XP Inc.

Good evening, everyone. I appreciate you all joining us today for the second quarter 2025 earnings call. So half a year is already behind us, but there's much more to come. We are still working hard, I would say in an obsessive way to keep evolving our client's journey, experience and product offering. 2025 has demonstrated to be more challenging than we estimated, demanding more efforts from all our teams to keep growing our business in a profitable way. As a result, we are continuously increasing our profitability. Now, analyzing the main KPIs. The first one is client assets AUM and AUA for which we posted 1.9 trillion reais at 17% growth year over year. Total advisors accounted for 18.2 thousand represent flat figures year over year. And on active clients, we posted 4.7 million clients with 2% growth year over year. During the quarter, gross revenues marked 4.7 billion reais, with a 4% growth year over year. EBT year over year is 5% lower, reaching 1.3 billion, mainly because last year we had positive impacts from overhead, turning this quarter not like for like. And on the bottom line, It's another record. We achieved the highest net income in our history, reaching R$1,321,000,000. It represents an 18% year-over-year growth. On profitability, we achieved 24.4% ROE during the quarter, a 223 bps expansion versus second quarter 24. 10 out of 11 quarters posting consecutive growth. This means 10 out of 11 quarters posting consecutive growth. On capital ratio, we printed a comfortable level at 20.1%. It represented an increase of 110 bps quarter over quarter. Regarding diluted EPS, we posted 22% growth year-over-year, another quarter in which it grew faster than net income, driven by our Share-by-back program execution. As we speak, we still have a Share-by-back program of R$1 billion to be executed until next year. As I mentioned during last quarters, our capital distribution plan is aligned with our guidance and we will operate the business with a business ratio between 16 and 19%. Now, let's see more details on the next slides. Since last quarter, we have been sharing new info to provide a better understanding of our ecosystem, considering institutional clients in total client assets and provided assets under management from our asset management business and AUA from our fund administration business. Sad that our total clients AUM and AUA comprehend almost 1.9 trillion, which represented a 17% growth year over year. On the right hand of the slide is presented how net new money evolved. This net new money is only related to client assets. This quarter, we market $16 billion in retail net new money and minus $6 billion in corporate and institutional. It's important to mention that during the second quarter, SMEs and large corporates' net new money reflected the dynamics of the current macro scenario. First, due to payment of higher interest expense, companies have less liquidity than before. Second, in order to minimize this liquidity constraint, some companies withdrew part of their investments with us, as they were used in reciprocity for credit lines with other players. On the retail side, the lower tax exempt volumes in GCM impacted primary offerings allocation and consequently the net new money coming from individuals. We keep developing our product offering and capabilities to constantly offer the best investment alternatives to clients. which should drive higher net new money in the long term. I would say that the current environment has proven to be more challenging than we expected at the beginning of the year, especially for investment banking origination activities. However, we still have a better GCM pipeline for the second half of the year, new investment products offering, and other initiatives supporting our efforts to achieve retail net new money averaging 20 billion per quarter this year. On the next slide, let's delve into our retail strategy. Here, I'd like to address some topics which are connected to our business model. Today, the company presents a more complete ecosystem with retail, institutional and corporate divisions fully integrated to generate investment opportunities. This benefits us in many instances. One of them is the fixed income platform in which we are much more complete now. Being one, the largest distributor of mid-sized banks time deposits. Second, innovative in developing new instruments such as the boundary pack structure notes. And third, also having a robust wholesale bank franchise with a corporate secured book to serve retail clients. As part of our business model, To engage clients on another level, we also launched new verticals in strengthening our investments portfolio while attending clients to demand in banking, insurance, retirement plans, global account, effects, and now consortium. This competitive ecosystem enabled us to present higher profitability during the last years. And there is much more to do since we will keep investing in channel diversification expanding sales teams, improving our product platform experience with a more accurate client offering, and improving our intelligent segmentation. Recently, we also launched new guidelines to the AFAs, sharing our knowledge, tools, and methodologies, focusing on an opportunity to increase productivity, responsiveness, and efficiency. And independently if it's through XP internal teams or AFAs, we also developed and agreed in a new and more comprehensive way to serve our clients. New rules are aligned with one objective, to improve client experience. Our main goal is to keep serving clients with excellence, no matter in which channel or remuneration model they have chosen. With this new way of growing business, we are convinced that we have a more sustainable revenue model and profitability is a consequence. For sure, the current diversified ecosystem defines XP as a defensive business with long-term growth. We are confident that our unique business model will keep evolving to achieve our long-term goals, which is to become the leader in investments in Brazil. Moving to the next slide, we see on the left-hand side how we serve clients with different models, channels, and how XP is remunerated. By the way, we have already launched fee-based model a long time ago, anticipating what's becoming reality today. It means that IFAs and internal advisors can attend clients with transactional fees or fee-based model, according to client's preference. We also have RIAs and consultants which work in a fee-based model, attending clients with asset custody in different platforms. What we see today from the client perspective is a higher demand for fee-based model when compared to the recent past. Today, the fee-based model represents only 5% of our total client assets. Looking at developed markets, for example, the US, the fee-based model achieved around 50% share of clients' assets. If this is the trend in Brazil, we are ready to serve our clients. Our capacity to attend clients with different models differentiate us from competitors, and it's translated into more share of wallet and longer lifetime. Moving now to the next slide about retail cross-sell. As we have stated before, we have implemented new initiatives and products to diversify our revenue streams during the last years. Starting with credit card, it grew 8% year-over-year, marking 12.4 billion in TPV during the quarter. As we anticipated last quarter, we launched new products targeting affluent and private banking clients. We estimate that with the new value proposition, cards should accelerate in the next years. Life insurance written premiums posted 45% growth year over year. As we said in recent quarters, our insurance business is a growth avenue which is still at its early stage. Since it presents a huge penetration potential, we understand that we'll keep growing at a fast pace on a quarterly basis. On retirement plans, our client assets posted 15% growth year-over-year on the second quarter and reached 86 billion. We keep expanding our sales force to increase our relevance in this industry since our market share is mid-single digit and there is a relevant addressable market to penetrate during the next years. In new products, we consider FX, Global Investments, Digital Account, and Consortium. Altogether, they presented a 146% growth year-over-year, with revenues reaching R$256 million this quarter. It's important to note that Consortium came from scratch, and it's gaining traction month after month. Moving to the next slide, we will address our wholesale bank evolution. Taking GCM into consideration, this quarter we saw decent industry volumes, but not close to last year's. Coupled with that, some players became more aggressive in pricing, trying to gain market share, and therefore resulting in lower fees. Finally, tax incentivized products have lost share in total industry volumes during this quarter. For the next quarter, pipeline is solid. We have more opportunities and there is a chance to reaccelerate our revenue growth. Regarding XP's broker Jiller, it was another positive quarter and we became the leader in the local industry with 17% market share. As we saw this quarter, we still expect to see improvements bit by bit until 2026. This quarter, we kept the same size of our corporate securities book with 34 billion. Bear in mind that we can have a change in tax rules which can impact currently tax exempt fixed income instruments. We are now expecting to increase this book during the year. The rationale behind this is that companies will try to anticipate their debt issuance before the change. Also, for next year, with elections in sight, we are likely to see an increase in volatility and therefore a reduction in corporate clients' appetite for new issuance. So, our strategy, that being the case, is to keep this warehouse book until we sell it to our retail clients during the next year. To conclude my presentation, I would like to reinforce that our innovative offering, advisory model, Costs and capital discipline are translating into a higher profitability, even considering the more challenging scenario. Our ecosystem is way more complete than years ago, and there is a big opportunity in front of us to expand our core business, our retail cross-sell, and our wholesale activity. We are confident that by executing this, we will reach our goals regarding market leadership in investments and also regarding our long-term growth. Now, I will hand it over to Victor, who will provide a deeper look into our financial performance this quarter. And I will be back for the Q&A session.

Thank you, Mafra. Good evening, everyone. It's a pleasure to be here with you to discuss our financial performance for the second quarter of 2025. Starting with total gross revenues. Total gross revenues for the quarter reached 4.7 billion, representing a 4% increase year-over-year and a 2% increase quarter-over-quarter. It was another quarter that retail gained participation in total revenues, now representing 77% out of total. This quarter, once again, our main driver for retail growth year-over-year were fixed income and other retail, which includes retail new verticals, such as global accounts and consortium. On the wholesale bank, corporate was the highlight, partially offsetting the negative impacts on issue services, due to a tough comp from 2Q24. I will share more details during the next slides. Retail revenue posted R$ 3.6 billion in the quarter, a 9% growth year-over-year and a 4% growth quarter-over-quarter. The quarter growth was mainly driven by equities, which presented a higher ADTV in the period. Equities printed slightly more than R$ 1 billion, with several percent growth quarter over quarter. On a year-over-year perspective, fixed income was the main contributor, growing 20% and reaching R$ 988 million in revenue. It's important to mention that in other retail concepts, the main contributor is the float remunerations, where we had higher average volumes if high interest rates during the quarter. Now, let's move to the next slide of corporate and issue services. Before moving to the quarter results, it's important to mention that on 2Q24, we posted all-time high corporate and issue services revenues, backed by a strong DCM activity. Therefore, we have a tough comp for this quarter. Issue services presented 268 million reais, minus 30% year over year, and a minus 5% quarter over quarter. On the other hand, corporate revenues posted a solid 14% increase year-over-year and was flat quarter-over-quarter. It reached R$ 279 million, supported by our capacity to offer different solutions to our clients, mainly if derivatives. Moving on to the next slides, we will explore SG&A and efficiency ratios. Our SG&A expenses totaled 1.56 billion reais in this quarter. It's a 10% growth year over year and also quarter over quarter. We keep investing in our business and this quarter we had a higher expense in the known people category. Most of it explained by marketing and technology investments. During the quarter, despite the slower pace in revenue growth, our operational cost discipline supported our efficiency ratio at 34.5% last 12 months. When compared to last year, our efficiency ratio improved 161 base points. We will keep our plan to improve our business efficiency and this will come in parallel with new investments that will continue to be made aiming to enhance our tech platform, our product offerings and sales team expansion. Moving to the next slide, let's see our EBT. Just a recap, last year we had positive EBT impact from the over-wage related to the head of certain assets and liabilities. Therefore, EBT is not like-for-like on our comparison. On 2Q25, we printed 1.3 billion reais EBT, which represented a 4% increase quarter over quarter. Even considering the issue services impact on our revenues, we are able to expand our EBT margin by 50 base points. On the next slide, we see the net income. Net income achieved 1.3 billion reais, an 18% growth year-over-year and a 7% growth quarter-over-quarter. Net margin expanded by approximately 130 base points quarter-over-quarter and 320 base points year-over-year, reaching 29.7% in Q25. In our revenue mix for this quarter, higher secondary market activity compensated lower volumes of investment banking, impacting our effective tax rate. This translated into a new record high net income for our quarter, with significant EPS growth. Let's focus on earnings per share and ROE details over the next slides. Our diluted EPS in 2Q25 reached R$ 2.46 per share. As we continued the execution of our Shiber Back program, canceling the respective shares acquired, the EPS growth pace was again faster than our net income growth. In the quarter, our diluted EPS posted 22% growth, while our net income grew 18%, both on year-over-year basis. Our OTE marked 30.1%, 209 base points higher year-over-year. Our ROE grew on a yearly and a quarterly basis, reaching 24.4%. This represents 230 base points increase in comparison to the same quarter last year. These numbers I have just mentioned are important indicators that we keep generating consistent income returns for our shareholders. Finally, moving to capital management. As we have planned, we keep our target of distributing dividends and executing share-by-back programs. Combined, their volumes should be above 50% of net income for 2025 and 2026. We already have a share-by-back program of R$ 1 billion to be executed until next year, and new announcements will be made according to the Board of Directors' decision. Moving to the second part of capital management on the next slide. This is the last topic of my presentation, and we can see on the left hand side that our BIS ratio in a very comfortable level of 20.1%. On the same rationale, our C21 is at 18.5%, which is way higher than PIS average, if 12%. On the high-hand side of the slide, we can see that our total RWA to total asset ratio was 27%, which represents the third reduction in a row and 4% lower year-over-year. Total RWA remained steady quarter-over-quarter and grew 9.8% year-over-year, reaching R$101 billion. As I said last quarter, RWA should grow at a moderate pace when compared to net income, and it was the case in this quarter, since net income posted 18% growth year-over-year. As Mafra said before, the potential new tax regulation may change the DCM dynamics and therefore impacting our willingness to warehouse more assets to distribute during the 4Q and 2026. It's important to highlight that our VAR marked 13 base points of our equity, or R$ 28 million, demonstrating our risk discipline since it was 4% lower year over year. And now we can go to the Q&A.

OK, we're going to start our Q&A session. And the first question is from Eduardo Rosman from BTG. Eduardo, you may proceed.