Inter & Co. Inc. Class A Common Shares 2026 Q2 Earnings Call

Hi everyone. I'm Rafa Vitória, IR Officer at Inter, and I would like to welcome all to Inter & Co.'s earnings conference call. First of all, some instructions. This call is also available in Portuguese. To access it, press the globe icon on the lower right side of your Zoom screen, then select the Portuguese room. Please be advised that all participants will be in listen-only mode and that the conference is being recorded. You may submit online questions at any time today using the Q&A box on the webcast. A replay will be available at the company's IR website. With me today are João Vitor Menin, our Global CEO, Alexandre Riccio, our Brazil CEO, and Santiago Stel, our CFO. To start with the CEO overview, I would like to invite João. João, please go ahead. Thank you, Rafa.

Thank you all for joining us today to discuss our second quarter results for 2026. I want to start with something that is truly meaningful for Inter. Back in May, at our Owners' Day, we introduced the Rule of 50 as our long-term plan, proving that growth and profitability are not a trade-off, but a combination we can deliver together. Here we are, just one quarter after announcing the plan, and the Rule of 50 is already a reality. Total net revenue grew 32%. ROE reached over 16%. We are already executing the plan. The Rule of 50 does not stand alone. It is built on top of our 60-30-30 North Star. The goal of 60 million clients, 30% efficiency ratio, and 30% ROE. That compass continues to guide everything we do.

The trend on this chart reflects years of disciplined capital allocation, high growth, and consistent execution, supported by a solid balance sheet. Results like this don't happen by accident. Delivering the Rule of 50 is only possible because of our Inter by Design approach. It combines three reinforcing pillars: sustainable revenue growth, scalable distribution capabilities, and unique cost efficiencies. That compounding effect is what you see in our numbers. We tripled our revenue growth while simultaneously doubling our active client base, meaning we are getting more engaged clients. We are doing all of this while improving our efficiency ratio by 32 percentage points and expanding ROE by 18 percentage points as well. Growth and profitability moving in the same direction at the same time. That is what Inter by Design produces.

When this flywheel runs at full speed, the natural consequence is market share gains across every product and segment. That is what I want to show you next. More clients bring more transactions. More transactions bring more data. Better data drives better products and smarter credit decisions. Better products attract even more clients, the cycle keeps compounding. That is what the flywheel concept means for Inter. What makes our flywheel particularly powerful is the breadth of our ecosystem. The more products we offer across more verticals, the more entry points we create for clients and the faster the cycle spins. Whether you look at Pix, credit cards, investments, or home equity, our market share numbers are climbing across the board faster than many of the most important players in Brazil. We are not just growing.

We are growing in every segment at the same time, but with discipline. That's the strength of our ecosystem, and it's only getting stronger. This flywheel guides not just how we grow, but also where we choose to grow. The opportunity in front of us is bigger than ever because we are actively deepening and widening our addressable market. Our core is secured lending. That was a deliberate choice from the start. Mortgages, home equity, and payroll, for instance. Nearly 82% of secured personal loans in Brazil are still concentrated in the top five players. That is massive, under-penetrated market, and we have the distribution, the product experience, the data, and the cost structure to keep gaining market share. We are widening into unsecured as well, and we're doing it carefully, with discipline, and the results are already showing up.

For the first time ever, we surpassed 2% market share in credit cards TPV in Brazil. We have never been more profitable in this product than we are today. In summary, secured loans remains our foundation. Strong asset quality, stable returns, resilient through different credit cycles. On top of that, unsecured credit such as credit card Pix Credit and buy now, pay later are deepening principality and widening our addressable market further on. We are seizing the opportunity in both, that is what gives us the confidence to keep growing 30% or more for many years to come. Now to conclude, as you can see on page nine, I would like to highlight three important milestones for our company. Number one, on gaining scale. For the first time ever, we reached over BRL 100 billion in total assets. Second, on expanding margins. For the first time, we crossed double-digit NIMs.

Third, on creating value. For the first time, we surpassed capital neutrality, meaning our business now generates more capital than it consumes to grow, even in a fast pace of growth. These are not just milestones, they are proof that the model we have been building with discipline, consistency and ambition is delivering real results for our shareholders. Now Xande and Santi will bring this story to life with the full numbers behind it. Xande will walk you through the business update while Santi will take you through the financial performance in detail.

Xande, please go ahead. Thank you, João, good morning everyone.

Let's now dive into our second quarter operational results. We reached 45.3 million clients and over the last 12 months added 3.7 million new active clients. The size of our base is not the main story here, the quality of it is. We have been deliberate about how we grow, being more selective, prioritizing clients that engage faster. That means a sharper focus on ARPA growth, building a stronger and more profitable base. The strategy is showing up directly into our numbers. Our new cohorts are starting with an initial ARPA approximately BRL 10 higher than older cohorts. A key driver of ARPA growth is credit penetration. As clients deepen their relationship with Inter and adopt credit products, their monetization increases significantly. Private payroll is a great example of this, I'll explore this subject later.

We also see evidence of engagement in the behavior of our clients overall. We averaged 22 million daily logins this quarter, up from 18 million a year ago. These clients are not only active, they're truly engaged in bringing primary relationships to Inter. That engagement is translating directly into monetization while we keep our cost to serve flat. ARPA goes up, CTS stays stable. The gap is what drives margin expansion and the results speak for themselves. Margin per active client just reached its best level ever. This is the financial outcome of everything I just described. Better clients, deeper relationships, higher credit penetration. It compounds quarter after quarter. This engagement we talked about also translates into transaction volume. Our cards and Pix TPV reached 1.8 trillion on a run rate basis. TPV is growing faster than our client base, an evidence of deeper relationships.

True market share numbers tell this story best. First, we now hold approximately 9% of all Pix transactions in Brazil. We are still expanding, growing 31 basis points over the past year. Second, for the first time ever, we crossed 2% market share in credit card TPV, as João mentioned earlier. Our new cohorts are starting at an engagement level that's higher than ever before. The flywheel is not just working, it's accelerating. Now, I want to deep dive into two of our hero credit products, credit cards and private payroll loans. Santi will cover the full portfolio performance later. I want to give you the strategic view on both. Starting with credit cards and our reshaping strategy, the thesis is simple. Shift our portfolio towards more interest-earning balances, more installment usage, better monetization, bringing higher revenues.

Our interest-earning portfolio keeps growing as a share of the total and now stands for 26% of the credit card book. The interest income of this product grew 64% year-over-year. Here's a key message. Interest income is growing faster than provisions. A larger interest-earning portfolio does come with more provisioning. That's expected. We're comfortable with it. The income is outpacing the costs and the margins are expanding. We'll maintain our discipline in this strategy, growing the right balances with the right clients at the right time. Now let me turn to private payroll loans. We maintain our confidence in the product and its fit to our platform. It generates strong revenue expansion. It scales through our own digital distribution. It is efficient to originate and serve. That's exactly the kind of product we want more of.

In the second quarter, we surpassed 600,000 clients with private payroll loans. These clients have an ARPAC that's 3.7 times that of our average, making it a true principals and monetization accelerator. There are operational improvements in progress. We're managing through them with discipline. We believe the product will only get better as Dataprev introduces new features such as automatic employee relinkage. We're growing. We believe we're doing it at the right pace, building a proprietary portfolio that will be healthy and profitable for the long term. That will strengthen principals. The next step is already coming. Insurance launches in August. We estimate that insurance adoption can reduce provisions and increase fee revenues, a meaningful improvement in the product's overall performance. I will now talk about business accounts, a significant opportunity we have in front of us.

We reached 2.9 million business clients, growing 24% year-over-year. Our market penetration is already at 12% in these types of accounts. Business clients generate 2.8 times the ARPAC of our average client. We have built a complete suite of products for businesses, including payments, investments, acquiring, cards, and credit. The electronic trade invoice as a collateral, or as called in Portuguese, duplicata escritural, to be launched by the Central Bank of Brazil, is currently in testing, and once live, it will deepen our product suite, drive higher ARPAC, and compound directly into NII growth. The more products a business client uses, the more they consolidate their financial transactions at Inter. This is the same flywheel we see on the retail side, now on the business account side. Let me shift to another important dimension of our business: fee income. Credit is a powerful engine of our results.