PagSeguro Digital(PAGS) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenue for the three-month period ended September 30, 2025, was R$5,105,410, an increase of 5.66% compared to R$4,831,492 for the same period in 2024[9] - Net income for the nine-month period ended September 30, 2025, rose to R$1,616,337, up 6.53% from R$1,517,344 in the prior year[11] - Basic earnings per common share for the three-month period ended September 30, 2025, increased to R$1.8998, compared to R$1.6726 in the same period of 2024, representing a growth of 13.56%[10] - Net income for the nine-month period ended September 30, 2025, was R$1,832,586, an increase from R$1,743,634 in the same period of 2024, reflecting a growth of approximately 5.1%[14] - Total revenue and income for the nine-month period ended September 30, 2025, was R$15,013,736, an increase from R$13,694,621 in the same period of 2024, representing a growth of 9.6%[121] - Basic earnings per share for the nine-month period ended September 30, 2025, was R$5.4292, compared to R$4.7737 for the same period in 2024, reflecting an increase of 13.7%[118] Assets and Liabilities - As of September 30, 2025, total assets decreased to R$72,285,249 from R$72,900,617 as of December 31, 2024, reflecting a decline of approximately 0.85%[6] - Total liabilities decreased to R$57,397,264 as of September 30, 2025, from R$58,232,245 at the end of 2024, indicating a reduction of approximately 1.43%[8] - The company’s total equity increased to R$14,887,985 as of September 30, 2025, compared to R$14,668,372 at the end of 2024, representing a growth of 1.49%[8] - The total financial liabilities as of September 30, 2025, were R$54,969,799, a decrease from R$55,643,518 as of December 31, 2024, showing a reduction of 1.2%[132] Cash and Cash Equivalents - Cash and cash equivalents increased to R$1,427,303 as of September 30, 2025, from R$927,668 at the end of 2024, marking a significant increase of 53.67%[6] - Cash and cash equivalents as of September 30, 2025, were R$1,427,303, up from R$927,668 as of December 31, 2024, indicating a 53.9% increase[147] Accounts Receivable - The company reported a decrease in accounts receivable from R$57,628,538 as of December 31, 2024, to R$56,625,151 as of September 30, 2025, a decline of about 1.75%[6] - Accounts receivable totaled R$59,055,725 as of September 30, 2025, slightly down from R$59,803,273 at the end of 2024, reflecting a decrease of about 1.2%[41] - The company reported a significant decrease in accounts receivable, with a reduction of R$3,432,483 compared to R$15,646,034 in the previous year, suggesting improved collection processes[14] - Past due accounts receivable increased to R$327,889 from R$272,294, representing a growth of approximately 20.4%[44] - Expected credit losses (ECL) for accounts receivable rose to R$314,572, up from R$284,620, indicating a 10.1% increase[44] - The net receivables after ECL stood at R$3,838,347 as of September 30, 2025, compared to R$3,152,793 at the end of 2024, reflecting a growth of 21.8%[44] Financial Costs and Expenses - Total expenses for the nine-month period ended September 30, 2025, were R$13,181,150, compared to R$11,950,988 in 2024, which is an increase of 10.3%[123] - Financial costs for the nine-month period ended September 30, 2025, increased to R$3,852,323, compared to R$2,654,889 in 2024, reflecting a rise of 45%[123] Investments and Subsidiaries - The company established a new subsidiary, PSGP México Aggregator S. de R.L. de C.V., in April 2025, aimed at expanding its operational footprint in Mexico[20] - PagSeguro Digital's investment in Fundo de Investimento em Direitos Creditórios – PagSeguro increased to 20% following the acquisition of additional shares in June 2024[18] Shareholder Actions - The company paid dividends totaling R$431,206 during the nine-month period, marking a new distribution to shareholders[15] - The company authorized a new share repurchase program on May 29, 2025, allowing for the repurchase of up to US$200 million in outstanding Class A common shares[111] - The first dividend payment of US$0.14 per common share was approved on May 13, 2025, totaling R$236,037, with payments made to both UOL and third-party shareholders[114] Tax and Contingencies - The effective income tax and social contribution rate for the nine-month period ended September 30, 2025, was 12%, compared to 13% for the same period in 2024[95] - The total provision for contingencies amounted to R$1,152,777, an increase from R$996,526 on December 31, 2024[83] - The main tax lawsuit against PagSeguro Internet involves an assessment of R$336,022 related to the non-collection of tax on financial operations, up from R$315,403 on December 31, 2024[84] Borrowings and Financial Instruments - The borrowings balance decreased to R$2,398,160 as of September 30, 2025, from R$4,521,503 on December 31, 2024, reflecting a significant reduction in debt[89] - The Group's obligations to FIDC quota holders amounted to R$1,128,717 as of September 30, 2025, with an average cost of 108% of CDI[70] - The derivative financial instruments portfolio included liabilities of R$632,364 for EUR swaps and R$945,947 for another EUR swap as of September 30, 2025[155] Operational Efficiency - Total losses for the nine-month period decreased to R$269,321 from R$335,402 in 2024, indicating improved operational efficiency[14] - The Group recorded a profit before taxes of R$636,432 for the three-month period ended September 30, 2025, compared to R$593,540 for the same period in 2024, indicating a year-over-year growth[94]