Inter&Co Inc. Reports Record Profit

Rhea-AI Summary

Inter&Co Inc. reported record net income of R$195 million and a 37% YoY increase in net revenue for the first quarter of 2024. The company showcased strong financial performance, with a 5th consecutive quarter of increased account activations, reaching 54.9%, and total gross revenue of R$2.3 billion. Inter&Co's efficiency ratio improved to 47.7%, with a record ROE of 9.7%. The Global Account, Loop loyalty program, and new credit lines were noted as successful initiatives driving revenue growth. The company's CEO emphasized the success of their platform's scalability and innovation.

Positive

• Record net income of R$195 million and a 37% YoY increase in net revenue.

• 5th consecutive quarter of increased account activations, reaching 54.9%.

• Total Gross Revenue of R$2.3 billion and efficiency ratio improvement to 47.7%.

• Record ROE of 9.7% and notable success of Global Account, Loop loyalty program, and new credit lines.

• CEO highlighted platform's scalability and innovation driving revenue growth.

Negative

• None.

Insights

Financial Analyst

In scrutinizing Inter&Co Inc.'s reported figures, a sharp increase in net income to R$195 million signals robust growth, surpassing previous year's performance by 37%. The improvement in the efficiency ratio to 47.7% indicates a commendable advancement in cost management, enhancing profitability. These figures suggest a positive trend in operational efficiency, which is a critical metric for investors to consider as it directly correlates to better margins and profitability. Moreover, the growth in transactional volume to R$257 billion reflects an increasing trust and usage of the company's services among its clients, reinforcing its market footprint. Furthermore, the Cost of Funding remaining below 62% of CDI is a clear indicator of the company's competitive funding strategy. Lastly, the uptick in ROE to 9.7% is a testament to the effective allocation of equity, potentially attracting dividend-seeking investors.

Market Research Analyst

The introduction and uptake of new initiatives such as the Loop loyalty program and the Global Account are pivotal. With the Global Account serving three million clients, it demonstrates a successful penetration into a more affluent client segment. Such offerings are not just revenue accelerators but are also critical in improving client retention and expanding the lifetime value of each user. The activation rate of 55%, translating to 17.4 million active clients, is indicative of Inter&Co's ability to not only attract but also engage users effectively. This, coupled with the consistent increase in active account activations over five quarters, suggests a strong, growing user base which can be expected to continue contributing to the company's recurring revenue streams.

BELO HORIZONTE, Brazil, May 09, 2024 (GLOBE NEWSWIRE) -- Inter&Co Inc. (NASDAQ: INTR | B3: INBR32), the premier financial super app that provides financial and digital commerce services to over 31 million customers, today reported financial results for the first quarter of 2024.

Highlights:

• Record net income of R$195 million.
• A 37% YoY increase in net revenue.
• Transactional Volume (TPV) increased to R$257 billion.
• A 5^th consecutive quarter of increased account activations, reaching 54.9%.

Inter&Co reported solid results across the board with marked increases in net revenues and profits, and notable improvements in its efficiency ratio and return on equity (ROE).

João Vitor Menin, CEO of Inter&Co commented:

“I am pleased to announce that the second year of our 60/30/30 north star goal has begun with extraordinary success. We have welcomed one million new active clients during this quarter, highlighting the unmatched appeal of our super app and our comprehensive financial platform.

He added that “Our integrated banking, credit, shopping, and investment services have captivated the market, cementing our position as the go-to solution for our clients. Our commitment to innovation has proven fruitful, with new credit lines, our Loop loyalty program, and the Global Account emerging as notable successes.

He continued “These initiatives have not only propelled engagement, but they have also accelerated revenue generation. The Global Account, with an incredible three million clients, has become an integral part of our platform's success story. All of this has been accomplished with another marked improvement in efficiency, demonstrating the scalability of our platform.”

Financial Highlights – Q1'24

• Total Gross Revenue of R$2.3 billion, a 27% growth compared to Q1'23.
• Efficiency Ratio of 47.7%, a 306 bps improvement in the quarter.
• Cost of Funding below 62% of CDI, remains a key competitive advantage.
• Record Net Income of R$195 million.
• ROE reached 9.7%, a 115 bps improvement, marking the fifth consecutive quarter of rapid growth.

Operational Highlights – Q1'24

• More than 31 million clients with a 55% activation rate, or 17.4 million active clients.
• Over R$257 billion in TPV.
• Almost 3 million Global Clients, a higher engaged base of affluent clients.
• The new loyalty program vertical, Loop, reached over 6.6 million customers.

Conference Call
Inter&Co will discuss its Q1 2024 financial results on May 9th, 2024, at 01:00 p.m. ET (02:00 p.m. BRT). The webcast details, along with the earnings materials can be accessed on the company’s Investor Relations website at https://investors.inter.co/en/.

About Inter&Co
Inter&Co (NASDAQ: INTR), the company that controls Banco Inter in Brazil and the subsidiary Inter&Co Payments, is the pioneering financial super app serving over 31 million customers across the Americas. The Inter ecosystem offers a broad array of services, including banking, investments, mortgages, credit, insurance, and cross-border payments. The financial super app also boasts a dynamic marketplace, linking consumers with shopping discounts, cashback rewards, and exclusive access to marquee events across the globe. Focused on innovation and captivating member experiences, Inter&Co delivers comprehensive financial and lifestyle solutions to meet the evolving needs of modern consumers.

Investor Relations:
Santiago Stel
ir@inter.co

Media Relations:
Chemistry Cultura
interco@chemistryagency.com

Kaio Philipe
kaio.philipe@inter.co

Disclaimer
This report may contain forward-looking statements regarding Inter, anticipated synergies, growth plans, projected results and future strategies. While these forward-looking statements reflect our Management’s good faith beliefs, they involve known and unknown risks and uncertainties that could cause the company’s results or accrued results to differ materially from those anticipated and discussed herein. These statements are not guarantees of future performance. These risks and uncertainties include, but are not limited to, our ability to realize the number of projected synergies and the projected schedule, in addition to economic, competitive, governmental and technological factors affecting Inter, the markets, products and prices and other factors. In addition, this presentation contains managerial figures that may differ from those presented in our financial statements. The calculation methodology for these managerial numbers is presented in Inter’s quarterly earnings release. Statements contained in this report that are not facts or historical information may be forward looking statements under the terms of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may, among other things, beliefs related to the creation of value and any other statements regarding Inter. In some cases, terms such as “estimate”, “project”, “predict”, “plan”, “believe”, “can”, “expectation”, “anticipate”, “intend”, “aimed”, “potential”, “may”, “will/shall” and similar terms, or the negative of these expressions, may identify forward looking statements.

These forward-looking statements are based on Inter's expectations and beliefs about future events and involve risks and uncertainties that could cause actual results to differ materially from current ones. Any forward-looking statement made by us in this document is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether because of new information, future developments or otherwise. The definition of each such operational metric is included in the earnings release available on our Investor Relations website.

For additional information that about factors that may lead to results that are different from our estimates, please refer to sections “Cautionary Statement Concerning Forward Looking Statements” and “Risk Factors” of Inter&Co Annual Report on Form 20-F. The numbers for our key metrics (Unit Economics), which include, among other, active clients and average revenue per active client (ARPAC), are calculated using Inter’s internal data. Although we believe these metrics are based on reasonable estimates, there are challenges inherent in measuring the use of our business. In addition, we continually seek to improve our estimates, which may change due to improvements or changes in methodology, in processes for calculating these metrics and, from time to time, we may discover inaccuracies and adjust to improve accuracy, including adjustments that may result in recalculating our historical metrics.

About Non-IFRS Financial Measures
To supplement the financial measures presented in this press release and related conference call, presentation, or webcast in accordance with IFRS, Inter&Co also presents non-IFRS measures of financial performance, as highlighted throughout the documents. The non-IFRS Financial Measures include, among others: Adjusted Net Income, Cost of Funding, Efficiency Ratio, Cost of Risk, Cards+PIX TPV, Gross ARPAC, Global Clients, Total Gross Revenues, and Return on average equity (ROE).

A “non-IFRS financial measure” refers to a numerical measure of Inter&Co’s historical or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS in Inter&Co’s financial statements. Inter&Co provides certain non-IFRS measures as additional information relating to its operating results as a complement to results provided in accordance with IFRS. The non-IFRS financial information presented herein should be considered together with, and not as a substitute for or superior to, the financial information presented in accordance with IFRS. There are significant limitations associated with the use of non-IFRS financial measures. Further, these measures may differ from the non-IFRS information, even where similarly titled, used by other companies and therefore should not be used to compare Inter&Co’s performance to that of other companies.