Stone accelerates growth, recovering profitability, and reports record revenue of BRL 2.07 billion in 1Q22, with 138.6% increase year over year

Rhea-AI Summary

StoneCo Ltd (Nasdaq: STNE) reported a record revenue of BRL 2.07 billion in Q1 2022, marking a 138.6% year-over-year increase. The company exceeded guidance by 16% and experienced 10x pre-tax earnings growth from the previous quarter. Revenues from Financial Services and Software saw remarkable increases of 107.8% and 955.6% respectively. The total payment volume surged by 63.1%, driven by a significant customer base expansion to 1.9 million users. Stone projects further growth in Q2 with expected revenues between BRL 2.15 billion and BRL 2.2 billion.

Positive

• Total revenues reached BRL 2.07 billion, a 138.6% increase year-over-year.
• Exceeded revenue guidance by 16%.
• Pre-tax earnings grew from BRL 17.2 million to BRL 163.1 million sequentially.
• Financial Services revenues increased by 107.8% to BRL 1.7 billion.
• Software revenues surged by 955.6% to BRL 326.6 million.
• Total payment volume (TPV) grew by 63.1% to BRL 83.2 billion.
• Customer base expanded to 1.9 million users, a 93.3% increase.
• Take rate improved from 1.71% to 2.06%.

Negative

• None.

Company exceeds forecasts with pre-tax earnings 16% above guidance and 10 times higher than in previous quarter

SÃO PAULO, June 2, 2022 /PRNewswire/ -- StoneCo Ltd (Nasdaq: STNE) total revenues reached BRL 2.07 billion in 2022's first quarter, a 138.6% increase over the same period in 2021. The figures exceeded BRL 1.85 to BRL 1.90 billion guidance due to a 107.8% increase in revenues from Financial Services to BRL1.7 billion in the period, and 955.6% increase in Software to BRL 326.6 million in this quarter.

Adjusted EBT (earnings before taxes) grew from BRL17.2 million in the fourth quarter to BRL163.1 million in the first quarter of 2022. The positive performance results from the combination of a strong increase in total revenue, despite seasonality, and effective control of costs and expenses. Adjusted net income in the first quarter was BRL132.2 million, four times higher than BRL33.7 million reported in the previous quarter.

"The pricing initiatives have gained traction and we have raised the quality of our customer base. We are at a time of inflection for the company, with significant improvement in profitability," says Stone CEO, Thiago Piau.

The company reported the results of its Financial Services and Software businesses separately. "This separation is in line with our business strategy and offers greater clarity and transparency about our performance in each segment," he adds.

Stone recorded a 63.1% increase in total volume of payments (TPV) in the first quarter, to BRL83.2 billion, with emphasis on the micro, small and medium-sized companies (MSME), which advanced 93.3 % in the first quarter due to an increase in customer base, reaching 1.9 million users in Q122, and an average increase in TPV per customer. The take rate increased from 1.71% to 2.06% in the quarter.

Stone projects a total revenue of BRL2.15 billion to BRL2.2 billion in Q222, with a 148% to 154% growth compared to Q221 (pro-forma for Linx). The estimate is that MSME TPV will beBRL67 billion to BRL68 billion in Q222, up 71% to 73% over previous year, and a pre-tax profit growth from BRL163 million of adjusted EBT to BRL185 million before bond financial expenses or from BRL82 million to over BRL90 million.

To continue evolving the business, improving its governance and reaching higher levels of efficiency, Stone announces the arrival of new professionals. Marcus Fontoura takes over as Chief Technology Officer (CTO), after stints at Microsoft, Google, Yahoo and IBM. Thomas Gregor, currently in garden leave, has more than 30 years' experience in financial services as risk director for small and medium-sized companies at Santander Brasil, will be Head of Credit in the second half of the year. Osmar Castellani takes over as VP of Finance in the Software Division. He has extensive experience in Investment Banking, with stints at Goldman Sachs and Credit Suisse.

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SOURCE StoneCo.

FAQ

What were StoneCo's total revenues for Q1 2022?

StoneCo reported total revenues of BRL 2.07 billion for Q1 2022.

How much did StoneCo exceed earnings guidance by?

StoneCo exceeded its earnings guidance by 16%.

What was the year-over-year revenue growth for StoneCo?

StoneCo experienced a year-over-year revenue growth of 138.6%.

What is the expected revenue range for StoneCo in Q2 2022?

StoneCo projects total revenues between BRL 2.15 billion and BRL 2.2 billion in Q2 2022.

What growth did StoneCo's Financial Services segment experience?

The Financial Services segment saw a 107.8% increase in revenues.

How many users does StoneCo have as of Q1 2022?

StoneCo reached 1.9 million users in Q1 2022.

What was the increase in total payment volume for StoneCo?

Total payment volume increased by 63.1% to BRL 83.2 billion.