In This Article:
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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PagSeguro Digital Ltd (NYSE:PAGS) reported a strong quarter with a 16% year-over-year growth in total payment volume (TPV), reaching a record 129 billion reais.
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The company achieved a 13% year-over-year increase in net revenues, totaling 4.9 billion reais.
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PagSeguro Digital Ltd (NYSE:PAGS) announced the launch of a cash dividend of $0.14 per common share, marking the first dividend payment in the company's history.
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The banking segment's gross profit margin reached 70%, marking its fifth consecutive quarter of growth and now represents 22% of the total gross profit.
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The company successfully reduced its cost of funding, with the average total deposit cost decreasing by 700 basis points to 90% of the CDI.
Negative Points
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TPV growth decelerated from 28% in the previous quarter to 16% year-over-year, partly due to challenging comparisons and repricing strategies.
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The company faced a 42% increase in financial costs, driven by higher interest rates and TPV growth, which required larger pre-payment volumes.
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Operating expenses decreased by only 3% quarter over quarter, indicating limited cost-cutting measures.
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There was a contraction in deposits during the quarter, attributed to the higher cost of opportunity due to the elevated interest rate environment.
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The company acknowledged potential churn in the MSMB segment due to repricing, which could impact future growth.
Q & A Highlights
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Q: What explains the deceleration in TPV growth from 28% in Q4 to 16% in Q1? A: Ricardo Lutra, Principal Executive Officer, explained that the deceleration is partly due to a difficult comparison with Q1 2024, which had higher volumes. The focus remains on winning MSMBs and online segments, with large retail being more sensitive to repricing due to interest rate hikes. The company is balancing growth and profitability, with some clients moving volumes to other companies due to repricing.
Q: Why is the dividend distribution only 10% of net income, given the company's strong capital position? A: Ricardo Lutra, Principal Executive Officer, stated that the 10% dividend is part of a combined initiative with share buybacks. The company has been aggressive in buybacks, purchasing over 1.1 billion reais in shares over the last 12 months. The dividend percentage is a starting point and could change in the future.