StoneCo Ltd.

Good evening, ladies and gentlemen. Thank you for standing by. Welcome to the StoneCo fourth quarter and fiscal year 2022 earnings conference call. By now, everyone should have access to our earnings release. The company has also posted a presentation to go along with its call. All material can be found at www.stone.co on the investor relations section. Throughout this conference call, the company will be presenting non-IFRS financial information, including adjusted net income and adjusted net cash. These are important financial measures for the company but are not financial measures as defined by IFRS. Reconciliations of the company's non-IFRS financial information to the IFRS financial information appear in today's press release. Finally, before we begin our formal remarks, I would like to remind everyone that today's discussion might include forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the company's expectations. Please refer to the forward-looking statements disclosure in the company's earnings press release. 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. I would now like to turn the conference over to your host, Rafael Martins, VP of Finance and Investor Relations Officer at StoneCo. Please proceed.

Thank you, Operator, and good evening, everyone. Joining us today on the call, we have our CEO and board member, Thiago Piau, and our chief strategy officer, Lia Matos. Today, we'll present our fourth quarter 2022 results, discuss some recent trends, and provide an updated outlook for our business. I will now pass it over to Thiago so he can share some highlights of our performance. Thiago?

Thank you, Rafa, and good evening, everyone. Let me start by reviewing the key highlights for the year and fourth quarter 2022 that we lay out on slide four of our presentation. We successfully drove strong growth with improvement in profitability. Our revenue doubled in 2022, while our adjusted net income reached 526 million reais. In the quarter, adjusted net income reached 235 million reais, a 44% sequential growth. This achievement was largely a result of a successful price execution and strong operational leverage, while we improved engagement with our clients and continued to invest in our growth. We generated increasingly stronger cash flows. Our company is generating cash in a very consistent way and has a strong balance sheet and liquidity to fund its growth ahead. Our adjusted net cash increased by R$1.2 billion in 2022 and R$385 million in the fourth quarter alone. We expect that our cash flow generation will remain strong in 2023. In financial services, we expanded our client base, offered new solutions, and captured higher take rates. In 2022, we generated strong profitable growth in our client base, while improving unit economics both through price execution and increase in monetization from our banking solutions. In the fourth quarter, MSNB TPV grew 23% year-on-year, almost two times the industry growth. Active client base grew 48% year-on-year to 2.5 million merchants at the same time that we increased take rates by 50 pips compared to last year. Additionally, total banking deposits reached R$ 4 billion, R$ 3.6 billion of which in the MSNB segment, reaching almost 693,000 active banking clients. I think such results show our ability to pass along price increases, gain market share, and improve engagement with our clients at the same time. In software, we gained scale, improved operating margins, and advanced our product integrations. Software revenue grew 21% year-on-year in the fourth quarter, and our adjusted EBITDA margin reached 16.2% in the fourth quarter, the highest margin since we acquired the business. We gained efficiency while also investing in several areas to better serve our clients, like customer service and product integrations. We've integrated our financial services platform to POS and ERP solutions in strategic verticals, opening a key cross-sell opportunity, which we believe is unique within the industry. Last, we enhanced the capabilities necessary to execute the next phase for Stone. We added to our team experienced and seasoned leaders, strengthening key capabilities in banking, credit, product, tech, and risk, which will be crucial for our plans in the coming years. I'm excited to share these results with you, which marks the completion of our turnaround in 2022, with the company well positioned to continue its successful story. Most importantly, we have executed our turnaround, maintaining our special culture and strong devotion to serve our clients. Finally, we're also successfully completing our CEO transition, and I'm confident that under Pedro's leadership, Stone will evolve on an even stronger future, and 2023 will start a new chapter in our journey. Now, I'm very happy to bring Pedro to send a message to all of you.