences. The company does not believe it was a PFIC for its 2024 taxable year[806](index=806&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=156&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to various market risks, including interest rate, currency, price, liquidity, and credit risk, which are managed through sensitivity analysis, diversification, and derivatives - The company is exposed to market risks including interest rate, currency, price, liquidity, and credit risk[822](index=822&type=chunk) - Interest rate risk arises from floating rate indebtedness and cash equivalents indexed to the CDI rate[829](index=829&type=chunk) - Currency risk stems from investments in subsidiaries in the U.S. and U.K. The U.S. dollar exposure is hedged to minimize volatility[826](index=826&type=chunk) Market Risk Sensitivity Analysis (Scenario III - 50% shock, in R$ millions) | Risk Factor | 2024 Impact | 2023 Impact | 2022 Impact | | :--- | :--- | :--- | :--- | | Pre-fixed interest rate | 50 | 23 | (484) | | Foreign currencies | 148 | 907 | (121) | | Shares prices | (459) | (290) | (243) | | **Total Impact** | **(283)** | **438** | **(1,232)** | [PART II](index=158&type=section&id=PART%20II) [ITEM 15. CONTROLS AND PROCEDURES](index=158&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of the company's disclosure controls and internal control over financial reporting as of December 31, 2024, as assessed by management and attested by PwC - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[857](index=857&type=chunk) - Based on the COSO framework, management concluded that internal controls over financial reporting were effective as of December 31, 2024[860](index=860&type=chunk) - The independent registered public accounting firm, PwC, has issued an attestation report on the effectiveness of the company's internal control over financial reporting[861](index=861&type=chunk)[862](index=862&type=chunk) - No changes occurred during the period that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting[864](index=864&type=chunk) [Other Information](index=158&type=section&id=ITEM%2016.%20Other%20Information) This section covers governance, including audit committee expertise, code of ethics, **R$8.8 million** in accountant fees, **14 million shares** repurchased in 2024, and cybersecurity program details, including a recent remediated incident [Principal Accountant Fees and Services](index=158&type=section&id=ITEM%2016C.%20Principal%20Accountant%20Fees%20and%20Services) Fees billed by PwC totaled **R$8.77 million** in 2024 and **R$8.75 million** in 2023, primarily for audit services, all pre-approved by the audit committee Accountant Fees (in thousands of reais) | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit fees | 7,137 | 7,992 | | Audit-related fees | 509 | 760 | | Tax fees | — | — | | All other fees | 1,124 | — | | **Total** | **8,770** | **8,752** | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=159&type=section&id=ITEM%2016E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) The company executed multiple share repurchase programs in 2024, buying back **13,977,674 common shares** at an average price of **US$18.37**, and approved a new **R$1.0 billion** program until November 2025 - The company repurchased a total of **13,977,674 common shares** during fiscal year 2024 at an average price of **US$18.37 per share**[878](index=878&type=chunk) - A new share repurchase program for up to **R$1.0 billion** was approved on November 19, 2024, and is effective until November 20, 2025[876](index=876&type=chunk) [Corporate Governance](index=160&type=section&id=ITEM%2016G.%20Corporate%20Governance) As a foreign private issuer, XP Inc. follows Cayman Islands governance, enhancing its board in 2024 with **four new independent directors** and establishing new committees to improve oversight and accountability - In 2024, the company appointed **four new independent directors**, resulting in a majority-independent board[922](index=922&type=chunk)[923](index=923&type=chunk) - Two new board committees were established: the Risks, Credit and ESG Committee and the Strategy and Performance Committee[926](index=926&type=chunk) - The company eliminated slate director elections, allowing shareholders to vote for directors on an individual basis to enhance accountability[916](index=916&type=chunk) - A compensation recoupment policy was adopted in November 2023 in compliance with SEC and NASDAQ regulations[928](index=928&type=chunk) [Cybersecurity](index=161&type=section&id=ITEM%2016K.%20Cybersecurity) XP Inc. manages cybersecurity risk through a program overseen by its Risks, Credit and ESG Committee, and successfully remediated a March 2025 third-party vendor data access incident without material impact - Cybersecurity risk management is overseen by the board's Risks, Credit and ESG Committee and directed by the Chief Technology Officer (CTO)[939](index=939&type=chunk)[940](index=940&type=chunk) - On March 22, 2025, an unauthorized third party accessed a client database hosted by a third-party vendor. The company contained the incident and remediated the vulnerability[937](index=937&type=chunk) - The cybersecurity incident did not compromise any client accounts, funds, or internal XP systems and has not had a material impact on the company's business or financial condition[937](index=937&type=chunk) [PART III](index=161&type=section&id=PART%20III) [Financial Statements](index=161&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents XP Inc.'s audited consolidated financial statements for 2022-2024, prepared under IFRS, with PwC confirming fair presentation and effective internal controls Consolidated Balance Sheet Highlights (in R$ thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **347,456,760** | **249,040,678** | | Cash | 5,610,548 | 3,943,307 | | Financial assets | 321,697,974 | 229,197,214 | | Goodwill and Intangible assets | 2,634,449 | 2,502,045 | | **Total Liabilities** | **327,409,523** | **229,589,834** | | Financial liabilities | 257,965,004 | 171,237,146 | | Retirement plans and insurance liabilities | 66,224,387 | 56,409,075 | | **Total Equity** | **20,047,237** | **19,450,844** | Consolidated Income Statement Highlights (in R$ thousands) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Total revenue and income** | **17,030,861** | **14,860,096** | **13,347,390** | | Net revenue from services rendered | 7,424,856 | 6,532,005 | 5,940,456 | | Net income from financial instruments | 9,606,005 | 8,328,091 | 7,406,934 | | **Income before income tax** | **4,985,967** | **3,936,348** | **3,444,656** | | **Net income for the year** | **4,514,840** | **3,899,391** | **3,580,211** | - The independent auditor, PwC, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[960](index=960&type=chunk)

Core Viewpoint - XP Inc. has released a more optimistic outlook for the Brazilian economy, projecting GDP growth of 2.3% in 2025 and 1.5% in 2026, up from previous forecasts of 2.0% and 1.0% respectively [1][2] Economic Indicators - The upward revision in GDP forecasts is attributed to strong job market performance, resilient household income, and recent federal government stimulus measures [2] - Key stimulus measures include additional funding for the "Minha Casa Minha Vida" housing program, payroll-deductible credit expansion, and fiscal incentives for low and middle-income households [2] Inflation and Monetary Policy - Inflation forecast remains at 6.0% for 2025, with a revision to 4.7% for 2026 due to higher growth expectations and potential inflationary effects from income tax reform [5] - The Brazilian Real (BRL) is forecasted to maintain a value of 6.00 per USD by year-end, although risks are associated with global trade disruptions and commodity price volatility [5] - The Chief Economist at XP emphasizes that while monetary policy is currently effective, achieving sustained inflation reduction and lower interest rates will require clarity on fiscal consolidation and structural reforms [3][4] Fiscal Challenges - XP projects that the Brazilian government will need to raise an additional BRL 110 billion (approximately USD 18.3 billion) in revenue to meet the surplus target for 2026, indicating ongoing fiscal balance challenges [5]

Core Insights - Brazil's newly launched payroll-deductible loan program for private sector workers is projected to add approximately 0.6 percentage points to GDP growth, equating to nearly BRL 70 billion (around USD 11.7 billion) annually [1][2] - The program, initiated on March 21, 2025, aims to provide affordable credit to 47 million formal employees, including household and agricultural workers, through the Digital Work Card app [2] - Strong demand for the loans is evident, with over BRL 4.5 billion (approximately USD 750 million) in loans granted shortly after the program's launch [2] Economic Impact - The program is viewed as a strategic macroeconomic lever, allowing households to replace high-cost debt with lower-interest payroll loans, thereby increasing disposable income and stimulating consumption [3] - XP has revised Brazil's GDP growth forecast for 2025 from 2.0% to 2.3% and for 2026 from 1.0% to 1.5%, with an optimistic scenario suggesting a potential increase of up to 1.0 percentage point in GDP growth if adoption accelerates [3] - The program is expected to soften the impact of global economic challenges and tighter monetary conditions, showcasing the resilience of Brazil's economy [4] Mechanisms of Impact - The analysis identifies two key transmission effects: - A substitution effect where consumers replace expensive debt with cheaper loans, leading to a GDP impact of +0.35 percentage points [5] - An incremental effect where increased credit access stimulates consumption-led lending growth, contributing an additional +0.2 percentage points to GDP [5]

Core Viewpoint - XP Inc. is facing serious allegations of operating a Ponzi scheme, leading to a significant decline in its share price after a report was published by Grizzly Research, which claims that the company's profits are unsustainable and dependent on misleading financial practices [1][3]. Group 1: Allegations and Investigations - A report titled "XP's Entire Profits Are Dependent on What Insiders Call a 'Madoff-Like Ponzi Scheme'" was published by Grizzly Research, causing XP's share price to drop over 5% [1][3]. - Hagens Berman, a prominent investor rights firm, is investigating the allegations against XP and is encouraging affected investors to come forward with their losses [1][2]. - The investigation is focused on the accuracy of XP's statements regarding its business model and its claims of improved internal controls over financial reporting [2][3]. Group 2: Specific Claims from the Report - The Grizzly Research report alleges that XP is running a Ponzi scheme through certain derivatives sales to retail clients, misrepresenting these as proprietary trading profits [5]. - A fund called GLADIUS FIM CP IE, which reportedly returned over 2,419% over the last five years with low volatility, is central to these allegations, suggesting that without this fund, XP would be unprofitable [5]. - The report indicates that the profitability of Gladius is tied to a product called COE (Certificado de Operações Estruturadas), which XP aggressively markets to Brazilian retail clients [5]. - Former employees have claimed that the scheme relies on continuous inflows from COEs, and if these inflows cease, XP could face significant financial obligations it cannot meet [5].

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks in various market conditions, focusing on undervalued companies based on fundamental analysis [2][3]. Company Summary - XP (XP) is highlighted as a strong value stock, currently holding a Zacks Rank of 1 (Strong Buy) and an A grade in the Value category [4]. - The stock has a P/E ratio of 8.39, significantly lower than its industry's average P/E of 14.69, indicating potential undervaluation [4]. - XP's Forward P/E has fluctuated between 1.97 and 12.76 over the past year, with a median of 9.81 [4]. - The PEG ratio for XP is 0.59, compared to the industry's average PEG of 0.97, suggesting favorable growth expectations relative to its valuation [5]. - XP's P/B ratio stands at 2.07, lower than the industry average of 2.62, indicating an attractive valuation based on book value [6]. - The P/CF ratio for XP is 8.51, compared to the industry's average of 14.53, further supporting the notion of undervaluation based on cash flow [7]. - Overall, these metrics suggest that XP is likely undervalued, making it an appealing investment opportunity at this time [8].

Core Viewpoint - XP Inc. is facing serious allegations of operating a Ponzi-like scheme, leading to a significant decline in its share price after a report by Grizzly Research was published [1][3]. Group 1: Allegations and Investigations - A report titled "XP's Entire Profits Are Dependent on What Insiders Call a 'Madoff-Like Ponzi Scheme'" was published by Grizzly Research, causing XP's share price to drop over 5% [1][3]. - Hagens Berman, a prominent investor rights firm, is investigating the allegations and is encouraging affected investors to submit their losses [1][2]. - The investigation is focused on the accuracy of XP's statements regarding its business model and its internal financial controls [2][3]. Group 2: Details of the Allegations - The report claims that XP is running a massive Ponzi scheme through certain derivatives sales to retail clients, misrepresented as proprietary trading profits [7]. - A specific fund, GLADIUS FIM CP IE, reportedly returned over 2,419% over five years with low volatility, raising questions about its legitimacy [7]. - The profitability of XP is allegedly dependent on the sales of a product called COE (Certificado de Operações Estruturadas), which is aggressively marketed to Brazilian retail clients [7]. - Former employees indicated that the scheme relies on continuous inflows of COEs, and a halt in sales could lead to significant liabilities for XP [7].

NEW YORK, March 31, 2025 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of XP Inc. ("XP" or the "Company") (NASDAQ: XP). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980. The investigation concerns whether XP and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. [Click here for information about joining the class action] On March 12, 2025, Grizzly Research publishe ...

Attorney advertising. Prior results do not guarantee similar outcomes. CONTACT: Danielle Peyton Pomerantz LLP dpeyton@pomlaw.com 646-581-9980 ext. 7980 Following publication of the report, XP's stock price fell $0.82 per share, or 5.48%, to close at $14.14 per share on March 12, 2025. Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late ...

XP Inc.A (XP) closed the last trading session at $14.67, gaining 1.2% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $20.13 indicates a 37.2% upside potential.The average comprises eight short-term price targets ranging from a low of $13 to a high of $30, with a standard deviation of $5.94. While the lowest estimate indicates a decline of 11.4% from the current price level, the mo ...

Shares of XP Inc.A (XP) have been struggling lately and have lost 5.3% over the past week. However, a hammer chart pattern was formed in its last trading session, which could mean that the stock found support with bulls being able to counteract the bears. So, it could witness a trend reversal down the road.The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that makes a bullish case for the stoc ...