Pagseguro Digital Ltd. · NYSE:PAGS
Pagseguro Digital — Q3 2022 Earnings Presentation
41 slides from Pagseguro Digital's earnings presentation, Nov 22, 2022
Slide 1: Earnings Release 3Q22
es) PagBank es) PagSeguro Earnings Release 3Q22 November 22, 2022 € Ajustar limite Limite atual: R$ 15.000,00 2 Disponivel: R$ 15.000,00 R$ 15.000 PAGS LISTED NYSE
Slide 2: R$3.2B R$3.4B
445% — R$3.9B R$3.2B R$3.4B R$2.8B 3Q21 4Q21 1Q22 2Q22
Slide 3: R$89.2B R$90.3B
+35% R$89.2B R$90.3B R$78.9B R$80.1B R$66.8B 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 4: Net Income, Monthly TPV per Merchant, Total Deposits
Net Income | GAAP PagSeguro Monthly TPV / Merchant Total Deposits R$ 380 Million R$ 4.1 K R$ 19.4 Billion
Slide 5: NAAT R$403M
-2%—————_,, NAAT R$403M R$371M R$334M 3Q21 4Q21 1Q22 2Q
Slide 6: +71% ————_, R$2.7B R$2.3B R$2.1B R$1.9B R$1.6B
+71% ————_, R$2.7B R$2.3B R$2.1B R$1.9B R$1.6B
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Slide 9: Tap on Phone, PagTotem & Moderninha Smart, Automatic Savings
Tap on Phone PagTotem & Moderninha Smart 2 Automatic Savings • Integrated solution in PagVendas ◦ Tap on Phone ◦ Payment Link ◦ Pix QR Code • Reducing Capex deployment • Fostering one-stop-shop solution • Exploring a much larger market • Increasing VAS usage ◦ PagVendas ◦ ClubPag • Diversifying POS
Slide 10: MICHEL TEL
12345678 9101 7788 08/25 MICHEL TEL VISA
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Slide 12: Credit Card backed by Balance Account, Bancassurance, Financial Education
Credit Card backed by Balance Account Bancassurance Financial Education ( “Trilha do Rendimento” ) • Expanding credit offering • Addressing new and existing clients • Credit card limit tied to balance account • No NPLs • New insurance products: ◦ Pix ◦ Credit Cards • Cross-selling opportunity • Dist
Slide 13: 125.6 3022
125.6 302 3022
Slide 14: PAGS TPV and Net Take Rate
PAGS TPV totaled R$195.4 billion , an increase of +56% vs. 3Q21 due to the growth of +35% in PagSeguro TPV and +79% in PagBank TPV, mainly driven by the maturation of merchant cohorts’ and market share gains in payments combined with deeper engagement with PagBank services. PAGS Net Take Rate totale
Slide 15: 90.3 66.8
90.3 66.8
Slide 16: PagSeguro TPV
PagSeguro TPV totaled R$ 90.3 billion , an increase of +35% vs. 3Q21 mainly due to: larger share of wallet , driven by the migration from cash to electronic payments, leading to higher TPV per merchant; maturation of existing cohorts , due to increasing productivity of our sales channels; (i) (ii)
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Slide 18: PagSeguro Active Merchants
PagSeguro ended the quarter with 7.3 million Active Merchants , the highest Active Merchants base in the Brazilian Acquiring Industry, -5% lower as compared to 3Q21. Since the beginning of the year, PagSeguro has been adopting a more selective acquisition strategy by increasing POS prices (reducing
Slide 19: PagBank TPV
PagBank TPV totaled R$ 105.1 billion , an increase of +79% vs. 3Q21. This growth is mainly related to deepening clients’ engagement with day-to-day banking (deposits, bill payments, mobile top-up, Pix), cards spending and credit underwriting. The number of Pix transactions by PagBank clients account
Slide 20: MlWorking Capital Hl Crect Card Others
16 3021 3022 MlWorking Capital Hl Crect Card Others
Slide 21: PagBank Credit Portfolio
PagBank Credit Portfolio reached R$ 2.7 billion in 3Q22, +71% vs. 3Q21. The increase in the quarter was mostly driven by secured loans underwriting such as Payroll Loans , FGTS early prepayment and our newest Secured Credit Card . Secured products reached 35% of share in the Credit Portfolio, result
Slide 22: 25.9 19.6
25.9 19.6
Slide 23: PagBank Clients
PagBank ended the quarter with 25.9 million clients , an increase of +32% vs. 3Q21, and Active Clients of 15.8 million , an increase of +29% vs. 3Q21. This increase is mainly related to higher penetration in consumers segment which represents 58% of PagBank clients vs. 47% in 3Q21. This increase als
Slide 24: Total Revenue and Income
Total Revenue and Income reached R$ 4,035 million in 3Q22, an increase of +45% from R$ 2,776 million reported in 3Q21, as described below: Transaction Activities and Other Services: Revenues from Transaction Activities and Other Services in 3Q22 amounted to R$ 2,292 million , an increase of +28% vs.
Slide 25: Transaction Costs
↑ ↑ Transaction Costs reached R$ 1,424 million in 3Q22, an increase of +28% from R$ 1,112 million reported in 3Q21. As a percentage of the total of our Revenues from Transaction Activities and Other Services, Transaction Costs remained stable in 62.1% in 3Q22 same as 3Q21. When including one-time po
Slide 26: i<e) re) -
921 i<e) re) - 210
Slide 27: Financial Expenses
Financial Expenses totaled R$ 921 million in 3Q22, up +339% vs. 3Q21. This increase is mainly explained by: (i) R$ 637 million additional expenses related to the Brazilian Basic Interest Rate (SELIC) hikes ; and (ii) R$ 74 million related to the TPV growth with higher credit card mix ; Chargebacks R
Slide 28: Chargebacks
Chargebacks reached a total of R$ 273 million in 3Q22, up +110% vs. 3Q21. As a percentage of Total Revenues and Income, Chargebacks increased by +210 bps to 6.8% in 3Q22, up from 4.7% in 3Q21. This increase was mainly due to PagSeguro TPV higher exposure to credit cards, which have a higher likeliho
Slide 29: Gross Profit and Operating Expenses
Gross Profit totaled R$ 1,384 million in 3Q22, up +7% from R$ 1,297 million presented in 3Q21. This increase is mainly related to volume gains, successes stemming from PAGS’ repricing strategy, operating leverage captured by PAGS, diligent credit underwriting strategy more focused on payroll product
Slide 30: Operating Expenses
Operating Expenses which include Personnel Expenses, Marketing and Advertising and Other Expenses, totaled R$ 615 million , an increase of +11% compared to R$ 555 million in 3Q21. As a percentage of Total Revenue and Income, Operating Expenses represented 15% vs. 20% in 3Q21, showing PAGS ability to
Slide 31: POS subscription business model
In September 2019, we changed our business model from selling POS devices to subscription to follow the industry’s best standards and to improve merchant’s user experience in terms of: • POS delivery for new merchants; and • POS maintenance and replacement for existing merchants. At that time, we st
Slide 32: 290
290 200
Slide 33: Adjusted EBITDA and Income Tax Reconciliation
0 % 0 % 1 % -4 % 51 % 6 % n.a. 22 % 65 % n.a. (0.6) p.p. (6.5) p.p. -121 % -100 % -49 % -39 % Adjusted EBITDA amounted to R$ 770 million in 3Q22, up +4% vs. 3Q21, reflecting the ongoing repricing strategy carried out by PAGS during the period and operating leverage gains on HUBs and PagBank operatio
Slide 34: 321
321
Slide 35: Net Income
Net Income for the quarter amounted to R$ 411 million on a non-GAAP basis, a decrease of -2% , from R$ 418 million reported in 3Q21, reflecting PAGS repricing process during the period, operating leverage gains on HUBs and PagBank operations and higher investment on marketing related to PagBank prod
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Slide 39: Empowerment
EMPOWERMENT w ~~ > ms) i = = © o a = in ry) QUALITY MEANS BUSINESS
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Slide 41: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 22, 2022 PagSeguro Digital Ltd. By: /s/ Artur Schunck Name: Artur Schunck Title: Chief F