StoneCo Ltd. Earnings Recaps
StoneCo shares fell 4.5% after the company delivered a cautious outlook amid ongoing challenges from elevated interest rates and only modest reacceleration in TPV growth, signaling investor disappointment with the pace of recovery and margin pressures. Despite credit portfolio growth, investors reacted negatively to the tempered guidance and slow progress on key metrics.
Key takeaways
- TPV growth accelerated slightly to 4% year-over-year, but remains subdued and continues to be weighed down by elevated churn, especially among larger merchants.
- Credit portfolio doubled year-over-year to BRL 3.8 billion, including BRL 300 million government-backed loans and BRL 400 million in credit cards, driving a 14% increase in credit revenues.
- Adjusted gross profit remained broadly stable at BRL 1.6 billion as higher revenue was offset by increased provisions associated with credit portfolio expansion.
- Retail deposits grew over 20% to BRL 10.8 billion, supporting banking franchise expansion.
- Management maintained full-year guidance but noted a more challenging macro environment with higher interest rates persisting, focusing on delivery at the lower end of prior ranges and expecting performance improvements only later in the year.
StoneCo's shares edged up 0.8% post-earnings, reflecting a largely in-line quarter marked by stable margins and ongoing credit portfolio growth, though softer merchant dynamics and elevated provisions weighed on upside.
Key takeaways
- Total revenue grew 6% year-over-year to BRL 3.6 billion, led by expanding credit revenues and solid payment profitability.
- Adjusted gross profit held steady at BRL 1.5 billion despite higher provisions and some one-off expenses including severance costs.
- Non-performing loans exceeded expectations, prompting tightened risk controls and pricing adjustments to preserve credit cohort profitability.
- Elevated churn persisted among clients onboarded in 2025 due to complex bundling and pricing, with management working to simplify offerings to improve retention.
- Capital returns remained significant, with BRL 3.6 billion distributed year-to-date including a large special dividend from the Linx divestiture, and further buybacks planned.
StoneCo demonstrated resilient performance in Q3 2025, achieving a 15.2% year-to-date growth in adjusted gross profit and a 37% increase in adjusted EPS amidst a challenging macro environment.
Key takeaways
- Adjusted net income rose 18% year-over-year, with a consolidated ROE improving to 24%.
- Total revenue reached BRL 3.6 billion, driven by solid execution in core business despite lower floating revenues.
- Active client base grew 17% to 4.7 million, reflecting strong engagement in the MSMB segment.
- Client deposits increased by 32% year-over-year, indicating higher adoption of banking solutions.
- The credit portfolio grew 27% sequentially, maintaining strong asset quality with NPLs over 90 days at 5.03%.