XP(XP) - 2024 Q3 - Quarterly Report

Financial Performance - XP Inc. reported total revenue of $322 million for the three and nine months ended September 30, 2024, reflecting a significant increase compared to the previous periods[1]. - Operating expenses for the same period were reported at$ 324 million, indicating a rise in operational costs[2]. - Earnings per share (EPS) for the quarter were reported at $3.26, both basic and diluted, showcasing strong profitability[3]. - Net revenue from services rendered for the nine months ended September 30, 2024, was R$ 5,512,945, compared to R $4,651,223 for the same period in 2023, reflecting an increase of 18.5%[14]. - Total revenue and income for the three months ended September 30, 2024, reached R$ 4,318,808, a slight increase from R $4,131,920 in the previous year, marking a growth of 4.5%[14]. - Net income for the period was R$ 3,334,094 for the nine months ended September 30, 2024, compared to R $2,859,377 in 2023, indicating a rise of 16.6%[14]. - The company reported a total comprehensive income for the period of R$ 2,702,617 for the nine months ended September 30, 2024, down from R $3,080,694 in 2023, a decrease of 12.3%[14]. - The total income before taxes for the nine months ended September 30, 2024, was R$ 3,684,593, compared to R $2,941,219 for the same period in 2023, indicating a year-over-year increase of 25.2%[139]. - The Group's net income attributable to owners for the nine months ended September 30, 2024, was R$ 3,333,203, reflecting a 16.6% increase from R $2,856,525 in the same period of 2023[181]. - Total net revenue for the nine months ended September 30, 2024, reached R$ 12,590,922, up 16.5% from R $10,814,533 in the prior year[168]. Investments and Acquisitions - The company has made investments in associates and joint ventures amounting to$ 212 million, highlighting its commitment to strategic partnerships[4]. - The acquisition of Banco Modal S.A. was completed on July 1, 2023, with a total consideration of R $2,097,326 and goodwill of R$ 1,336,092 attributed to the workforce and profitability[54]. - The Group recorded a total fair value consideration of R $834,743 for minority stake acquisitions in Monte Bravo, Blue3, and Ável, including preliminary goodwill of R$ 537,671[55]. - In July and August 2024, the Group acquired minority interests in two IFAs for a total consideration of R $324,503, with R$ 234,507 attributed to preliminary goodwill[56]. - The company issued 18,717,771 Class A common shares valued at R $2,097,326 to acquire 100% of Banco Modal's shares on July 1, 2023[143]. Financial Position - Total assets increased to R$ 316,399,799 as of September 30, 2024, up from R $249,040,678 at December 31, 2023, representing a growth of 27%[11]. - Financial liabilities rose to R$ 228,017,751 as of September 30, 2024, from R $171,237,146 at December 31, 2023, an increase of 33%[13]. - Total equity attributable to owners of the Parent company increased to R$ 21,353,091 as of September 30, 2024, from R $19,449,352 at December 31, 2023, reflecting an increase of 9.8%[13]. - Total equity as of September 30, 2024, reached R$ 21,357,696 thousand, up from R $20,023,201 thousand as of September 30, 2023, reflecting a growth of 6.7%[16]. - The company reported total borrowings of R$ 6,229,937, an increase from R $5,534,081 as of December 31, 2023, representing a growth of approximately 12.6%[123]. Cash Flow and Liquidity - Cash flow from operations was reported at$ 430 million, demonstrating strong liquidity and operational efficiency[7]. - Cash from operations for the nine months ended September 30, 2024, was R $8,072,743 thousand, compared to R$ 4,416,060 thousand in 2023, indicating a significant increase of 83.5%[18]. - The total cash and cash equivalents at the end of the period on September 30, 2024, were R $11,437,817 thousand, compared to R$ 6,689,511 thousand at the end of September 2023, marking an increase of 71.5%[18]. Risk Management - The management emphasized the importance of financial risk management and the implementation of new financial instruments to mitigate risks[9]. - XP Inc. aims to neutralize risks associated with interest rate and foreign exchange fluctuations through various hedging strategies, including future contracts and structured notes[90]. - The Group's risk management structure focuses on minimizing adverse effects from financial market unpredictability, utilizing derivative financial instruments for risk mitigation[192]. Shareholder Actions - The company repurchased 12,650,574 shares under its buy-back programs, totaling R $1.2 billion (approximately US$ 240 million), with an average purchase price of US $19.00 per share[28]. - The company canceled 31,267,095 Class A shares on April 5, 2023, which was 5.6% of total issued shares at that time, reducing the total from 560,534,012 to 529,266,917[150]. - The company has not declared or paid dividends for the nine months ended September 30, 2024, compared to R$ 1,577,622 in the same period of 2023[154]. Operational Highlights - The company is focusing on market expansion and new product development, aiming to enhance its competitive edge in the industry[6]. - The company is actively pursuing technological advancements to improve its product line and customer experience[10]. - The Group's revenue and performance are monitored as a single operating segment, with financial data reviewed on a combined basis[63]. Compliance and Standards - The review of the financial statements was conducted under Brazilian and International Standards, indicating a thorough assessment of financial and accounting matters[6]. - No significant issues were identified that would suggest the financial statements are not materially prepared in accordance with IAS 34[7]. - The Group assessed the impacts of new accounting standards and concluded no significant effects on the interim financial statements[42].