PAGS · PagSeguro Digital Ltd.

PagSeguro Digital Ltd. delivered Q1 2026 results highlighting resilient performance amid challenging year-over-year comparisons due to higher average SELIC rates pressuring funding costs and margins. Total Revenue and Income ex-ITC grew 6.4% y/y to R$3,335 million, driven by the banking vertical's increasing contribution, while Gross Profit edged up 0.8% y/y to R$1,889 million despite higher financial costs and credit provisioning. Non-GAAP Net Income rose 3.8% y/y to R$575 million, with diluted EPS up 12.1% y/y to R$2.03, reflecting operating leverage from cost management and AI-driven efficiencies. CEO Carlos Mauad emphasized credit as the top strategic priority, with the portfolio expanding 35.9% y/y to R$5.0 billion, fueled by 190.6% y/y growth in working capital loans and gradual unsecured product rollout, though NPL 90+ ticked up to 3.05%. Banking metrics strengthened with Cash-In up 10.8% y/y to R$81.4 billion and Total Deposits surging 22.9% y/y to R$41.6 billion, 91.1% on-platform, supporting a Loan-to-Funding ratio of 109%. Payments TPV held stable at R$128.2 billion y/y, signaling volume reacceleration. Capital optimization continued with a robust BIS Ratio of 24.1%, R$1,385 million in share repurchases over 12 months (90% of US$200 million program), and R$171 million Q1 dividends plus upcoming US$0.26/share and R$400 million tranches. Management expressed confidence in meeting full-year 2026 guidance and progressing toward 2029 ambitions, bolstered by expected SELIC easing and credit scaling discipline.