PagSeguro Digital Ltd. Class A Common Shares

Good evening. My name is Algir and I will be your conference operator today. Welcome to PagSeguro Digital's earnings call for the second quarter of 2025. This live presentation for today's webcast is available on PagSeguro Digital Investor Relations website at investors.pagbank.com. Please refer to the forelooking statement and reconciliation disclosure in this presentation and in the company's earnings release appendix. Finally, 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're announced, a request to activate your microphone will appear on your screen. Please ask our 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 call 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 Gustavo Sequin, Head of IR. Please go ahead, sir.

Hello, everyone, and welcome to PagBank earnings conference call for the quarter ending June 30th, 2025. I am Gustavo Sequin, PagBank's Investor Relations Director. Thank you for taking the time to join us today. We will begin by sharing the highlights for the quarter, followed by our live Q&A session. Tonight, I am joined by Ricardo Dutra, our principal executive officer, Alexandre Moiani, our CEO, and Arthur Schunk, our CFO. Now, I would like to turn it over to Dutra. Please, Dutra.

Hello, everyone, and thank you for joining our second quarter 2025 earnings call. I will begin with slide four, which summarizes our key operational and financial highlights. This quarter, We continue to execute our strategy with discipline, navigating a more challenging macroeconomic environment, while maintaining our focus on long-term value creation. We ended the quarter with 33.1 million clients, growing 1.5 million clients year over year. Despite facing a tougher economic environment and harder comparison from 2Q24, which made top-line growth more challenging, we managed to grow and preserve profitability. Total payment volume, TPV, in our payments business reached R$130 billion, a 4% year-over-year growth. Our credit portfolio and funding base continued their double-digit growth, with highlights to the lower APY and the gradual acceleration of unsecured lending, reflecting the strength of our ecosystem in our commitment to broaden access to financial services prudently. Going to financial highlights, our net revenues increased 11% year-over-year, reaching R$ 5.1 billion. When excluding costs related to interchange fees, net revenue increased impressive 18% year-over-year, capturing the repricing efforts implemented in the period. Our non-GAAP net income was R$ 565 million, a 4% growth compared to Q2-24, while diluted EPS on a GAAP basis reached R$ 1.79, 14% growth year-over-year, supported by consistent cost discipline and capital efficiency. Reinforcing our balanced approach to capital allocation, announced in May 2025, we returned 1.1 billion in excess capital to our shareholders here to date, with 700 million reais in share repurchase and over 400 million as dividends. In conclusion, our results reflected a business that remains solid, profitable, and resilient. Since our IPO, we have consistently delivered positive earnings every quarter, a track record we are committed to maintain through continued execution efficiency, and strategic discipline. On slide five, turning to the market environment, we continue to see signs of broad-based economic cooling in Brazil, which may represent an additional challenge going forward. Consumer confidence has weakened, leading to a slowdown in discretionary spending, especially in sectors sensitive to interest rates and inflation. GDP growth has decelerated to about half of last year's pace, largely due to the loss of momentum in services, which had previously been a strong driver of economic activity. As a result of this softer backdrop, we observed a contraction in credit origination in the market, as both consumers and financial institutions adopted a more cautious stance. Risk aversion increased and lending standards became more selective, especially for unsecured products. In this context, Q2-25 results is a testament to our ability to manage the company despite economic cycles. It is important to mention we expect the current market backdrop to remain. Going to slide six, despite this more cautious economic backdrop, our track record demonstrates the resilience and consistency of our business model in creating long-term value. Here, we showcase the resilience and consistency of our business model in creating long-term value. Since our IPO in 2018, we have grown our GAAP EPS by approximately 2.3 times, representing a compounding annual growth rate of 15%, even amid this change in industry dynamics and events like the COVID pandemic. Along the way, we've achieved several strategic milestones that expanded our addressable market and strengthened profitability. These initiatives have laid the foundation for sustained EPS growth, supported by operational leverage and discipline execution. This performance is a result of our strategic focus on recurrent earnings, which have supported predictability and long-term value creation. A disciplined capital allocation, combined share by bags and dividend distribution, with a total yield of approximately 18% year-to-date, and a robust capital position, which continues to give us flexibility to pursue value-accredited initiatives. Moving to slide eight, here we see how we've been building the company with a clear long-term vision. Our fully integrated ecosystem, combining payments and banking, allows us to create a strong synergy between the two, using one to reinforce the other. By offering a broad and complimentary set of products, we've been able to increase client engagement, improve monetization, and capture a larger share of wallet positioning ourselves as the primary financial partner for our clients. Moving to the next slide, beyond the solid results we delivered so far, there is still significant room to growth across our platform. In some areas, our banking business, our market share is still below 1%, which reinforces our view that we are only beginning to tap into the full potential of what we can build. As we continue to scale our banking operations, we unlock new growth opportunities, whether by deepening cross-sell, strengthening our deposit base, or expanding and diversifying our credit portfolio in a disciplinary way. With that, I will hand it over to Alex, who will take you through the operational highlights for the quarter. Thank you.