PagSeguro Digital Ltd. Class A Common Shares

Good evening, my name is Ogir and I will be your conference operator for today's call. Welcome to PEG Seguro Digital Earnings Call for the second quarter of 2024. This live presentation for today's webcast is available on PEG Seguro Digital's Investor Relations website at investors.pegbank.com. Please be advised that all participants will be in listen-only mode. After the presentation, to ask a live question, please use the raise hand button to join the queue. Once you are announced, a request to activate your microphone will appear on your screen. Please ask all your questions at once. Alternatively, you can also write your question directly into the Q&A icon located on the lower part of your screen. Today's conference is being recorded and will be available on the company's IR website after the event is concluded. I would now like to turn the call over to your host, Eric Oliveira, Head of IR. Please, go ahead, sir.

Hello, everyone. Thanks for joining our second quarter 2024 earnings call. After the speaker's remarks, there will be a question and answer session. Before proceeding, let me mention that any forward-looking statements included in the presentation or mentioned on this conference call are based on currently available information and packed Seguro Digital's current assumptions, expectations, and projections. While Paxigroo Digital believes that those are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements, as actual results may differ materially from those included in Paxigroo Digital's earnings presentation or discussed on this conference call. For a variety of reasons, including those described in the forward-looking statements and risk factor section of Paxigroo Digital's most recent annual report on Form 20F, and other findings with the Security and Exchange Commission, which are available on Paxigroup Digital's Investor Relations website at investors.pacbank.com. Finally, I'd like to remind you that during this conference call, the company may discuss non-GAAP measures. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. The presentation of this non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered separately from or as a substitute for our financial information prepared and presented in accordance with IFRS as issued by the EASB. For more details, the foregoing non-GAAP measures and the reconciliation of these non-GAAP financial measures to the most directly comparable IFRS measures are presented in the appendix of this webcast presentation and earnings release. With that, let me turn the call over to Ricardo. Thank you.

Hello, everyone, and thanks for joining our second quarter 2024 earnings call. Tonight, I have the company of Alex, our CEO, and Arthur, our CFO. and I'm proud to announce the company had a very strong quarter with all-time high in key financial metrics, such as revenues and net income. Hence, you'll see many all-time highs at the beginning of the slide titles throughout the presentation. On this first section, I'll share the main operational and financial highlights for the quarter. Starting with slide four, total revenue grew 19% year-over-year, reaching 4.6 billion reais, an all-time high quarter result with a strong CPV and revenue growth in all client segments. Our gross profit margin ended the quarter close to 40%, in line with the current guidance and 86 basis points increase in comparison to Q2 2023. On a year-to-date basis, we ended the semester with a gross profit margin of 40.3%. We also reached the all-time high net income in GAAP and non-GAAP basis, which reached 542 million reais, a 31% year-over-year growth. In the last bullet, we can see our EPS reached 1.68 reais, 32% higher than Q2 2023, also an all-time high. Moving on to slide five. We reached 31.6 million clients by the end of June, adding more than 2 million clients in the last 12 months, with 17.7 million active clients. We also had an all-time deposit level reaching R$34.2 billion, an impressive 87% increase year-over-year. This increase shows the power of our value proposition, which has been contributing to improve client engagement and to lower our cost of funding, supporting our profitability metrics. Down in the slide, in the first bullet, we can see we also had a AAA rating from Moody's. Now, PagBank has AAA rating from both agencies, Moody's and S&P. Also worth to highlight, in the bottom right of the slide, our PagBank app evaluation of 4.9 stars in App Store and 4.8 in Google Play. Moving on to slide six, we share some highlights of the payments and banking units. In payments, We have been able to maintain a strong growth, and our TPV reached 124 billion reais, 34% year-over-year growth, three times more than the Cardo's industry growth, which was 11%. We had strong growth in MSNBs and LMEc merchants as a result of our strategy of attracting merchants with monetization potential on financial services. On the banking side, in the mid column, we can see our cash in reached 76.4 billion reais, a 52% growth year-over-year aligned to our strategy to successfully stimulate principality for our clients. Our credit portfolio grew 11% year-over-year to 2.9 billion reais, the third consecutive quarter of expansion driven mainly by our credit underwriting on security products. In the last two bullets, We can see our early prepayment of receivables from other acquirers restart now in Q3. And also, our NPL 90 reached 3.2% in Q2 2024. Now, I pass the word over to Alex for the commentaries on the business units highlights for the quarter. Thank you.