Earning Date, Transcript Summary & Report

Client Growth Milestone: PagBank achieved an all-time high performance in 2024, ending the year with 33.2 million clients, a growth of 2.1 million year-over-year.

Record Payment Growth: Total payment TPV reached a record of BRL 518 billion, marking a 32% growth year-over-year.

Revenue and Income Surge: Net revenues increased by 18% year-over-year, reaching BRL 18.8 billion, while net income hit an all-time high of BRL 2.3 billion, a 28% growth compared to 2023.

Diluted EPS Growth: Diluted EPS on a GAAP basis reached BRL 6.62, growing 30% versus the previous year, reinforcing the commitment to shareholder value.

Return on Average Equity Growth: Return on average equity increased to 15.2%, a 198 basis points rise year-over-year, showcasing financial strength despite a conservative capital structure.

Banking Segment Revenue Surge: The banking segment achieved a remarkable year-over-year revenue growth of 34%, with gross profit growth of nearly 50%.

Deposit Growth and Cost Reduction: Total deposits increased by 31%, reaching BRL 36.1 billion, while the cost of funding was reduced significantly, demonstrating effective financial management.

Credit Portfolio Expansion: The credit portfolio grew by 36% year-over-year, reaching BRL 3.4 billion, focusing on low-risk products that promote financial inclusion.

Shareholder Value Enhancement: The company successfully executed over 50% of its $200 million buyback program, demonstrating a commitment to enhancing shareholder value.

Net Income vs. Financial Costs: Despite achieving record net income, the company faced challenges with rising financial costs, which increased by 30% due to higher interest rates and the need for larger volumes of prepayment.

Merchant Retention Challenges: The overall reduction in active merchants was primarily attributed to a decrease in nano merchants, indicating potential issues in retaining smaller clients.

Rising Transaction Costs: Transaction costs rose by 19% year-over-year, reflecting the impact of stronger TPV performance but also indicating increased operational expenses.

Capital Structure Limitations: The company’s reliance on a conservative capital structure may limit its ability to leverage growth opportunities in a competitive market.

Banking Segment Growth Insights: While the banking segment showed impressive growth, it still only accounted for 18% of total gross profit, suggesting that the payments segment remains the dominant revenue driver but may face saturation.

Deposit Growth vs. Profitability Pressure: The increase in total deposits was achieved despite ongoing initiatives to reduce funding costs, indicating potential pressure on profitability if interest rates remain high.

Growth Expectations Caution: The company’s guidance for 2025 indicates a slowdown in growth expectations, with gross profit growth projected between 7% and 11%, which may signal caution in the face of macroeconomic uncertainties.