Pagseguro Digital Ltd. · NYSE:PAGS

Pagseguro Digital — Q4 2023 Earnings Presentation

29 slides from Pagseguro Digital's earnings presentation, Feb 20, 2025

  1. Slide 1: Webcast Presentation 4Q23

    Webcast Presentation 4Q23 Feb 28, 2024

  2. 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

  3. Slide 3: In 2023, PAGS posted the largest net income in the history

    In 2023, PAGS posted the largest net income in the history Business Highlights Shareholders’ Return Value-added to Society PagBank Clients Cash-in1 Earnings per Share (EPS) Sustainalytics 1st # Million R$ Billion Diluted | GAAP Morningstar ESG Rating 31M R$ 217B R$ 5.10 28.5 20.5 18.7 LatAm Digital

  4. Slide 4: 4Q23 Highlights

    4Q23 Highlights Revenue growth with all-time high net income ▪ EPS¹ (GAAP): R$ 1.53, +24% y/y ▪ Net Income (Non-GAAP): R$ 520M, +27% y/y ▪ Total Revenue and Income: R$ 4.3B, +10% y/y Solid cash position with disciplined capital allocation, supporting organic growth ▪ Net Cash Balance: R$11.2B, +13%

  5. Slide 5: Payments

    Payments

  6. Slide 6: Our value proposition in Payments has unlocked new addressable markets

    Our value proposition in Payments has unlocked new addressable markets… …beyond micro-merchants …beyond point-of-sales …with better SLAs TPV from SMBs Contact Rate MoIP integration concluded +31% y/y in 4Q23 ramping up online payments -48% vs. 2020 TPV from Large Accounts Average Service Time¹ Cross

  7. Slide 7: TPV growth acceleration driven by all merchants' segments

    TPV growth acceleration driven by all merchants’ segments Total Payment Volume MSMB TPV R$ Billion Ex-Large Accounts +19.4B +21% y/y +27% 113.7 99.8 94.3 4Q22 3Q23 4Q23 4Q23 TPV growth by segment y/y growth SMB have the highest TPV share, 31% followed by Large Accounts and Micro 14% 11% 4Q22 3Q23 4Q

  8. Slide 8: TPV per Merchant +32% y/y; Active Merchants (ex-nano): +3% y/y

    TPV per Merchant +32% y/y; Active Merchants (ex-nano): +3% y/y TPV per Merchant1 Active Merchants2 breakdown R$ Thousand Indexed to 100 +32% Go-to-Market Strategy 17.2 Merchant’s activation, healthy cohorts, and cross-selling 14.9 rather than merchants’ net adds 13.1 103 100 98 92 4Q22 3Q23 4Q23 4Q2

  9. Slide 9: Financial Services

    Financial Services

  10. Slide 10: Seamless experience, high-rated apps combining payments, value-added services and banking

    Seamless experience, high-rated apps (>4.8 stars), combining payments, value-added services and banking through multiple interfaces… 4.9 4.8 …for all merchants’ segments …for consumers ▪ Bank account for companies with multiple users ▪ Credit Cards with limit based on investments ▪ Comprehensive int

  11. Slide 11: Strong client engagement: R$66B Cash-in; Avg. Cash-In/Client +43% y/y

    Strong client engagement: R$66B Cash-in; Avg. Cash-In/Client: +43% y/y PagBank Clients Cash-in¹ # Million R$ Billion +48% +3.4M +12% y/y 66.3 56.3 27.7 30.2 31.1 44.7 4Q22 3Q23 4Q23 4Q22 3Q23 4Q23 PagBank Active Clients Cash-In / Active Client² # Million R$ Thousand +550K +43% +3% y/y 4.0 16.2 16.7

  12. Slide 12: Total Deposits: Record level combined to downtrend in APYs

    Total Deposits: Record level combined to downtrend in APYs Total Deposits Checking Accounts R$ Billion R$ Billion APY 72% CDI +6.9B +2.7B +33% y/y +31% y/y 27.6 11.4 8.7 9.7 21.6 20.7 4Q22 3Q23 4Q23 78% APY1 on Total Deposits % 82% 85% 13.7% 13.7% 13.7% 13.3% 12.2% 96% 94% 94% 93% brAAA2 94% 13.2% 1

  13. Slide 13: Credit Portfolio: 66% secured with ongoing downtrend in NPL90+

    Credit Portfolio: 66% secured with ongoing downtrend in NPL90+1 Credit Portfolio Credit Portfolio mix R$ Billion % Credit Portfolio 2.72 2.46 2.53 40% 60% 66% 32% Secured 48% 54% Unsecured 4Q22 3Q23 4Q23 NPL90+1 41% % over Credit Portfolio up to 360 days 33% 30% 20.6% 17.9% 14.4% 10.7% 7.5% 27% 19%

  14. Slide 14: Financial Results

    @ PagBank iy rz) < © — i Results

  15. Slide 15: All-Time High Net Income (non-GAAP and GAAP)

    All-Time High Net Income (non-GAAP and GAAP) Net Income (non-GAAP) Net Income (GAAP) R$ Million R$ Million +11% +10% 1,768 1,654 1,597 1,505 5.10 +20% 4.57 +27% 488 520 408 411 440 1.53 411 1.24 1.27 4Q22 3Q23 4Q23 2022 2023 4Q22 3Q23 4Q23 2022 2023 EPS (R$) Net Income 15

  16. Slide 16: All-Time High Gross Profit, +19% y/y (4Q23 vs 4Q22)

    All-Time Hight Gross Profit, +19% y/y (4Q23 vs 4Q22) Gross Profit R$ Billion ▪ Gross Profit is the KPI that best captures our margins evolution by considering the impacts of financial expenses and total losses +9% ▪ Downtrend in net take rate is natural in the current scenario due to our strategy to

  17. Slide 17: Payments: Gross Profit +13% q/q driven by revenue growth

    Payments: Gross Profit +13% q/q driven by revenue growth Total Revenue and Gross Profit Gross Profit Bridge R$ Billion R$ Million 3Q23 1.376 +6% 14.9 Revenues 313 14.1 Trans. Costs (134) +8% 4.1 Fin. Expenses (48) 3.7 3.8 +8% +13% Total Losses 44 5.1 5.4 1.2 1.4 1.6 4Q23 1.550 4Q22 3Q23 4Q23 2022 20

  18. Slide 18: Financial Services: Gross Profit +24% q/q driven by higher margins

    Financial Services: Gross Profit +24% q/q driven by higher margins Total Revenue and Gross Profit Gross Profit Bridge R$ Billion R$ Million Cap on Interchange since Apr-23 (Prepaid and Debit Cards) -23% 3Q23 101 1,414 Revenues (7) 1,087 Focus on products with Trans. Costs (2) higher gross profit mar

  19. Slide 19: Operating Leverage: Costs and Expenses efficiencies boost profitability

    Operating Leverage: Costs and Expenses1 efficiencies boost profitability Financial Expenses Total Losses2 Operating Expenses Consolidated | R$ Million Consolidated | R$ Million Non-GAAP | R$ Million Strengthening salesforce and marketing without harming margins vs. 4Q22 21.6% 15.7% 16.1% 20.4% 4.8%

  20. Slide 20: Cash Earnings up +65% y/y in 2023

    Cash Earnings up +65% y/y in 2023 Cash Earnings¹ Capital Expenditures R$ Million R$ Million 13.9% 12.5% 13.1% 12.0% +65% 9.5% -7% 1.516 2.136 1.988 +38% 378 529 521 4Q22 3Q23 4Q23 2022 2023 % Total Revenue and Income 917 D&A + POS Write-off +11% R$ Million | Non-GAAP 8.3% 9.6% 454 410 8.5% 9.8% 9.3%

  21. Slide 21: Solid Balance Sheet: R$11.2B Net Cash Balance

    Solid Balance Sheet: R$11.2B Net Cash Balance 4Q23 Balance Sheet Net Cash Balance1 R$ Billion R$ Billion ~R$1B 11.2 in share buybacks since 2021 R$ B Net Cash Balance¹ 9.8 (2.0) 11.2 3.7 (0.4) 55.1 55.1 4Q22 Cash Capital Shares 4Q23 Generation Expenditures Buyback 37.7 49.1 Cash and Financial Invest

  22. Slide 22: Guidance 2024

    Guidance 2024 2023 2024e Guidance Results (Y/Y) Total Payment Volume R$ 394B R$ 441B to 457B (+12% to +16%) Gross Profit Margin 37.4% >38.5% % Total Revenue and Income (Non-GAAP) Net Income R$ 1.77B R$ 2.05B to R$ 2.15B Non-GAAP (+16% to +22%) Capital Expenditures R$ 2.0B R$ 2.0B to R$ 2.2B D&A + PO

  23. Slide 23: Q&A

    Q&A To ask a live question via audio, please use the “raise hand” button to join the queue. Once you are announced, a request to activate your microphone will appear on your screen. Please ask all your questions at once. You can also write your question directly into the Q&A icon on the lower part o

  24. Slide 24: Appendix 4Q23

    Appendix 4Q23

  25. Slide 25: P&L and EPS (GAAP and non-GAAP)

    P&L and EPS (GAAP and non-GAAP) Financial Highlights R$ Million R$ Million 4Q23 4Q22 Var. y/y 3Q23 Var. q/q 2023 2022 Var. y/y Total Revenues and Income 1 4,347 3,962 10% 4,026 8% 15,948 15,335 4% (-) Other Financial Income (73) (43) 69% (66) 11% (268) (176) 53% (-) Transactions Costs (1,645) (1,478

  26. Slide 26: EBITDA | GAAP and Non-GAAP financial measures

    EBITDA | GAAP and Non-GAAP financial measures R$ Million 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Net Income | GAAP 350 367 380 408 370 385 411 488 (+) Income Tax and Social Contribution 67 76 45 67 66 100 101 96 (+) LTIP Expenses2 28 51 43 (42) 19 30 30 32 (+) POS Write-off 0 93 41 66 62 65 64 57 (+

  27. Slide 27: Net Income | GAAP and Non-GAAP financial measures

    Net Income | GAAP and Non-GAAP financial measures R$ Million 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Net Income | GAAP 350 367 380 408 370 385 411 488 (+) LTIP Expenses2 28 51 43 (42) 19 30 30 32 3 (+) M&A Expenses 5 5 5 5 5 5 3 5 (+) Income Tax and Social Contribution (11) (19) (16) (2) (11) (16) (

  28. Slide 28: Managerial Float change from Payments to Financial Services

    Managerial Float change from Payments to Financial Services¹ R$ million 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Total Revenue and Income 3,427 3,911 4,035 3,962 3,750 3,826 4,026 4,347 ▪ Before 1Q23, Float from Accounts Balance was partially As previously reported Payments 3,125 3,606 3,712 3,654 3,

  29. Slide 29: Investor Relations Media Press

    Investor Relations https://investors.pagbank.com/ 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 — Q4 2023 Earnings Presentation on 6ix