StoneCo Ltd (STNE) Q3 2025 Earnings Call Highlights: Strong Financial Performance Amidst ...

This article first appeared on GuruFocus.

Release Date: November 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

StoneCo Ltd (NASDAQ:STNE) reported a 15.2% year-to-date growth in adjusted gross profit, demonstrating resilience despite a challenging macroeconomic environment. The company's adjusted basic EPS increased by 37% year-to-date, indicating strong financial performance. StoneCo Ltd (NASDAQ:STNE) returned 2.8 billion reais to shareholders through share buybacks, reflecting a 10% yield for the period. The active client base for StoneCo Ltd (NASDAQ:STNE)'s payments business grew by 17% year-over-year, reaching 4.7 million clients. Client deposits in StoneCo Ltd (NASDAQ:STNE)'s banking operations grew by 32% year-over-year, showcasing strong client acquisition and engagement.

Negative Points

StoneCo Ltd (NASDAQ:STNE) experienced a deceleration in TPV growth, reflecting a more challenging macroenvironment and industry dynamics. The company's financial expenses increased by 28% year-over-year, largely due to higher average CDI rates. StoneCo Ltd (NASDAQ:STNE) faced increased marketing expenses, which negatively affected year-over-year comparisons. The company's NPLs over 90 days increased to 5.03%, reflecting the natural maturation of the credit portfolio. StoneCo Ltd (NASDAQ:STNE) anticipates further deceleration in TPV growth due to ongoing macroeconomic challenges.

Q & A Highlights

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Q: On your prepayment business, are you at an all-time high level of spreads post-pricing adjustments? How do you see the sustainability of this level going forward? Also, what are the main drivers for earnings growth apart from policy rates? A: We are not at all-time high spreads. The increase in gross profit yield is due to higher penetration of banking and credit, not prepayment pricing. For earnings growth, credit portfolio growth will contribute more to the P&L in 2026 as it matures. Operational efficiency (OE) management will also be a focus given the macroenvironment. - Matteo Scherer, CFO

Q: How are you sensing the competitive environment in your payments business, and what are the pricing trends going forward? A: The competitive environment is stable, with some new entrants, but overall players remain rational. Regarding pricing, short-term rate cuts positively impact us, but we don't expect to maintain these benefits long-term. Spreads are currently healthy. - Lia Mattos, Strategy and Marketing Officer

Story Continues

Q: Where does the company stand in its organizational redesign towards a unified brand and customer-centric culture? A: We have made significant progress, shifting from a BU organization to a fully functional one, which helps in setting strategy and offering bundled services to clients. We are almost there, with some adjustments needed over time. - Pedro Zinner, CEO

Q: Can you provide more details on the changes in credit stages, particularly the increase in stage 2 and 3? A: Stage 3 increases are due to portfolio maturation. Stage 2 changes are influenced by portfolio maturation and external credit restrictions affecting clients. Volatility in credit restrictions in Brazil contributes to stage changes. - Matteo Scherer, CFO

Q: Regarding asset quality, you mentioned a specific case of non-payment. Can you elaborate on that? Also, what do you mean by deceleration in MSMB segment volume growth? A: The non-payment issue was minor, affecting NPL 15-90 days by 40 basis points, and has been resolved. For MSMB, deceleration is driven by industry trends and macro impacts, with growth expected to remain above industry average. - Matteo Scherer, CFO and Lia Mattos, Strategy and Marketing Officer

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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