Slide 1: 1Q20 Earnings Release
JUNTOS TRANSFORMAMOS O movimento que nasce para ajudar as familias afetadas pela crise. A movement to help families impacted by the COVID-19 crisis. For more information: https:/Awww.juntostransformamos.com.br/ XPiinc. 1Q20 Earnings Release May 12%, 2020 investors.xpinc.com
Slide 2: To our shareholders
São Paulo, Brazil, May 12, 2020 – XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading, technology-driven financial services platform and a trusted pioneer in providing low-fee financial products and services in Brazil, today reported its financial results for the first quarter of 2020. To our sh
Slide 3: Letter to shareholders (continued)
remained low. The current Selic rate, 3.0% per year with a downward trend, seems to be a catalyst for secular change in the behavior of Brazilian investors. In this environment, XP will remain focused on providing the best experience, content and tools to its clients to help them reach their financi
Slide 4: 1Q20 KPIs
1Q20 KPIs 1Q20 1Q19 YoY 4Q19 QoQ Operating and Financial Metrics (unaudited) Retail – AUC (in R$ bn) 366 232 58% 409 -11% Retail – active clients (in '000s) 2,039 1,126 81% 1,702 20% Retail – gross total revenues (in R$ mn) 1,254 700 79% 1,155 9% Institutional – gross total revenues (in R$ mn) 331 1
Slide 5: Operational Performance
Operational Performance Assets Under Custody (in R$ bn) Total AUC reached R$366 billion at March 31, 2020, up 58% year-over-year and down 11% quarter-over-quarter. The R$43 billion decline versus 4Q19 is shown on the bridge chart below and was driven by: (1) R$58 billion of market depreciation and (
Slide 6: 1Q20 Revenue Breakdown
Active Clients (in 000’s) Active clients totaled 2.0 million at the end of 1Q20, up 81% from 1.1 million at the end of 1Q19. The growth was driven by the expansion of our direct and B2B channels and our three retail brands, particularly Clear following the increased number of individual investors tr
Slide 7: Retail
Total Gross Revenue (in R$ mn) Total Gross Revenue increased 84% from R$1.0 billion in 1Q19 to R$1.9 billion in 1Q20 reflecting strong growth across all our businesses. Retail Retail Revenue (in R$ mn) Retail revenue grew 79% from R$700 million in 1Q19 to R$1.3 billion in 1Q20. The main growth drive
Slide 8: Institutional
LTM Take Rate (LTM Retail Revenue / Average AUC) The last twelve months Take Rate (or Revenue Yield) was 1.4% in 1Q20 vs 1.2% in 4Q19. The expansion was mainly due to: (1) record volumes in the equity market boosting Retail Revenue in 1Q20 and (2) AUC growth lagging Retail Revenue growth in the peri
Slide 9: Issuer Services, Digital Content and Other
Issuer Services Issuer Services Revenue (in R$ mn) Issuer Services revenue grew 137% year-over-year from R$56 million in 1Q19 to R$132 million in 1Q20, reflecting strong deal flow in January and February for REITS, DCM and ECM, in order of contribution to revenue. While capital markets activity rema
Slide 10: COGS and SG&A Expenses
COGS COGS (in R$ mn) and Gross Margin COGS rose 89% from R$308 million in 1Q19 to R$581 million in 1Q20, following the increase in revenue. The gross margin for the 1Q20 was 66.5% vs 67.0% in 1Q19. SG&A Expenses SG&A Expense (in R$ mn) and as a % of Net Revenue SG&A expenses totaled R$587 million in
Slide 11: Adjusted Net Income and Cash Flow
Adjusted Net Income Adjusted Net Income¹ (in R$ mn) and Margin In 1Q20, Adjusted Net Income grew 147% vs 1Q19 and reached R$415 million. The adjusted net margin expanded from 18.0% in 1Q19 to 23.9% in 1Q20, reflecting: (1) the increase in total revenues, particularly equity brokerage across the Reta
Slide 12: Net Cash Flow Used in Operating and Investing Activities
Net Cash Flow Used in Operating Activities Our net cash flow used in Operating activities represented by Adjusted net cash flow (used in) from operating activities (which in management’s view is a more useful metric to track the intrinsic cash flow generation of the business) for 1Q20 was R$398 mill
Slide 13: Floating Balance and Adjusted Gross Financial Assets
Floating Balance and Adjusted Gross Financial Assets (in R$ mn) Floating Balance (=net uninvested clients' deposits) 1Q20 4Q19 Assets (1,016) (505) (-) Securities trading and intermediation (1,016) (505) Liabilities 13,334 9,115 (+) Securities trading and intermediation 13,334 9,115 (=) Floating Bal
Slide 14: Other Information
Other Information Web Meeting The Company will host a webcast to discuss its first quarter 2020 financial results on Tuesday, May 12, 2020 at 5:00pm ET (6:00pm BRT). To participate in the earnings webcast please subscribe at: 1Q20 Earnings Web Meeting. The replay will be available on XP’s investor r
Slide 15: 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 16: Company does not undertake any obligation to update these forward-looking statements. Past performance does
Company does not undertake any obligation to update these forward-looking statements. Past performance does not guarantee or predict future performance. Moreover, the Company and its affiliates, officers, employees and agents do not undertake any obligation to review, update or confirm expectations
Slide 17: Unaudited Managerial Income Statement
Unaudited Managerial Income Statement (in R$ mn) 1Q20 1Q19 YoY 4Q19 QoQ Managerial Income Statement Total Gross Revenue 1,856 1,006 84% 1,823 2% Retail 1,254 700 79% 1,155 9% Institutional 331 147 126% 306 8% Issuer Services 132 56 137% 221 -40% Digital Content 27 16 70% 30 -10% Other 113 88 28% 111
Slide 18: Accounting Income Statement
Accounting Income Statement (in R$ mn) 1Q20 1Q19 Net revenue from services rendered 1,152 599 Brokerage commission 505 289 Securities placement 348 160 Management fees 255 141 Insurance brokerage fee 29 19 Educational services 26 14 Other services 94 44 Taxes and contributions on services (105) (67)
Slide 19: Balance Sheet
Balance Sheet (in R$ mn) Assets 1Q20 4Q19 Cash 250 110 Financial assets 56,217 41,889 Fair value through profit or loss 33,607 26,528 Securities 25,092 22,443 Derivative financial instruments 8,515 4,085 Fair value through other comprehensive income 4,896 2,616 Securities 4,896 2,616 Evaluated at am
Slide 20: Liabilities
Liabilities 1Q20 4Q19 Financial liabilities 44,628 31,842 Fair value through profit or loss 8,247 5,251 Securities 721 2,022 Derivative financial instruments 7,526 3,229 Evaluated at amortized cost 36,381 26,591 Securities sold under repurchase agreements 21,111 15,638 Securities trading and interme
Slide 21: Adjusted Net Income and Adjusted EBITDA
Adjusted Net Income (in R$ mn) 1Q20 1Q19 YoY 4Q19 QoQ Net Income 398 210 89% 390 2% (+) Share Based Compensation 28 - - 8 278% (+) IPO expenses - - - 22 -100% (-) One-time tax claim recognition - (71) - - - (+/-) Taxes (11) 28 -140% -3 279% Adj. Net Income 415 168 147% 417 -1% Adjusted EBITDA (in R$