Q2 2025 XP Inc Earnings Call
Speaker #1: Right behind us, but there’s much more to come. We are still working hard, I would say, in an obsessive way to keep evolving our clients’ journey, experience, and product offering.
Speaker #1: Which should drive higher net new money in the long term? I would say that the current environment has proven to be more challenging than we expected at the beginning of the year.
Speaker #1: 2025 has demonstrated to be more challenging than we estimated, demanding more effort from all our teams to keep growing our business in a profitable way.
Speaker #1: Especially for investment banking origination activities. However, we still have a better DCIM pipeline for the second half of the year. New investment product offerings and other initiatives support our efforts to achieve retail net new money averaging $20 billion per quarter this year.
Speaker #1: As a result, we are continuously increasing our profitability. Now, analyzing the main KPIs, the first one is client assets (AUM) and AUA, for which we posted R$1.9 trillion at a 17% growth year-over-year.
Speaker #1: Total advisors accounted for 18.2 thousand, representing flat figures year-over-year. On active clients, we posted 4.7 million clients, with 2% growth year-over-year. During the quarter, gross revenues marked R$4.7 billion, with a 4% growth year-over-year.
Speaker #1: EBIT year-over-year is 5% lower, reaching $1.3 billion, mainly because last year we had positive impacts from our capabilities to constantly offer the best investment alternatives to clients.
Speaker #1: And there's a big opportunity in front of us to expand our core business, retail cross-sell, and our wholesale activity. We are confident that by executing this, we will reach our goals regarding market leadership in investments and also our long-term growth.
Speaker #1: Now, I will hand it over to Victor, who will provide a deeper look into our financial performance this quarter. I will be back for the Q&A session.
Speaker #2: Thank you, Thiago Maffra. Good evening, everyone. It's a pleasure to be here with you to discuss our financial performance for the second quarter of 2025.
Speaker #1: On the next slide, let's delve into our retail strategy. Here, I'd like to address some topics that are connected to our business model. Today, the company presents a more complete ecosystem with retail, institutional, and corporate divisions fully integrated to generate investment opportunities.
Speaker #1: This benefits us in many instances; one of them is the fixed income platform, in which we are much more complete now. We are one of the largest distributors of mid-sized banks' time deposits.
Speaker #1: Second, we are innovative in developing new instruments, such as the bond repack structure notes. Third, we also have a robust wholesale bank franchise with a corporate secured book to serve retail clients.
Speaker #1: As part of our business model, to engage clients on another level, we also launched new verticals in strengthening our investment portfolio. While attending to client demand in banking, insurance, retirement plans, global accounts, FX, and now consortium.
Speaker #1: This competitive ecosystem enabled us to present higher profitability during the last years. And there is much more to do since we'll keep investing in channel diversification, expanding sales teams, and improving our product platform experience with a more accurate client offering.
Speaker #1: And improving our intelligent segmentation. Recently, we also launched new guidelines to the FAs, sharing our knowledge tools and methodologies, focusing on an opportunity to increase productivity, response finance, and efficiency.
Speaker #1: And independently, if it's true, XP internal teams or FAs, we also developed and agreed in a new and more comprehensive way to serve our clients.
Speaker #1: New rules are aligned with one objective: to improve client experience. Our main goal is to keep serving clients with excellence, no matter in which channel or remuneration model they have chosen.
Speaker #1: With this new way of growing the business, we are convinced that we have a more sustainable revenue model, and profitability is a consequence. For sure, the current diversified ecosystem defines XP as an ecosystem; it's way more complete than years ago.
Andre Parize: ecosystem is way more complete than years ago, and there is a big opportunity in front of us to expand our core business, our retail cross-sell, and our wholesale activity. We are confident that by executing this, we reach our goals regarding market leadership in investments and also regarding our long-term growth. Now, I will hand it over to Victor Mansur, who will provide a deeper look into our financial performance this quarter, and I will be back for the Q&A session.
Victor Mansur: Thank you, Andre Parize. Good evening, everyone. It is a pleasure to be here with you to discuss our financial performance for the second quarter of 2025. Starting with total gross revenues, total gross revenues for the quarter reached 4.7 billion, representing a 4% increase year-over-year and a 2% increase quarter-over-quarter. It was another quarter that retail gained participation in total revenues, now representing 77% out of total. This quarter, once again, our main drivers for retail growth year-over-year were fixed income and other retail, which includes retail new verticals such as global accounts and consortium. On the wholesale bank, corporate was the highlight, partially offsetting the negative impacts on issued services due to a tough comp from Q2 2024. I will share more details during the next slides. Retail revenue posted 3.6 billion reais in the quarter, a 9% growth year-over-year and a 4% growth quarter-over-quarter.
Total gross revenues for the quarter: Richard, $4.7 billion.
Representing a 4% increase year-over-year and a 2% increase quarter-over-quarter.
It was another quarter that retail gained participation in total revenues, now representing 77% of the total.
Quarter. Once again, our main driver for retail growth year-over-year was fixed income and other retail, which includes retail news and new verticals such as Global Accounts and Consulting.
On the Wells Fargo Bank corporate was the highlight, partially offsetting the negative impacts on issue services due to a tough count. From Q2 2024, I will share more details during the next slides.
Victor Mansur: The quarter growth was mainly driven by equities, which presented a higher ADTV in the period. Equities printed slightly more than 1 billion reais, with 7% growth quarter-over-quarter. On a year-over-year perspective, fixed income was the main contributor, growing 20% and reaching 988 million reais in revenue. It is important to mention that in other retail concepts, the main contributor is the float remunerations, where we had higher average volumes with higher interest rates during the quarter. Now, let us move to the next slides with corporate and issued services. Before moving to the quarter results, it is important to mention that on Q2 2024, we posted all-time high corporate and issued services revenues, backed by a strong DCM activity. Therefore, we have a tough comp for this quarter. Issued services presented 268 million reais, a minus 30% year-over-year and a minus 5% quarter-over-quarter.
A retail revenue posted $3.6 billion highs in the quarter, a 9% growth year-over-year and a 4% growth quarter-over-quarter.
The quarter's growth was mainly driven by equities, which presented a higher EDTV in the period. Equis printed slightly more than 1 billion highs. If we consider a 7% growth quarter-over-quarter,
One year of perspective: income 6 in revenue was the main contributor, growing 20% and reaching highs of $988 million.
Uh, it's important to mention that in other retail concepts, the main contributor is the float premium durations, where we had higher average volumes. If higher interest rates occurred during the quarter,
Victor Mansur: On the other hand, corporate revenues posted a solid 14% increase year-over-year and was flat quarter-over-quarter. It reached 279 million reais, supported by our capacity to offer different solutions to our clients, mainly if derivatives. Moving on to the next slides, we will explore our SG&A and efficiency ratios. Our SG&A expenses totaled 1.56 billion reais in this quarter, with a 10% growth year-over-year and also quarter-over-quarter. We keep investing in our business, and this quarter we had a higher expense in the non-people category, most of it explained by marketing and technology investments. During the quarter, despite the slower pace in our revenue growth, our operational cost discipline supported our efficiency ratio at 34.5% last 12 months. When compared to last year, our efficiency ratio improved 161 basis points.
Now, let's move to the next slides, if corporate and issue Services before moving to the quarter results, it's important to mention that on 2q 24, we posted all-time high cooperation issues Services, revenues, backed by I strongly the same activity. Therefore, we have a tough cam for this quarter, if your services presented to 268 million highs, uh, minus 30% year-over-year and the minus 5% quarter of a quarter on the other hand,
Corporate revenues posted a solid 14% increase year-over-year and were flat quarter-over-quarter. It reached $279 million, supported by our capacity to offer different solutions to our clients, mainly through derivatives.
moving on to the next slides, we will explore our sgna and efficiency. Ratios our sgna expenses, totaled 1.56 billion highs in this quarter if a 10% growth year over year and also quarter over quarter, we keep investing in your business and this quarter. We had a higher expense in the known people category. Most of it explained by uh marketing and Technology Investments.
Victor Mansur: We will keep our plan to improve our business efficiency, and this will come in parallel with new investments that will continue to be made, aiming to enhance our tech platform, our product offerings, and sales team expansion. Moving to the next slide, let's see our EBT. Just to recap, last year we had positive EBT impact from the override related to the head of certain assets and liabilities. Therefore, EBT is not like-for-like in one-year comparison. On Q2 2025, we printed R$1.3 billion EBT, which represented a 4% increase quarter-over-quarter. Even considering the issued services impact on our revenues, we are able to expand our EBT margin by 50 basis points. On the next slide, we see the net income. Net income achieved R$1.3 billion, an 18% growth year-over-year and a 7% growth quarter-over-quarter.
During the quarter, despite the slower pace in our revenue growth, our operational cost discipline supported our efficiency ratio at 34.5%. Over the last 5 months, when compared to last year, our efficiency ratio improved by 161 basis points.
We will keep our plan to improve our business efficiency, and this will come in parallel. New investments will continue to be made, aiming to enhance our tech platform, our product offerings, and our sales team expansion. Moving to the next slide, let's see—your EBT. Just a recap: last year, we had a positive EBT impact from the override related to the head of certain assets and liabilities; therefore, EBT is not a like-for-like comparison.
On 2q 25. We printed 1.3 billion igbt which represented a 4% increase quarter of a quarter. Even considering the issue Services impact on our revenues, we are able to expand our ability margin by 50 base points.
Victor Mansur: Net margin expanded by approximately 130 basis points quarter-over-quarter and 320 basis points year-over-year, reaching 29.7% in Q2 2025. In our revenue mix for this quarter, higher secondary market activity compensated lower volumes of investment banking, impacting our effective tax rate. This translated into a new record high net income for a quarter with significant EPS growth. Let's focus on earnings per share and ROE details over the next slides. Our diluted EPS in Q2 2025 reached R$2.46 per share. As we continued the execution of our share buyback program, canceling the respective shares acquired, the EPS growth pace was again faster than our net income growth. In the quarter, our diluted EPS posted 22% growth, while our net income grew 18%, both on a year-over-year basis. Our ROE market grew 30.1%, 209 basis points higher year-over-year. Our ROE grew on a yearly and a quarterly basis, reaching 24.4%.
Required and 320 base points year over year reaching 29.7% in QQ, 25 in your Revenue. Mix for this quarter higher, secondary Market activity, compensated, lower volume of investment banking impacting our effective tax rate.
This translated into a new hackard, high net income for a quarter. If significant EPS growth, let's focus on earnings per share and are we details over the next slide? Our diluted EPS in 2q, 25, Richard 2, arey eyes and 46 cents per share. As we continue the execution of our shy bar, back program canceling. The respective shares acquired, the EPS growth base was again, faster than our net income growth.
In the quarter, our diluted EPS posted 22% growth, while our net income grew 18% on a Euro area basis.
Our OT market is at 30.19 basis points, higher year-over-year.
Victor Mansur: This represents 230 basis points increased in comparison to the same quarter last year. These numbers I have just mentioned are important indicators that we keep generating consistent income returns to our shareholders. Finally, moving to capital management. As we have planned, we keep our target of distributing dividends and executing share buyback programs. Combined, their volumes should be above 50% of net income for 2025 and 2026. We already have a share buyback program of R$1 billion to be executed until next year, and new announcements will be made according to the Board of Directors' decision. Moving to the second part of capital management on the next slide, this is the last topic of my presentation. We can see on the left-hand side that our BIS ratio is at a very comfortable level of 20.1%.
We grew on a yearly and a quarterly basis, reaching 24.4%.
This represents a 230 basis points increase compared to the same quarter last year. These numbers I just mentioned are important indicators that we continue to generate consistent income returns for our shareholders.
Finally moving to capital management. As we have planned, we keep our target of distributing dividends and educating share buyback programs.
Combine it. Their volumes should be above 50% of net income for 2025 and 2026.
We already have a share buyback program of $1 billion, which should be executed until next year. New announcements will be made according to the board of directors' decision.
Victor Mansur: On the same rationale, our C2 is at 18.5%, which is way higher than P/E average of 12%. On the right-hand side of the slide, we can see that our total RWA to total assets ratio was 27%, which represents the third reduction in a row and 4% lower year-over-year. Total RWA remained steady quarter-over-quarter and grew 9.8% year-over-year, reaching R$101 billion. As I said last quarter, RWA should grow at a moderate pace when compared to net income, and it was the case in this quarter, since net income posted 18% growth year-over-year. As Thiago Maffra said before, the potential new tax regulation may change the DCM dynamics and therefore, impacting our willingness to house more assets to distribute during Q4, Q2, and 2026.
Moving to the second part of Capital Management on the next slide, this is the last topic of my presentation. We can see on the left-hand side that our BIS ratio is at a very comfortable level of 20.1%. On the same rationale, our C1 is at 18.5%, which is way higher than the previous average of 12%. On the high hand side of this slide, we can see that our total RWA to total assets ratio was 27%, which represents the third reduction in our ROE and is 4% lower year-over-year. Total RWA remains steady quarter over quarter and grew 9.8% year-over-year, reaching $101 billion highs.
Victor Mansur: It's important to highlight that our VAR market 13 basis points of our equity are R$28 million, demonstrating our risk discipline since it was 4% lower year-over-year. Now, we can go to the Q&A. We are going to start our Q&A session, and the first question is from Eduardo Houseman from BTG Pactual. Eduardo, you may proceed.
As I said, the last quarter should grow at a moderate pace when compared to net income. And it was the case in this quarter. Since net income posted an 18% growth year-over-year, as Maffra said before, the potential new tax regulation may change the DCM dynamics and therefore impact our willingness to warehouse more assets to distribute during Q4 and 2026.
It's important to highlight that our V Market has 13 basis points of our equity or $28 million highs, demonstrating our risk discipline since it was 4%, lower year-over-year. And now we can go to the Q&A.
Okay, we're going to start our Q&A session. And the first question is from Eduardo Hoseman from BTG. You may proceed.
Eduardo Houseman: Hi, hi everyone. My question here is on capital generation and dividends and buybacks. Just help us understand a little bit more your capital generation because it seems that you have been able to improve it this quarter. Actually, you are growing your capital base, I think, faster than your net income. You are still way below the level this year in the level of buybacks and dividends when compared to last year. Can we see an acceleration of that now in the second quarter? How do you see that? We see that you have this soft guidance of above 50% for 2025 and 2026, but can you please help us with more details? Thanks.
Hi. Hi, everyone. Now, my question here is on capital generation, dividends, and buybacks, right? So.
Just help us understand a little bit more about your capital generation, because it seems that you've been able to improve it this quarter.
Actually, you are growing your capital base, I think, faster than your net income, right? So, uh, but you're still way below the level this year in the level of buybacks and dividends when compared to last year, right? So can we see an acceleration of that now in the second quarter? How do you see that? We see that you have this soft guidance of above 15.
50%. You know, for 2025 and 2026, but can you please help us with more details? Thanks.
Yuri Fernandez: Thank you for.
thank you for.
Victor Mansur: Hi Houseman, good evening. Thank you for your question. First, dividing the answer here in some parts. The first one, as we anticipated, the net income would grow a bit faster than the RWA over this year, delivering some leverage in capital terms. I think that was the case. Also, as you comment, we did not distribute as much of the net income as we generated over this quarter. The second part, we are still capturing a bit of leverage over the 4960's new regulation, and the benefits will be delivered over the year in the DRC and the market risk, principally in the credit spread risks inside of market risk. The second part will be delivered over the risk-weighted assets or operational risk. Also, we expect to see that over the next quarters.
Uh, hi hoseman. Good evening. Uh, thank you for for your question. Um first dividing the the answer here in some parts. Uh first 1 uh as we anticipated the net, net income would grow a bit faster than the the rwa over this year. Uh the delivering some leverage in capital terms.
As much of the net income as we generated over this quarter. Uh, the second part, we are still capturing a bit of Leverage over the 4966 new regulation. And the, the benefits will be delivered over the year in in the DRC and the
Victor Mansur: Another part here, talking about the trend for the year, we expected to see the RWA growing lower than the net income, and the new tax regulation may change a bit the dynamics of the DCM market. Depending on how it goes, we may warehouse a bit faster than initially expected to take advantage of the demand from clients to issue before the regulation takes place in 2026. Even though we do not expect any of those to impact our target to pay more than 50% of our profits this year because we still have a lot of spare capital. Remember here, our C2 ratio is at 18, and the average of the industry is at 12. So, a lot of space.
The market risk, uh, principally in the credit spread risks inside of market risk. The second part will be delivered over the risk-weighted assets or operational risk. Also, we expect to see that over the next quarters.
Victor Mansur: We may announce the rest of the payouts over the rest of the year, and the discussion between dividends and buybacks depends on the price of the stock, and we need to discuss that before board.
Uh, another part here, talking about the, the trend for, for the year, uh, we expected to see the rwa growing is lower than the net income and the new tax regulation may change a bit. The Dynamics of the DCM Market on depending on how it goes. We met Warehouse a bit faster than initially expected to to take advantage of the demand from clients to issue. Before the regulation, takes place in 2026. Uh, even though we don't expect any of those to impact our targeting, our targets should pay more than 50% of our profits this year because we still have a lot of spare capital and remembering here. Uh, our city 1 ratio is at 18 and the average of the industry is at 12, so a lot of space. Uh, so we may announce the rest of
To the payout, uh, over the rest of the year.
Eduardo Houseman: Crystal clear. Thanks a lot, Victor Mansur.
And the discussion between dividends and buybacks depends on the price of the stock, and we need to discuss that for Bart.
Yuri Fernandez: Thanks a lot, Victor Mansur.
Crystal Clear. Thanks a lot.
Victor Mansur: Okay, the next question is from Yuri Fernandez, JP Morgan. Yuri, you may proceed.
okay, next question is from, uh,
Yuri Finance, JP Morgan. Yuri, may proceed.
Yuri Fernandez: Thank you, Parize. Hi, Maffra, Mansur. I have a question regarding our corporate lending strategy. I know it is something small for you, but you have been discussing new products, new strategies. A question I have is if corporate lending matters for the entire ecosystem. When we go to your AUC, we see that the commercial is the portion not growing as much. Actually, it is green for an AUC and asset money the same. Just trying to understand your perception about corporate lending and if you believe it is the missing thing for your ecosystem and your strategy. Thank you.
Thank you. I have a question regarding our corporate like Corporate Landing strategy. I know it's something small for you, um, but you have been discussing new products, new strategies and a. And a question I have is if corporate leader matters
Eduardo Houseman: Hi, Yuri here. It's Andre Parize. Could you repeat the question? We couldn't hear in the beginning. Sorry about that.
for the entire ecosystem. When we go to your a, we see that the commercial is the is the portion, like not growing as much, and like, actually 3 in, and then you'll see and that no money the same. So, just trying to understand, if you how, how, how is your perception about corporate planning, and if you believe it is going to be something that is missing for your ecosystem and your electricity. Thank you.
Yuri Fernandez: No worries. Let me speak closer to the mic here. I would like to understand a little bit about corporate lending. If you believe corporate lending is important for your asset strategy overall.
Hi, Yuri here. Uh, it's crazy. Could you repeat the question? We couldn't hear in the beginning. Sorry about that. No, no worries. Let me, let me speak closer to the mic here. So, I would like to understand a little bit about Corporate Landing. Do you believe Corporate Landing is important for your overall astrology strategy?
Victor Mansur: Hi, Yuri. This is Victor. Thank you for the question. Our idea in corporate lending is the same as other products we originate to sell. You may see the corporate book growing, but everything that we put in, we expect to put out at some moment in time. So, the growth you see in the credit portfolio is exactly that. The portfolio grew roughly 3 billion reais, and that will go under a securitization, and we are going to sell those assets over the next quarters.
Uh, this is Victor. Thank you for the question.
Yuri Fernandez: No, thank you, Victor Mansur, but you don't believe being more or less active here, it could be more helpful for your operation?
Our idea Incorporated Landing is the same as other product. We originated to sell, you may see the corporate book growing but everything that we put in we expect to put out at this moment in time. So the growth you see in the credit portfolio is exactly that uh the portfolio grow. Hopefully 3 billion eyes and that will go under a security and we're going to sell those assets over the next quarters.
Oh, thank you, Mr. But you don't believe in being more or less active here. It's, you know, could be more helpful for your operation.
Victor Mansur: Yes, it could, but the same as capital markets, we have our risk appetite. If you are buying credit to sell or originate a security to sell, it occupies the same risk space. We are not going to increase our portfolio over our risk appetite because of any other strategy, because they use the same pocket.
We have our risk appetite and...
Yuri Fernandez: Perfect. Thank you.
If you are buying credit to sell, or originated a security to sell, it occupies the same risk space. So we are not going to increase our portfolio over our risk appetite because of any other strategy, because they use the same pocket.
You know, perfect. Thank you.
Victor Mansur: Okay, the next question is from Thiago Batista, UBS. Thiago, you may proceed.
Okay. Next question is from Thiago Maffra, UBS Jago. You may proceed.
Thiago Batista: Hi, guys. I do not hear me? Okay. Hi, Thiago Maffra, Victor Mansur, Andre Parize. I have two questions. Thiago Maffra, in the beginning, you commented about the new initiatives to try to speed up the net new money next spring, the second half of the year. Can you give us a little bit more details about those initiatives? The second one is about the guidance for next year. Are you still comfortable with the guidance that you gave, I would say, two or three years ago? If you look to consensus for this year on top line, consensus is something close to R$20 billion of top line. So, to achieve the low end, you need to expand 14%, 1.4% next year. It seems still feasible, but I only want to hear from you guys if the guidance for next year is still achievable.
Hi, guys. Can you hear me?
So, to achieve the low end, you need to expand 14%, uh, 15% uh, next year.
Since it's still feasible, but, uh, only to her, uh, for you guys. Uh, if the guidance for next year is, is, is to, uh,
Achievable.
Thiago Maffra: Thank you for the question, Thiago. The first question about net new money, as we mentioned on the presentation, we still see the 20 billion per quarter in retail as a reasonable level for the next quarters. Of course, if we see a change in the macro environment, starting interest rate cuts or something like that, we should see the 20 billion accelerating, but for now, that is the level that we are comfortable. Of course, this quarter, it was a little bit tougher on SMBs and corporate lending and corporate segment, but we are confident that the 20 billion is a good level. How we get there? There are a lot of initiatives in the company. If you go back a few years, I would say that the main one was channel diversification. Back in 2021, we only had one channel, what we call the B2B, the AFA channel.
Thank, thank you for the question, Thiago. Uh, the first question about, uh, net new money, as we mentioned on the presentation, uh, we still see the 20 billion per quarter in retail as a reasonable level, for the next, uh, quarters. Uh, of course, if we see a change in the macro environment, uh, start in, uh, interest rate Cuts or uh, something like that. We should, uh, see the 20 billion accelerating. But for now, uh, that's the level that we are, uh, comfortable. Uh, of course, this quarter, uh, it was a little bit tougher on smbs and and corporate, uh, lending uh, but on on, on corporate segment. But uh, we are confident that the 2000 is. It's a good to a good level. Uh, how we get there. Uh, there are a lot of uh, initiatives in the company. Uh, if you go back a few years, I would say that.
Thiago Maffra: Today, we have the internal advisors, we have the RIA model. If you look at the numbers today, more than half of the net new money is coming from the new channels, and we keep investing in increasing the number of internal advisors, the number of AFAs on our network. So, expansion is one of the levers here. The second one, when you have a tougher environment and higher interest rates competing with products, CGs from the banks, especially the tax-exempt ones, it is not that easy. So, all the time, we are creating new products to compete with the banks. We just launched some new products here this quarter. They are performing very well. It is a type of fund with a senior tranche, and it is a select rate here and tax-exempt, so it is a very good one.
The main 1 was Channel diversification uh back in 2021 we only had uh 1 channel. What we call the the B2B the IFA uh, Channel. Today we have the internal advisors, we have the Raa model. So if you look the number today uh, more than half of the net, new money is coming from the new channels and we keep investing in increasing uh the number of uh uh
Internal advisor, uh the number of ifas on our Network so expansion. Needs 1 of the uh levers here. The second 1. Uh, when you have uh a tougher uh environment uh and higher interest rates,
Thiago Maffra: So, we are all the time trying to create products to compete with the banks, and we do also partnerships with some of the public banks and some other banks through auctions or through bilateral distribution. So, all the time, we are trying to originate products. I would say the third one and probably the most short-term and effective tool here is how we increase the productivity of our AFAs. We have been investing a lot of time, as I said, on the first quarter on helping the AFA channel to increase productivity through technology, through sales management. We have some people in some of the operations, and we are seeing the numbers starting to pick up.
Competing with products, uh, CGS from the banks, especially the tax exempt ones. It's not that easy. So, all the time we are like creating new products, uh, to compete with the banks. Uh, we just launched it, uh, some new products here just quarter. They are performing, uh, very well. Uh, it's a type of fund with, uh, senior uh, trench. Uh, and it's, uh, as a leak, uh, rate here and a tax exempt, so it's a very good 1. Uh, so we are all the time trying to create products to compete with the banks. Uh, and we do also partnership with some of the the, the public
Banks and some other banks, uh, through auctions or through bilateral, uh, distribution. So, all the time, we are trying to originate products, uh, I would say the third one.
Thiago Maffra: The last one, but it is more like a, I would say, medium term, we have been investing a lot on increasing the level of services, the way of serving our clients through financial planning, through wealth planning, succession, tax planning, and so on. We have created our own internal models. We have been training all the advisors (AFAs), but I would say here is more like a medium term, especially on the current scenario where buying a CG at 15% is probably a good option for some of the investors, and it is harder to make them move to XP. But on the medium term and long term, for me, this is the biggest opportunity we have, like increasing the way of serving in the market and creating a new level of servicing investing in Brazil. The second question was guidance for next year.
And probably uh the most uh short-term and effective uh, tool here. It's how we increase the productivity of our ifas. Okay. So we have been investing a lot of time as I said on the the first quarter uh know helping the IFA channel to increase productivity through technology through uh Sales Management. We have some people in some of the operations and we are seeing the the numbers starting to pick up and the last 1, but it's more like a I would say, medium term. We have been investing a lot on increasing the uh level of service in the way of serving. Our clients through financial planning through wealth planning uh uh uh session tax planning. And so on. We have created our own internal models. We have been training all the FAS but I would say here is more like a median term, especially
On the current scenario where he buying a CG at, at, at 15%. Uh, it's, uh, probably, uh, good option option for some of the investors, and it's harder to make them move, uh, to XP, but on the medium term and and long term for me, this is the biggest uh, opportunity. We have like a increase in the way of serving in the market and creating a new level of service investing in Brazil.
And the second, the second question was,
Thiago Maffra: We are still pursuing the guidance for next year. Of course, right now we are pursuing the bottom of the guidance. We are still pursuing. For this year, we believe that the number for revenue that we are pursuing is still around 10%. Of course, you saw the numbers for the first half of the year. They are a little bit lower, 5.5% against 10%, but we are very confident that the numbers will accelerate on the second half and the growth rate will be higher on the second half than the first one.
Uh, for Revenue that we are pursuing, it's still around 10%. Uh, of course, you saw the numbers for the first half of the year. They are a little bit lower, uh, 5 and a half percent, uh, against uh 10. But we are very confident that the numbers we will accelerate on the second half and the growth uh, rate will be higher on the second half than than the first 1, okay?
Victor Mansur: Thanks, Maffra. Very clear. Okay, next question is from Mario Piazzi, Bank of America. Mario, you may proceed.
Thanks Mantra. Very clear.
Okay. Next question is from Mario Pi, Bank of America. Mario, may proceed.
Mario Piazzi: Hey guys, thanks for taking my question. Thiago Maffra, can you give us a little bit more color on the inflows so far in Q3? Because again, it sounds as if you're confident that you can return to this 20 billion reais per quarter. Are you seeing, have you seen so far in the first half of this quarter a number close to the level that gives you confidence? That is my first question. My second question is related to your EBT margin. Yes, it continues to improve. However, you are still below your medium-term guidance, and it seems like revenues are growing a little less than you anticipated, even though you are still maintaining the plus 10% for this year. Is there anything you can do on the cost side if the revenues do not come through this year? Thank you.
Hey, guys. Uh, thanks for taking my question.
Uh mam. Can you give us a little bit more color on the on on inflows so far in the third quarter? Because again it sounds as if you're confident that you can return to this 20 billion REI per quarter. Are you, are you seeing, have you seen so far in the first half of this quarter?
Uh, uh, uh. A number close to the level that, like, if you have confidence. Uh, so that's my first question. My second question is related to, you know, your EBT margin. Yes, it continues to improve.
However, you are still below. Write your medium-term guidance, and it seems like revenues are growing a little.
Less than you anticipated, even though you're still maintaining the plus 10% for this year.
Uh, is there anything you can do on the cost side? If the revenues don't come through this year, thank you.
Thiago Maffra: Thank you, Mario, for the question. We will take the first one. We cannot talk about the net new money for the quarter so far, but my answer for you will be we are confident in delivering the 20 billion or around 20 billion for the next quarters, as I mentioned before.
Thank you, Marty, for the question. I will take the first one. Uh, we cannot talk about the net, your money for the quarter so far, but, um, my answer for you will be, we are confident in delivering around $20 billion for the next quarters, as I mentioned before.
Victor Mansur: Hi, Mario. Taking the second part here about EBT and SG&A. First, talking about EBT. Our EBT depends on the product mix, as we discussed before, and also the take rate. The trend in both of them should be trading around this quarter if the market keeps the way it is. Talking about SG&A, we delivered a lot of reduction in the efficiency ratio over the last two years, almost 400 bps. Since we keep investing in strategic areas as new advisors and technology, and you name it, we may see the index more flattish over this year. It is valid to reinforce our commitment to cost control and efficiency. We are not going to stop investing in our core because of a bit more of unpredictable levels of revenue coming from the wholesale banking side.
And hi. Mario taking the second part here about EBT and SG&A.
Uh, first, talking about, uh, Evine, uh,
Our product and the ABT depend on the product mix, as we discussed before. Also, the tax rate and the trend in both of them should be trading around this quarter if the market keeps the way it is.
And talking about SG&A, we delivered a lot of reduction in the efficiency ratio over the last 2 years—almost 400 basis points.
Victor Mansur: As Thiago Maffra said, 2026, there is a lot of time to the end of 2026. For now, we are comfortable with the levels.
Mario Piazzi: Okay, that is clear. Let me rephrase the first question then. When we look at inflows during the second quarter, did you see an improving pattern throughout the quarter or on a monthly basis? Are you seeing inflows improving or did you see them improving in the quarter or is it relatively, you know, the same amount of inflows per month?
And since we keep investing in strategic areas as new advisors and and technology and You Name It, We may see the index more flattish over this year. Uh invited to reinforce our commitment to cost control and efficiency, even though, but we are not going to stop investing in your car because of uh uh a bit more of unpredictable levels of Revenue, coming from the world sale banking, Willow banking size. Um, as Mafra said 2026, there is a lot of time to the end of 20126. And for now we are comfortable. If the levels
Okay, that's clear. Let me rephrase the first question then. When we look at inflows during the second quarter, did you see an improving pattern throughout the quarter or on a monthly basis? Are you seeing those improving, or did you see them improving over the quarter, or is it relatively, you know, on the same amount of inflows per month?
Thiago Maffra: Mario, I will give you the same answer that I gave before. I believe we can deliver the $20 billion. If you get the last quarter, it was $16 billion. I imagine that one customer or two could make the difference here. So, $20 billion is the number here and around $20 billion. It could be a little bit higher or a little bit lower. That is the pace right now.
Mario Piazzi: Okay, thank you.
Mario I I will give you the same answer that I gave before. Uh, I believe we we can deliver the, the 20 billion. Uh um, if you get the last quarter it was 16. I imagine that 1 1 customer or 2 could make the the difference here. Uh, so 20 billion. Uh, it's the number here and around 20 billion, it could be a little bit higher or a little bit lower, okay? But that's the the pace right now.
Okay, thank you.
Victor Mansur: Okay, next question is from Marcelo Mizrahi. Marcelo, you may proceed.
Okay. Next question is from Marcelo, my uh baby Marcelo. You may proceed.
Yuri Fernandez: Hello everyone. Thank you for the question, the opportunity to do the question here. My question is regarding, again, the corporate portfolio. There was a huge growth on a quarterly basis and not too much on a yearly basis, but just to understand what is the type of fixed credit, what is happening exactly here. Looking forward, another question is regarding the net new money of the corporates. To understand if there are any new strategies here, if there are any news here to justify this net new money negative on the corporate side. Okay, thank you.
Hello everyone. Thank you for the question the opportunity to, to do the question here. So my question is regarding again about the the corporate portfolio, which was a, a huge growth in a quarterly basis. And not so much in a yearly basis, but just to understand what's the, what's the the trip up? That's credit, what's happening? Exactly here. Uh, and looking forward, another question is
Regarding the menu money of the corporates.
To understand, if there are any new strategies here, or if there are any news items to justify this net new money negative on the corporate side. Thank you.
Victor Mansur: Thank you for your question, Victor here. The first part, sorry, the first part about credit portfolio. As we said before, those are credits that we originated to sell. Basically, those are operations we did with corporates and we originate receivables that will be securitized and then sold to our client's base. That's something that we did before over the other quarters and it's the same that we're going to do again. We expect to sell that. Talking about the corporate net new money, I think the problem here is the dynamics of the market. We are seeing, we began to see that in the first quarter and then the trend intensified a bit in the second quarter. What we are seeing, the banks that give credit to the companies, they are asking for reciprocity in terms of investments to deliver some credit lines.
Too for a question Victor here.
Uh, the first part.
Ah, sorry, the first part about credit portfolio. Uh, as we said before those are credit, we were originated to sell. So basically, those are operations, we did, if corporates and we originated receivables, that will be securitized and then sold to our clients base. Uh, that's something that we did before over the other quarters and it's the same that we're going to do again. So we expect to sell that.
And talking about the corporate, then you money. I think the problem here is the dynamics of the market we are seeing.
Victor Mansur: Since we are not in this business and we are not able to give the main product that is credit, we are seeing the money flow to banks that usually have some products as cash flows, anticipation of cards, et cetera. That's basically the case.
Uh, we began to see that in the first quarter, and then the trending things changed a bit in the second quarter. What we are seeing is that the banks that give credit to the companies are asking for reciprocity in terms of investments to deliver some credit lines. Since we are not in this business, and we are not able to give the main product, that is correct. We are seeing the money flow to banks that usually have some products like cash flows and anticipation of cards, etc. So that's basically the situation.
The case.
Yuri Fernandez: Okay, okay, moving to the next question. Tito Labardo from Goldman Sachs, you may proceed.
Okay. Okay. Moving to
Moving to the next question. Uh,
Tito, lubarda
From Goldman Tito, you may proceed.
Tito Labardo: Hi, it is a busy day for the call. Thanks for the question. A question just following up a little bit more on the revenue growth. You are maintaining the 10% growth for this year, around 10%. Thiago Maffra, you said it should accelerate the second half of the year. If you break that down, retail growing 9% year-over-year, so that is a big closure. I guess first, do you think retail in and of itself will accelerate the second half of the year? Or two, is it more the issued services, the corporate, and all the other lines you expect? Those obviously should accelerate given the somewhat weak first half of the year, but just to break out between retail and other revenues and which lines can drive that revenue growth closer to 10%. Thank you.
Victor Mansur: Hi, Tito. This is Victor. Basically, we can break that revenue growth between the first half of the year and the second half into three factors. The first one is very easy to explain. We have 6% more business days, so more business days, we have more trading days, more interest rates over our capital and clients' cash, and also a higher take rate in the second half of the year against the first. That is the first part of the explanation. The second one is the new verticals and new advisors. Basically, we keep hiring advisors and we have a lot of products that are still in rollout and are growing a lot, such as international investments, consortium, and other products in the new verticals portfolio. The last one that is more volatile is the product mix.
Hi, good evening. Thanks for the call and big question. Um, my question, just following up uh, a little bit more on the revenue growth rate and maintaining the 10% for this year around 10% Mara, you said it should be accelerating because that can happen a year. If you break that down, right retail growing 9% year-over-year, so that that's a big closer, I guess, first, do you think retail in and of itself will accelerate in the second half of the year or 2? Is it more? The issue of services, the corporate and all the other lines, you expect? I mean, those obviously, you should accelerate given those some some, but we first half of the year but just so we can break out, we can retail and other revenues and and which lines can drive that Revenue growth go to the 10%. Thank you.
Uh, hi. Uh, this is Victor. Uh, so basically we can break...
Victor Mansur: If we have a second quarter, if a DCM that is stronger and more primary offering from funds, we may see a lift in retail revenues and also in issued services revenues. Basically, those are the three components and why we are expecting to have higher revenues in the second half against the first.
That revenue growth between the first half of the year and the second half is attributed to three factors. The first one is very easy to explain: we have 6% more business days. So with more business days, we have more trading days, more interest rates over our capital, and clients' cash, as well as a higher select rate in the second half of the year compared to the first. That's the first part of the explanation. The second factor is the new verticals and new advisors. Basically, we keep hiring advisors, and we have a lot of products that are being rolled out and are growing significantly, such as International Investments, Consortium, and other products in the New Vertical portfolio. Lastly, the third factor, which is more volatile, is the product mix. If we have a second quarter with a stronger emerging market and more primary offerings from funds, we may see a lift in retail revenues and also any issues.
Issue with service revenues.
So, basically, those are the three components and why we are expecting to have higher revenues in the second half against the first.
Tito Labardo: Great. That's helpful, Victor. Just one quick follow-up. Maybe on the fixed income revenues, which are still strong at 20% year-over-year, although it did fall a little bit in the quarter. You mentioned higher rates. How do you think about, are you getting to sort of like the peak level on the fixed income or can that still continue to outpace the other segments just on a relative basis? How do you see the fixed income revenue relative to the other given where we are on the rate segment?
Great. No, that's helpful, Victor. Just one quick follow-up maybe on the sixth income revenue, which is so strong at 20% year-over-year, although it did fall a little bit in the quarter. I mean, you mentioned higher rates. How do you think about are you getting to sort of like the peak level on the sixth income, or can that still continue to help?
Face the other segments, just the UN relative basis. I see the 15th where we are on the website.
Victor Mansur: Okay, Tito, I heard the first part of the question, but the second was a bit confusing here. I will try to answer here. First, in fixed income, it is important to mention that for retail clients, we are in the highest ever selling rate in almost 20 years. We are in the highest level of the cycle. In the perception of the clients, they never had interest rates, spot interest rates that are as high as now. Why is it important to mention that? Because clients, they do not go longer in duration when that happens if this is low in the interest rate curve. What we are seeing is an increase in volume but a decrease in ROA given that duration profile. When interest rates start falling or the interest rate has a more normal shape, we may see the duration going higher again and the ROA increasing.
Victor Mansur: That is a bit of the dynamics of fixed income right now. What can change that over the second half of the year is the DCM market and the primary offerings that may go to market if the pipeline goes as it is because of the new tax regulations. A lot of primary offerings attract clients and we may see they go longer in duration again. Basically, we will expect the fixed income line to keep your performance well. Depending on the primary markets in DCM, we may see this number a bit higher.
No longer in duration when that happens. If this is slope in the interest rate curve. So what we are seeing is an increase in volume, but a decreasing row A, given that duration profile. So, when interest rates start falling or the interest rate has a more normal shape, we may see the duration going higher again, and they are way increasing, but that's a bit of the dynamics of fixed income right now. And what can change that over the second half of the year is the same market and the primary offerings that may go to market. If.
The pipeline goes as it is because of the new tax regulations. So a lot of primary options attract clients, and we may see they get longer in duration again. So basically, uh,
We expect the fixed income line to perform well. Depending on the primary markets, when we see this number a bit higher, we will keep your performance.
Tito Labardo: Thanks, that's clear. Thank you.
Victor Mansur: Next question is from Arnaud Shirazi from Citi. Arnaud, you may proceed.
Next question is from our No Shirazi from City. I know you may proceed.
Mario Piazzi: Hi all. I have two questions here. My first one is related to non-people related expenses. We saw a 38% year-on-year increase. I know that it was explained by marketing and also technology, but it seemed a little bit too much for me. The second one is related to tax. How did the tax increase, especially on offshore funds, evolve? What drove the positive income tax rate for this quarter? Thank you.
Victor Mansur: Okay, thank you. Thank you for your question. First here, talking about SG&A. We had a lot of investments in marketing. We had some events that are the first time that we do in the size that we did. We had the B2B experience. It is an event for all our advisors (AFAs) network outside of Brazil where we announced some important measures for the year. Second is the GAF. It is an agribusiness event here in Brazil that we sponsored. It is very important to us because we get closer to the clients that issue tax-exempt notes, corporations that are able to issue tax-exempt notes. Also, investments in markets to get our reputation a bit more stronger and more visible over all brands and newspapers and et cetera.
Hi. All I have 2 questions here. My first 1 is related to known people related expenses. We saw 38% year on year, uh, increase. I know that it was explained by marketing and also technology but it seems a little bit too much for me. And also the second 1 1 is related to tax uh, how the the tax increase especially on offshore funds has been evolving and what role the positive income tax rate for, uh, for for this quarter. Thank you.
Okay, thank you. Thank you for your question.
Ah, first year, you're talking about, uh, SG&A. We had a lot of investments in marketing. We had some events that, uh, are the first time that we did in the size that we did. We had a B2B experience in Evans for all, or IFAs network, outside of Brazil, where we announced some important measures for the year. And second is the gap is an aggro business we have here in Brazil that we sponsored, and it's very important to us because we get closer to the clients that issue taxes and notes, uh, corporations that are able to issue taxes and notes also.
Victor Mansur: In terms of technology, it is one of the events that we did in terms of cloud and other kinds of tech. Talking about the trend over the year, keep in mind the next quarter we have our main event of the year, the Expert. So, also another quarter with no-people expenses that are higher than comparison quarter over quarter. Moving to take rates, I think we talked in a few opportunities that given the dynamic of the market and the product mix, if the market-making activity and secondary market are a bit more stronger than investment banking and broker-dealer revenues, that our take rate should be trading around 15%. That was basically the case. Now we closed at 14-something over the last 12 months. If the product mix keeps the way it is, that is the number that we may see over the year.
Investments in markets to to get our reputation a bit more stronger, and more visible over all brands and newspapers and Etc. Uh, in terms of technology is 1 of a that we did in terms of cloud and other kinds of tech. And talking about the, the trained, over the, the, the year. Keep in mind, the next quarter, we have the the our main event of the year, the expert. So also another quarter, if no people expenses that are higher than comparison, quarter over quarter.
And moving to tax rates, I think we talked in a few opportunities that, given the dynamic of the market and the product mix.
If the market-making activity and secondary market were a bit more, stronger than investment banking, and brokers did the revenues, there are tax rates that should be trading around 15%, and that was basically the case. We closed it first at 14% something over the last 12 months.
Mario Piazzi: As related to offshore tax, what are the talks regarding the potential increase?
And if the product mix keeps the way it is, that's the number that we may see over the year.
Victor Mansur: Okay, perfect. I think as any other financial institution in Brazil, there are a lot of ways to plan our tax structure. We are confident that the impact will be marginal in your business.
Thank you. But as related to offshore tax, what is the potential increase? What are the talks?
Ah, okay, perfect. I think that, as with any other financial institution in Brazil, there are a lot of ways to plan or tax structure, and we are confident that the impact will be marginal on your business.
Mario Piazzi: Thank you.
Thank you.
Victor Mansur: Okay, the next question is from Neha Argawala from HSBC. Neha, you may proceed.
Okay. Next question is from Niha Arawwala from HSBC NHA. You may proceed.
Yuri Fernandez: Hi, thank you for taking my question. Just once again, sorry to go back to this, but the corporate net new money was significantly weak versus what we saw in the previous quarters. I understand the volatility, but anything specific this quarter that led to this big decline compared to the previous quarter? Should we expect more of that next quarter or was this like a one-off trend with some one-off moves? My second question is, you talked a bit about the fee-based model and that that's only 5% of your AUC and that's been growing. Can you talk a bit more about what impact we could see from that on your take rate, if any? Thank you.
Uh thank you for taking my question. Uh just 1 1 second. Sorry to go back to this, but the corporate net new money was significantly. Weak versus what we saw in the scene in the previous quarters, I understand the volatility. But anything specific this quarter that led to this big uh decline compared to previous quarter and should we expect more of that next quarter, or was this like a 1 of trend with some 1 of moves? Um, and my second question is you talked a bit about, uh, the uh,
That’s only 5% of your AUC and that’s been growing. Can you talk a bit more about what impact we could see from that on your day rate, if any?
Victor Mansur: Okay, thank you. Thank you, Neha. I will take the first one. I think the corporate dynamics are a bit better than what I said. If the banks that give credit to their clients keep asking for investments in terms of reciprocity, we may suffer a bit more in Q3 or Q4 since we are not going to this business. Also, it is important to remember that the ROA of this money is extremely low. So, the impacts in revenues to losing that money, they are not relevant. It is very hard to predict what we are going to see over the next quarters. As you say, these are more volatile cash.
thank you.
Okay, thank you. Thank you, Nia. I will take the first 1, I think the cover for the name is a bit that what I said, if the the banks that give credit to their clients, keep asking for investments, in terms of reciprocity, uh, we may suffer uh a bit more in the third queue for Q since we are not going to this business and
But also, it's important to remember that they are a way of. This money is extremely low, so, uh, the impacts in revenues from losing that money are not relevant, and it's very hard to predict what we are going to see over the next quarter. As you say, these are more volatile cash flows.
Thiago Maffra: Neha, this is Thiago. Thank you for your question. I will take the second part. When I think about fee-based model, I believe there is an evolution about the model in Brazil. If we get the U.S. market, for example, today, if you look in terms of AUC, it is 70-30, but in terms of revenues, it is more like 50-50. In Brazil, as I mentioned, it is still very small, but it is growing. As I mentioned on the presentation, today we are prepared to offer to our clients any kind of model: consultancy, fee-based, AFA model, transactional-based model. We can serve our clients in different ways and charge in different ways. We are agnostic and we offer what is best for our clients.
You had to do Chicago. Uh, thank you for your question. I will take the second part. Uh, when you think about, uh, a few days at model? Uh, I believe there is an evolution, uh, about, uh, the model in Brazil if we get the uh, US market, for example today. Uh, if you look in terms of AUC, it’s 70/30, but in terms of revenues, it’s more like 50/50, okay? Uh, in Brazil, as I mentioned, it’s still very small, okay. Uh, but it’s growing.
Thiago Maffra: What we expect for the next years, as I mentioned at the beginning of the year, this year was to grow, I would say, from 3-4% to 7-8%. It is growing, but it is going to be a long journey here. It is not going to happen from one day to the other, but we will grow. Again, we are the best platform to offer all the models to our clients. We believe being agnostic to models is a real differentiation to serve our clients better. Thinking about revenues, if you look only at the take rate, it goes down a little bit, not a lot, but it goes down. Usually, it comes with a higher share of wallet.
As I mentioned, the presentation today we are prepared for to offer to our clients, uh, any kind of model, uh, consultancy, uh, fee based IFA model transactional. Based model, we can serve our clients in different ways and charge in different ways. Okay? So we are aosi and we offer, what's best for our clients? Uh, what we expect for the next years? Uh, as I mentioned at the beginning of the year, uh, this year, uh, was uh, to grow, I would say from, uh, 3 4% to 7 8%. Okay. So uh, it's growing and but it's going to be uh, a long journey here. It's not going to happen like uh front 1 day to the other uh but we'll grow. And again, we are the best platform to offer all the models to our clients. Uh and we believe being agnostic to models is uh, real differentiation.
Thiago Maffra: Usually, when we start to serve a client through a fee-based model or through consolidation of funds outside of XP, usually, the AUC or the wallet or all the money that we oversee, if it is not 100% here, because today we offer that model, we can consolidate what is outside of XP. Usually, you make more money or I would say equal money in terms of revenue because you increase the size of the wallet. I would say if in the next quarters or years, we will start to see the take rate going a little bit down, but at a very slow pace, the share of wallet per client will increase and will compensate the lower take rate.
Uh, to serve our clients better, but thinking about, uh, revenues. Uh, if you look only, uh, the take rate, uh, it goes down, uh, a little bit, not a lot, but it goes down. Okay, but usually, it comes with a higher share of wallet. So usually, when we start to serve a client to a C-based model or to, uh, consolidation of, uh, funds outside of XP,
Usually the AUC or the wallet, or all the money that we oversee, if it's not 100% here. Because today we offer that model, we can consolidate watch outside of XP. Usually, you make more money, or I would say.
Yuri Fernandez: Very clear. Thank you so much.
Eco money, in terms of Revenue because you increase the the size of the wallet. Okay? So I would say, uh, if, uh, in the next quarters or years, uh, we'll start to see, uh, the decorate going a little bit down, but at a very low Pace, uh, but the sheriff wallet per client will increase and we compensate, uh, the lower the rate.
Very clear. Thank you so much.
Victor Mansur: Okay, the next question is from Pedro Leduc, Itaú BBA. Leduc, you may proceed.
Okay. Next question is from a Pedro. You may proceed.
Mario Piazzi: Okay, good evening everyone. Thank you so much for the call and taking the question. I would like to explore the gross margin a little bit more, expand that Q1 Q. When I try to look at the moving pieces here, AFA, commission, incentives get nicely diluted. I was trying to dig into this trend a little bit more, what drove it, if it was related to maybe the lower place of net new money or the mix of your revenue movements, so more equity, less fixed income. Just trying to get a sense of what is driving this gross margin expansion and how to think about it in the second half. Thank you.
Okay, good evening everyone. Thank you so much for the call and for taking the question. I would like to explore the gross margin a little bit more, expanded quarter over quarter. I'm going to try to look at the moving pieces here. IFA commissions and incentives get nicely diluted. So I was trying to dig into this trend a little bit more, what drove it, if it was related to maybe the lower pace of...
Your money or the mix of your revenue movements, or more equity and less fixed income—just trying to get a sense of what is driving this cross-margin expansion and how to think about it in the second half. Thank you.
Victor Mansur: Hi, Leduc. Thank you for your question. I think here, first talking about some events. As we said before, the expected credit losses should be trading a bit lower than last quarter, and that trend should remain like that, around R$92 million. The second point was a bit higher than average sales tax, and that should go back to the average and not expect the number to go as high as that. The margin should normalize when you look in the last 12 months. The channel mix is also important to mention. As the internal sales force keeps growing, that is a trend that you are going to see improving over quarters. If you look at the last 12 months, that is the pace that should be expected for the rest of the year.
Hi.
Credit losses should be trading a bit lower than last quarter, and that trend should remain like that around $9.2 billion highs. And the second point was a bit higher than average sales tax.
And that should go back to the average. Another expects the number to go to be as high as that.
And the margin. The margin should normalize when you look at the last 12 months.
Yeah. And and the channel mix is also important to mention and as the internals as far as keep growing. But also that's a trend that you're going to see improving over over over over quarters. But if you look at the last 12 months, that's the that's the pace.
Mario Piazzi: Thank you.
That should be expected for the rest of the year.
Thank you.
Victor Mansur: Okay, next question is from Daniel Vaz from Banco Safra. Vaz, you may proceed.
Okay. Next question is from Danielle Vaas from Bank of V. You may proceed.
Yuri Fernandez: Thank you. In risk opportunities, you mentioned that the B2C productivity has been much stronger than the B2B, right? The B2C has been a large focus recently, and you standardized probably an approach for selling and for the sales team, right? It seems more well structured right now. When it comes to the B2B, I think the productivity has deteriorated over the years. I want to hear from you first if you are seeing net outflows from this channel from the B2B, and secondly, if you could tell us a bit your diagnostic on the B2B channel if you need a higher focus right now to maybe refresh or review this model. This has been in the press recently regarding M&As on the advisory offices, a lot of mandates. It would be good to hear from you the diagnostic. Thank you.
What is it? Uh, in really opportunities. You mentioned that the pitch, you see productivity has been much stronger than the B2B, right? So, um, the B2C has been a large focus recently, and you standardized probably an approach for selling and for the sales team, right? So it seems more well-structured right now.
When it comes to to the B2B, I think the productivity has deteriorated like over the years. So I want to hear from you first. If you're seeing uh, net outflows from this channel from the B2B. And secondly, if you could tell us a bit, your diagnostic right on the B2B Channel, if you need a higher Focus right now to maybe refresh or Vision uh review this model. So
This, uh, has been in the press recently regarding M&As on the advisory offices. A lot of mandates would be good to hear from you the diagnostic. Thank you.
Thiago Maffra: Thank you for the question. As we have said in the past, for us, it is not one channel or the other. We believe in having multiple channels for different reasons. When we look at the B2B channel, the B2B channel specifically, as you mentioned, the productivity was very low. It is still low when compared to two years ago, one year and a half or more ago, but it is getting back. It is improving bit by bit. It is not going to change a lot from one quarter to the other, but it is improving. Everything that we have been doing, a lot of efforts and energy that we have put on the channel since the end of last year, and more specifically at the beginning of this year, it is paying off and we are starting to see the performance of B2B channel improving.
Thank you for the question as we have said in the past, uh, for us is not, uh, 1 channel or, or the other, we believe in having multiple channels, uh, for our, uh, different reasons. Uh, but when we look the, the B2B Channel
the B2B Channel specifically, uh,
As you mentioned, the productivity was, uh, very low. Uh, it's too low compared to, uh, two years ago, one year and a half, uh, or more ago, but it's getting back. It's improving, uh, bit by bit. Uh, it's not going to change a lot from one and a quarter to the other, but it's improving. So everything that we have been doing, a lot of efforts and energy that we have put.
Thiago Maffra: That is why we are confident on the $20 billion, okay?
Uh, on the channel since, uh, the end of last year, uh, and more specifically at the beginning of this year, it's paying off. We are starting to see the performance of the B2B channel, uh, improving. So that's why we are confident on the $20 billion, okay?
Victor Mansur: Okay, just to follow up, so you do not need a refresh or a review in the way you operate in this model, right, as you did in the B2C?
Thiago Maffra: It is just a normal evolution. You have to evolve the model. We just announced backing on the B2B experience, the big event that we do annually for the B2B channel. This year was in Mendoza, and we announced some changes on the way of serving clients. I would say minimal standards of serving our clients: allocation, number, and ways, points of contact with the customers. I would say it is more like a franchisee model where we have minimal standards and we just announced that like two months ago. It is an evolution. It is not like a big change.
Okay, so so you just to follow up. So you don't need a, a refresh or a review in this the way you operate in this model, right? As you didn't. But you see
Victor Mansur: Okay, thank you. We are at the time. In the name of the company, I would like to thank you all for participating in our second quarter 2025 earnings call. Any further questions would be more than welcome. Just look for the IR team, and we keep in touch and see you soon. Thank you very much.
But it's just, uh, uh, normal, uh, Evolution you have like to to evolve the model. Uh, we just announced back in on the B2B experience. The, the big event that we do annually for the B2B channel, uh, this year was in mandoa, and we announced some, uh, change on the way of serving clients. So, I would say minimum in standards of, uh, serving our clients. So, a location, uh, uh, number and ways, uh, points of contact with the customers. And so, I would say more like, uh, a franchisee model where we have a minimum wage standards, and we just announced that like, uh, 2 months ago. So it's an evolution. It's not like a, a big change.
Okay, thank you.
Okay, we are at the time. Um, so
On behalf of Xp Inc., I would like to thank you all for participating in our second quarter 2025 earnings call.
Any further questions will be more than welcome. Just look for our team, and we will keep in touch. See you soon. Thank you very much.