XP Inc.

who will both be available for the Q&A session right after the presentation. If you'd like to ask a question, please use the raise hand feature on Zoom and we will address them in the order we received. We also offer the option of simultaneous translation to Portuguese. If you'd like to activate it, please click the button below. Before we begin, please refer to our legal disclaimers on page two, where we provide additional information regarding forward-looking statements. You can also find more information in the SEC filing section on our IR website. Now I'll turn it over to Thiago Mafra. Good evening, Mafra.

Thank you, André. Good evening, everyone. I appreciate you all joining us today for our first quarter 2025 earnings call. Let's begin by reviewing the key highlights for the quarter. It is important to mention that we continue to execute our strategy initiatives, delivering high results consistently. Starting with client assets plus AUM and AOA that we are now disclosing, that achieved 1.8 trillion, posting a 13% growth year over year. we accounted 18.1 thousand advisors representing 2% growth year-over-year and active client base posted 4.7 million with 2% growth year-over-year in the quarter gross revenues posted 4.6 billion with 7% growth year-over-year We delivered solid ABT growth of 16% year-over-year, reaching R$ 1.3 billion. And once again, happy to announce that we achieved the all-time high quarterly net income in our history, posting R$ 1.236 billion. It represents a 20% year-over-year growth. On profitability, we achieved 24.1% ROE during the quarter, with 340 bps expansion versus first quarter 24. On capital ratio, we marked a comfortable level at 19%. It represented an increase of 130 bps quarter over quarter. What's important here is our capacity to grow our business while keeping our capital discipline. Vitor will provide further details on this topic. related to new regulation implemented during the quarter regarding diluted eps we posted 24 growth year over year which corresponds to a faster growth than net income as we mentioned last quarter we should take this dynamic into consideration since we are executing our share buyback program strategy on this topic i would like to reinforce that we have ended previous program of 1 billion and have cancelled the treasury shares today we also have announced a new share buyback program of another 1 billion it's part of our capital distribution plan aligned with our guidance target of BizRatio to operate the business between 16% and 19%. Now, let's see more details on the next slides. this quarter we are sharing new info to provide a better understanding of our ecosystem basically we added institutional client assets in total client assets and provided the completely view including assets under management from our asset management business and a way from our fund administration business said that our total client assets, AUM and AUA, comprehends almost 1.8 trillion, which represent a 13% growth year over year. On the right hand of the slide, we see how net new money evolves. This net new money is only related to client assets, not AUM or AUA. This quarter, we marked 24 billion in net new money, representing 79% growth year over year. Even considering the public events we faced during this year, we were able to keep growing. As we said many times before, our target for retail net new money is around 20 billion per quarter. This quarter, we delivered our commitment and it posted 54% growth year over year, corroborating to our understanding that our two differentials set us apart from peers and will contribute to our continuous growth for the next years. On the next slide, let's delve into our retail strategy. Here we will explore our differentials and results of recent implemented initiatives. Looking to our product platform, we have not only the most complete and sophisticated in the country, but also the largest. If we look to our credentials in equities, futures, FX, options, and ETFs, we represent roughly 50% of the market. Including fixed income in the analysis, we are also the largest player in corporate credit traded volumes, number of trades, and mid-sized banks' time deposit distribution, among other indicators. This advantage places XP ahead of any player in the country regarding investments. Being top of mind is an important lever to capture any market opportunity. And based on this rationale, we are confident that we can navigate in different ways, grow our business while benefiting from our operational leverage. Now, on our multi-channel distribution, I would like to remind you that since we have implemented our proprietary tools providing more intelligence to support internal advisors with daily activities, we had increased their daily activities by 11 times. religious out to all of our advisors we have seen this standardized model providing higher productivity and client satisfaction across the board results of that are clear the standardization of the way of work resulted in 19% lower year-over-year client churn and 14% higher year-over-year in adherence to recommended allocation. In parallel, we keep focusing on quality. We have increased our top tier advisors by 21% year-over-year. The latter shows that the most productive profile is increasing faster and we should capture this benefit during the next years. By providing a better level of service to our clients, more intelligence to our advisors and recommended allocation process along the financial planning initiative, we are seeing encouraging results. This powerful combination resulted in 10 points higher NPS, and a lift in net new money of more than 50% for clients that went through the financial planning process. Besides that, our standardized model includes IFAs and provides not only scale, but also balanced returns to clients with different risk profiles. In other words, we see clients become even more satisfied with our service while they have returns aligned with their profiles on all channels. Finally, we were once again awarded as the best financial advisor platform in Brazil, something we are very proud of. This shows how we keep innovating and getting ahead of competition through different strategies throughout the years, but all those strategies have in common our client satisfaction as the priority. Now let's move to the next slide and see retail cross-sell figures. As we already mentioned, during recent quarters, we launched many initiatives to provide better quality service to our clients, and as a consequence, they are increasing their engagement with XP. Now, let's see more details on our cross-sell, and the first one is Credit Card. It grew 7% year-over-year, marking $12.1 billion in TPV during first quarter. Despite the seasonality quarter over quarter, we expect to accelerate our credit card business with the new launches we will have by June. We will offer two new products focused on affluent and private bank segments. The new offering will comprehend an attractive package of benefits that will accelerate our penetration pace. Life insurance written premium presented 40% growth year over year in first quarter 25. As we said before, our insurance business is another growth avenue for the next years since our penetration is still in early stage and will keep evolving on quarterly basis. It's important to recap that we are starting to reap the benefits from our own insurance company. since it takes three years on average to see more positive results flowing through the P&L. This dynamic is because the first two years are more concentrated with paid commissions and provisions. On retirement plans, our client assets keep growing double-digit, posting 15% year-over-year growth and market $83 billion. XP has only 5% market share and there is a lot of room to grow. As I said in recent quarters, we implemented new initiatives as cashback and Salesforce expansion to keep gaining relevance in our offering during the next years. RetailCred NII posted 48% growth year over year, marking 82 million in revenues in the quarter. Our lending process is based on client investments as collateral, and we have a lower than 1% ECL. On other new products, compounded by FX, global investments, digital account and consortium, they presented 99% growth year over year, with revenues marking 205 million this quarter. It corroborates with our plan to explore other opportunities through cross-sell in our retail client base with innovative and attractive offerings, targeting to achieve R$1 billion per year this year. Moving to the next slide, we will address our wholesale bank evolution. Starting with GCM, as we had anticipated last quarter, the industry presented much lower volumes at the beginning of the year, and we also were impacted. On the flip side, as we had also anticipated and expected, it was possible to gain market share and keep our credentials of top-ranked in GCM, agribusiness credit notes and real estate funds. While the GCM industry reduced by 19% year-over-year, XP had an impact of 8% year-over-year. During the last years, we built the largest investment platform in Brazil with relevance in secondary trading. This is a true differential to compete in this arena today and in the future. Regarding XP, Institutional Broker Dealer, it's another quarter that we gained market share. In the end of 2024, XP posted 16% market share. And now we are at 17, co-pitching head to head with the leader. In recent quarters, we have described our corporate securities growth engine. First, our capacity to originate, warehouse, and distribute corporate credit is way better than it was a few years ago. And second, how we are strategically warehousing assets under different market conditions. XP became a relevant player, and more important than that, is to show how we have created a unique loop to recycle our corporate securities book to retail and institutional channels. In the quarter, we have sold a good portion of our book from the end of 2024, and we have warehoused more than that, achieving $34 billion, a net increase of $2 billion quarter over quarter. the rationale was backed by our understanding that gcm is still with mild volumes in second quarter 25 and we want to keep our competitiveness in the fixed income arena to our retail clients to conclude my presentation i like to reinforce that we are starting to reap the benefits of the cross-sell and wholesale strategy we have been implementing the last years Despite not having yet a positive investment cycle, we are delivering solid results capturing operating leverage with margin and ROE expansion. We believe we are still at the beginning of this process and we are already projecting to close the year with ROE expansion, which is also a trend we expect to continue in the coming years. Now, I will hand it over to Vitor, who will provide a deeper look into your financial performance this quarter.

Thank you, Mafra. Good evening, everyone. It's a pleasure to be here with you to discuss the financial performance for the first quarter of 2025. Let's begin with the financial highlights for the quarter. Total gross revenues for the quarter reached 4.6 billion, representing a 7% increase year-over-year and a 4% decrease quarter-over-quarter. It's important to bear in mind the seasonality of the first quarter due to holidays and summertime. we must pay attention that retail grew 10% year-over-year, corporate industry service 11% year-over-year, and other posted minus 24% year-over-year. Considering other revenue concepts, it is important to understand the prudential conglomerate restructuring effects. Just to recap, before the restructuring, the financial results generated from cash position invested from the issued debt used to be allocated in other revenue, and the cost of corporate debt was allocated in interest expense on debt. Now, if the XP bank on the top of the local conglomerate, both concepts are allocated as the bank net interest margin. If it wasn't for this effect, other revenue would have been flat year over year. Therefore, it's fair to calculate the operational revenues growth, excluding other. In this case, total growth was 90% year over year, sustaining that our business are responding to our plan for the year and accelerating for the second half of 2025. The key drivers behind this growth for the year were retail fixed income, retail new verticals, and other retail with our new ventures growing at a fast pace. On the wholesale bank, corporate also posted positive growth of 23% year-over-year. As just mentioned, retail revenues grew 10% year-over-year and minus 4% quarter-over-quarter. Retail revenue posted 3.4 billion in the quarter, a 10% growth year-over-year and a 4% decrease quarter-over-quarter due to the seasonality. As expected, fixed income was the main driver in the quarter, achieving R$ 1.15 billion, with 4-5% growth year-over-year and posting 3% growth quarter-over-quarter. For the first time in our history, fixed income was the largest revenue in retail. Fixed income results are completely connected for distribution capacity, warehouse strategy, and the relevance in secondary trading. I also would like to highlight that other retail posted 19% growth in the year, mainly supported by FX, Global Account, and Digital Account. Let's move next to the slide of Corporate Initiative Service. Corporate and issue services revenue increased 11% year-over-year, marking R$ 506.2 million and minus 6% quarter-over-quarter. Even in a scenario with lower volumes from local industry, we gained market share in DCM Arena, and as a result, issue services delivered flat-ish revenues year-over-year, marking R$ 282 million and a decrease of 16% quarter-over-quarter. It was a strong quarter for our corporate division, capturing cross-selling opportunities, mainly if derivatives and energy. Corporate posted R$ 280 million in the quarter, with 23% growth year-over-year and 7% growth quarter-over-quarter. Moving on to the next slide, we will explore our SG&A and efficiency ratios. Our SG&A expenses totaled 1.4 billion in the quarter, flat year over year, and 10% lower quarter over quarter. We still focus on our expense control discipline, such as new hirings of internal advisors. Once again, we improved our efficiency ratio, and this time it was lower in 204 base points, reaching 34.1% in the first quarter. It is the lowest in our history. As revenue growth outpaced expense growth, we expected continued gains in operating leverage as we scale our business, even considering new investments to enhance our platform, such as improvement in our banking prod offering and a more intelligent segmentation. Moving to the next slide. As a consequence of our assertive strategy to provide and complete our sophisticated investment platform to our clients, our EBT margin expanded to 120 base points year-over-year, reaching 29.1%. It also represents an expansion of 4 base points quarter-over-quarter. Total EBT for the quarter was 1.3 billion, a 16% increase year-over-year and minus 2% quarter-over-quarter. As I said last quarter, during 2025, our efforts will be concentrated on expanding our ecosystem and capturing the benefits of a larger business, targeting our commitment to 2026, deliver EBT margins between 30 and 34. On the next slide, we see the net income. Net income achieved R$ 1.2 billion, a 20% growth year-over-year and a 2% growth quarter-over-quarter. As Mafra mentioned, a record high net income for the quarter. More importantly, EPS grew 24% year over year, and we will explore this better in the next slide. We have been more vocal on our share bar back programs lately. Our diluted EPS achieved 2 reais and 29 cents per share. And as a consequence of executing the program and canceling the shares, its growth pace is faster than our net income. During the first quarter of 25, our diluted EPS posted 24% growth while the net income grew 20%, both on a year-over-year basis. In the quarter, our OTE marked 30.2% for 174 base points higher year-over-year and ROE achieved 24.1% if 304 base points higher than the last year. When compared on quarter over quarter basis, ROTE increased 101 base points and ROE increased 68 base points respectively. And now moving to capital management. As we demonstrated last quarter, XP has distributed closer to R$ 10 billion in dividends and buybacks during the last years. During this year, we also have executed our last buyback program and today we announce a new one of R$ 1 billion. The new program can be executed until December 26 and is part of our plan to return more than 50% of our net income in both 2025 and 26. Moving to the second part of capital management on the next slide. To conclude my presentation, as anticipated last quarter, we had a new effect from the 4966 resolution, which contributed positively to our capital ratio, returning our BIS ratio to 19% in the quarter. This new resolution changed the operational RWA calculation. The new methodology introduced some additional factors, such as the 10-year operational loss base. This combination of factors made the operational RWA model more risk-sensitive resulting in a reduction in XP required capital. On the right-hand side of the slide, we can see that the total RWA to total assets reduced by 2 percentage points year over year, and total RWA reduced by 4% sequentially when compared to the last quarter. As I said before, our RWA will grow at a moderate pace, more aligned with net income, and delivering some leverage throughout the year. It is important to highlight that our VAR stood stable at 16 base points of our equity, or R$ 33 million, demonstrating our risk discipline. We continue to maintain our conservative capital position if a City 1 is standing at 17.3%. City 1 alone is a red if in our guidance for a total business ratio and well above our peers. which provide us with flexibility to execute our strategy, include further investments in technology or business expansion, and also enable us to return capital, targeting our 16 to 19 BIS ratio guidance. And now, me and Mafra will be available to the Q&A session.