Q4 2025 StoneCo Ltd Earnings Call

March 2, 2026

Speaker #1: By now, everyone should have access to our earnings release. The company also posted a presentation to go along with its call. All material can be found online at investors.stone.co.

Roberta Noronha: Good evening, everyone. Thank you for standing by. Welcome to StoneCo's Q4 and fiscal year 2025 Earnings Conference Call. By now, everyone should have access to our earnings release. The company also posted a presentation to go along with its call. All material can be found online at investors.stone.co. Before we begin the call, I advise you to review the disclaimer included in the press release and presentation, which outlines important information about forward-looking statements and non-IFRS financial measures. In addition, many of the risks regarding the business are disclosed in the company's Form 20-F filed with the Securities and Exchange Commission, which is available at www.sec.gov. In hindsight, I would like to highlight that the company is restricting the number of questions to 1 per analyst.

Speaker #1: Before we begin the call, I advise you to review the disclaimer included in the press release and presentation which outlines important information about forward-looking statements and non-IFRS financial measures.

Speaker #1: In addition, many of the risks regarding the business are disclosed in the company's Form 20F filed with the Securities and Exchange Commission, which is available at www.sec.gov.

Speaker #1: Beforehand, I would like to highlight that the company is restricting the number of questions to one per analyst. Joining the call today is StoneCo's former CEO, Pedro Zinner, the incoming CEO, Mateus Scherer, the CFO, and IRO, Diego Salgado, and the head of IR, Roberto Noronha.

Speaker #1: I would now like to turn the conference over to Pedro Zinner.

Roberta Noronha: Joining the call today is StoneCo's former CEO, Pedro Zinner, the incoming CEO, Mateus Scherer, the CFO and IRO, Diego Salgado, and the Head of IR, Roberta Noronha. I would now like to turn the conference over to Pedro Zinner.

Speaker #2: Thank you, Operator, and good evening, everyone. This call marks the conclusion of my journey as CEO of Stone, and the beginning of a new chapter.

Speaker #2: As I transition leadership to Mateus, during my tenure, we chose to fight complexity, directly, simplifying the business, sharpening our focus on payments, banking, and credit, and building a more resilient and scalable platform for long-term growth.

Pedro Zinner: Thank you, operator. Good evening, everyone. This call marks the conclusion of my journey as CEO of Stone and the beginning of a new chapter as I transition leadership to Mateus. During my tenure, we chose to fight complexity directly, simplifying the business, sharpening our focus on payments, banking, and credit, and building a more resilient and scalable platform for long-term growth. In 2025, that meant selling our softer assets, Linx, to TOTVS for more than BRL 3 billion. Not because it was a bad business, but because it sat outside the intersection where our competitive advantages live. It also meant expanding our credit book prudently, launching products like TapTon and payments Linx with the zero settlement, unifying our technology stack, and deploying AI where it reduces cost and improves quality. Adjusted EPS grew 34% year-over-year.

Speaker #2: In 2025, that meant selling our software assets, links, to TOTVS for more than $3 billion. Not because it was a bad business, but because it set outside the intersection where our competitive advantages live.

Speaker #2: It also meant expanding our credit book prudently, launching products like Tapstone and Payments Links with the Zero Settlement, unifying our technology stack, and deploying AI where it reduces costs and improves quality.

Not because it was a bad business but because it set outside the intersection where our competitive advantages live.

Speaker #2: Adjusted EPS grew 34% year over year, return on equity expanded 26% in the fourth quarter of '25, and we closed the year with a robust net cash position.

Speaker #2: I'm deeply proud of the team, and what we have built together. I would also like to sincerely thank our investors for their continued trust, partnership, and support throughout this journey.

It also meant expanding our credit book. Prudently, launching products like tap Stone and payments links with the zero settlement, unifying, our technology stack and deploying AI where it reduces cost and improves quality.

Pedro Zinner: Return on equity expanded 26% in Q4 2025. We closed the year with a robust net cash position. I'm deeply proud of the team and what we have built together. I would also like to sincerely thank our investors for their continued trust, partnership, and support throughout this journey. From my new future role as non-executive chairman of the board, I remain fully committed to supporting Stone's continued evolution and long-term vision, thinking like an owner, protecting what we have built, and contributing to what comes next. I have complete confidence in Mateus' leadership. He has been one of the architects of Stone's transformation, helping restore discipline, simplify the business, and focus the organization on what truly matters.

Speaker #2: From a new future role as not-executive chairman of the board, I remain fully committed to supporting Stone's continued evolution and long-term vision. Thinking like an owner, protecting what we have built, and contributing to what comes next.

Adjusted EPS grew 34% year-over-year. Return on equity expanded 26% in the fourth quarter of '25, and we closed the year with a robust net cash position.

I'm deeply proud of the team and what we have built together.

Also like to sincerely. Thank our investors for their continued trust partnership and support throughout this journey.

Speaker #2: I have complete confidence in Mateus' leadership. He has been one of the architects of Stone's transformation, helping restore discipline, simplify the business, and focus the organization on what truly matters: he brings clarity of direction, analytical rigor, and the right sense of urgency to accelerate execution and continue elevating what matters most: delivering value to our clients and building intrinsic value per share.

From a new future role as not executive chairman of the board.

I remain fully committed to supporting Stones. Continued, Evolution and long-term vision.

Thinking like an owner protecting what we have built and contributing to what comes next.

I have complete confidence in Materials leadership.

It has been 1 of The Architects of stones transformation.

Pedro Zinner: He brings clarity of direction, analytical rigor, and the right sense of urgency to accelerate execution and continue elevating what matters most, delivering value to our clients and building intrinsic value per share. With that, I'll hand it over to Mateus, your new CEO, who will walk you through our Q4 and full year 2025 results.

Helping restore discipline, simplify the business, and focus the organization on what truly matters.

Speaker #2: With that, I'll hand it over to Mateus, your new CEO, who will walk you through our fourth quarter and full year 2025 results.

Speaker #3: Thank you, Pedro, and good evening, everyone. Before getting into the results, I want to thank Pedro for his leadership and commitment to Stone over the past years.

He brings Clarity of Direction, analytical rigor in the right sense of urgency to accelerate, execution and continue elevating. What matters? Most the living value to our clients and building intrinsic value per share?

Speaker #3: It has been a privilege to work alongside him, and I'm honored to step into this role as we continue building Stone as the financial partner for entrepreneurs across Brazil.

Mateus Scherer: Thank you, Pedro, and good evening, everyone. Before getting into the results, I want to thank Pedro for his leadership and commitment to Stone over the past years. It has been a privilege to work alongside him, and I'm honored to step into this role as we continue building Stone as the financial partner for entrepreneurs across Brazil. Now, turning to slide 3, we highlight our full year performance relative to the guidance we provided at the beginning of the year. Despite a challenging macroeconomic environment, we delivered solid results while remaining fully committed to our capital allocation framework and to returning excess capital to shareholders. Our adjusted gross profit reached BRL 6.319 billion, an increase of 13.5% year-over-year.

Mateus Scherer: Thank you, Pedro, and good evening, everyone. Before getting into the results, I want to thank Pedro for his leadership and commitment to Stone over the past years. It has been a privilege to work alongside him, and I'm honored to step into this role as we continue building Stone as the financial partner for entrepreneurs across Brazil. Now, turning to slide three, we highlight our full year performance relative to the guidance we provided at the beginning of the year. Despite a challenging macroeconomic environment, we delivered solid results while remaining fully committed to our capital allocation framework and to returning excess capital to shareholders. Our adjusted gross profit reached BRL 6.319 billion, an increase of 13.5% year-over-year.

With that, I'll hand it over to Mateus, your new CEO, who will walk you through our fourth quarter and full year 2025 results.

Thank you, Pedro and good evening, everyone.

Speaker #3: Now, turning to slide three, we highlight our full-year performance relative to the guidance we provided at the beginning of the year. Despite a challenging macroeconomic environment, we delivered solid results while remaining fully committed to our capital allocation framework and to returning excess capital to shareholders.

It has been a privileged work alongside him and I'm honored to step into this role as we continue Building Stone as the financial partner for entrepreneurs across Brazil.

Speaker #3: Our adjusted gross profit reached $6.319 billion and increased of 13.5% year over year. Importantly, when factoring in the $1.8 billion in share repurchases executed in the second half of the year, which had an estimated $60 million impact on gross profit, our adjusted gross profit would have reached $6.379 billion, slightly above our guidance of $6.375 billion.

Now, turning to slide 3. We highlight our full year, performance relative to the guidance, we provided at the beginning of the year.

despite a challenging macroeconomic environment, we delivered solid results while remaining fully committed to our Capital, allocation framework, and to returning excess Capital to shareholders,

Mateus Scherer: Importantly, when factoring in the BRL 1.8 billion in share repurchases executed in the second half of the year, which had an estimated BRL 60 million impact on gross profit, our adjusted gross profit would have reached BRL 6.379 billion, slightly above our guidance of BRL 6.375 billion. Adjusted basic EPS came in at BRL 9.71 per share, representing a 34% year-over-year growth and exceeding the BRL 9.60 per share guidance, reflecting disciplined operational execution and a consistent focus on capital efficiency. On capital allocation, one year ago, we identified a position of BRL 3 billion in excess capital. True to our commitment, we distributed the full BRL 3 billion over the course of the year, representing a 15% yield.

Our adjusted gross profit reached $6.319 billion, an increase of 13 and a half percent year-over-year.

Speaker #3: Adjusted basic EPS came in at $9.71 per share, representing a 34% year-over-year growth and exceeding the $9.60 per share guidance. Reflecting disciplined operational execution and a consistent focus on capital efficiency.

In the 1.8 billion Reis and share repurchases executed in the second half of the year which had an estimated 60 million Reigns impact on Gross profits. Our adjusted gross profit would have reached 6.379 billion with slightly above our kindness of 6.375 billion.

Speaker #3: On capital allocation, one year ago, we identified a position of $3 billion in excess capital. True to our commitment, we distributed the full $3 billion over the course of the year.

Speaker #3: Representing a 15% yield. We remain disciplined in our capital allocation strategy, and we'll continue returning capital to shareholders whenever we do not identify immediate value accretive opportunities.

Adjusted basic TPS came in at 9.71% representing a 34% year-over-year growth and exceeding, the 9.660 re eyes per share, guidance, reflecting discipline, operational execution, and a consistent focus on Capital efficiency.

On Capital location. 1 year ago, we identified a position of 3 billion in excess capital.

Speaker #3: Moving to slide four, we will now examine our consolidated profitability and return on equity. Our fourth quarter adjusted net income increased 10% year over year, driven by 12% growth in continuing operations.

Mateus Scherer: We remain disciplined in our capital allocation strategy, and we will continue returning capital to shareholders whenever we do not identify immediate value accretive opportunities. Moving to slide 4, we will now examine our consolidated profitability and ROE. Our Q4 adjusted net income increased 10% year-over-year, driven by 12% growth in continuing operations. These results demonstrate the resilience of our model in a macro environment that continues to weigh more meaningfully on smaller merchants alongside a competitive and dynamic market. Adjusted basic EPS was BRL 2.87, up 27% year-over-year, benefiting from both net income growth and the impact of share repurchases. On returns, our consolidated ROE continued to expand, increasing by 6 percentage points year-over-year to 26%, reflecting ongoing improvements in profitability and capital efficiency. Moving to slide 5, we highlight the top-line performance of our continuing operations.

True to our commitment. We distributed the full 3 million over the course of the Year. Representing a 15% yield

We remain disciplined in our Capital, allocation strategy, and we will continue returning Capital to shareholders. Whenever we do not identify immediate value a creative opportunities.

Speaker #3: These results demonstrate the resilience of our model in a macroenvironment that continues to weigh more meaningfully on smaller merchants, alongside a competitive and dynamic market.

Moving to slide 4, we will now examine our Consolidated profitability and return on equity.

Speaker #3: Adjusted basic EPS was $2.87, up 27% year over year. Benefiting from both net income growth and the impact of share repurchases. On returns, our consolidated ROE continued to expand, increasing by 6% points year over year, to 26%.

our fourth quarter adjusted, net income increased 10% year-over-year driven by 12%, growth in continuing operations,

These results demonstrate the resilience of our model. In a micro environment, that continues to weigh more, meaningfully on smaller versions.

Alongside the competitive and dynamic markets.

Speaker #3: Reflecting ongoing improvements in profitability and capital efficiency. Moving to slide five, we highlight the top-line performance of our continuing operations. Total revenue and income increased 13% year over year, to $3.7 billion.

Adjusted basic EPS was $2.87. REI was up 27% year-over-year, benefiting from both income growth and the impact of share repurchases.

Speaker #3: Reflecting mid-single-digit TPV growth, combined with disciplined pricing. Credit continues to scale and is becoming a more meaningful contributor to revenue. Further strengthening our position as the financial partner of choice for MSNB clients.

On returns our Consolidated, Roe, continue to expand, increasing by 6 percentage points year-over-year to 26% reflecting ongoing improvements in profitability and capital efficiency.

Mateus Scherer: Total revenue and income increased 13% year-over-year to BRL 3.7 billion, reflecting mid-single-digit TPV growth combined with disciplined pricing. Credit continues to scale and is becoming a more meaningful contributor to revenue, further strengthening our position as the financial partner of choice for our MSMB clients. In Q4, adjusted gross profit from continuing operations grew 9% year-over-year to BRL 1.7 billion. Revenue growth was the primary driver, partially offset by higher credit provisions as we continue to scale our loan portfolio. We see this as a natural step in expanding our credit business and further diversifying our revenue streams to build a more resilient earnings profile. We will discuss portfolio performance and credit dynamics in more detail later in the presentation. Turning to slide six, we present our key operating metrics, starting with MSMB payments.

Moving to his light 5. We highlight the Top Line performance of our continuing operations.

Total revenue and income increased 13% year-over-year to $3.7 billion.

Speaker #3: In the fourth quarter, adjusted gross profit from continuing operations grew 9% year over year, to $1.7 billion. Revenue growth was the primary driver. Partially offset by higher credit provisions as we continue to scale our loan portfolio.

Reflecting mid-single-digit TPV growth combined with disciplined pricing.

Credits continues to scale and is becoming a more meaningful contributor to revenue.

Further, strengthening your position as a financial partner of choice from SMB clients.

Speaker #3: We see this as a natural step in expanding our credit business and further diversifying our revenue streams to build a more resilient earnings profile.

In the fourth quarter, adjusted gross profit from continuing operations will 9% year-over-year to 1.7 billion Reise.

Speaker #3: We will discuss portfolio performance and credit dynamics in more detail later in the presentation. Turning to slide six, we present our key operating metrics, starting with MSNB payments.

Revenue growth was the primary driver partially offset by higher credit Provisions. As we continue to scale our loan portfolio.

Speaker #3: Our client base increased 15% year over year, reaching $4.7 million clients at year-end. Out of those, $41% are classified as heavy users. Up from 38% in the previous quarter.

We see this as a natural step in expanding our credit business. And further, there is diversifying our revenue streams to build a more resilient earnings profile.

We will discuss portfolio performance and credit dynamics in margin to you later in the presentation.

Mateus Scherer: Our client base increased 15% year-over-year, reaching 4.7 million clients at year-end. Out of those, 41% are classified as heavy users, up from 38% in Q3. This trend reinforces our strategy of deepening client engagement beyond payments as we seek to build a more comprehensive and long-lasting financial relationship with our clients. MSMB TPV growth decelerated to 5.3% year-over-year, driven by three factors. First, the macro environment continues to weigh on smaller clients. Second, digital native merchants are performing better than brick-and-mortar businesses, a segment where we have greater exposure. Third, our operational performance in Q4 fell short of our internal expectations, with slightly higher churn and softer gross client additions than planned. We're not standing still. We are implementing a series of commercial initiatives, and gross additions have already shown a clear improvement.

There is like six. We present our EQ operating metrics, starting with MSMB payments.

Speaker #3: This trend reinforces our strategy of deepening client engagement beyond payments, as we seek to build a more comprehensive and long-lasting financial relationship with our clients.

Our client base increased 15% year over year, reaching 4.7 million clients at year-end.

Out of those 41% are classified as head users.

Speaker #3: MSNB TPV growth decelerated to 5.3% year over year. Driven by three factors: first, the macroenvironment continues to weigh on smaller clients; second, digital-native merchants are performing better than brick-and-mortar businesses, a segment where we have greater exposure; and third, our operational performance in the fourth quarter fell short of our internal expectations.

Up from 38% in the previous quarter.

These Trends, reinforces our strategy of deepening client engagement Beyond payments as we seek to build a more comprehensive and long-lasting financial relationship of our clients.

Ms. And btpb growth decelerated to 5.3% year-over-year driven by 3 factors.

Continues to weigh on our smaller clients.

Speaker #3: With slightly higher churn and softer gross client additions than planned. We're not standing still. We are implementing a series of commercial initiatives and gross additions have already shown a clear improvement.

Second digital native, Merchants are performing better than brick and mortar businesses. A segment where we have greater exposure

Speaker #3: Our focus is now shifting toward churn management by deepening client relationships and ramping up bundle offerings to increase share of wallet and improve retention over time.

And third, our operational performance in the fourth quarter fell short of our internal expectations, which is likely due to higher churn and softer gross client additions and plans.

We're not standing still.

Speaker #3: Turning to slide seven, we highlight the performance of our banking operations. Our banking active client base increased 21% year over year, reaching $3.7 million clients.

Mateus Scherer: Our focus is now shifting toward churn management by deepening client relationships and ramping up bundled offerings to increase share of wallet and improve retention over time. Turning to slide 7, we highlight the performance of our banking operations. Our banking active client base increased 21% year-over-year, reaching 3.7 million clients, reflecting continued progress in bundling payments and banking into a more integrated value proposition. Client deposits grew 27% year-over-year and 23% quarter-over-quarter, totaling BRL 11.1 billion at year-end. Notably, deposits expanded significantly faster than MSMB TPV, with penetration over MSMB TPV increasing from 6.8% in Q1 2024 and 7.1% in Q4 2024 to 8.2% in Q1 2025.

We are implementing a series of commercial initiatives and growth addition, to have already shown a clear Improvement.

Our focus is now shifting toward turn management by deepening client relationships, and ramping up our bundle of offerings to increase share of wallet and improve retention over time.

Speaker #3: Reflecting continued progress in bundling payments and banking into a more integrated value proposition. Client deposits grew 27% year over year, and 23% quarter over quarter.

Trends. Good light 7. We highlight the performance of our banking operations.

Speaker #3: Totaling ing $11.1 billion at year-end. Notably, deposits expanded significantly faster than MSNB TPV, with penetration over MSNB TPV increasing from 6.8% in the fourth quarter of '24 and 7.1% last quarter to 8.2% in the fourth quarter of '25.

Our banking active client base increases the 21% year-over-year reaching 3.7 million clients reflecting continued progress in bundling payments and banking into a more integrated value proposition.

Client, deposits, grew, 27% year-over-year, and 23% quarterly of reporter totaling 11.1 billion Reise at year end.

Speaker #3: This outperformance reinforces that we are on the right track with our banking strategy. Deepening engagement and capturing a larger share of our clients' financial flows within our ecosystem.

Speaker #3: Of the $11.1 billion in deposits, 86% were time deposits in the quarter, compared to 84% in the previous quarter. This shift reflects higher adoption of our investment products and increases in the portion of deposits eligible for our cash sweep strategy.

Mateus Scherer: This outperformance reinforces that we are on the right track with our banking strategy, deepening engagement and capturing a larger share of our clients' financial flows within our ecosystem. Of the BRL 11.1 billion in deposits, 86% were time deposits in the quarter, compared to 84% in the previous quarter. This shift reflects higher adoption of our investment products and increases in the portion of deposits eligible for our cash sweep strategy, contributing to lower funding costs and supporting profitability. Turning to Slide 8, we review the evolution of our credit operations. Our portfolio reached BRL 2.8 billion in the quarter, growing 23% sequentially. Of this total, two and a half billion reais relates to merchant solutions, primarily our MSMB working capital offering, which also expanded 23% quarter-over-quarter.

Notably, deposits expanded significantly faster than MSNBC, with penetration over. MSNBC increased from 6.8% in the first quarter of '24 and 7.1 in the left quarter, to 28.2 in the fourth quarter of '25.

Diesel Performance reinforces that we are on the right track with our making strategy.

Mateus Scherer: Of the BRL 11.1 billion in deposits, 86% were time deposits in the quarter, compared to 84% in the previous quarter. This shift reflects higher adoption of our investment products and increases in the portion of deposits eligible for our cash sweep strategy, contributing to lower funding costs and supporting profitability. Turning to Slide 8, we review the evolution of our credit operations. Our portfolio reached BRL 2.8 billion in the quarter, growing 23% sequentially. Of this total, two and a half billion reais relates to merchant solutions, primarily our MSMB working capital offering, which also expanded 23% quarter-over-quarter. The remaining BRL 300 million corresponds to our credit card portfolio, which grew 30% sequentially from a smaller base. Credit continues to be relevant in our results.

Deepening engagement and capturing a larger share of our clients' financial flows within our ecosystem.

Of the 11.

Speaker #3: Contributing to lower funding costs and supporting profitability. Turning to slide eight, we review the evolution of our credit operations. Our portfolio reached $2.8 billion in the quarter, growing 23% sequentially.

1 billion in deposits. 86% were time. Deposits in the quarter compared to 84% in the previous quarter.

This shift reflects higher adoption of our investment products and increases in the portion of deposits eligible for our cash. Sweep strategy contributing to lower funding costs and supporting profitability.

Speaker #3: Of this total, $2.5 billion relates to merchant solutions. Primarily, our MSNB working capital offering. Which also expanded 23% quarter over quarter. The remaining $300 million corresponds to our credit card portfolio, which grew 30% sequentially from a smaller base.

Turn into is like 8, we reviewed the evolution of our credit operations.

Our portfolio reached 2.8 billion. REI, in the quarter, we're in 23% sequentially.

Of this total 2 and a half billion Reigns released to Merchant Solutions, primarily our msmb working capital offering.

Speaker #3: Credit continues to gain relevance in our results. In the fourth quarter of '25, credit revenues reached $238 million, up 33% sequentially. While provisions totaled $110 million, increasing 27%.

Mateus Scherer: The remaining BRL 300 million corresponds to our credit card portfolio, which grew 30% sequentially from a smaller base. Credit continues to be relevant in our results. In Q4 2025, credit revenues reached BRL 238 million, up 33% sequentially, while provisions totaled BRL 110 million, increasing 27%. As provisions are recognized upfront and revenues are accrued over time, continued portfolio growth should translate into a stronger earnings contribution going forward. Since relaunching our credit operations, we have prioritized disciplined scaling and tight portfolio oversight. Within MSMB working capital, we operate two distinct models: a fully digital approach for smaller merchants, resulting in granular and diversified exposures, and a more analytical desk-based approach for larger SMBs with higher average ticket sizes and a more concentrated position. In terms of asset quality, we remain aligned with our risk appetites.

which also expanded 23% quarter over quarter.

The remaining 300 million corresponds to our credit card portfolio which grew 30% sequentially from a smaller base.

Mateus Scherer: In Q4 2025, credit revenues reached BRL 238 million, up 33% sequentially, while provisions totaled BRL 110 million, increasing 27%. As provisions are recognized upfront and revenues are accrued over time, continued portfolio growth should translate into a stronger earnings contribution going forward. Since relaunching our credit operations, we have prioritized disciplined scaling and tight portfolio oversight. Within MSMB working capital, we operate two distinct models: a fully digital approach for smaller merchants, resulting in granular and diversified exposures, and a more analytical desk-based approach for larger SMBs with higher average ticket sizes and a more concentrated position. In terms of asset quality, we remain aligned with our risk appetites. NPL 15 to 90 days increased to 4.43%, primarily reflecting payment delays from a limited number of higher-ticket clients within the specialized desk.

Credit continues to be relevant in our results.

Speaker #3: As provisions are recognized upfront and revenues are accrued over time, continued portfolio growth should translate into a stronger earnings contribution going forward. Since relaunching our credit operations, we have prioritized disciplined scaling and tight portfolio oversight.

in the fourth quarter of 25 credit revenues, reached 238 million, REI

Up 33%, sequentially while Provisions totaled. 110 million. REI increasing 27%.

Speaker #3: Within MSNB working capital, we operate two distinct models. A fully digital approach for smaller merchants resulting in granular and diversified exposures, and a more analytical, desk-based approach for larger SMBs.

As Provisions are recognized up front and revenues are acred over time. Continued portfolio growth, should translate into a stronger earnings contribution going forward.

Since relaunching our credit operations, we have prioritized discipline scaling and tight portfolio oversight.

Speaker #3: With higher average ticket sizes and a more concentrated position. In terms of asset quality, we remain aligned with our risk appetites. NEPL 15 to 90 days increased to 4.43%.

Within MSMB working capital, we operate two distinct models: a fully digital approach for smaller merchants, resulting in granular and diversified exposures.

Speaker #3: Primarily reflecting payment delays from a limited number of higher ticket clients within the specialized desk. NEPLs above 90 days stood at 5.21% compared to 5.03% in the prior quarter.

And a more analytical, desk-based approach for larger SMBs, with higher average ticket sizes and a more concentrated position.

Mateus Scherer: NPL 15 to 90 days increased to 4.43%, primarily reflecting payment delays from a limited number of higher-ticket clients within the specialized desk. NEPLs above 90 days stood at 5.21% compared to 5.03% in the prior quarter, consistent with normal portfolio seasoning. Our coverage ratio remains stable at 264%, and cost of risk was approximately 17% in the quarter. We have also continued refining our pricing framework, balancing client sensitivity with risk-adjusted returns. This has allowed us to improve spreads while maintaining disciplined and sustainable growth. As a result, our average monthly credit yields, calculated as credit revenue over the average portfolio, reached 3.1% compared to 2.9% in Q3 2025, despite mixed effects from the specialized desk and non-interest-bearing credit card balances.

In terms of asset quality, we remain aligned with our risk appetites.

Any PL 15 to 90 days. Increased to 4.43%.

Speaker #3: Consistent with normal portfolio seasoning. Our coverage ratio remains stable at 264% and cost of risk was approximately 17% in the quarter. We have also continued refining our pricing framework.

Mateus Scherer: NEPLs above 90 days stood at 5.21% compared to 5.03% in the prior quarter, consistent with normal portfolio seasoning. Our coverage ratio remains stable at 264%, and cost of risk was approximately 17% in the quarter. We have also continued refining our pricing framework, balancing client sensitivity with risk-adjusted returns. This has allowed us to improve spreads while maintaining disciplined and sustainable growth. As a result, our average monthly credit yields, calculated as credit revenue over the average portfolio, reached 3.1% compared to 2.9% in Q3 2025, despite mixed effects from the specialized desk and non-interest-bearing credit card balances. To wrap up, and before I hand over to Diego, I want to thank the team for their resilience and dedication in delivering a solid performance despite a challenging year.

Primarily reflecting payment delays from a limited number of higher-ticket clients within the specialized desk.

NPLs above 90 days is 5.21%, compared to 5.03% in the prior quarter, consistent with normal portfolio seasoning.

Speaker #3: Balancing client sensitivity with risk-adjusted returns. This has allowed us to improve spreads while maintaining disciplined and sustainable growth. As a result, our average monthly credit yield calculated as credit revenue over the average portfolio reached 3.1%, compared to 2.9% in the third quarter of '25.

Our coverage ratio remains stable at 265%, and cost of risk was approximately 17% in the market.

We have also continued refining our pricing framework, balancing client sensitivity with risk-adjusted returns.

This has allowed us to improve spreads while maintaining disciplined and sustainable growth.

Speaker #3: Despite mixed effects from the specialized desk and non-interest-bearing credit card balances. To wrap up and before I hand over to Diego, I want to thank the team for their resilience and dedication in delivering a solid performance despite the challenging year.

Speaker #3: I'm truly honored to lead the company into its next chapter continuing to execute our strategy with energy and passion as we strive to be the leading financial services provider for entrepreneurs in Brazil.

Mateus Scherer: To wrap up, and before I hand over to Diego, I want to thank the team for their resilience and dedication in delivering a solid performance despite a challenging year. I'm truly honored to lead the company into its next chapter, continuing to execute our strategy with energy and passion as we strive to be the leading financial services provider for entrepreneurs in Brazil. With that, I'll hand it over to Diego, our new CFO, who will take you through our financial performance in more detail, along with updates on capital allocation and guidance. Diego?

This Revenue over the average portfolio reached 3.1% compared to 2.9% in the third quarter of 25 despite mixed effects from the specialized desk and no interest bearing credit card balances.

Mateus Scherer: I'm truly honored to lead the company into its next chapter, continuing to execute our strategy with energy and passion as we strive to be the leading financial services provider for entrepreneurs in Brazil. With that, I'll hand it over to Diego, our new CFO, who will take you through our financial performance in more detail, along with updates on capital allocation and guidance. Diego?

To wrap up, and before I hand over to Gable, I want to thank the team for their resilience and dedication in delivering a solid performance despite the challenging year.

Speaker #3: With that, I'll hand it over to Diego, our new CFO, who will take you through our financial performance in more detail along with updates on capital allocation and guidance.

Speaker #3: Diego, thank you, Mateus, and good evening, everyone. It's a pleasure to speak with you today for the first time as CFO. I'm honored to take this responsibility.

I'm truly honored to lead the company into its next chapter, continuing to execute our strategy with energy and passion as we strive to be the leading financial services provider for entrepreneurs in Brazil.

Speaker #3: You have my commitment to keep elevating our financial discipline and to hold a high bar on execution. Now, I'll begin by reviewing our adjusted consolidated P&L for continuing operations for the fourth quarter as shown on slide nine.

Diego Salgado: Thank you, Mateus. Good evening, everyone. It's a pleasure to speak with you today for the first time as CFO. I'm honored to take this responsibility. You have my commitment to keep elevating our financial discipline and to hold a high bar on execution. Now, I'll begin by reviewing our adjusted consolidated P&L for continuing operations for Q4, as shown on slide 9. Our cost of services increased 23%, rising 200 basis points as a percentage of revenues. This increase was driven by higher loan loss provisions during Q4, mostly driven by the growth of our credit portfolio. Financial expenses increased 12%, a reduction of 30 basis points as percentage of revenues. This was primarily driven by the use of low-cost demand deposits as funding source, which helped offset the impact of higher average CDI rate compared to the prior year period.

With that, I'll hand it over to Diego. Our new CFO who will take you through our financial performance in more detail along with updates on Capital location and guidance Diego.

Thank you, mate, and good evening, everyone. It's a pleasure to speak with you today for the first time as CFO.

Speaker #3: Our cost of services increased 23%, rising $200 bps as a percentage of revenues. This increase was driven by higher loan loss provisions during the quarter mostly driven by the growth of our credit portfolio.

I'm honored to take this responsibility. You have my commitment to keep elevating our financial discipline and to hold a high bar on execution.

Now, I'll begin by reviewing our adjusted consolidated P&L for continuing operations for the fourth quarter, as shown on slide 9.

Speaker #3: Financial expenses increased 12%, a reduction of 30 basis points as percentage of revenues. This was primarily driven by the use of low-cost demand deposits as funding source which helped offset the impact of higher average CDI rate compared to the prior year period.

Our cost of service increased 23%, rising 200 bps as a percentage of revenues. This increase was driven by higher loan and loss provisions during the quarter, mostly driven by the growth of our credit portfolio.

Diego Salgado: This was primarily driven by the use of low-cost demand deposits as funding source, which helped offset the impact of higher average CDI rate compared to the prior year period. Admin expenses also increased 12%, a small decrease as percentage of revenues, reflecting ongoing efforts to gain leverage across our support functions. Selling expenses increased 16%, a 40 basis points increase as percentage of revenues. This reflects a more evenly distributed market spending in 2025 compared with 2024, when expenses were weighted towards the first half of the year due to a significant investment in a specific reality show. Other expenses decreased 27% year-over-year or 100 basis points as percentage of revenues, a result of lower share-based compensation expenses in the quarter. Our effective tax rate was 10.3% in the quarter, down from 13.7% in the Q4 of 2024.

Speaker #3: Admin expenses also increased 12%, a small decrease as ongoing efforts to gain leverage across our support functions. Selling expenses increased 16%, a 40 bps increase as percentage of revenues.

Diego Salgado: Admin expenses also increased 12%, a small decrease as percentage of revenues, reflecting ongoing efforts to gain leverage across our support functions. Selling expenses increased 16%, a 40 basis points increase as percentage of revenues. This reflects a more evenly distributed market spending in 2025 compared with 2024, when expenses were weighted towards the first half of the year due to a significant investment in a specific reality show. Other expenses decreased 27% year-over-year or 100 basis points as percentage of revenues, a result of lower share-based compensation expenses in the quarter. Our effective tax rate was 10.3% in the quarter, down from 13.7% in the Q4 of 2024. The year-over-year decrease was driven primarily by higher benefits from Ledo Bank.

Financial expenses increased at 12%, a reduction of 30 basis points as percentage of revenues. This was primarily driven by the use of low-cost demand deposits as funding sources which helped offset the impact of higher average CDI rate, compared to the prior year period.

Speaker #3: This reflects a more evenly distributed market spending in 2025 compared with 2024 when expenses were weighted towards the first half of the year due to a significant investment in a specific reality show.

Admin expenses also increased at 12%, a small decrease as a percentage of revenues, reflecting ongoing efforts to gain leverage across our support functions.

Fairly expenses increased at 16%.

A 40 bps increase as a percentage of revenues.

Speaker #3: Other expenses decreased 27% year over year or 100 basis points as percentage of revenues, a result of lower shared-based compensation expenses in the quarter.

Speaker #3: Our effective tax rate was 10.3% in the quarter, down from 13.7% in the fourth quarter of 2024. The year-over-year decrease was driven primarily by higher benefits from Lado Bank.

This reflects a more evenly distributed market spending in 2025. Compared with 2024, when expenses were weighted towards the first half of the year due to a significant investment in a specific reality show,

Other expenses decreased 27% year-over-year, or 100 basis points as a percentage of revenues, as a result of lower share-based compensation expenses in the quarter.

Speaker #3: Moving to slide 10, our adjusted net cash position closed the quarter at 2.6 billion, down 930 million sequentially. This reduction stems primarily from the 1.3 billion in share repurchases during the fourth quarter excluding these buybacks adjusted net cash would have increased by nearly 350 million.

Diego Salgado: The year-over-year decrease was driven primarily by higher benefits from Ledo Bank. Moving to slide 10, our adjusted net cash position closed the quarter at BRL 2.6 billion, down BRL 930 million sequentially. This reduction stems primarily from the BRL 1.3 billion in share repurchases during Q4. Excluding these buybacks, adjusted net cash would have increased by nearly BRL 350 million. Let's review our capital allocation in more details, distinguishing between recurring operational generation and the extraordinary proceeds from the Linx transaction. Starting with operational excess on slide 11, as you may recall from last year's call, our framework is guided by three strict hurdles that define excess capital. Maintaining a minimal Core Equity ratio for the consolidated entity, the maintenance of certain global rates, and maintaining an adjusted net cash position above zero.

Diego Salgado: Moving to slide 10, our adjusted net cash position closed the quarter at BRL 2.6 billion, down BRL 930 million sequentially. This reduction stems primarily from the BRL 1.3 billion in share repurchases during Q4. Excluding these buybacks, adjusted net cash would have increased by nearly BRL 350 million. Let's review our capital allocation in more details, distinguishing between recurring operational generation and the extraordinary proceeds from the Linx transaction. Starting with operational excess on slide 11, as you may recall from last year's call, our framework is guided by three strict hurdles that define excess capital. Maintaining a minimal Core Equity ratio for the consolidated entity, the maintenance of certain global rates, and maintaining an adjusted net cash position above zero. This year we have refined our Core Equity ratio hurdle.

Our effective tax rate was 10.3% in the quarter, down from 13.7% in the fourth quarter of 2024. The year-over-year decrease was driven primarily by higher benefits from Leo Bank.

Moving to slide 10, our adjusted net cash position closed the quarter at $2.6 billion. REI

Down, 930 million. REI sequentially.

Speaker #3: Now, let's review our capital allocation in more details, distinguishing between recurring operational generation and the extraordinary proceeds from the links transaction. Starting with operational excess on slide 11, as you may recall from last year's call, our framework is guided by three strict hurdles that define excess capital.

These reduction stems primarily from the 1.3 billion in share repurchases. During the fourth quarter.

Excluding these BuyBacks adjusted. Net cash would have increased by nearly 350 million. REI?

Speaker #3: Maintaining a minimal core equity ratio for the consolidated entity, the maintenance of certain global ratings, and maintaining an adjusted net cash position above zero.

Now let's review our capital allocation in more detail, distinguishing between recurring, operational generation and the extraordinary proceeds from the Linx transaction.

Starting with operation access on July 11th. As you may recall from last year's, all our framework is guided by three street hurdles that define excess capital.

Speaker #3: This year, we have refined our core equity ratio hurdle. First, we have enhanced our methodology to better align it with the resilient central bank standards for the treatment of all the deferred tax assets that we have.

Diego Salgado: This year we have refined our Core Equity ratio hurdle. First, we have enhanced our methodology to better align it with the Brazilian central bank standards for the treatment of all the deferred tax assets that we have, regardless of which legal entity holds it. Consequently, we felt more comfortable to reduce the capital hurdle from 20% to 17%. These adjustments mostly offset each other. Our policy is very straightforward. Upon the approval of our annual budget and financial statements, in the absence of additional immediate value accretive opportunities, excess capital is returned to shareholders. Following our 2025 performance, we have generated excess capital of just over BRL 2 billion, which the board approved for distribution via share repurchases during 2026.

Maintaining a minimal core equity ratio for the Consolidated, entity the maintenance of certain Global ratings and maintaining an adjusted net. Cash position above zero.

Speaker #3: Regardless of which legal entity holds it. Consequently, we felt more comfortable to reduce the capital hurdle from 20% to 17%. This adjustment mostly offset each other.

Diego Salgado: First, we have enhanced our methodology to better align it with the Brazilian central bank standards for the treatment of all the deferred tax assets that we have, regardless of which legal entity holds it. Consequently, we felt more comfortable to reduce the capital hurdle from 20% to 17%. These adjustments mostly offset each other. Our policy is very straightforward. Upon the approval of our annual budget and financial statements, in the absence of additional immediate value accretive opportunities, excess capital is returned to shareholders. Following our 2025 performance, we have generated excess capital of just over BRL 2 billion, which the board approved for distribution via share repurchases during 2026. As a reminder, we already have an open repurchase program of the same amount announced on 22 December, which will be used for distribution.

This year, we have refined our core equity ratio, heardle.

Speaker #3: Our policy is very straightforward. Upon the approval of our annual budget and financial statements, in the absence of additional immediate value accretive opportunities, excess capital is returned to shareholders.

First, we have enhanced our methodology to better align it with the Brazilian Central Bank standards for the treatment of all the deferred tax assets that we have, regardless of which legal entity holds it.

consequently, we felt more comfortable to reduce the capital Hurdle from 20% to 17%.

These adjustments mostly offset each other.

Speaker #3: Following our 2025 performance, we have generated excess capital of just over $2 billion which the board approved for distribution via share repurchases during 2026.

Our policy is very straightforward upon the approval of our annual budget and financial statements in the absence of additional immediate value. Accretive opportunities excess capital is returned to shareholders.

Speaker #3: As a reminder, we already have an open repurchase program of the same amount announced on December 22nd, which will be used for distribution. Now, turning to slide 12, we detail the extraordinary distribution from the link sale.

Diego Salgado: As a reminder, we already have an open repurchase program of the same amount announced on 22 December, which will be used for distribution. Now turning to slide 12, we detail the extraordinary distribution from the Linx sale. On 27 February, we received the proceeds from the sale and closed the deal. This divestment releases slightly over BRL 3 billion in capital, which will be returned to shareholders in 2026. However, given the recent closing, we expect to approve this specific distribution during a board meeting in April with a market announcement to follow. Finally, let's move to slide 13, where we present our guidance for 2026 and 2027 for continuing operations. Starting with 2026, we expect adjusted gross profit to range between BRL 6.6 and 7 billion.

For distribution via share repurchases during 2026.

Speaker #3: On February 27th, we received the proceeds from the sale and closed the deal. This divestment releases slightly over $3 billion in capital which will be returned to shareholders in 2026.

As a reminder, we already have an open repurchase program of the same amount announced on December 22nd, which will be used for the distribution.

Diego Salgado: Now turning to slide 12, we detail the extraordinary distribution from the Linx sale. On 27 February, we received the proceeds from the sale and closed the deal. This divestment releases slightly over BRL 3 billion in capital, which will be returned to shareholders in 2026. However, given the recent closing, we expect to approve this specific distribution during a board meeting in April with a market announcement to follow. Finally, let's move to slide 13, where we present our guidance for 2026 and 2027 for continuing operations. Starting with 2026, we expect adjusted gross profit to range between BRL 6.6 and 7 billion. Adjusted basic EPS is expected to be between BRL 10.8 and 11.4 per share.

Now, turning to July 12th. We detailed the extraordinary distribution from the Link sale.

Speaker #3: However, given the recent closing, we expect to approve this specific distribution during a board meeting in April with a market announcement to follow. Finally, let's move to slide 13, where we present our guidance for 2026 and 2027 for continuing operations.

On February 27th, we received a proceeds from the sale and close the deal.

This divestment releases slightly over 3 Billion Rising Capital which will be returned to shareholders in 2026.

Speaker #3: Starting with 2026, we expect adjusted gross profit to range between 6.6 and 7 billion. Adjusted basic EPS is expected to be between 10.8 and 11.4 per share.

However, given the recent closing, we expect to approve this specific distribution during a Board meeting in April, with a market announcement to follow.

Finally, let's move to slide 13, where we present our guidance for 2026 and 2027 for continuing operations.

Speaker #3: The guidance for both KPIs considers the capital distribution that we have already announced of $2 billion, to be fully returned through buybacks during 2026, but doesn't include the proceeds from links.

Diego Salgado: Adjusted basic EPS is expected to be between BRL 10.8 and 11.4 per share. The guidance for both KPIs considers the capital distribution that we have already announced of BRL 2 billion to be fully returned through buybacks during 2026, but doesn't include the proceeds from Linx. Regarding 2027, we are no longer providing operational KPI guidances and keeping it consistent to 2026's. Therefore, we expect adjusted gross profit to range between BRL 7.2 and 8.3 billion. Adjusted basic EPS is projected between BRL 11.8 and 13.4. In those numbers, we are not considering yet any additional capital distribution. We will adjust this in the beginning of 2027 when we disclose 2026 full year earnings. Also important to keep in mind that for the guidance we assume an effective tax rate in the mid-teens range.

Starting with 2026. We expect that just gross profit to range between 6.6 and 7 billion rise.

Diego Salgado: The guidance for both KPIs considers the capital distribution that we have already announced of BRL 2 billion to be fully returned through buybacks during 2026, but doesn't include the proceeds from Linx. Regarding 2027, we are no longer providing operational KPI guidances and keeping it consistent to 2026's. Therefore, we expect adjusted gross profit to range between BRL 7.2 and 8.3 billion. Adjusted basic EPS is projected between BRL 11.8 and 13.4. In those numbers, we are not considering yet any additional capital distribution. We will adjust this in the beginning of 2027 when we disclose 2026 full year earnings. Also important to keep in mind that for the guidance we assume an effective tax rate in the mid-teens range.

I just said, basic EPS is expected to be between 10.8 and 11.43 eyes per share.

Speaker #3: Regarding 2027, we are no longer providing operational KPI guidances and keeping it consistent to 2026. Therefore, we expect adjusted gross profit to range between 7.2 and 8.3 billion.

The guidance for both KPIs considers the capital distribution that we have already announced of R$2 billion, to be fully returned through buybacks during 2026.

It doesn't include the proceeds from links.

Speaker #3: Adjusted basic EPS is projected between 11.8 and 13.4. In those numbers, we are not considering yet any additional capital distribution. We will adjust this in the beginning of 2027 when we disclose 2026 full year earnings.

Regarding 2027, we are no longer providing operational kpi guidance, and keeping it. Consistent to 2026.

Therefore we expect that adjusted gross profit to range between 7.2 and 8.3 billion. Reis.

I just said basic APS is projected between 11.8 and 13.4 Reis.

Speaker #3: Also, important to keep in mind that for the guidance, we assume an effective tax rate in the mid-teens range. To close, we started this journey with a simple belief that resilience merchants deserve a better financial partner and that conviction hasn't changed.

In those numbers, we are not considering yet any additional capital distribution.

We will adjust this at the beginning of 2027, when we disclose 2026 full-year earnings.

Speaker #3: For 2026 and 2027, our priorities are clear. Continued earnings expansion, a credit business that scales on our terms, and capital return to shareholders including the extraordinary links distribution.

Diego Salgado: To close, we started this journey with the simple belief that Brazilian merchants deserve a better financial partner, and that conviction hasn't changed. For 2026 and 2027, our priorities are clear: continued earnings expansion, a credit business that scales on our terms, and capital return to shareholders, including the extraordinary Linx distribution. Operator, we're ready for questions.

Also important to keep in mind that for the guidance we assume an effective tax rate in the mid teens range.

To close, we started this journey with the simple belief that Brazilian merchants deserve a better financial partner, and that conviction hasn't changed.

Speaker #3: Operator, we're ready for questions.

Speaker #1: Now we will begin the Q&A session with Mateus Scherer, CEO, Diego Salgado, CFO, and Roberta Noronha, head of investor relations. If you would like to ask a question, please press the Q&A button at the bottom of the screen or to ask questions on audio, click on raise hand.

For 2026 and 2027, our priorities are clear: continued earnings expansion, a credit business that scales on our terms, and capital return to shareholders, including the extraordinary Linx distribution.

Operator, we're ready for questions.

Roberta Noronha: Now we'll begin the Q&A session with Matheus Scherer, CEO, Diego Salgado, CFO, and Roberta Noronha, Head of Investor Relations. If you would like to ask a question, please press the Q&A button at the bottom of the screen. To ask question on audio, click on Raise Hand. You will then receive a request to activate your microphone. Our first question comes from Guilherme Grespan with JPMorgan.

Operator: Now we'll begin the Q&A session with Matheus Scherer, CEO, Diego Salgado, CFO, and Roberta Noronha, Head of Investor Relations. If you would like to ask a question, please press the Q&A button at the bottom of the screen. To ask question on audio, click on Raise Hand. You will then receive a request to activate your microphone. Our first question comes from Guilherme Grespan with JPMorgan.

Speaker #1: You will then receive a request to activate your microphone. Our first question comes from Guilherme Grespan, with JP Morgan.

Now, we will begin the Q&A session with Mattel, Sher CEO, CFO and Hera head of investor relations.

Speaker #3: Hello, good evening, everyone. Thank you for opening for questions. Just one on the guidance itself. Clarification plus a follow-up. Share count, if understood correctly, I should work with 248 million by the end of '25, right, which is the end share count.

If you would like to ask a question, please press the Q&A button at the bottom of the screen or to ask question on audio. Click on raise hand, you will then receive a request to activate your microphone.

Our first question comes from JP Morgan.

Guilherme Grespan: Hello. Good evening, everyone. Thank you for opening for questions. Just one on the guidance itself, clarification, plus a follow-up. Share count. If understood correctly, I should work with 248 million by the end of 2025, right? Which is the end share count. If I assume that you're gonna buy back $2 billion in the year and you're gonna meet your expectation, assuming current screen price, it means that I should work with roughly 225 million for 2026. I should work with a flat share count for 2027.

Speaker #3: Then if I assume that you're going to buy back 2 billion in the year and you're going to meet your expectation, assuming current screen price, it means that I should work with roughly 225 million for 2026.

Hello, good evening, everyone. Thank you for opening for questions. Uh, just 1 on, on the guidance itself for clarification plus, uh, a follow-up, uh, share count, if I understood correctly, uh, I should work with

248 Million by the end of 25, right? Which is the end share count.

Speaker #3: Then I should work with a flat share count for '27. I just want to confirm that the rationale makes sense. Here, because then my question is, if that's true, your earnings in 2027, it's growing 8% year over year, which is almost half of gross profit of 14%.

Then if you assume that you're going to buy back 2 billion in the year and you're going to meet your expectation, uh, assuming current uh, screen price. It means that I should work with roughly 2 uh 225 million for 2026.

Guilherme Grespan: I just want to confirm that the rationale makes sense here, because then my question it is, if that's true, your earnings in 2027, it's growing 8% year-over-year, which is almost half of gross profit of 14%. Just wanted to confirm what is driving this delta between gross profit growth and earnings growth. Thank you so much.

Speaker #3: Just wanted to confirm what is driving this delta between gross profit growth and earnings growth. Thank you so much.

Then I should work with a Fletcher account for 27. I just want to confirm that the rationale makes sense. Uh,

Speaker #4: Thank you, Despin. Thanks for the question, Mateus here. So our first clarify a few things on the capital distributions because there are indeed a lot of moving pieces.

Speaker #4: And then I'll hand it over to Diego to clarify the 2026 question. So just to clarify, when we look at the guidance for '26 and '27, the guidance does not include any impact from a potential distribution of links.

Diego Salgado: Hey, Grespan. Thanks for the question. Matheus here. I'll first clarify a few things on the capital distributions because there are indeed a lot of moving pieces, and then I'll hand it over to Diego to clarify the 2026 question.

Here. Because then my question is, if that's true, your earnings in 2027, it's growing 8% over the year, which is almost half of gross profit of 14%. Just wanted to confirm what is what is driving this Delta between gross profit, growth and and earnings growth. Thank you so much.

Speaker #4: Neither on the P&L nor on the share counts. So just to make it clear, if links were to be distributed via dividends, there would be no impact on our EPS guidance.

Mateus Scherer: Just to clarify, when we look at the guidance for 2026 and 2027, the guidance does not include any impact from a potential distribution of Linx, neither on the P&L nor on the share counts. Just to make it clear, if Linx were to be distributed via dividends, there would be no impact on our EPS guidance. If we were to distribute that value through share repurchase instead, there would be potential upside to the EPS due to the reduction in share counts. Now, regarding the ordinary capital distributions, which I think were your question. For 2026, we have decided to execute distributions through buyback, like Diego has said, and this impact is already embedded in the EPS guidance, which means that the guidance assumes that shares are repurchased throughout the year at an estimated average price.

Thanks for the question, Matthew, here. So, first, I'll clarify a few things on the capital distributions, because there are indeed a lot of moving pieces. And then I'll hand it over to be able to clarify the 2026 question.

Speaker #4: But if we were to distribute that value through share repurchase instead, there would be potential upside to the EPS due to the reduction in share counts.

So just to clarify uh when we look at the guidance for 26 and 27, the guidance does not include any impact from a potential distribution of links, neither on the pnl nor on the share accounts.

Speaker #4: Now, regarding the ordinary capital distributions, which I think were your question, for 2026, we have decided to execute distributions through buyback, like Diego has said.

Speaker #4: And this impact is already embedded in the EPS guidance. Which means that the guidance assumes that shares are repurchased throughout the year at an estimated average price.

If links were to be distributed via dividends there would be no impact on our APS guidance. But if we were to distribute that value through, share repurchase instead, there would be potential website to DPS due to the reduction in share accounts.

Now, regarding the ordinary capital distributions, which I think were your question?

Speaker #4: For '27, since we have not yet defined the mechanism for capital distribution, the guidance was constructed under the assumption that capital is retained and reinvested in the business.

For 2026, we have decided to execute distributions through buyback. Like Guga said,

Mateus Scherer: For 2027, since we have not yet defined the mechanism for capital distribution, the guidance was constructed under the assumption that capital is retained and reinvested in the business. Depending on the eventual allocation decision, particularly if we opt for buybacks, there could be incremental upside to EPS relative to the current guidance. That's the general overview. I'll hand it over to Diego to address the 2026 parts.

Speaker #4: So depending on the eventual allocation decision, particularly if we opt for buybacks, there could be incremental upside to EPS relative to the current guidance.

And this impact is already embedded in the EPS guidance, which means that the guidance assumes that shares are repurchased throughout the year at an estimated average price.

Speaker #4: So that's the general overview I'll hand it over to Diego to address the 2026 part.

For 27, uh, since we have not yet defined the mechanism for capital distribution, the guidance was constructed, uh, under the assumption that capital is retained and reinvested in the business.

Speaker #3: So Guilherme, let me walk you through a bit of the growth numbers for 2026. So basically, we're guiding to a growth on gross profit between 4 and 11%.

So, depending on the eventual allocation decision—particularly if we opted for buybacks—there could be an incremental benefit to EPS relative to the current guidance.

Diego Salgado: Guilherme, let me walk you through a bit of the growth numbers for 2026. Basically, we're guiding to a growth on gross profit between 4% and 11%. That has to do with a softer growth of TPV of mid-single digits throughout the year being compensated in terms of margin expansions and impact on P&L by both banking and credit. Naturally, that comes with a cost from the credit business, which is charted upfront, as you know. On EPS, what you're looking at a growth between 17% and 24%, which as Mateus mentioned, has to do basically with the fact that we are considering only the BRL 2 billion buybacks. If we were to use the Linx distribution to buybacks, that number would have grown significantly on one hand.

So, that's the general overview of hand. It over to the able to address the 2026 parts.

Speaker #3: That has to do with a softer growth of TPV, of mid-single digits throughout the year. Being compensated in terms of margin expansions and impact on P&L by both banking and credit.

So yeah. I mean

Let me walk you through a bit of the growth numbers for 2026. So basically, we're guiding to a growth on gross profit between 4% and 11%.

Speaker #3: But naturally, that comes with a cost from the credit business, which is charted upfront, as you know. Then on EPS, what you're looking, it's a growth between 17 and 24%, which has Mateus mentioned, has to do basically with the fact that we are considering only the 2 billion reais buybacks.

Um, that has to do with a software growth on TPV of mid-single digits.

Throughout the year.

Being compensated in terms of margin expansions and impact on tnl by both Banking and credit.

Speaker #3: If we were to use the links distribution to buybacks, that number would have grown significantly on one hand. If not, then EPS doesn't grow between 17 and 24%, as we've mentioned.

Speaker #3: But total shareholders' return would be massively impacted.

Diego Salgado: If not, then EPS grows between 17 and 24%, as we mentioned, but total shareholders return would be massively impacted.

Speaker #4: That's clear. But just the second point of the question, like if we assume all else equal, no further distributions, earnings would be growing much less than gross profit, right?

But naturally that comes with a cost, uh, from the credit business which is started up front as, you know, then on EPS. Uh, what you're looking at a growth between 17 and 24% which has mentioned has to do, basically, with the fact that we are, considering only the 2 billion rise BuyBacks. If we were to use the links distribution to buy backs that number would have grown significantly on 1 hand, if not then, EPS doesn't close between 20 17 and 24 percent as we mentioned. But total shareholders show total shareholders return. Would be massively impacted.

Speaker #4: In '27 specifically. Just want to get your view on why. This happens if there is any headwind that I'm missing here. I don't think it's massively below.

Guilherme Grespan: That's clear. Just the second point of the question, like, if we assume all else equal, no further distributions, earnings would be growing much less than gross profit, right? In 2027 specifically. Just want to get your view on why this happens, if there's any headwind that I'm missing here.

Speaker #4: So like Diego said, gross profit would grow between 4 and 11% on the guidance. When you do the assumptions that's close to the current market prices for the buybacks throughout the year, what you get is that adjusted net income would grow between 3 and 9%.

That's clear, but just the, the second point of the question, like, uh, if we assume all our SQL, no further distributions earnings would be growing much less than gross profit, right in 27. Specifically,

Uh just want to to get your view on on why uh this happens if there's any headwind that I'm missing here.

Mateus Scherer: Guilherme, I don't think it's massively below. Like Diego said, gross profit would grow between 4% and 11% on the guidance. When you do the assumptions that's close to the current market prices for the buybacks throughout the year, what you get is that adjusted net income would grow between 3% and 9%, so it is slightly below. The reason for that embedded in the guidance is because we continue to invest in selling expenses, which are partly offset by G&A expenses in general. It's not a massive gap. I think it's a very small gap.

Uh, it is fine.

Speaker #4: So this is slightly below. And the reason for that embedded in the guidance is because we continue to invest in selling expenses. Which are partly offset by GNA expenses in general.

I don't think it's massively below. So, like JGO said, gross profit would grow between, uh, 4 and 11% on the guidance.

Speaker #4: But it's not a massive gap. I think it's a very small gap.

Speaker #3: That's clear. Yeah, the gap widens a little bit in '27. That's why I asked. But it's clear. Thank you so much.

Speaker #4: Yeah, naturally, when building a 2027 guidance, we tend to look for a little bit more of a leeway. Especially on the bottom of the range, Guilherme.

Uh, when you do the assumptions that close to the current market price is for the BuyBacks throughout the year. Uh, what you get is that I just need income would grow between 3 and 9 percent. So, it's a slightly below. And the reason for that embedded in the guidance is because we continue to invest in selling expenses, uh, which are partly offset by G&A, expenses in general, but it's not a massive Gap. I think it's a very small Gap.

Guilherme Grespan: That's clear. Yeah, the gap widens a little bit in 27. That's why I ask, but, it's clear. Thank you so much.

That's clear. Yeah, the gap widens a little bit in '27, that's why I asked, but it's clear. Thank you so much.

Diego Salgado: Yeah. Naturally, when building a 2027 guidance, we tend to look for a little bit more of a leeway, especially on the bottom of the range, Guilherme.

Speaker #1: Our next question comes from Ricardo Buchpiguel with BTG.

Speaker #5: Hi everyone. Thank you for the opportunity of making questions. I understand that one of the priorities for Stone today is to accelerate the banking and credit initiatives.

Yeah, naturally, when building a 2027 guidance, we tend to look for a little bit more of a leeway, especially on the bottom of the range.

Operator: Our next question comes from Ricardo Buchpiguel with BTG.

Speaker #5: However, although Stone has been advancing on this front, many of the merchants still see the company more as a payment provider, as a POS machine.

Our next question comes from Hikaru Bush, Pika with BTG.

Ricardo Buchpiguel: Hi, everyone. Thank you for the opportunity of making questions. I understand this, that one of the priorities for Stone today is to accelerate the banking credit initiatives. However, although Stone has been advancing on this front, many of the merchants still see the company more as a payment provider, as a POS machine than necessary as a bank. In this regard, I want you to understand how do you plan to change this perception among your merchants and would the possibility of obtaining a banking license and being able to have a bank in your name would help on this direction? Thank you.

Speaker #5: Then necessary as a bank. In this regard, I wanted to understand how do you plan to change this perception among your merchants and would the possibility of obtaining a banking license and being able to have a bank in your name would help on this direction?

Hi everyone. Thank you for the opportunity to ask questions. Uh, I understand that one of the priorities for Stone today is to accelerate the banking and credit initiatives.

Speaker #5: Thank you.

Speaker #4: Thanks for the question, Mateus here. So on the license front, I don't think having the license is actually a big constraint on our plans.

Speaker #4: We already have a full product roadmap and we are evolving on the banking and credit features with the license that we have in place.

However, uh, although Stone has been advancing on this front. Many of the merchants, uh, still see the company more as a payment provider as a PS machine than necessary as a, a bank in this regard, I want you to understand, how do you plan to change this perception among your merchants and, uh, would the possibility of obtaining a a banking license and and, and being able to have a bank in your name would help on on this direction. Thank you.

Mateus Scherer: Thanks for the question. Mateus here. On the license front, I don't think having the license is actually a big constraint on our plans. We already have a full product roadmap, and we are evolving on the banking credit features with the license that we have in place. That said, I think you hit the nail on the question, which is when we look back at 2025, I think we had a massive improvement in terms of how many products we have and what we launched. I think there is still a huge effort in terms of how we bundle those products and also, like you mentioned, in how the clients perceive our offering.

Thanks for the question. Matthews here.

Speaker #4: That said, I think you hit the nail on the question. Which is when we look back at 2025, I think we had a massive improvement in terms of how many products we have.

So, on the license front, uh, I don't think having the license is actually a big constraint on our plans.

Speaker #4: And what we launched. I think there is still a huge effort in terms of how we bundle those products. And also like you mentioned, in how the clients perceive our offering.

Uh, we already have a full product road map and we are evolving on the banking credit features with the license that we have in place.

Speaker #4: And when we look into 2026, part of the selling expenses and the marketing investments that we're doing throughout the year is on how we reposition the company to be perceived for the clients.

that uh, I think you hit the nail on the question, which is when we look back at 2025, I think we had a massive Improvement in terms of in terms of how many products we have and what we launched

Mateus Scherer: When we look into 2026, part of the selling expenses and the marketing investments that we're doing throughout the year is on how we reposition the company to be perceived for the clients as not only a POS provider, but much more than that. I think we have a plan in place to address that point.

I think there's still a huge effort in terms of how we bundle those products and also, uh, like you mentioned, in how the clients perceive our offering.

Speaker #4: As not only a POS provider, but much more than that. And I think we have a plan in place to address that point.

Speaker #5: Thank you. Very clear.

Speaker #1: Our next question comes from Antonio Ruette with Bank of America.

And when we look into 2026, part of the selling expenses and the marketing investments that we're doing throughout the year is on how we reposition the company to be perceived for the clients as not only a FOSs provider, but much more than that, and I think we have a plan in place to address that point.

Ricardo Buchpiguel: Thank you. Very clear.

Speaker #6: Hey everyone. Thank you for your time. So two quick things on my side. So first on the guidance, if you could just explore which selling rate did you use for that.

Thank you very clear.

Operator: Our next question comes from Antonio Ruette with Bank of America.

Our next question comes from Antonio Huet with Bank of America.

Antonio Ruette: Hey everyone, thank you for your time. Two quick things on my side. First on the guidance, if you could just explore which Selic rate did you use for that. And the second one on credit, if you could dig a little bit deeper on your operating numbers for Q4. We saw increase in write-offs for both working capital and also credit cards. The same on NPLs, while maintaining an elevated cost of risk. What you are seeing there and what are expectations going forward, if you could give a little bit of color since you'll no longer have the guidance for operating metrics. Thank you.

Speaker #6: And the second one on credit, if you could dig a little bit deeper. On your operating numbers for the fourth quarter, we saw an increase in write-offs for both working capital and also the credit cards.

Speaker #6: Same on NPLs. While maintaining an elevated cost of risk. So what you are seeing there and what our expectations going forward, if you could give a little bit of color since you'll no longer have the guidance for operating metrics.

Hey everyone, thank you for your time. Um, so to, to 2, quick things on my side. So first on the guidance, if you could just, um, explore uh, with silly crate and did you use for that? Um, and the second 1 on credit, uh, if you could dig a little bit deeper, um, on your operating numbers, uh, for the fourth quarter. Uh, we saw an increase in write offs, uh, for both working capital and also credit

Speaker #6: Thank you.

Speaker #3: Hey Antonio, good evening. This is Diego. So basically, we're assuming Celic at low 12% by the end of 2026. And high 11% for 2027.

Diego Salgado: Hey Antonio Ruette, good evening. This is Diego Salgado. Basically, we're assuming Selic at low 12% by the end of 2026, and high 11% for 2027. That's what behind the guidance number. On the credit side, basically what you have, it's the result of a portfolio that keeps growing into different publics and different products, but also getting more mature, especially on the core product for the digital credit offerings that we have. Let me try to walk you through a bit of some of those moving parts. As we expand the public to which we are offering credit, naturally, we tend to extend credit to a little bit more riskier clients.

Diego Salgado: Hey Antonio Ruette, good evening. This is Diego. Basically, we're assuming Selic at low 12% by the end of 2026, and high 11% for 2027. That's what behind the guidance number. On the credit side, basically what you have, it's the result of a portfolio that keeps growing into different publics and different products, but also getting more mature, especially on the core product for the digital credit offerings that we have. Let me try to walk you through a bit of some of those moving parts. As we expand the public to which we are offering credit, naturally, we tend to extend credit to a little bit more riskier clients.

Cards. Um, the same on NPLs while maintaining an elevated cost of risk. So, uh, what you are seeing there and what our expectations are going forward—if you could give a little bit of color—since, uh, you'll no longer have the guidance for query metrics. Thank you.

Speaker #3: That's what's behind the guidance number. On the credit side, basically, what you have, it's the result of a portfolio that keeps growing. Into different publics and different products.

Hey Antonio, good evening. This is Diego. Um, so basically we're assuming Selleck at low 12%, by the end of 2026

Speaker #3: But also getting more mature especially on the core product for the digital credit offerings that we have. So let me try to walk you through a bit of some of those moving parts.

And high 11% for 2027. Uh, that's what behind the guidance number.

Speaker #3: As we expand the public to which we are offering credit, naturally, we tend to extend credit to a little bit more riskier clients. We charge proportionally to that higher risk.

On the credit side, basically what you have, it's the result of a portfolio that keeps growing in the different publics and different products, but also getting more mature, especially on the core product for the digital credit offerings that we have.

Speaker #3: But that comes with a cost on the risk side, which is what you see in terms of cost of risk on the balance sheet and naturally provisions upfront.

Diego Salgado: We charge proportionately to that higher risk, but that comes with a cost on the risk side, which is what you see in terms of cost of risk on the balance sheet and naturally provisions up front. Also, as we deploy other short term capital offerings to those clients, you also have a similar effect. On the other hand, as the core business gets a little bit more mature, we keep on learning with the products. You're gonna see additional write-offs. You're gonna see growing NPLs just as the natural process of a credit portfolio.

So, let me try to walk you through a bit of some of those moving parts as we expand the public to which we are offering credit. Naturally, we tend to extend credit to a little bit more riskier clients.

Speaker #3: Also, as we deploy other short-term capital offerings to those clients, you also have a similar effect on the other hand. As the core business gets a little bit more mature, we keep on learning with the products.

We charge, uh, proportionally to that higher risk. But that comes with a cost on the risk side, which is what you see, uh, in terms of cost of risk on the balance sheet and, naturally, provisions upfront.

Speaker #3: You're going to see additional write-offs. You're going to see growing NPLs just as the natural process of a credit portfolio.

Also, as we as we deploy uh, other short-term capital offerings to those clients. You also have a similar effect on the other hand,

Speaker #4: Yeah, if I may add, Diego. Two points on the NPLs as well that you mentioned. I think when you look at the trends in NPLs, we have two factors in place.

Speaker #4: So the NPLs 15 to 90 days were impacted by a few cases on the specialized desk. Which tends to add some volatility to that number in the short run.

Uh, as the core business gets a little bit more mature, we keep on learning. Uh, with the products, you're going to see additional write-offs, you're going to see growing NPLs, just as the natural process of a credit portfolio.

Mateus Scherer: If I may add, Diego, 2 points on the NPLs as well that you mentioned. I think when you look at the trends in NPLs, we have 2 factors in place. The NPLs 15 to 90 days were impacted by a few cases on the specialized desk, which tends to add some volatility to that number in the short run. The NPLs 90 days are basically just the process of maturation of the portfolio. As the growth rate for the portfolio is declining on a percentage basis, it's natural that the NPLs over 90 days will increase over time. That's something that we already had anticipated in the past.

Speaker #4: And the NPLs 90 days are basically just the process of maturation of the portfolio. So as the growth rate for the portfolio is declining on a percentage basis, it's natural that the NPLs over 90 days will increase over time.

Yeah, if I may add you uh 2 points on the npls as well that you mentioned. Uh I think when you look at the trends in npls, we have 2 factors in place. So the npl 15 to 90 days were impacted by a few cases on the specialized desk, which tends to add some volatility to that number in the short term.

Speaker #4: And that's something that we already had anticipated in the past. The only point that I would emphasize that Diego mentioned is again, even though we look closely to the cost of risk metrics and the NPL metrics, it's important to analyze that metric alongside the rates that we're charging.

Mateus Scherer: The only point that I would emphasize that Diego mentioned is again, even though we look closely to the cost of risk metrics and the NPL metrics, it's important to analyze that metric alongside the rates that we're charging. When you look at the movements of the portfolio over the past quarters, you have a pretty consistent trend of increasing the average yield of the portfolio at the same time, where the cost of risk remains in the mid-teens. That, in the long run, should increase the contribution of credit to the company, and it's something important to keep in mind.

And the NPLs 90 days are basically just, uh, the process of maturation of the portfolio. So as the growth rate for the portfolio, uh, is declining on a percentage basis, it's natural that the NPLs over 90 days will increase over time, and that's something that we already had anticipated in the past.

Speaker #4: And when you look at the movements of the portfolio over the past quarters, you have a pretty consistent trend of increasing the average yield of the portfolio at the same time where the cost of risk remains in the mid-teens.

The only points that I would emphasize that Diego mentioned is, again, even though we look

Closely to the cost of risk Matrix and the NPO Matrix, uh, it's important to analyze that metric alongside the rates that we're charging.

Speaker #4: So that in the long run should increase the contribution of credit to the company. And it's something important to keep in mind.

Speaker #3: All right. Thank you.

And when you look at the movements of the portfolio, over the past quarters you have a pretty consistent trend of increasing the average yield of the portfolio, at the same time where the cost of risk remains in the meetings.

Speaker #1: Our next question comes from Neha Agarwala with HSBC.

So that, in the long run, should increase the contribution of credit to the company, and it's something important to keep in mind.

Antonio Ruette: All right. Thank you.

Speaker #5: Hi. Thank you for taking my question. If we can touch a bit upon the volume growth as I think you mentioned during the remarks.

All right. Thank you.

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

Our next question comes from Niha Agarwala with HSBC.

Speaker #5: You expect about single-digit TPV growth. And I understand you're focused on profitability. But could you break down a bit in terms of what kind of volumes are you giving up?

Neha Aggarwal: Hi, thank you for taking my question. If you can touch a bit upon the volume growth. As I think you mentioned during the remarks, you expect about single-digit TPV growth. I understand your focus on profitability, but could you break down a bit in terms of what kind of volumes are you giving up? What is behind this expected growth? Is competition playing a role because we see some players among the incumbents like Cielo ramping up their operations which might make it more competitive. Also at the bottom of the pyramid, you have players like PagSeguro who are being more active. How do you see competition playing out in the volume growth expectations that you have? Thank you so much.

Hi. Thank you for taking my question.

No, that's a bit upon the volume growth. Uh, I think you mentioned during the remarks,

Speaker #5: What is behind this expected growth? And is competition playing a role? Because we see some players among the incumbents like CLO ramping up their operations, which might make it more competitive.

You expect about single-digit TPV growth, and I understand your focus on profitability, but could you break that down a bit in terms of—

Speaker #5: And also at the bottom of the pyramid, you have players like Pago who are being more active. So how do you see competition playing out in the volume growth expectations that you have?

Speaker #5: Thank you so much.

Speaker #3: Yeah, thanks for the question. So around first the competitive environment, I think overall the message has not changed. So when you look at the players, the market in general has remained rational from a pricing standpoint.

Mateus Scherer: Neha, thanks for the question. Around first the competitive environment, I think overall the message has not changed. When you look at the players, the market in general has remained rational from a pricing standpoint. We're not observing behavior that suggests competitors using growth at any cost or engaging in structuring unsustainable pricing. What we did see throughout the second half of last year was some players expanding their offerings and strengthening their sales footprint, but this is a natural movement in the industry. It tends to come in waves. In terms of the TPV growth itself, when we look back at our performance, there are clearly three trends playing at the same time.

What kind of volumes are you giving up, uh, what is behind this expected growth? Um, and is, is competition playing a role because we see some players, uh, for among the incumbents like C, uh, ramping up, uh, their operations, which might have, which might make it more competitive. Uh, and also at the bottom of the pyramid, you have players like Pago, who are being more more active. So, how do you see competition playing out? Uh, in in the, in the volume growth expectations that you have? Thank you so much.

Yeah, thanks for the question.

Speaker #3: We're not observing behavior that suggests competitors using growth at any cost. Or engaging in structuring unsustainable pricing. What we did see throughout the second half of last year was some players expanding their offerings and strengthening their sales footprint.

So, around first, the competitive environment—um, I think overall the message has not changed. So, when you look at the players, the market in general has remained rational from a pricing standpoint.

Speaker #3: But this is a natural movement in the industry. It tends to come in waves. Now, in terms of the TPV growth itself, when we look back at our performance, there are clearly three trends playing at the same time.

We're not observing behavior that suggests competitors using growth at any cost or engaging in structuring a sustainable pricing.

What we did see throughout the second half of last year was, uh, some players expanding their offerings and strengthening their sales footprint.

Speaker #3: The first one is that since the third Q of last year, we've been operating in a more challenging macro environment. Which has put pressure on TPV growth.

But this is a natural movement in the industry. It tends to come, uh, in waves,

Now, in terms of the TPV growth itself,

Speaker #3: The second one, which we mentioned in the call, is that within the market itself, we saw digital merchants performing better than brick-and-mortar recently. And this mixed shift creates a temporary headwind for our TPV given our focus on brick-and-mortar MSNBs.

Mateus Scherer: The first one is that since Q3 of last year, we've been operating in a more challenging macro environment, which has put pressure on TPV growth. The second one, which we mentioned in the call, is that within the market itself, we saw digital merchants performing better than brick-and-mortar recently. This mix shift creates a temporary headwind for our TPV, given our focus on brick-and-mortar and SMBs. The third one is that in Q1, we experienced higher than expected churn and softer new client acquisition, which weighted on TPV growth as we head into this year. These factors, they are more internal than external, and it's less about competition and more about execution. To that end, on the commercial side, we've already made meaningful progress in addressing the onboarding dynamics.

When we look back at our performance, there are clearly, uh, three trends playing at the same time.

The first one is that, since the third few of last year, we've been operating in a more challenging micro environment, which has put pressure on TPV growth.

The second one, uh, which we mentioned in the

in the call.

Speaker #3: And the third one, is that in the fourth Q, we experienced higher than expected churn and softer new client acquisition. Which weighted on TPV growth as we head into this year.

Speaker #3: These factors, they are more internal than external. It's less about competition and more about execution. And should that end on the commercial side, we've already made meaningful progress in addressing the onboarding dynamics.

Is that within the market itself? We saw digital Merchants performing better than brick and mortar, uh, recently and this makeshift creates a temporary headwind for our tpv given our focus on brick and market and smbs.

And the third one is that in the first few, we experienced higher-than-expected churn and softer new client acquisition, which weighed on TPV growth as we head into this year.

Speaker #3: And when we look at the new sales productivity recently, it has improved significantly. And now what we're doing is basically turning our attention to deepening engagement with our existing base.

These factors are more internal than external, and it’s less about competition and more about execution.

Mateus Scherer: When we look at the new sales productivity here recently, it has improved significantly. Now what we're doing is basically turning our attention to deepening engagement with our existing base, both in terms of share of wallets and in terms of retention, where we see clear room to improve and have specific initiatives underway. When we put that all together, for the Q1 of the year, this factor should result in the TPV growth, roughly flattish year-over-year. As we move through the year, we expect a stronger second half as our bundle and this cross-sell initiatives gain traction. That's what composed into the guidance of mid-single digit TPV growth for the year.

Speaker #3: Both in terms of share of wallets and in terms of retention. Where we see clear room to improve and have specific initiatives underway. So when we put that all together, for the first Q of the year, these factors should result in the TPV growth.

And to that ends on the commercial side, we've already made meaningful progress in addressing the on boarding Dynamics.

And when we look at the new sales productivity, recently it has improved significantly.

Speaker #3: Roughly flattish year over year. And then as we move through the year, we expect a stronger second half. As our bundle and this cross-sell initiatives gain traction.

And now what we're doing is basically turning our attention to deepening engagement with our existing base, both in terms of share of wallet and in terms of retention, where we see clear room to improve and have specific initiatives on the way.

Speaker #3: And that's what composed into the guidance of mid-single-digit TPV growth for the year.

Speaker #5: If I may ask, on that, there's no do you see any reason to believe why going forward the brick-and-mortar sales are going to be going to pick up?

So, when we put that all together for the first few of the year, this factor should result in the TPV growth, uh, roughly flattish year-over-year. And then as we move through the year, we expect a stronger second half as our bundle and this process of initiatives gain traction. And that, uh, composes into the guidance of mid single-digit TPV growth for the year.

Neha Aggarwal: If I may ask, on that, Do you see any reason to believe why going forward, the brick-and-mortar sales are going to pick up? I mean, it could pick up more with the overall economy, but not much more than that. Is there any way that you could participate in a profitable manner on the online side, or anything that you could do? Any optionalities that you see to improve the volume growth as the macro improves?

Speaker #5: I mean, it could pick up more with the overall economy, but not much more than that. Is there any way that you could participate in a profitable manner on the online side?

If I may ask, uh, on that—

Speaker #5: Or anything that you could do? Any optionalities that you see to improve the volume growth as the macro improves?

There's no—um, do you see any reason to believe why, going forward, the brake and motor sales are going to pick up? I mean, it could pick up more with the overall, uh, economy, but not much more than that.

Speaker #3: That's a good question, Neha. So on the second part of the question on how we can participate, the digital volume tends to be more concentrated on marketplace where the economics are smaller.

Is there any way that you could participate in a profitable manner on the online side? Um, or anything that you could do, any optional initiatives that you see to improve the volume growth, uh, as the macro improves.

Mateus Scherer: That's a good question. On the second part of the question on how we can participate, the digital volumes tends to be more concentrated on Marketplace, where the economics are smaller than the overall economics for SMBs. That said, we did launch the new payments link product late last year, and it's fairly common for SMBs in Brazil to sell through WhatsApp. Then they can use our payments links, which improved a lot. That's one of the initiatives behind the plan. The second question, I sorry, if you could repeat.

Speaker #3: Then the overall economics for MSNBs. That said, we did launch the new payments link product late last year. And it's fairly common for MSNBs in Brazil to sell through WhatsApp.

Uh, that's a good question. Yeah. So

Speaker #3: And then they can use our payments links, which improved a lot. So that's one of the initiatives behind the plan. The second question, I'm sorry if you could repeat.

On the second part of the question, on how we can participate? Uh, the digital volume tends to be more concentrated on Marketplace, where the economics are smaller than the overall economics for MSBs.

Speaker #5: No, I mean, I was just asking how. In the long term, you could increase your volume growth more than just mid-single digit. Because I mean, one thing you mentioned is participating in digital volumes.

That's sad. Uh, we did launch the P, the new payments link product, uh, late last year, and it's fairly common for Ms. in Brazil to sell through WhatsApp, uh, and then they can use our payment links, uh, which improved a lot. So that's one of the initiatives behind the plan.

the second question, uh,

Neha Aggarwal: I mean, I was just asking how in the long term, like, you could increase your volume growth more than just mid-single digit. Because I mean, one thing you mentioned is participating in digital volumes. I wanted to understand, without losing focus on profitability, how can you continue to gain volume growth? Or is this a business that we should think should grow at mid-single digit?

Speaker #5: So I wanted to understand without losing focus on profitability, how can you continue to gain volume growth? Or is this a business that we should think should grow at mid-single digit?

Speaker #3: Yeah, I think a lot is related to execution. So like we said when we talked about the TPV on the second half of last year, the trends that we're seeing now are still weighted by a relatively rough macroeconomic environment.

No, I mean, I was just asking how, in the long term, you can increase your volume growth more than, uh, more than just with single digits. Because, I mean, one thing you mentioned is participating in digital, uh, volumes. So I wanted to understand, without losing focus on profitability, how can you continue to gain volume growth? Or is this a business that we should think would grow at mid-single digits?

Mateus Scherer: Yeah. I think a lot is related to execution. Like we said when we talked about the TPV on the second half of last year, the trends that we're seeing now are still weighted by a relatively rough macroeconomic environment, plus a number of initiatives from the operational side that could improve. I think what we are embedded in this mid-single-digit growth for the year is us solving the operational needs. I think if the macro improves, it can be a tailwind for TPV growth in the future as well.

Yeah, I think a lot is related to execution. So,

Speaker #3: Plus, a number of initiatives from the operational side that could embedded in this mid-single digit growth for the year is us solving the operational needs.

Like we said, when we talked about the TV in the second half of last year,

The trends that we're seeing now are still weighted by a relatively, uh, rough macroeconomic environment.

Speaker #3: But I think if the macro improves, it can be a tailwind for TPV growth in the future as well. The only other thing that I would say is that even though there is space to re-accelerate TPV growth medium term, I think it's also important to keep in mind that the biggest jackpot or the biggest prize is also in terms of how we engage in banking and credit within the ecosystem.

Mateus Scherer: The only other thing that I would say is that, even though there is space to re-accelerate TPV growth medium term, I think it's also important to keep in mind that the biggest jackpot or the biggest prize is also in terms of how we engage in banking and credit within the ecosystem. On one hand, we have this drag from digital transactions and from the macro. On the other hand, I think when we look at the execution of banking and credit, we're trending well, but the opportunity is very, very big. That's where the focus is.

Plus, a number of initiatives from the operational side that could improve. So I think what we are embedded in this mid-single-digit growth for the year is us solving the operational needs. But I think if the market improves, it can be a tailwind for previous growth in the future as well.

the only other thing that I would say is that uh even though there is a space to re-accelerate, cpv growth medium-term

Speaker #3: So on one hand, we have this drag from digital transactions and from the macro. On the other hand, I think when you look at the execution of banking and credit, we're trending well.

I think it's also important to keep in mind that the the biggest uh, jackpot or the biggest price.

Speaker #3: But the opportunity is very, very big. So that's where the focus is.

Speaker #5: And thank you so much.

Speaker #3: Thank you.

Speaker #1: Our next question comes from Caio Prato with UBS.

Neha Aggarwal: Understood. Thank you so much.

Is also in terms of how we engage in banking and credit within the ecosystem. So, on 1 hand, we have this rag from digital uh transactions and from the macro on the other hands. I think when we look at the execution of banking credits, we're trending. Well, but the opportunity is very, very big so that's where the focus is.

Speaker #4: Hi everyone. Good evening. Thanks for the opportunity. I have two on my side, please. First, on the credit business, just to double-check if you are discontinuing your guidance on portfolio for 2027 or not.

Mateus Scherer: Thank you.

And thank you so much.

Thank you.

Operator: Our next question comes from Kaio Prato with UBS.

Mateus Scherer: Our next question comes from Kaio Prato with UBS.

Our next question comes from Caillou Pratu with UBS.

Kaio Prato: Hi, everyone. Good evening. Thanks for the opportunity. I have two on my side, please. First, on the credit business, just to double-check if you are discontinuing your guidance on portfolio for 2027 or not, and if so, what has changed? Second, if I may follow up on your expenses and overall operating leverage. If you can walk us through your investment plans towards 2026 and 2027, what kind of investments are we talking about? What should we expect in terms of leverage not only for 2026 but also 2027? Not sure on why we shouldn't see some leverage for 2027, especially in a momentum when we are discussing a lot about potential efficiency gains to come from AI and other tech developments.

Speaker #4: And if so, what has changed? And second, if I may follow up on your expenses and overall operating leverage, if you can walk us through your investment plans towards 2026 and 2027.

Hi, everyone. Good evening. Thanks for the opportunity. I have two on my side. First, on the credit business—just to double check—if you are discontinuing your guidance on portfolio for 2027 or not.

Speaker #4: What kind of investments are we talking about? What should we expect in terms of leverage, not only for '26, but also '27? Not sure on why we shouldn't see some leverage for '27, especially in a momentum where when we are discussing a lot about potential efficiency gains to come from AI and other tech developments.

And if so, what has changed? And second, if we may follow up on your expenses and overall operating leverage, could you walk us through your investment plans toward 2026 and 2027? What kind of investments?

Speaker #4: So it would be interesting to hear from you. Especially as probably in this guidance, we are not considering any relevant pickups in TPV for 2027.

Kaio Prato: It would be interesting to hear from you, especially as probably in this guidance, we are not considering any relevant pick-ups in TPV for 2027. Thank you.

Speaker #4: Thank you.

Speaker #3: Hi, Caio. Good evening. So let's start with your question on operational guidance for credit. Yes, we discontinued the operational guidance metrics that we had.

Are we talking about—what should we expect in terms of leverage? Not only for '26, but also '27. I'm not sure why we shouldn't see some leverage for '27, especially in a moment where we're discussing a lot about potential efficiency gains to come from AI and other tech developments. So, it would be interesting to hear from New York, especially as, probably, in this guidance, we are not considering any relevant pickup in TPV for 2027. Thank you.

Mateus Scherer: Hi, Kaio. Good evening. Let's start with your question on operational guidance for credit. Yes, we discontinued the operational guidance metrics that we had. Basically, because it made sense back in 2023 when we launched the 2027 guidance. At the time, you may remember...

All right. Okay. Good evening.

Speaker #3: Basically, because it made sense back in 2023 when we launched the 2027 guidance. At the time, you may remember we had virtually no credit portfolio, a much smaller balance of deposits.

So, um, let's start with your question on operational guidance for credit. Yes, we discontinued the operational guidance metrics that we had.

basically, because

Speaker #3: And we wanted to build that bridge between 2023 and 2027. Truth is, if you look today at the numbers that we have, we are probably ahead of the plan in terms of credit portfolio and deposits behind the plan in terms of TPV.

Diego Salgado: We had virtually no credit portfolio, a much smaller balance of deposits, we wanted to build that bridge between 2023 and 2027. Truth is, if you look today at the numbers that we have, we are probably ahead of the plan in terms of credit portfolio and deposits behind the plan, in terms of TPV. Naturally, we feel comfortable based on the guidance that we're delivering, that we will deliver the plan ultimately, with a different mix. That's why it didn't make sense any longer to continue providing specific guidance on the operational KPIs. That said, if we switch to expenses, you should expect expenses, selling and marketing expenses is still growing in 2026 as percentage of total revenues.

Speaker #3: Naturally, we feel comfortable based on the guidance that we're delivering that we will deliver the plan ultimately. But with a different mix. And that's why it didn't make sense any longer to continue providing specific guidance on the operational KPIs.

Speaker #3: That said, if we switch to expenses, you should expect expenses selling expenses, selling and marketing expenses is still growing in 2026 as percentage of total revenues.

it made sense back in 2023. When we launched the 2027, guidance at the time, you may remember, we had virtually, uh, no credit portfolio, a much smaller balance of deposits, and we wanted to build that bridge between 2023 and 2027. Um, truth is, if you look today at the numbers that we have, we are probably ahead of the plan in terms of credit portfolio and deposits behind the plan. Uh, in terms of tpz naturally, we feel comfortable based on the guidance, uh, that we're delivering that we will deliver the plan ultimately, but with a different mix, uh, and that's why it didn't make sense any

Longer to continue providing specific guidance on the operational KPIs.

Speaker #3: A lot of it has to do with this new positioning that we've been talking about. And other growth initiatives that we've been putting in place.

Diego Salgado: A lot of it has to do with this new positioning, that we've been talking about, and other growth initiatives that we've been putting in place. The dedicated desk in credit, it's naturally one of the things that it's new in the company. It's bringing portfolio, it's bringing top line, and has an impact on 2026. For 2027, what you have on the guidance, it's still a similar trend. That said, I wouldn't be surprised, as the overall market develops and especially as AI has been developing, as you just mentioned, that the mix could be potentially different in 2027. There is a lot of new initiatives going on on the company in terms of gaining efficiency. You should not expect large one-off actions.

That said, um, if we switch to expenses, you should expect expenses, uh, selling expenses selling and marketing expenses is still growing in 2026 as percentage of total revenues.

Speaker #3: So the dedicated task in credit is naturally one of the things that it's new in the company. It's bringing portfolio. It's bringing top line.

A lot of it has to do with this new positioning, um, that we've been talking about, uh, and other growth, uh, initiatives that we've been, uh, putting in place.

Speaker #3: And has an impact on 2026. For 2027, what you have on the guidance, it's still a similar trend that said, I wouldn't be surprised as the overall market develops and especially as AI has been developed and as you just mentioned, that the mix should could be potentially different in 2027.

So, the dedicated desk, uh, in credit, it's naturally one of the things that, it's new in the company, it's bringing portfolio, it's bringing Topline, uh, and has an impact on, on 2026.

For 2027, what do you have on the guidance? It's still a similar trend. That said, I wouldn't be surprised.

Speaker #3: There is a lot of new initiatives going on on the company. In terms of gaining efficiency, you should not expect large one-offs actions. It should be more of a long-term practice that we will emphasize not only in 2026, but 2027 onwards.

The overall market develops, and especially as AI has been developed and, as you just mentioned, that the mix—

Should could be potentially different in 2027. Um, there is a lot of new initiatives going on in the company.

In terms of gaining efficiency, um,

Diego Salgado: It should be more of a long-term practice, that we will emphasize, not only in 2026, but 2027 onwards. Those things are naturally still not reflected in that guidance number because everything is still new and we're all learning with it.

Speaker #3: And those things are naturally still not reflected in that guidance number because it's everything is too new and we're all learning with it.

Speaker #4: Yeah, Diego, if I may complement on one point, I think Caio mentioned AI in the question. And it's really true that over the past six months, we've seen a meaningful acceleration in practical application of AI, not only in the company, but I think in the world as a whole.

Mateus Scherer: Diego, if I may comment on one point. I think Kaio mentioned AI in the question, and it's really true that over the past six months, we've seen a meaningful acceleration in practical application of AI, not only in the company, but I think in the world as a whole. When I think long term, we do believe that AI agents will meaningfully improve productivity of several processes, including processes that historically in the company required large operational structures. I think it's too soon to estimate those impacts. When you look at the guidance for 2027, we're not including huge benefits from AI, even though we're doing all the effort to capture them over time.

You should not expect large 1 offs. Uh, actions it should be more of a long-term practice, uh, that we will emphasize, uh, not only in 2026, but 2027 onwards. Uh, and those things are naturally still not reflected in that guidance number because it's everything is shown you and we're all learning with it.

Yeah, go. If I may compliment on one point, I think Cayo mentioned AI and the question.

Speaker #4: When we think long-term, we do believe that AI agents will meaningfully improve productivity of several processes including processes that historically in the company required large operational structures.

And it's really true that over the past six months, we've seen a meaningful acceleration in practical application of AI—not only in the company, but I think in the world as a whole.

Speaker #4: But I think it's too soon to estimate those impacts. So when you look at the guidance for 2027, we're not including huge benefits from AI.

Speaker #4: Even though we're doing all the effort to capture them over time. Okay, great. That's clear. Thank you, Diego and Mateus.

Uh, when I think long term, we do believe that AI agents will meaningfully improve productivity of several processes, uh, including processes that historically in the company required a large operation of structures.

Speaker #1: Our next question comes from Tito Labarta with Goldman Sachs.

But I think it's too soon to estimate those impacts. So when you look at the guidance for 2027, we're not including huge benefits from AI even though we're doing all the effort to capture them over time.

Diego Salgado: Okay, great. That's clear. Thank you, Diego and Matheus.

Okay, great. That's clear. Thank you.

Speaker #6: Hi, good evening. Thanks for the call and thank you for my question. I guess just going back on the 2027 guidance, could you kind of just backing into a net income number, assuming that roughly $225 million shares, it's 2.7 to 3 billion.

Operator: Our next question comes from Tito Labarta with Goldman Sachs.

Diego Salgado: Our next question comes from Tito Labarta with Goldman Sachs.

Our next question comes from Tito Alberta with Goldman Sachs.

Tito Labarta: Hi. Good evening. Thanks for the call and taking my question. I guess, just going back on the 2027 guidance, kind of just backing into a net income number, assuming that roughly 225 million shares, it's $2.7 to 3 billion. You know, when you initially issued the guidance, I know it was a different environment then, you know, the net income was above $4.3 billion. I know you sold Linx, but Linx didn't necessarily contribute that much to earnings. just I guess the question is, what is the big difference today aside from slower TPV? I mean, which obviously we can see that, but I think there was always some implied expectation that take rate for payments would come down with maybe the uplift coming from credit.

Speaker #6: And when you initially issued the guidance, and I know it was a different environment than the net income was above 4.3. And I know you saw links, but links didn't necessarily contribute that much to earnings.

Hi, good evening. Thanks for the call and taking my question. I guess, uh, just going back on the 2027 guide, and, uh, could—kind of just backing into a net income number, assuming that roughly 225 million shares, it's...

Speaker #6: But just I guess the question is, what is the big difference today aside from slower TPV? I mean, which obviously we can see that.

Speaker #6: But I think there was always some implied expectation that take rate for payments would come down with maybe the uplift coming from credit. I mean, you just said that credit, you can potentially still deliver on that.

Speaker #6: And we saw very good growth over the last year. But what do you think is the biggest difference from when you initially gave the guidance to what you're seeing now and why it's so much lower?

Tito Labarta: I mean, you just said that, you know, credit, you can potentially still deliver on that, and we saw very good growth over the last year. What do you think is the biggest difference from when you initially gave the guidance to what you're seeing now and why it's so much lower? I guess along those lines, Mateus, you know, and congrats on, you know, moving to CEO. What would you say is your biggest priority now as you step into that role? Thank you.

Speaker #6: And I guess along those lines, Mateus, and congrats on moving to the CEO, what would you say is your biggest priority now as you step into that role?

So, $2.7 to $3 billion. And you know, when you initially issued the guidance—and I know it was a different environment—and yeah, the net income was above $4.3 [billion]. And I know he's a Lynx, but Lynx didn't necessarily contribute that much to earnings. But just, I guess the question is, what is the big difference today, aside from slower TPV? I mean, which obviously, we can see that. But I think there was always some implied expectation that take rate for payments would come down, with maybe the uplift coming from credit. I mean, you just said that, you know, credit you can potentially still deliver on that. And we saw very good growth over the last year.

But what do you think is the biggest difference from when you initially gave the guidance?

Speaker #6: Thank you.

Speaker #3: Hi, Tito. Good evening. So let me try to help you reconcile the numbers. So there are three big movements affecting the 2027 guidance. The first two effects are links divestments.

To what you're seeing now and why it's so much lower and I guess along those lines Mateos, you know, and congrats on on, you know, moving to see CEO. What what do you what would you say is is your biggest priority. Now as you step into that role, thank you.

Diego Salgado: Hi, Tito. Good evening. Let me try to help you reconcile the numbers. There are three big movements affecting the 2027 guidance. The first two effects are Linx divestments and the repurchases executed in 2025 and expected for 2026. These two movements combined have an effect of a little bit over BRL 2 billion in gross profit and BRL 1.3 billion in nominal net income. These two effects would adjust our guidance from BRL 15 per share to BRL 13 per share. Therefore, at the top of the range of our new guidance, we are within the previous plan and guidance. On the lower range of the guidance, what you have is the inclusion of a number that reflects the short-term headwinds that we're currently facing.

Hi, good evening.

Speaker #3: And the repurchases executed in 2025 and expected for 2026. These two movements combined have an effect of a little bit over $2 billion in gross profit.

Speaker #3: And $1.3 billion in nominal net income. So these two effects would adjust our guidance from 15 reais per share to 13 reais per share.

So let me try to help you reconcile the numbers. So, there are 3, Big Move movements, affecting the 2027 Guidance. The first 2 effects are links divestments and the repurchases executed in 2025 and expected. 42026

These two movements combined have an effect of a little bit over $2 billion REI in gross profit and $1.3 billion REI in nominal net income.

Speaker #3: Therefore, at the top of the range of our new guidance, we are within the previous plan and guidance. On the lower range of the guidance, what you have is the inclusion of a number that reflects a short-term headwinds that we are currently facing.

So, these, uh, two effects would adjust our guidance, uh, from 15 REI per share to 13 REI per share.

Speaker #3: The execution on the newer verticals, particularly in credit and banking, continue to evolve positively. As we've mentioned, but TPV performance has been softer than we initially anticipated.

Therefore, at the top of the range of our new guidance, we are within the previous plan and guidance.

Diego Salgado: The execution on the new, the newer verticals, particularly in credit and banking, continue to evolve positively, as we've mentioned. TPV performance has been softer than we initially anticipated. That's a bit of the dynamic that you see. The revision is primarily driven by the portfolio changes and the capital allocation decisions, along with a more conservative view on near-term TPV trends, rather than a deterioration in the core strategic initiatives.

On the lower range of the guidance, what you have is the inclusion, uh, of a number that reflects the short-term headwinds that we are currently facing.

Speaker #3: So that's a bit of the dynamic that you see. So the revision is primarily driven by the portfolio changes and the capital allocation decisions.

Speaker #3: Along with a more conservative view on near-term TPV trends, rather than a deterioration in the core strategic initiatives.

Speaker #4: And going to the second part of the question, Tito, around priorities. Let me start by seeing the following. So I've been in the company for a while now.

Mateus Scherer: Going to the second part of the question, Tito, around priorities. Let me start by saying the following. I've been in the company for a while now, what is now 11 years. While a lot has evolved over that period, in terms of strategic direction, I think we've always had a really clear target, which is we built these very strong distribution channels, we serve our clients with passion, and we want to leverage that relationship to become the primary financial services platform for SMBs in Brazil. I think in terms of vision, it remains unchanged. What we're doing now is really sharpening our execution to become more agile, and we're doing that by focusing on three priorities. The first one around payments.

The execution on the new, the newer verticals, particularly in credit and banking continue to evolve positively as we've mentioned, but tpv performance has been softer than than we initially anticipated. So that's, that's a bit of the dynamic, uh, that you see. So the revisions primarily driven by the portfolio changes and the capital allocation decisions. Along with the more conservative view on your term tpv Trends, rather than a deterioration in the course strategic initiatives.

Speaker #4: What is now 11 years? And while a lot has evolved over that period, in terms of strategic direction, I think we've always had a pretty clear target.

Uh, and going to the second part of the question, T2, around priorities.

Uh, let me start by saying the following. So, I've been in the company for a while now. What is it now—11 years?

Speaker #4: Which is we built this very strong distribution channels. We serve our clients with passion. And we want to leverage that relationship to become the primary financial services platform from SMBs in Brazil.

and while a lot has evolved over that period, in terms of strategic Direction, I think we've always had a

Pretty clear, uh, targets.

Speaker #4: So I think in terms of vision, it remains unchanged. What we're doing now is really sharpening our execution to become more agile and we're doing that by focusing on three priorities.

We serve our clients with passion.

And we want to leverage that relationship to become the primary financial services platform for SMBs in Brazil.

So, I think, in terms of vision, it remains unchanged.

Speaker #4: The first one around payments. I think we've mentioned this a couple of times throughout the Q&A. But we're now at a stage where we've reached a leadership position in our core segments.

What we're doing now is really sharpening our execution to become more agile.

And we're doing that by focusing on 3, priorities.

Mateus Scherer: I think we've mentioned this a couple times, throughout the Q&A, but we're now at a stage where we've reached a leadership position in our core segments. At this scale, the game evolves. While onboarding new clients remains important, developing the capability to deepen the relationship with them through better engagement, through cross-sell and retention is now as important, and that's priority number one. Second, when we think about banking and credit, we've built a solid foundation over the past three years. We're seeing encouraging results when we look at the portfolio and the deposits evolution, but we are very early relative to the opportunity ahead of us. Acceleration this execution on credit and banking while preserving the risk discipline that has defined the approach is priority number two. The third one, I think Diego has touched on this topic as well.

The first 1 around payments.

Speaker #4: And at this scale, the game evolves. So while onboarding new clients remains important, developing the capability to deepen the relationship with them through better engagement, through cross-sell and retention, is now as important.

I think we've mentioned this a couple of times throughout the Q&A.

But we're now at a stage where we've reached a leadership position in our core segments.

And at this scale, the game evolves.

Speaker #4: And that's priority number one. Second, when we think about banking and credit, we've built a solid foundation over the past three years. We're seeing encouraging results when you look at the portfolio and the deposits evolution.

So why you on boarding new clients remains, uh, important—developing the capability to deepen the relationship with them through better engagement, through process, sell, and retention is now as important, and that's priority number one.

Speaker #4: But we are very early relative to the opportunity ahead of us. So acceleration is execution on credit and banking. While preserving the risk discipline that has defined the approach, it's priority number two.

Second, uh, when we think about Banking and Credit, we've built a solid foundation over the past three years,

we're seeing encourage results when you look at the portfolio and the deposits evolution.

But we are very early relative to the opportunity ahead of us.

Speaker #4: And the third one, I think Diego has touched on this topic as well, but when we look at what is happening in the world recently, with the transformation underway in AI, we see substantial room to drive further productivity gains across the organization.

So, acceleration is execution on credit and banking while preserving the risk discipline that has defined the approach as priority. Number two,

Mateus Scherer: When we look at what is happening in the world recently, with the transformation underway in AI, we see substantial room to drive further productivity gains across the organization and to be more efficient in general. Efficiency is priority number 3. When we put that all together, again, I think it's much more about raising the bar on execution and trying to become a more agile organization than it is about shifting the direction of the company.

And the third one, I think Go has touched on this topic as well.

Uh,

Speaker #4: And to be more efficient in general. So efficiency is priority number three. So when we put that all together, again, I think it's much more about raising the bar on execution and trying to become a more agile organization than it is about shifting the direction of the company.

But when we look at what is happening in the world recently, with the transformation on the way in AI,

We see substantial room to drive further productivity, gains across the organization and to be more efficient in general. So, efficiency is priority number 3?

Speaker #6: Okay. No, that's very helpful. Thanks, Diego. And Mateus. And maybe just to touch on that second point, Mateus, with AI and this isn't completely comparable, right?

So, when we put that all together, again, I think it's much more about raising the bar on execution and trying to become a more agile organization than it is about shifting the direction of the company.

Tito Labarta: Okay. No, that's very helpful. Thanks, Diego and Mateus. Maybe just to touch on that second point, Mateus, with AI, I mean-- This isn't completely comparable, right? We saw one of the payment peers in the US, you know, reduce the employee base almost in half. Just how do you think about your position in terms of... I'm not asking if you're gonna cut employees or not, but just in terms of the employee base that you have, is it like sort of the right level? Is the-- Is there more productivity there? I mean, do you need to grow more? How do you think about your positioning given these potential efficiencies in AI and sort of, you know, what you have today? Thanks.

Speaker #6: But we still want a payment peers in the US, reduce the employee base almost in half. How do you think about your position in terms of I'm not asking if you're going to cut employees or not, but just in terms of the employee base that you have, is it sort of the right level?

Speaker #6: Is there more productivity there? I mean, do you need to grow more? How do you think about your positioning given these potential efficiencies in AI and sort of what you have today?

Speaker #4: Yeah, that's a good question, Tito. So in terms of AI, over the past six months, we've seen meaningful acceleration in the application of AI across the company.

Mateus Scherer: Yeah, that's a good question, Tito. In terms of AI, over the past six months, we've seen meaningful acceleration in the application of AI across the company. We touched upon that in the earnings release as well. When we think about our approach in the topic, it has been very deliberate. We're really intentionally avoiding the temptation to launch dozens of disconnected pilots with no clear path to scale or without measurable economic impact. Instead, what we're doing is twofold. First, we're focused on the core. Within the core, we have dedicated teams redesigning how we operate in key areas like customer service, the sales process, the hubs, or even in risk.

Okay. No, that that's very helpful. Thanks Diego. And maybe just to touch on that second Point Mateos with AI and this isn't completely comparable, right? But we still want to payment peers in the US, you know, reduce employee base almost in half, just how how do you think about your position in terms of I'm not asking if you're going to cut employees or not. But just in terms of the employee base that you have, is it, like sort of the right level is the, the the is there more productivity there? I mean, do you need to grow more? How, how do you think about your positioning, given these potential efficiencies in, in Ai and sort of, you know what you have today? I think

Speaker #4: We touched upon that in the earnings release as well. But when we think about our approach in the topic, it has been very deliberate.

Yeah that's that's a good question, should do?

So, in terms of AI, uh, over the past 6 months, we've seen meaningful acceleration in the application of AI across the company.

Speaker #4: So we are really intentionally avoiding the temptation to launch dozens of disconnected pilots with no clear path to scale. Or without measurable economic impact.

We touched upon that uh, in the earnings release as well. But when we think about our, our approach in the topic, it has been very deliberate.

Speaker #4: And instead, what we're doing is twofold. So first, we're focused on the core. Within the core, we have dedicated teams redesigning how we operate in key areas like customer service, the sales process, the hubs.

So we are really intentionally avoiding the temptation, uh, to launch dozens of disconnected pilots with no clear path to scale or without measurable economic impact.

And instead, what we're doing is 2 fold. So

First, uh, we're focused on the core.

Speaker #4: Or even in risk. And I think we had a first successful example of this application within customer service. Where we implemented AI agents to handle the first-level interactions.

Mateus Scherer: I think we had a first successful example of this application within customer service, where we implemented AI agents to handle the first level interactions, and we had huge efficiencies there. The second front is really around AI enablement, which is making sure that everyone in the company has the modern AI tools available to use within their day-to-day. When we democratize the access, we allow the teams to experiment and improve their workflows. On the other hand, we centrally monitor the usage, and then we establish the best practices to capture the efficiencies later. Now, it's hard to talk about actual impacts or estimates at this time. I think the one thing that we're certain is that over time, we can massively improve productivity in the company by embedding AI.

Within the company, we have dedicated teams redesigning how we operate in key areas, like customer service and the sales process, the hubs, or even in Risk.

Speaker #4: And we had huge efficiencies there. The second front is really around AI enablement, which is making sure that everyone in the company has the modern AI tools available to use.

And I think we had a, a first, uh, successful example of this application within customer service where implemented AI agents to handle, uh, the first level interactions and we had huge efficiencies there.

Speaker #4: Within their day-to-day. And when we democratize the access, we allow the teams to experiment and improve their workflows. And on the other hand, we centrally monitor the usage and then we establish the best practices to capture the efficiencies later.

The second front is really around AI enablement, which is making sure that everyone in the company has the modern AI tools available to use within their day-to-day.

And when we democratize the access we allow the teams to experiment and improve their workflows.

Speaker #4: Now, it's hard to talk about actual impacts or estimates at this time. I think the one thing that we're certain is that over time, we can massively improve productivity in the company by embedding AI.

And on the other hand, we centrally monitor the usage, and then we establish the best practices to capture the capture, the efficiencies later.

Speaker #4: I think the how and the how much is still too early to talk. But for sure, we're going to pursue those gains over the medium term.

Now, it's hard to talk about actual impacts or estimates at this time. I think the one thing that we're certain is that

Mateus Scherer: I think the how, and the how much is still too early to talk, but for sure, we're gonna pursue those gains over the medium term.

Over time, uh we can massively improve productivity in the company by embedding AI.

Speaker #6: Okay. That's great. Thanks, Mateus.

I think the how and the how much is still too early to talk, but for sure we're going to pursue those things over the medium term.

Speaker #1: Our next question comes from Renato Meloni with Autonomous Research.

Tito Labarta: Okay, that's great. Thanks, Matheus.

Okay, that's great. Thanks mate.

Operator: Our next question comes from Renato Meloni with Autonomous Research.

Speaker #3: Hey, everyone. Hey, Mateus, Diego. Thanks here for the question. I would like to explore the guidance a bit more. And going back to your comments, Mateus, in the last call, you said that you still expected to see some expansion in the gross profit yield.

Oh, our next question comes from Renato Meloni with Autonomous Research.

Renato Meloni: Hey, everyone. Hey, Matheus, Diego. Thanks here for the question. I would like to explore the guidance a bit more. Going back to your comments, Matheus, in the last call, you said that you still expected to see some expansion in the gross profit yield. Thinking back in light of lower rates, I was assuming that would be some price maintenance at the same time you're getting lower funding costs. During the call today, I'm left with the impression that you're assuming the entire expansion is gonna come from credit. I'm curious, what are your expectations here for the year given this scenario of low TPV growth and more churn if you expect to pass through lower funding costs and monetize on the credit side?

Speaker #3: And thinking back in light of lower rates I was assuming that would be some price maintenance at the same time you're getting lower funding costs.

Speaker #3: But during the call today, I'm left with the impression that you're assuming the entire expansion is going to come from credit. So I'm curious what are your expectations here for the year given this scenario of loaded PV growth and more churn if you expect to pass through lower funding costs and monetize on the credit side.

Speaker #3: And then also within this, if you could just mention a little bit of the trajectory here of gross profit throughout 2026. Thank you.

Renato Meloni: Also, within this, if you could just mention a little bit of the trajectory here of gross profit throughout 2026. Thank you.

Speaker #4: Yeah. So Renato, nothing really changed in terms of the pricing dynamics. In payments, we still believe the price levels that we've been putting on the market are healthy.

Hey everyone. Uh Hey Mattel. Diego Thank you for for the question. Oh like to explore the guidance a bit more and going back to your comments materials in the last call. You said that you still expected to see some expansion in the gross profit yield and uh thinking back uh in light of lower rates. I was assuming that would be some price maintenance. At the same time, you're getting lower uh, funding costs but uh during the call today I'm left with the impression that you're assuming the entire expansion is going to come from uh, from credit. So I'm curious, what are your expectations here for the year? Given this scenario of low tpz growth and more churn if you expect to pass through lower funding costs and monetize on the on the credit side? And then also uh, we thinking if uh, this if you could just mention a little bit of the uh, trajectory here of gross profit throughout 2026, thank you.

Diego Salgado: Yep. Renato, nothing really changed in terms of the pricing dynamics in payments. We still believe the price levels that we've been putting on the market are healthy. As Mateus mentioned before, we don't see anything being crazy being done or executed by competitors. That said, what we've always told is that once interest rates start coming down, we should benefit in the short term from tailwinds associated with the reduction on financial expenses, and that in time, those reductions should be passed on not only to new sales but also to the client base. That's what we currently have in our model, and we don't see that changing in the short term.

Yep. So, how not to?

um,

Speaker #4: And as Mateus mentioned before, we don't see anything being crazy. Being done or executed by competitors. That said, what we've always told is that once interest rates start coming down, we should benefit in the short term from tailwinds associated with the reduction on financial expenses.

Nothing really changed in terms of the pricing dynamics. Uh, in payments, we still believe

The price levels, uh, that we've been putting on the market are healthy. And as Mateus mentioned before, we don't see anything being crazy, being, uh, being done or executed by competitors.

Speaker #4: And that in time, those reductions should be passed on not only to new sales, but also to the client base. So that's what we currently have.

Speaker #4: In our model and we don't see that changing in the short term. When talking about the mix between TPV yield, TPV growth, and gross profit margins, what I've been telling for quite some time now is really that gross profit margin should continue to expand based on the expansion of the other two main products, credit and banking.

Diego Salgado: When talking about the mix between TPV yield, TPV growth, and gross profit margins, what I've been telling for quite some time now is really that gross profit margin should continue to expand based on the expansion of the other two main products, credit and banking. That the ROE from payments on a standalone basis in the long term should continue to decline. Spread should continue to decline on the long term, but are still super healthy.

Speaker #4: And that the ROE from payments on a standalone basis in the long term should continue to decline, spread should continue to decline on the long term.

Speaker #4: But are still super healthy.

That said, what we've always told is that once interest rates start coming down, we should benefit, uh, in the short term from, uh, tailwind, uh, associated with the reduction on financial expenses, and that in time, uh, those, uh, reductions should be passed on, not only to new sales but also to the client base. So that's what we currently have, uh, in our model. And we don't see that changing, um, in the short term when talking about, uh, the mix between, uh, TPV yield, TPV growth, uh, and gross profit margins. Um, what I've been telling for quite some time now is really that gross profit margin should continue to expand based on the expansion of the other two main products, Credit and Banking, and that the ROE, uh, from Payments on a standalone basis.

Is in the long term.

Speaker #3: Perfect. So then in terms of trajectory, assuming that we get the first cuts around the second half, you get one quarter of expansion there on the payment side.

Should continue, uh, to decline. Spread should continue to decline, uh, in the long term, but are still super healthy.

Renato Meloni: Perfect. In terms of trajectory, assuming that we get the first cuts around the second half, you get, one quarter of expansion there on the payment side. How long does it take to pass through the benefit to clients?

Speaker #3: And how long does it take to pass through the benefit to clients?

Speaker #4: Yeah. Well, that's a tricky question. Renato, and naturally that has to do with pace of sales. But also with churn levels, we monitor those two things on a daily basis.

Diego Salgado: Yeah. Well, that's a tricky question, Renato. Naturally, that has to do with pace of sales, but also with churn levels. We monitor those two things on a daily basis. Based on the performance of those KPIs, we try to hold those spreads for as long as possible, naturally then to pass it through as competition enhances.

Perfect. So then, in terms of trajectory, assuming that we get the first cuts around the second half, you get one quarter of expansion there on the payment side. And how long does it take to pass through the benefit to clients?

Yeah. Well

Speaker #4: And based on the performance of those KPIs, we try to hold those spreads for as long as possible. But naturally, tend to pass it through as competition enhances.

Speaker #3: Okay. Thanks, guys.

Speaker #1: Our next question comes from Daniel Vaz with Safra.

Renato Meloni: Okay. Thanks, guys.

That's that's a tricky question, uh, and how to naturally that has to do with pace of sales, but also with churn levels, we monitor uh those 2 things on a daily basis and based on the performance of those kpis uh we try to hold those those spreads for as long as possible but naturally tend to pass it through uh as competition. Enhances

Thank you.

Operator: Our next question comes from Daniel Vaz with Safra.

Renato Meloni: Our next question comes from Daniel Vaz with Safra.

Speaker #3: Good night and thank you very much for the question. I want to go back to the operating expenses. And sorry. Can you hear me?

Oh, our next question comes from Danielle Vas with Saffra.

Daniel Vaz: Good night, thank you for taking the question. I'll go back to the operating expenses. Sorry, can you hear me?

Speaker #3: Yeah. Thank you. Sorry. Yeah, yeah. Okay. Thank you. And I'm trying to connect your higher OPEX or selling expenses to your main strategy to develop a more complete bundle.

um, good night and thank you for

Uh, I want to go back to the operating expenses and kind of...

Diego Salgado: Yeah. Thank you. Now we can.

Sorry, can you hear me?

Daniel Vaz: Sorry. Yeah, yeah. Okay. Thank you. I'm trying to connect your higher OpEx or selling expenses to your main strategy to develop a more complete bundle and a more competitive environment in terms of rates or your competitors being more aggressive on taking market shares. Am I looking for your higher OpEx as a defensive strategy? I mean, are you trying to maintain your market share? Maybe you're looking at increased growth on OpEx and selling expenses for any way to your attacking strategy. Maybe we're looking at here trying to get a sense of, are you defending, trying to create a bundle? Are you attacking, trying to look at different opportunities here, trying to figure it out what's the main goal for your 2026, 2027?

Yeah, thank you.

Speaker #3: And a more competitive environment in terms of rates or your competitors being more aggressive on taking market shares. So am I looking for your higher OPEX as a defensive strategy?

No, we can. I'm sorry. Yeah, yeah. Okay, thank you. And I'm trying to connect your higher Opex or selling expenses uh to your main strategy to develop a more complete bundle.

Speaker #3: I mean, are you trying to maintain your market share or maybe you're looking at increased growth on OPEX and selling expenses for any way to your attacking strategy?

And I'm more competitive with environment, uh, in terms of of rates, or, or, or your your competitors being more aggressive on on taking market share. So, uh, am I looking for?

Speaker #3: Maybe we're looking at here trying to get a sense of are you defending trying to create a bundle? Are you attacking trying to look at different opportunities here trying to figure it out what's the main goal for your 26, 27?

Your higher Opex as a defensive strategy—I mean, are you trying to maintain your market share, or maybe you're looking at increased growth on Opex and selling expenses for any way to your attacking. Um,

Speaker #3: I know you're already talked about in the past that market share is a consequence. But I'm looking at your is it more defensive or attack?

Daniel Vaz: I know you already talked about in the past that market share is a consequence. I'm looking at your... Is it more defensive or attack? Is it good to hear from you? Thank you.

Speaker #3: Is it good to hear from you? Thank you.

Speaker #4: Thanks for the question, Daniel. I think we have two different dynamics. When we look the short term versus when we look ahead. So short term, when we look at the selling expenses for the fourth quarter, what happened was that we had higher turnover in the third Q.

Is it more defensive or attack? Is it good to hear from you? Thank you.

Mateus Scherer: Thanks for the question, Daniel. I think we have two different dynamics when we look the short term versus when we look ahead. Short term, when we look at the selling expenses for Q4, what happened was that we had higher turnover in Q3, and therefore, we have hired more in Q1 to replace that turnover, and that's why selling expenses increased primarily. Now, when we look ahead, I think the reason why we're not being vocal about seeking too much efficiency in the short run in selling expenses is because we still think we need to invest heavily in terms of repositioning the company not only as a payment provider, but as a provider of financial services as a whole. That will require capital, of course.

Thanks for the question, and I think we have two different dynamics. Uh, when we look at the short term versus when we look ahead,

Speaker #4: And therefore, we have hired more in the fourth Q to replace that turnover. And that's why selling expenses increased primarily. Now, when we look ahead, I think the reason why we're not being vocal about seeking too much efficiency in the short run in selling expenses is because we still think we need to invest heavily in terms of repositioning the company not only as a payment provider, but as a provider of financial services as a whole.

So short term when we look at the selling expenses, uh, for the part uh fourth quarter, what happened was that we had higher turnover in the third queue and therefore uh we have higher more in the first fuel to replace that turnover. And that's why uh, selling expenses increase primarily

Now, when we look ahead, I think the reason why we're not vocal about, uh, seeking too much efficiency in the short run in selling expenses.

It's because we still think we need to continue to invest.

Speaker #4: That will require capital of course. But on the other hand, I think those investments should yield continued growth on the credit and banking operations as we move ahead.

heavily in terms of repositioning the company not only as a payment provider, but as a provider of financial services as a whole.

Mateus Scherer: On the other hand, I think those investments should yield continued growth on the credit and banking operations as we move ahead. Again, I think we have two different dynamics. Short term is about hiring salespeople. Longer term, I think it's about this repositioning of the company to offer more bundles.

Speaker #4: So again, I think we have two different dynamics. Short term is about hiring salespeople. Longer term, I think it's about this repositioning of the company to offer more bundles.

Speaker #3: Cool. Thank you. And maybe a follow-up. On these bundles, I guess in the past, we have tried to see the payment segment as more linked to the US or any developed market software model, kind of a trying to upsell products for a service kind of revenue.

Uh, that will require capital, of course, but on the other hand, I think those investments should yield continued growth on the credits and banking operations as we move ahead. So again, I think we have two different dynamics. Short term is about hiring salespeople. Longer term, I think it's about this repositioning of the company to offer more bundles.

Daniel Vaz: Cool. Thank you. Maybe a follow-up. On these bundles, I guess in the past we have tried to see the payment segment as more linked to the US or any developed market software model, kind of, trying to upsell products for a service, kind of revenue. I don't know, maybe correct me if I'm wrong, but the Brazilian pay point here is working capital, and I think credit is the way how you monetize and how you.

Well, thank you. And maybe a follow-up on these bundles. Uh, I guess in the past, we have tried to see the payment segment.

Speaker #3: But I don't know, maybe correct me if I'm wrong, but the Brazilian pay point here is working capital and I think credit is the way how you monetize and how you maybe increase loyalty through your client base.

Speaker #3: Are you looking again into the service model? Has it changed any way the clients require or any specific needs from them you see?

Diego Salgado: Maybe increase loyalty through your client base. Are you looking again into the service model? Has it changed any way the clients require or any specific needs from them you see?

as more linked to the US or any developed market software model, kind of trying to upsell products for a service, um, kind of, kind of revenue. But I—I don't know, maybe correct me if I'm wrong—but the Brazilian pay point here is working capital, and I think credit is the way how you monetize and how you, um,

Speaker #4: That's a very good question. So I think we're rolling out a lot of features within our banking that we call workflow tools. So it's basically helping our clients to manage their businesses on their day-to-day operations.

Maybe increase loyalty through your client base. Uh, are you looking again into the service model? Um, has it changed in any way—the way the clients, um, require or any specific needs from them? You see?

Mateus Scherer: That's a very good question. I think we're rolling out a lot of features within our banking that we call workflow tools. It's basically helping our clients to manage their businesses on their day-to-day operations. I don't think the goal here is really to monetize those tools through service fees, but rather to have more lifetime value because clients become more stickier. In terms of monetization, the reality is that when we look at the country and the market, most of the TAM is around holding deposits and underwriting credits. What I would only complement that you said, you talked about working capital loans. I think they are one specific part of the credit value proposition. There are plenty of other products within credits which we have launched and that we are developing.

Speaker #4: But I don't think the goal here is really to monetize those tools through service fees, but rather to have more lifetime value because clients become more stickier.

That's a very good question. So, I think we're rolling out a lot of features within our banking, uh, that we call workflow tools. So, it's basically helping our clients to manage their businesses in their day-to-day operations.

Speaker #4: In terms of monetization, the reality is that when we look at the country and the markets, most of the time is around holding deposits and underwriting credits.

But I don't think the goal here is really to monetize those tools through service fees, but rather to have more lifetime value, because clients become more secure in terms of monetization.

Speaker #4: What I would only complement is that you said you talked about working capital loans. I think they are one specific part of the credit value proposition that are plenty of other products within credits.

The reality is that when we look at the, the country and the markets, most of the time is around holding deposits and underwriting credits.

Speaker #4: Which we have launched and that we are developing. They are still very small, but they can be a lot bigger than they currently are.

Speaker #4: Like overdrafts, like the credit card operation itself, and so on and so forth. So again, we're not giving up in terms of developing those workflow tools, but in terms of monetization, it's around financial services.

Mateus Scherer: They're still very small, but they can be a lot bigger than they currently are. Like overdraft, like the credit card operation itself and so on and so forth. Again, we're not giving up in terms of developing those workflow tools, but in terms of monetization, it's around financial services.

Speaker #3: All right. Nope. Pretty complete. Thank you.

Speaker #1: Our next question comes from Jamie Friedman.

Diego Salgado: All right. No, pretty complete. Thank you.

What I would only compliment that you said, you talked about working Capital Loans, I think there are, uh, 1 specific part of the credit value proposition, that are plenty of other products within credits, uh, which we have launched and that we are developing. There is still very small, but they can be a lot bigger than, uh, their, their currently are like overdrafts like the credit card, operation itself and so on and so forth. So again, uh, we're not giving up in terms of developing those workflow tools, but in terms of monetization, it's around Financial Services.

All right. No.

Pretty complete. Thank you.

Operator: Our next question comes from James Friedman.

Speaker #5: Hi. Good evening. Thank you for the opportunity. Mateus, in your prepared remarks, you had referenced improving execution, especially on the boarding and the inputs that would go into volume.

Our next question comes from Jamie Freedman.

James Friedman ): Hi, good evening. Thank you for the opportunity. Mateus, in your prepared remarks, you had referenced improving execution, especially on the boarding and the inputs that would go into volume. I was hoping you could elaborate on what some of those execution initiatives may be apropos volume.

James Friedman: Hi, good evening. Thank you for the opportunity. Mateus, in your prepared remarks, you had referenced improving execution, especially on the boarding and the inputs that would go into volume. I was hoping you could elaborate on what some of those execution initiatives may be apropos volume.

Speaker #5: I was hoping you could elaborate on what some of those execution initiatives may be apropos of volume.

Bye. Uh, good evening, thank you for the opportunity. Um, Mas, in your prepared remarks, you had referenced improving execution, especially on the boarding and

Speaker #4: Yeah, for sure, Jamie. So I think we have two different dynamics. One related to new onboardings and the other one's related to churn. In terms of new onboardings, it's basically a full review that we did of our offerings and the go-to-market approach of each distribution channel.

Inputs that would go into volume—I was hoping you could elaborate on what some of those are.

Uh, execution initiatives, maybe uh, propo volume.

Mateus Scherer: Yeah, for sure, Jamie. I think we have two different dynamics, one related to new onboardings and the other one's related to churn. In terms of new onboardings, it's basically a full review that we did of our offerings and the go-to-market approach of each distribution channel. I think those initiatives have already been implemented, and we're starting to see the results. In terms of churn, what I would say is that historically, our focus as a company was heavily skewed towards optimizing the sales engine, with a lot less emphasis on deepening engagement and systematically nurturing our existing client base. As we have scaled and the competitive landscape has evolved as well, excellence in terms of retention and client relationship has become pretty important.

Yeah, for sure. Jamie

So I think we have two different dynamics—one related to new onboardings, and the other one related to churn.

Speaker #4: I think those initiatives have already been implemented and we're starting to see the results. In terms of churn, what I would say is that historically, our focus as a company was heavily skewed towards optimizing the sales engine.

in terms of new on boardings is basically a fully a full review that we did of our offerings and they go to market approach of each distribution Channel.

I think those initiatives have already been implemented, and we're starting to see the results.

Speaker #4: With a lot less emphasis on deepening engagement and systematically nurturing our existing client base. As we have scaled and the competitive landscape has evolved as well, excellence in terms of retention and client relationship has become pretty important.

In terms of churn, what I would say is that historically, our focus as a company was heavily skewed.

Towards optimizing the sales engine, with a lot less emphasis on deepening engagements and systematically nurturing our existing client base.

Speaker #4: So what we're doing now, broadly speaking, is basically implementing a new company-wide initiative focused on delivering highly customized bundles at a much more granular level.

As we have skills, and the competitive landscape has evolved as well.

Mateus Scherer: What we're doing now, broadly speaking, is basically implementing a new company-wide initiative focused on delivering highly customized bundles at a much more granular level. Again, it's basically about segmentation and personalization of offerings, which has become a lot more important now.

Excellence in terms of retention and client relationship has become pretty important.

Speaker #4: So again, it's basically about segmentation and personalization of offerings which has become a lot more important now.

Doing now, broadly speaking, is basically implementing a new company-wide initiative focused on delivering highly customized bundles at a much more granular level.

Speaker #5: Okay. Perfect. And then a question about credit. So in terms of slide 8, the one that shows the NPL and coverage ratios, and you may have alluded to this or it may be in the footnotes, but can you unpack the what you're seeing in terms of credit between the working capital portfolio and the other dimensions of lending?

So, again, it's basically about segmentation and personalization of offerings, which has become a lot more important now.

James Friedman ): Okay, perfect. A question about credit. In terms of slide 8, the one that shows the NPL and coverage ratios, you may have alluded to this or it may be in the footnotes, but can you unpack what you're seeing in terms of credit between the working capital portfolio and the other dimensions of lending? I apologize if it's in these footnotes. I just... But that would be my question. How you're observing about overall credit performance by product line. Thank you.

James Friedman: Okay, perfect. A question about credit. In terms of slide 8, the one that shows the NPL and coverage ratios, you may have alluded to this or it may be in the footnotes, but can you unpack what you're seeing in terms of credit between the working capital portfolio and the other dimensions of lending? I apologize if it's in these footnotes. I just... But that would be my question. How you're observing about overall credit performance by product line. Thank you.

Okay, perfect. And then, um, a question about credit.

Um,

So, in terms of slide 8, uh, the one that shows the NPL and coverage ratios.

Um, and you may have alluded to this, or it may be in the footnotes, but can you unpack?

Speaker #5: And I apologize if it's in these footnotes. I just.

Speaker #4: But that would be my question. How you're what you're observing about overall credit performance by product line. Thank you.

What are you seeing in terms of credit between the working capital portfolio and the other dimensions of lending?

Um, and I apologize if it's in these footnotes, I just—

Speaker #3: So Jamie, the more mature product, which is the working capital solution, it's converging well towards expected losses. Margins so forth. That said, we've been seeing the possibility to increase margins on that product.

Um, but, but that—that would be my question. What—how you're, what you're observing about overall credit performance by, um, by product line. Thank you.

Diego Salgado: Jamie, the more mature product which is the working capital solution, it's converging well towards expected losses, margins, so forth. That said, we've been seeing the possibility to increase margins on that product, and it's something that we're executing on a monthly basis. On the short-dated products, especially on credit cards, you probably noticed an uptick on the volumes in the Q4. That said, it's probably one of the products in which we probably have a bigger opportunity in 2026 when compared to 2025. There is still a lot to learn in terms of the credit underwriting of that product and also in other short-term facilities to risk your clients. It is a focus of the firm for 2026. On the longer-dated products, we haven't launched anything yet.

Speaker #3: And it's something that we're executing on a monthly basis. On the short-dated products, especially on credit cards, you probably notice an uptick on the volumes in the fourth quarter.

So Jamie, um, the more mature product, which is the working capital solution, uh, it's converging well towards expected losses, margins, and so forth. That said, we've been seeing, uh...

Um, the possibility to increase margins on that product, and it's something that we're executing, uh, on a monthly basis.

Speaker #3: That said, it's probably one of the products in which we probably have a bigger opportunity in 2026 when compared to 2025. There is still a lot to learn in terms of the credit and underwriting of that product and also in other short-term facilities to risk your clients.

On the short-dated products, especially on credit cards, you probably noticed an uptick in the volumes in the fourth quarter.

That said, it's probably one of the products that we probably have.

Uh, a bigger opportunity in 2026 when compared to 2025.

Speaker #3: But it is a focus of the firm for 2026. And then on the longer-dated products, we have launched anything yet. It's also something that it's within our expectations for 2026.

There is still a lot to learn in terms of the crediting and the writing of that product, and also in other, uh, short-term facilities to risk your clients. But it is a focus of the firm for 2026.

Diego Salgado: It's also something that is within our expectations for 2026, and that should provide a bigger support for the dedicated desk. We currently have a medium-term product for the dedicated desk. As you know, the dedicated desk is focused on slightly larger clients, not necessarily credit card businesses. That's a bit of the portfolio that is slightly more volatile because of the concentration on the portfolio. As we scale the 3 products and launch these additional features for that client base, you should see the portfolio maturely, maturing slowly, going forward.

Speaker #3: And that should provide a bigger support for the dedicated desk. We currently have a medium-term product for the dedicated desk. As you know, the dedicated desk is focused on slightly larger clients, not necessarily credit card businesses.

And then on the longer dated products, we have them launched, uh, anything yet. It's also something, uh, that it's, uh, within our expectations for 2026 and that should provide a bigger support for the dedicated desk. Uh,

Speaker #3: And that's a bit of the portfolio that it's slightly more volatile because of the concentration on the portfolio. And as we scale, the three products and launch these additional features, for that client base, you should see the portfolio maturing slowly going forward.

We currently have, uh, a medium-term product for the dedicated desk. Uh, as you know, the dedicated desk is focused on slightly larger clients, not necessarily, uh, credit card, uh, businesses.

Speaker #5: Okay. Thank you, Diego. Thank you, Mateus.

Speaker #1: There are no more questions at this time. This concludes the question and answer session. I would like to pass the word back to Mateus Scherer for a final considerations.

And that's a bit of of, of the portfolio that it's a slightly more volatile because of the concentration on the portfolio. And as we scale, the 3 products and launch, uh, these uh, additional features, uh, for that client base. You should see the portfolio material, maturing slowly, uh, going forward.

James Friedman ): Okay. Thank you, Diego. Thank you, Mateus.

James Friedman: Okay. Thank you, Diego. Thank you, Mateus.

Okay. Thank you, Diego. Thank you, Matis.

Operator: There are no more questions at this time. This concludes the question and answer session. I would like to pass the word back to Mateus Scherer for his final considerations.

James Friedman: There are no more questions at this time. This concludes the question and answer session. I would like to pass the word back to Mateus Scherer for his final considerations.

Speaker #4: Thank you all for the support. And we'll see you in the second queue.

Mateus Scherer: Thank you all for the support. We'll see you in Q2.

There are no more questions at this time. This concludes the question and answer session. I would like to pass the word back to Mateus Schwening for a final consideration.

Thank you all for the support, and we’ll see you in the second queue.

Operator: This concludes today's presentation. You may now disconnect. Goodbye.

Mateus Scherer: This concludes today's presentation. You may now disconnect. Goodbye.

This concludes today's presentation. You may now disconnect.

goodbye.

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