Stone delivers a consistent quarter with adjusted net income of R$450 million, a 90% growth compared to the same time last year

Rhea-AI Summary

StoneCo (Nasdaq: STNE) reported a strong first quarter for 2024, with adjusted net income reaching R$450 million, marking a 90% increase year-over-year. The company achieved a total revenue of R$3.1 billion, up 14% from the same period last year. Adjusted EBT rose by 75% to R$568 million, with an 18.4% margin. Financial services revenue grew by 16% to R$2.7 billion, supported by a 24% increase in Total Payment Volume (TPV) for SMEs. The SME customer base expanded by 33%, now totaling 3.7 million active clients. Additionally, the banking platform saw a 53% rise in deposits, reaching R$6 billion. On the software front, revenue increased by 3%, with Adjusted EBITDA climbing to R$66 million. CEO Pedro Zinner highlighted the company's strategic growth and robust profitability.

Positive

• Adjusted net income surged by 90% year-over-year to R$450 million.
• Total revenue increased by 14% year-over-year to R$3.1 billion.
• Adjusted EBT grew by 75% to R$568 million, with a margin of 18.4%.
• Financial services revenue rose by 16% to R$2.7 billion.
• Total Payment Volume (TPV) for SMEs increased by 24% annually.
• SME customer base expanded by 33%, reaching 3.7 million active clients.
• Deposits in the banking platform saw a 53% increase, totaling R$6 billion.
• Software revenue grew by 3%, with Adjusted EBITDA rising to R$66 million and a margin of 17.8%.

Negative

• Software revenue growth was modest at only 3% year-over-year.

Insights

Financial Analyst

StoneCo Ltd.'s performance this quarter is impressive, with adjusted net income of R$450 million, a 90% increase year-over-year. This growth is noteworthy, especially within the competitive financial services sector. The company's total revenue of R$3.1 billion, representing a 14% growth, indicates a solid increase across their business lines. An important detail is the adjusted EBT of R$568 million, up 75% from the previous year, with an EBT margin of 18.4%. This is a strong indicator of operational efficiency and profitability.

However, it's essential to consider the sustainability of this growth. The increased take rate by 15bps year-over-year is a positive sign, suggesting enhanced pricing power and better customer engagement. The growth in SME clients by 33% to 3.7 million also demonstrates an expanding customer base. Investors should monitor whether this trend continues or if it was a result of a one-time effect.

In terms of cash position, the adjusted net cash of R$5.1 billion and an increase in deposits to R$6 billion are positive signs, indicating strong liquidity and financial health. This allows for potential future investments and cushioning against economic downturns.

Market Research Analyst

The substantial growth in StoneCo's Total Processed Volume (TPV) for SMEs, at 24% year-over-year, including PIX transactions, highlights the company's strength in serving small and medium-sized enterprises. The integration of PIX, a growing payment method in Brazil, shows StoneCo's adaptability to market trends and regulatory environments. In addition, the software segment, although showing modest growth of 3% year-over-year, indicates a stable revenue stream, with Adjusted EBITDA margins improving significantly from 11.1% to 17.8%. This suggests that the company's integration strategy and focus on priority verticals are starting to bear fruit.

One should also consider the competitive landscape. StoneCo's ability to grow its SME customer base and TPV amidst strong competition from other financial technology companies is especially noteworthy. This indicates strong market positioning and effective customer engagement strategies.

Nonetheless, the slower growth in software revenue compared to other segments could be a point of concern, pointing to potentially tougher competition or market saturation in that specific area. Keeping an eye on this segment's development will be important for understanding the company's holistic growth trajectory.

• Adjusted EBT of R$ 568 million had a 75% increase compared to the same quarter of 2023
• Total Payment Volume (TPV) of SMEs had an annual growth of 24%, considering also PIX transactions

SÃO PAULO, May 13, 2024 /PRNewswire/ -- StoneCo Ltd. (Nasdaq: STNE, B3: STOC31) reported adjusted net income of R$ 450 million in the first quarter, a 90% increase over the same time last year. The company's total revenue reached R$ 3.1 billion, a 14% year-over-year growth. Adjusted net cash was R$ 5.1 billion, an increase of R$ 87 million in the quarter and R$ 1.2 billion in the year. The adjusted EBT of R$ 568 million represents a 75% increase compared to 1Q23, with an adjusted EBT margin of 18.4%.

Financial services revenue reached R$ 2.7 billion in 1Q24, 16% higher than the previous year, with Total Processed Volume (TPV) of SME (small and medium-sized enterprises) clients growing by 24% year over year, including PIX P2M processed volume. The segment showed a 15 bps increase in take rate year over year, resulting from significant contributions from all our financial platform solutions. The SME customer base grew by 33% on an annual basis, reaching 3.7 million active customers.

In the first quarter of the year, the banking platform also showed growth, with deposits reaching R$ 6 billion, a 53% increase compared to the same time in 2023. In the credit solution, working capital grew by 72% quarter over quarter, reaching a portfolio of R$ 532 million.

In the software area, the integration strategy continues with a focus on priority verticals. Software revenue grew by 3% year over year, and Adjusted EBITDA reached R$ 66 million in 1Q24, with a margin of 17.8%, compared to Adjusted EBITDA of R$ 40 million and a margin of 11.1% in 1Q23.

"The first quarter represents a great start to a year in which we expect significant strategic evolution and solid results. We experienced healthy growth in TPV combined with a significant increase in take rate, a result of increasingly engaging with our customers and our ability to deliver better bundles that combine our multiple product platforms, such as payments, banking, credit and software. We are pleased to report strong profitability growth, reflecting our dedication to the consistency and solidity of the business," says Pedro Zinner, CEO of Stone.

View original content:https://www.prnewswire.com/news-releases/stone-delivers-a-consistent-quarter-with-adjusted-net-income-of-r450-million-a-90-growth-compared-to-the-same-time-last-year-302144031.html

SOURCE Stone

FAQ

What was StoneCo's adjusted net income for the first quarter of 2024?

StoneCo's adjusted net income for the first quarter of 2024 was R$450 million, a 90% increase compared to the same period last year.

How much did StoneCo's total revenue grow in the first quarter of 2024?

StoneCo's total revenue grew by 14% year-over-year, reaching R$3.1 billion in the first quarter of 2024.

What was StoneCo's adjusted EBT margin for Q1 2024?

StoneCo's adjusted EBT margin for Q1 2024 was 18.4%.

How did StoneCo's financial services revenue perform in Q1 2024?

StoneCo's financial services revenue increased by 16%, totaling R$2.7 billion in Q1 2024.

What was the annual growth in Total Payment Volume (TPV) for SMEs in Q1 2024?

The Total Payment Volume (TPV) for SMEs grew by 24% year-over-year in Q1 2024.

How many active SME customers did StoneCo have in Q1 2024?

StoneCo had 3.7 million active SME customers in Q1 2024, reflecting a 33% annual growth.

What was the growth rate of deposits in StoneCo's banking platform in Q1 2024?

Deposits in StoneCo's banking platform grew by 53%, reaching R$6 billion in Q1 2024.

How did StoneCo's software revenue perform in Q1 2024?

StoneCo's software revenue grew by 3% year-over-year in Q1 2024.