XP Inc.

Good evening, everyone. I'm Andre Parize, Investor Relations Officer at XP, Inc. Welcome and thank you for joining us for our second quarter 26 earnings call. Today's presentation will be delivered by our CEO Thiago Maffra and our CFO Gustavo Alejo. Right after the presentation, they will be both available for the Q&A session. To ask a question during Q&A, Your questions in the order they are received. Live translation in Portuguese is available. You can enable it by clicking the button below. Before we begin, please take a moment to reveal the legal disclaimer on page 2 of today's presentation, which addresses forward-looking statements. The full presentation is available for download on our Investor Relations website, and you will find additional materials in the SEC filings Now, I hand it over to Thiago Maffra. Good evening, Maffra.

Thank you, Andre. Good evening, everyone, and thank you for joining our second quarter 2026 earnings call. I would like to begin by welcoming Gustavo Alejo, our new CFO. He joins us At an exciting time, just after the biggest export in our history, an event that showed how far we have come and how much further we aim to go. Now, let's dive into our second quarter 2026 numbers. Beginning with the key highlights of the quarter, client assets, combining AUM and AOA, reached 2.2 trillion, representing a 17% year-over-year growth. We ended the period with 18.4 thousand advisors, up 1% year-over-year, while our active client base totaled 4.8 million, a 1% increase year-over-year. Gross revenues amounted to $5.1 billion this quarter, up 8% from the same period last year. EBT advanced 15% to $1.6 billion, while net income came to $1.4 billion, rising 5% year over year. In terms of profitability, our ROE increased 80 bps sequentially to 22.5%. Our capital ratio stood at a comfortable 20.3%, reflecting our ability to grow while maintaining disciplined capital and risk management. Also, our EPS grew 9% year-over-year, stronger than our net income growth thanks to our capital management and payout strategy. The second quarter of 2026 was again marked by ongoing global geopolitical tensions and residual market volatility. While these headwinds materialized with less intensity than in the previous quarter, they still impacted our results, particularly through the widening of credit spreads and a reduction in primary GCM offerings. Without these effects, Thank you very much. We began to see signs of normalization across markets, along with a gradual recovery in the fixed income pipeline. We expect this pipeline to materialize into primary offerings over the coming quarters, depending on the market dynamics. That said, depending on how these dynamics evolve, we continue to target double-digit growth throughout 2026. This quarter, we continue to launch products for both individuals and businesses, and our ecosystem is becoming more complete every day. We have a clear ambition to be the investment leader in Brazil by 2033, but that leadership will come hand in hand with increasing completeness in everything we offer to our clients. This next growth phase is built on personalized service with a focus on financial, tax and succession planning. Our goal is simple, to be our client's CFO, covering their full spectrum of financial service needs. Moving on to the next slide, let's take a look at client assets. During the second quarter of 2026, our total client assets, combined with assets under management from our asset management business and AOA from our fund administration business, total approximately 2.2 trillion, representing 17% growth year over year. On the right side of the slide, you can see how Net New Money has evolved. In the second quarter of 2026, We again met our soft target of 20 billion in retail net new money, while corporate and institutional inflows came in at 8 billion. Altogether, net new money amounted to 28 billion for the period. While we posted positive results and met our soft guidance, we continued to navigate a challenging environment in 2026. We are constantly improving our investment platform and, as we have mentioned, enhancing the client experience through numerous initiatives. This combination reinforced our confidence in achieving our ambition of roughly 20 billion in retail net new money per quarter on average. Related to that, it's worth mentioning that our NPS ended the second quarter at 66 points. As mentioned in your previous earnings call, we are on a consistent recovery path from the one-off events that impact us in former quarters. This demonstrates the strength of our brand and the trust clients place in our platform, and it gives us an indication that we will return to historical levels over the next quarters. With that, let's now take a deeper dive into the strategic drivers that are shaping our next growth phase. Our comprehensive financial ecosystem is built around long-term relationships. We provide service and personalized advice with excellence across every aspect of our clients' financial lives, from investments to banking solutions. Many of our clients have needs well beyond investments, and our mission is to provide them with complete solutions. Under this model, the focus shifts from product distribution to building a personalized financial strategy for each investor. Looking ahead, we see the role of the investment advisor at XP undergoing a profound transformation. The professional is no longer just an intermediary of financial products, but is taking on a role closer to that of a wealth consultant Broadly accompanying clients throughout their financial journey. Given this context, it's crucial to understand personal and family goals, such as retirement and long-term wealth building. The same client-centricity logic that guides us on offerings from individuals also extends to our corporate clients. We have recently launched new initiatives targeting the business segment, Always focus on delivering financial management solutions. We already have a very robust corporate segment, and now we are expanding our offering, particularly for a small and medium-sized enterprise. As we have said over the past few quarters, XP is uniquely positioned for this new market environment. We have the largest and most qualified advisor network in Brazil, along with a trusted brand and an innovative DNA, a combination that enables our tech lead scaling and keeps us ahead of the market. On the next slide, we share further details on our strategy. Across every client segment we serve, our ambition is to deepen relationships, enhance the completeness of our product offering and fully meet all of our clients' financial needs. On the individual side, our focus remains on investments. We continue to deepen our segmentation, offering a specific value proposition for each client layer. We were the first to address a latent market demand and offer a truly model agnostic approach. Today, we have evolved this concept into a comprehensive wealth planning model, One that allow us to cover our clients across all their financial needs, from investment allocation to estate planning, succession, and beyond. Under this model, the charging structure naturally aligns as a fee-based, which continues to gain traction. We already have slightly more than 26% of our clients' assets under this framework. On top of that, we are expanding our offshore investment capabilities. and making continued progress on new product launch, including ETFs and managed portfolios, all fully aligned with our way of serving clients. At the same time, we are adding credit to a solutions shelf that has already expanded meaningfully over the past few years, during which we introduced numerous innovations in banking and insurance. I would like to emphasize that this expansion is the continuation of a well-planned strategy, one that has been consistently executed over the years with the addition of services and solutions. For businesses, the same logic holds true, and this is where we see the greatest opportunity, since these companies and their founders have long been underserved by traditional players. We plan to change that by delivering a complete, modern and scalable offering. Just as we transformed the investment landscape for individuals, we are now about to do the same for businesses. We will introduce a new standard of high-quality advice, supported by technology and a complete range of products and services. Thank you very much. and a credit card geared toward small and medium-sized enterprises. These are natural extensions of our franchise and a continuation of our strategy that has been underway since 2019, when we obtained our banking license. Finally, I want to emphasize that we execute this strategy with the utmost discipline. ensuring that every step we take remains firmly aligned with our capital ratios and conservative risk approach. With that, I will now hand the call over to Alejo to cover the financial section on the presentation.

Thank you, Maffra. It's a pleasure to be here with all of you today. I would like to begin by expressing my sincere appreciation for the warm welcome since joining XP. I'm thrilled to be part of this journey, and I'm looking forward to contributing to our next chapter of growth. Now, let me walk you through our financial performance for the quarter. Total gross revenue in the second quarter of 2026 reached 5.1 billion reais, up 8% year-over-year and 3% quarter-over-quarter. Retail growth In the quarter was driven by equities, funds platform, new verticals, and other retail, which expanded at a rapid pace year over year. The wholesale bank division also delivered consistent growth, led by solid performance of our corporate segments. Now, let's move on to retail revenue. Retail revenue totaled 3.9 billion reais in the quarter, representing An 8% growth year-over-year and a 3% growth quarter-on-quarter. Reflecting the impact of fixed income corporate credit in Brazil, already explained. Excluding this market-to-market effect, retail revenues would have grown 15% in the first half of 2026, when compared to the same period last year. showing a resilient underlying momentum. Even with the lower ADTV of equities and futures in the second quarter, equities revenue increased 11% when compared to the same period of last year, reaching almost 1.1 billion reais. Sequentially, Equities revenue dropped 2%, while ADTV fell approximately 8% in the same period. Funds Platform also posted a strong performance disorder, growing 23% year-over-year and 7% sequentially. Due to the booking of management and performance fees disorder. Also, retail annual performance benefited from stronger contributions from new verticals and different revenue lines included in other retail, like Float, International Platform, and FX. Now, let's move on to the next slide, where we'll cover how our wholesale bank is evolving. Our wholesale segment, including corporate, issuer services, and institutional revenues, grew 32% year-over-year and 3% sequentially. The market deterioration that began in March and prevailed through April, combined with the lower risk appetite for investors, led to a sharp decrease in the number of new fixed income offerings, particularly tax-exempt fixed income instruments. The reduction in fixed income offerings weighed directly on our issuer services segments, resulting in lower revenues versus both prior year and the previous quarter. Despite this reduced number of offerings, the corporate segment posted another strong result, with revenues growing 117% year-over-year and 22% Our ability to cross-sell and deliver a broader set of solutions to our corporate clients, such as derivatives, effects, and credits, continued to support our revenue growth. Finally, our institutional business grew year over year and was relatively flat sequentially. Like retail equities, the segment reflects lower trading volumes Now let's shift our focus to SG&A and efficiency ratios. Our SG&A totaled 1.6 billion reais in the second quarter, increasing 5% year-over-year and 2% quarter-over-quarter. On the right-hand side of the slide, our last 12 months efficiency ratio stood at 34.3%, an increase of Thank you very much. We continue to closely monitor the pace of our investments, and we still target to deliver a flat-ish efficiency ratio on a year-over-year basis for full year. Moving to earnings before taxes now, our adjusted earnings before taxes totaled R$1.6 billion in the second quarter of 2026, Up 15% year-over-year and 10% quarter-over-quarter. We delivered a 32% adjusted EBT margin, expanding on both a quarterly and a yearly basis. Lower market-to-market impacts, positive performance across several of our segments, and controlled expenses all contributed to operating leverage, which resulted in a higher EBT and On the next slide, we present our net income. Adjusted net income reached R$1.4 billion in the second quarter, representing a 5% increase compared with both the prior year and the prior quarter periods. Net margin was 28.3% in the second quarter of 2026, up around 50 basis points sequentially and down around 100 basis points year-over-year. And our tax rate for the quarter was sequentially higher due to the mix of results. Stronger performance results from the corporate line and less negative mark-to-market impacts from the warehousing book. Now, let's move on to the next slide to talk about our earnings per shares and returns. Our adjusted diluted earnings per shares increased by approximately 9% year-over-year at a faster pace than our net income growth, reflecting the execution of our share-by-back program. On the right-hand side of the slide, you can see our adjusted annualized return on tangible equity and return on equity. Given our lower bezel ratio sequentially, Both metrics are higher this quarter when compared to the previous one. With that, I move on to the next slide to talk about our capital management strategy. During the second quarter, we continued executing our share buyback program. As of the end of June, we have executed R$1 billion and closed the previous buyback program. We still have another open program of R$1 billion, which we continue to execute strategically. Combining the two buyback programs and approximately R$500 million in dividends distributed in June, we reached nearly R$2.5 billion in capital distribution already announced in 2026. Additionally, I would also like to announce that we will be canceling approximately 11.8 million treasury shares. We present roughly 2.3% of our total outstanding shares, further reinforcing our commitment to discipline, capital location, and returning value to our shareholders. Now, let's move on to the second part of our capital management strategy on the next slide. I'd like to turn to our capital ratio and risk-weighted assets. We close the quarter with a Basel ratio of 20.3% and a CT1 ratio of 17.1%. As mentioned in our previous earnings calls throughout 2026, we will operate the business with a high Basel ratio. However, We are comfortable bringing it down to our target range of 16% to 19% while still maintaining comfortable capital birth. On the right-hand side of the slide, we show our RWA. The main growth driver was credit RWA, mostly associated with our corporate business. It's worth noting that while total RWAs grew around 26% year over year, Our corporate revenues expanded 117% over the same period. This shows that we will continue to evaluate and seize growth opportunities as they arise, while maintaining our focus on risk return criteria. And with that, we can move on to the Q&A section. Thank you.