PagSeguro Digital(PAGS) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenue for the three-month period ended June 30, 2025, was R$5,058,170, an increase of 11% compared to R$4,556,707 in the same period of 2024[12] - Net income for the six-month period ended June 30, 2025, reached R$1,061,851, representing a 7.6% increase from R$986,192 in the same period of 2024[12] - Basic earnings per common share for the three-month period ended June 30, 2025, was R$1.8031, up from R$1.5785 in the same period of 2024, reflecting a growth of 14.2%[12] - Net income for the six-month period ended June 30, 2025, was R$1,196,154, compared to R$1,150,094 for the same period in 2024, reflecting an increase of 4.0%[18] - The Group's net profit before taxes for the six-month period ended June 30, 2025, was R$1,196,154, compared to R$1,150,094 for the same period in 2024, indicating an increase of approximately 4%[97] - Basic earnings per share for the six-month period ended June 30, 2025, was R$3.5320, compared to R$3.1012 in 2024, indicating an increase of 13.9%[118] Cash and Liquidity - Cash and cash equivalents increased to R$1,128,207 as of June 30, 2025, compared to R$927,668 at the end of 2024, marking a growth of 21.6%[7] - Cash and cash equivalents at the end of the period were R$1,128,207, compared to R$1,374,218 at the end of June 2024, reflecting a decrease of 17.9%[18] - PagSeguro's liquidity risk management includes maintaining reserves and credit lines, with cash and cash equivalents held at R$1,128,207 as of June 30, 2025[148] Assets and Liabilities - Total assets decreased to R$71,193,206 as of June 30, 2025, down from R$72,900,617 at the end of 2024, a decline of 2.3%[10] - Total liabilities decreased to R$56,609,506 as of June 30, 2025, compared to R$58,232,245 at the end of 2024, a reduction of 2.8%[10] - Total financial liabilities decreased to R$54,261,962 as of June 30, 2025, from R$55,643,518 at the end of 2024, showing a reduction of 2.5%[137] - The total amount of taxes and contributions decreased to R$684,991 as of June 30, 2025, from R$706,076 on December 31, 2024, reflecting a decline of approximately 3%[83] Equity and Shareholder Returns - Total equity as of June 30, 2025, was R$14,583,700, slightly down from R$14,668,372 at the end of 2024, a decrease of 0.6%[10] - The company paid dividends totaling R$236,037 during the six-month period ended June 30, 2025, marking its commitment to returning value to shareholders[18] - The company declared a dividend of US$0.14 per common share on May 13, 2025, totaling R$236,037, with R$141,117 allocated to third-party shareholders[116] Borrowings and Financial Costs - Borrowings for the six-month period ended June 30, 2025, were R$4,748,000, compared to R$2,398,160 in 2024, showing an increase of 97.9%[18] - The total borrowings as of June 30, 2025, were R$1,016,353 thousand due within 30 days, compared to R$2,540,481 thousand on December 31, 2024, indicating a significant reduction[159] - Financial costs for the six-month period ended June 30, 2025, were R$2,457,346, up from R$1,690,554 in 2024, representing an increase of 45.3%[124] Accounts Receivable and Credit Management - The company reported a decrease in accounts receivable to R$55,643,579 as of June 30, 2025, from R$57,628,538 at the end of 2024, a decline of 3.4%[7] - The total accounts receivable as of June 30, 2025, amounted to R$57,994,169, a decrease from R$59,803,273 as of December 31, 2024[43] - The expected credit losses (ECL) for accounts receivable increased to R$294,345 as of June 30, 2025, compared to R$284,620 at the end of 2024, reflecting a rise of 3.0%[45] - Past due accounts receivable rose to R$304,101 as of June 30, 2025, up from R$272,294 on December 31, 2024, indicating an increase of 11.7%[46] Operational Expenses - The total expenses for the six-month period ended June 30, 2025, were R$8,712,172, compared to R$7,713,038 in 2024, reflecting an increase of 12.9%[124] - The company incurred shared service costs of R$54,951 for the six-month period ended June 30, 2025, compared to R$55,691 for the same period in 2024, showing a marginal decrease[56] Strategic Initiatives - The company authorized a share repurchase program of up to US$200 million in August 2024, which was completed in May 2025, totaling US$200 million in Class A common shares repurchased[112] - PagSeguro Group operates in a single segment as financial service agents, with all strategic decisions made on a consolidated basis[36] Risk Management - The company has established a Credit Committee to assess the risk levels of card issuers, classifying them into three risk categories[146] - PagSeguro's exposure to foreign exchange risk is primarily related to POS purchases in various countries, with hedging strategies in place for revenues in foreign currencies[141] - The Group's strategy includes managing risks through derivative financial instruments to hedge against fluctuations in foreign currency and interest rates[165]