StoneCo Ltd.

Good evening, ladies and gentlemen. Thank you for standing by. Welcome to the StoneCo fourth quarter 2023 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. 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 appears in today's press release. Finally, before we begin our formal remarks, I would like to remind you that today's discussion might include forward-looking statements. These forward-looking statements are not guarantees of future performances and therefore 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. 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. I would now like to turn the conference over to your host, Roberta Noronha, Head of Investor Relations at StoneCo. Please proceed.

Thank you, operator, and good evening, everyone. Joining me today on the call is our CEO, Pedro Zinner, our CFO and Investor Relations Officer, Matheus Scherer, and our Chief Strategy and Marketing Officer, Lia Matos. Today, we will present our fourth quarter 2023 results and provide an updated outlook for our business. I will now pass it over to Pedro, so he can share some highlights of our performance. Pedro?

Thank you, Roberta, and good evening, everyone. As I have outlined in our annual shareholders' letter, after a year into my role as CEO, I have taken a deeper look at our company, better spotting our strengths and areas of improvement. This journey has been revealing as it has provided valuable lessons and enhanced my perspective on the opportunities we face. Reflecting on the successful year we had, it is impressive how well our company performed. I am not only referring to our strong financial performance, but also acknowledging the strategic milestones that have strengthened our position in the market and paved the way for future growth, as we detailed in our investor day. In response to the initial insights and assessment in my role as CEO, in 2023, we have initiated several strategic adjustments to better position our business for the future. We have reorganized ourselves to deliver our solutions more effectively across different client segments, from micro to medium businesses, tailoring our go-to-market approach to meet their unique needs. Our new organizational structure aligns with each client segment while it also strengthens key capabilities around engineering, product, marketing, and innovation, enhancing our ability to address client needs in a unique way. We have sharpened our strategic focus around three strategic priorities, which we outline in our investor day. These three priorities, to win in MSNBs, to drive engagement with our clients, and to scale through platforms, help us to set key focus areas for the coming years. The first one, defining where our focus will be in terms of the software and financial services integration effort. By focusing our execution around four priority verticals of retail, gas stations, food, and drugstores, we're increasing our competitive edge and opening a significant growth avenue for the future. LIA represents some initial encouraging results we achieved in the fourth quarter. The second one, to leverage the power of the combination of payments, banking, and software. There is a huge opportunity in our installed base to increase engagement with our solutions. As an example, today, only a fraction of our client base can be considered heavy users of our solutions. And there is a substantial potential to improve our unit economics as we continue to engage the base. The results we saw in our financial service segment in the fourth quarter reflect the success of this strategy around payments and banking. And the third one, the creation of the STON platform. Our rapid growth initially focused on development speed, sometimes at the expense of consistency and reusability. This resulted in the existence of multiple data platforms. But over the last year and a half, we've made a significant change. We've brought our technology teams together, streamlined how we work, and started to build a solid foundation that we all share, the Stone platform. As we move forward, especially with new tech like artificial intelligence, we're setting ourselves up to generate new synergies and use our insights even more effectively to serve our clients. Our last strategic adjustment focused on the implementation of cost management and spending controls. Recognizing the potential to unlock substantial operating leverage, we have embarked on initiatives aimed at enhancing profitability even further. Through sustainable cost optimization, we are setting the stage for more efficient and profitable operations. By implementing a shared service center and a zero-based budgeting, we're enhancing our financial discipline across the organization. While the opportunity is huge, we will seize it through a target approach, ensuring we do not dissipate our efforts. Before handing it over to Lear, I'd like to briefly talk about our 2023 results. Last year was a milestone for us, marking a complete rebound from the challenges faced in 2021. We closed the year with exceptional results, particularly in the fourth quarter, when we accomplished significant progress in our key strategic initiatives. We posted remarkable growth, achieving a notable increase in MSNB TPV, both annually, with MSNB TPV increasing 21% to 350 billion highs, and in the fourth quarter, with an acceleration from the previous period. Our banking services also recorded impressive growth, with deposits reaching 6.1 billion reais by the end of December, a significant increase from 2022. This growth not only reflects higher engagement, but also a better conversion of TPV into deposits. Monetization improved substantially throughout the year, with MSNB take rates achieving 2.43%, up 22 basis points year over year. In the fourth quarter, we saw a slight decline of six basis points compared to the previous quarter, but that was already expected and purely a result of seasonality. More importantly, we continue to advance in our credit solution, reaching a working capital portfolio of 309 million reais by the end of the year. with very encouraging results regarding the health of the portfolio and NPLs strictly under control. Additionally, our integration efforts in the four prioritized verticals have just started to be fruitful, with participation in TPV from these software clients surpassing 20 billion reais in the year. The push to scale through platforms yielded substantial operational leverage, boosting our EBT to billion highs, an increase of 3.3 times over the previous year. This leap forward improved our EBT margin by more than 10 percentage points, and our adjusted net profit surged to 1.6 billion highs, up 3.8 times from the previous year. Our profitability also translated into cash generation, And we ended the year with an adjusted net cash position of 5.1 billion reais, even after significant investments in our credit portfolio and share buybacks. On a separate note, the software segment faced challenges in 2023, particularly in non-strategic verticals, where growth was lower. However, our efficiency initiatives already started showing results. with EBITDA margins in 2023 improving by 1.9 percentage points to 16.4%. The fourth quarter recorded a dip due to one-off restructuring costs, but these moves are poised to generate savings in 2024. In summary, 2023 was a year of significant achievements and strategic advancement for us. and our fourth quarter results are positioning us in a good place to deliver our 2024 and 2027 outlook. Now, I'd like to pass it over to Lia to discuss our fourth quarter 2023 performance and strategic updates. Lia?