Financial Data and Key Metrics Changes - The company reported a net revenue increase of 13% year over year, reaching BRL billion [6] - Non-GAAP net income was BRL 554 million, reflecting a 6% growth year over year [6] - Diluted EPS on a GAAP basis reached BRL 1.72, a 14% growth year over year [6][28] - Total deposits increased by 11%, reaching BRL 33.9 billion [16] - The total credit portfolio reached BRL 3.7 billion, a 34% year over year increase [18] Business Line Data and Key Metrics Changes - Payments TPV reached BRL 129 billion, growing 16% year over year [6][13] - The MSMB segment grew 11% year over year, while the large retail and online segment grew 30% year over year [14] - The banking revenue reached a record, growing 60% year over year, driven by higher interest income from the expanding credit portfolio [22] Market Data and Key Metrics Changes - The company has less than 1% market share in some banking businesses, indicating significant room for market penetration and future growth [10] - The cash in levels in PagBank accounts reached BRL 83 billion, with cashing per active client growing 23% year over year [15] Company Strategy and Development Direction - The company aims to become the primary financial partner for clients by integrating payments, banking, and credit services [9] - The focus is on winning MSMBs and scaling the platform, with a strategy to deepen engagement and boost monetization [9][10] - The company plans to balance growth and profitability while exploring initiatives to strengthen its capital structure [32] Management Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the company in a challenging macroeconomic environment, maintaining positive results every quarter since the IPO [7][32] - The company is focused on mitigating macroeconomic uncertainty and executing its repricing strategy [32] - Management expressed confidence in achieving the guidance for the year, with expectations for continued growth in gross profit and earnings per share [31][87] Other Important Information - The company announced a cash dividend of $0.14 per common share, to be paid on June 6, marking the first dividend in its history [7][30] - The Basel Index improved by approximately five percentage points, reflecting an enhanced capital structure [30] Q&A Session Summary Question: What explains the deceleration in TPV growth from Q4 to Q1? - Management noted that the deceleration is partly due to tougher year-over-year comparisons and emphasized the company's diversified revenue sources beyond payments [36][38] Question: Why is the dividend distribution set at 10% of net income? - The company aims to balance dividends with share buybacks, indicating that the 10% is a guideline that may change based on future performance [43][44] Question: What drove the decrease in deposits this quarter? - Management explained that the decrease in checking accounts was influenced by higher opportunity costs in a rising rate environment, and emphasized efforts to manage funding costs effectively [48][51] Question: How durable is the repricing strategy? - Management indicated that repricing is necessary due to rising interest rates and that they are working to implement it without losing clients [58][86] Question: What is the outlook for the banking business's contribution to gross profit? - Management did not provide specific targets but indicated that the banking business is expected to continue growing and contributing significantly to overall profitability [114][116]

Financial Data and Key Metrics Changes - In 2024, the company achieved a net income of BRL2.2 billion, exceeding the guidance of BRL1.9 billion, despite macroeconomic challenges and over BRL100 million negative impacts from accounting changes [10] - Adjusted net income grew 18% year over year, with adjusted basic EPS increasing by 26% compared to Q4 2023 [12] - Adjusted administrative expenses were BRL994 million, lower than the guidance of BRL1.125 billion, reflecting ongoing efficiency improvements [10][12] Business Line Data and Key Metrics Changes - The MSMB car TPV reached BRL403 billion, a 15% year-over-year growth, while total MSMB TPV exceeded expectations at BRL454 billion, a 22% increase [6][10] - The MSNB take rate was 2.55%, surpassing the guidance of 2.49%, driven by disciplined pricing and increased contributions from banking and credit solutions [8][10] - The credit portfolio grew to BRL1.2 billion, significantly exceeding the target of BRL800 million, with non-performing loans over ninety days remaining controlled at 3.61% [9][20] Market Data and Key Metrics Changes - The active client base for MSMB payments increased by 19% year over year to 4.1 million clients, with a notable acceleration in client additions [15] - Retail deposits reached BRL8.7 billion, exceeding the guidance of BRL7 billion, reflecting strong performance in bundled payments and banking offerings [7][18] - The banking active client base grew by 46% year over year to 3.1 million, outpacing the payments client base growth [18] Company Strategy and Development Direction - The company aims to establish Stone accounts as the primary financial hub for clients, focusing on enhancing the value proposition through a comprehensive ecosystem beyond payments [8] - Key initiatives for 2025 include investment products and workflow tools to accelerate deposit growth [8] - The company is committed to maximizing long-term intrinsic business value growth, emphasizing disciplined execution and prudent capital allocation [40] Management Comments on Operating Environment and Future Outlook - Management acknowledged potential macroeconomic challenges but expressed confidence in delivering sustainable long-term value creation [40] - The company plans to continue outpacing market growth and expanding its share in the MSMB payments market [6] - Management highlighted the importance of evolving client engagement and the successful execution of strategic priorities [5][10] Other Important Information - The company recognized a goodwill impairment charge of BRL3.6 billion for the software cash-generating units, which is a non-cash accounting adjustment [27] - The adjusted net cash position was BRL4.7 billion at quarter end, reflecting ongoing share repurchase activity [32] - The company expects to return excess capital to shareholders over time when value-accretive growth opportunities are not immediately available [35] Q&A Session Summary Question: Performance of banking solutions and room for improvement - Management noted that deposits are growing ahead of TPV due to successful bundling of payments and banking solutions, with expectations for continued growth as more solutions are developed [45][46] Question: View on dividends and capital structure - Management emphasized a commitment to returning capital to shareholders through share buybacks, with no specific targets for dividends at this time [50][51] Question: Pricing strategy and impact - Management confirmed that a substantial repricing initiative was implemented at the beginning of Q1 2025, with expectations for effective adjustments across the client base [58][61] Question: Guidance on basic vs. diluted EPS - Management explained the decision to guide basic EPS due to accounting volatility and the potential for double counting with share-based compensation [62][64] Question: Potential sale of software business - Management stated that no offers met the intrinsic value for the software assets, and they will focus on maximizing value through cross-selling financial services [75][76]