Bloomberg Línea — Brazilian fintech PagSeguro (PAGS) announced Tuesday that it notched up net revenue of 4 billion reais ($746.3 million) in third quarter, a growth of 45% over the same quarter of 2021.
The fintech’s shares dropped 2.75% in after-hours trading, with analysts having estimated adjusted revenue of 4.1 billion reais.
In an interview with Bloomberg Línea, the company said that with the card-payment segment having declined due to inflation, PagSeguro saw net profits of 380 million reais ($71 milion) during the quarter, its biggest profit since Q4 2019.
Analysts’ adjusted net estimate for net profit was 407.9 million, and PagSeguro had a recurring net income of 411 million reais, above the guidance due to the focus on customers with higher volumes and with readjustments (repricing) to help raise earnings.
“We continue to grow faster than the market. We were the company that most increased the take-up rate in the last two quarters, which improved the financial cost margin,”CEO Alexandre Magnani said.
“We were diligent with the control of operating and personnel expenses, even though this quarter we made important investments in marketing with the campaign for the new card backed by an income account,” he added.
Magnani attributed the higher net income to capex investment control and less subsidy. The company had a capex per revenue of 12.4% in the quarter, improving by 230 basis points from the previous quarter.
“We focus on bringing in better-quality customers,” Magnani said.
Even without making cuts as other tech giants have recently carried out, PagSeguro said it froze its headcount growth.
Amid a scenario of investors being more fearful of risk assets with high-interest rates, the fintech’s shares fell 53% during the year and in the last week alone, its stock has dropped 14%.
For next year, the company disclosed guidance of 1.5 billion reais, with growth of 10 to 12% compared to the previous year, and an accounting net profit with growth of 24% to 27% compared with 2021.
“Despite all the macroeconomic uncertainty in Brazil and the world, we are very happy with the company’s highest earnings per share for a quarter, 1.16 reais per share”, said Éric Oliveira, director of investor relations and ESG of the company, in an interview with Bloomberg Línea.
For the first nine months of this year, the company said it saw net revenue of 11.4 billion reais, an increase of 58% year-over-year, and net income of 1.1 billion reais, a growth of 27% compared to the same period of 2021.
The company has around 16 million active customers. In third quarter alone, PagSeguro added 1.1 million new customers, to total 4.1 million in the first nine months of 2022.
The company also said that it intends to launch a new Pix insurance product in the coming days, to add to the credit card that uses the account balance as a guarantee.