Pagbank (PAGS) Q2 2024 earnings summary

Executive summary

• Achieved all-time highs in net income, EPS, revenue, and TPV for Q2 2024, with total revenue up 19% year-over-year to R$4.6 billion and net income (non-GAAP) up 31% to R$542 million.

• EPS (non-GAAP) rose 32% to R$1.68, and total deposits surged 87% year-over-year to R$34.2 billion.

• Client base reached 31.6 million, with 17.7 million active clients; active merchants totaled 6.4 million, reflecting a focus on higher-value clients.

• Received Triple-A ratings from Moody’s and S&P, reflecting robust financial strength.

• Gross profit increased 21.7% year-over-year to R$1,819 million, with a margin of 39.9%.

Financial highlights

• Gross profit margin for Q2 was close to 40%, up 86 bps year-over-year; year-to-date margin at 40.3%.

• Payments TPV reached R$124.4 billion, up 34% year-over-year, outpacing industry growth.

• Banking revenue grew 41% year-over-year, with gross profit margin above 60% for the third consecutive quarter.

• Credit portfolio expanded 11% year-over-year to R$2.9 billion, with NPL 90 improving to 3.2% from 14.4% a year ago.

• Net cash balance increased 22% year-over-year to R$12.3 billion; equity up 14% to R$14.3 billion.

Outlook and guidance

• Raised 2024 TPV guidance to R$480–505 billion, reflecting stronger-than-expected growth.

• Net income (non-GAAP) guidance increased to R$2.1–2.2 billion, with gross profit margin expected to remain above 40%.

• CapEx guidance at R$1.9–2.2 billion; D&A plus POS write-offs expected at R$1.7–1.8 billion.

• No reduction in Selic rate assumed for the remainder of the year; company prepared for various interest rate scenarios.