XP Inc Reports Strong Financial Results for Q2 2024
Intellectia.AI Updated: 2024-08-14
XP Inc. Reports Strong Financial Results for Q2 2024
XP Inc. (NASDAQ:XP), a leading tech-enabled platform providing low-fee financial products and services in Brazil, has announced its financial results for the second quarter of 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Q1 2024 | YoY Change | QoQ Change | Consensus Estimates (Q2 2024) |
|---|---|---|---|---|---|---|
| Total Revenue | R$4.5 billion | R$3.72 billion | R$4.29 billion | +21% | +5% | $752.33M |
| Net Income | R$1.1 billion | (not provided) | R$1.01 billion | +14% | +9% | (not provided) |
| Basic EPS | R$2.05 | (not provided) | R$1.88 | +11% | +9% | $0.36 |
| Fully Diluted EPS | R$2.03 | (not provided) | R$1.87 | +10% | +9% | (not provided) |
| Gross Margin | 69.7% | 67.7% | 67.5% | +200 bps | +220 bps | (not provided) |
| EBT Margin | 32.8% | 27.3% | 26.9% | +552 bps | +594 bps | (not provided) |
| ROAE | 22.1% | 21.9% | 20.6% | +13 bps | +149 bps | (not provided) |
XP Inc. showed a robust year-over-year (YoY) and quarter-over-quarter (QoQ) growth in total revenue, net income, and earnings per share (EPS). The company's Gross Margin and Earnings Before Taxes (EBT) Margin also improved, indicating efficient cost management and operational effectiveness.
Segment Revenue Performance
| Segment | Revenue (R$ million) | Q2 2024 | YoY Change | QoQ Change |
|---|---|---|---|---|
| Retail | R$3,300 | +14% | +5% | |
| Institutional | R$346 | -10% | -2% | |
| Corporate & Issuer Services | R$629 | +122% | +24% | |
| Other | R$233 | +39% | -16% |
XP Inc.'s Retail segment, which includes fixed income and card services, performed well, boosted by a 42% increase in fixed income revenues and a 35% increase in card revenues YoY. Despite a decline in the Institutional segment due to reduced market activity by institutional clients, the Corporate & Issuer Services segment experienced significant growth, reinforcing XP's diversification strategy and benefiting from Debt Capital Markets (DCM) activity in Brazil.
Key Operational Data
| Operational Metric | Q2 2024 | YoY Change | QoQ Change |
|---|---|---|---|
| Client Assets (R$ billion) | 1,200 | +14% | +2% |
| Net Inflow (R$ billion) | 32 | (not provided) | +83% |
| Active Clients (‘000s) | 4,600 | +15% | +1% |
| Total Advisors (‘000s) | 18.3 | +11% | (not provided) |
| Retail Daily Average Trades (‘000s) | 2,400 | +10% | +12% |
| NPS | 71 | (not provided) | (not provided) |
| Retirement Plans Client Assets (R$ billion) | 75 | +17% | (not provided) |
XP Inc. showcased its strong operational capabilities, marked by notable increases in client assets, net inflow, active clients, and retirement plan assets. The company also maintained a high Net Promoter Score (NPS) of 71, reflecting a priority on client experience.
Executive Commentary
XP Inc.'s management expressed confidence in the company's ability to sustain growth through its diversified revenue streams, operational efficiency, and client-centric approach. They highlighted the record EBT and net income for Q2 2024 as significant milestones.
Dividends or Share Repurchase Program
There were no announcements pertaining to dividends or share repurchase programs in the current earnings release.
Forward Guidance
XP Inc. did not provide specific forward guidance for future quarters in this report.
Stock Price Movement
Following the earnings release, XP Inc.'s stock price increased by 2.27%, indicating a positive reception from investors.
For more detailed financial information, please refer to the XP Inc.'s financial release document.
