XP · XP Inc.

Operational investments sustained this growth trajectory, with capital expenditures directed toward IT systems upgrades, software and infrastructure development, and office space expansions amid rapid employee headcount increases. Such spending aligns with XP's growth strategy, accommodating research and development, marketing, sales, and new product features while navigating market acceptance challenges.

However, profitability faces pressures in downturns, as low retail and institutional brokerage volumes or subdued investment banking activity impair margins given relatively fixed expenses. Balance sheet and liquidity management remain integral, operating in sync with the Group's business model, product complexity, and risk profile.

Looking ahead, XP anticipates absolute increases in non-performing loans from total loan portfolio expansion, with credit quality potentially underperforming expectations. The company continues to rely heavily on XP CCTVM for significant revenue, where any downturn could materially impact financial condition and operations. These factors highlight the need for vigilant risk management amid Brazil's volatile markets.