Pagseguro Digital Ltd. · NYSE:PAGS
Pagseguro Digital — Q3 2023 Earnings Presentation
20 slides from Pagseguro Digital's earnings presentation, Nov 16, 2023
Slide 1: Webcast Presentation 3Q23
Webcast Presentation 3Q23 Nov 16, 2023
Slide 2: Forward-looking statements; Non-GAAP financial measures
Forward-looking statements; Non-GAAP financial measures Forward-looking statements This presentation, prepared by PagSeguro Digital Ltd (“we” or the “Company”), is solely for informational purposes. The information in this presentation does not constitute or form part of, and should not be construed
Slide 3: 3Q23 Highlights
3Q23 Highlights Quality growth driving higher margins ▪ Net Income (Non-GAAP): R$ 440M, +7% y/y ▪ Adj. EBITDA: R$ 894M, the highest margin¹ since 3Q21 (+310bps vs. 3Q22) ▪ Total Revenue and Income: R$ 4.0B, flattish y/y (+5% q/q) Disciplined capital allocation driving cash earnings momentum ▪ Net Ca
Slide 4: 2023 Tech Milestones and Product Launches
2023 Tech Milestones and Product Launches Technology Payments Financial Services First transaction Tap on Phone Payroll Solution executed by PagBank and embedded on up to 2,000 employees other financial institution PagVendas ERP App Payment Link Collection Platform Direct Deposits facial authenticat
Slide 5: Payments: TPV growth acceleration driven by all merchants' segments
Payments: TPV growth acceleration driven by all merchants’ segments Total Payment Volume MSMB TPV R$ Billion Ex-Large Accounts +9.5B +11% y/y +15% 99.8 90.3 92.7 3Q22 2Q23 3Q23 3Q23 TPV growth by segment y/y growth SMB have the highest TPV share, 18% followed by Large Accounts and Longtail 9% 3% 3Q2
Slide 6: Payments: TPV per merchant +22% y/y and Active Merchants up +1% y/y
Payments: TPV per merchant +22% y/y and Active Merchants1 up +1% y/y TPV per Quarter per Merchant2 Active Merchants 12M R$ Thousand # Million +22% -9% 14.9 7.3 6.8 6.7 13.5 12.2 3Q22 2Q23 3Q23 Active Merchants breakdown Indexed to 100 Nano-merchants have the lowest TPV share, accounting for ~1.5% 10
Slide 7: Financial Services: 30.2M Clients with Cash-in up +34% y/y
Financial Services: 30.2M Clients with Cash-in up +34% y/y PagBank Clients PagBank Cash-in # Million R$ Billion PIX P2P and wire transfers inflows into PagBank accounts from other financial institutions +4.3M +14.4B +16% y/y +34% y/y 29.5 30.2 56.3 25.9 50.3 41.9 3Q22 2Q23 3Q23 PagBank Active Client
Slide 8: Total Deposits: All time high level, reaching R$21.6B
Total Deposits: All time high level, reaching R$21.6B Total Deposits Checking Accounts Balance R$ Billion R$ Billion APY 72% CDI +2.9B +2.2B +43% y/y +11% y/y 9.7 21.6 8.3 6.7 19.4 18.3 3Q22 2Q23 3Q23 85% APY1 on Total Deposits 74% % brAAA2 86% 12.4% 13.5% 13.7% 13.7% 13.7% 13.3% 10.2% 7.6% 97% 99%
Slide 9: Credit Portfolio: 60% secured with ongoing downtrend in NPL90+
Credit Portfolio: 60% secured with ongoing downtrend in NPL90+1 Credit Portfolio Credit Portfolio mix R$ Billion % Credit Portfolio 2.7 2.6 2.5 (0.1) (0.1) 35% 52% 60% Secured Unsecured 2 3Q22 WK Run-off 3Q23e Write-Off 3Q23 3Q22 2Q23 3Q23 Credit Portfolio breakdown NPL90+1 R$ Billion % over Credit
Slide 10: All-time high Net Income
All-time high Net Income 3Q23 Financial Highlights R$ Million +5% q/q in Total Revenue and Income +3% q/q in Gross Profit +5% q/q in Adj. EBITDA (Payments: +5% q/q) +6% q/q in Net Income (Non-GAAP) +7% q/q in EPS (GAAP / Non-GAAP) +14% q/q in Cash Earnings 1. Including Other Financial Income; 2. Tot
Slide 11: Payments: Total Revenue and Adj. EBITDA growth up +5% q/q
Payments: Total Revenue and Adj. EBITDA growth up +5% q/q Total Revenue and Gross Profit Gross Profit Bridge Adj. EBITDA R$ Billion R$ Million R$ Million y/y: TPV growth and Trans. Costs savings due to ITC cap q/q: TPV growth + lower Fin. Exp. partially offset by +5% take rates reduction (mainly mer
Slide 12: Financial Services: Total Revenue rebound, up +8% q/q
Financial Services: Total Revenue rebound, up +8% q/q Total Revenue and Gross Profit Gross Profit Bridge Adj. EBITDA R$ Million R$ Million R$ Million Cap on the interchange (prepaid/debit cards) y/y: impact related to ITC cap on prepaid/debit cards q/q: interest income/fees growth offset by higher l
Slide 13: Costs and Expenses efficiencies boosting profitability
Costs and Expenses1 efficiencies boosting profitability Financial Expenses Total Losses2 Operating Expenses Consolidated | R$ Million Consolidated | R$ Million Non-GAAP | R$ Million y/y: lower ECL and -1bps on CBK levels (% TPV) y/y: lower avg cost of funding driven by deposits y/y: headcount resizi
Slide 14: Cash Earnings up +36% y/y; CapEx / Revenue down -80bps q/q
Cash Earnings up +36% y/y; CapEx / Revenue down -80bps q/q Cash Earnings Capital Expenditures D&A + POS Write-off R$ Million R$ Million Non-GAAP | R$ Million y/y: gross profit growth and OpEx discipline control y/y: POS mix and positive trends (merchants’ gross adds) y/y and q/q: stacking up deploye
Slide 15: Solid position with R$10.6B in Net Cash Balance
Solid position with R$10.6B in Net Cash Balance 3Q23 Balance Sheet Net Cash Balance1 R$ Billion R$ Billion ~R$1B in share buybacks R$ 10.6 Net Cash Balance¹ B since 2021 10.6 9.0 3.7 (1.8) (0.3) 47.3 47.3 3Q22 Cash Capital Shares 3Q23 Generation Expenditures Buyback 30.8 Equity Breakdown R$ Billion
Slide 16: Appendix 3Q23
@ PagBank Appendix ANA C PEREIRA @ PagBank
Slide 17: Managerial Float change from Payments to Financial Services
Managerial Float change from Payments to Financial Services¹ ▪ Before 1Q23, Float from Accounts Balance was partially booked in Payments, partially offsetting Financial Exp. ▪ From 1Q23 onwards, 100% of Float will be booked in Financial Services, similar to other financial institutions ▪ For Payment
Slide 18: EBITDA | GAAP and Non-GAAP financial measures
EBITDA | GAAP and Non-GAAP financial measures Total Costs and Expenses | Non-GAAP are booked in: 1. Transaction Costs; 2. Operating Expenses; 18 3. Depreciation and Amortization.
Slide 19: Net Income | GAAP and Non-GAAP financial measures
Net Income | GAAP and Non-GAAP financial measures Total Costs and Expenses | Non-GAAP are booked in: 1. Transaction Costs; 2. Operating Expenses; 19 3. Depreciation and Amortization.
Slide 20: Investor Relations Media Press
Investor Relations https://investors.pagbank.com/ +55 (11) 3914-9524 ir@pagbank.com Av. Brigadeiro Faria Lima, 1384, 10th floor São Paulo | SP CEP: 01451-001 Media Press https://xcom.net.br/ pagbank@xcom.net.br
PagSeguro Digital Ltd. Class A Common Shares — Q3 2023 Earnings Presentation on 6ix