PicS N.V. Class A Common Shares 2026 Q2 Earnings Call

Thank you, operator, and welcome everyone. This is our third earnings call as a public company, and I'm proud to share another quarter of strong execution across our platform. Before we get into the results, I want to say a few words about our CFO transition. As we announced in early August, André Cazotto has succeeded Rodrigo Couto as our Chief Financial Officer. This transition is the result of a planned succession process, and I'm confident in the strength and continuity of our leadership team. Rodrigo played a key role in a critical phase of PicPay's evolution, strengthening our finance organization, leading our Sarbanes-Oxley preparation, and being instrumental in our successful IPO in January. He has been a tremendous partner, and I'm glad he will continue working with us as special advisor through year-end.

Andre brings over 20 years of experience in payments and financial services and has been with PicPay since 2021, leading the capital markets workstream for our NASDAQ listing, investor relations, and M&A. He has deep institutional knowledge and strong relationships with our financial stakeholders. Andre, I'm confident you are the right person for this role. Welcome, and best of luck as we enter this new chapter together.

Thank you, Eduardo. It's a privilege to step into this role at such an exciting moment for the company. I have spent the past few weeks working closely with Rodrigo and our teams to ensure a seamless transition. What stands out to me is the strength of our financial foundation and the discipline with which this business operates. I'm excited to lead the next phase of PicPay's financial journey.

Thank you, André. Let's jump into the second quarter results now. I am proud of what we delivered in the second quarter. This slide tells the story in one picture. We beat guidance on virtually every metric. Credit portfolio came in at BRL 31.9 billion, 3% above the high end of guidance. Cost of risk came in at 3.9%, aligned within our guidance range. Revenues reached BRL 3.7 billion, 3.6% above guidance, and net interest income was BRL 2 billion, 5.4% above our guidance range. But the real story is in the profitability. Gross profit came in at BRL 1.25 billion, that is 8.4% above guidance, driven by the operating leverage. Adjusted net income reached BRL 283 million, 15.5% above guidance, reflecting strong top-line momentum and continued cost discipline. That is the story. We delivered on our commitments across the board with particularly strong beats on the profitability metrics that matter most.

Let me start with our operating metrics, which are scaling with consistency. Total accounts reached 70.4 million, up 10% year-over-year and 3% sequentially. Quarterly active clients grew to 45.4 million, reflecting sustained engagement across our base. Consolidated TPV came in at BRL 167.6 billion, 27% above the prior year and 7% higher sequentially. Wallet and banking TPV reached BRL 142.6 billion, up 19% year-over-year and 6% quarter-over-quarter. Total cash-in was BRL 136.4 billion, growing 17% versus a year ago and 9% sequentially. On average, more than BRL 45 billion per month. Deposits grew to BRL 35.8 billion, up 45% year-over-year, and 10% higher than last quarter. This is a strong signal of increasing trust and principality in our franchise. Active insurance policies reached 11.1 million, 63% ahead of last year and 9% above Q1, as our insurance vertical continues to scale rapidly.

Across every metric, consistent sequential growth on top of already strong comparables. Turning to financials, this is where the monetization engine really shows its power. Total revenues reached BRL 4.1 billion, a 67% increase year-over-year and 17% higher than last quarter. That is the top line growing fast. Let me highlight what is underneath. Excluding derivatives and hedge accounting, managerial revenues were BRL 3.7 billion, up 59% year-over-year and 17% sequentially. That acceleration is driven by secured and partially secured credit origination, deeper card engagement, and a richer fee-based product mix. RPAC grew to BRL 92 per active client, 52% above where we were a year ago, and 14% ahead of Q1. Excluding hedge accounting, RPAC was BRL 83.3, showing that even on a like-for-like basis, we are monetizing each client significantly more.

Gross profit came in at BRL 1.25 billion, up 48% year-over-year and 14% higher sequentially. The gap between revenue growth at 67% and cost growth at a fraction of that is the operating leverage this model was built for, and that leverage shows up clearly in our unit economics. Cost to serve was BRL 21.3 per active client, up 13% year-over-year, but only 5% sequentially. It is worth noting that this figure includes BRL 0.70 per client of opportunistic investments in marketing campaigns for seasonal events that we brought forward from the third quarter. Excluding this anticipation, cost to serve would have been BRL 20.6, representing only a 1% sequential increase. Let me put that in perspective. Revenue per client expanded 67% year-over-year, while cost to serve grew just 13%.

For every BRL we invest in serving our clients, we are generating over 4 BRL in revenue. That's the leverage embedded in this model. Adjusted earnings before taxes reached BRL 291 million, up 174% year-over-year and 17% sequentially. This reflects a business that is scaling efficiently and translating top-line growth into bottom-line results. Adjusted net income was BRL 283 million, up 135% year-over-year and 67% above last quarter. The sequential jump from BRL 169 million to BRL 283 million reflects strong top-line momentum, continued cost discipline, and the positive tax benefit from Brazil's Lei do Bem incentive program for technology companies. I want to spend a moment on this slide because it captures a planned structural shift in PicPay's revenue mix.

Total revenue of BRL 4.1 billion is broken down as follows: 29% from unsecured credit, 24% from secured and partially secured products, 24% from fees and commissions, and 23% from float and hedge accounting. The key number, 71% of our revenues are now driven by no or lower credit risk streams, float, hedge accounting, fees, commissions, and secure and partially secured credit. That's up from 63% just 12 months ago. Let me say that again. We are growing total revenue 67% year-over-year while simultaneously building a fundamentally more resilient business. A more diversified revenue mix, combined with a higher share of collateralized credit revenues, allows us to balance growth across more mature collateralized portfolios while using intentional risk as a lever, growing through small and progressive limits on cards, Buy Now, Pay Later on loans, and selectively expanding into slightly higher-risk clusters within private payroll loans.

All of this while maintaining the same risk appetite and targeted risk-adjusted returns. Looking at the three revenue engines individually over the last five quarters, secure credit revenues reached BRL 1 billion, up 158% year-over-year, and 23% sequentially. The trajectory from BRL 391 million to BRL 1 billion in 12 months tells the story of our payroll loan franchise reaching meaningful scale. Unsecured credit revenues came in at BRL 1.2 billion, up 40% year-over-year and 11% above last quarter, growing at a strong, deliberate, but measured pace. Non-credit revenues hit BRL 1.9 billion, up 57% year-over-year and 19% higher sequentially. This is fees, commissions, float, hedge accounting, insurance, and acquiring. All capital light, all compounding quarter after quarter. Three engines, three growth vectors, and each one getting stronger. On returns, let me walk you through the two charts on this slide.

First, adjusted net income, BRL 283 million, up 135% year-over-year and 67% sequentially. This represents a significant acceleration in profitability as we scale the business. Second, adjusted ROE, 20.2%, up from 15.5% in the previous quarter. Both metrics benefited from the positive impact of Lei do Bem, our R&D tax incentive program, which contributed to the strong quarterly performance. Moving to credit, PicPay Card TPV was BRL 19.5 billion, up 40% year-over-year and 12% sequentially. Card engagement continues to deepen as our maturing vintages drive higher spend per user. Consumer loan origination reached BRL 4.8 billion, up 78% year-over-year and 7% above last quarter. Total credit portfolio reached BRL 31.9 billion, up 99% from a year ago and 14% higher sequentially. The consumer book represents 93% of the total, with SMBs and others comprising the remaining 7%.

On our audiences and ecosystem business unit, we've built a portfolio that lets our users solve most of their daily needs within PicPay. More reasons to use the app every day drives higher engagement, which creates opportunities to cross-sell financial products and increase customer lifetime value. From shopping and food delivery to travel, entertainment, telecom, and urban mobility, we cover the key journeys of everyday life. One standout example is iGaming. In just one year, we built a high-margin business with over 2.7 million clients across lucky numbers, national lotteries, and themed World Cup games, all integrated into our ecosystem. This broader everyday ecosystem increases our relevance, deepens engagement, and strengthens the financial relationship with our customers. On our small and medium businesses segment, we're seeing real momentum across the board.

New small and medium business accounts reached 85,000 per month in the first half of 2026, up from 27,000 in the first half of 2025, a threefold acceleration. Supply chain finance is scaling fast. Origination hit BRL 1.05 billion in the quarter from BRL 40 million in the last quarter of last year and BRL 693 million just a quarter ago. The trajectory is clear, and the unit economics are attractive. We're also rolling out Tap on Phone to individual consumers, turning 70 million PicPay users into potential merchants. It's a distribution play that uniquely positions us in the payments value chain. We just launched our marketing AI agent. SMBs now can create self-serve ads, and our platform identifies the most relevant customers within the merchant geographic footprint and delivers the ads to them. First week results, 10,000 opt-ins, 1.5 thousand campaigns, and 1.7 million individuals reached.