STNE

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 5 p.m. ET Chief Executive Officer-Mateus Scherer Chief Financial Officer and Investor Relations Officer-Diego Salgado Head of Investor Relations-Roberta Noronha Operator: Good evening, everyone. Thank you for standing by. Welcome to StoneCo's Second Quarter 2026 Earnings Conference Call. By now, everyone should have access to our earnings release. The company also posted a presentation to go along with this call. All material can be found online at investors.stone.co. Before we begin the call, I advise you to review the disclaimer included in the press release and presentation, which outlines important information about forward-looking statements and non-IFRS financial measures. In addition, many of the risks regarding the business are the Securities and Exchange Commission, which is also available at www.sec.gov. Before we begin, I would like to highlight that the company is restricting the number of questions to one per analyst. Joining the call today is StoneCo's CEO, Mateus Scherer; the CFO and IRO, Diego Salgado; and the Head of IR, Roberta Noronha. I would now like to turn the conference over to Mateus. Please proceed. Mateus Schwening: Thank you, operator, and good evening, everyone. Let me start with some perspective on the quarter. This was a quarter of steady progress on the priorities we laid out earlier in the year, reaccelerating TPV growth through better retention, deepening our banking and credit franchises and keeping a disciplined approach to costs. TPV growth accelerated to 4%, an early signal that the retention initiatives we launched this year are beginning to work, though there is still a lot of work to be done. Banking and credit kept advancing with retail deposits up 22% year-over-year and our credit portfolio now more than doubled its level from a year ago. On costs, we kept expense growth well below revenue growth while scaling the use of AI more broadly across the company. Finally, we continue to return meaningful capital to shareholders throughout the quarter. Having said that, today, I want to spend a few minutes on something that goes beyond the quarterly numbers, how we are positioning Stone today for the long term and how our ecosystem is coming together for the merchants. Let's turn to Slide 3. This quarter, we launched our new brand positioning, Stone, the bank for entrepreneurs. This is not a changing strategy, and it does not depend on anything new. We already have the complete offering: payments, banking and credit, working together in a single relationship. The gap is in the perception. Many clients still see Stone mainly as a payments company. This positioning is our way of closing that gap so that when an entrepreneur needs banking or credit, Stone is part of the consideration from day 1. As that perception builds, it naturally opens the door to more cross-sell, deeper relationships and growth across the ecosystem. To bring this to life, we also launched a campaign film. The link is on this page. Now moving to Slide 4. This is what the bank for entrepreneurs means in practice. Everything starts with a complete account. Money comes in through whatever channel the client sells in person or online, it goes out to pay employees, suppliers and taxes. In between, it stays within Stone, where clients can hold a balance, invest their money or take credit. On its own, this is just what a complete account should do. The difference is what we build around it helping entrepreneurs run their day-to-day by charging customers, issuing invoices, managing orders with AI increasingly doing part of that work from enhancing catalog images to creating content that helps merchants sell more. On Slide 5, we recently reached an important milestone in that direction. Pagar.me, which historically was our digital commerce front has been integrated into Stone. For the merchant, this means online and physical operations in one account with one view of the business. It brings our full digital commerce suite into the Stone platform. And with sales consolidated in one place, we understand the business better, which unlocks more credits and more cross-sell. One brand, one account, one experience. For Stone, this opens a new growth avenue, capturing a larger share of digital transactions, a part of the market that is growing faster than the average. Now let me connect this to our financial commitments for the year on Slide 6. In the first half, we delivered BRL 3.1 billion in adjusted gross profits and BRL 4.58 in adjusted basic EPS against our full year 2026 guidance of BRL 6.6 billion to BRL 7 billion in adjusted gross profit and BRL 10.8 billion to BRL 11.4 in adjusted basic EPS. While our guidance remains achievable, interest rates have stayed higher for longer than expected, making the backdrop considerably more challenging than what we anticipated at the start of the year. In that context, while the scenario today is more challenging than it was last quarter, we continue to be focused on delivering toward the lower end of these ranges. Our year-to-date effective tax rate of 15.4% remains consistent with the mid-teens level we guided to, and we stay disciplined on execution with performance weighted toward the second half as credit revenues compound and our commercial initiatives continues to take hold. With that said, I will pass it over to Diego, who will go over our financial and operating results for the quarter. Diego? Diego Salgado: Thank you, Mateus, and good evening, everyone. Let me start on Slide 7, where we present our main financial metrics for the quarter. Our revenue grew to BRL 3.6 billion, led by credit as our portfolio continues to scale. Adjusted gross profit was broadly stable year-over-year at BRL 1.6 billion as higher revenues and lower financial expenses were offset by the provision expenses that come with the credit portfolio growth. Adjusted net income was down slightly on an annual basis, while adjusted EPS grew 9% with continued share buybacks over the past year, meaningfully reducing our share count. On Slide 8, our active client base reached 4.8 million merchants and ARPAC grew mainly as credit keeps gaining penetration and weight in our client base. Turning to Slide 9. TPV growth accelerated to 4% annually, a small improvement over the pace we saw in the first quarter. We're still facing the churn challenges we detected earlier this year, and they still weight on our overall performance. However, this is the first tangible sign that our initiatives are gaining traction. Our work here is focused on 3 fronts: simplifying our offerings and bundles, aligning sales force incentives and improving client experience to reduce operational friction. So far, the effect is more meaningful on micro merchants as simpler offerings and an easier contact allowed us to move quickly and bring churn down. With larger merchants, the breadth of the offerings and needs make the operation more complex and riskier. And therefore, we calibrated it cautiously before scaling. We expect the benefits of our initiatives to become more visible as the year progresses and therefore, accelerates TPV. Looking at TPV mix, PIX QR Code continues to grow faster than card volumes. In banking, our deposit franchise keeps building. Retail deposits reached BRL 10.8 billion, up more than 20% year-over-year as we further engage clients with our account offerings. On Slide 10, we present the growth metrics of our credit business. Our portfolio reached BRL 3.8 billion, 2x larger than 1 year ago, driven mainly by working capital solutions. During this quarter, we also began disbursing government-backed loans, which already account for roughly BRL 300 million of our portfolio, while credit cards reached BRL 400 million. Moving to revenues. Given the continued growing contribution of our credit card, we have revisited our credit revenue and yield metrics to include credit card interchange fees as we see it as part of the overall product P&L. Credit revenues grew 14% in the period with flattish yield. This stability reflects the entry of government-backed lines, which carry lower rates and lower risk profile. That takes me to Slide 11, where I want to spend some time explaining how government-backed facilities will impact our P&L going forward, considering its growing relevance in our portfolio. Let me first explain how we segregate clients on working capital products based on the 2 main distribution channels we have. Our automated debt handles the smaller tickets about BRL 40,000 and typically up to 18 months tenor at an average rate of 4% per month. Our dedicated desk serves larger clients with an average ticket today closer to BRL 700,000, but with tenors going up to 30 months and lower rates of roughly 2.5% per month. Through those desks, we are currently operating 2 government programs, each with a different profile and focus. We began disbursing FGI PEAC in April, and it has already gained some relevance in our book. And the second program we just launched, so it's still very small. What these programs have in common is the guarantee that reduces losses upon an event of default from a client of ours, considering the reimbursement of guarantees that we obtain from the government. As a result, this reduction on provision expenses affects the coverage for loans on Stage 1 and 2. This kind of guarantee allows us to be more aggressive in pricing for clients where we were previously not that competitive, improving the risk-adjusted returns on what we lend. In short, this is about expanding access to credit and deepening merchant relationships while keeping the risk profile of our growth under control. On Slide 12, we turn to credit quality and cost of risk. In the quarter, provision expenses reached BRL 188 million. The growth on expenses is a combination of: first, the record expansion of the portfolio; second, the roll-forward effect of the loans disbursed in late 2025 and early 2026 that are moving to later provisioning stages. And finally, the continuous pressure that we've been noticing on the dedicated desks with records in bankruptcy protection filings all over the country. Although the dedicated desk represents less than 25% of our total merchant portfolio and the average ticket today is at BRL 700,000, as I've mentioned, we've been facing defaults precisely on some of the largest tickets we have in our books, in some cases, north of BRL 10 million. On the other hand, on the automated desk, the improvements that we rolled out during the second quarter are showing significant results with first payment defaults consistently trending down and the June cohort presenting the best result during the last 12 months. These combined effects pushed our NPLs higher across all indicators and kept the cost of risk at 21.5%. On coverage, the ratio came down to 204%, and I want to address that directly. Two main effects explain the move. One, it's mix related and the other is simply a mechanical effect. In the mix, we're steering new disbursements toward better-rated clients and ramping our government-backed facilities, which carry a guarantee and therefore, require lower provisioning. Therefore, these 2 effects combined structurally lower the coverage we need to hold. The mechanical part is simply the math of a seasoning book. This quarter, our over 90 NPLs grew faster than our provisions as the strong late 2025 and early 2026 vintages rolled into over 90 buckets, while write-offs, which clear the oldest and most heavily provisioned loans come with a lag. Slide 13 provides a bit more color of the NPL composition by product and channel. On the short end, sequential increase came mainly from new delinquency cases in our dedicated debt, as I've mentioned. The automated desk by contracts actually pulled this early metric down, in line with the improvements of first payment default metrics we previously mentioned. Later stage delinquency tells the opposite story. Here, the automated desk was the main driver of the increase as weaker vintages are rolling forward to over 90 days stage. On Slide 14, we present the evolution of our cost and expenses. Cost of services, excluding provisions, was broadly flat year-over-year as we continue seeking operational leverage using technology and start benefiting from the workforce reduction carried out in the first quarter. Net financial expenses have been flattish for quite some time now as we've been growing client deposits. This shows in our funding costs, which has come down to roughly 85% of CDI. Admin expenses were lower year-over-year on reduced personnel and third-party services expenses. Selling expenses were up modestly on higher marketing investments, partially offset by lower distribution channel expenses. Other operating expenses were higher year-over-year, mainly reflecting a nonrecurring gain in the prior year and higher net provisions for POS. These effects were partially offset by lower share-based compensation. Our effective tax rate was 16.4% in the quarter, slightly higher than the mid-teens implied in our guidance. We certainly have a long path toward the efficiency levels we want, but we'll keep evolving in time. Finally, on Slide 15, we present our capital position and return on equity. Our capital ratio stood at 26%, normalizing after the extraordinary dividend paid in May from the Link sale proceeds. In total, we have already returned BRL 4.3 billion to shareholders during the first half of the year. To wrap it up and coming back to Mateus' opening remarks, this was a quarter of steady execution. TPV growth is reaccelerating. Our banking franchise keeps building up and credit continues to scale despite the short-term headwinds we keep facing. Ultimately, this all comes down to the merchant. Our goal is to be the bank that Brazilian entrepreneurs rely on to run and grow their businesses. And we believe that improving our banking and credit capabilities, it's how we deepen that relationship over time. With that, let's open it up for questions. Operator: [Operator Instructions] Our first question comes from Eric Ito from Bradesco BBI. Eric Ito: I have 2 here on my side. The first one, I think in the release, we saw a BRL 200 million nonrecurring allowance for expected losses on the issuers in distress. So could you please just give us some color on the main trends there? Or what's the -- what happened there? Just for us to have more color on that? And then the second one, I'd like to touch on the credit. I think you guys provided very good details on the different desks. But my question is toward the government-backed loans already reaching BRL 330 million in the quarter. So I just wanted to see if you could share more expectations going forward? And how does that change your guidance for credit book forward? Mateus Schwening: Eric, thanks for the question. So I will start giving some context around the provisions and then hand it over to Diego to talk about the accounting piece and the path forward as well as the credit question. So in terms of the provision we did for issuers for selected issuers this quarter, maybe it's worthwhile to give some context on the topic. As you know, the Central Bank has ordered the liquidation of a large financial group earlier this year. And one of the subsidiaries of that group was a sizable credit card issuer. It now has a little bit over 90 days since we last received the cash flow from that issuer. And then as a matter of accounting prudence, we decided to do the provision. But in terms of how we evolve from here, we have the position that ensuring that these amounts get settled by the issuers is the role of the card networks. And the reason for that is quite straightforward in our view. Just to give you some example and some color on that, whenever a merchant accepts a credit card transaction, usually, the merchants don't look at who is the name of the cardholder or who is the issuer behind the transaction. And in order for that to work, the merchant acquirers need to trust the networks to manage the risk of their members. and to ensure that every transaction that is authorized gets settled to the merchant acquirers so that we can pass it through our merchants. If we merchant acquirers had to underwrite every issuer one by one and then accept only those that we judge to be creditworthy, the credit card itself would lose a lot of the value that makes it such a good item to make purchases of services and goods, and the system would be worse off. So in summary here, we do have an issuer that has been liquidated. It has been more than 90 days since we last received. And while we do expect to settle this issue and receive the settlements that are due to us, for a matter of accounting prudence, we decided to make the provisions. I'll hand it over to Diego to give some more color on that and to address the credit question as well. Diego Salgado: So Eric, thank you very much for the question. As Mateus mentioned, since the asset -- since the last time that we collected from that issuer was over 90 days ago, we decided to treat the asset as a distressed asset and start provisioning accordingly. So we are being prudent on the balance sheet manage, and you should always expect that from us. We are adjusting this effect in our results because we understand it's just a temporary effect arising from our accounting standards and not our view on the recovery. We understand it is the responsibility of the network to ultimately settle these amounts, as Mateus just mentioned, as it's very clear on the Central Bank legislation, who bears the responsibility for the risk management. This is not the first time that an issuer goes bankrupt in Brazil. And historically, we have always collected 100% of these accounts receivables from the networks, precisely because of that chain of responsibility and trust that Mateus just mentioned, which is what creates value to the overall system. So I'm cautiously optimistic about a good outcome here, but we're going to be very careful with the balance sheet management. To your second question on the government programs and the overall impact on the forecast or on the guidance and so on, it doesn't change anything. When we -- during the last quarter, mentioned that you should expect cost of risk to trend down to the mid- to high teens. We already had some of that in mind. naturally, the mix of the disbursements on a quarter-over-quarter basis may fluctuate. So it's not every quarter that we're going to be disbursing the same mix of products to the same kind of clients, so on and so forth. So it's natural to have some short-term fluctuation. But the guidance still stands that cost of risk will trend down to that mid- to high teens in the medium term, probably ending the end of the year already at the high teens level. Eric Ito: Perfect. Just to be clear on the first point here, you mentioned, Diego, that you are optimistic with the outlook. So going forward, we shouldn't expect more provisions, just to make sure if we should expect more provisions related to that. And then the recovery will depend on the process. That's correct? Diego Salgado: So we may need to provision more. What we have -- the provision level that we have today, it's a weighted probability scenario for different outcomes, including a possible litigation. So all cards are on the table. I'm optimistic about a positive outcome because of the reasons we've mentioned. We think a possible litigation destroys value for everybody. So we think it's just a matter of time getting to that agreement, but it may occur that it won't happen during the next quarter or it won't happen at all. So we need to be ready for everything. In terms of size, which I'm pretty sure is going to be your next question about what -- how much else we may need to provision. Our total exposure reflects the market share that we have in payments generally. So the exposure that we have for this issuer is proportional to our market share, just as it is to any given issuer. Operator: Our next question comes from Daniel Vaz from Safra. Daniel Vaz: I was looking at your 2026 guidance, which you kept unchanged. You need to catch up a bit under your run rate. I know the fourth quarter usually is stronger, but to reach the low end of gross profit and looking at your revenue trajectory like quarter-over-quarter, it didn't looked so well when we compare to the TPV, which has recovered quite a bit. So congrats on that. But mostly on PIX, right? So PIX might not be bringing the same unit economics as the card when we look to your financial income. And then you have a headwind on the other financial income portion given that you would not have the same cash position, right? So how can we deliver the low end of the guidance with the new take rate levels that look a bit more sluggish than your past? And if the costs, the COGS, which you delivered a good COGS this quarter, is that where you want to surprise or where you want to have your most upside to deliver the low end? So how to treat this balance between revenues with take rates and headwinds from the cash position and then your COGS, is there where you want to meet the guidance between -- with the costs and not the revenues? Diego Salgado: Thank you very much for the question. So the gross profit was flattish during the first half of the year, mainly because of the reasons we've mentioned in the presentation. So credit revenues keep adding to the top line, payments revenue, not necessarily because of lower prices, marginal lower prices in payments, which you've mentioned as well. But most importantly, what weights is the cost of provisions that come with the credit portfolio growth. As to the end to the second half of the year, we expect growth to accelerate both on credit card TPV, but also on PIX, as we've mentioned, and we start benefiting more from the churn initiatives that we've mentioned. So these things, combined with the credit portfolio growth and an improvement on the overall risk profile that we have for the portfolio should capture an additional benefit for the gross profit during the second half of the year. That said, when we set our guidance for the year, we assumed that the Selic would end 2026 at 12.5%. And today, that number is probably closer to 14%, maybe 0.25 point below that depending on what happens on the next Central Bank meeting. And as we have disclosed already, every 100 basis points on Selic carries a pre-tax impact of roughly BRL 200 million to BRL 250 million. So rates alone are a headwind north of BRL 300 million for 2026. On top of that, the credit environment has been tougher than we all expected, in line with what the broader market is seeing. None of this changes our guidance ranges, as we've mentioned before, but it does make the backdrop more demanding than it was at the start of the year, which is why we're focused on delivering toward the lower end of the guidance. I don't think it's going to have to do with the total cash balance of the quarter or of the year or the benefits that we have on the second quarter in COGS. Daniel Vaz: Okay. And if I may follow up, do you have any specific target for your cost of risk for the second half of the year? Diego Salgado: So it's going to trend down to those high teens that we've mentioned. Naturally, the -- as I've mentioned, short-term fluctuations are natural because of the mix of the disbursement, but there also may occur because of specific cases on the dedicated desk. As we've disclosed, for example, this quarter, a big impact that we had on the 15 to 90 days NPLs were cases coming from the dedicated desk, and that's hard to forecast when those cases will happen if they do happen. So short-term fluctuations may occur, but we are optimistic about going down to those mid- to high-teen levels that we've always guided the market. Operator: Our next question comes from Antonio Ruette from BofA. Antonio Gregorin Ruette: So my question is actually a follow-up on Vaz's question related to the cost of risk in the credit business. So my question goes on this large cases of the dedicated desk. If you could provide a little bit of detail of what happened here. So why you decided to move to these clients and which kind of problem did you have? And how are you addressing this going forward, did you reduce the size of loans that you are originating the size of clients going forward? That's pretty much it. Mateus Schwening: Antonio, thanks for the question. So I'll give a little bit of color and then talk about the changes that we've made. But first of all, you're right, we have seen some delinquency case in the dedicated desk. And I think Diego mentioned this in the call -- in the beginning of the call as well, that the delinquency we saw was particularly among the larger ticket exposures that we have on the desk. If you remember the overall profile of the desk, we have an average ticket of around BRL 700,000, which is precisely the core clients that we serve. It's part of the core offering. But whenever we try to disburse to higher clients, I think we were a little bit exposed to the record judicial recuperations that we're having in the country as well, and that's part of the problem. In terms of how we are addressing that, I would say we're doing 2 main things. The first one is that we're shifting originations toward the government-backed credit lines. particularly for clients where we do not have a long-standing relationship or sufficient historical data prior to the disbursement. And the second thing, we are minimizing the amount of maximum tickets on the dedicated desk so that we don't have exposure to any single clients that can hurt the portfolio or create volatility going forward. So overall, the things I would say is that the dedicated desk itself is part of the core offering. It's something that we have some success whenever we stay around our core clients. I think the issue here has been related to specific cases, especially when we had higher tickets. Diego Salgado: And Antonio, just to add a little bit more color on what Mateus was saying, there are different cases, naturally, but just to give you an example, one of the cases that we had on the second quarter was a no client of ours, both in payments and software, which had a long-standing relationship, a large client. We had a ticket of BRL 11 million, if I'm not mistaken, BRL 11 million or BRL 12 million, large list of banks, so on and so forth. And we were supporting that client because of the overall business that we were getting from them. We started discussing them banking opportunities. And then we were all taken by surprise with this account -- with this client filing for bankruptcy protection. Once that happens, we move that client immediately from Stage 1 to Stage 3, and that has an impact on the overall metrics. Antonio Gregorin Ruette: This is great color. If I may follow up on this. When you look at most of your large corporate cases, are these usual clients that were distressed by poor macro and high rates? Or you consider that most of them are some kind of fraud or it's more macro related? Mateus Schwening: No, this is mostly macro related. In this case, Antonio was a large retailer. Operator: Our next question comes from Neha Agarwala from HSBC. Neha Agarwala: You mentioned in your press release that you've seen good results from your efforts in the TAM clients, but you're still working on the SMB clients. Could you explain why it has been a bit more difficult to gain back the SMB clients? And are you already seeing improvements starting third quarter, so we can see the results in 3Q? Or would it take a bit more time for the SMB churn to reduce? Mateus Schwening: Thanks for the question. I can give some color and then maybe Diego can add. So it is true that we've seen more success faster in the micro merchants. And the reason for that is quite simple, which is the offer for micro merchants is usually a lot simpler and the distribution channel is also a lot simpler. Whenever we talk about SMBs, usually the base spans different offerings, different channels and different needs. And because of that, there is no single fix. So we have to adjust offers in many different segments and intensify the retention work, which is, by definition, spread out. These changes when we talk about SMB, there are no silver bullets, and they require by design, a lot of testing and careful calibration before we roll out. So I wouldn't say that we were unsuccessful in these initiatives. I think by nature of the SMB business, we need to test more and the rollout takes a lot more time. But when we see the results that we're having, the reality is that both trends are improving in both the micro merchant segments and within SMBs. I think it's just the definition that it's not a silver bullet. It's gradual. And therefore, when we talk about TPV acceleration, it's going to be gradual as well. I don't think it's going to be the flip of a switch. Diego Salgado: Yes. Just to add on Mateus, Neha, most of the capital that we deploy in terms of selling goes toward SMBs. Most of our TPV comes from SMBs. So it's a very large engine, and you've got to be careful when changing it significantly. So these things take time. We're evolving. We're optimistic about it, but it's going to take a little bit longer than we would like. Neha Agarwala: Perfect. If I can ask one more question. We've seen very strong growth and a mix shift toward the PIX volumes. And I believe you've been giving some offers where you are giving -- PIX volumes are being processed for free or at very low rates. Should we expect continued pressure on take rate coming from that? And also as you try to reduce churn, you probably are giving more benefits to the merchants. So should we see pressure on take rate coming more from your initiatives and the change in mix? Diego Salgado: Neha, so again, yes, on the margin, take rates in payments are falling. -- mostly as a result of mix because of what you just described, right? PIX is getting -- it's growing proportionately on total TPV. And in some segments, there are other price moves as well. That said, we've been saying for quite some time now that looking at take rates by product tells less of the story as we price the clients' relationship and not the product on a stand-alone basis. It's not uncommon already to have clients with very small take rates in payments, which we would typically reprice in other times of the company, but that today, we bundle with credit and payments, bringing economics to very healthy levels. So once the client is on the base, we manage the relationship holistically and not looking at payments on a stand-alone basis or credit on a stand-alone basis. Mateus Schwening: And just to add on that, Diego, when you look at our offerings in place, I don't think we have offers in place where we provide peaks for free unconditionally. It's usually tied to a certain commitment of volume or any other commercial agreement as well, which connects to what Diego has just said, which is we really look at the unit economics on a broad-based. And I think it's not a good proxy of unit economics to look at those offerings on a piece by piece. Operator: Our next question comes from Arnon Shirazi from Citi. Arnon Shirazi: My question is maybe related to the communication with the client base. From the past conversations we had, it was clear that have some problems communicating with them, mostly with core SMB clients, while for clients, it seems that the communication got better as was just addressed in the past question from Neha. But how is the communication with the larger SMB clients? And how the offer is improving. I see that the integration with Pagar.me is part of this math, but it would be great to have more information on that. Diego Salgado: We keep evolving on that front. It's still easier to reach out to a micro merchant than to an SMB, especially when it becomes a larger client, which is not necessarily looking at the app every single day or looking at our communications every single day. So it takes -- those are 2 different processes. So we keep evolving on that front and communicating better both new offerings, both the current profiles or plans in which the clients are currently assigned. But it's a longer journey than simply fixing it from one quarter to the other. Arnon Shirazi: Okay. I got it. But there's any expectation on that? Like should we see that advancing by the end of this year or something for -- sorry for 2027? Diego Salgado: It's going to be a gradual process that will certainly come with lower churn. So you will see that gradually. And the best way to see it, it's not going to be on any other metric other than churn. Operator: Our next question comes from Renato Meloni from Autonomous Research. Renato Meloni: Can you expand your comments a bit on your net revenue from transaction activities declining 11% sequentially here, the opposite way from TPV. If you can maybe comment on like how that's pricing mix affecting that or potentially some reallocations in the numbers? Diego Salgado: Basically, we had lower revenues from incentives that we get from the card networks related to our activities as credit card issuer. So every now and then, we collect certain incentives from the networks. Some of those incentives occurred in the first quarter and didn't occur on the second quarter. So short-term fluctuations. Renato Meloni: Perfect. So we shouldn't expect to see anything like that over the coming quarters? Diego Salgado: No. Operator: Our next question comes from Guilherme Grespan from JPMorgan. Mateus Schwening: We're not hearing the question. Operator: Guilherme Grespan is having some technical problems. We are heading on to the next one. Our next question comes from Mr. Pedro Leduc from Itau BBA. Pedro Leduc: A question on financial results, both income, but more expenses slide down a bit sequentially. Year-over-year, it seems very controlled as well. Can you remind us a little bit your strategy here, how you are in terms of own and third party? And maybe what we should also think for the next quarters here, if there are any levers that we should think about? Or is it just the lower effect from the Selic maybe? Diego Salgado: Pedro, thank you for the question. There were 2 combined effects here. So first, yes, Selic is slightly lower on average this quarter than it was last quarter or at the same period of last year. But most importantly, we had more deposits from clients on average deployed on the operation. The mix of own capital and third-party capital has been pretty much the same as the amount of capital that we've been generating every quarter has been pretty similar to the amount of capital that we have returned to shareholders every quarter through buybacks. So I'm excluding here the extraordinary effect of Linx dividends. As to levers for the following quarters, if any, I would be more cautious on it. basically because we expect assets to grow faster than deposits until the end of the year. Let's see how that dynamic will evolve. Hopefully, assets will keep growing faster. And therefore, there may be pressure on financial expenses. Operator: Our next question comes from Mr. Guilherme Grespan from JPMorgan. Guilherme Grespan: Can you hear me? Mateus Schwening: Yes, we can now. Guilherme Grespan: So my question is specifically on the credit and the government programs. And sorry about the -- I couldn't ask before, but on the government programs, of course, it seems to be a very important point of growth to the business nowadays. So I have twofold questions here. Number one, if you can explain a little bit in more details what is the risk waterfall of the programs, how much the government guarantees in terms of NPLs, especially I think PEAC is the one that is most relevant to you. Correct me if I'm wrong, but I think it is. And the second one is just how you're going to treat provisions. Diego mentioned that part of the lower coverage would be natural to be driven by the government programs. How you handle provisions in this case? Like if you have the guarantee of the government, do you provision at all or no? How it works this timing mismatch between when you have the default and when you receive the owner of the government? Diego Salgado: Awesome question, Guilherme, and that's precisely why we added Page 11 on the materials. So the waterfall of the programs are similar in the objectives, but each one of them has its own nitty-gritty detail depending on what's the public to whom you're lending, what's the size of the company, so on and so forth. But on average, especially on PEAC, the government guarantees roughly 75% of the defaulted amount. So the loss given default for a credit under PEAC. On average, it's about 25%, which is materially lower than what we have in our overall portfolio. That's the reason why we have to provision less upfront when underwriting that credit. Other programs, not only the Sebrae facility that we have here on the mature that we didn't talk very much, but others that we've been working on will have different risk profiles, but the rationale is similar. So because of the guarantee upon a loss, we provision less upfront. So whenever one of those credits roll into default, the coverage, especially on Stage 2 will drop and the coverage for the loans between 15 and 90 days will drop because we have the right to collect the guarantee from the government on the 91st day after the default. So it doesn't affect that much the coverage for Stage 3 or for over 90-day credits, but it does affect significantly the coverage for Stage 2 and for short-term NPLs. Operator: Our next question comes from Mr. Kaio Prato from UBS. Kaio Penso Da Prato: I have 2 on my side, please. The first one is a follow-up on the credit portfolio. You talked about the -- I think you comment about -- could you comment about your current appetite on both the dedicated and the automated desk given the current credit landscape that you talked about now. Today, we already noted some contraction month-over-month on your portfolio under the FDIC as of July. So just wondering if this scenario implies a reduction in the pace of growth at this point, specifically on these 2 fronts, please? And the second one is in terms of your D&A. We noted a reduction on your D&A this quarter, allocated both in costs and selling expenses. If you can share a little bit more color on the drivers behind that? And what can we expect in terms of D&A going forward as well? Mateus Schwening: Thanks for the question. I'll take the first one around credit growth appetite and then hand it over to Diego for the second one. So in terms of appetite for growth, we are very mindful that the macro environment has been very tough for -- especially for Brazilian MSMBs with rates being very high for so long, probably now over 3 years of high rates. And this, of course, weighs a lot on our clients. That said, we continue to see a lot of room for profitable growth because when we look at our share of wallet within our own client base, it is still really small. We estimate that our share of wallet within our own client base at credit is still at around mid-single digits. So the opportunity remains large, and we feel that we are in a strong position of lending to clients whose daily sales flow through our platform as well. In terms of how we navigate this environment that is tough while having a share of wallet that is still low. If you remember a couple of quarters ago, we started by proactively raising prices toward the second half of last year in anticipation of this tougher macro environment. And now what we are increasingly doing is shifting the portfolio mix toward lower risk exposure, focusing on government-backed programs that, like Diego mentioned in the previous question, have a risk-sharing profile built into itself. And in terms of the dedicated desk, I think I approached this in a previous question as well, but we're taking a more conservative approach, especially in regards to ticket size. So overall, I think the message is that we still have appetite to grow the book. And the second thing that I would mention, you mentioned the FDIC data as well. I wouldn't read too much into the FDIC data, especially now that we have not only many other products, but also the facilities from the government, not necessarily every disbursement will go through a FDIC itself. So I think the FDIC data becomes a read or a proxy that is not as good going forward. So in summary, I think we remain comfortable growing the portfolio. We are taking a cautious approach because we think the environment is tough. But again, I think there's a lot of room going forward. Diego Salgado: Kaio, on the D&A, it's fairly simple. We can take it offline if you want. But basically, this is just an improvement in our accounting practice that has no effect on the P&L. Basically, we had a provisioning mechanism for POS of inactive clients that was fully provisioned, but existed with a positive value in one line of the balance sheet and the same negative value in another line. So what we're doing now is merging these 2 effects on the P&L. So it's really just a mix effect between lines. Operator: The question-and-answer section is over. We would like to hand the floor back to CEO, Mateus Scherer, for the company's final remarks. Mateus Schwening: Thank you all for the support, and we see you in the next earnings call. Operator: StoneCo's conference call is now closed. We thank you for your participation and wish you a very nice day. Before you buy stock in StoneCo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and StoneCo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* Now, it’s worth noting Stock Advisor’s total average return is 973% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends StoneCo. The Motley Fool has a disclosure policy. StoneCo (STNE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: R$3.6 billion in Q2 2026, led by credit portfolio scaling. Adjusted Gross Profit: R$1.6 billion, broadly stable year-over-year. Adjusted Net Income: Down slightly on an annual basis. Adjusted EPS: Grew 9% year-over-year, aided by share buybacks. TPV Growth: Accelerated to 4% annually. Active Clients: Reached 4.8 million merchants. Retail Deposits: R$10.8 billion, up over 20% year-over-year. Credit Portfolio: R$3.8 billion, two times larger than one year ago. Credit Revenues: Grew 14% in the period. Provision Expenses: R$188 million in the quarter. Cost of Risk: 21.5%. NPL Coverage Ratio: 204%. Effective Tax Rate: 16.4% in the quarter. Capital Ratio: 26%. Shareholder Returns: R$4.3 billion returned in the first half of 2026. Warning! GuruFocus has detected 6 Warning Signs with STNE. Is STNE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. TPV growth accelerated to 4% annually, signaling early success from retention initiatives. Retail deposits grew 22% year-over-year, strengthening the banking franchise. Credit portfolio more than doubled year-over-year, driven by working capital solutions and government-backed loans. Adjusted EPS grew 9% year-over-year, supported by continued share buybacks. Expense growth remained below revenue growth, with cost of services flat year-over-year and admin expenses lower. Higher interest rates than expected create a challenging backdrop, pressuring guidance toward the lower end. Provision expenses increased due to credit portfolio growth and delinquency cases on the dedicated desk, including large tickets over R$10 million. NPLs rose across all indicators, with cost of risk at 21.5% and coverage ratio down to 204%. A non-recurring provision of R$200 million was taken for a distressed credit card issuer, with potential for further provisions. Churn challenges persist, especially among SMB clients, with slower progress in reducing churn for larger merchants. Q: Can you provide more color on the $200 million non-recurring allowance for expected losses on issuers in distress, and how will the government-backed loans, which reached $330 million in the quarter, change your credit book forecast?A: CEO Mateus Schwening explained that the provision relates to a large financial group ordered into liquidation by the central bank, which included a sizable credit card issuer. Since it has been over 90 days since the last cash flow was received, the company made a prudent provision. He emphasized that the responsibility for settling these amounts lies with the card networks, as merchants trust networks to manage issuer risk. CFO Diego Salgado added that historically, StoneCo has always collected 100% of these receivables from networks, and he is cautiously optimistic about recovery. Regarding government-backed loans, Salgado stated that this does not change the guidance, and the cost of risk should still trend down to mid-to-high teens, potentially ending the year at high teens levels. Q: How can you deliver the low end of your 2026 guidance given the sluggish take rates, headwinds from cash position, and the need to catch up on gross profit run rate?A: CFO Diego Salgado explained that gross profit was flattish in the first half due to credit portfolio growth offset by provision expenses. For the second half, growth is expected to accelerate in credit, TPV, and PIX, with benefits from churn initiatives. He noted that the guidance assumed a Selic rate of 12.5% by end of 2026, but it's now closer to 14%, creating a headwind of over R$300 million. Despite this, the guidance remains achievable, though the company is focused on delivering toward the lower end of the ranges. Q: Can you provide details on the large cases in the dedicated desk that caused delinquency, and how are you addressing this going forward?A: CEO Mateus Schwening explained that the delinquency cases were particularly among larger ticket exposures on the dedicated desk, with average tickets around R$700,000. The company was exposed to record judicial recuperations in the country. To address this, StoneCo is shifting originations towards government-backed credit lines for clients without longstanding relationships, and minimizing maximum ticket sizes on the dedicated desk to avoid single-client exposure. CFO Diego Salgado added an example of a large client with an R$11-12 million ticket that filed for bankruptcy protection, which moved immediately from stage one to stage three. Q: Why has it been more difficult to reduce churn among SMB clients compared to micro-merchants, and are you seeing improvements starting in the third quarter?A: CEO Mateus Schwening explained that micro-merchants have simpler offerings and distribution channels, making it easier to implement changes quickly. SMBs span different offerings, channels, and needs, requiring more testing and careful calibration before rollout. He noted that both trends are improving, but the process is gradual rather than a "flip of a switch." CFO Diego Salgado added that most of the capital deployed in selling goes towards SMBs, and since they represent most of the TPV, changes must be made carefully, taking longer than desired. Q: Should we expect continued pressure on take rates from the mix shift towards PIX volumes and from initiatives to reduce churn?A: CFO Diego Salgado acknowledged that take rates in payments are falling, mostly due to mix as PIX grows proportionally. However, he emphasized that StoneCo prices the client relationship holistically, not products on a standalone basis. Some clients have very small take rates in payments but are bundled with credit, bringing economics to healthy levels. CEO Mateus Schwening added that PIX is not offered for free unconditionally; it's tied to volume commitments or other commercial agreements, and unit economics should be viewed on a broad base. Q: Can you explain the risk waterfall of the government programs, particularly PEAC, and how you handle provisions given the government guarantee?A: CFO Diego Salgado explained that on average, the government guarantees roughly 75% of the defaulted amount under PEAC, making the loss given default about 25%, materially lower than the overall portfolio. Because of this guarantee, StoneCo provisions less upfront. When credits roll into default, the coverage for stage two and short-term NPLs (15-90 days) drops because the company has the right to collect the guarantee from the government on the 91st day after default. This doesn't significantly affect coverage for stage three or over-90-day credits. Q: What is your current appetite for growth on both the dedicated and automated desks given the current credit landscape, and can you explain the reduction in DNA?A: CEO Mateus Schwening stated that StoneCo remains comfortable growing the portfolio, as the share of wallet within their own client base is still around mid-single-digits. The company is shifting portfolio mix towards lower-risk government-backed programs and taking a more conservative approach on the dedicated desk regarding ticket sizes. He cautioned against reading too much into FIDC data as not all disbursements go through FIDCs. CFO Diego Salgado explained the DNA reduction as an improvement in accounting practice with no P&L effect, merging a fully provisioned mechanism for POS of inactive clients that existed with positive and negative values on different balance sheet lines. Q: Can you expand on the net revenue from transaction activities declining 11% sequentially, opposite to TPV growth?A: CFO Diego Salgado explained that the decline was due to lower revenues from incentives received from card networks related to activities as a credit card issuer. Some incentives occurred in the first quarter but not in the second, representing short-term fluctuations. He confirmed that this should not be expected to repeat in coming quarters. Q: How are you managing financial expenses, and what levers should we consider for the next quarters?A: CFO Diego Salgado explained that two combined effects drove the results: a slightly lower Selic rate on average and more client deposits deployed in the operation. The mix of home capital and third-party capital has remained stable, with capital generated each quarter similar to capital returned through buybacks. Looking forward, he cautioned that assets are expected to grow faster than deposits, which may create pressure on financial expenses. Q: How is communication with the larger SME clients improving, and should we expect to see advancements by the end of this year or in 2027?A: CFO Diego Salgado acknowledged that reaching SMB clients is more challenging than micro-merchants, as larger clients don't engage For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a reacceleration in TPV growth to 4% and a doubling of the credit portfolio year-over-year, reflecting early success in retention initiatives. Management launched a new brand positioning, 'Stone, the bank for entrepreneurs,' to close the perception gap and establish the company as a primary banking partner from day one. The integration of Pagar.me into the Stone platform consolidates online and physical operations into a single account, unlocking deeper merchant insights for credit and cross-selling. Banking franchise growth was supported by a 22% year-over-year increase in retail deposits, enhancing the company's funding profile to roughly 85% of CDI. Operational leverage was achieved by keeping expense growth below revenue growth while scaling AI applications for merchant catalog and content management. Management noted that while the ecosystem strategy is working, the macro backdrop is considerably more challenging than anticipated at the start of the year due to 'higher for longer' interest rates. Management is now targeting the lower end of its 2026 adjusted gross profit (BRL 6.6B to 7.0B) and adjusted basic EPS (BRL 10.8 to 11.4) guidance ranges. Guidance assumes a significant headwind from interest rates, with every 100 basis points on Selic carrying a pretax impact of roughly BRL 200 million to BRL 250 million. Credit cost of risk is expected to trend down to the high teens by year-end as the portfolio mix shifts toward government-backed facilities and better-rated clients. TPV acceleration is expected to be gradual as retention initiatives for the complex SMB segment require more testing and calibration compared to the micro-merchant segment. The company plans to continue returning capital to shareholders, having already returned BRL 4.3 billion in the first half of 2026. A BRL 200 million non-recurring provision was taken for a liquidated credit card issuer, though management expects to eventually recover these funds from the card networks. The dedicated credit desk faced pressure from record bankruptcy protection filings in Brazil, including a specific BRL 11-12 million default from a long-standing retail client. Credit coverage ratio decreased to 204% due to a mix shift toward government-backed loans (FGI PEAC) which require lower provisioning due to 75% loss guarantees. Management is proactively reducing maximum ticket sizes on the dedicated desk to minimize single-client exposure and volatility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management treated the asset as distressed after 90 days of non-payment for accounting prudence but remains 'cautiously optimistic' about recovery. They asserted that card networks bear the ultimate responsibility for risk management and settlement of authorized transactions under Central Bank legislation. Management acknowledged that the current Selic rate environment (near 14%) creates a headwind of over BRL 300 million compared to their initial 12.5% assumption. Growth in the second half is expected to be driven by credit revenue compounding and improved risk profiles, despite the demanding macro backdrop. Government programs like FGI PEAC guarantee roughly 75% of defaulted amounts, allowing Stone to be more aggressive in pricing for competitive clients. These programs structurally lower the required upfront provisioning and Stage 2 coverage because guarantees are collectible 91 days after default. Micro-merchant churn improved quickly due to simpler offerings, whereas SMB retention requires complex adjustments across multiple bundles and channels. Management emphasized there is 'no silver bullet' for SMBs; improvements will be gradual and visible primarily through steady TPV acceleration.

Interested in StoneCo Ltd.? Here are five stocks we like better. StoneCo’s Q2 performance improved operationally: TPV grew 4% year over year, revenue reached BRL 3.6 billion, and EPS rose 9% despite largely flat adjusted gross profit. Management maintained 2026 guidance but is now focused on reaching the lower end because Brazilian interest rates are expected to remain higher for longer. Credit and deposits expanded rapidly, alongside rising risk: The credit portfolio more than doubled to BRL 3.8 billion and retail deposits grew over 20% to BRL 10.8 billion, but provisions reached BRL 188 million and cost of risk was 21.5%. Management cited defaults among larger exposures and expects cost of risk to improve toward the high teens by year-end. StoneCo is pursuing deeper merchant relationships through its “bank for entrepreneurs” positioning, retention initiatives and the integration of Pagar.me. The company returned BRL 4.3 billion to shareholders in the first half, while warning that additional provisions may be needed for distressed card-issuer exposures. 2 Digital Payment Platforms That Are Crushing PayPal and Square StoneCo (NASDAQ:STNE) reported second-quarter 2026 results marked by accelerating total payment volume growth, expanding banking deposits and a larger credit portfolio, while management said elevated interest rates and credit-market pressure have made its full-year targets more challenging. Chief Executive Officer Mateus Scherer Schwening said the company made “steady progress” on its priorities, including merchant retention, banking and credit expansion, cost discipline and shareholder returns. Total payment volume, or TPV, grew 4% year over year, an improvement from the first quarter that management said reflects early progress from retention initiatives. → Lumentum Just Delivered the AI Growth Investors Wanted StoneCo Stock May be Basing Like a Rock StoneCo also introduced a new brand positioning, “Stone, the bank for entrepreneurs,” intended to increase awareness of its broader payments, banking and credit offerings. Schwening said many customers continue to view Stone mainly as a payments company, while the company is seeking to deepen relationships through its full financial-services ecosystem. Revenue reached BRL 3.6 billion in the quarter, supported by the scaling of the credit business, according to Chief Financial Officer and Investor Relations Officer Diego Ventura Salgado. Adjusted gross profit was broadly unchanged from a year earlier at BRL 1.6 billion, as revenue growth and lower financial expenses were offset by higher loan-loss provisions tied to credit portfolio expansion. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal StoneCo Ltd. Stock is in Turnaround Adjusted net income declined slightly year over year, while adjusted earnings per share increased 9%, which Salgado attributed to a lower share count following share repurchases. For the first half, StoneCo generated BRL 3.1 billion in adjusted gross profit and BRL 4.58 in adjusted basic earnings per share. The company maintained its 2026 guidance of BRL 6.6 billion to BRL 7 billion in adjusted gross profit and BRL 10.80 to BRL 11.40 in adjusted basic EPS. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be However, Schwening said the company is focused on reaching the lower end of those ranges because interest rates have remained higher for longer than management expected at the start of the year. Salgado said StoneCo had assumed Brazil’s Selic benchmark rate would end 2026 at 12.5%, compared with a current expectation closer to 14%. He said each 100-basis-point change in the Selic rate has a pretax impact of roughly BRL 200 million to BRL 250 million. Management expects performance to be weighted toward the second half as credit revenue compounds and commercial retention efforts gain traction. StoneCo’s active client base reached 4.8 million merchants. Management said its efforts to reduce churn have produced faster results among micro merchants, where products and distribution channels are simpler. The company is working to simplify offerings and bundles, align sales-force incentives and reduce operational friction for clients. For small and medium-sized businesses, the process is more gradual because merchants have a wider range of needs, offerings and channels, Schwening said. He said the company is seeing improvement in both micro-merchant and SMB trends, but cautioned that a broader recovery in retention and TPV would not occur “at the flip of a switch.” Pix QR-code volumes continued to grow faster than card volumes. Salgado said payment take rates are declining at the margin, primarily due to mix as Pix becomes a larger portion of TPV, as well as certain pricing actions. He said StoneCo evaluates customer economics across the broader relationship rather than on payments or credit as standalone products. The company also integrated Pagar.me, its historical digital-commerce platform, into Stone. Management said the integration gives merchants a single account and view of online and in-person sales, while potentially improving StoneCo’s ability to cross-sell services and assess credit opportunities. StoneCo’s credit portfolio reached BRL 3.8 billion, more than double its level a year earlier. Working-capital products were the principal driver, while government-backed loans accounted for roughly BRL 300 million of the portfolio and credit cards represented BRL 400 million. Retail deposits rose more than 20% year over year to BRL 10.8 billion. Salgado said the growing deposit base has helped reduce funding costs to roughly 85% of CDI, though he expects assets to grow faster than deposits through year-end, which could create pressure on financial expenses. Credit revenue increased 14%, with a broadly stable yield. Salgado said the growth of government-backed lending reduced average yields because these programs carry lower rates but also lower risk. Under the FGI Pix program, the government guarantees about 75% of a defaulted amount on average, according to Salgado. This reduces the loss given default and allows StoneCo to hold lower upfront provisions for eligible loans. The company said the programs can help it extend credit to merchants where it was previously less competitive while managing the risk profile of portfolio growth. Provision expenses totaled BRL 188 million in the quarter, while the cost of risk stood at 21.5%. Management cited rapid portfolio growth, the aging of late-2025 and early-2026 loan vintages, and pressure in its dedicated lending desk. The dedicated desk serves larger clients and has experienced defaults involving some of its largest individual exposures amid a rise in bankruptcy-protection filings in Brazil. Schwening said the company is responding by shifting more originations toward government-backed products for clients without longstanding relationships or sufficient historical data, and by reducing maximum ticket sizes on the dedicated desk. Management characterized the pressure as mostly macroeconomic rather than fraud-related. StoneCo said its automated lending desk has shown improvement following second-quarter changes, with first-payment defaults trending down and the June cohort producing its best result in 12 months. The company expects its cost of risk to trend toward the mid- to high-teens over the medium term and to reach the high teens by year-end, though management warned that individual large cases could create quarterly volatility. StoneCo’s capital ratio stood at 26% following an extraordinary dividend paid in May from Linx sale proceeds. The company said it returned BRL 4.3 billion to shareholders during the first half through dividends and share repurchases. During the quarter, StoneCo also recorded a provision related to selected card issuers in distress after a large financial group’s credit-card-issuer subsidiary was liquidated. Salgado said more than 90 days had passed since StoneCo last received cash flows from the issuer, prompting the company to treat the exposure as distressed for accounting purposes. Management said it expects card networks to ultimately settle the amounts and noted that it has historically collected 100% of such receivables from networks when issuers have failed. Still, Salgado said StoneCo may need to record additional provisions because the current balance reflects weighted-probability scenarios that include the possibility of litigation. StoneCo Ltd., commonly known as Stone, is a Brazilian financial technology company that provides integrated digital payment solutions and related financial services to merchants. Through its cloud-based platform, Stone enables businesses of all sizes to accept a variety of payment methods, including point-of-sale (POS) terminals, mobile card readers and e-commerce gateways. In addition to payment acceptance, the company offers value-added services such as working capital loans, digital banking products and automated billing tools designed to help merchants manage cash flow and streamline operations. Since its founding in 2012 by André Street and Eduardo Pontes, Stone has focused on serving over half a million merchants across Brazil's retail, restaurant and services sectors. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "StoneCo Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

StoneCo Ltd. (STNE) came out with quarterly earnings of $0.47 per share, beating the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.17%. A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.42, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. StoneCo, which belongs to the Zacks Internet - Software industry, posted revenues of $709.88 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.91%. This compares to year-ago revenues of $672.06 million. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. StoneCo shares have lost about 32.4% since the beginning of the year versus the S&P 500's gain of 13.2%. While StoneCo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for StoneCo was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.50 on $741.11 million in revenues for the coming quarter and $2.27 on $2.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Workday (WDAY), another stock in the same industry, has yet to report results for the quarter ended July 2026. The results are expected to be released on August 27. This maker of human resources software is expected to post quarterly earnings of $2.63 per share in its upcoming report, which represents a year-over-year change of +19%. The consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. Workday's revenues are expected to be $2.63 billion, up 12.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StoneCo Ltd. (STNE) : Free Stock Analysis Report Workday, Inc. (WDAY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Monday.com (MNDY) came out with quarterly earnings of $1.48 per share, beating the Zacks Consensus Estimate of $1.14 per share. This compares to earnings of $1.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +29.83%. A quarter ago, it was expected that this project management software developer would post earnings of $0.96 per share when it actually produced earnings of $1.15, delivering a surprise of +19.79%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Monday.com, which belongs to the Zacks Internet - Software industry, posted revenues of $364.62 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.72%. This compares to year-ago revenues of $299.01 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Monday.com shares have lost about 36.9% since the beginning of the year versus the S&P 500's gain of 13.3%. While Monday.com has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Monday.com was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.13 on $372.42 million in revenues for the coming quarter and $4.54 on $1.47 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, StoneCo Ltd. (STNE), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly earnings of $0.46 per share in its upcoming report, which represents a year-over-year change of +18%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. StoneCo Ltd.'s revenues are expected to be $731.18 million, up 8.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report monday.com Ltd. (MNDY) : Free Stock Analysis Report StoneCo Ltd. (STNE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. StoneCo stock has given investors a difficult ride, with the share price down about 74.9% over the past five years, yet the valuation checks currently suggest the shares may be pricing in more pessimism than the fundamentals imply. The roughly 74.9% decline over five years points to investors heavily marking down StoneCo's long term prospects. Future revenue and cash flow growth can support the current price. However, any setback in profitability or credit quality may quickly weigh on what investors are willing to pay. On Simply Wall St's broader valuation checks, StoneCo screens as cheap in 5 of 6 areas, which indicates the stock currently leans undervalued on the full set of metrics. The issue now is whether that apparent undervaluation offers enough comfort given the share price record investors have just lived through. Find out why StoneCo's -10.3% return over the last year is lagging behind its peers. The P/E ratio is a useful way to see what investors are currently willing to pay for StoneCo earnings. StoneCo trades on a P/E of about 3.6x, compared with an industry average of 16.9x for diversified financial companies and a broader peer group average of 20.2x. That is a very steep discount to both its direct industry and peers on headline earnings. Simply Wall St's fair P/E ratio estimate for StoneCo is 10.9x, which factors in the company profile, analyst expectations and risk. The current 3.6x multiple sits well below that fair level, so the market is pricing StoneCo earnings at a sizeable markdown relative to what this framework suggests could be reasonable. On the P/E multiple alone, StoneCo stock appears inexpensive compared with both the tailored fair ratio and typical sector pricing. See what the numbers say about this price — find out in our valuation breakdown. For a stock like StoneCo, where the P/E points to a puzzle, Simply Wall St Narratives act as the link between the current price and the future paths that could justify it. They do this by spelling out what would need to happen to revenue, margins and earnings for the stock to be worth materially more or less than it is today. Each narrative lays out the key assumptions behind its view of fair value so you can compare those expectations with StoneCo's actual results over time. Views on StoneCo sit far apart, with some investors focused on capital returns and others worried about pressure on the core payments engine. Bull case: 35% undervalued Read the full Bull Case to see why StoneCo could be undervalued Bear case: 17% overvalued Read the full Bear Case to see why StoneCo could be overvalued Do you think there's more to the story for StoneCo? Head over to our Community to see what others are saying! StoneCo screens as undervalued on earnings multiples, especially when set against both its industry and the tailored fair P/E estimate. That discount suggests the market is still cautious on the durability of its earnings and the risks around profitability and credit quality. For you, the key question is whether StoneCo can sustain healthy revenue and margin performance without new setbacks in its core payments and credit operations. The crux of the bull versus bear debate is whether this discount reflects a genuine opportunity or a fair warning about those business risks. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include STNE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Wall Street expects a year-over-year increase in earnings on higher revenues when StoneCo Ltd. (STNE) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 13. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly earnings of $0.46 per share in its upcoming report, which represents a year-over-year change of +18%. Revenues are expected to be $731.18 million, up 8.8% from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For StoneCo, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -4.35%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that StoneCo will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that StoneCo would post earnings of $0.42 per share when it actually produced earnings of $0.42, delivering no surprise. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. StoneCo doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Internet - Software industry, Quantum Computing Inc. (QUBT), is soon expected to post loss of $0.05 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +16.7%. This quarter's revenue is expected to be $4.7 million, up 7733.3% from the year-ago quarter. The consensus EPS estimate for Quantum Computing Inc. has remained unchanged over the last 30 days. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Quantum Computing Inc. will beat the consensus EPS estimate. Over the last four quarters, the company surpassed EPS estimates just once. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StoneCo Ltd. (STNE) : Free Stock Analysis Report Quantum Computing Inc. (QUBT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. StoneCo (STNE) has been added to several Russell value and small cap benchmarks, a shift that is drawing fresh attention to its upcoming earnings report and the debate around its risk and reward profile. Index inclusion often matters because it can influence how much exposure institutional investors have to a stock through passive funds and benchmarks. For StoneCo, these additions come at a time when the stock’s recent performance and earnings expectations are already in focus. Over the past five years, StoneCo’s share price has fallen about 77%, and the stock is described as trading at a discount on many valuation measures. At the same time, recent commentary highlights expectations for higher earnings per share and revenue in the upcoming release, along with a Zacks Rank of #2 (Buy) and positive analyst sentiment. This mix of index inclusion, discounted valuation metrics, and earnings expectations is set against ongoing concerns about the durability of StoneCo’s business model, especially around credit quality, regulation, and potential changes in payments technology that could influence transaction revenues. See our latest analysis for StoneCo. Recent trading has been choppy for StoneCo, with a 1 day share price return of 4.18% but a 90 day share price return that has declined 22.05%. The 3 year total shareholder return is slightly positive, suggesting longer term holders have had a different experience from recent traders. If you are weighing StoneCo’s risk and reward ahead of earnings, it can help to compare it with other payment and fintech related plays by scanning 18 top founder-led companies After a choppy stretch and a sharp long term pullback, StoneCo now sits at a level some investors see as a discount, while others would rather wait for more clarity. So what does the current valuation actually say about buying now versus holding off? Compared with StoneCo’s last close at $10.96, the most followed narrative points to a fair value of $9.10, so it frames the current price as stretched and heavily dependent on tougher earnings assumptions. Read the complete narrative. Want to see how modest revenue growth, slimmer margins and a higher future earnings multiple still add up to that lower fair value? The key is how these analysts balance slower profit trends against buybacks, discounting and sector valuation gaps. Curious which assumptions really move the needle in this model and how sensitive the outcome is to even small changes in earnings power? Result: Fair Value of $9.10 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, StoneCo’s growing MSMB client base and multi product ecosystem could still counter some pressure if cross sell continues and operational efficiency holds up. Find out about the key risks to this StoneCo narrative. The bearish narrative frames StoneCo as about 20.5% overvalued at $10.96 versus a $9.10 fair value, yet our DCF model points in the opposite direction, with StoneCo trading roughly 80.1% below an estimated future cash flow value of $55.15. Which story do you think better fits the risk you are willing to take? Look into how the SWS DCF model arrives at its fair value. With sentiment clearly split on StoneCo’s risks and rewards, do you want to rely on others or test the assumptions yourself and act quickly? To see how those trade offs stack up in one place, take a closer look at the 3 key rewards and 2 important warning signs. If StoneCo has you thinking harder about risk, reward, and timing, do not stop with just one stock. Use objective screens to quickly spot other opportunities that fit your style. Target potential upside with companies that combine quality fundamentals and attractive pricing by scanning 44 high quality undervalued stocks today before the crowd catches on. Prioritize resilience by filtering for companies that score well on financial strength using the solid balance sheet and fundamentals stocks screener (47 results) so sudden shocks do not catch you off guard. Spot early stage opportunities with strong underlying metrics by working through the screener containing 19 high quality undiscovered gems before they show up on everyone else’s radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include STNE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]