Inter & Co (INTR) Q3 2024 earnings summary

Executive summary

• Achieved record net income of R$260 million, up 150% year-over-year, and ROE of 11.9% in 3Q24, driven by strong client growth, product innovation, and operational efficiency.

• Client base reached 35 million, with 1.1 million new active clients this quarter and a record 56% activation rate, highlighting strong engagement and expansion across all business lines and geographies.

• Continued innovation with hyper-personalization, AI-powered features, and new content and loyalty programs driving engagement and cross-sell.

• Gaining market share across all seven verticals, with upsell and cross-sell strategies improving profitability and platform engagement.

• Expansion of the super app ecosystem, launching new products and enhancing cross-selling, resulting in record ARPAC and TPV.

Financial highlights

• Gross revenue reached R$2.7 billion (+25% YoY), net revenue R$1.7 billion (+32% YoY), and net income R$260 million (+150% YoY).

• Net interest income grew 39% YoY to R$1.1 billion; net fee revenue rose 21% YoY, with fee income ratio at 32%.

• Gross loan portfolio expanded 35% YoY to R$38.1 billion, with strong growth in FGTS, Home Equity, credit card, and SMB lending.

• Funding reached R$50.3 billion (+27% YoY), with transactional deposits up 30% YoY and time deposits up 40% YoY.

• Efficiency ratio improved to 50.7% (48.6% ex-Inter Pag), with cost-to-serve down 0.4% YoY and net revenue growth outpacing expenses.

Outlook and guidance

• Five-year plan targets 60 million clients, 30% efficiency ratio, and 30% ROE by 2027, emphasizing scale, monetization, and operational excellence.

• Management remains focused on balancing investments in IT, marketing, and people with operational efficiency to drive sustainable growth and profitability.

• Expects further synergy gains and efficiency improvements from the integration of Inter Pag and continued expansion of the super app ecosystem.

• NIM expected to continue its positive trend, driven by improved capital allocation and product mix.