STNE · StoneCo Ltd.

StoneCo's Q1 2026 results showed resilient top-line growth of 6.5% YoY to R$3,578.0 million, primarily fueled by expanding credit revenues which hit R$297.1 million, up 186.2% YoY, amid a credit portfolio surge to R$3.2 billion. However, gross profit remained flat YoY at R$1,487.8 million with margins contracting to 41.6% due to elevated provisions for loan losses at R$166.3 million, reflecting portfolio growth and rising delinquencies (NPL 15-90 days at 4.97%, >90 days at 6.98%). Management attributes sequential declines across metrics to typical Q1 seasonality, compounded by softer TPV growth to R$137.2 billion (+2.7% YoY), impacted by macroeconomic pressures on smaller merchants, digital sales shifts, and churn. Adjusted EBT dipped 1.9% YoY to R$641.0 million, but net income rose 3.5% to R$549.1 million thanks to a favorable 14.3% tax rate. EPS growth of 15.4% YoY significantly outpaced net income due to aggressive share buybacks totaling R$2.7 billion over the past year, reducing shares by 32.4 million. Client metrics reflected strategic shifts: active base at 4.7 million (+13.2% YoY) after consolidating definitions and pricing inactive accounts, with ARPAC down 10.9% YoY. Banking deposits grew 21.9% YoY to R$10.1 billion via cross-selling. Post-Linx sale, the Board approved a one-time extraordinary dividend of US$2.53 per share (R$3.08 billion total), signaling strong capital position without implying future policy. Coverage ratio remains conservative at 229.0%, supporting credit expansion in a challenging environment.