PagSeguro $PAGS 4Q22 Earnings
- Rev R$4b +22% ↗️🟢
- NTR R$2.4b +36% ↗️ margin 62% +612 bps ✅
- GP R$1.4b +18% ↗️ margin 36% -137 bps ↘️🔴
- Adj EBITDA R$0.8b +29% ↗️ margin 20% +98 bps ✅
- EBT R$0.5b +15% ↗️ margin 12% -80bps↘️🔴
- NG Net Inc R$0.4b +23% ↗️ margin 10% +5bps✅
$PAGS FY22 Earnings
- Rev R$15.3b +47% ↗️🟢
- NTR R$9.5b +60% ↗️ margin 62% +509bps✅
- GP R$5.5b +19% ↗️ margin 36% -842bps↘️🔴
- Adj EBITDA R$3.1b +19% ↗️ margin 20% -454bps↘️🔴
- EBT R$1.9b +1% ➡️ margin 12% -561bps↘️🔴
- NG Net Inc R$1.6b +12% ↗️ margin 10% -322bps↘️🔴
Biz Metrics
TPV R$209b +42% ↗️🟢
PagSeguro
- TPV R$94b +19% ↗️🟢
- Rev R$3.6b +25% ↗️🟢
- HUBS TPV Share 32.7% 📶
- Gross Profit R$1.3b +14% ↗️🟡
PagBank
- TPV R$115b +68% ↗️🚀
- Rev $329m +7% ↗️🟡
- Deposits R$21b +134% ↗️🚀
- Gross Profit R$131m ↘️⤴️🟢
- ROAE 14% +250bps ↗️🟢
- ARPAC (PagSeguro) R$1.9K +50% ↗️🟢
- ARPAC (PagBank) R$86 ➡️🟡
1 | 2nd Largest Digital Bank in Brazil (after NuBank)
“In December 2022, we had 28 million clients, making us the second largest digital bank in Brazil: a Brazilian tech company made for and focused on Brazilians.”
1 | cont’d
“The unique combination of 40% growth in PagSeguro TPV, leading to R$354bn in Payments, 10% market share in PIX transactions and salary portability led our deposits to surpass important landmarks: R$10bn in the first quarter and R$20bn in Q4.”
2 | Most most profitable fintech/merchant acquirer in Brazil
“…we presented net income growth in GAAP and non-GAAP basis totaling R$1.5bn and R$1.6bn, respectively, consolidating our position as the most profitable fintech/merchant acquirer in Brazil.”
3 | $PAGS over the last 5Y - Solid growth
“Our company truly experienced an exponential growth and the scale over the years…initially through payments, and then through digital bank [and financial] services…always balancing growth and profitability.”
4 | Strong Deposit growth lowered COF and diversifies funding away from CDs
“At the same time, we had strong deposit growth, which helped to reduce our funding costs and helped to diversify our funding resources.”
5 | Successful repricing to recover spreads
“implemented a successful repricing model to recover spreads. At the same time, we gained market share and diversified our merchants base, with HUBs representing more than 30% of our TPV in the last two quarters.”
6 | Shift from Unsecured to Secured
“Regarding credit, we took the right decision in Q1 2022 to shift our credit from unsecured products to secured products. Today, we have 40% of our credit portfolio that is secured. We expect that to reach 60% in the short term…”
7 | Improving Cash Earnings
8 | Strong growth in clients, selective acquisition of merchants leading to negative growth
“working to keep growing payments in a profitable way….Market share, to be honest, is a consequence….growing our TPV in specific segments…long tail micro merchants and the SMBs.”
9 | Credit Losses 4.8% of Revenues - Improving
10 | Trading at ~20% Discount below Book Value (at end 4Q22)
Key Takeaways on PagSeguro. $PAGS
Pivoting from Acquiring/Payments to Digital Bank with PagBank. Continued focus on profitable growth, and improving profitability.
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