GEORGE TOWN, Grand Cayman, Aug. 14, 2024 (GLOBE NEWSWIRE) -- StoneCo Ltd. (NASDAQ:STNE, B3: STOC31)) ("Stone" or the "Company") today reports its financial results for its second quarter ended June 30, 2024. Adjusted EBT MSMB CTPV (Card TPV) R$652 million R$97.8 billion +45.9% year over year +17.4% year over year     Adjusted Net income Adjusted Basic EPS R$497 million R$1.61 +54.4% year over year +57.2% year over year     Business Overview Stone has made significant progress in the second quarter across our strategic priorities, advancing in critical areas as we work towards our 2024 and long-term targets. Highlighting our strong growth within Financial Services, MSMB Card TPV increased by 17.4% year-over-year, representing continued market share gains within the segment. This growth was achieved with continued focus towards strong monetization, as shown by our MSMB take rates, which increased 7 basis points, reaching 2.54% in the 2Q24. In banking, we continued to drive engagement, reaching 2.7 million active banking clients and R$ 6.5 billion in deposits. As we continue to evolve in our banking solution, we have also started to pilot interest-bearing products, such as time deposits – which is an exciting development to further help our clients with their most critical needs. Our credit portfolio also continues to grow, reaching R$ 712 million in the quarter with strong quality, as shown by our working capital NPLs over 90 days still at 2.6% - very much in line with our expectations. On the product side, we have finalized the structuring of our Giro Fácil product, a short-term overdraft solution designed to address the immediate capital requirements of our clients. In software, our initiative to cross-sell financial services to software clients continues to progress well, particularly in the gas station and retail verticals. This effort has led to stronger card TPV growth among software clients in priority verticals compared to the overall MSMB card TPV growth. We have also maintained our focus on efficiency. Administrative expenses have decreased by 13% year-over-year, resulting in a 180 basis-point reduction as a percentage of revenues when compared to the 2Q23. As a result of these positive developments, our adjusted basic EPS demonstrated strong growth, reaching R$1.61. We remain committed to our business plan and the targets established during our Investor Day. In light of this commitment and considering short-term market fluctuations, we allocated capital to repurchase an additional 9.67 million shares, totaling R$724 million during the beginning of 3Q24, bringing us closer to completing the R$1 billion share repurchase program announced in November 2023. Additionally, as part of our liability management strategy, we allocated $295 million to the tender offer for our 2028 bonds, achieving nearly 60% participation. Operating and Financial Highlights for 2Q24 MAIN CONSOLIDATED ADJUSTED FINANCIAL METRICS Table 1: Main Consolidated Financial Metrics Main Consolidated Financial Metrics (R$mn) 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y % 1H24 1H23 y/y % Total Revenue and Income 3,205.9 3,084.9 3.9% 2,954.8 8.5% 6,290.8 5,666.4 11.0% Adjusted EBITDA 1,587.2 1,512.0 5.0% 1,498.8 5.9% 3,099.2 2,750.2 12.7% Adjusted EBITDA margin (%) 49.5% 49.0% 0.5 p.p. 50.7% (1.2 p.p.) 49.3% 48.5% 0.7 p.p. Adjusted EBT 652.2 567.6 14.9% 447.0 45.9% 1,219.8 771.0 58.2% Adjusted EBT margin (%) 20.3% 18.4% 1.9 p.p. 15.1% 5.2 p.p. 19.4% 13.6% 5.8 p.p. Adjusted Net Income 497.1 450.4 10.4% 322.0 54.4% 947.6 558.6 69.6% Adjusted Net income margin (%) 15.5% 14.6% 0.9 p.p. 10.9% 4.6 p.p. 15.1% 9.9% 5.2 p.p. Adjusted Net Cash 5,256.9 5,139.8 2.3% 4,327.2 21.5% 5,256.9 4,327.2 21.5%                   Total Revenue and Income reached R$3,205.9 million in the quarter, up 8.5% year over year. This growth was mostly driven by a 10.6% increase in financial services revenues, mainly as a result of consistent active client base growth and higher client monetization. Adjusted EBITDA was R$1,587.2 million in the quarter, an increase of 5.9% year over year and 5.0% quarter over quarter. Adjusted EBITDA Margin increased from 49.0% to 49.5% sequentially, primarily due to consolidated revenue growth, combined with lower selling expenses as a percentage of revenues. Adjusted EBT was R$652.2 million in 2Q24, a 45.9% increase year over year, with an adjusted EBT margin of 20.3%, a 5.2 percentage points increase over the same period. Adjusted EBT was up 14.9% sequentially, with adjusted EBT margin increasing 1.9 percentage point. The quarter over quarter margin increase is primarily attributed to consolidated revenue growth, combined with lower financial and selling expenses as percentage of revenues, being partially offset by more normalized levels of other operating expenses. Adjusted Net Income reached R$497.1 million in 2Q24, a 54.4% growth year over year, with an adjusted net margin of 15.5% compared with R$450.4 million and a margin of 14.6% in 1Q24. The sequential margin increase was primarily driven by the same factors that impacted Adjusted EBT margin, partially compensated by a higher effective tax rate. Adjusted Net Cash position was R$5,256.9 million in 2Q24, representing a 21.5% increase year over year or 2.3% sequentially. The R$117.1 million quarter over quarter growth is mainly explained by cash generation from our operations with the main outflows being capex and buyback of shares. OUTLOOKWe are on track to deliver our 2024 guidance. The profitability achieved in 1H24 has positioned us favorably to meet our full-year guidance, despite several headwinds. These include a ~R$120 million reduction in revenues in 1H24 alone due to changes in the recognition of membership fee revenues and a challenging macroeconomic environment with a higher yield curve.           On track to deliver our 2024 Guidance     2024 Guidance 2024Guidance   ∆% y/y   1H24   ∆% vs 1H23   Comments MSMB CTPV (Card TPV) (R$bn) > 412   > +18%   191   +18%   MSMB Card TPV Clients Deposits (R$bn) > 7.0   > +14%   6.5   65%   Demand deposits Growth ↑                                       Credit Portfolio (R$bn) > 0.8   > +2.6x   0.7   +38x   Working capital loans and Credit Card MSMB Take Rate (%) > 2.49%   > +4bps   2.54%   +15bps   MSMB Financial Services Revenues over Card TPV Monetization ↑                                       Adjusted Administrative Expenses (R$bn) < 1.125   < +7%   0.948   -12%   Strong results despite (i) the execution of the share buyback program, (ii) changes in the recognition of the membership fee revenues and (iii) the new future yield curve Adjusted Net Income (R$bn) > 1.9   > +22%   0.467   +70%   Efficiency ↑                 MAIN OPERATING METRICS Table 2: Payments Payments Operating Metrics 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y %             Total TPV1 (R$bn) 126.1 117.3 7.5% 103.7 21.6% CTPV2 (Card TPV) 110.9 105.8 4.8% 97.4 13.8% PIX QR Code 15.2 11.5 32.1% 6.3 141.5%             MSMB TPV1 109.3 101.9 7.2% 87.7 24.6% CTPV2 (Card TPV) 97.8 93.4 4.7% 83.3 17.4% PIX QR Code 11.5 8.5 34.8% 4.3 164.5%             Key Accounts TPV1 16.8 15.3 9.7% 16.0 4.8% CTPV2 (Card TPV) 13.1 12.3 6.0% 14.1 (7.2%) PIX QR Code 3.8 3.0 24.6% 2.0 90.7%             Active Client Base ('000) 3,904.1 3,720.6 4.9% 3,014.7 29.5% MSMB 3,860.2 3,676.2 5.0% 2,962.0 30.3% Key Accounts 51.8 51.9 (0.2%) 62.6 (17.2%)             Net Adds ('000) 183.6 198.5 (7.5%) 196.6 (6.6%) MSMB 184.0 204.9 (10.2%) 203.9 (9.8%) Key Accounts (0.1) (6.4) (98.4%) (5.0) (97.9%)                         Total TPV (including PIX QR Code) reached R$126.1 billion in 2Q24, 21.6% higher on a year over year basis. This growth is mainly explained by (i) continuous growth in the MSMB segment, with CTPV (Card TPV) growing 17.4% and (ii) the increase in PIX QR Code volumes which grew 141.5% compared with the prior-year period. Total Payments Active Client base reached 3.9 million with a net addition of 183,600 active clients in the quarter. MSMB (Micro and SMB clients) MSMB Active Payment Clients were 3.9 million in 2Q24, growing 30.3% year over year. The quarterly net addition was 184,000, a 10.2% quarter over quarter decrease, which can be mainly attributed to higher net adds in 1Q24 due to a specific marketing campaign in that period. MSMB TPV (including PIX QR Code) was R$109.3 billion in the quarter, an year over year increase of 24.6% and 7.2% sequentially. MSMB CTPV (Card TPV) was R$97.8 billion, growing 17.4% year over year and 4.7% sequentially. The year over year increase was primarily driven by the continuous growth of our active payments client base in the segment. MSMB PIX QR Code reached R$11.5 billion in the quarter, 1.6x higher year over year or a 34.8% growth over the previous quarter. From 2Q24 onwards, MSMB PIX QR Code volumes will include those from Pagar.me SMB clients, who are now fully integrated into the complete Stone banking solution, which contributed with R$1.4 billion in the quarter. ________________________1 TPV means "Total Payment Volume". Considers all volumes settled by StoneCo, including PIX QR Code),defined as transactions from dynamic POS QR Code and static QR Code, unless otherwise noted.2 CTPV means "Card Total Payments Volume" and considers only card volumes settled by the Company. Table 3: Banking Banking Operating Metrics 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y %             MSMB Active Client Base ('000) 2,704.2 2,379.7 13.6% 1,672.0 61.7% Client Deposits (R$mn) 6,471.6 5,985.0 8.1% 3,918.6 65.2% MSMB ARPAC (R$) 25.7 29.3 (12.6%) 25.3 1.2%                         Banking solutions Banking active client base in 1Q24 was 2.7 million active clients, up 61.7% year over year or 13.6% quarter over quarter. The sequential growth was mainly a result of (i) the increase of our payments active client base, (ii) the continued activation of new banking accounts within our existing Stone payments client base, in line with the execution of our strategy of selling integrated solutions, and (iii) the migration of Pagar.me clients to the full banking solution. Total deposits achieved R$6.5 billion in the quarter, increasing 65.2% year over year and 8.1% quarter over quarter. The sequential increase is mainly attributed to the growth in our banking active client base.  Banking ARPAC was R$25.7 per client per month, representing a 1.2% increase year over year and a 12.6% decrease quarter over quarter. The quarter over quarter decrease is mainly explained by (i) a lower average CDI in the period which impacts our floating revenues and (ii) higher contribution of Ton clients in the MSMB Active Banking Client Base, as Ton clients generate lower revenue contribution compared to Stone clients. Table 4: Credit Credit Metrics 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y %             Consolidated credit metrics                       Portfolio (R$mn) 711.8 539.6 31.9% 18.7 3704.1% Provisions for losses (R$mn) (18.1) (44.8) (59.7%) (3.7) 382.9%             Working capital loans metrics           Active contracts 24,264 18,754 29.4% 672 3510.7%             Portfolio (R$mn) 681.6 531.7 28.2% 18.7 3542.7% Disbursements (R$mn) 275.6 294.9 (6.6%) 19.0 1350.8%             Provision for losses (R$mn) (16.9) (44.4) (62.0%) (3.7) 350.6% Accumulated provision for losses (R$mn) (123.1) (106.3) 15.9% (3.7) 3186.8% Provisions ratio (18.1%) (20.0%) 1.92 p.p. (20.0%) 1.96 p.p.             NPL 15-90 days 2.85% 2.20% 0.66 p.p. 0.31% 2.55 p.p. NPL > 90 days 2.60% 1.47% 1.13 p.p. n.a. n.a.                         Working Capital loans: In 2Q24 we disbursed R$275.6 million, reaching 24,264 contracts and a portfolio of R$681.6 million at month-end. The Company remains focused on offering this credit solution to the SMB client segment. Provision for expected working capital losses was R$16.9 million in the quarter compared with R$44.4 million in the previous quarter. We have started to converge provision levels to our expected loss levels as the portfolio matures. As a result, the ratio of accumulated loan loss provision expenses over the working capital portfolio was 18.1% in the period compared with 20.0% in previous quarters. Working capital NPL 15-90 days was 2.85% and NPL over 90 days was 2.60% in 2Q24 compared with 2.20% and 1.47% in 1Q24 respectively. This expected increase is a natural result of the portfolio maturation process. Table 5: Monetization Take Rate 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y %             MSMB 2.54% 2.54% 0.01 p.p. 2.48% 0.07 p.p. Key Accounts 1.33% 1.29% 0.04 p.p. 1.14% 0.19 p.p.                         MSMB Take Rate was flat sequentially in 2Q24 at 2.54%. For more information about reconciling our reported take rates with our financial services revenue, please refer to the "Build-up Take Rate" tab in our Results Spreadsheet. Table 6: Software Software Operating Metrics (R$bn) 2Q24 1Q24 Δ q/q % 2Q23 Δ y/y %             CTPV3 (Card TPV) Overlap 5.5 5.1 8.2%