It's time to spotlight Adobe's expectations for the holiday shopping season. Joining us now is Vivic Pandia, the lead analyst at Adobe Digital Insights. And Vivic, thank you for being with us today.Before we move to the holidays, I'd love to just quickly talk about your expectations for Amazon's Prime event, which is currently happening. So, we we're anticipating some pretty decent growth for the fall Prime event. So about 6% growth and that'll get it over over 9 billion across the two days.And u when we th ...

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Core Viewpoint - The company is expected to have substantial demand for its IPO, with a pricing set above the offered range at $40, indicating investor interest in unprofitable tech firms within the fintech ecosystem [1] Company Growth and Profitability - The company has shown five consecutive quarters of profitability and is anticipated to continue this trend with more positive cash flow and profitability in upcoming quarters [2] - The company is pivoting towards becoming a retail bank, which is expected to be well understood by investors [3][4] Market Position and Expansion - The tools provided by the company are enabling consumers to manage cash flows better, which is positively received, and the company is expected to expand its banking franchise into the U.S. and U.K. markets [4] - The company is currently operating in 26 countries and is expected to continue its growth trajectory [9] IPO Context and Underwriting - The company had previously delayed its IPO due to uncertainties related to tariffs but is now moving forward with strong underwriters, including Goldman Sachs, JP Morgan, and Morgan Stanley [5][7] - The listing in New York is strategic, as it is the largest market for the company [8] Market Performance and Investor Sentiment - There is a noted trend of profit-taking after stocks rise, particularly among fintech-related companies, but the absence of tariffs on financial services presents a favorable opportunity for the company [9] - Long-term investors express confidence in the company's competitive position and are likely to increase their holdings if stock prices remain low [10]

Financial Data and Key Metrics Changes - The company reported a total gross revenue of BRL 3.2 billion and net revenue of BRL 1.8 billion, reflecting a year-over-year growth of 3831% respectively [28] - The efficiency ratio improved to 48.8%, a 130 basis points improvement compared to the previous quarter [32] - The return on equity (ROE) reached 12.9%, excluding minority interest, marking a significant achievement for the company [32] Business Line Data and Key Metrics Changes - The total loans grew by 33% year-over-year, significantly outpacing the Brazilian market [22] - The Consumer Finance 2.0 portfolio, which includes PIX financing and buy now pay later, grew more than five times year-over-year, reaching BRL 920 million [15] - The insurance segment saw a 51% increase in active contracts, reaching nearly 8 million [17] Market Data and Key Metrics Changes - The company added 1 million new active clients for the fifth consecutive quarter, achieving a 57% activation rate [13] - Transactions made through PIX totaled BRL 315 billion in the first quarter, achieving an 8.2% market share [14] - The marketplace GMV grew by almost 30% year-over-year, reaching BRL 300 million [18] Company Strategy and Development Direction - The company is focused on sustainable products and a diversified revenue stream, positioning itself well in a rapidly changing banking industry [5][7] - The launch of new products like private payroll loans is seen as a significant opportunity for market share growth [15][16] - The company aims to continue expanding its product offerings and enhancing client engagement to solidify its market position [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing market opportunities due to a secular shift towards digital banking services [6] - The company anticipates continued growth in loans, projecting a range of 25% to 30% for the year [56] - Management noted that the current economic environment, including inflation and interest rates, has not negatively impacted their growth strategy [58] Other Important Information - The company achieved nearly 4% market share of treasury direct balance, growing 80 basis points in one year [16] - The cost of risk improved to 4.6%, marking the best performance since 2022 [26] - The company is actively working on improving operational efficiency through technology and AI [76] Q&A Session Summary Question: Comments on the private payroll product and its impact - Management expressed excitement about the private payroll product, indicating it has significant market potential but noted no impact in the first quarter yet [41][44] Question: Expectations for NIM trajectory - Management explained that NIM growth is driven by improved credit mix and rising interest rates on loan portfolios, with expectations for continued expansion [45][48] Question: Loan growth expectations and impact of inflation - Management expects loan growth to accelerate, projecting 25% to 30% growth for the year, with no significant impact from inflation or interest rates [56] Question: Explanation for decrease in net ARPAK - The decrease in net ARPAK was attributed to seasonal factors affecting fees and the deferral of certain fees due to regulatory changes [61][64] Question: Outlook for efficiency ratio and expense growth - Management indicated that efficiency improvements will come from top-line growth outpacing expense growth, aiming for a long-term target of 30% efficiency by 2027 [72] Question: Asset quality and NPL levels - Management noted that the current NPL levels are influenced by product mix and expect further improvements as new products scale [90][91] Question: Increase in stage two formation for credit cards - The increase in stage two was attributed to regulatory requirements rather than a decline in asset quality, with no significant performance issues noted [97][98]