StoneCo (STNE), the Brazilian fintech powerhouse, saw its stock soar by almost 15% in early Wednesday trading, following the release of its strong financial results for the fourth quarter of 2024. The company exceeded market expectations across several key metrics, including Total Payment Volume (TPV), retail deposits, and net income, signaling its robust performance and growth trajectory.
Strong Growth in Total Payment Volume (TPV)
One of the standout figures from StoneCo’s Q4 2024 results was its Total MSMB TPV, which reached BRL 403 billion, marking a 15% year-over-year growth. The overall TPV for the company across all business segments surged to BRL 454 billion, representing an impressive 22% increase compared to the previous year. This robust performance highlights the growing demand for StoneCo’s payment solutions, particularly within the micro, small, and medium-sized business (MSMB) segment, which continues to be a key driver of revenue.
Exceeding Expectations on Retail Deposits and Take Rate
StoneCo’s retail deposit performance was another highlight of the quarter. The company reported BRL 8.7 billion in retail deposits, exceeding its guidance of BRL 7 billion. This increase underscores the growing confidence in StoneCo’s banking services, which cater to both businesses and individual customers.
Furthermore, StoneCo’s MSMB take rate for 2024 was 2.55%, surpassing its guidance of 2.49%. The ability to maintain a high take rate is crucial for the company’s profitability, as it reflects the success of its payment solutions and the effectiveness of its pricing model.
Credit Portfolio and Net Income Exceed Expectations
StoneCo’s credit portfolio also exceeded expectations, reaching BRL 1.2 billion, well above the BRL 800 million target for 2024. This growth highlights the company’s continued expansion into consumer and business lending, which complements its core payment services and further strengthens its position in the Brazilian fintech space.
The company posted net income of BRL 2.2 billion, exceeding its guidance of BRL 1.9 billion. This impressive result was driven by strong revenue growth and effective cost control. StoneCo’s adjusted administrative expenses for the quarter were BRL 994 million, well below the projected BRL 1.125 billion, indicating the company’s ability to scale efficiently while managing costs.
Impressive Profitability Metrics
StoneCo’s profitability metrics showed remarkable year-over-year growth. The company achieved a 22% year-over-year increase in adjusted EBT (earnings before tax) for Q4 2024. Adjusted net income also grew by 18%, and the adjusted net margin reached 18.4%, representing a 1 percentage point improvement over the previous year.
Adjusted basic earnings per share (EPS) grew by 26% year-over-year, further reflecting the company’s strong operational performance. These figures illustrate the efficiency with which StoneCo is growing its business, managing expenses, and generating value for its shareholders.
Expanding Client Base and Software Growth
StoneCo’s client base continued to expand in Q4 2024. The MSMB payments active client base grew by 19% year-over-year, reaching 4.1 million clients, while the banking active client base surged by 46% to 3.1 million clients. This strong client acquisition demonstrates the company’s growing reach within Brazil’s dynamic fintech landscape.
In addition to its payment services, StoneCo’s software business continued to thrive, with a 15% year-over-year growth in software revenue for Q4 2024. The company also reported a 54% year-over-year growth in software adjusted EBITDA, which reached a solid 21.6% margin. This growth underscores StoneCo’s successful strategy of diversifying its revenue streams and building a comprehensive suite of financial solutions for its clients.
Robust Financial Position and Capital Allocation
As of December 31, 2024, StoneCo reported an adjusted net cash position of BRL 4.7 billion, providing the company with significant flexibility to pursue future growth opportunities. Additionally, the company maintained excess capital of over BRL 3 billion, strengthening its financial position and offering a cushion to weather any potential market fluctuations.
StoneCo also engaged in a share repurchase program, purchasing BRL 1.6 billion worth of its shares in 2024. This move demonstrates the company’s confidence in its future prospects and its commitment to returning value to shareholders.
CEO’s Outlook: Building for Sustainable Growth
CEO Pedro Zinner shared a positive outlook for the company, stating, “2024 was a pivotal year of execution, marked by significant progress despite market challenges. We strengthened our position for sustainable growth, successfully executing our strategy, delivering exceptional client service, and generating value for shareholders.” Zinner’s comments reflect StoneCo’s commitment to long-term growth and value creation, despite the challenges posed by the broader market environment.
