Slide 1: 3Q21 Earnings Release
Exhibit 99.1 3Q21 Earnings Release November 3rd, 2021
Slide 2: XP Inc. Reports 3Q21 Financial Results
XP Inc. Reports 3Q21 Financial Results São Paulo, Brazil, November 3, 2021 – XP 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 third quarter
Slide 3: Letter to shareholders (continued)
Additionally, the diversification of our business and the portfolio effect, especially in Retail, tend to preserve the company's revenue-generating capacity in different scenarios. In the first days of October, we had the important conclusion of the spin-off process of Itaú Unibanco's stake in XP In
Slide 4: Highlights
Highlights 3Q21 KPIs Key Business Metrics 3Q21 3Q20 YoY 2Q21 QoQ Operating and Financial Metrics (unaudited) Total AUC (in R$ bn) 789 563 40% 817 -3% Active clients (in '000s) 3,296 2,645 25% 3,140 5% Retail – gross total revenues (in R$ mn) 2,599 1,698 53% 2,452 6% Institutional – gross total reven
Slide 5: Operational Performance
Operational Performance Investments Assets Under Custody (in R$ bn) *Concentrated custodies are custodies greater than R$ 5 billion per client/economic group. These custodies are more volatile by nature. Total AUC was R$789 billion as of September 30, up 40% year-over-year and down 3% quarter-over-q
Slide 6: Banking
Banking Credit Portfolio1 (in R$ bn) Our Credit portfolio reached R$8.6 billion as of September 30, 2021, increasing six times year over year. The duration of our credit book was 3.3 years, with a 90-day Non-Performing Loan (NPL) ratio of 0%. ¹This portfolio does not include Intercompany and Credit
Slide 7: Active Clients and IFA Network Gross Adds
Active Clients (in ‘000s) Active clients grew 25% and 5% in 3Q21 vs 3Q20 and 2Q21, respectively, reaching 3.3 million. Average monthly client additions grew 6% sequentially from 49,000 in 2Q21 to 52,000 in 3Q21. “Despite the more challenging environment, with interest rates in an upward trend, we ex
Slide 8: Retail DATs and Net Promoter Score
Retail DATs¹ (mn trades) ¹Daily Average Trades, including Stocks, REITs, Options and Futures Retail DATs totaled 2.6 million in 3Q21, remaining relatively stable quarter-over-quarter and year-over-year. Net Promoter Score (NPS) Our NPS, a widely known survey methodology used to measure customer sati
Slide 9: 3Q21 Revenue Breakdown
3Q21 Revenue Breakdown Total Gross Revenue (in R$ mn) Total Gross Revenue grew 50% from R$2.2 billion in 3Q20 to R$3.4 billion in 3Q21.The increase was mainly driven by the Retail business, which contributed with 80% of the growth year-over-year, while Issuer Services contributed with 10%. In additi
Slide 10: Retail
Retail Retail Revenue (in R$ mn) 3Q20 vs 3Q21 Retail revenue grew 53% from R$1.7 billion in 3Q20 to R$2.6 billion in 3Q21, attributable mostly to (i) fixed income and structured products growth and (ii) floating revenues driven by higher interest rates. Revenue profile was on par with 2Q21, when the
Slide 11: Institutional
LTM Take Rate (LTM Retail Revenue / Average AUC) The take rate for the last twelve months ended September 30, 2021 remained stable compared to the same period of 2020. Our ability to add new products and services to the platform – such as credit cards and credit – coupled with a diversified revenue
Slide 12: Issuer Services, Digital Content and Other
Issuer Services Issuer Services Revenue (in R$ mn) 3Q20 vs 3Q21 Issuer Services revenue expanded 68% year-over-year from R$169 million in 3Q20 to R$284 million in 3Q21. This increase was driven by (i) Equity Capital Markets (ECM), with 15 executed deals vs 14 in 3Q20, and (ii) our Debt Capital Marke
Slide 13: Other Revenue and COGS
Other Revenue 3Q20 vs 3Q21 Other revenue increased 61% in 3Q21 vs 3Q20, from R$107 million to R$172 million. Interest on gross cash was higher due to both increases in interest rates and higher adjusted gross financial asset balance in the period, along with better results coming from asset and liab
Slide 14: SG&A Expenses
SG&A Expenses SG&A Expenses (ex-Share-Based Compensation) (in R$ mn) 3Q20 vs 3Q21 SG&A expenses (excluding share-based compensation) totaled R$1,116 million in 3Q21, up 67% from R$669 million in 3Q20. Despite the fact that the marketplace is increasingly competitive concerning talent attraction and
Slide 15: Adjusted EBITDA
Adjusted EBITDA Adjusted EBITDA¹ (in R$ mn) and Margin 3Q20 vs 3Q21 Adjusted EBITDA grew 61% year over year, from R$728 million to R$1,170 million. Adjusted EBITDA margin expanded 225 bps to 36.9%, driven by gross margin expansion, which was partially offset by higher SG&A expenses, mainly attributa
Slide 16: Adjusted Net Income
Adjusted Net Income Adjusted Net Income¹ (in R$ mn) and Margin 3Q20 vs 3Q21 Adjusted Net Income grew 82%, from R$570 million in 3Q20 to R$1,039 million in 3Q21, in connection with the factors explained in the Adjusted EBITDA and a lower normalized effective tax rate. The effective tax rate, normaliz
Slide 17: Adjusted Cash Flow
Adjusted Cash Flow (in R$ mn) 3Q21 2Q21 3Q20 Cash Flow Data Income before income tax 908 1,002 632 Adjustments to reconcile income before income tax 693 178 128 Income tax paid (174) (69) (126) Contingencies paid (0) (1) (0) Interest paid (8) (4) (44) Changes in working capital assets and liabilitie
Slide 18: Net Cash Provided by Financing Activities
· the investment in intangible assets, mostly IT infrastructure and capitalization software development and property and equipment which decreased from R$108 million in 2Q21 to R$68 million in 3Q21 and increased from R$42 million in 2Q20; · Our investments in associates and joint ventures, mostly re
Slide 19: Floating Balance and Adjusted Gross Financial Assets
Floating Balance and Adjusted Gross Financial Assets (in R$ mn) Floating Balance (=net uninvested clients' deposits) 3Q21 2Q21 Assets (1,065) (2,776) (-) Securities trading and intermediation (1,065) (2,776) Liabilities 19,635 20,814 (+) Securities trading and intermediation 19,635 20,814 (=) Floati
Slide 20: Other Information
liabilities), Deposits, Structured Operation Certificates (COE), Financial Bills, Foreign exchange portfolio (liabilities), Credit cards operations and (3) less Floating Balance. It is a measure that we track internally daily, and it more intuitively reflects the effect of the operational profits we
Slide 21: Important Disclosure
Important Disclosure IN REVIEWING THE INFORMATION CONTAINED IN THIS RELEASE, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER. THIS INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT. This release is prepared by XP Inc. (the “Company
Slide 22: 21
21
Slide 23: Important Disclosure (continued)
information used in this release involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although the Company believes that these sources are reliable, there can be no assurance as to the accuracy or completeness of this information, and th
Slide 24: Unaudited Managerial Income Statement
Unaudited Managerial Income Statement (in R$ mn) 3Q21 3Q20 YoY 2Q21 QoQ Managerial Income Statement Total Gross Revenue 3,368 2,245 50% 3,200 5% Retail 2,599 1,698 53% 2,452 6% Institutional 281 239 17% 375 -25% Issuer Services 284 169 68% 255 11% Digital Content 31 32 -2% 29 6% Other 172 107 61% 88
Slide 25: Accounting Income Statement
Accounting Income Statement (in R$ mn) 3Q21 3Q20 YoY 2Q21 QoQ Accounting Income Statement Net revenue from services rendered 1,589 1,278 24% 1,601 -1% Brokerage commission 633 548 16% 650 -3% Securities placement 442 388 14% 513 -14% Management fees 415 274 51% 384 8% Insurance brokerage fee 33 18 8
Slide 26: Balance Sheet
Balance Sheet (in R$ mn) 3Q21 2Q21 Assets Cash 2,823 1,237 Financial assets 119,626 107,174 Fair value through profit or loss 68,904 60,845 Securities 53,432 45,360 Derivative financial instruments 15,471 15,485 Fair value through other comprehensive income 28,566 23,701 Securities 28,566 23,701 Eva
Slide 27: Balance Sheet: Liabilities and Equity
3Q21 2Q21 Liabilities Financial liabilities 88,560 78,314 Fair value through profit or loss 16,588 19,163 Securities 2,082 2,790 Derivative financial instruments 14,506 16,373 Evaluated at amortized cost 71,972 59,151 Securities sold under repurchase agreements 24,234 16,062 Securities trading and i
Slide 28: Adjusted EBITDA and Adjusted Net Income Reconciliation
Adjusted EBITDA (in R$ mn) 3Q21 3Q20 YoY 2Q21 QoQ EBITDA 1,005 681 48% 1,080 -7% (+) Share Based Compensation 165 45 269% 165 0% (+) Offering expenses - 2 -100% - n.a. Adj. EBITDA 1,170 728 61% 1,245 -6% Adjusted Net Income (in R$ mn) 3Q21 3Q20 YoY 2Q21 QoQ Net Income 936 541 73% 931 1% (+) Share Ba