Business
XP Inc. Reports Fourth Quarter and Full-Year 2022 Financial Results
SÃO PAULO--(BUSINESS WIRE)-- XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading tech-enabled platform and a trusted pioneer in providing low-fee
About this update from Xp Inc.
[{"type":"text","content":" SÃO PAULO--(BUSINESS WIRE)--\nXP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading tech-enabled platform and a trusted pioneer in providing low-fee financial products and services in Brazil, reported today its financial results for the fourth quarter and full-year 2022.\n\nTo our shareholders\n\nDespite several challenges and uncertainties faced during 2022, the year was marked by important achievements and many lessons learned.\n\nThe recent bull market cycle ended in 2021, boosted capital markets and attracted Brazilian investors to more sophisticated investment products.\n\nAs the main investment platform in the country and with the largest specialized distribution network, XP Inc. benefited from this scenario and from its scalable and disruptive business model.\n\nBetween 2018 and 2021, our Client Assets, Gross Revenue and Net Income expanded by 59%, 58% and 98% per year, respectively, well above the most optimistic forecast by analysts and even ourselves at the IPO.\n\nOver that period, proceeds from the IPO and earnings were mainly invested in: (i) preserving and developing the advisory channel; (ii) strategic acquisitions and (iii) new verticals that are complementing and improving customers' experience, as well as increasing our addressable market.\n\nWe have no doubt that these investments will create long-term value and gradually reduce the cyclicality of our business, which can already be seen in the new verticals’ reported results.\n\nThe last monetary tightening cycle in Brazil began in 2013 and took the overnight rate close to the current level of 13.75%. Although ten years ago our business was substantially smaller, going back in time allows us to clearly see the evolution of our company from a countercyclical point of view.\n\nIn 2014, XP’s net income fell 40% relative to 2013 as 80% of revenues derived from stock trading. With the market worsening, our main KPIs — net inflow and the addition of new clients and IFAs — were strongly affected too. The fact of the matter was that the company’s performance was almost perfectly correlated with the Brazilian stock market.\n\nReturning to the present and analyzing 2022, which resembles 2014 for Brazil, the scenario for XP is quite different. Our revenue grew 10% compared to 2021 and, even amidst many challenges, our net income remained stable.\n\nIn short, we evolve...