Q4 2025 PagSeguro Digital Ltd Earnings Call

March 4, 2026

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Ricardo Dutra: Focus on our long-term ambition. Going to slide 4, we can see the key operational and financial highlights for the full year 2025. Compared to last year, our revenues reached 13.4 billion BRL, 16% growth, driven by an impressive 51% growth in banking revenues and 9% in payments revenues. Net income was up 4% year-over-year. Later on the presentation, we will see the main impact on net income was due to the increase in financial expenses linked with the basic interest rate of Brazil, Selic, which grew from an average of around 10.8% per year in 2024 to almost 14.5% per year in 2025. Going to the value creation for shareholder section, our earnings per share reached 7.99 BRL, growing 21% year-over-year.

Speaker #2: Focus on our long-term ambition. Going to Design 4, we can see the key operational and financial highlights for the full year 2025. Compared to last year, our revenues reached 13.4 billion reais 16% growth, driven by an impressive 51% growth in banking revenues and 9% in payments revenues.

[Company Representative] (PagSeguro Digital Ltd.): Focus on our long-term ambition. Going to slide 4, we can see the key operational and financial highlights for the full year 2025. Compared to last year, our revenues reached 13.4 billion BRL, 16% growth, driven by an impressive 51% growth in banking revenues and 9% in payments revenues. Net income was up 4% year-over-year. Later on the presentation, we will see the main impact on net income was due to the increase in financial expenses linked with the basic interest rate of Brazil, Selic, which grew from an average of around 10.8% per year in 2024 to almost 14.5% per year in 2025. Going to the value creation for shareholder section, our earnings per share reached 7.99 BRL, growing 21% year-over-year.

Speaker #2: Net income was up 4% year over year. Later on the presentation, we will see the main impact on net income was due to the increase in financial expenses linked with the Selic, which grew from an average of around 10.8% per year in 2024 to almost 14.5% per year in 2025.

Speaker #2: Going to the value creation for shareholder section, our earnings per share reached 7.99 reais growing 21% year over year. Buybacks and total dividends distributed in 2025 reached 2.1 billion reais, leading to a yield.

[Company Representative] (PagSeguro Digital Ltd.): Buybacks and total dividends distributed in 2025 reached BRL 2.1 billion, leading to a 15% total shareholder yield. On slide 5, we can see the highlights of the Q4. Our TPV grew 10% quarter-over-quarter, marking an inflection point with sequential improvement in volumes. Our expanded credit portfolio reached BRL 50 billion. It is important to highlight the portion of the credit portfolio composed by loans, credit cards, and working capital grew 33% year-over-year, with NPL 90+ approximately half of the industry average. These trends reinforce the underlying strength of our ecosystem and our ongoing commitment to expanding access to financial services in a responsible and sustainable way. On the funding efficiency initiative, our deposits reached BRL 40 billion, growing 13% year-over-year.

Ricardo Dutra: Buybacks and total dividends distributed in 2025 reached BRL 2.1 billion, leading to a 15% total shareholder yield. On slide 5, we can see the highlights of the Q4. Our TPV grew 10% quarter-over-quarter, marking an inflection point with sequential improvement in volumes. Our expanded credit portfolio reached BRL 50 billion. It is important to highlight the portion of the credit portfolio composed by loans, credit cards, and working capital grew 33% year-over-year, with NPL 90+ approximately half of the industry average. These trends reinforce the underlying strength of our ecosystem and our ongoing commitment to expanding access to financial services in a responsible and sustainable way. On the funding efficiency initiative, our deposits reached BRL 40 billion, growing 13% year-over-year.

Speaker #2: On slide 5, we can see the highlights of the fourth quarter. Our TPV grew 10% quarter over quarter, marking an inflection point with sequential improvement in volumes.

Speaker #2: Our expanded credit portfolio reached 50 billion reais; it is important to highlight the portion of the credit portfolio composed by loans. Credit cards and working capital grew 33% year over year, with NPLs 90 approximately half of the industry average.

Speaker #2: This trend reinforced the underlying strength of our ecosystem and our ongoing commitment to expanding access to financial services in a responsible and sustainable way.

Speaker #2: On the funding efficiency initiative, our deposits reached R$40 billion, growing 13% year over year. Moving on to financial highlights, our total net revenue excluding interchange and card scheme fees increased 12% year over year, reaching R$3.5 billion.

[Company Representative] (PagSeguro Digital Ltd.): Moving on to financial highlights, our total net revenue, excluding interchange and card scheme fees, increased 12% year-over-year, reaching BRL 3.5 billion. Our non-GAAP net income was BRL 678 million, 7.4% higher year-over-year, leading to analyzed return on average equity of 18.4%, improved 100 basis points year-over-year. On slide six, I'm pleased to announce we successfully delivered our 2025 guidance despite strong headwinds such as macro volatility and sharp increase in Brazilian interest rates in 2025. Gross profits grew 6.9% for the year within our expected range of 5% to 7%. GAAP diluted EPS increased 18.2% in 2025, above the guided range of 13% to 15% using the same share count as of December 2024.

Ricardo Dutra: Moving on to financial highlights, our total net revenue, excluding interchange and card scheme fees, increased 12% year-over-year, reaching BRL 3.5 billion. Our non-GAAP net income was BRL 678 million, 7.4% higher year-over-year, leading to analyzed return on average equity of 18.4%, improved 100 basis points year-over-year. On slide six, I'm pleased to announce we successfully delivered our 2025 guidance despite strong headwinds such as macro volatility and sharp increase in Brazilian interest rates in 2025. Gross profits grew 6.9% for the year within our expected range of 5% to 7%. GAAP diluted EPS increased 18.2% in 2025, above the guided range of 13% to 15% using the same share count as of December 2024.

Speaker #2: Our non-gap net income was 678 million reais, 7.4% higher year over year, leading to analyzed return on average equity of 18.4%, improved 100 basis points year over year.

Speaker #2: On slide 6, I'm pleased to announce we successfully delivered our 2025 guidance despite strong headwinds such as macro volatility and sharp increase in Brazilian interest rates in 2025.

Speaker #2: Gross profits grew 6.9% for the year, within our expected range of 5% to 7%. Gap diluted EPS increased 18.2% in 2025, above the guided range of 13 to 15% using the same share count as of December 2024.

Speaker #2: When you consider the benefit of buyback execution, reducing shares outstanding, EPS increased more than 20% year over year. Cap to expenditures reached 2.3 billion in 2025, landing at the upper end of our 2.2 billion to 2.3 billion range.

[Company Representative] (PagSeguro Digital Ltd.): When you consider the benefit of buyback execution, reducing shares outstanding, EPS increased more than 20% year-over-year. CapEx expenditures reached BRL 2.3 billion in 2025, landing at the upper end of our BRL 2.2 billion to 2.3 billion range. Overall, the full delivery of 2025 guidance makes us confident about 2026 perspectives and reinforces our strong track record as shown in the following slide. I'd like to briefly focus on our consistent track record in creating shareholder value. Since our IPO in 2018, GAAP diluted EPS has grown at a compounded annual rate of nearly 16% despite global disruptions in macro volatility during this time frame. Throughout this journey, we have advanced in key strategic milestones which broaden our addressable market, strengthened profitability, and built a solid foundation for sustainable earnings growth.

Ricardo Dutra: When you consider the benefit of buyback execution, reducing shares outstanding, EPS increased more than 20% year-over-year. CapEx expenditures reached BRL 2.3 billion in 2025, landing at the upper end of our BRL 2.2 billion to 2.3 billion range. Overall, the full delivery of 2025 guidance makes us confident about 2026 perspectives and reinforces our strong track record as shown in the following slide. I'd like to briefly focus on our consistent track record in creating shareholder value. Since our IPO in 2018, GAAP diluted EPS has grown at a compounded annual rate of nearly 16% despite global disruptions in macro volatility during this time frame. Throughout this journey, we have advanced in key strategic milestones which broaden our addressable market, strengthened profitability, and built a solid foundation for sustainable earnings growth.

Speaker #2: Overall, the full delivery of 2025 guidance makes us confident about 2026 perspectives and reinforces our strong track record, as shown in the following slide.

Speaker #2: I'd like to briefly focus on our consistent track record in creating shareholder value. Since our IPO in 2018, gap diluted EPS has grown at a compounded annual rate of nearly 16% despite global disruptions in macro volatility during this timeframe.

Speaker #2: Throughout this journey, we have advanced in key strategic milestones, which broadened our addressable market, strengthened profitability, and built a solid foundation for sustainable earnings growth.

Speaker #2: These efforts have increased the visibility and recurrence of our results and enhanced predictability and reinforced the resilience of our business model in generating long-term value.

[Company Representative] (PagSeguro Digital Ltd.): These efforts have increased the visibility and recurrence of our results, enhancing predictability and reinforces the resilience of our business model in generating long-term value. Now I'll pass the word to Carlos Mauad.

Ricardo Dutra: These efforts have increased the visibility and recurrence of our results, enhancing predictability and reinforces the resilience of our business model in generating long-term value. Now I'll pass the word to Carlos Mauad.

Speaker #2: Now, I'll pass the word to Carlos Mawad.

Speaker #3: Thank you, Dutra. Good evening. In this section, we will take a look at the operational and commercial performance of our units in this past quarter.

Carlos Mauad: Thank you, Dutra. Good evening. In this section, we will take a look at the operational and commercial performance of our units in this past quarter. Let me start on slide 9, where we highlight our remaining growth opportunities. As we've highlighted in recent quarters, as we tap into the new verticals, there is a substantial room for expansion across our platform. In many areas of our banking business, our market share remains below 1%, which reinforces our conviction that we are only at the beginning of what we can build, whether through deeper cross-sell or a stronger, more efficient deposit franchise or a broader, more diversified credit portfolio. I'll manage with discipline and a long-term view. On the next slide, we will highlight our customer-centric approach demonstrated by increasing transactionality and engagement of our ecosystem.

Speaker #3: Let me start on slide 9, where we highlight our main growth opportunities. As we've highlighted in recent quarters, as we tap into the new verticals that is a substantial room for expansion across our platform.

Speaker #3: In many areas of our banking business, our market share remains below 1%, which reinforces our conviction that we are only at the beginning of what we can build, whether through deeper cross-sell or a stronger, more efficient deposit franchise or a broader, more diversified credit portfolio.

Speaker #3: I'll manage with discipline in a long-term view. On the next slide, we will highlight our customer-centric approach, demonstrated by an increasing transactionality and engagement of our ecosystem.

Speaker #3: The evolution of our cashing metric, which represents inflow, not related to acquiring, remains one of the most important indicators of our client activity on our platform.

Carlos Mauad: The evolution of our cash-in metric, which represents inflow not related to acquiring, remains one of the most important indicators of our clients' activity on our platform. In Q4 of 2025, cash-in reached more than BRL 90 billion, an increase of 11% compared to the same period of last year. On a per-client basis, the figure rose to BRL 5.3 thousand, up 10% year-over-year. As a reminder, cash-in is mainly composed by Pix transactions received, showing how Pix has become an important and profitable component of our business. We are also seeing an increase in our platform usage as measured through the amount of bill payments, Pix transactions, and the penetration of investment and insurance products, signaling deeper relationships and improved monetization as clients increasingly rely on us for a wider portion of their financial needs.

Speaker #3: In the fourth quarter of 2025, cashing reached more than 90 billion reais and increased 11% compared to the same period of last year. On a per-client basis, the figure rose to 5.3 thousand reais, up 10% year over year.

Speaker #3: As a reminder, cashing is mainly composed by fixed transactions received, showing how PIX has become an important and profitable component of our business. We are also seeing an increase in our platform usage.

Speaker #3: As measured through the amount of bill payments, PIX transactions and the penetration of investment and insurance products. Signaling deeper relationships and improved monetization as clients increasingly rely on us for a wider portion of their financial needs.

Speaker #3: These trends underscore the strength of our ecosystem and the growing intensity of customer engagement across our base. On slide 11, let's speak about our credit performance.

Carlos Mauad: These trends underscore the strength of our ecosystem and the growing intensity of customer engagement across our base. On slide 11, let's speak about our credit performance. We can see credit as a strategic driver of engagement across both our banking and payment business, enabling deeper transactional activity, unlocking meaningful cross-sell opportunities. In Q4, our total credit portfolio reached BRL 4.6 billion, a 33% year-over-year increase. Since the second half of 2024, we have been gradually accelerating underwriting for unsecured products with a particular focus on working capital. This progress reflects ongoing improvements in our risk assessment and collections capabilities, increasingly supported by AI. While originating typically is low in Q4 due to the seasonal pattern, working capital originations were still 26% higher than in Q3, showing a healthy and consistent traction.

Speaker #3: We can see credit as a strategic driver of engagement across both our banking and payment business, enabling deeper transactional activity and unlocking meaningful cross-sell opportunities.

Speaker #3: In the fourth quarter, our total credit portfolio reached 4.6 billion reais, a 33% year over year increase. Since the second half of 2024, we have been gradually accelerating underwriting for unsecured products, with a particular focus on working capital.

Speaker #3: This progress reflects ongoing improvements in our risk assessment and collections capabilities, increasingly supported.

Speaker #1: By AI While originating , typically is lows in the fourth quarter due to the seasonal pattern , working capital originations were still 26% higher than in Q3 , showing a healthy and consistent traction when we include financial operations linked to merchant prepayment supported by our instant assessment feature .

Carlos Mauad: When we include financial operations linked to merchant prepayment supported by our instant settlement feature, our expanded credit portfolio now approaches BRL 50 billion, up 3% over the last 12 months despite lower volumes. Turning to asset quality, as shown on the bottom right of the slide, our NPL 90+ ratio remains well below market average due to our disciplined approach to risk and product mix. The small increase we observe is a natural consequence of the greater mix of unsecured products in the portfolio. On the next slide, we present the continuous strength of our deposit base and the progress we are making in improving our funding efficiency. During the quarter, total deposits reached more than BRL 40 billion, growing 13% year-over-year, a resilient performance despite the macro environment.

Speaker #1: Our expanded credit portfolio now approaches $50 billion, up 3% over the last 12 months, despite lower volumes. Turning to asset quality.

Speaker #1: As shown on the bottom right of the slide , our NPL 90 ratio remains well below market average due to our disciplined approach to risk and product mix .

Speaker #1: The small increase will observe is a natural consequence of the greater mix of unsecured products in the portfolio . On the next slide , we present the continued strength of our deposit base and the progress we are making in improving our funding efficiency During the quarter , total deposit reached more than 40 billion reais , growing 13% year over year .

Speaker #1: A resilient performance despite the macro environment. Deposits are the core of our funding structure, and this quarter we saw a meaningful shift towards on-platform deposits, which reached 95% of the total, reinforcing strong client engagement.

Carlos Mauad: Deposits are the cores of our funding structure, and this quarter we saw a meaningful shift towards on-platform deposits, which reached 94% of the total, reinforcing a strong client engagement and the growing relevance of our digital channels. Importantly, this was the 7th consecutive quarter of reduction in our funding cost as a percentage of the CDI. This trend highlights the effectiveness of our strategy to broaden and diversify our funding mix with cost efficiency, and it contributes to the resilience of our liability structure and supports the expansion of our credit portfolio. Finally, as shown on the right-hand side of the slide, our loan to funding ratio improves from 113% last year to 111% this quarter as we continue to grow credit with caution and prioritize a well-balanced structure.

Speaker #1: And a growing relevance of our digital channels Importantly , this was the seventh consecutive quarter of reduction in our funding costs as a percentage of the CDI .

Speaker #1: This trend highlights the effectiveness of our strategy to broaden and diversify our funding mix with cost efficiency , and it contributes to the resilience of our liability structure and support the expansion of our credit portfolio Finally , as shown on the right hand side of the slide , our loan to funding rate improves from 113% last year to 111% this quarter .

Speaker #1: As we continue to grow credit with caution and prioritize a well balanced structure With that , I will hand it over to Gustavo , who will walk you through the financial highlights of the quarter of 2025 .

Carlos Mauad: With that, I will hand it over to Gustavo, who will walk you through the financial highlights of the quarter of 2025. Gustavo, please.

Speaker #1: Gustavo , please .

Speaker #2: Thanks , Maud . Hello , everyone , and thank you for joining us today Let's focus now on our consolidated financial results in this first slide .

Gustavo: Thanks, Mauad. Hello, everyone, thank you for joining us today. Let's focus now on our consolidated financial results. In this first slide, as a consequence of the increase in transactionality and engagement, total revenue and income net of interchange and card scheme fees reached BRL 3.5 billion in Q4, up 12% year-over-year. This performance captures the expansion of the banking business and also the repricing measures we began implementing in the Pix payment at the end of 2024, which have been essential to offset higher financial costs and to reinforce the sustainability of our revenue base. It is very important to highlight that revenue growth has once again outpaced TPV, showing that our repricing strategy effectively supported profitability. Disciplined execution drove resilient result in 2025, position us to sustain solid performance into 2026 despite market uncertainty.

Gustavo Sechin: Thanks, Mauad. Hello, everyone, thank you for joining us today. Let's focus now on our consolidated financial results. In this first slide, as a consequence of the increase in transactionality and engagement, total revenue and income net of interchange and card scheme fees reached BRL 3.5 billion in Q4, up 12% year-over-year. This performance captures the expansion of the banking business and also the repricing measures we began implementing in the Pix payment at the end of 2024, which have been essential to offset higher financial costs and to reinforce the sustainability of our revenue base. It is very important to highlight that revenue growth has once again outpaced TPV, showing that our repricing strategy effectively supported profitability. Disciplined execution drove resilient result in 2025, position us to sustain solid performance into 2026 despite market uncertainty.

Speaker #2: As a consequence of the increase in Transactionality and engagement , total revenue and income , net of interchange and card scheme fees reached 3.5 billion in the fourth quarter , up 12% year over year This performance captures the expansion of the banking business and also the repricing measures we began implementing the payment at the end of 2020 .

Speaker #2: Four , which have been essential to offset higher financial costs and to reinforce the sustainability of our revenue base . It is very important to highlight that revenue growth has also , outpaced TPV , showing that our strategy effectively supported profitability , disciplined execution drove resilient results in 2025 , positioned us to sustain solid performance in 2026 .

Speaker #2: Despite market uncertainty Banking revenue reached 757 million , growing 47% year over year , driven by the expansion of our credit portfolio . Higher engagement and stronger monetization supported by deposit growth and increased fee generation , particularly from card usage and account related services .

Gustavo: Banking revenue reached BRL 757 billion, growing 47% year-over-year, driven by the expansion of our credit portfolio, higher engagement, and a stronger monetization, supported by deposit growth and increased fee generation, particularly from card usage and account related services. As a result, banking gross profit grew 54% year-over-year with a 72% margin of revenues. The combination of stronger banking results and our repricing efforts helped partially offset the impact of higher interest rates throughout the year. Consolidated gross profit reached BRL 2.1 billion for the quarter, an increase of 80.7% year-over-year when we excluded the negative effect of BRL 54 billion of buyback and dividend distributions. Turning to the next slide, Q4 delivered operating leverage reflecting continued efficiency gains across the platform.

Gustavo Sechin: Banking revenue reached BRL 757 billion, growing 47% year-over-year, driven by the expansion of our credit portfolio, higher engagement, and a stronger monetization, supported by deposit growth and increased fee generation, particularly from card usage and account related services. As a result, banking gross profit grew 54% year-over-year with a 72% margin of revenues. The combination of stronger banking results and our repricing efforts helped partially offset the impact of higher interest rates throughout the year. Consolidated gross profit reached BRL 2.1 billion for the quarter, an increase of 80.7% year-over-year when we excluded the negative effect of BRL 54 billion of buyback and dividend distributions. Turning to the next slide, Q4 delivered operating leverage reflecting continued efficiency gains across the platform.

Speaker #2: As a result , banking gross profit grew 54% year over year , with a 72% margin of revenues . The combination of stronger banking results and our repricing efforts helped partially offset the impact of higher interest rates throughout the year Consolidated gross profit reached 2.1 billion for the quarter , an increase of 80.7% year over year .

Speaker #2: When we excluded the negative effect of 54 million of buybacks and dividend distributions Turning to the next slide . Fourth quarter delivery operation leverage reflecting continued efficiency gains across the platform Our disciplined approach to managing expenses and delivery operation leverage remains a key pillar of our strategy .

Gustavo: Our disciplined approach to managing expenses and delivery operation leverage remains a key pillar of our strategy, and it played an important role in helping us navigate the impacts of higher financial costs this period, allowing us to balance sustainable growth with continued profitability. On the cost side, financial costs increased 39% year-over-year, driven mainly by the higher interest rate environment and the effects of recent capital structure adjustments, as highlighted earlier. On the other hand, sequentially, financial costs reduced at 1% due to the progress we have made in diversifying our funding structure and reducing our funding costs. At the same time, total losses declined at 8%, reflecting improvements in our Know Your Customer and onboarding process, which led to fewer chargebacks. This benefit was partially offset by the natural increase in expected credit loss as we continued to accelerate our credit operation.

Gustavo Sechin: Our disciplined approach to managing expenses and delivery operation leverage remains a key pillar of our strategy, and it played an important role in helping us navigate the impacts of higher financial costs this period, allowing us to balance sustainable growth with continued profitability. On the cost side, financial costs increased 39% year-over-year, driven mainly by the higher interest rate environment and the effects of recent capital structure adjustments, as highlighted earlier. On the other hand, sequentially, financial costs reduced at 1% due to the progress we have made in diversifying our funding structure and reducing our funding costs. At the same time, total losses declined at 8%, reflecting improvements in our Know Your Customer and onboarding process, which led to fewer chargebacks. This benefit was partially offset by the natural increase in expected credit loss as we continued to accelerate our credit operation.

Speaker #2: And it played an important role in helping us navigate the impacts of higher financial costs. This period allowed us to balance sustainable growth with continued profitability.

Speaker #2: On the cost side Financial costs increased 39% year over year , driven mainly by the higher interest rate environment and the effects of recent capital structure adjustments .

Speaker #2: As highlighted earlier . On the other hand , sequentially financial costs reduced 1% due to the progress we have made in diversifying our funding structure and reducing our funding costs .

Speaker #2: At the same time , total losses declined 80% , reflecting improvements in our Know Your customers and onboarding process , which led to fewer chargebacks .

Speaker #2: This benefit was partially offset by the natural increase in expected credit losses. As we continued to accelerate our credit operation, operating expenses decreased 2% year over year, clearly showing our commitment to efficient cost management.

Gustavo: Operating expense decreased 2% year-over-year, clearly showing our commitment to efficient cost management. This reduction reflects lower personal expenses and more disciplined marketing investments. As a result, operating leverage improved significantly by 320 basis points as compared to the same period last year. Moving on to the next slide, we reported non-GAAP net income of BRL 678 billion in Q4, represent 7% year-over-year growth and an increase of 16% on our EPS diluted. On the right side of the slide, you can see our return on average equity improving by 100 basis points year-over-year, reaching 18.4% compared to 17.3 in Q4 2024.

Gustavo Sechin: Operating expense decreased 2% year-over-year, clearly showing our commitment to efficient cost management. This reduction reflects lower personal expenses and more disciplined marketing investments. As a result, operating leverage improved significantly by 320 basis points as compared to the same period last year. Moving on to the next slide, we reported non-GAAP net income of BRL 678 billion in Q4, represent 7% year-over-year growth and an increase of 16% on our EPS diluted. On the right side of the slide, you can see our return on average equity improving by 100 basis points year-over-year, reaching 18.4% compared to 17.3 in Q4 2024.

Speaker #2: This reduction reflects lower personnel expenses and more disciplined marketing investments . As a result , operating leverage improved significantly by 320 basis points compared to the same period last year Moving on to the next slide , we reported non-GAAP net income of 678 million in the quarter , represented 7% year over year growth and an increase of 16% on our EPs diluted .

Speaker #2: On the right side of the slide , you can see our return on average equity improving by 100 basis points year over year , reaching 18.4% compared to 17.3 in the fourth quarter of 2020 .

Speaker #2: For even with the conservative capital structure , we have consistently managed to deliver a solid returns and it becomes clear that positive impact in this metric as we progress in improving our capital structure .

Gustavo: Even with the conservative capital structure, we have consistently managed to deliver solid returns. It becomes clear the positive impact in this metric as we progress in improving our capital structure, as shown in the next slide. Now, moving on to the next slide, let's focus on the initiatives that drive shareholder value and improve our capital structure. In order to achieve our Basel Index target level of 18% to 22% in the next coming years, we have used not only dividends, but also buyback as an additional tool to enhance shareholder value, as it can be adjusted to market conditions and liquidity. In our point of view, dividends offer stability and predictability while buybacks provide tactical flexibility. It's important to use both tools to improve our capital structure.

Gustavo Sechin: Even with the conservative capital structure, we have consistently managed to deliver solid returns. It becomes clear the positive impact in this metric as we progress in improving our capital structure, as shown in the next slide. Now, moving on to the next slide, let's focus on the initiatives that drive shareholder value and improve our capital structure. In order to achieve our Basel Index target level of 18% to 22% in the next coming years, we have used not only dividends, but also buyback as an additional tool to enhance shareholder value, as it can be adjusted to market conditions and liquidity. In our point of view, dividends offer stability and predictability while buybacks provide tactical flexibility. It's important to use both tools to improve our capital structure.

Speaker #2: As shown in the next slide . Now moving on to the next slide . Let's focus on the initiatives that driver shareholder value and improve our capital structure in order to achieve our basal index target level of 18 to 22% in the next coming years .

Speaker #2: We have used not only dividends , but also buyback as an additional tool to enhance shareholder value . As it can be adjusted to market conditions and liquidity in our point of view , dividends of stability and predictability while buybacks provide tactical flexibility and it's important to use both tools to improve our capital structure Throughout 2025 , we maintain and consistent momentum in our buyback program , repurchasing over 27 million shares in February , 5 million common shares held in Treasury were cancelled Furthermore , we paid 617 million in cash dividends during 2025 and in 2026 .

Gustavo: Throughout 2025, we maintained a consistent momentum in our buyback program, repurchasing over 27 million shares. In February, 5 million common shares held in treasury were canceled. Furthermore, we paid 617 million in cash dividends during 2025, and in 2026, last month, roughly BRL 200 million out of the BRL 1.4 billion dividend announced for the year were already paid. The remaining balance will be distributed in three tranches over the course of this year. This schedule reinforced the consistency of our capital return framework and our focus on predictable value creation. Let me address our CET1 and the impacts from the new regulatory tax framework. Due to the tax framework approved last year, a new 10% withholding tax on intra-group dividends is effective in Brazil.

Gustavo Sechin: Throughout 2025, we maintained a consistent momentum in our buyback program, repurchasing over 27 million shares. In February, 5 million common shares held in treasury were canceled. Furthermore, we paid 617 million in cash dividends during 2025, and in 2026, last month, roughly BRL 200 million out of the BRL 1.4 billion dividend announced for the year were already paid. The remaining balance will be distributed in three tranches over the course of this year. This schedule reinforced the consistency of our capital return framework and our focus on predictable value creation. Let me address our CET1 and the impacts from the new regulatory tax framework. Due to the tax framework approved last year, a new 10% withholding tax on intra-group dividends is effective in Brazil.

Speaker #2: Last month , roughly 200 million out of the 1.4 billion dividend announcement for the year were already paid The remaining balance will be distributed in three tranches over the course of this year This is scheduled reinforces the consistency of our capital return framework and our focus on predictable value creation .

Speaker #2: Let me address our CET1 and the impacts from the new regulatory tax framework. Due to the tax framework approved last year, a new 10% withholding tax on intragroup dividends is effective in Brazil.

Speaker #2: Dividends declared by the end of December 2025 . We remain exempt from this tax , provided they are effectively paid by 2028 . This transition rule gave companies the ability to optimize internal capital flows ahead of the new framework , and we are managing this process in a disciplined manner .

Gustavo: Dividends declared by the end of December 2025 will remain exempt from this tax, provided they are effectively paid by 2028. This transition rule gave companies the ability to optimize internal capital flows ahead of the new framework. We are managing this process in a disciplined manner. As a result, in Q4 of 2025 of our regulatory capital at the entity level, while the consolidated capital base remained stable. Our Basel Index ratio decreased temporarily this quarter, placing our Basel Index below our intended target of 18% to 22%. It's important to highlight that this effect is purely account driven and does not impact on our cash position, nor our ability to support growth. The reallocation of excess capital is consistent with our long-term capital efficiency strategy.

Gustavo Sechin: Dividends declared by the end of December 2025 will remain exempt from this tax, provided they are effectively paid by 2028. This transition rule gave companies the ability to optimize internal capital flows ahead of the new framework. We are managing this process in a disciplined manner. As a result, in Q4 of 2025 of our regulatory capital at the entity level, while the consolidated capital base remained stable. Our Basel Index ratio decreased temporarily this quarter, placing our Basel Index below our intended target of 18% to 22%. It's important to highlight that this effect is purely account driven and does not impact on our cash position, nor our ability to support growth. The reallocation of excess capital is consistent with our long-term capital efficiency strategy.

Speaker #2: As a result , in the fourth quarter . Fourth quarter , 2444 40 . Carbonate of our regulatory capital at the entity level , while the consolidated capital base remain stable , our Basel index ratio decreases temporarily this quarter , placing our base index below our intended target of 1,822% .

Speaker #2: It's important to highlight that its effect is purely accounting driven and does not impact on our cash position , nor our ability to support growth The relocation of excess capital is consistent with our long term capital efficiency strategy .

Speaker #2: As we look ahead , the actions we took in 2025 position us well for next phase of disciplined and sustainable growth and strengthens our ability to navigate 2026 with confidence .

Gustavo: As we look ahead, the actions we took in 2025 position us well for the next phase of disciplined and sustainable growth, and it strengthens our ability to navigate 2026 with confidence. Bearing that in mind, let's move to the next slide, where we outline our 2026 guidance and walk through. Our performance and efficient includes the operation priorities, credit initiatives, and efficiency opportunities that support our trajectory and reinforce the foundations for long-term value creation. Starting this year, we are evolving the way we communicate with the market by aligning our annual guidance with our long-term ambition for 2029. This shift reflects the confidence we have in the structural levels of our business and the visibility we have built into our key growth drivers.

Gustavo Sechin: As we look ahead, the actions we took in 2025 position us well for the next phase of disciplined and sustainable growth, and it strengthens our ability to navigate 2026 with confidence. Bearing that in mind, let's move to the next slide, where we outline our 2026 guidance and walk through. Our performance and efficient includes the operation priorities, credit initiatives, and efficiency opportunities that support our trajectory and reinforce the foundations for long-term value creation. Starting this year, we are evolving the way we communicate with the market by aligning our annual guidance with our long-term ambition for 2029. This shift reflects the confidence we have in the structural levels of our business and the visibility we have built into our key growth drivers.

Speaker #2: Bearing that in mind , let's move to the next slide where we outline our 2026 guidance and walk through and walk through and walk through our Is the operational priorities credit initiatives and efficiency opportunities that support our trajectory and reinforce the foundations for long term value creation Starting this year , we are evolving the way we communicate with the market by aligning our annual guidance with our long term ambition for 2029 .

Speaker #2: This shift reflects the confidence we have in the structural levers of our business and the visibility we have built into our key growth drivers in this context , our full year guidance will focus on four pillars the expansion of our credit portfolio , the acceleration of gross profit , the continued progress toward delivering non-GAAP diluted EPs , and also capital expenditure .

Gustavo: In this context, our full year guidance will focus on four pillars: The expansion of our credit portfolio, the acceleration of gross profit, the continued progress to deliver non-GAAP diluted EPS, and also capital expenditure, all in line with our long-term path. We expect our 2026 credit portfolio growth to be in the range of 25% to 35%, supported by the expansion of underwriting our core credit products, including working capital. Gross profit growth outlook is expected to be in the range of 6% to 9%, reflecting an increased contribution on our banking segment in a still pressured financial cost scenario. Diluted non-GAAP EPS is expected to be in the range of 9% to 13%, consistent with our long-term profitability roadmap and the operational efficiency we are driving across the company.

Gustavo Sechin: In this context, our full year guidance will focus on four pillars: The expansion of our credit portfolio, the acceleration of gross profit, the continued progress to deliver non-GAAP diluted EPS, and also capital expenditure, all in line with our long-term path. We expect our 2026 credit portfolio growth to be in the range of 25% to 35%, supported by the expansion of underwriting our core credit products, including working capital. Gross profit growth outlook is expected to be in the range of 6% to 9%, reflecting an increased contribution on our banking segment in a still pressured financial cost scenario. Diluted non-GAAP EPS is expected to be in the range of 9% to 13%, consistent with our long-term profitability roadmap and the operational efficiency we are driving across the company.

Speaker #2: All in line with our long term path . We expect our 2026 credit portfolio growth to be in the range of 25 to 35% , supported by the expansion of underwriting our core credit product , including working capital , gross profit growth outlook is expected to be in the range of 6 to 9% , reflecting an increased contribution from our banking segment in a still pressured financial cost scenario Diluted non-GAAP EPs is expected to be in the range of 9 to 13% .

Speaker #2: Consistent with our long term profitability roadmap and the operational efficiency we are driving across the company Finally , capital expenditure is expected to be in the range of 1.8 billion and 2.0 billion , reflecting our focus on efficiency and disciplined approach .

Gustavo: Finally, capital expenditure is expected to be in the range of BRL 1.8 billion and 2.0 billion, reflecting our focus on efficiency and disciplined approach. With that, I'll invite Mauad for the closing remarks.

Gustavo Sechin: Finally, capital expenditure is expected to be in the range of BRL 1.8 billion and 2.0 billion, reflecting our focus on efficiency and disciplined approach. With that, I'll invite Mauad for the closing remarks.

Speaker #2: With that , I will invite my watch for the closing remarks

Speaker #1: Thank you . Gustavo . Before we conclude , let's move to the next slide for a few final remarks First , we can see credit growth accelerate , supported by discipline and underwriting and health asset quality .

Carlos Mauad: Thank you, Gustavo. Before we conclude, let's move to the next slide for a few final remarks. First, we can see credit growth accelerate, supported by discipline and underwriting and health asset quality. The continued momentum in our unsecured working capital solutions, driven primarily by our own active client base, reinforces both the relevance of our products and the quality of the risk management approach. Secondly, acquiring volumes have been recovering steadily since mid Q3, marking a clear inflection point. This recovery is now consolidating into a strong foundation for positive trends as we move into 2026, reflecting healthier client activity and the effectiveness of our commercial initiatives. Finally, improved funding efficiency and consistent cost control have played an important role in protecting margins. These efforts allowed us to sustain net income growth even in a still challenging interest rate environment.

Speaker #1: The continuum momentum in our unsecured working capital solutions, driven primarily by our own active client base, reinforces both the relevance of our products and the quality of the risk management approach. Secondly, acquiring volumes have been recovering steadily since mid third quarter, marking a clear inflection point.

Speaker #1: This recovery is now consolidating into a strong foundation for positive trends as we move into 2020 . Six , reflecting healthier client activity and effectiveness of our commercial initiatives .

Speaker #1: And finally improved funding efficiency and consistent cost control have played an important role in protecting margins . These efforts allowed us to sustain net income growth even in a still challenging interest rate environment Together , these elements demonstrated our ability to execute with discipline , manage macroeconomic pressure , and continue advancing our long term goals .

Carlos Mauad: Together, these elements demonstrated our ability to execute with discipline, manage macroeconomic pressure, and continue advancing our long-term goals. As a reminder, our 2029 strategic targets include BRL 25 billion in credit portfolio with a balanced mix of secured and unsecured products, emphasizing working capital loans and AI-enabled solutions such as private payroll and PIX finance. Above 10% gross profit CAGR, driven by stronger banking contribution, cross-sell opportunities, and efficiency gains. Above 60% EPS CAGR as we continue converting growth and operational improvement into consistent shareholders returns. This target reflects our confidence in the scalability of our platform and the strength of our execution.

Speaker #1: As a reminder, our 2029 strategic targets include $25 billion in credit portfolio with a balanced mix of secured and unsecured products, emphasizing working capital loans and AI-enabled solutions such as private payroll and PIGS financing. Above 10% gross profit will be driven by stronger banking contribution, cross-sell opportunities, and efficiency gains.

Speaker #1: And above 16% EPs CAGR . As we continue converting growth and operational improvement into consistent shareholders returns This target reflects our confidence in the scalability of our platform and strength of our execution

Speaker #3: Thank you all for the presentation. We will now begin the Q&A session for investors and analysts.

Operator: Thank you all for the presentation. We'll now begin the Q&A session for investors and analysts. As a reminder, we will only take one question per analyst to ensure the best use of our time. Our first question comes from Mario Pierry with Bank of America. You can open your microphone.

Speaker #4: As a reminder, we will only take one question per analyst to ensure the best use of our time. Our first question comes from Mario PE with Bank of America.

Speaker #4: You can open your microphone

Speaker #5: Hi , guys . Good evening Thank you for taking my question . I wanted to focus on your gross profit guidance of 6 to 9% , trying to understand because this looks conservative to us .

Mario Pierry: Hi, guys. Good evening. Thank you for taking my question. I wanted to focus on your gross profit guidance of 6% to 9%. Trying to understand, because this looks conservative to us because as you mentioned, right, your TPV growth accelerated quarter-over-quarter to 10%. However, you're guiding for 6% to 9%. When we think about your financial expenses in 2026, they should be coming down as rates come down. I'm trying to understand. Are you expecting a slowdown revenue growth, or what kind of Selic rates do you have embedded on your forecasts? Maybe that's the reason why, you know, gross profits is growing single digits. Again, right, this number is below your medium-term outlook of at least 10% growth.

Speaker #5: Because as you mentioned , right , your TPV growth accelerated quarter over 9:45 percent . However , you're guiding for 6 to 9 .

Speaker #5: And then when we think about your financial expenses in 2026 , they should be coming down as rates come down So , so I'm trying to understand are you expecting a slowdown revenue growth or what kind of leak rates do you have embedded on your forecasts ?

Speaker #5: And maybe that's the reason why gross profits is growing single digits . And again , right . Both this number is below your long your medium term outlook of at least 10% growth .

Mario Pierry: Trying to understand then what gives you confidence that this growth can accelerate going forward. I understand, right, you're introducing more banking products, and you're accelerating the credit product. Just wanted, you know, to understand a little bit better the single digit growth in gross profits. Thank you.

Speaker #5: And trying to understand them . What gives you confidence that this growth can accelerate going forward ? I understand you're introducing more banking products and you're accelerating the credit product , but just wanted to understand a little bit better .

Speaker #5: The the single digit growth in gross profits . Thank you

Speaker #6: Hi , Mario . Thank you . Gustavo here . Thank you for your question You are right that we are posting for this year .

Gustavo: Hi, Marius. Thank you. This is Gustavo here. Thank you for your question. You are right that we are posting for this year lower gross profit when compared to our long-term ambition. You're gonna remember that when we released our long-term ambition and also given to the market uncertainty that we are right now facing and is still facing, we should assume that the performance in 2006 should be a little bit below the long-term ambition. It's important to consider that as we ramp up the credit business, it also consumes higher provisions and also reduce the gross profit and also reduce the EPS in the first year of our long-term ambition trend. We are totally confident that we are on track to deliver the long-term ambition in all lines.

Gustavo Sechin: Hi, Mario. Thank you. This is Gustavo here. Thank you for your question. You are right that we are posting for this year lower gross profit when compared to our long-term ambition. You're gonna remember that when we released our long-term ambition and also given to the market uncertainty that we are right now facing and is still facing, we should assume that the performance in 2006 should be a little bit below the long-term ambition. It's important to consider that as we ramp up the credit business, it also consumes higher provisions and also reduce the gross profit and also reduce the EPS in the first year of our long-term ambition trend. We are totally confident that we are on track to deliver the long-term ambition in all lines.

Speaker #6: Lower gross profit . When compared to our long term ambition . But you you're going to remember that when we released our long term ambition and also given to the macro that we are right now facing , and is still facing , we should assume that the performance in 2006 should be a little bit below the long term ambition , and also it's important to consider that as we are ramp up the credit business , it also consumes a lot higher provisions .

Speaker #6: And also reduce the gross profit . And also reduce the pH . In the first year of our long term ambition trend . But we are totally confident that we are on track to deliver the long term ambition in online spread .

Gustavo: Red, as we post the EPS CAGR and also the gross profit CAGR. When we talk about the Selic rate, that's very important when we talk about the financial cost. When we look and what we expect for 2006, despite that we will face cuts in the interest rate along the year, the average Selic probably is gonna be quite close to the 2005 Selic rate. At the same time, we also assume that and included that in our 2006 guidance.

Gustavo Sechin: Red, as we post the EPS CAGR and also the gross profit CAGR. When we talk about the Selic rate, that's very important when we talk about the financial cost. When we look and what we expect for 2006, despite that we will face cuts in the interest rate along the year, the average Selic probably is gonna be quite close to the 2005 Selic rate. At the same time, we also assume that and included that in our 2006 guidance.

Speaker #6: As we post the EPs , and also the gross profit margin when we when we talk about the leak rate , that's very important .

Speaker #6: When we talk about the financial cost , when we look and what we expect for 2026 , despite that , we we will face cuts in the interest rate along the year .

Speaker #6: The average profit is going to be quite close to the 2005 Selic rate. And at the same time, we also assume that and included that in our 2026 guidance.

Speaker #5: Okay , Gustavo , let me follow up then when we look at your EPs right , growing faster than gross profits , then you are implying , I think efficiency gains here , if you can just explore a little bit where this efficiency gains are coming from .

Mario Pierry: Okay. Gustavo, let me follow up. When we look at your EPS, right, growing faster than gross profit, you are implying, I think, efficiency gains here. If you can just explore a little bit where these efficiency gains are coming from. Just to be sure, the EPS of 9% to 13% does not imply, right, a reduction in the share count, correct?

Speaker #5: And just to be sure , the EPs of 9 to 13% does not imply a reduction in the share count . Correct ?

Speaker #6: Yes , you are right . We are not . Assume the same share base for the EPs guidance . And also we are considering continuing generate operational leverage through the through the operation .

Gustavo: Yes, you are right. We are not assuming the same share base, for the EPS guidance. We are considering continued generate operation leverage through the operation. We understand that we have different initiatives that we are working on, some of them we put in place. All of those initiatives will deliver a continuous operation leverage.

Gustavo Sechin: Yes, you are right. We are not assuming the same share base, for the EPS guidance. We are considering continued generate operation leverage through the operation. We understand that we have different initiatives that we are working on, some of them we put in place. All of those initiatives will deliver a continuous operation leverage.

Speaker #6: We understand that we have different initiatives that we are working on. Some of them we put in place, and all of those initiatives will deliver a continuous operating leverage.

Speaker #5: Okay . Thank you

Mario Pierry: Okay, thank you.

Speaker #4: Our next question comes from Guillermo with J.P. Morgan. You can open your microphone.

Operator: Our next question comes from Guilherme Grespan with JPMorgan. You can open your microphone.

Operator: Our next question comes from Guilherme Grespan with J.P. Morgan. You can open your microphone.

Speaker #7: Hi . Good evening everyone . Thank you for opening for questions . Just one clarification before I jump into my question . The EPs guidance should I read it as same share count meaning EPs is the same as earnings growth ?

Guilherme Grespan: Hi, good evening, everyone. Thank you for opening for questions. Just one clarification before I jump into my question. The EPS guidance, should I read it as same share count, meaning EPS is the same as earnings growth? Should I dilute it with the buyback of the year? This is just a clarification. My question is actually on the TPV recovery. It was a nice quarter. Just want to get your views and update on what is the diagnosis you have on why you were missing clients and potentially having churn and what you sold so far. Looking ahead, if you still has any bottleneck that you feel that you need to fix.

Speaker #7: Or should I dilute it with the buyback of the year ? This is just a clarification . And then my question is actually on on the TPV recovery .

Speaker #7: It was a nice quarter. Just want to get your views and update on what is the diagnosis you have on why you are missing clients potentially having churn, and what you solved so far.

Speaker #7: And looking ahead , if you're still has any bottleneck that you feel that you need to to to fix and basically this , this whole diagnosis with what is happening , what you already did and what still to be to be done in in early 2026 .

Guilherme Grespan: Basically, this whole diagnosis with what is happening, what you already did, and what's still to be done in early 2026. Thank you so much.

Speaker #7: Thank you so much

Gustavo: It's Gustavo again. Thank you for your question. Just to make clear, we are not considering the buyback in our EPS. If we continue, we intend to continue working on our buyback problem, it will be diluted for the EPS.

Gustavo Sechin: It's Gustavo again. Thank you for your question. Just to make clear, we are not considering the buyback in our EPS. If we continue, we intend to continue working on our buyback problem, it will be diluted for the EPS.

Speaker #6: Gustav . Again , thank you for your question . Just just to make clear , we are not considering the buyback in our EPs .

Speaker #6: So if we continue , then we intend to continue working on our buyback program . It will be diluted for the EPs

Speaker #1: And thank you . Thank you for your question here . This is Mawad on regarding the TPV recovery . We we did have some operational enhancements on the second half of of last year .

Guilherme Grespan: Thank you.

Gustavo: Thank you.

Gustavo Sechin: Thank you.

Carlos Mauad: Thank you for your question here. This is Mauad. Regarding the TPV recovery, we did have some operational enhancements on the second half of last year. We deployed our new logistics operations by August. We are reviewing everything related to the set of terminals that we have with our customers. The banking platform is gaining quality and a new set of products. Everything that we are doing here under the operational perspective is helping up to keep up with the customer database and to recovery TPV. Remembering that on the last call that we had with you guys here, we mentioned that the low part of the curve in terms of TPV was in August, and we keep seeing the recovery month after month.

Speaker #1: We we deployed our new operations by , by August . We are reviewing everything related to the set of terminals that we have with our customers .

Speaker #1: The banking platform is gaining quality and new set of products . So everything that we are doing here under the operational perspective is helping us to keep up with the customer database and to recovery .

Speaker #1: TPV, remembering that on the last call that we had with you guys here, we mentioned that the low part of the curve in terms of TPV was in August, and we keep seeing the recovery month after month.

Speaker #1: And on the beginning of this year here , we keep seeing the same movement that we saw throughout the second half of the year .

Carlos Mauad: On the beginning of this year here, we keep seeing the same movement that we saw throughout the second half of the year. Just to complement here, remember, we, of course, TPV is one of the metrics that we follow here, but TPV per se is not the main metric. Look at the revenues that we've been growing year-over-year. We reached 16% revenue growth. If you consider the financial services companies in Brazil, including FinTechs and banks, is one of the largest growths in the year. We are trying to do here to optimize the growth of TPV combining with revenues and combined with gross profit.

Speaker #1: And just .

Speaker #6: To compliment here , remember , we of course , TPV is one of the metrics that we follow here . But C is not the main metric .

Speaker #6: We look at the revenues that we've been growing year over year . We reached 16% revenue growth . If you consider the financial services companies in Brazil , including fintechs and banks , is one of the largest growth in the year .

Speaker #6: So we are trying to do here the optimize the growth of TPV , combining with revenues and combined with gross profit

Speaker #7: That's clear . That's clear . Thank you . Indeed , the gross profit had a rebound right . Went from 2% to over a year to to seven eight .

[Analyst] (JPMorgan Chase & Co.): That's clear. That's clear. Thank you. Indeed, the gross profit had a rebound, right? Went from 2% year-over-year to 7%, 8%. Thank you so much.

Guilherme Grespan: That's clear. That's clear. Thank you. Indeed, the gross profit had a rebound, right? Went from 2% year-over-year to 7%, 8%. Thank you so much.

Speaker #7: Thank you so much

Speaker #4: Our next question comes from Arnon Shirazi with Citi. You can open your microphone.

Operator: Our next question comes from Arnon Shirazi with Citi. You can open your microphone.

Speaker #8: Hi, y'all. Good evening. Thanks for the opportunity. I have two brief questions. The first one is related to the NPL increase compared to Turkey, without the 30 basis points deterioration.

Arnon Shirazi: Hi, all. Good evening. Thanks for the opportunity. I have two brief questions. The first one is related to the NPL increase compared to Q3. We saw 30 basis points deterioration. What's behind that? My second one is related to the CapEx guidance for 2026. It is expected to be below 2025 in BRL 400 million. What's behind that? Thanks.

Speaker #8: What's behind that? And my second one is related to the CapEx guidance for '26, expected to be below 25 in 400 meters.

Speaker #8: What's behind that ? Thanks

Speaker #9: I don't you just have

Carlos Mauad: Arnon, it's Gustavo.

Gustavo Sechin: Arnon, it's Gustavo.

Speaker #8: Type of tab

Arnon Shirazi: Hi, Gustavo.

Speaker #9: Our CapEx guidance for this year includes a reduction or savings of around 4 million reais when compared to last year, and that's basically because we are implementing some initiatives.

Carlos Mauad: Our CapEx guidance for these years includes a reduction or savings around BRL 4 million AIs when compared to last year. Basically, because we are implement some initiative, as I said in the first question of Mario Pierry, not relate only the OpEx, but also relates to the CapEx that we intend to de-deploy along through the year. It will reduce both the demand for POS and also the demand for technology investments that we have in plan. Narno, can you repeat the first part of the question? Because it's, it cut a little bit of connection here. First part of the question, please.

Gustavo Sechin: Our CapEx guidance for these years includes a reduction or savings around BRL 4 million AIs when compared to last year. Basically, because we are implement some initiative, as I said in the first question of Mario Pierry, not relate only the OpEx, but also relates to the CapEx that we intend to de-deploy along through the year. It will reduce both the demand for POS and also the demand for technology investments that we have in plan. Narno, can you repeat the first part of the question? Because it's, it cut a little bit of connection here. First part of the question, please.

Speaker #9: As I said in the first question of Mario , not relate , only the OpEx , but also relates to the CapEx that we intend to to the deploy along the through the year .

Speaker #9: And it will reduce both the demand for POS and also the demand for technology investments that we have in plan now.

Speaker #6: Can you repeat the first part of the question , because it got a little bit the connection here . The first part of the question , please , the question please .

Speaker #8: No problem at all . We sell a 30 basis deterioration in metals in this particular . But behind that

Arnon Shirazi: No problem at all. We saw a 30 basis deterioration in NPLs in this Q4. What's behind that?

Carlos Mauad: Here it's Mauad. I'm just gonna make sure if I understood it right. You are asking about the NPL, 30 basis points that we saw quarter-over-quarter, right?

Speaker #1: Here it's I'm just going to make sure if I understood it right . You were asking about the NPL 30 Bips that we saw quarter over quarter .

Carlos Mauad: Here it's Mauad. I'm just gonna make sure if I understood it right. You are asking about the NPL, 30 basis points that we saw quarter-over-quarter, right?

Speaker #1: Right . So I'm getting getting to that . We have , I would say two main effects here . First , it is the new regulation here where we we we keep accruing interest revenues until 90 days .

Arnon Shirazi: Yeah.

Carlos Mauad: I'm getting to that. We have, I would say, two main effects here. First, it is the new regulation here, where we keep accruing interest revenues until 90 days. That makes the balances to go up. That's an artificial movement due to the regulatory milestone. Plus, there is the unsecured products that we are deploying that pushes the NPL 90+ a little bit up. Remembering that we have pretty much half of the industry in terms of NPL. That's leaving us a lot of room to keep pushing up our credit outstanding.

Speaker #1: That makes the balances to go up . So that's an artificial movement due to the regulatory milestone . And plus there is the unsecured products that we are deploying that that pushes the the NPL 90 a little bit up , remembering that we have pretty much half of the industry in terms of NPL .

Speaker #1: That's leaving us a lot of room to keep pushing up our credit . Outstanding .

Speaker #8: Great . Thank you . If I may , just a follow up on CapEx , you mentioned that you reduce demand for POS .

Arnon Shirazi: Great. Thank you. If I may, just a follow-up on CapEx. You mentioned that you reduce demand for POS. What's driving that? It's going to be Tap on Phone or anything else? Why would reduce the demand? Thank you.

Speaker #8: What's driving that? Is it going to be type-on-phone or anything else? Why would it reduce the demand? Thank you.

Speaker #1: So here that are many factors that we are working on under the product perspective and under the logistics perspective that help us out to optimize the terminal CapEx .

Carlos Mauad: Here there are many factors that we are working on under the product perspective and under the logistic perspective that help us out to optimize the terminal CapEx. We are developing here a reverse logistics to make sure that every time we have to replace a terminal, we get the terminal that carries a kind of problem to remanufacture that and to reinclude that on our logistic network. On top of it, we also have the Tap on Phone that helps us out, especially on the terminals that are simpler to create these CapEx saving over time. Here, when you see a number which it is below what we have on 2025, there is no customer impact.

Speaker #1: So we are we are developing here a reverse logistics to make sure that every time we we have to replace a terminal , we get the terminal that carries a kind of problem to remanufacture that into re-include that on our logistic network and on top of it , we also have the tap on phone that helps us out , especially on the terminals that are simpler to create these CapEx saving over time .

Speaker #1: So here when you see a number , which it is below what we have on 2025 , that is no customer impact . In fact , we are going to keep pushing forward the customer database throughout 2026 .

Carlos Mauad: In fact, we are going to keep pushing forward, the customer database, throughout 2026.

Arnon Shirazi: That's all clear. Thank you.

Speaker #8: Here . Thanks . You .

Speaker #10: Okay

Speaker #4: Our next question comes from Kyle Prato with UBS You can open your microphone

Operator: Our next question comes from Kaio Prato with UBS. You can open your microphone.

Speaker #11: Hello everyone . Good evening . If first before my question , if I can just clarify if the so the EPs the non-GAAP growth that you mentioned is basically today considered as the same as the net income and also you basically centers like the guidance on the non-GAAP .

Kaio Prato: Hello, everyone. Good evening. First, before my question, if I can just clarify, if the... The EPS, the non-GAAP growth that you mentioned is basically, today considered as the same as the net income. Also you basically sent us like the guidance on the non-GAAP. Just would like to understand if you are assuming same level of share-based compensation for 2026 or if we can see any acceleration. Then I can follow up with my question, please.

Speaker #11: Just would like to understand if you are assuming same level of share based compensation for 2026 , or if we can see any acceleration .

Speaker #11: And then I can follow up with my question , please

Carlos Mauad: Hi, Kaio. Gustavo again. Yes, we are considering for the EPS as the base, the net income, non-GAAP as the base for calculation for the EPS.

Gustavo Sechin: Hi, Kaio. Gustavo again. Yes, we are considering for the EPS as the base, the net income, non-GAAP as the base for calculation for the EPS.

Speaker #9: Gustavo , again , yes . We are considering for the EPs . The net as the base , the net net income non-GAAP as the base for calculation for the apps .

Speaker #9: And also , as I said , we consider we going to consider the number of shares that we will find in each period that we are going to calculate .

Gustavo: Also, as I said, we're gonna consider the number of share that we will find in each period that we are gonna calculate. If that's very important to consider that because in both case, as we have been balancing buybacks and dividends, we understand that it is better to track the EPS trend and also, it consider, it is better. It eliminates the long-term investment, long-term plan that we have here in the company. We reduce that variable for the calculation of the EPS.

Gustavo Sechin: Also, as I said, we're gonna consider the number of share that we will find in each period that we are gonna calculate. If that's very important to consider that because in both case, as we have been balancing buybacks and dividends, we understand that it is better to track the EPS trend and also, it consider, it is better. It eliminates the long-term investment, long-term plan that we have here in the company. We reduce that variable for the calculation of the EPS.

Speaker #9: So if that's that's very important to consider that because in both cases , as we have been balancing buybacks and dividends , we understand that it is better to track the apps trend .

Speaker #9: And also consider it better . It eliminates the long term investment and long term plan that we have here in the company . So we reduce that that variable for the calculation of the EPs When I said the share based compensation okay , just to make it clear so it eliminates when we use the income non-GAAP it eliminates for the EPs calculation , the duration .

Kaio Prato: Okay.

Gustavo: When I said the share base compensation, okay. Just to make it clear. It eliminates, when we use the non-GAAP, it eliminates, for the EPS calculation, the share-based remuneration.

Gustavo Sechin: When I said the share base compensation, okay. Just to make it clear. It eliminates, when we use the non-GAAP, it eliminates, for the EPS calculation, the share-based remuneration.

Speaker #11: Yes, but just wondering if there is any potential acceleration on the shared base. Just want to understand what would be the GAAP.

Kaio Prato: Yes, just wondering if there is any potential acceleration on the share base, just to understand what would be the gap.

Speaker #9: No . We we could assume the same levels we do not have any plans to accelerate that .

Gustavo: No, we could assume the same levels. We do not have any plans to accelerate that.

Gustavo Sechin: No, we could assume the same levels. We do not have any plans to accelerate that.

Speaker #11: Okay , great . And in terms of like my main question would be on your engagement metrics , I think all of them were quite good this quarter .

Kaio Prato: Okay, great. In terms of, like my main question would be on your engagement metrics. I think all of them were quite good this quarter, so encouraging trends across the board. My question is, especially in the banking, if you can break down this metric between pure individuals and actually pure merchants. Just wondering about the performance of each of them. In your strategy, I would like to understand how relevant can be individuals actually only going forward. Any metric that you can share in terms of engagement, especially on pure individuals, would be good. If you can link that in terms of the expectation on the breakdown of your portfolio by the end of 2026.

Speaker #11: So encouraging trends across the board and my question is , especially in the banking , if you can break down this metric between pure individuals and actually pure merchants .

Speaker #11: So just wondering about the performance of each of them . And in our strategy , I would like to understand how relevant can be individuals actually only going forward .

Speaker #11: Any metric that you can share in terms of engagement , especially on pure individuals , would be good . And if you can link that in terms of the expectation on the breakdown of your portfolio by the end of 2026 , you already sent the guidance in terms of growth , but would be interesting to see how could be the breakdown of that in terms of working capital for merchants and also individuals .

Kaio Prato: You already sent the guidance, in terms of growth, but it would be interesting to see how could be the breakdown for that in terms of working capital for merchants and also individuals. Thank you.

Speaker #11: Thank you

Speaker #1: Yeah , we are not guiding exactly those numbers , like between individuals and entrepreneurs here . But I can assure you that both are growing .

Gustavo: Yeah. We, we are not guiding exactly those numbers like between individuals and entrepreneurs here. I can assure you that both are growing, both are gaining, engaging. Remembering that for the kind of customer that we have, especially on the payment side, the individual, the SMB is pretty much the same, let's say, the same set of products or the same set of needs that those customers has. Again, when we take a look at the product evolution here, we have initiatives on both sides, on payments, on credit products for small enterprises and for individuals also as the Private Payroll loan that it's already started to pilot inside the company.

Gustavo Sechin: Yeah. We, we are not guiding exactly those numbers like between individuals and entrepreneurs here. I can assure you that both are growing, both are gaining, engaging. Remembering that for the kind of customer that we have, especially on the payment side, the individual, the SMB is pretty much the same, let's say, the same set of products or the same set of needs that those customers has. Again, when we take a look at the product evolution here, we have initiatives on both sides, on payments, on credit products for small enterprises and for individuals also as the Private Payroll loan that it's already started to pilot inside the company.

Speaker #1: Both are gaining engaging and remembering that for the kind of customer that we have , especially on the payment side , the , the , the individual , the SMB is pretty much the same , let's the same set of products or the same set of needs that those customers has .

Speaker #1: But again , when we take a look at the product evolution here , we have initiatives on both sides on payments , credit products for small enterprises and for individuals .

Speaker #1: Also, as the private payroll loan that has already started to pilot inside the company. So, sorry that I couldn't answer completely.

Gustavo: Sorry that I couldn't answer completely your question, but again, it is something that is growing on both sides.

Gustavo Sechin: Sorry that I couldn't answer completely your question, but again, it is something that is growing on both sides.

Speaker #1: Your question , but again , it is something that it is growing on both sides .

Speaker #11: Okay . Thank you very much

Kaio Prato: Okay. Thank you very much.

Speaker #4: Our next question comes from Tiago Pora with BTG I believe he left the queue . We're gonna go with Tito from Tito Labarta with Goldman Sachs

Operator: Our next question comes from Thiago Paura with BTG. I believe he left the queue. We are gonna go with Tito Labarta with Goldman Sachs.

Speaker #12: Okay . Good evening . Thank you for taking my question . Just a follow up . I guess . More on the capital return , you mentioned .

Tito Labarta: Okay. Good evening. Thank you, for taking my question. Just a follow-up, I guess, more on the capital return. Since you probably mentioned, I guess you're assuming a similar share count. I mean, we know you have the dividend. You're on an 8% yield, and you've completed 70% of the buyback. If you complete the other 30%, that's maybe another 2% of shares. Should we assume that any additional buyback or like how are you thinking about capital return beyond that? Is that it for 2026, and then we should start thinking about further buybacks or dividends more in 2027? Or is there the potential for additional buybacks perhaps in 2026?

Speaker #12: I guess you're assuming a similarly share count . I mean , we know you have the dividend , which is around 8% yield .

Speaker #12: And you've completed 70% of the buyback . So if you complete the other 30% , that's maybe another 2% of shares . But do we assume that any additional buyback or like how are you thinking about capital return beyond that ?

Speaker #12: Is that it for 2026 . And then we should start thinking about further buybacks and dividends . More in 2027 . Or is there a potential for additional buybacks perhaps in 2026 ?

Speaker #9: I will here , I think that as you mentioned , we have been working on the buyback as at the same time as we have been working on dividends , and we we intend to use both tools and try to balance both tools because that's important to , to , to they give us flexibility in terms of when we use buyback and also dividends .

Gustavo: Hi, Tito. Marcelo here. I think that as you mentioned, we have been working on the buyback at the same time that we have been working on dividends. We intend to use both tools and try to balance both tools because that's important. They give us some flexibility in terms of when we use buyback and also dividends, they bring some stability in terms of return. We have the third buyback program that was launched last May. It remains open. We have been executing them since then. Approximately 80% of these buyback programs have been executed, and we probably gonna deploy the rest of this program in the upcoming months.

Marcelo Martinez: Hi, Tito. Marcelo here. I think that as you mentioned, we have been working on the buyback at the same time that we have been working on dividends. We intend to use both tools and try to balance both tools because that's important. They give us some flexibility in terms of when we use buyback and also dividends, they bring some stability in terms of return. We have the third buyback program that was launched last May. It remains open. We have been executing them since then. Approximately 80% of these buyback programs have been executed, and we probably gonna deploy the rest of this program in the upcoming months.

Speaker #9: They bring some stability in terms of return . So we have the buyback program that that was launched last May . We it remains open .

Speaker #9: We have been executing them since then. Approximately 80% of these buyback programs have been executed. And we are probably going to deploy the rest of this program in the upcoming months.

Speaker #9: At the same time, it's very important to remember that we have released the $1.4 billion in terms of dividend. That is going to be paid along this year.

Gustavo: At the same time, it's very important to remember that we have released the BRL 1.4 billion in terms of dividend that's gonna be paid along this year in March, three tranches. Just remember last February, we paid the first one of BRL 200 million.

Marcelo Martinez: At the same time, it's very important to remember that we have released the BRL 1.4 billion in terms of dividend that's gonna be paid along this year in March, three tranches. Just remember last February, we paid the first one of BRL 200 million.

Speaker #9: In March , three tranches . And just remember , last , last Friday , last February paid the first one of 200 million .

Tito Labarta: All right. Thank you.

Speaker #12: All right . Thank you

Speaker #4: Our next question comes from the Vaz with Safra . You can open your microphone .

Operator: Our next question comes from Daniel Vaz with Safra. You can open your microphone.

Speaker #13: Thank you . Good night everyone . Thanks for the opportunity . Making questions I'm looking at your credit portfolio guidance . Nearly at midpoint of 30% year over year .

Daniel Vaz: Thank you. Good night, everyone. Thanks for the opportunity in making questions. I'm looking at your credit portfolio guidance, nearly at midpoint of 30% year-over-year. This implies, right, I think we've already covered that in your strategic update that the 2027 to 2029 window would be essentially a regime in changing pace, right? It would not be a continuation of the current trajectory. I wanted to understand further on your confidence and the macro assumptions you embed in that back-end acceleration, right? What terminal Selic rate are you using? Maybe, how much of that growth is a function of the rate cycle rather than structurally achievable market share gains, right?

Speaker #13: This implies . Right ? I we've already covered that in your in your strategic update that the 2027 to 2029 window would be essentially a regime in changing pace .

Speaker #13: Right ? So it would not be a continuation of the current trajectory . So I wanted to understand further on your confidence and the macro assumptions you embed in that back back end acceleration .

Speaker #13: Right . So what what terminal selic rate are you using ? Maybe how how much of that growth is a function of the rate cycle rather than structurally achievable market share gains ?

Speaker #13: Right . So that would be my question . And maybe I'll do a follow up later . Thank you

Daniel Vaz: that would be my question, and maybe, I'll do a follow-up later. Thank you.

Speaker #1: Hello . This is Mawatha . Thank you for your question . We are looking pretty much at the same level as focus for the silica and at between like 12.5 and 13% .

Carlos Mauad: Hello, this is Mauad. Thank you for your question. We are looking pretty much at the same level as Focus for the Selic and at between, like, 12.5% and 13%. Again, there are many other matters that explain a lower growth on the first year of our long-term guidance here. There are the product evolution that we are deploying as we speak here with you guys. There is a lot of products that are going to our to our value prop throughout the year. That is some learnings that are the credit strategy to be deployed, and that is the macro environment also that is a little tougher.

Speaker #1: But again , the the that that are many other matters that explain a lower growth on the first year of our long term guidance here .

Speaker #1: There is the product evolution that we are deploying as we speak here with you guys. So, there are a lot of products that are going to add to our value prop throughout the year.

Speaker #1: So that is some learnings that are the credit strategy to be deployed . And that is the macro environment . Also , that it is a little tougher .

Carlos Mauad: We expect that on 2027, 2028 to be softer and have a better credit environment, so we can evolve. It is a mix between the macro environment, the product evolution, and the credit strategy to make sure that we have the right pace and the right credit performance to push the portfolio up to BRL 25 billion.

Speaker #1: So we expect that on 2027 , 2028 to be softer in , have a better credit environment . So we can evolve . So it is a mix between the macro environment , the product evolution and the credit strategy to make sure that we have the right pace and the right credit performance to push the portfolio up to 25 billion reais .

Speaker #6: And just to complement, remember that the credit portfolio is based on different cohorts, and then we start making these cohorts in '25, '26.

Marcelo: Just to complement, remember that credit portfolio is based on different cohorts, we start making these cohorts in 25, 26, and they will stack up. It's not a linear growth. When we gave the update, the strategic update in September 2025, we said that 26 would not grow, on average, the necessary pace to reach the BRL 25 billion. That's why we are giving this guidance BRL 25 to 35 billion. Of course, it could be higher than that, remember that effect that we have with the cohorts that can stack up. Also, I would like also to remember that today we are operating with NPLs that are half of the industry's average, which gave us comfort and room to grow and to accelerate in a sustainable way, not to one step forward, two step back.

Gustavo Sechin: Just to complement, remember that credit portfolio is based on different cohorts, we start making these cohorts in 25, 26, and they will stack up. It's not a linear growth. When we gave the update, the strategic update in September 2025, we said that 26 would not grow, on average, the necessary pace to reach the BRL 25 billion. That's why we are giving this guidance BRL 25 to 35 billion. Of course, it could be higher than that, remember that effect that we have with the cohorts that can stack up. Also, I would like also to remember that today we are operating with NPLs that are half of the industry's average, which gave us comfort and room to grow and to accelerate in a sustainable way, not to one step forward, two step back.

Speaker #6: And there stack up . So it's not a linear growth . That's why when we we gave the update the strategic update in September 25th , we we said that 26 would not grow on average .

Speaker #6: The necessary pace to reach the $25 billion. So that's why we are giving this guidance, $25 to $35 billion. Of course, it could be higher than that.

Speaker #6: But remember that effect that we have with the cohorts that can stack up and also I would like also to remember that today we are operating with NPLs that are half of the industry average , which gave us comfort and room to grow and to accelerate in a sustainable way , not to one step forward , two steps back .

Speaker #6: So we want to do it in a sustainable way . And again , there's this mathematical or mechanical movement . The cohort is going to stack up and then it's going to grow , not in a linear way .

Marcelo: We wanna do it in a sustainable way. Again, there's this mathematical or mechanical movement. The cohorts is gonna stack up, and then it's gonna grow not in a linear way in 2027, 2028.

Gustavo Sechin: We wanna do it in a sustainable way. Again, there's this mathematical or mechanical movement. The cohorts is gonna stack up, and then it's gonna grow not in a linear way in 2027, 2028.

Speaker #6: In 2728 .

Speaker #13: No thank you . Thank you for the the answer . And maybe a follow up . So is the target . Basically we're we're saying that the target is is contingent on a constructive macro scenario .

Daniel Vaz: No, thank you. Thank you for the answer and maybe a follow-up. Basically, we're saying that the target is contingent on a constructive macro scenario, right? I guess everything you said on your perspective of better models, stronger underwriting, product development, but still contingent on a constructive macro, right? I mean, if anything changes on the fiscal side, on the trajectory of the interest rates, we would probably be looking at the revisions for this number. Am I correct?

Speaker #13: Right . I guess everything you said on your perspective of better models , stronger underwriting , product development , but still contingent on a constructive macro , right ?

Speaker #13: I mean , if if anything changes on the fiscal side , on the trajectory of the interest rates , we would probably be looking at a revision for this number .

Speaker #13: Am I correct

Speaker #9: Yes , I think I think you are you are , you are right . It includes that mark unsorted . It's Gustavo here .

Carlos Mauad: Yes. I think you are right. It includes that mark uncertain. It's Gustavo here, just to clarify. In our guidance, it includes that kind of mark uncertain that we are facing, and that is room for acceleration. As the macro brings more opportunity to grow, we are gonna do that. It's included.

Speaker #9: Just to clarify . So in our in our guidance , it includes that that kind of mark uncertain that we are facing and that is room for acceleration .

Speaker #9: So as we as , as the macro brings more opportunities to growth , we are going to do that . So it's included

Speaker #13: Now . Pretty clear . Thank you everyone .

Daniel Vaz: No, pretty clear. Thank you, everyone.

Speaker #6: But just to complement, it's too far to plan when you think about two years ahead. Remember, we were in a scenario last week, and last Saturday we had a new war in the world, with the Middle East, with oil prices going up and down.

Marcelo: Just to complement, it's too far to plan when you think about two years ahead. Remember, we were in a scenario last week, and last Saturday we had a new war in the world with Middle East, with oil prices going up and down. There are many variables. What we're trying to send the message here is that regardless of these macroeconomic movements, we are going to try to grow in a sustainable way. Of course, there are going to be cycles, credit cycles, but we are confident with the guidance for 2026, and we are confident with the long-term ambition, BRL 25 billion in 2029.

Gustavo Sechin: Just to complement, it's too far to plan when you think about two years ahead. Remember, we were in a scenario last week, and last Saturday we had a new war in the world with Middle East, with oil prices going up and down. There are many variables. What we're trying to send the message here is that regardless of these macroeconomic movements, we are going to try to grow in a sustainable way. Of course, there are going to be cycles, credit cycles, but we are confident with the guidance for 2026, and we are confident with the long-term ambition, BRL 25 billion in 2029.

Speaker #6: So it's there are many variables , what they're trying to to send the message here is that regardless of this macro economic movements , we are going to try to grow in a sustainable way .

Speaker #6: Of course , there's going to be cycles , credit cycles , but we are confident with the guidance for 26 and we are confident with the long term ambition that 25,000,000,000 in 2029 .

Speaker #13: All right. Good. Thank you.

Daniel Vaz: All right, good. Thank you.

Speaker #4: Our next question comes from with BTG . You can open your microphone

Operator: Our next question comes from Thiago Paura with BTG. You can open your microphone.

Speaker #14: Hi everyone . Thanks for the opportunity here . Good evening . I believe I have accidentally left the call . Us or left the queue in the in the previous call , but just a follow up on the on the volumes .

Thiago Paura: Hi. Hi, everyone. Thanks for the opportunity here. Good evening. I believe I have accidentally left the call or left the queue in the previous call. Just a follow-up on the volumes, maybe a double click here on the dynamics that you are seeing. Given the change that you have been, you know, kind of releasing recently in the TPV disclosure, just to get a sense from you regarding the mix behind incremental volumes growth. Basically, more recently and what to expect going forward regarding the main drivers for TPV growth. Is it being more driven by nano merchants, more SMBs, larger accounts?

Speaker #14: Maybe a double click here on the dynamics that you are seeing given the changes that you have been , you know , kind of releasing recently in the TPD disclosure , just to have a get a sense on from you regarding the mix behind incremental volumes growth .

Speaker #14: So basically more recently and what to expect going forward regarding the , the , the main drivers for TPV growth , is it being more driven by nano merchants , more SMEs or larger accounts just to , to to get a sense on this kind of , you know , client profile on the , on the payment side .

Thiago Paura: Just to get a sense on this kind of, you know, client profile, on the payment side. Thank you.

Speaker #14: Thank you

Speaker #1: Thank you for your question . Just answering straightforward . The focus of the company is to SMEs . So we are talking talking about small and medium enterprise .

Carlos Mauad: Thank you for your question. Just answering straightforward, the focus of the company is still SMBs. We are talking about small and medium enterprise. The nano merchant, it is part of our strategy on the Tap on Phone, on the organic inflow that we have here in terms of customers. We put our efforts, our capabilities, our market investment for SMBs, which it is still the growth frontier of the company. Nothing different than that. We're gonna keep pushing small and medium enterprises.

Speaker #1: The the nano emulsion . It is part of our strategy on the tap on phone , on the organic inflow that we have here .

Speaker #1: In terms of customers . And we put our efforts , our capabilities , our marketing investment for SMEs , which is still the the growth from tier of the company .

Speaker #1: So nothing different than that . We're going to keep pushing as more and medium enterprises .

Marcelo: If I can add, I would just like to highlight. I think that we have a unique combination in terms of product and service, especially for MSMB. We have a very seamless digital experience. We have a full digital bank here with all set of products and service. It give us, it generates multiple revenue streams that we will deliver to our customers. At the same time, we will continue to grow our operation. Right now, on top of that, we have been working on the credit avenue of growth. Those opportunities give us the confidence that we're gonna be on track to deliver our results.

Speaker #9: If I can add , I would just I would like to highlight , I think that we have a unique combination in terms of product and service special for MSME .

Gustavo Sechin: If I can add, I would just like to highlight. I think that we have a unique combination in terms of product and service, especially for MSMB. We have a very seamless digital experience. We have a full digital bank here with all set of products and service. It give us, it generates multiple revenue streams that we will deliver to our customers. At the same time, we will continue to grow our operation. Right now, on top of that, we have been working on the credit avenue of growth. Those opportunities give us the confidence that we're gonna be on track to deliver our results.

Speaker #9: So we have a very similar digital experience . We have a full digital bank here with all set of products and service , and it gives us the generate multiple revenue streams that we we will deliver to our customers .

Speaker #9: And at the same time , we will continue to grow our operation . And right now , on top of that , we have been working on the credit avenue of growth .

Speaker #9: So those give those opportunities , give us the confidence that we're going to be on track to deliver our results

Speaker #14: Great . Thank you . Thank you . And if I may , just a follow up on the on the EPs guidance because several questions are being , you know , are coming from from clients just to , to to double check that .

Thiago Paura: Great. Thank you. Thank you. If I may, just to follow up on the EPS guidance, because several questions are being, you know, are coming from clients. Just to double-check that. Given the share count by the end of the year will be lower than now, mechanically, even if net income grows like, you know, zero or it remains flat, that would imply something like, you know, just high single-digit EPS growth that is embedded in the guidance. That's the idea behind, just to double-check that.

Speaker #14: So given the share count by the end of the year will be lower than than than Mechanically , even if net income grows like , you know , zero or it remains flat , that would imply something like , you know , this high single digit EPs growth that is embedded in the .

Speaker #14: That's the that's the idea behind just to to to double check that

Speaker #9: Mathematically speaking , yes . You are right . But you can assume that the net income will still grow .

Marcelo: Mathematically speaking, yes, you are right. You can assume that the net income will still grow.

Gustavo Sechin: Mathematically speaking, yes, you are right. You can assume that the net income will still grow.

Speaker #14: Okay . Thank you .

Thiago Paura: Okay. Thank you.

Speaker #9: You still be growing .

Marcelo: Will still be growing.

Gustavo Sechin: Will still be growing.

Speaker #14: Okay. Perfect. Thank you.

Thiago Paura: Okay. Perfect. Thank you.

Speaker #4: Our next question comes from Nihar Agarwala with HSBC.

Operator: Our next question comes from Neha Agarwala with HSBC.

Speaker #15: Hi. Just for clarification on the volume growth that you mentioned—we saw good growth in the fourth quarter. But how should we think about the sustainability of this growth?

Neha Agarwala: Hi. Just a clarification on the volume growth that you mentioned. We saw a good growth in Q4, but how should we think about the sustainability of this growth? Some of your competitors might also be putting in more effort to retain clients. How do you see the competition in 2026, and what efforts would be required for you to ensure that you retain the customers, especially given the fact that you have a lot of operational efficiency focus and you want to control the costs? If you could talk about that. Second, one is just on the effective tax rate. We had a bit of a volatility in Q4, and you explained about the change in tax rate.

Speaker #15: Some of your competitors might also be putting in more effort to retain clients . So how do you see the competition in 2026 , and what efforts would be required for you to ensure that you retain the customers , especially given the fact that you have a lot of operational efficiency , focus and you want to control the costs .

Speaker #15: So if you could talk about that and second one is just on the effective tax rate , we had a bit of a volatility in fourth quarter .

Speaker #15: And you explained about the change in tax rate. If you could elaborate a bit on that and tell us what kind of level we should expect going forward in '26-'27.

Neha Agarwala: If you could elaborate a bit on that and tell us what kind of level should we expect going forward in 2026, 2027, roughly any range, that would be very helpful. Thank you.

Speaker #15: Roughly any range that would be very helpful . Thank you

Speaker #1: Thank you for your question , Nihar . Here , in terms of in terms of the growth , I've understood , right . The first part of your question , we're not going to guide the volumes throughout the year .

Carlos Mauad: Thank you for your question, Neha. Here in terms of TPV growth, if I understood right the first part of your question, we're not gonna guide our volumes throughout the year. Again, I will reinforce the same trend that we saw in the second half of last year, we see on Q1 of this year here. We are very confident on our customer acquisition strategy. Also we are quite confident on the way that we're engaging our customers to control turnover time. Again, of course, the competitiveness arena is quite hot, as you guys know, we have a very powerful set of products here to keep up growing or recovering TPV throughout the year.

Speaker #1: But again , I will reinforce the same trend that we saw in the second half of last year . We see on the first quarter Of this year here .

Speaker #1: So we are very confident on our customer acquisition strategy . And also we are quite confident on the way that we are engaging our customers to control turnover time .

Speaker #1: So again , of course , the the competitiveness arena is quite hot as as you guys know . But we have a very powerful set of products here to keep up growing or recovering TPV over throughout the year .

Speaker #6: And yeah, just to complement, the competition is the same that we've been seeing in the last years. When you have an interest rate in the country of 15% per year, everyone needs to be rational.

Marcelo: Neha, just to complement, the competition is the same that we've been seeing the last years. When you have a interest rate of the country with 15% per year, everyone needs to be rational. We don't see anyone trying to buy market share. Everyone is trying to look for profitability. I know you mentioned about the cost control that you are doing, but all the cost control we are looking for and that we are reaching at this time does not affect the customer services or go-to-market and things like that. We are looking for efficiency. We are using artificial intelligence in many fronts in such a way that it can have lower cost without any problem or any impact in sales for our clients or the way that we go to the market.

Gustavo Sechin: Neha, just to complement, the competition is the same that we've been seeing the last years. When you have a interest rate of the country with 15% per year, everyone needs to be rational. We don't see anyone trying to buy market share. Everyone is trying to look for profitability. I know you mentioned about the cost control that you are doing, but all the cost control we are looking for and that we are reaching at this time does not affect the customer services or go-to-market and things like that. We are looking for efficiency. We are using artificial intelligence in many fronts in such a way that it can have lower cost without any problem or any impact in sales for our clients or the way that we go to the market.

Speaker #6: We don't see anyone trying to buy market share . Everyone is trying to look for profitability and I know you mentioned about the cost control that you are doing , but all the cost control , cost control we are looking for and they do are reaching at this time does not affect the customer service .

Speaker #6: Our go to market and things like that . We are looking for efficiency . We are using artificial intelligence in many fronts in such a way that we can have lower cost without any problem or any impact in service for our clients , or the way that you go to the market .

Speaker #6: Just to be clear , here , we are going to keep accelerating the way we've been doing the past years , and have more efficient in this go to market and all the back office and logistics and so on .

Marcelo: Just to be clear here, we are gonna keep accelerating the way we've been doing the past years and have more efficient in this go-to-market and all the back office and logistics and so on. Regarding the tax rate, Gustavo.

Gustavo Sechin: Just to be clear here, we are gonna keep accelerating the way we've been doing the past years and have more efficient in this go-to-market and all the back office and logistics and so on. Regarding the tax rate, Gustavo.

Speaker #6: Regarding the tax rate, Gustavo, can—

Gustavo: Anira, good to see you. Talking about the tax, I think that the main message is structurally tax rates should increase over time, especially because the increase of the banking revenue pool. For this year, we should close our tax around mid-terms, mid-teens for the full year.

Gustavo Sechin: Anira, good to see you. Talking about the tax, I think that the main message is structurally tax rates should increase over time, especially because the increase of the banking revenue pool. For this year, we should close our tax around mid-terms, mid-teens for the full year.

Speaker #9: You would see you talking about the tax. I think that the main message is, structurally, tax rate should increase over time, especially because of the increase of the banking revenue pool.

Speaker #9: But for this year , you should we should post a tax around mid terms mid teens for the full year

Marcelo: Anira, just to complement, I just wanna reinforce here that we have a very powerful ecosystem. I know you already know, but it's worth to mention that we have this digital bank account that we've been working on since 2019 or 2018, that makes the difference when you go to the market. We see some other players that believed in other synergies, now they're talking about banking, but they are too much behind, as I would say. We have this powerful combination of the digital account that serves SMBs and all the powerful that you have in the payments that was the origin of the company. Just to be clear here, we are using all the advantages that we have in this go-to-market.

Gustavo Sechin: Anira, just to complement, I just wanna reinforce here that we have a very powerful ecosystem. I know you already know, but it's worth to mention that we have this digital bank account that we've been working on since 2019 or 2018, that makes the difference when you go to the market. We see some other players that believed in other synergies, now they're talking about banking, but they are too much behind, as I would say. We have this powerful combination of the digital account that serves SMBs and all the powerful that you have in the payments that was the origin of the company. Just to be clear here, we are using all the advantages that we have in this go-to-market.

Speaker #6: Just to compliment I just want to reinforce here that we have a very powerful ecosystem . We . I know you already know , but it's worth to mention that we have this digital bank account that we've been working on since 2019 or 2018 .

Speaker #6: That makes the difference when you go to the market , we see some other players that believe in synergies , and now they are talking about banking , but they are to to too much behind us .

Speaker #6: I would say we have this powerful combination of the digital account that serves and all the powerful that it have in the payments .

Speaker #6: That was the origin of the company . But just to be clear , here we are using all the the advantage that you have in this go to market and it's worth to mention in Q4 , we 10% quarter over quarter while the market grew 5% .

Marcelo: It's worth to mention in Q4, we grew 10% quarter-over-quarter, while the market grew 5%. We grew the double of the market in Q4 compared to Q3. Thank you.

Gustavo Sechin: It's worth to mention in Q4, we grew 10% quarter-over-quarter, while the market grew 5%. We grew the double of the market in Q4 compared to Q3. Thank you.

Speaker #6: So we we grew the double of the market in Q4 compared to Q3 . Thank you .

Speaker #15: That's very helpful . Thank you for that . Maybe . Probably I missed . I mentioned previously , what is the assumption you have for 2026 , as well as for the long term guidance that you posted

Neha Agarwala: That's very helpful. Thank you for that. Maybe probably I missed, and you mentioned previously, what is the static assumption you have for 2026 as well as for the long-term guidance that you posted?

Speaker #9: For this year , we are including 12.5 for the year end , which will give us an average quite similar for with the 2025 for the long term guidance , we we assume reduction , but in the in the spirit they will be above 10% in 2027 .

Gustavo: For this year, we are including 12.5 for the year-end, which will give us an average Selic quite similar for with the 2025. For the long-term guidance, we assume some reduction, but in the spirit, they will be above 10% in 2027 and also in 2008.

Gustavo Sechin: For this year, we are including 12.5 for the year-end, which will give us an average Selic quite similar for with the 2025. For the long-term guidance, we assume some reduction, but in the spirit, they will be above 10% in 2027 and also in 2008.

Speaker #9: And also in 2008 .

Neha Agarwala: Super clear. Thank you so much.

Speaker #15: Thank you so much

Operator: This concludes today's presentation. You may now disconnect and have a nice evening. Goodbye.

Q4 2025 PagSeguro Digital Ltd Earnings Call

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