Description

StoneCo: Is Its BRL 2.3B Credit Portfolio the Next Big Earnings Lever—or a Hidden Risk?

StoneCo Ltd. reported results that reflected operational progress despite a challenging macroeconomic backdrop and intensifying competition in Brazil’s financial technology sector. Revenue and income from continuing operations rose 16% year over year to BRL 3.6 billion, primarily driven by solid execution in the company’s payments and banking businesses. Adjusted gross profit increased 12% to BRL 1.6 billion, aligned with total payment volume (TPV) growth of 11%. The firm’s adjusted net income advanced 18%, supported by a 13% rise in continuing operations and efficiency gains from a lower effective tax rate and improved use of client deposits as a funding source. However, higher financial expenses tied to elevated CDI rates and a more balanced marketing spend reduced operating leverage compared to the previous year. Operationally, StoneCo’s MSMB (micro, small, and medium business) segment expanded its active client base 17% to 4.7 million, with 38% classified as heavy users adopting multiple products.