Slide 1: XP Inc. 1Q21 Earnings Release
XP inc. 1Q21 Earnings Release May 4th, 2021 Investors.xpinc.com
Slide 2: Key Business Metrics
(1) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA Key Business Metrics 1Q21 1Q20 YoY 4Q20 QoQ Operating and Financial Metrics (unaudited) AUC (in R$ bn) 96% 8% Active clients (in '000s) 2,993 2,039 47% 2,777 8% Retail – gross total revenues (in R$ mn) 2,088 1,254 67% 1
Slide 3: Total AUC reached R$715 billion at March 31
Total AUC reached R$715 billion at March 31, up 96% year-over-year and 8% quarter-over-quarter. Year-over-year growth was driven by R$252 billion of net inflows and R$97 billion of market appreciation. Through a very challenging twelve-month period since the outbreak of the COVID-19 pandemic, XP’s b
Slide 4: Average monthly Net Inflows
Average monthly Net Inflows, adjusted for extraordinary equity inflows/outflows, was R$14.2 billion in 1Q21, up 15% from R$12.3 billion in 4Q20. For 1Q21, flows were strong across all channels and brands, led by the IFA network, reflecting investments in the business in the second half of 2020.
Slide 5: Active clients grew 47% and 8% in 1Q21
Active clients grew 47% and 8% in 1Q21 vs 1Q20 and 4Q20, respectively. Average monthly net client additions increased to 72,000 in 1Q21 from 44,000 in 4Q20, reflecting seasonality, the reduction of brokerage fees for online stock trading at Rico and XP in 3Q20 and our ongoing client acquisition and
Slide 6: IFA Network gross additions in 1Q21
IFA Network gross additions totaled 917 in 1Q21, consistent with strong growth trends in 2H20. Our total IFA headcount stood at nearly 9,000 as of March 31, 2021. Ongoing IFA growth was driven by both industry growth as well as XP’s network investments. Retail Equity DARTs¹ (million trades)
Slide 7: Retail Equity DARTs
¹Daily Average Revenue Trades, including Stocks, REITs, Options and Futures Retail DARTs increased 23% in 1Q21 to 3.2 million from an already robust level of 2.6 million in 4Q20. The remarkable figures reinforce the benefits of the platform investments and pricing strategy across XP’s three Retail b
Slide 8: Our Credit portfolio reached R$4.7 billion
Our Credit portfolio reached R$4.7 billion as of March 31, 2021, representing 0.7% of our total AUC. The average duration of our credit book was 3.1 years , with a 90-day Non-Performing Loan (NPL) ratio of 0.0% . Furthermore, we highlight the capital-light nature of our loan book, which currently re
Slide 9: Total Gross Revenue (in R$ millions)
Total Gross Revenue (in R$ millions)
Slide 10: Total Gross Revenue reached an all-time high
Total Gross Revenue reached an all-time high, increasing 50% from R$1.9 billion in 1Q20 to R$2.8 billion in 1Q21, despite a lower contribution from performance fees. The increase was mainly driven by strong growth in the Retail business, which contributed 90% of the growth year-over-year.
Slide 11: Retail revenue 1Q20 vs 1Q21
1Q20 vs 1Q21 Retail revenue grew 67% from R$1.3 billion in 1Q20 to R$2.1 billion in 1Q21. Revenue generation was strong across all products and channels within Retail, as resilient secondary trading volumes in securities, solid primary market activity, increases in structured operations distribution
Slide 12: Retail take rate and Institutional revenue
1Q21 take rate (for the last twelve months) remained stable compared to 1Q20. Despite the strong growth in AUC during the period and pricing changes in online brokerage, Retail monetization remained stable due to higher client activity and our diversified revenue profile. The resilience in the take
Slide 13: Institutional revenue 1Q20 vs 1Q21
1Q20 vs 1Q21 Institutional gross revenue was R$294 million in the 1Q21, down 11% from R$331 million in 1Q20. Despite the growth in core institutional trading desks in 1Q21, 1Q20 benefited from strong client activity in the fixed income business related to the pandemic.
Slide 14: Issuer Services and Digital Content revenue
1Q20 vs 1Q21 Issuer Services revenue expanded 77% year-over-year from R$132 million in 1Q20 to R$234 million in 1Q21. This increase was driven by (1) Equity Capital Markets (ECM), with 12 executed deals vs 5 in 1Q20, and (2) our Debt Capital Markets (DCM) division, with participation in 43 deals vs
Slide 15: COGS 1Q20 vs 1Q21
1Q20 vs 1Q21 COGS rose 45% from R$579 million in 1Q20 to R$841 million in 1Q21, following the expansion in overall Retail Revenues. The gross margin expanded 137 bps, from 66.6% to 68.0%, despite the impact of long-term incentives with the IFA network, as costs were abnormally high in the same perio
Slide 16: SG&A expenses 1Q20 vs 1Q21
1Q20 vs 1Q21 SG&A expenses (excluding share-based compensation) totaled R$765 million in 1Q21, up 36% from R$561 million in 1Q20. Despite growing our headcount by 64% year-over-year, continuously investing in technology and new verticals, and deploying new products, we increased efficiency, reducing
Slide 17: 1Q20 1Q21
178 1Q20 1Q21
Slide 18: Adjusted EBITDA 1Q20 vs 1Q21
¹ See appendix for a reconciliation of Adjusted EBITDA. 1Q20 vs 1Q21 Adjusted EBITDA grew 75%, from R$595 million to R$1,043 million and margins expanded from 34.3% to 39.7%. The growth was driven by (1) increases in the top line, mainly coming from Retail; (2) better COGS as a percentage of Net Rev
Slide 19: Adjusted Net Income 1Q21 vs 1Q20
1Q21 vs 1Q20 Adjusted Net Income grew 104%, from R$415 million in 1Q20 to R$846 million in 1Q21. Year-over-year growth was driven by (1) strong performance for the Retail business; (2) cost efficiencies and operating leverage and (3) a lower effective tax rate. Our effective tax rate decreased from