UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN
PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number: 001-38714
STONECO LTD.
(Exact name of registrant as specified in its
charter)
4th Floor, Harbour Place
103 South Church Street, P.O. Box 10240
Grand Cayman, KY1-1002, Cayman Islands
+55 (11) 3004-9680
(Address of principal executive office)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
StoneCo Ltd. |
|
|
|
|
|
By: |
/s/ Mateus Scherer Schwening |
|
|
Name: |
Mateus Scherer Schwening |
|
|
Title: |
Chief Financial Officer and Investor Relations Officer |
Date: August 14,
2024
EXHIBIT INDEX
Exhibit 99.1
Unaudited Interim Condensed
Consolidated Financial Statements
StoneCo Ltd.
June 30, 2024
Index to Consolidated Financial Statements
Interim Condensed Consolidated Financial Statements |
|
Page |
|
|
|
Report on review of interim condensed consolidated financial information |
|
F-3 |
Unaudited interim consolidated statement of financial position as of June 30, 2024 and December 31, 2023 |
|
F-4 |
Unaudited interim consolidated statement of profit or loss for the six and three months ended June 30, 2024 and 2023 |
|
F-6 |
Unaudited interim consolidated statement of other comprehensive income for the six and three months ended June 30, 2024 and 2023 |
|
F-7 |
Unaudited interim consolidated statement of changes in equity for the six months ended June 30, 2024 and 2023 |
|
F-8 |
Unaudited interim consolidated statement of cash flows for the six months ended June 30, 2024 and 2023 |
|
F-9 |
Notes to unaudited interim condensed consolidated financial statements June 30, 2024 |
|
F-10 |
|
|
|
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
To the Shareholders and Management of
StoneCo Ltd.
Introduction
We have reviewed the accompanying interim consolidated statement of
financial position of StoneCo Ltd. (the “Company”) as of June 30, 2024 and the related interim consolidated statements of
profit or loss and of other comprehensive income for the three and six-months periods then ended, and of changes in equity and cash flows
for the six-months period then ended and explanatory notes
Management is responsible for the preparation and fair presentation
of this interim condensed consolidated financial information in accordance with IAS 34 – Interim Financial Reporting, issued by
the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on this interim consolidated financial
information based on our review.
Scope of review
We conducted our review in accordance with International Standard on
Review Engagements 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity.
A review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable
us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us
to believe that the accompanying interim condensed consolidated financial statement does not give a true and fair view of the financial
position of the entity as at June 30, 2024, and of its financial performance and its cash flows for the three and six-months periods then
ended in accordance with IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB).
São Paulo, August 13, 2024
ERNST & YOUNG
Auditores Independentes S/S Ltda.
| |
Notes | |
June 30, 2024 | |
December 31, 2023 |
Assets | |
| |
| |
|
Current assets | |
| |
| |
|
Cash and cash equivalents | |
| 4 | | |
| 4,743,236 | | |
| 2,176,416 | |
Short-term investments | |
| 5.1 | | |
| 106,575 | | |
| 3,481,496 | |
Financial assets from banking solutions | |
| 5.5 | | |
| 6,967,814 | | |
| 6,397,898 | |
Accounts receivable from card issuers | |
| 5.2.1 | | |
| 27,471,965 | | |
| 23,895,512 | |
Trade accounts receivable | |
| 5.3.1 | | |
| 438,289 | | |
| 459,947 | |
Loans operations portfolio | |
| 5.4 | | |
| 474,243 | | |
| 209,957 | |
Recoverable taxes | |
| 7 | | |
| 182,707 | | |
| 146,339 | |
Derivative financial instruments | |
| 5.7 | | |
| 71,275 | | |
| 4,182 | |
Other assets | |
| 6 | | |
| 390,493 | | |
| 380,854 | |
| |
| | | |
| 40,846,597 | | |
| 37,152,601 | |
Non-current assets | |
| | | |
| | | |
| | |
Long-term investments | |
| 5.1 | | |
| 32,410 | | |
| 45,702 | |
Accounts receivable from card issuers | |
| 5.2.1 | | |
| 84,273 | | |
| 81,597 | |
Trade accounts receivable | |
| 5.3.1 | | |
| 21,967 | | |
| 28,533 | |
Loans operations portfolio | |
| 5.4 | | |
| 112,550 | | |
| 40,790 | |
Receivables from related parties | |
| 11.1 | | |
| 714 | | |
| 2,512 | |
Deferred tax assets | |
| 8.2 | | |
| 755,589 | | |
| 664,492 | |
Other assets | |
| 6 | | |
| 133,274 | | |
| 137,508 | |
Investment in associates | |
| | | |
| 79,177 | | |
| 83,010 | |
Property and equipment | |
| 9.1 | | |
| 1,728,204 | | |
| 1,661,897 | |
Intangible assets | |
| 10.1 | | |
| 8,904,988 | | |
| 8,794,919 | |
| |
| | | |
| 11,853,146 | | |
| 11,540,960 | |
| |
| | | |
| | | |
| | |
Total assets | |
| | | |
| 52,699,743 | | |
| 48,693,561 | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
| |
Notes | |
June 30, 2024 | |
December 31, 2023 |
Liabilities and equity | |
| |
| |
|
Current liabilities | |
| |
| |
|
Retail deposits | |
| 5.6.1 | | |
| 6,471,970 | | |
| 6,119,455 | |
Accounts payable to clients | |
| 5.2.2 | | |
| 18,472,870 | | |
| 19,163,672 | |
Trade accounts payable | |
| | | |
| 525,684 | | |
| 513,877 | |
Institutional deposits and marketable debt securities | |
| 5.6.1 | | |
| 1,443,932 | | |
| 475,319 | |
Other debt instruments | |
| 5.6.1 | | |
| 1,594,018 | | |
| 1,404,678 | |
Labor and social security liabilities | |
| | | |
| 504,016 | | |
| 515,749 | |
Taxes payable | |
| | | |
| 676,278 | | |
| 514,299 | |
Derivative financial instruments | |
| 5.7 | | |
| 112,226 | | |
| 316,171 | |
Other liabilities | |
| | | |
| 247,205 | | |
| 119,526 | |
| |
| | | |
| 30,048,199 | | |
| 29,142,746 | |
Non-current liabilities | |
| | | |
| | | |
| | |
Accounts payable to clients | |
| 5.2.2 | | |
| 39,987 | | |
| 35,455 | |
Institutional deposits and marketable debt securities | |
| 5.6.1 | | |
| 3,857,986 | | |
| 3,495,759 | |
Other debt instruments | |
| 5.6.1 | | |
| 2,370,710 | | |
| 143,456 | |
Deferred tax liabilities | |
| 8.2 | | |
| 613,826 | | |
| 546,514 | |
Provision for contingencies | |
| 12.1 | | |
| 233,201 | | |
| 208,866 | |
Labor and social security liabilities | |
| | | |
| 30,690 | | |
| 34,301 | |
Other liabilities | |
| | | |
| 286,345 | | |
| 410,504 | |
| |
| | | |
| 7,432,745 | | |
| 4,874,855 | |
| |
| | | |
| | | |
| | |
Total liabilities | |
| | | |
| 37,480,944 | | |
| 34,017,601 | |
| |
| | | |
| | | |
| | |
Equity | |
| 13 | | |
| | | |
| | |
Issued capital | |
| 13.1 | | |
| 76 | | |
| 76 | |
Capital reserve | |
| 13.2 | | |
| 14,084,356 | | |
| 14,056,484 | |
Treasury shares | |
| 13.3 | | |
| (490,752 | ) | |
| (282,709 | ) |
Other comprehensive income (loss) | |
| 13.4 | | |
| (468,014 | ) | |
| (320,449 | ) |
Retained earnings | |
| | | |
| 2,037,957 | | |
| 1,168,862 | |
Equity attributable to controlling shareholders | |
| | | |
| 15,163,623 | | |
| 14,622,264 | |
Non-controlling interests | |
| | | |
| 55,176 | | |
| 53,696 | |
Total equity | |
| | | |
| 15,218,799 | | |
| 14,675,960 | |
| |
| | | |
| | | |
| | |
Total liabilities and equity | |
| | | |
| 52,699,743 | | |
| 48,693,561 | |
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
StoneCo Ltd.
Unaudited interim consolidated statement of profit or loss
For the six and three months ended June 30, 2024
and 2023
(In thousands of Brazilian Reais, unless otherwise
stated)
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
Notes |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Net revenue from transaction activities and other services |
15.1 |
|
1,557,341 |
|
1,573,125 |
|
807,511 |
|
840,069 |
Net revenue from subscription services and equipment rental |
15.1 |
|
909,976 |
|
902,459 |
|
453,267 |
|
457,330 |
Financial income |
15.1 |
|
3,567,776 |
|
2,837,639 |
|
1,826,662 |
|
1,462,595 |
Other financial income |
15.1 |
|
255,691 |
|
353,216 |
|
118,434 |
|
194,789 |
Total revenue and income |
|
|
6,290,784 |
|
5,666,439 |
|
3,205,874 |
|
2,954,783 |
|
|
|
|
|
|
|
|
|
|
Cost of services |
16 |
|
(1,651,300) |
|
(1,406,579) |
|
(841,374) |
|
(685,302) |
Administrative expenses |
16 |
|
(512,487) |
|
(601,948) |
|
(255,487) |
|
(303,900) |
Selling expenses |
16 |
|
(1,054,605) |
|
(801,819) |
|
(524,930) |
|
(411,891) |
Financial expenses, net |
17 |
|
(1,747,599) |
|
(1,997,483) |
|
(851,052) |
|
(1,073,844) |
Mark-to-market on equity securities designated at FVPL |
16 |
|
— |
|
30,574 |
|
— |
|
— |
Other income (expenses), net |
16 |
|
(188,976) |
|
(158,251) |
|
(80,920) |
|
(56,747) |
|
|
|
(5,154,967) |
|
(4,935,506) |
|
(2,553,763) |
|
(2,531,684) |
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in associates |
|
|
(113) |
|
(1,848) |
|
(424) |
|
(826) |
Profit before income taxes |
|
|
1,135,704 |
|
729,085 |
|
651,687 |
|
422,273 |
|
|
|
|
|
|
|
|
|
|
Current income tax and social contribution |
8.1 |
|
(257,229) |
|
(117,753) |
|
(151,377) |
|
(74,199) |
Deferred income tax and social contribution |
8.1 |
|
(6,579) |
|
(78,431) |
|
(2,009) |
|
(40,863) |
Net income for the period |
|
|
871,896 |
|
532,901 |
|
498,301 |
|
307,211 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
|
Controlling shareholders |
|
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
Non-controlling interests |
|
|
2,801 |
|
893 |
|
2,187 |
|
1,842 |
|
|
|
871,896 |
|
532,901 |
|
498,301 |
|
307,211 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic earnings per share for the period attributable to controlling shareholders (in Brazilian reais) |
14.2 |
|
R$ 2.82 |
|
R$ 1.70 |
|
R$ 1.61 |
|
R$ 0.98 |
Diluted earnings per share for the period attributable to controlling shareholders (in Brazilian reais) |
14.2 |
|
R$ 2.76 |
|
R$ 1.63 |
|
R$ 1.58 |
|
R$ 0.93 |
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
StoneCo Ltd.
Unaudited interim consolidated statement of other comprehensive
income
For the six and three months ended June 30, 2024
and 2023
(In thousands of Brazilian Reais)
|
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
Notes |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
|
871,896 |
|
532,901 |
|
498,301 |
|
307,211 |
Other comprehensive income ("OCI") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income that may be reclassified to profit or loss in subsequent periods: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in the fair value of accounts receivable from card issuers |
19.1 |
|
(89,126) |
|
139,846 |
|
(64,745) |
|
48,084 |
Tax on changes in the fair value of accounts receivable from card issuers |
|
|
30,364 |
|
(47,548) |
|
22,074 |
|
(16,346) |
Exchange differences on translation of foreign operations |
|
|
1,505 |
|
(8,768) |
|
1,820 |
|
(4,303) |
Changes in the fair value of cash flow hedge |
5.7.1 |
|
(130,783) |
|
65,457 |
|
(88,284) |
|
(40,524) |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods: |
|
|
|
|
|
|
|
|
|
Net monetary position in hyperinflationary economies |
|
|
2,376 |
|
920 |
|
1,479 |
|
62 |
Changes in the fair value of equity instruments designated at fair value |
5.1 |
|
1,623 |
|
(1,141) |
|
873 |
|
(748) |
Gain on sale of equity instruments designated at fair value through other comprehensive income |
5.1 |
|
35,647 |
|
— |
|
35,647 |
|
— |
Other comprehensive income for the period |
|
|
(148,394) |
|
148,766 |
|
(91,136) |
|
(13,775) |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
|
723,502 |
|
681,667 |
|
407,165 |
|
293,436 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
Controlling shareholders |
|
|
721,530 |
|
680,774 |
|
404,085 |
|
291,594 |
Non-controlling interests |
|
|
1,972 |
|
893 |
|
3,080 |
|
1,842 |
Total comprehensive income for the period |
|
|
723,502 |
|
681,667 |
|
407,165 |
|
293,436 |
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
StoneCo Ltd.
Unaudited interim consolidated statement of changes in equity
For the six months ended June 30, 2024 and 2023
(In thousands of Brazilian Reais)
|
|
|
Attributable to controlling
shareholders |
|
|
|
|
|
|
|
|
|
Capital reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
Issued capital |
|
Additional paid-in capital |
|
Transactions among shareholders |
|
Special reserve |
|
Other reserves |
|
Total |
|
Treasury shares |
|
Other comprehensive income |
|
Retained earnings |
|
Total |
|
Non-controlling interests |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2022 |
|
|
76 |
|
13,825,325 |
|
(445,062) |
|
61,127 |
|
377,429 |
|
13,818,819 |
|
(69,085) |
|
(432,701) |
|
(423,203) |
|
12,893,906 |
|
56,118 |
|
12,950,024 |
Net income for the period |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
532,008 |
|
532,008 |
|
893 |
|
532,901 |
Other comprehensive income for the period |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
148,766 |
|
— |
|
148,766 |
|
— |
|
148,766 |
Total comprehensive income |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
148,766 |
|
532,008 |
|
680,774 |
|
893 |
|
681,667 |
Share-based payments |
|
|
— |
|
— |
|
— |
|
— |
|
136,991 |
|
136,991 |
|
— |
|
— |
|
— |
|
136,991 |
|
(114) |
|
136,877 |
Shares delivered under share-based payment arrangements |
|
|
— |
|
— |
|
(47,591) |
|
— |
|
(4,873) |
|
(52,464) |
|
53,270 |
|
— |
|
— |
|
806 |
|
— |
|
806 |
Equity transaction related to put options over
non-controlling interest |
|
|
— |
|
— |
|
— |
|
— |
|
(14,531) |
|
(14,531) |
|
— |
|
— |
|
— |
|
(14,531) |
|
1,007 |
|
(13,524) |
Equity transaction with non-controlling interests |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
49 |
|
49 |
Dividends paid |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,935) |
|
(1,935) |
Others |
|
|
— |
|
— |
|
(22) |
|
— |
|
— |
|
(22) |
|
— |
|
— |
|
— |
|
(22) |
|
— |
|
(22) |
Balance as of June 30, 2023 |
|
|
76 |
|
13,825,325 |
|
(492,675) |
|
61,127 |
|
495,016 |
|
13,888,793 |
|
(15,815) |
|
(283,935) |
|
108,805 |
|
13,697,924 |
|
56,018 |
|
13,753,942 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2023 |
|
|
76 |
|
13,825,325 |
|
(518,504) |
|
61,127 |
|
688,536 |
|
14,056,484 |
|
(282,709) |
|
(320,449) |
|
1,168,862 |
|
14,622,264 |
|
53,696 |
|
14,675,960 |
Net income for the period |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
869,095 |
|
869,095 |
|
2,801 |
|
871,896 |
Other comprehensive income for the period |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(147,565) |
|
— |
|
(147,565) |
|
(829) |
|
(148,394) |
Total comprehensive income |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(147,565) |
|
869,095 |
|
721,530 |
|
1,972 |
|
723,502 |
Repurchase of shares |
13.3 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(236,526) |
|
— |
|
— |
|
(236,526) |
|
— |
|
(236,526) |
Share-based payments |
|
|
— |
|
— |
|
— |
|
— |
|
73,867 |
|
73,867 |
|
— |
|
— |
|
— |
|
73,867 |
|
— |
|
73,867 |
Shares delivered under share-based payment arrangements |
|
|
— |
|
— |
|
(28,483) |
|
— |
|
— |
|
(28,483) |
|
28,483 |
|
— |
|
— |
|
— |
|
— |
|
— |
Equity transaction related to put options over
non-controlling interest |
|
|
— |
|
— |
|
— |
|
— |
|
(17,512) |
|
(17,512) |
|
— |
|
— |
|
— |
|
(17,512) |
|
3,174 |
|
(14,338) |
Dividends paid |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3,028) |
|
(3,028) |
Others |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(638) |
|
(638) |
Balance as of June 30, 2024 |
|
|
76 |
|
13,825,325 |
|
(546,987) |
|
61,127 |
|
744,891 |
|
14,084,356 |
|
(490,752) |
|
(468,014) |
|
2,037,957 |
|
15,163,623 |
|
55,176 |
|
15,218,799 |
The accompanying notes are an integral part of these unaudited interim
condensed consolidated financial statements.
StoneCo Ltd.
Unaudited interim consolidated statement of cash flows
For the six months ended June 30, 2024 and 2023
(In thousands of Brazilian Reais)
|
|
|
Six months ended June 30, |
|
Notes |
|
2024 |
|
2023 |
Operating activities |
|
|
|
|
|
Net income for the period |
|
|
871,896 |
|
532,901 |
Adjustments to reconcile net income for the period to net cash flows: |
|
|
|
|
|
Depreciation and amortization |
9.2 |
|
441,559 |
|
434,182 |
Deferred income tax and social contribution |
8.1 |
|
6,579 |
|
78,431 |
Gain on investment in associates |
|
|
113 |
|
1,848 |
Accrued interest, monetary and exchange variations, net |
|
|
70,603 |
|
(175,839) |
Provision for contingencies |
12.1 |
|
40,018 |
|
5,099 |
Share-based payments expense |
18.1.4 |
|
90,156 |
|
120,525 |
Allowance for expected credit losses |
|
|
102,507 |
|
32,465 |
Loss on disposal of property, equipment and intangible assets |
19.5 |
|
14,317 |
|
45,065 |
Effect of applying hyperinflation accounting |
|
|
2,791 |
|
1,195 |
Loss on sale of subsidiary |
|
|
52,958 |
|
— |
Fair value adjustment in financial instruments at FVPL |
19.1 |
|
(206,628) |
|
93,997 |
Fair value adjustment in derivatives |
|
|
7,188 |
|
8,615 |
Remeasurement of previously held interest in subsidiary acquired |
20.1.2 |
|
(5,657) |
|
— |
Other |
|
|
— |
|
1,217 |
Working capital adjustments: |
|
|
|
|
|
Accounts receivable from card issuers |
|
|
(2,358,871) |
|
3,900,802 |
Receivables from related parties |
|
|
7,730 |
|
11,627 |
Recoverable taxes |
|
|
(8,831) |
|
(60,054) |
Prepaid expenses |
|
|
68,416 |
|
46,607 |
Trade accounts receivable, banking solutions and other assets |
|
|
(14,746) |
|
(10,534) |
Loans operations portfolio |
|
|
(314,403) |
|
— |
Accounts payable to clients |
|
|
(4,016,667) |
|
(3,794,545) |
Taxes payable |
|
|
210,299 |
|
92,626 |
Labor and social security liabilities |
|
|
(31,512) |
|
(7,632) |
Payment of contingencies |
12.1 |
|
(29,588) |
|
(16,869) |
Trade accounts payable and other liabilities |
|
|
160,842 |
|
(2,094) |
Interest paid |
|
|
(313,485) |
|
(437,099) |
Interest income received, net of costs |
19.4 |
|
2,038,931 |
|
1,145,657 |
Income tax paid |
|
|
(75,644) |
|
(47,294) |
Net cash provided by in operating activities |
|
|
(3,189,129) |
|
2,000,899 |
Investing activities |
|
|
|
|
|
Purchases of property and equipment |
19.5 |
|
(390,912) |
|
(536,511) |
Purchases and development of intangible assets |
19.5 |
|
(260,345) |
|
(212,072) |
Proceeds from (acquisition of) short-term investments, net |
|
|
3,388,247 |
|
106,346 |
Sale of subsidiary, net of cash disposed of |
|
|
(4,204) |
|
— |
Proceeds from disposal of long-term investments – equity securities |
5.1 |
|
57,540 |
|
218,105 |
Proceeds from the disposal of non-current assets |
19.5 |
|
4,216 |
|
245 |
Acquisition of subsidiary, net of cash acquired |
20.1.1 |
|
(9,054) |
|
— |
Payment for interest in subsidiaries acquired |
|
|
(151,908) |
|
(32,562) |
Net cash provided by (used in) investing activities |
|
|
2,633,580 |
|
(456,449) |
Financing activities |
|
|
|
|
|
Proceeds from institutional deposits and marketable debt securities |
5.6.1 |
|
971,681 |
|
— |
Payment of institutional deposits and marketable debt securities |
5.6.1 |
|
(38,693) |
|
— |
Proceeds from other debt instruments, except lease |
5.6.1 |
|
4,007,264 |
|
2,798,229 |
Payment to other debt instruments, except lease |
5.6.1 |
|
(1,570,264) |
|
(3,626,210) |
Payment of principal portion of leases liabilities |
5.6.1 |
|
(28,182) |
|
(40,755) |
Repurchase of own shares |
13.3 |
|
(236,526) |
|
— |
Acquisition of non-controlling interests |
|
|
72 |
|
(1,175) |
Dividends paid to non-controlling interests |
|
|
(3,028) |
|
(1,935) |
Net cash provided by (used in) financing activities |
|
|
3,102,324 |
|
(871,846) |
Effect of foreign exchange on cash and cash equivalents |
|
|
20,045 |
|
17,505 |
Change in cash and cash equivalents |
|
|
2,566,820 |
|
690,109 |
Cash and cash equivalents at beginning of period |
4 |
|
2,176,416 |
|
1,512,604 |
Cash and cash equivalents at end of period |
4 |
|
4,743,236 |
|
2,202,713 |
Change in cash and cash equivalents |
|
|
2,566,820 |
|
690,109 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
StoneCo Ltd. (the “Company”),
is a Cayman Islands exempted company with limited liability, incorporated on March 11, 2014. The registered office of the Company is located
at 4th Floor, Harbour Place 103 South Church Street, P.O. box 10240 Grand Cayman E9 KY1-1002.
VCK Investment Fund Limited SAC is
the ultimate parent of HR Holdings LLC, which holds, approximately, 31% of the Company’s voting shares. VCK Investment Fund Limited
SAC is owned by the co-founder of the Company, Mr. Andre Street.
The Company’s shares are publicly
traded on Nasdaq under the ticker symbol STNE and its Brazilian Depositary Receipts (BDRs) representing the underlying Company´s
shares are traded on the Brazilian stock exchange (B3) under the ticker symbol STOC31.
The Company and its subsidiaries (collectively,
the “Group”) provide financial services and software solutions to clients across in-store, mobile and online device platforms
helping them to better manage their businesses by increasing the productivity of their sales initiatives.
The interim condensed consolidated
financial statements of the Group for the six months ended June 30, 2024 and 2023 were approved by the Audit Committee on August 13,
2024.
1.1. Seasonality
of operations
The Group’s revenues are subject
to seasonal fluctuations as a result of consumer spending patterns. Historically, revenues have been strongest during the last quarter
of the year as a result of higher sales during the Brazilian holiday season. This is due to the increase in the number and amount of electronic
payment transactions related to seasonal retail events. Adverse events that occur during these months could have a disproportionate effect
on the results of operations for the entire fiscal year. As a result of seasonal fluctuations caused by these and other factors, results
for an interim period may not be indicative of those expected for the full fiscal year.
| 2. | Basis of preparation and changes to the Group’s accounting policies and estimates |
The interim condensed consolidated
financial statements for the six months ended June 30, 2024 have been prepared in accordance with IAS 34 – Interim Financial Reporting,
issued by the International Accounting Standards Board (“IASB”).
The interim condensed consolidated
financial statements are presented in Brazilian Reais (“R$”), and all values are rounded to the nearest thousand (R$ 000),
except when otherwise indicated.
The interim condensed consolidated
financial statements do not include all the information and disclosures required in the annual financial statements and should be read
in conjunction with the Group’s annual consolidated financial statements as of December 31, 2023.
The accounting policies adopted in
this interim reporting period are consistent with those of the previous financial year, except for the following:
From January 1, 2024 onwards, the Group
recognizes revenues from membership fees deferred through the expected lifetime of the client. The new criteria has been adopted and the
Group has applied prospectively because the effect of the change and of the old criteria was not material to the consolidated financial
statements both for the current and past periods. For further details see Note 15.1.
Considering that the Group is diversifying
its sources of funding in the different markets (retail, banking, capital markets, institutional and other), as from June 30, 2024, a
revised classification of deposits and debt instruments has been adopted. The comparative balances as of December 31, 2023 have been retroactively
reclassified following the new criteria.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
The preparation of the Group’s
financial statements requires management to make judgments and estimates and to adopt assumptions that affect the amounts presented of
revenues, expenses, assets and liabilities at the financial statement date. Actual results may differ from these estimates.
Judgements, estimates and assumptions
are frequently revised, and any effects are recognized in the revision period and in any future affected periods. The objective of these
revisions is mitigating the risk of material differences between the estimated and actual results in the future.
In preparing these interim condensed
consolidated financial statements, the significant judgements and estimates made by management in applying the Group’s accounting
policies and the key sources of estimation uncertainty were the same as those from the consolidated financial statements for the year
ended December 31, 2023.
In accordance with IFRS 10 - Consolidated
Financial Statements, subsidiaries are all entities in which the Company holds control.
The following table shows the main
consolidated entities, which correspond to the Group’s most relevant operating vehicles.
|
|
|
|
% of Group's equity interest |
Entity name |
|
Principal activities |
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
|
|
Stone Instituição de Pagamento S.A. (“Stone Pagamentos”) |
|
Merchant acquiring |
|
100.00 |
|
100.00 |
Pagar.me Instituição de Pagamento S.A. (“Pagar.me”) |
|
Merchant acquiring |
|
100.00 |
|
100.00 |
Stone Sociedade de Crédito Direto S.A. (“Stone SCD”) |
|
Financial services |
|
100.00 |
|
100.00 |
Tapso Fundo de Investimento em Direitos Creditórios (“FIDC TAPSO”) |
|
Investment fund |
|
100.00 |
|
100.00 |
On February 7, 2024, the equity interest
of Pinpag was sold, thus, the Group ceased to hold equity interest in Pinpag.
In the first quarter of 2024, the Group
incorporated the companies Linx Impulse Ltda. ("Linx Impulse"), Stone Sociedade de Crédito, Financiamento e Investimento
S.A. ("Stone SCFI"), Sponte Educação Ltda. ("Sponte Educação") and Linx Automotivo Ltda.
(“Linx Automotivo”) all of which are wholly owned by the Group.
In the second quarter of 2024, the
Group incorporated the companies Linx People Ltda. (“Linx People”), Linx Saúde Ltda. (“Linx Saúde”),
Linx Commerce Ltda. (“Linx Commerce”) and Linx Enterprise Ltda. (“Linx Enterprise”) all of which are wholly owned
by the Group.
Other than the changes described above
there were no other changes in the interest held by the Group in its subsidiaries.
During the six months ended
June 30, 2024, there were no changes in the ownership of the structured entities.
The Group holds call options
to acquire additional interests in some of its subsidiaries (Note 5.7) and issued put options to non-controlling investors (Note 5.10.1.)
The following table shows all entities
in which the Group has significant influence.
|
|
|
|
% Group's equity interest |
Entity name |
|
Principal activities |
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
|
|
Alpha-Logo Serviços de Informática S.A. (“Tablet Cloud”) |
|
Technology services |
|
25.00 |
|
25.00 |
APP Sistemas S.A. (“APP”) (a) |
|
Technology services |
|
19.80 |
|
19.90 |
Agilize Tecnologia S.A ("Agilize") |
|
Technology services |
|
33.33 |
|
33.33 |
Dental Office S.A. (“Dental Office”) |
|
Technology services |
|
20.00 |
|
20.00 |
Neostore Desenvolvimento de Programas de Computador S.A. (“Neomode”) (b) |
|
Technology services |
|
42.25 |
|
40.02 |
Trinks Serviços de Internet S.A. (“Trinks”) (c) |
|
Technology services |
|
— |
|
19.90 |
Delivery Much Tecnologia S.A. (“Delivery Much”) |
|
Food delivery marketplace |
|
29.50 |
|
29.50 |
(a) In the first
quarter of 2024, the equity interest held by the Group was diluted by the issuance of new shares under a long-term incentive program.
(b) On April
17, 2024, Linx Sistemas Consultoria Ltda., a Group company, increased its equity interest in Neomode through a loan conversion.
(c) On May 2,
2024, STNE Participações S.A. ("STNE PAR"), a Group company, acquired 100% of the remaining shares of Trinks.
STNE PAR had already owned 19.90% of Trinks' share capital. (Note 20.1)
The Group holds call options to acquire
additional interests in some of its associates (Note 5.7.).
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 4. | Cash and cash equivalents |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Denominated in R$ |
|
4,514,251 |
|
2,128,425 |
Denominated in US$ |
|
228,985 |
|
47,991 |
|
|
4,743,236 |
|
2,176,416 |
| 5.1. | Short and Long-term investments |
|
|
Short-term |
Long-term |
|
June 30, 2024 |
|
|
Listed securities |
|
Unlisted securities |
|
Unlisted securities |
|
|
|
|
|
|
|
|
|
|
Bonds (a) |
|
|
|
|
|
|
|
|
Brazilian sovereign bonds |
|
49,096 |
|
— |
|
— |
|
49,096 |
Time deposits |
|
55,947 |
|
— |
|
— |
|
55,947 |
Equity securities (b) |
|
— |
|
— |
|
32,410 |
|
32,410 |
Investment funds (c) |
|
— |
|
1,532 |
|
— |
|
1,532 |
|
|
105,043 |
|
1,532 |
|
32,410 |
|
138,985 |
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
106,575 |
Non-current |
|
|
|
|
|
|
|
32,410 |
|
|
Short-term |
Long-term |
|
December 31, 2023 |
|
|
Listed securities |
|
Unlisted securities |
|
Unlisted securities |
|
|
|
|
|
|
|
|
|
|
Bonds (a) |
|
|
|
|
|
|
|
|
Brazilian sovereign bonds |
|
2,954,236 |
|
— |
|
— |
|
2,954,236 |
Structured notes linked to Brazilian sovereign bonds |
|
— |
|
473,259 |
|
— |
|
473,259 |
Time deposits |
|
51,933 |
|
— |
|
— |
|
51,933 |
Equity securities (b) |
|
— |
|
— |
|
45,702 |
|
45,702 |
Investment funds (c) |
|
— |
|
2,068 |
|
— |
|
2,068 |
|
|
3,006,169 |
|
475,327 |
|
45,702 |
|
3,527,198 |
|
|
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
|
3,481,496 |
Non-current |
|
|
|
|
|
|
|
45,702 |
| (a) | As of June 30, 2024, bonds of listed securities are mainly
linked to the CDI and Selic benchmark interest rates. |
| (b) | Comprised of common shares of unlisted entities. All assets at the reporting dates are unlisted securities
that are not traded in an active market and recognized at fair value through other comprehensive income. Fair value of unlisted equity
instruments was determined based on negotiations of the securities. The change in fair value of equity securities at FVOCI for the six
months ended June 30, 2024 was R$ 1,623, (R$ (1,141) for the six months ended June 30, 2023). |
| • | On June 03, 2024, the Group sold its remaining stake in Cloudwalk INC for payment of R$ 57,540. The gain
on the sale of R$ 35,647 was recognized in other comprehensive income. |
| (c) | Comprised of foreign investment fund shares. |
Short and Long-term investments are
denominated in Brazilian Reais and U.S. dollars.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.2. | Accounts receivable from card issuers and accounts payable to clients |
| 5.2.1. | Composition of accounts receivable from card issuers |
Accounts receivable are amounts due
from card issuers and acquirers regarding the transactions of clients with card holders, performed in the ordinary course of business.
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Accounts receivable from card issuers (a) |
|
27,020,694 |
|
23,364,806 |
Accounts receivable from other acquirers (b) |
|
598,274 |
|
667,922 |
Allowance for expected credit losses |
|
(62,730) |
|
(55,619) |
|
|
27,556,238 |
|
23,977,109 |
|
|
|
|
|
Current |
|
27,471,965 |
|
23,895,512 |
Non-current |
|
84,273 |
|
81,597 |
| (a) | Accounts receivable from card issuers, net of interchange
fees, as a result of processing transactions with clients. |
| (b) | Accounts receivable from other acquirers related to PSP (Payment Service Provider) transactions. |
Part of the Group’s cash requirement
are to make prepayments to acquiring customers. The Group finances those requirements through different sources of funding including the
definitive sale of receivables to third parties. When such sales of receivables are carried out to entities in which the Group has subordinated
shares or quotas, the receivables sold remain in the statement of financial position, as these entities are consolidated in the financial
statements. As of June 30, 2024 a total of R$ 568,225 (December 31, 2023 - R$ 467,622) were consolidated through FIDC ACR FAST and R$
2,617,420 (December, 2023 - R$ nil) through FIDC ACR I, of which the Group has subordinated shares. When the sale of receivables is carried
out to non-controlled entities and for transactions where continuous involvement is not present, the amounts transferred are derecognized
from accounts receivable from card issuers. As of June 30, 2024, the sale of receivables that were derecognized from accounts receivables
from card issuers in the statement of financial position represent the main form of funding used for the prepayment business.
Accounts receivable held by FIDCs guarantee
the obligations to FIDC quota holders.
| 5.2.2. | Accounts payable to clients |
Accounts payable to clients represent
amounts due to accredited clients related to credit and debit card transactions, net of interchange fees retained by card issuers and
assessment fees paid to payment scheme networks as well as the Group’s net merchant discount rate fees which are collected by the
Group as an agent.
| 5.3. | Trade accounts receivable |
| 5.3.1. | Composition of trade accounts receivable |
Trade accounts receivables are amounts
due from clients mainly related to subscription services and equipment rental.
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Accounts receivable from subscription services |
|
283,163 |
|
293,304 |
Accounts receivable from equipment rental |
|
104,611 |
|
114,252 |
Chargeback |
|
89,250 |
|
72,401 |
Services rendered |
|
39,564 |
|
51,456 |
Receivables from registry operation |
|
18,543 |
|
22,347 |
Cash in transit |
|
23,197 |
|
24,172 |
Allowance for expected credit losses |
|
(130,792) |
|
(117,553) |
Others |
|
32,720 |
|
28,101 |
Total |
|
460,256 |
|
488,480 |
|
|
|
|
|
Current |
|
438,289 |
|
459,947 |
Non-current |
|
21,967 |
|
28,533 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.4. | Loans operations portfolio |
Portfolio balances by product:
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Working capital loan |
|
681,573 |
|
309,677 |
Credit card |
|
30,209 |
|
3,131 |
Loans operations portfolio, gross |
|
711,782 |
|
312,808 |
|
|
|
|
|
Allowance for expected credit losses (Note 5.4.4) |
|
(124,989) |
|
(62,061) |
Loans operations portfolio, net of allowance for expected credit losses |
|
586,793 |
|
250,747 |
|
|
|
|
|
Current |
|
474,243 |
|
209,957 |
Non-current |
|
112,550 |
|
40,790 |
| 5.4.1. | Non-performing loans ("NPL") |
Total outstanding
of the contract whenever the clients default on an installment:
|
June 30, 2024 |
|
December 31, 2023 |
|
Working capital |
|
Credit card |
|
Total |
|
Working capital |
|
Credit card |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Balances not overdue |
631,098 |
|
29,822 |
|
660,920 |
|
298,460 |
|
3,130 |
|
301,590 |
Balances overdue by |
|
|
|
|
|
|
|
|
|
|
|
<= 15 days |
13,322 |
|
131 |
|
13,453 |
|
4,350 |
|
1 |
|
4,351 |
15 < 90 days |
19,437 |
|
198 |
|
19,635 |
|
6,016 |
|
— |
|
6,016 |
> 90 days |
17,716 |
|
58 |
|
17,774 |
|
851 |
|
— |
|
851 |
|
50,475 |
|
387 |
|
50,862 |
|
11,217 |
|
1 |
|
11,218 |
|
|
|
|
|
|
|
|
|
|
|
|
Loans operations portfolio, gross |
681,573 |
|
30,209 |
|
711,782 |
|
309,677 |
|
3,131 |
|
312,808 |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
Working capital |
|
Credit card |
|
Total |
|
Working capital |
|
Credit card |
|
Total |
Installments not overdue |
|
|
|
|
|
|
|
|
|
|
|
|
<= 30 days |
|
38,802 |
|
11,246 |
|
50,048 |
|
12,911 |
|
1,465 |
|
14,376 |
30 < 60 days |
|
65,858 |
|
5,071 |
|
70,929 |
|
30,213 |
|
457 |
|
30,670 |
61 < 180 days |
|
226,103 |
|
9,412 |
|
235,515 |
|
110,110 |
|
847 |
|
110,957 |
181 < 360 days |
|
225,507 |
|
3,828 |
|
229,335 |
|
113,005 |
|
318 |
|
113,323 |
361 < 720 days |
|
103,131 |
|
17 |
|
103,148 |
|
41,572 |
|
1 |
|
41,573 |
> 720 days |
|
7,472 |
|
— |
|
7,472 |
|
61 |
|
— |
|
61 |
|
|
666,873 |
|
29,574 |
|
696,447 |
|
307,872 |
|
3,088 |
|
310,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Installments overdue by |
|
|
|
|
|
|
|
|
|
|
|
|
<= 30 days |
|
4,356 |
|
470 |
|
4,826 |
|
904 |
|
43 |
|
947 |
30 < 90 days |
|
5,053 |
|
125 |
|
5,178 |
|
799 |
|
— |
|
799 |
91 < 180 days |
|
3,807 |
|
40 |
|
3,847 |
|
99 |
|
— |
|
99 |
181 < 360 days |
|
1,484 |
|
— |
|
1,484 |
|
3 |
|
— |
|
3 |
|
|
14,700 |
|
635 |
|
15,335 |
|
1,805 |
|
43 |
|
1,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans operations portfolio, gross |
|
681,573 |
|
30,209 |
|
711,782 |
|
309,677 |
|
3,131 |
|
312,808 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.4.3. | Gross carrying amount |
The Group calculates an expected credit
loss allowance for its loans based on statistical models that consider both internal and external historical data, negative credit information
and guarantees, among which information addressing the behavior of each debtor. The Group calculates its loans operations portfolio in
three stages:
| (i) | Stage 1: corresponds to loans that do not present significant increase in credit risk since origination; |
| (ii) | Stage 2: corresponds to loans that presented significant increase in credit risk subsequent to origination. |
The Group determines
Stage 2 based on following criteria:
| (a) | absolute criteria: financial asset overdue more than 30 days, or; |
| (b) | relative criteria: in addition to the absolute criteria, the Group analyzes the evolution of the risk
of each financial instrument on a monthly basis, comparing the current behavior score attributed to each client with that attributed at
the time of recognition of the financial asset. Behavioral scoring considers credit behavior variables, such as default on other products
and market data about the customer. When the credit risk increases significantly since origination, the Stage 1 operation is moved to
Stage 2. |
For Stage 2,
a cure criterion is applied when the financial asset no longer meets the criteria for a significant increase in credit risk, as mentioned
above, and the loan is moved to Stage 1.
| (iii) | Stage 3: corresponds to impaired loans. |
The Group determines
Stage 3 based on following criteria:
| (a) | absolute criteria: financial asset overdue more than 90 days, or; |
| (b) | relative criteria: indicators that the financial asset will not be paid in full without activating a guarantee
or financial guarantee. |
The indication
that an obligation will not be paid in full includes the tolerance of financial instruments that imply the granting of advantages to the
counterparty following the deterioration of the counterparty's credit quality.
The Group also
assumes a cure criterion for Stage 3, with respect to the counterparty's repayment capacity, such as the percentage of total debt paid
or the time limit to liquidate current debt obligations.
Management regularly seeks forward
looking perspectives for future market developments including macroeconomic scenarios as well as its portfolio risk profile. Management
may adjust the ECL resulting from the models above in order to better reflect this forward looking perspective.
Reconciliation of gross portfolio of
loans operations, segregated by Stages:
Stage 1 |
|
December 31, 2023 |
|
Transfer to stage 2 |
|
Transfer to stage 3 |
|
Cure from stage 2 |
|
Cure from stage 3 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
296,282 |
|
(63,956) |
|
(3,915) |
|
31,150 |
|
142 |
|
— |
|
375,381 |
|
635,084 |
Credit card |
|
3,131 |
|
(663) |
|
(81) |
|
345 |
|
10 |
|
— |
|
27,002 |
|
29,744 |
|
|
299,413 |
|
(64,619) |
|
(3,996) |
|
31,495 |
|
152 |
|
— |
|
402,383 |
|
664,828 |
Stage 2 |
|
December 31, 2023 |
|
Cure to stage 1 |
|
Transfer to stage 3 |
|
Transfer from stage 1 |
|
Cure from stage 3 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
12,195 |
|
(31,150) |
|
(18,647) |
|
63,956 |
|
29 |
|
— |
|
(3,377) |
|
23,006 |
Credit card |
|
— |
|
(345) |
|
(19) |
|
663 |
|
— |
|
— |
|
48 |
|
347 |
|
|
12,195 |
|
(31,495) |
|
(18,666) |
|
64,619 |
|
29 |
|
— |
|
(3,329) |
|
23,353 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
Stage 3 |
|
December 31, 2023 |
|
Cure to stage 1 |
|
Cure to stage 2 |
|
Transfer from stage 1 |
|
Transfer from stage 2 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
1,200 |
|
(142) |
|
(29) |
|
3,915 |
|
18,647 |
|
— |
|
(108) |
|
23,483 |
Credit card |
|
— |
|
(10) |
|
— |
|
81 |
|
19 |
|
— |
|
28 |
|
118 |
|
|
1,200 |
|
(152) |
|
(29) |
|
3,996 |
|
18,666 |
|
— |
|
(80) |
|
23,601 |
Consolidated 3 stages |
|
December 31, 2023 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
Working capital loan |
|
309,677 |
|
— |
|
371,896 |
|
681,573 |
Credit card |
|
3,131 |
|
— |
|
27,078 |
|
30,209 |
|
|
312,808 |
|
— |
|
398,974 |
|
711,782 |
| 5.4.4. | Allowance for expected credit losses of loans operations |
Stage 1 |
|
December 31, 2023 |
|
Transfer to stage 2 |
|
Transfer to stage 3 |
|
Cure from stage 2 |
|
Cure from stage 3 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
57,576 |
|
(21,340) |
|
(2,741) |
|
3,604 |
|
14 |
|
— |
|
61,236 |
|
98,349 |
Credit card |
|
200 |
|
(303) |
|
(60) |
|
44 |
|
— |
|
— |
|
1,724 |
|
1,605 |
|
|
57,776 |
|
(21,643) |
|
(2,801) |
|
3,648 |
|
14 |
|
— |
|
62,960 |
|
99,954 |
Stage 2 |
|
December 31, 2023 |
|
Cure to stage 1 |
|
Transfer to stage 3 |
|
Transfer from stage 1 |
|
Cure from stage 3 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
3,445 |
|
(3,604) |
|
(13,053) |
|
21,340 |
|
8 |
|
— |
|
209 |
|
8,345 |
Credit card |
|
— |
|
(44) |
|
(17) |
|
303 |
|
— |
|
— |
|
(76) |
|
166 |
|
|
3,445 |
|
(3,648) |
|
(13,070) |
|
21,643 |
|
8 |
|
— |
|
133 |
|
8,511 |
Stage 3 |
|
December 31, 2023 |
|
Cure to stage 1 |
|
Cure to stage 2 |
|
Transfer from stage 1 |
|
Transfer from stage 2 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital loan |
|
840 |
|
(14) |
|
(8) |
|
2,741 |
|
13,053 |
|
— |
|
(173) |
|
16,439 |
Credit card |
|
— |
|
— |
|
— |
|
60 |
|
17 |
|
— |
|
8 |
|
85 |
|
|
840 |
|
(14) |
|
(8) |
|
2,801 |
|
13,070 |
|
— |
|
(165) |
|
16,524 |
Consolidated 3 stages |
|
December 31, 2023 |
|
Derecognition |
|
Acquisition / (Settlement) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
Working capital loan |
|
61,861 |
|
— |
|
61,272 |
|
123,133 |
Credit card |
|
200 |
|
— |
|
1,656 |
|
1,856 |
|
|
62,061 |
|
— |
|
62,928 |
|
124,989 |
| 5.5. | Financial assets from banking solutions |
As required by Brazilian Central Bank
(“BACEN”) regulation, client’s proceeds deposited in payment accounts must be fully collateralized by government securities,
and/or deposits at BACEN. At June 30, 2024, the amount of financial assets from banking solutions was R$ 6,967,814 (December 31, 2023
- R$ 6,397,898).
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.6. | Financial liabilities |
5.6.1. Retail
deposits
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
Deposits from retail clients |
6,471,629 |
|
6,119,455 |
Time deposits from retail clients (a) |
341 |
|
— |
|
6,471,970 |
|
6,119,455 |
| (a) | During the second quarter, the Company issued for the first
time Time deposits to its retail clients. Principal and interest of such liabilities are paid at maturity, which may vary significantly
in time but currently provide daily liquidity to clients. |
5.6.2. Changes
in financial liabilities
The table below presents the movement
of financial liabilities other than Retail deposits:
|
December 31, 2023 |
|
Additions |
|
Disposals |
|
Payment of principal |
|
Payment of interest |
|
Changes in exchange rates |
|
Fair value adjustment |
|
Interest |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds |
2,402,698 |
|
— |
|
— |
|
— |
|
(53,299) |
|
362,353 |
|
— |
|
52,519 |
|
2,764,271 |
Debentures, financial bills and commercial
papers (a) |
1,116,252 |
|
750,000 |
|
— |
|
— |
|
(62,075) |
|
— |
|
— |
|
70,260 |
|
1,874,437 |
Time deposits (b) |
— |
|
116,117 |
|
— |
|
(4,599) |
|
(38) |
|
— |
|
— |
|
604 |
|
112,084 |
Obligations to open-end FIDC quota holders |
452,128 |
|
105,564 |
|
— |
|
(34,094) |
|
(59) |
|
— |
|
— |
|
27,587 |
|
551,126 |
Institutional deposits and marketable debt securities |
3,971,078 |
|
971,681 |
|
— |
|
(38,693) |
|
(115,471) |
|
362,353 |
|
— |
|
150,970 |
|
5,301,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations to closed-end FIDC quota
holders (c) |
53,103 |
|
2,325,984 |
|
— |
|
— |
|
— |
|
— |
|
(202,716) |
|
99,762 |
|
2,276,133 |
Bank borrowings and working capital facilities |
1,321,348 |
|
1,681,280 |
|
— |
|
(1,570,264) |
|
(75,797) |
|
73,865 |
|
— |
|
80,601 |
|
1,511,033 |
Leases |
173,683 |
|
38,279 |
|
(5,560) |
|
(28,182) |
|
(5,730) |
|
(658) |
|
— |
|
5,730 |
|
177,562 |
Other debt instruments |
1,548,134 |
|
4,045,543 |
|
(5,560) |
|
(1,598,446) |
|
(81,527) |
|
73,207 |
|
(202,716) |
|
186,093 |
|
3,964,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
1,879,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,037,950 |
Non-current |
3,639,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,228,696 |
| (a) | On June 19, 2024 the subsidiary Stone SCFI concluded its
first issuance of financial bills raising R$ 750,000 with a two year maturity at CDI + 0.75% p.a. The issuance is guaranteed by both
Stone Pagamentos and by the Company. |
| (b) | In the second quarter of 2024, the Company started the issuance
of Time deposits, representing the first issuance of interest bearing deposits following the authorization granted by the BACEN to start
operations earlier this year. The certificates are held by multiple counterparties and maturities up to December 2024. The principal
and interest of this type of issuance are mainly paid at the maturity indexed to CDI rate. |
| (c) | FIDC ACR I issued quotas in exchange for a contribution of
R$ 2,325,984. The contribution was made by an special purpose vehicle funded by a revolving facility in which United States International
Development Finance Corporation (“DFC”) has invested US$ 467.5 million, funding our prepayment business through this FIDC.
FIDC ACR I has a final maturity of seven years and pays a semi-annual coupon at a fixed rate of 12.75% in R$. |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.7. | Derivative financial instruments, net |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Cross-currency interest rate swap used as hedge accounting instrument classified as cash flow hedge (Note 5.7.1.1) |
|
(33,218) |
|
(311,445) |
Interest rate swap used as hedge accounting instrument classified as fair value hedge (Note 5.7.1.2) |
|
(25,355) |
|
— |
Derivatives used as economic hedge instrument (Note 5.7.2) |
|
15,484 |
|
(4,097) |
Call options to acquire additional interest in associates and subsidiaries |
|
2,138 |
|
3,553 |
Derivative financial instruments, net |
|
(40,951) |
|
(311,989) |
5.7.1.1 Cash
flow hedge
During 2021, the Group entered into
hedge operations to protect its inaugural dollar bonds, subject to foreign exchange exposure using cross-currency interest rate swap contracts.
Additionally, in January 2024, the Group entered into hedge operations to protect bank borrowings, subject to foreign exchange exposure
using cross-currency interest rate swap contracts. The transactions have been designated for hedge accounting and classified as cash flow
hedge of the variability of the designated cash flows of the US Dollar denominated bonds / bank borrowings due to changes in the exchange
rate. The effective portion of the derivative's gain or loss is initially reported as a component of accumulated other comprehensive income,
recorded in a specific equity account, and subsequently reclassified into earnings in the same period the hedge object affects earnings,
while any ineffective portion, when applicable, is immediately recognized in profit or loss. The details of the cross-currency interest
rate swaps and their financial position as of June 30, 2024 are presented as follows.
Notional in US$ |
|
Notional in R$ |
|
Pay rate in local currency |
|
Trade date |
|
Due date |
|
Fair value as of June 30, 2024 – Asset (Liability) |
|
Gain (loss) recognized in income in six months ended June 30, 2024(a) |
|
Gain (loss) recognized in OCI (net of tax) in six months ended June 30, 2024(b) |
|
Fair value as of December 31, 2023 – Asset (Liability) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inaugural dollar bonds as hedged item |
|
|
|
|
|
|
|
|
|
|
50,000 |
|
248,500 |
|
CDI + 2.94% |
|
June 23, 2021 |
|
June 16, 2028 |
|
(3,933) |
|
24,526 |
|
(12,852) |
|
(26,967) |
50,000 |
|
247,000 |
|
CDI + 2.90% |
|
June 24, 2021 |
|
June 16, 2028 |
|
(3,351) |
|
24,677 |
|
(12,878) |
|
(26,359) |
50,000 |
|
248,500 |
|
CDI + 2.90% |
|
June 24, 2021 |
|
June 16, 2028 |
|
(6,670) |
|
24,314 |
|
(12,849) |
|
(27,625) |
75,000 |
|
375,263 |
|
CDI + 2.99% |
|
June 30, 2021 |
|
June 16, 2028 |
|
(4,956) |
|
12,022 |
|
(6,402) |
|
(43,894) |
50,000 |
|
250,700 |
|
CDI + 2.99% |
|
June 30, 2021 |
|
June 16, 2028 |
|
(9,347) |
|
36,524 |
|
(19,281) |
|
(29,705) |
50,000 |
|
250,110 |
|
CDI + 2.98% |
|
June 30, 2021 |
|
June 16, 2028 |
|
(14,407) |
|
23,733 |
|
(12,775) |
|
(29,207) |
25,000 |
|
127,353 |
|
CDI + 2.99% |
|
July 15, 2021 |
|
June 16, 2028 |
|
(4,603) |
|
24,577 |
|
(12,865) |
|
(16,495) |
25,000 |
|
127,353 |
|
CDI + 2.99% |
|
July 15, 2021 |
|
June 16, 2028 |
|
(5,039) |
|
12,022 |
|
(6,409) |
|
(16,573) |
50,000 |
|
259,890 |
|
CDI + 2.96% |
|
July 16, 2021 |
|
June 16, 2028 |
|
(7,641) |
|
11,904 |
|
(6,357) |
|
(37,516) |
25,000 |
|
131,025 |
|
CDI + 3.00% |
|
August 6, 2021 |
|
June 16, 2028 |
|
(7,794) |
|
11,767 |
|
(6,345) |
|
(18,487) |
25,000 |
|
130,033 |
|
CDI + 2.85% |
|
August 10, 2021 |
|
June 16, 2028 |
|
(6,176) |
|
24,367 |
|
(12,855) |
|
(19,391) |
25,000 |
|
130,878 |
|
CDI + 2.81% |
|
August 11, 2021 |
|
June 16, 2028 |
|
(6,909) |
|
11,933 |
|
(6,365) |
|
(19,226) |
Bank borrowings as hedged item |
|
|
|
|
|
|
|
|
|
|
|
|
95,000 |
|
467,875 |
|
CDI + 1.70% |
|
January 4, 2024 |
|
January 8, 2025 |
|
47,608 |
|
50,157 |
|
(2,550) |
|
— |
|
|
|
|
|
|
|
|
Net amount |
|
(33,218) |
|
292,523 |
|
(130,783) |
|
(311,445) |
| (a) | Recognized in the statement of profit or loss, in “Financial expenses, net”. The amount recognized
during the six months ended June 30, 2023 was a loss of R$ 352,490. |
| (b) | Recognized in equity, in “Other comprehensive income.” The balance in the cash flow hedge
reserve as of June 30, 2024 is a loss of R$ 327,971 (December 31, 2023 - loss of R$ 197,188). |
In 2024 the Group
paid R$ 116,486 (2023 - R$ 305,990) for coupon on the cross-currency swaps above.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
5.7.1.2 Fair
value hedge
During the first quarter of 2024, the
Group entered into a definitive receivables assignment agreement at fixed rates with FIDC ACR I. To convert such contract to a floating
rate agreement, the company is part of interest rate swap contracts. The transactions have been designated for hedge accounting and classified
as fair value hedge. The fair value changes on both the hedge instruments and hedge object are recognized in the profit or loss (financial
expenses, net). The details of the interest rate swaps and their financial position as of June 30, 2024 are presented as follows:
Notional in R$(a) |
|
Pay rate in
local currency |
|
Trade date |
|
Due date |
|
Fair value as of June 30, 2024 – Asset (Liability) |
|
Gain (loss) recognized in income in six months ended June 30, 2024(b) |
|
|
|
|
|
|
|
|
|
|
|
760,040 |
|
CDI + 2.03% |
|
January 17, 2024 |
|
January 31, 2031 (c) |
|
— |
|
(48,832) |
471,000 |
|
CDI + 2.14% |
|
February 28, 2024 |
|
January 31, 2031 (c) |
|
— |
|
(27,774) |
265,000 |
|
CDI + 1.68% |
|
March 15, 2024 |
|
January 31, 2031 (c) |
|
— |
|
(14,323) |
25,228 |
|
CDI + 1.94% |
|
March 18, 2024 |
|
January 31, 2031 (c) |
|
— |
|
(1,299) |
14,514 |
|
CDI + 1.57% |
|
March 18, 2024 |
|
January 31, 2031 (c) |
|
— |
|
(754) |
760,040 |
|
CDI + 0.71% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(8,192) |
|
(8,192) |
471,000 |
|
CDI + 0.90% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(5,060) |
|
(5,060) |
265,000 |
|
CDI + 0.55% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(2,870) |
|
(2,870) |
25,228 |
|
CDI + 0.86% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(433) |
|
(433) |
14,514 |
|
CDI + 0.48% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(298) |
|
(298) |
790,834 |
|
CDI + 0.84% |
|
June 14, 2024 |
|
January 31, 2031 |
|
(8,502) |
|
(8,502) |
|
|
|
|
|
|
Net amount |
|
(25,355) |
|
(118,337) |
| (a) | The interest expense of the hedged obligations is taxable/deductible. For the operations contracted in
the second quarter of 2024, the hedge relationship has been designed to hedge the fair value risk on an after-tax basis. As a result,
the notional amount of the swaps is less than the notional amount of the obligation. |
| (b) | Recognized in the statement of profit or loss, in “Financial expenses, net”. |
| (c) | Operations settled on June 24, 2024. |
In the second
quarter of 2024, the Group paid R$ 92,982 in interest rate swap coupon payments mentioned above.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
The Group is party to non-deliverable
forward (“NDF”) contracts with different counterparties approved by the Board of Directors following the Counterparty Policy
to hedge its foreign currency exposure to the U.S. Dollar and Euro. The Group uses those derivatives to hedge foreign currency risk associated
with two exposures: (i) the cash position it holds, and (ii) certain software purchase agreements.
|
|
June 30, 2024 |
|
|
Minimum Rate |
|
Maximum Rate |
|
Notional |
|
Gain (loss) |
|
Balance |
|
|
|
|
|
|
|
|
|
|
|
NDF Dollar |
|
5.218 |
|
5.530 |
|
32,470 |
|
2,481 |
|
2,533 |
NDF Euro |
|
5.657 |
|
5.923 |
|
285 |
|
119 |
|
91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
Minimum Rate |
|
Maximum Rate |
|
Notional |
|
Gain (loss) |
|
Balance |
|
|
|
|
|
|
|
|
|
|
|
NDF Dollar |
|
4.8220 |
|
4.9400 |
|
6,460 |
|
19,116 |
|
323 |
NDF Euro |
|
5.3208 |
|
5.3715 |
|
570 |
|
(447) |
|
4 |
| 5.7.2.2 | Interest rates hedge |
The Group mitigates the interest rate
risk generated by the gap between its prepayment business (fixed rate) and loan portfolio (fixed rate) its funding activities (either
fixed or floating) with mixed maturities. This hedge is executed over-the-counter (“OTC”) with multiple financial institutions
following its Counterparty Policy.
|
|
June 30, 2024 |
|
|
Minimum Rate |
|
Maximum Rate |
|
Maturity is up to |
|
Notional |
|
Gain (loss) |
Balance |
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps (Fixed rate to CDI) |
|
9.8 % |
|
13.1 % |
|
Nov/25 |
|
13,810,303 |
|
13,997 |
12,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
Minimum Rate |
|
Maximum Rate |
|
Maturity is up to |
|
Notional |
|
Gain (loss) |
Balance |
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps (Fixed rate to CDI) |
|
10.2 % |
|
14.3 % |
|
May/25 |
|
6,079,500 |
|
(7,328) |
(4,424) |
| 5.8. | Financial risk management |
The Group’s activities expose
it to market, liquidity, credit, and counterparty risks. The two main market risks for the Group are interest rates and exchange rates.
Interest rate risk arises as the Group originates assets at fixed rates (credit card prepayment and loans) and with funding through fixed
and floating rates with unmatched maturities of such assets. The second risk arises from fluctuations in exchange rates among Brazilian
Reais and the currencies of countries where the Group has subsidiaries in addition to its indebtedness and expenses denominated in currencies
other than the Brazilian Real. The Group’s main liquidity risk is its potential inability to raise financing to continue its prepayment
and credit business, which although not a legal obligation, is a significant component of its revenues. Potential loss from its loan portfolio
is the main credit risk faced by the Group. The counterparty risk is mainly generated by the counterparties with which the Group engages
for financial contracts for hedging, investments and committed funding, in addition to its inherent credit risk exposure to credit card
issuers.
The Board of Directors has approved
policies, and limits for its financial risk management. The Group uses financial derivatives only to mitigate market risk exposures. It
is the Group’s policy not to engage in derivatives for speculative purposes. Different levels of managerial approval are required
for entering into financial instruments depending on its nature and the type of risk associated.
The Group’s financial risk management
is carried out by the Risk Management Area.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.9. | Financial instruments by category |
| 5.9.1. | Financial assets by category |
|
|
Amortized cost |
|
FVPL |
|
FVOCI |
|
Total |
|
|
|
|
|
|
|
|
|
June 30, 2024 |
|
|
|
|
|
|
|
|
Short and Long-term investments |
|
— |
|
106,575 |
|
32,410 |
|
138,985 |
Financial assets from banking solutions |
|
6,967,814 |
|
— |
|
— |
|
6,967,814 |
Accounts receivable from card issuers |
|
— |
|
— |
|
27,556,238 |
|
27,556,238 |
Trade accounts receivable |
|
460,256 |
|
— |
|
— |
|
460,256 |
Loans operations portfolio |
|
586,793 |
|
— |
|
— |
|
586,793 |
Derivative financial instruments(a) |
|
— |
|
71,275 |
|
— |
|
71,275 |
Receivables from related parties |
|
714 |
|
— |
|
— |
|
714 |
Other assets |
|
523,767 |
|
— |
|
— |
|
523,767 |
|
|
8,539,344 |
|
177,850 |
|
27,588,648 |
|
36,305,842 |
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
Short and Long-term investments |
|
— |
|
3,481,496 |
|
45,702 |
|
3,527,198 |
Financial assets from banking solutions |
|
5,250,496 |
|
1,147,402 |
|
— |
|
6,397,898 |
Accounts receivable from card issuers |
|
5,877 |
|
— |
|
23,971,232 |
|
23,977,109 |
Trade accounts receivable |
|
488,480 |
|
— |
|
— |
|
488,480 |
Loans operations portfolio |
|
250,747 |
|
— |
|
— |
|
250,747 |
Derivative financial instruments(a) |
|
— |
|
4,182 |
|
— |
|
4,182 |
Receivables from related parties |
|
2,512 |
|
— |
|
— |
|
2,512 |
Other assets |
|
518,362 |
|
— |
|
— |
|
518,362 |
|
|
6,516,474 |
|
4,633,080 |
|
24,016,934 |
|
35,166,488 |
| (a) | Derivative financial instruments as of June 30, 2024 of R$ 33,218 (December 31, 2023 – R$ 311,445)
were designated as cash flow hedging instruments, and therefore the effective portion of the hedge is accounted for in OCI. |
| 5.9.2. | Financial liabilities by category |
|
|
Amortized cost |
|
FVPL |
|
Total |
|
|
|
|
|
|
|
June 30, 2024 |
|
|
|
|
|
|
Retail deposits |
|
6,471,970 |
|
— |
|
6,471,970 |
Accounts payable to clients |
|
18,512,856 |
|
— |
|
18,512,856 |
Trade accounts payable |
|
525,684 |
|
— |
|
525,684 |
Institutional deposits and marketable debt securities |
|
5,301,917 |
|
— |
|
5,301,917 |
Other debt instruments(a) |
|
1,688,596 |
|
2,276,133 |
|
3,964,729 |
Derivative financial instruments |
|
— |
|
112,226 |
|
112,226 |
Other liabilities |
|
251,374 |
|
282,176 |
|
533,550 |
|
|
32,752,397 |
|
2,670,535 |
|
35,422,932 |
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
Retail deposits |
|
6,119,455 |
|
— |
|
6,119,455 |
Accounts payable to clients |
|
19,199,127 |
|
— |
|
19,199,127 |
Trade accounts payable |
|
513,877 |
|
— |
|
513,877 |
Institutional deposits and marketable debt securities |
|
3,971,077 |
|
— |
|
3,971,077 |
Other debt instruments |
|
1,548,135 |
|
— |
|
1,548,135 |
Derivative financial instruments |
|
— |
|
316,171 |
|
316,171 |
Other liabilities |
|
119,526 |
|
410,504 |
|
530,030 |
|
|
31,471,197 |
|
726,675 |
|
32,197,872 |
| (a) | The debt designated for hedge accounting as the hedged item in a fair value hedge is adjusted for changes
on its fair value only attributable to the specifically designated risks being hedged. |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 5.10. | Fair value measurement |
| 5.10.1. | Assets and liabilities by fair value hierarchy |
The following table shows an analysis
of financial instruments measured at fair value by level of the fair value hierarchy:
|
June 30, 2024 |
|
December 31, 2023 |
|
Fair value |
|
Hierarchy level |
|
Fair value |
|
Hierarchy level |
Assets measured at fair value |
|
|
|
|
|
|
|
Short and Long-term investments(a) (b) |
138,985 |
|
I /II |
|
3,527,198 |
|
I /II |
Financial assets from banking solutions(b) |
— |
|
I |
|
1,147,402 |
|
I |
Accounts receivable from card issuers(c) |
27,556,238 |
|
II |
|
23,971,232 |
|
II |
Derivative financial instruments(d) |
71,275 |
|
II |
|
4,182 |
|
II |
|
27,766,498 |
|
|
|
28,650,014 |
|
|
|
|
|
|
|
|
|
|
Liabilities measured at fair value |
|
|
|
|
|
|
|
Other debt instruments(g) |
2,276,133 |
|
II |
|
— |
|
II |
Derivative financial instruments(d) |
112,226 |
|
II |
|
316,171 |
|
II |
Other liabilities(e) (f) |
282,176 |
|
III |
|
410,504 |
|
III |
|
2,670,535 |
|
|
|
726,675 |
|
|
| (a) | Listed securities are classified as Level I and unlisted securities classified as Level II, determining
fair value using valuation techniques, which employ the use of market observable inputs. |
| (b) | Sovereign bonds are priced using quotations from Anbima public pricing method. |
| (c) | For accounts receivable from card issuers measured at FVOCI, fair value is estimated by discounting future
cash flows using market rates for similar items. |
| (d) | The Group enters into derivative financial instruments with financial institutions with investment grade
credit ratings. Derivative financial instruments are valued using valuation techniques, which employ the use of observable market inputs. |
| (e) | These are contingent considerations included in other liabilities arising on business combinations that
are measured at FVPL. Fair values are estimated in accordance with pre-determined formulas explicit in the contracts with selling shareholders.
The significant unobservable inputs used in the fair value measurement of contingent consideration categorized as Level III of the fair
value hierarchy are based on projections of revenue, net debt, number of clients, net margin and the discount rates used to evaluate the
liability. |
| (f) | The Group issued put options for Reclame Aqui’s non-controlling interests, in the 2022 business
combination. For the non-controlling shareholder amounts the Group has elected as an accounting policy that the put options derecognize
the non-controlling interests at each reporting date as if it was acquired at that date and recognize a financial liability at the present
value of the amount payable on exercise of the non-controlling interests put option. The difference between the financial liability and
the non-controlling interests derecognized at each period is recognized as an equity transaction. The amount of R$ 193,883 was recorded
in the consolidated statement of financial position as of June 30, 2024 as a financial liability under other liabilities (December 31,
2023 - R$ 178,721). |
| (g) | For Other debt instruments, fair value is estimated by discounting future cash flows using contract rates
for funding items, and using market value of senior quotas liabilities |
In the six month periods ended June
30, 2024 and 2023, there were no transfers between level I and level II and between level II and level III fair value measurements.
5.10.2. Fair
value of financial instruments not measured at fair value
The table below presents a comparison
by class between book value and fair value of the financial instruments of the Group, other than those with carrying amounts that are
reasonable approximations of fair values:
|
|
June 30, 2024 |
December 31, 2023 |
|
|
Book value |
|
Fair value |
|
Book value |
|
Fair value |
|
|
|
|
|
|
|
|
|
Financial assets |
|
|
|
|
|
|
|
|
Loans operations portfolio |
|
586,793 |
|
549,698 |
|
250,747 |
|
250,877 |
|
|
586,793 |
|
549,698 |
|
250,747 |
|
250,877 |
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
Accounts payable to clients |
|
18,512,856 |
|
17,759,792 |
|
19,199,127 |
|
18,685,622 |
Institutional deposits and marketable debt securities |
|
5,301,917 |
|
6,578,210 |
|
3,971,077 |
|
4,692,866 |
|
|
23,814,773 |
|
24,338,002 |
|
23,170,204 |
|
23,378,488 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Customer deferred acquisition costs |
|
197,234 |
|
190,239 |
Prepaid expenses(a) |
|
120,291 |
|
189,371 |
Salary advances |
|
67,626 |
|
10,837 |
Receivables from the sale of associates and subsidiaries (b) |
|
50,992 |
|
18,676 |
Suppliers advances |
|
21,523 |
|
35,835 |
Security deposits |
|
14,184 |
|
14,230 |
Judicial deposits |
|
13,402 |
|
22,507 |
Convertible loans |
|
12,121 |
|
11,267 |
Other |
|
26,394 |
|
25,400 |
|
|
523,767 |
|
518,362 |
|
|
|
|
|
Current |
|
390,493 |
|
380,854 |
Non-current |
|
133,274 |
|
137,508 |
| (a) | These expenditures include, but are not limited to, prepaid software licenses, certain consulting
services, insurance premiums and prepaid marketing expenses. The amount recognized as asset in the statement of financial position
is charged to the statement of profit or loss once the prepaid services are consumed by the Group. The balance is comprised
mainly by prepaid software subscriptions and licenses for R$ 78,500 (December 31, 2023 - R$ 32,639), and prepaid media R$ 20,744
(December 31, 2023 - R$ 114,260). |
| (b) | Refers to balances receivable from buyers for the sale of the equity interest of Pinpag and Everydata
Group Ltd. (formerly, StoneCo CI) and its subsidiaries (namely, the Creditinfo Caribbean companies). |
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
Withholding income tax on financial income(a) |
155,115 |
|
101,579 |
Income tax and social contribution |
12,807 |
|
9,584 |
Other withholding income tax |
2,342 |
|
19,710 |
Contributions over revenue(b) |
1,976 |
|
544 |
Other taxes |
10,467 |
|
14,922 |
|
182,707 |
|
146,339 |
| (a) | Refers to income taxes withheld on financial income which
will be offset against future income tax payable. |
| (b) | Refers to income taxes, social contributions, and withholding tax prepayments that have been offset against
income tax payable. |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
The Company is domiciled in the Cayman
Islands and there is no income tax in that jurisdiction. Some of the income earned by the Company is related to transactions abroad which
are subject to a 15% rate of withholding tax.
| 8.1. | Reconciliation of income tax expense |
Considering the fact that the Company
is an entity located in the Cayman Islands which has no income tax, for the purpose of the following reconciliation of income tax expense
to profit (loss) for the periods ended June 30, 2024 and 2023, as Brazil is the jurisdiction in which most of the Group’s transactions
takes place, the combined Brazilian statutory income tax rates at 34% was applied.
In Brazil such combined rate is applied,
in general, to all entities and comprises the Corporate Income Tax (“IRPJ”) and the Social Contribution on Net Income (“CSLL”)
on the taxable income of each Brazilian legal entity (not on a consolidated basis).
|
Six months ended June 30, |
|
Three months ended June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Profit before income taxes |
1,135,704 |
|
729,085 |
|
651,687 |
|
422,273 |
Brazilian statutory rate |
34% |
|
34% |
|
34% |
|
34% |
Tax (expense) at the statutory rate |
(386,139) |
|
(247,889) |
|
(221,574) |
|
(143,573) |
|
|
|
|
|
|
|
|
Additions (exclusions): |
|
|
|
|
|
|
|
Profit (loss) from entities subject to different tax rates |
126,908 |
|
46,503 |
|
57,296 |
|
19,977 |
Profit (loss) from entities subject to different tax rates - Mark to market on equity securities designated at FVPL |
— |
|
10,395 |
|
— |
|
— |
Other permanent differences |
(8,642) |
|
(1,110) |
|
(5,780) |
|
8,245 |
Equity pickup on associates |
(38) |
|
303 |
|
(144) |
|
651 |
Unrecognized deferred taxes |
(26,433) |
|
(9,904) |
|
(2,038) |
|
(4,965) |
Use of previously unrecognized tax losses |
225 |
|
1,955 |
|
(47) |
|
1,955 |
Previously unrecognized on deferred income tax (temporary and tax losses) |
18,577 |
|
— |
|
18,000 |
|
(358) |
Research and development tax benefits (Lei do Bem) |
8,812 |
|
2,242 |
|
(1,208) |
|
2,242 |
Other tax incentives |
2,922 |
|
1,321 |
|
2,109 |
|
764 |
Total income tax and social contribution benefit/(expense) |
(263,808) |
|
(196,184) |
|
(153,386) |
|
(115,062) |
Effective tax rate |
23.2 % |
|
26.9 % |
|
23.5 % |
|
27.2 % |
|
|
|
|
|
|
|
|
Current income tax and social contribution |
(257,229) |
|
(117,753) |
|
(151,377) |
|
(74,199) |
Deferred income tax and social contribution |
(6,579) |
|
(78,431) |
|
(2,009) |
|
(40,863) |
Total income tax and social contribution benefit/(expense) |
(263,808) |
|
(196,184) |
|
(153,386) |
|
(115,062) |
| 8.2. | Deferred income taxes by nature |
|
December 31, 2023 |
|
Recognized against other comprehensive income |
|
Recognized against profit or loss |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
Losses available for offsetting against future taxable income |
343,313 |
|
— |
|
40,109 |
|
383,422 |
Other temporary differences |
302,551 |
|
— |
|
(18,437) |
|
284,114 |
Assets at FVOCI |
179,944 |
|
30,364 |
|
— |
|
210,308 |
Share-based compensation |
123,211 |
|
— |
|
49,817 |
|
173,028 |
Contingencies arising from business combinations |
36,320 |
|
— |
|
1,858 |
|
38,178 |
Tax deductible goodwill |
42,625 |
|
— |
|
(29,365) |
|
13,260 |
Technological innovation benefit |
(9,038) |
|
— |
|
(40,284) |
|
(49,322) |
Temporary differences under FIDC |
(224,733) |
|
— |
|
(27,609) |
|
(252,342) |
Intangible assets and property and equipment arising from business combinations |
(676,215) |
|
— |
|
17,332 |
|
(658,883) |
Deferred tax, net |
117,978 |
|
30,364 |
|
(6,579) |
|
141,763 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 8.3. | Unrecognized deferred taxes |
The Group has accumulated tax loss
carryforwards and other temporary differences in some subsidiaries in the amount of R$ 141,433 (December 31, 2023 – R$ 133,710)
for which a deferred tax asset was not recognized and are available indefinitely for offsetting against future taxable profits of the
companies in which the losses arose. Deferred tax assets have not been recognized with respect of these losses as they cannot be used
to offset taxable profits between subsidiaries of the Group, and there is no other evidence of recoverability in the near future.
| 9.1. | Changes in Property and equipment |
|
December 31, 2023 |
|
Additions |
|
Disposals |
|
Transfers |
|
Effects of changes in foreign exchange rates |
|
Business combination |
|
June 30, 2024 |
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pin Pads & POS |
2,359,314 |
|
343,620 |
|
(88,448) |
|
— |
|
— |
|
— |
|
2,614,486 |
IT equipment |
295,330 |
|
19,335 |
|
(28,912) |
|
— |
|
68 |
|
423 |
|
286,244 |
Facilities |
77,594 |
|
845 |
|
(173) |
|
288 |
|
2 |
|
— |
|
78,556 |
Machinery and equipment |
23,950 |
|
1,642 |
|
(939) |
|
— |
|
(7) |
|
— |
|
24,646 |
Furniture and fixtures |
22,684 |
|
345 |
|
(285) |
|
— |
|
15 |
|
15 |
|
22,774 |
Vehicles and airplane |
27,175 |
|
46 |
|
(35) |
|
— |
|
8 |
|
— |
|
27,194 |
Construction in progress |
30,962 |
|
3,934 |
|
(5,173) |
|
(288) |
|
— |
|
— |
|
29,435 |
Right-of-use assets - equipment |
4,880 |
|
— |
|
(197) |
|
— |
|
— |
|
— |
|
4,683 |
Right-of-use assets - vehicles |
31,976 |
|
20,519 |
|
(11,976) |
|
— |
|
— |
|
— |
|
40,519 |
Right-of-use assets - offices |
179,154 |
|
16,971 |
|
(11,688) |
|
— |
|
164 |
|
— |
|
184,601 |
|
3,053,019 |
|
407,257 |
|
(147,826) |
|
— |
|
250 |
|
438 |
|
3,313,138 |
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pin Pads & POS |
(1,065,406) |
|
(258,092) |
|
85,752 |
|
— |
|
— |
|
— |
|
(1,237,746) |
IT equipment |
(172,517) |
|
(25,786) |
|
21,933 |
|
— |
|
(167) |
|
— |
|
(176,537) |
Facilities |
(30,507) |
|
(7,001) |
|
107 |
|
— |
|
542 |
|
— |
|
(36,859) |
Machinery and equipment |
(20,039) |
|
(3,980) |
|
846 |
|
— |
|
1,144 |
|
— |
|
(22,029) |
Furniture and fixtures |
(6,798) |
|
(1,193) |
|
194 |
|
— |
|
(21) |
|
— |
|
(7,818) |
Vehicles and airplane |
(5,468) |
|
(1,536) |
|
35 |
|
— |
|
(11) |
|
— |
|
(6,980) |
Right-of-use assets - equipment |
(1,150) |
|
(39) |
|
197 |
|
— |
|
— |
|
— |
|
(992) |
Right-of-use assets - Vehicles |
(23,302) |
|
(7,866) |
|
7,168 |
|
— |
|
— |
|
— |
|
(24,000) |
Right-of-use assets - Offices |
(65,935) |
|
(17,303) |
|
11,215 |
|
— |
|
50 |
|
— |
|
(71,973) |
|
(1,391,122) |
|
(322,796) |
|
127,447 |
|
— |
|
1,537 |
|
— |
|
(1,584,934) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
1,661,897 |
|
84,461 |
|
(20,379) |
|
— |
|
1,787 |
|
438 |
|
1,728,204 |
| 9.2. | Depreciation and amortization charges |
Depreciation and amortization expense
has been charged in the following line items of the consolidated statement of profit or loss:
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Cost of services |
|
334,089 |
|
290,339 |
|
172,236 |
|
150,969 |
Administrative expenses |
|
87,796 |
|
118,648 |
|
41,312 |
|
57,453 |
Selling expenses |
|
19,674 |
|
25,195 |
|
10,676 |
|
13,266 |
Depreciation and Amortization charges (Note 16) |
|
441,559 |
|
434,182 |
|
224,224 |
|
221,688 |
Depreciation charge |
|
322,796 |
|
283,621 |
|
165,983 |
|
146,989 |
Amortization charge |
|
118,763 |
|
150,561 |
|
58,241 |
|
74,699 |
Depreciation and Amortization charges |
|
441,559 |
|
434,182 |
|
224,224 |
|
221,688 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 10.1. | Changes in Intangible assets |
|
December 31, 2023 |
|
Additions |
|
Disposals |
|
Transfers |
|
Effects of hyperinflation
|
|
Effects of changes in foreign exchange rates |
|
Business combination |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill - acquisition of subsidiaries |
5,634,903 |
|
— |
|
(44,535) |
|
— |
|
— |
|
53 |
|
47,441 |
|
5,637,862 |
Customer relationships |
1,793,696 |
|
2,070 |
|
(14,062) |
|
— |
|
— |
|
— |
|
— |
|
1,781,704 |
Trademarks and patents |
550,999 |
|
2,065 |
|
(11,841) |
|
— |
|
— |
|
— |
|
— |
|
541,223 |
Software |
1,334,698 |
|
77,665 |
|
(30,810) |
|
47,412 |
|
— |
|
2,150 |
|
— |
|
1,431,115 |
Non-compete agreement |
26,024 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
26,024 |
Operating license |
5,674 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
5,674 |
Software in progress |
274,608 |
|
169,658 |
|
(10,006) |
|
(47,072) |
|
— |
|
— |
|
— |
|
387,188 |
Right-of-use assets - Software |
50,558 |
|
789 |
|
— |
|
— |
|
— |
|
(2) |
|
— |
|
51,345 |
|
9,671,160 |
|
252,247 |
|
(111,254) |
|
340 |
|
— |
|
2,201 |
|
47,441 |
|
9,862,135 |
Amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships |
(343,981) |
|
(28,942) |
|
11,472 |
|
— |
|
— |
|
— |
|
— |
|
(361,451) |
Trademarks and patents |
(20,219) |
|
(572) |
|
3,559 |
|
— |
|
— |
|
— |
|
— |
|
(17,232) |
Software |
(474,163) |
|
(79,376) |
|
23,840 |
|
(340) |
|
(414) |
|
(260) |
|
— |
|
(530,713) |
Non-compete agreement |
(12,834) |
|
(2,436) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(15,270) |
Operating license |
(5,673) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(5,673) |
Right-of-use assets - Software |
(19,371) |
|
(7,437) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(26,808) |
|
(876,241) |
|
(118,763) |
|
38,871 |
|
(340) |
|
(414) |
|
(260) |
|
— |
|
(957,147) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets net |
8,794,919 |
|
133,484 |
|
(72,383) |
|
— |
|
(414) |
|
1,941 |
|
47,441 |
|
8,904,988 |
| 11. | Transactions with related parties |
Related parties comprise the Group’s
parent companies, key management personnel and any businesses which are controlled, directly or indirectly by the founders, officers and
directors or over which they exercise significant management influence. Related party transactions are entered in the normal course of
business at prices and terms approved by the Group’s management.
The following transactions were carried
out with associates related parties:
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Sale of services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates (legal and administrative services)(a) |
18 |
|
76 |
|
7 |
|
38 |
|
|
18 |
|
76 |
|
7 |
|
38 |
|
|
|
|
|
|
|
|
|
Purchases of goods and services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates (transaction services)(b) |
(1,136) |
|
(1,526) |
|
(766) |
|
(300) |
|
|
(1,136) |
|
(1,526) |
|
(766) |
|
(300) |
| (a) | Related to services provided to Trinks until May 2, 2024, when the Group acquired 100% of the equity capital
and Trinks started to be consolidated into these financial statements. |
| (b) | Related mainly to expenses paid to Trinks, RH Software, APP and Tablet Cloud for consulting services,
marketing expenses, sales commissions and software license to new customer’s acquisition. |
Services provided to related parties
include legal and administrative services provided under normal trade terms and reimbursement of other expenses incurred in their respect.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
The following balances are outstanding
at the end of the reporting period in relation to transactions with related parties:
|
June 30, 2024 |
|
December 31, 2023 |
Loans to associate |
714 |
|
2,512 |
Receivables from related parties |
714 |
|
2,512 |
As of June 30, 2024, there is
no allowance for expected credit losses on related parties receivables. No guarantees were provided or received in relation to any accounts
receivable or payable involving related parties.
| 12. | Provision for contingencies |
The Group companies are party to labor,
civil and tax litigation in progress, which are being addressed at the administrative and judicial levels. For certain contingencies,
the Group has made judicial deposits, which are legal reserves the Group is required to make by the Brazilian courts as security for any
damages or settlements the Group may be required to pay as a result of litigation.
| 12.1. | Probable losses, provided for in the statement of financial position |
The provisions for probable losses
arising from these matters are estimated and periodically adjusted by management, supported by the opinion of its external legal advisors
and based on the actual status of the lawsuit. The amount, nature and the movement of the liabilities are summarized as follows:
|
|
Civil |
|
Labor |
|
Tax |
|
Total |
Balance as of December 31, 2023 |
|
35,862 |
|
39,705 |
|
133,299 |
|
208,866 |
Additions |
|
34,639 |
|
34,232 |
|
2 |
|
68,873 |
Reversals |
|
(16,494) |
|
(12,361) |
|
— |
|
(28,855) |
Interests |
|
2,120 |
|
4,780 |
|
7,005 |
|
13,905 |
Payments |
|
(13,980) |
|
(5,623) |
|
(9,985) |
|
(29,588) |
Balance as of June 30, 2024 |
|
42,147 |
|
60,733 |
|
130,321 |
|
233,201 |
|
|
Civil |
|
Labor |
|
Tax |
|
Total |
Balance as of December 31, 2022 |
|
25,324 |
|
24,460 |
|
160,592 |
|
210,376 |
Additions |
|
17,361 |
|
9,229 |
|
8,400 |
|
34,990 |
Reversals |
|
(6,902) |
|
(18,277) |
|
(4,712) |
|
(29,891) |
Interests |
|
2,121 |
|
1,929 |
|
9,849 |
|
13,899 |
Payments |
|
(1,539) |
|
(633) |
|
(14,697) |
|
(16,869) |
Balance as of June 30, 2023 |
|
36,365 |
|
16,708 |
|
159,432 |
|
212,505 |
In general, provisions and contingencies
arise from claims related to lawsuits of a similar nature, with individual amounts that are not considered significant. The nature of
the civil litigations has been categorized according to the primary business fronts of the Group. Substantial provisions are specifically
summarized in two of these business domains, namely (i) acquiring, totaling R$ 20,978 as of June 30, 2024 (R$ 18,556 as of December 31,
2023) and (ii) banking, totaling R$ 16,545 as of June 30, 2024 (R$ 12,559 as of December 31, 2023).
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
In the context of Labor Courts, the
Group encounters recurrent lawsuits, primarily falling in two categories: (i) labor claims by former employees and (ii) labor claims brought
forth by former employees of outsourced companies contracted by the Group. These claims commonly center around issues such as the claimant’s
placement in a different trade union and payment of overtime. The initial value of these lawsuits is asserted by the former employees
at the commencement of the legal proceeding.
| 12.2. | Possible losses, not provided for in the statement of financial position |
The Group is party to the following
civil, labor and tax litigation involving risks of loss assessed by management as possible, based on the evaluation of the legal advisors,
for which no provision for estimated possible losses was recognized:
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Civil |
|
57,564 |
|
50,762 |
Labor |
|
6,432 |
|
2,179 |
Tax |
|
86,926 |
|
181,163 |
Total |
|
150,922 |
|
234,104 |
The Group is a party to several legal
actions whose subjects are connected to its ordinary operations. In this regard, civil lawsuits have been categorized according to the
Group’s primary business fronts, mainly: (i) acquiring, amounting to R$ 12,608 as of June 30, 2024 (R$ 9,239 as of December 31,
2023); and (ii) software, amounting to R$ 28,597 as of June 30, 2024 (R$ 28,412 as of December 31, 2023).
For the acquiring business, there is
a noteworthy lawsuit filed by a business partner who was responsible for a portion of the acquisition and referral of commercial establishments.
The amount considered as a possible loss is R$ 11,026 as of June 30, 2024 (R$ 10,706 as of December 31, 2023). For the software product
line, there is significant indemnity lawsuit filed by an indirect supplier, for the utilization of a specific software provided by the
partner, amounting to R$ 26,360 as of June 30, 2024 (R$ 25,596 as of December 31, 2023).
12.2.2 Tax
litigations
Action for annulment of tax debits
regarding the tax assessment issued by the state tax authorities on the understanding that the Group would have carried out lease of equipment
and data center spaces from January 2014 to December 2015, on the grounds that the operations would have the nature of services of telecommunications
and therefore would be subject to state tax at the rate of 25% and a fine equivalent to 50% of the updated tax amount for failure to issue
ancillary tax obligations. As of June 30, 2024, the updated amount recorded as a probable loss is R$ 29,395 (December 31, 2023 - R$ 27,937),
and the amount of R$ 30,258 (December 31, 2023 - R$ 29,727) is considered as a possible loss (contingency arising from the acquisition
of Linx).
During 2022 and 2023, the Group received
tax assessment issued by a municipal tax authority relating to the allegedly insufficient payment of tax on services rendered. Considering
a partial victory and reduction of the amounts being claimed, as of June 30, 2024 the updated amount of claims are R$ 35,805 (December
31,2023 – R$ 129,141). The cases are classified as possible loss.
For certain contingencies, the Group
has made judicial escrow deposits, which are legal reserves the Group is required to make by the Brazilian courts as security for any
damages or settlements the Group may be required to pay as a result of litigation.
The amount of the judicial deposits
as of June 30, 2024 is R$ 13,402 (December 31, 2023 - R$ 22,507), which are included in other assets in non-current assets. Regarding
the reduction of the amounts, regarding the tax values, these are amounts deposited in court, which were converted in favor of the Public
Treasury, resulting from active legal action which discussed the incidence of taxation on software operations.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
On June 30, 2024 and December 31, 2023,
the Company’s issued capital totaled R$ 76 thousand. The Company has an authorized share capital of US Dollar 50 thousand,
corresponding to 630,000,000 authorized shares with a par value of US Dollar 0.000079365 each. The Company is authorized to increase capital
up to this limit, subject to approval of the Board of Directors. The liability of each member is limited to the amount from time to time
unpaid on such member’s shares.
| 13.2. | Subscribed and paid-in capital and capital reserve |
The Articles of Association provide
that at any time when there are Class A common shares issued, Class B common shares may only be issued pursuant to: (a) a share split,
subdivision or similar transaction or as contemplated in the Articles of Association; or (b) a business combination involving the issuance
of Class B common shares as full or partial consideration. A business combination, as defined in the Articles of Association, would include,
amongst other things, a statutory amalgamation, merger, consolidation, arrangement or other reorganization.
The additional paid-in capital refers
to the difference between the purchase price that the shareholders pay for the shares and their par value. Under Cayman Islands Law, the
balance in this type of account may be applied by the Company to pay distributions or dividends to members, pay up unissued shares to
be issued as fully paid, for redemptions and repurchases of own shares, for writing off preliminary expenses, recognized expenses, commissions
or for other reasons. All distributions are subject to the Cayman Islands Solvency Test which addresses the Company’s ability to
pay debts as they fall due in the natural course of business.
There were no changes in the number
of shares during the six months ended June 30, 2024:
|
|
Number of shares |
|
|
Class A |
|
Class B |
|
Total |
|
|
|
|
|
|
|
Of December 31, 2023 |
|
295,498,750 |
|
18,748,770 |
|
314,247,520 |
Of June 30, 2024 |
|
295,498,750 |
|
18,748,770 |
|
314,247,520 |
Own equity instruments that are reacquired
(treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale,
issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognized in equity.
On September 21, 2023, the Company's
Board of Directors approved a new program under which the Company may repurchase up to R$ 300,000 in outstanding Class A common shares
("New Repurchase Program"). The New Repurchase Program went into effect after the date of the resolution.
Following the New Repurchase Program
concluded in early November 2023, on November 9, 2023 the amount of R$ 292,745 was used to repurchase shares. As a result, the Company's
Board of Directors approved an additional share repurchase program. Under this program, the Company may repurchase up to R$ 1 billion
in Class A common shares (“Additional Share Repurchase Program”).
As of December 31, 2023 the Company
holds 5,311,421 Class A common shares in treasury. The main transactions involving treasury shares during the calendar year ended on December
31, 2023 were: (i) sale of 16,641 Class A common shares to Pagar.me, which were used for payment of contingent consideration related to
acquisition of Trampolin, which originally occurred in August 2021; (ii) delivery of 824 shares in the context of the transaction completed
with Vitta Group in May 2020; (iii) delivery of 132,607 shares to Linx founding shareholders, in accordance with the non-compete agreement
signed; (iv) delivery of 375,531 shares due to vesting of RSUs awards; (v) transfer of 130,488 treasury shares due to the anti-dilutive
mechanism of the IPO pool signed with the founders of the Company; and (vi) repurchase of 5,733,740 Class A shares for the amount of R$
292,745.
In the six months ended of 2024, the
movements in treasury shares correspond to (i) delivery of 132,606 shares to Linx founding shareholders, by the non-compete agreement
signed; (ii) delivery of 510,835 shares due to vesting of RSUs awards; (iii) repurchase of 3,237,251 Class A shares for the amount of
R$ 236,526.
As of June 30, 2024, the Company holds
a balance of 7,905,231 Class A common shares in treasury.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
13.4. Other comprehensive income
(OCI)
OCI represents the profit or loss not
reported in the statement of profit and loss being separately presented in the financial statements. This includes Company transactions
and operations that are not considered realized gains or losses. The table presents the accumulated balance of each category of OCI as
of June 30, 2024 and December 31, 2023:
|
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
|
|
Other comprehensive income (loss) that may be reclassified to profit or loss in
subsequent periods (net of tax): |
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations |
|
(38,932) |
|
(41,266) |
Accounts receivable from card issuers at fair value |
|
(407,291) |
|
(348,529) |
Unrealized loss on cash flow hedge |
|
(327,971) |
|
(197,188) |
|
|
|
|
|
Other comprehensive income (loss) that will not be reclassified to profit or loss
in subsequent periods (net of tax): |
|
|
|
|
|
|
|
|
|
Changes in fair value of equity instruments designated at fair value |
|
291,623 |
|
254,353 |
Effects of hyperinflationary accounting |
|
14,557 |
|
12,181 |
Total |
|
(468,014) |
|
(320,449) |
Basic earnings per share is calculated
by dividing net income for the period attributed to the controlling shareholders by the weighted average number of common shares outstanding
during the period.
Diluted earnings per share considers
the number of shares outstanding for the purposes of basic earnings plus (when dilutive) the number of potentially issuable shares.
All numbers of shares for the purpose
of earnings per share are the weighted average during each period presented.
| 14.1. | Numerator of earnings per share |
In determining the numerator of basic
EPS, earnings attributable to the Group is allocated as follows:
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net income attributable to controlling shareholders |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
Numerator of basic EPS |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
In determining the numerator of diluted
EPS, earnings attributable to the Group is allocated as follows:
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Net income attributable to controlling shareholders |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
Numerator of diluted EPS |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 14.2. | Basic and Diluted earnings per share |
The following table contains the EPS
of the Group for the six and three months ended June 30, 2024 and 2023 (in thousands except share and per share amounts):
|
|
Six months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Numerator of basic EPS |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
|
|
|
|
|
|
|
|
|
Weighted average number of outstanding shares |
|
308,241,316 |
|
312,912,323 |
|
307,483,544 |
|
313,074,253 |
Weighted average number of contingently issuable shares with conditions satisfied |
|
345,352 |
|
— |
|
345,352 |
|
— |
Denominator of basic EPS |
|
308,586,668 |
|
312,912,323 |
|
307,828,896 |
|
313,074,253 |
|
|
|
|
|
|
|
|
|
Basic earnings per share - R$ |
|
2.82 |
|
1.70 |
|
1.61 |
|
0.98 |
|
|
|
|
|
|
|
|
|
Numerator of diluted EPS |
|
869,095 |
|
532,008 |
|
496,114 |
|
305,369 |
|
|
|
|
|
|
|
|
|
Share-based instruments (a) |
|
6,847,645 |
|
12,742,894 |
|
6,982,345 |
|
13,837,978 |
Denominator of basic EPS |
|
308,586,668 |
|
312,912,323 |
|
307,828,896 |
|
313,074,253 |
Denominator of diluted EPS |
|
315,434,313 |
|
325,655,217 |
|
314,811,241 |
|
326,912,231 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share - R$ |
|
2.76 |
|
1.63 |
|
1.58 |
|
0.93 |
| (a) | Including share-based compensation, contingent consideration and non-compete agreement with founders of
Linx. Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding, considering potentially
convertible instruments. |
| 14.3. | Detail of potentially issuable common shares for purposes of Diluted EPS |
The potentially issuable common shares
consider the difference between the issuable shares under share-based instruments and the number of shares that potentially be purchased
at the weighted average market price of the shares during the period with the amount of future compensation expense of those share-based
instruments, as presented as follows:
|
|
Six months ended June 30, 2024 |
|
Three months ended June 30, 2024 |
|
|
|
|
|
Shares issuable under share-based payment plans for which performance conditions have already been met |
|
13,646,364 |
|
14,317,526 |
Total weighted average shares that could have been purchased: compensation expense to be recognized in future periods divided by the weighted average market price of Company’s shares |
|
(7,064,854) |
|
(7,601,316) |
Other total weighted average shares potentially issuable for no additional consideration |
|
266,135 |
|
266,135 |
Share-based instruments |
|
6,847,645 |
|
6,982,345 |
| 15.1. | Timing of revenue recognition |
Net revenue from transaction activities
and other services and discount fees charged for the prepayment of accounts payable to client are recognized at a point in time, except
for membership fees which are recognized over time as mentioned in Note 2.1. All other revenue and income are recognized over time.
The Group has recognized revenue to
those membership fees in the amount of R$ 35,466 in the six months ended June 30, 2024 (June 30, 2023 - R$ 160,692).
During the six months ended June 30,
2024 the Group billed R$ 154,708 in membership fees (six months ended June 30, 2023 - R$
160,692).
Net revenue from transaction activities
and other services includes membership fee mentioned above and R$ 24,183 of registry business fee in the six months ended June 30, 2024
(R$ 41,039 in six months ended June 30, 2023).
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
|
Six months ended June 30, |
|
Three months ended June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Personnel expenses |
1,407,992 |
|
1,351,287 |
|
730,974 |
|
662,927 |
Transaction and client services costs (a) |
726,287 |
|
578,430 |
|
372,116 |
|
290,770 |
Depreciation and amortization (Note 9.2) |
441,559 |
|
434,182 |
|
224,224 |
|
221,688 |
Marketing expenses and sales commissions (b) |
516,854 |
|
361,945 |
|
246,492 |
|
178,302 |
Third parties services |
140,674 |
|
109,186 |
|
74,979 |
|
47,918 |
Other |
174,002 |
|
133,567 |
|
53,926 |
|
56,235 |
Total expenses |
3,407,368 |
|
2,968,597 |
|
1,702,711 |
|
1,457,840 |
| (a) | Transaction and client services costs include card transaction capturing services, card transaction and
settlement processing services, logistics costs, payment scheme fees, cloud services, allowance for expected credit losses and other costs. |
| (b) | Marketing expenses and sales commissions relate to marketing and advertising expenses, and commissions
paid to sales related partnerships. |
17. Financial
expenses, net
|
Six months ended June 30, |
|
Three months ended June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Finance cost of sale of receivables |
1,298,491 |
|
1,585,564 |
|
625,689 |
|
870,853 |
Interest on bond (Note 5.6.1 e 5.7.1) |
172,506 |
|
205,269 |
|
87,366 |
|
102,323 |
Other interest on loans and financing |
284,544 |
|
145,924 |
|
167,991 |
|
62,501 |
Foreign exchange (gains) and losses |
(10,074) |
|
(13,442) |
|
(7,107) |
|
(3,574) |
Other |
2,132 |
|
74,168 |
|
(22,887) |
|
41,741 |
Total |
1,747,599 |
|
1,997,483 |
|
851,052 |
|
1,073,844 |
| 18.1. | Share-based payment plans |
The Group has equity settled share-based
payment instruments, under which management grants shares to employees and non-employees depending on the strategy of the Group. The following
table outlines the key share-based awards movements - in number of shares - as of June 30, 2024 and December 31, 2023.
|
Equity |
|
RSU |
|
PSU |
|
Options |
|
Total |
|
|
|
|
|
|
|
|
Balance as of December 31, 2023 |
12,429,557 |
|
8,305,048 |
|
45,159 |
|
20,779,764 |
Granted |
2,775,617 |
|
194,019 |
|
— |
|
2,969,636 |
Cancelled |
(1,198,489) |
|
(3,328,367) |
|
— |
|
(4,526,856) |
Delivered |
(655,860) |
|
— |
|
— |
|
(655,860) |
Balance as of June 30, 2024 |
13,350,825 |
|
5,170,700 |
|
45,159 |
|
18,566,684 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 18.1.1. | Restricted share units ("RSU") |
RSUs have been granted to certain key
employees under the Long-Term Incentive Plan (“LTIP”) to incentivize and reward such individuals. These awards are equity-classified
for accounting purposes and may be granted as part of the annual equity bonus and also as special recognition equity awards with a weighted
average vesting period of 2.9 years, subject to and conditioned upon the achievement of certain targets which are generally solely service
conditions. Assuming these conditions are met, awards are settled through Class A common shares. If the applicable conditions are not
achieved, the awards are forfeited for no consideration.
In the second quarter of 2024, the
Company granted 406,457 RSU’s with an average grant-date fair value of R$ 81.32, which were determined based on the fair value of
the equity instruments granted and the exchange rate, both at the grant date. Moreover, 587,291 RSUs vested in the first quarter, resulting
in a delivery through treasury shares of 402,652 shares net of withholding taxes.
In the six months ended June 30, 2024,
the Company granted 2,775,617 RSU’s with an average grant-date fair value of R$ 81.69, which were determined based on the fair value
of the equity instruments granted and the exchange rate, both at the grant date. Moreover, 655,860 RSUs vested in the first semester,
resulting in a delivery through treasury shares of 466,341 shares net of withholding taxes.
On June 30, 2024, 923 vested RSUs were
pending settlement by issuance of shares.
| 18.1.2. | Performance share units ("PSU") |
PSUs are equity classified for accounting
purposes and the vast majority have been granted as part of special recognition equity awards with a weighted average vesting period of
2.7 years. PSU grants beneficiaries the right to receive shares if the Group reaches minimum levels of total shareholder return (“TSR”)
for a specific period. If the minimum performance condition is not met the PSUs will not be delivered.
The fair value of the instruments is
estimated at the grant date using the Black-Scholes-Merton pricing model, considering the terms and conditions on which the PSUs were
granted, and the related expense is recognized over the vesting period. The performance condition is considered for estimating the grant-date
fair value and of the number of PSUs expected to be issued, based on historical data and current expectations and is not necessarily indicative
of performance patterns that may occur.
In the second quarter of 2024, the
Company granted 69,599 new PSUs with an average grant-date fair value of R$ 10.31. The grant-date fair value was determined based on historical
data and current expectations and is not necessarily indicative of performance patterns that may occur.
In the six months ended June 30, 2024,
the Company granted 194,019 new PSUs with an average grant-date fair value of R$ 11.11. The grant-date fair value was determined based
on historical data and current expectations and is not necessarily indicative of performance patterns that may occur.
The expected volatility reflects the
assumption that the historical volatility over a period similar to the life of the PSUs is indicative of future trends, which may not
necessarily be the actual outcome. For the grants mentioned above, the main two inputs to the model were: (i) Risk–free interest
rate between of 3.54% and 4.90% according to 3-month LIBOR/SOFR forward curve for 3 and 5 years period, and (ii) annual volatility between
73.23% and 75.12%, based on the Company’s historical stock price.
The Group has granted awards as stock
options, of which the exercise date will be between 3 and 10 years with a fair value estimated at the grant date based on the Black-Scholes-Merton
pricing model. On June 30, 2024, 14,592 (14,592 for the six months ended June 30, 2023) stock options were exercisable.
18.1.4 Share-based payment expenses
During the six months ended June 30,2024,
a net reversal of R$ 40,461 was recognized as Other income (expenses), net due to events such as the forfeiture of 3,833,527 shares because
of failure to satisfy service vesting condition.
The total expense related to share-based
plans, including taxes and social charges, recognized as Other income (expenses), net for the programs was R$ 90,156 for the six months
and R$ 64,373 for three months ended June 30, 2024 (R$ 120,525 for the six months and R$ 50,407 for three months ended June 30, 2023).
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 19. | Other disclosures on cash flows |
| 19.1. | Non-cash operating activities |
|
Six months ended June 30, |
|
2024 |
|
2023 |
|
|
|
|
Fair value adjustment on loans designated at FVPL |
— |
|
(124,571) |
Adjustment on FIDC obligations designated for fair value hedge (Note 5.6.1) |
202,716 |
|
— |
Fair value adjustment on equity securities designated at FVPL |
3,912 |
|
30,574 |
Fair value adjustment in financial instruments designated at FVPL |
206,628 |
|
(93,997) |
|
|
|
|
Changes in the fair value of accounts receivable from card issuers at FVOCI |
89,126 |
|
(139,846) |
Fair value adjustment on equity instruments/listed securities designated at FVOCI (Note 5.1) |
1,623 |
|
(1,141) |
| 19.2. | Non-cash investing activities |
|
Six months ended June 30, |
|
2024 |
|
2023 |
|
|
|
|
Property and equipment and intangible assets acquired through lease (Note 9.1 and 10.1) |
38,279 |
|
58,610 |
| 19.3. | Non-cash financing activities |
|
Six months ended June 30, |
|
2024 |
|
2023 |
|
|
|
|
Unpaid consideration for acquisition of non-controlling shares |
653 |
|
990 |
| 19.4 | Breakdown of interest income received, net of costs |
|
Six months ended June 30, |
|
2024 |
|
2023 |
|
|
|
|
Interest income received on accounts payable to clients |
3,337,422 |
|
2,731,221 |
Finance cost of sale of receivables on Accounts receivable from card issuers (Note 17) |
(1,298,491) |
|
(1,585,564) |
Interest income received, net of costs |
2,038,931 |
|
1,145,657 |
| 19.5. | Property and equipment, and intangible assets |
|
Six months ended June 30, |
|
2024 |
|
2023 |
|
|
|
|
Additions of property and equipment (Note 9.1) |
(407,257) |
|
(395,593) |
Additions of right of use (IFRS 16) (Note 9.1) |
37,490 |
|
26,061 |
Payments from previous period |
(65,348) |
|
(176,835) |
Purchases not paid at period end |
44,203 |
|
10,100 |
Prepaid purchases of POS |
— |
|
(244) |
Purchases of property and equipment |
(390,912) |
|
(536,511) |
|
|
|
|
Additions of intangible assets (Note 10.1) |
(252,247) |
|
(238,744) |
Additions of right of use (IFRS 16) (Note 10.1) |
789 |
|
32,549 |
Payments from previous period |
(14,117) |
|
(6,593) |
Purchases not paid at period end |
5,230 |
|
716 |
Purchases and development of intangible assets |
(260,345) |
|
(212,072) |
|
|
|
|
Net book value of disposed assets (Notes 9.1 and 10.1) |
92,762 |
|
69,081 |
Net book value of disposed leases (Note 5.6.1) |
(5,560) |
|
(23,243) |
Gain (loss) on disposal of property and equipment and intangible assets |
(14,317) |
|
(45,065) |
Disposal of Pinpag property, equipment and intangible assets |
(59,176) |
|
— |
Disposal of Cappta property, equipment and intangible assets, including goodwill |
— |
|
1,767 |
Outstanding balance |
(9,493) |
|
(2,295) |
Proceeds from disposal of property and equipment and intangible assets |
4,216 |
|
245 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
On May 2, 2024, after buying shares
from selling shareholders the Group obtained the control of Trinks with a 100% equity interest. Trinks was previously an associate and
accounted for under the equity method. The Group previously held an equity interest of 19.9% in Trinks which was acquired on November
25, 2019. Trinks is an unlisted company based in the State of Rio de Janeiro, Brazil, that develops an integrated solution of management,
focused mainly on the beauty service segment.
20.1.1. Financial position of business
acquired
The allocation of assets acquired and
liabilities assumed in the business combinations mentioned above are presented below. Identification and measurement of assets acquired,
liabilities assumed, consideration transferred and goodwill are preliminary.
Fair value |
|
Trinks |
|
|
|
Cash and cash equivalents |
|
991 |
Short-term investments |
|
1,788 |
Trade accounts receivable |
|
1,379 |
Recoverable taxes |
|
158 |
Property and equipment |
|
438 |
Other assets |
|
243 |
Total assets |
|
4,997 |
|
|
|
Accounts payable to clients |
|
187 |
Labor and social security liabilities |
|
1,840 |
Taxes payable |
|
252 |
Total liabilities |
|
2,279 |
|
|
|
Net assets and liabilities (a) |
|
2,718 |
Consideration paid (Note 20.1.2) |
|
50,159 |
Goodwill |
|
47,441 |
(a) The net assets
are based on the financial position of business acquired and the fair value amount and purchase price allocation are still being evaluated
by the Group.
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
20.1.2 Consideration paid
The fair value of the consideration
transferred on the business combination were as follows:
|
Trinks |
|
|
Cash consideration paid to the selling shareholders |
10,045 |
Cash consideration to be paid to the selling shareholders |
30,135 |
Previously held equity interest in the acquiree, at fair value (a) |
9,979 |
Total (b) |
50,159 |
(a) Refers to
the interest in Trinks' shares previously held by the Group. As a result of the step acquisition,the Group recognized a gain of R$ 5,657
for the remeasurement of the previously held 19.9% interest in Trinks to fair value, of R$ 9,979, compared to its carrying amount, of
R$ 4,322.
(b) In addition
to the items presented in the table, the measurement of contingent consideration on the acquisition of Trinks is still in the process
of being estimated. The amount will be paid to the selling shareholders in 2025 and 2027. The payment of the contingent consideration
shall be conditioned upon the achievement of certain financial and operational goals.
In line with the strategy and organizational
structure of the Group, the Group is presenting two reportable segments, namely “Financial Services” and “Software”
and certain non-allocated activities:
•
Financial services: Comprised of our financial services solutions which includes mainly payments solutions, digital banking, credit,
insurance solutions as well as the registry business.
•
Software: Composed of our Strategic Verticals (Retail, Gas Stations, Food and Drugstores), Enterprise and Other Verticals. The
Software segment includes the following solutions: POS/ERP, TEF and QR Code gateways, reconciliation, CRM, OMS, e-commerce platform, engagement
tool, ads solution, and marketplace hub.
•
Non allocated activities: Comprised of non-strategic businesses, including results on disposal / discontinuation of non-core businesses.
The Group used and continues to use
Adjusted net income (loss) as the measure reported to the CODM about the performance of each segment.
| 21.1. | Statement of profit or loss by segment |
|
Six months ended June 30, 2024 |
|
Three months ended June 30, 2024 |
|
Financial Services |
|
Software |
|
Non allocated |
|
Financial Services |
|
Software |
|
Non allocated |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue and income |
5,532,556 |
|
752,734 |
|
5,494 |
|
2,822,209 |
|
383,664 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
(1,322,529) |
|
(328,755) |
|
(16) |
|
(674,958) |
|
(166,416) |
|
— |
Administrative expenses |
(326,403) |
|
(138,280) |
|
(2,561) |
|
(167,506) |
|
(67,704) |
|
— |
Selling expenses |
(885,064) |
|
(168,387) |
|
(1,154) |
|
(438,040) |
|
(86,889) |
|
(1) |
Financial expenses, net |
(1,716,656) |
|
(22,040) |
|
(74) |
|
(838,527) |
|
(11,002) |
|
— |
Other income (expenses), net |
(145,573) |
|
(13,408) |
|
— |
|
(95,418) |
|
(6,834) |
|
— |
Total adjusted expenses |
(4,396,225) |
|
(670,870) |
|
(3,805) |
|
(2,214,449) |
|
(338,845) |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment in associates |
— |
|
(103) |
|
(10) |
|
— |
|
(223) |
|
(201) |
Adjusted profit before income taxes |
1,136,331 |
|
81,761 |
|
1,679 |
|
607,760 |
|
44,596 |
|
(202) |
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes and social contributions |
(261,681) |
|
(10,089) |
|
(428) |
|
(154,413) |
|
(597) |
|
— |
Adjusted net income for the period |
874,650 |
|
71,672 |
|
1,251 |
|
453,347 |
|
43,999 |
|
(202) |
|
Six months ended June 30, 2023 |
|
Three months ended June 30, 2023 |
|
Financial Services |
|
Software |
|
Non allocated |
|
Financial Services |
|
Software |
|
Non allocated |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue and income |
4,887,149 |
|
741,088 |
|
38,202 |
|
2,551,223 |
|
382,870 |
|
20,690 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
(1,075,255) |
|
(328,973) |
|
(2,351) |
|
(519,983) |
|
(164,777) |
|
(543) |
Administrative expenses |
(351,323) |
|
(162,979) |
|
(17,251) |
|
(180,393) |
|
(79,521) |
|
(9,187) |
Selling expenses |
(639,103) |
|
(148,344) |
|
(14,372) |
|
(324,276) |
|
(79,392) |
|
(8,223) |
Financial expenses, net |
(1,942,837) |
|
(25,252) |
|
(459) |
|
(1,047,819) |
|
(11,621) |
|
(223) |
Other income (expenses), net |
(171,473) |
|
(13,629) |
|
41 |
|
(78,846) |
|
(2,618) |
|
479 |
Total adjusted expenses |
(4,179,991) |
|
(679,177) |
|
(34,392) |
|
(2,151,317) |
|
(337,929) |
|
(17,697) |
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on investment in associates |
(2,991) |
|
419 |
|
724 |
|
(1,718) |
|
526 |
|
367 |
Adjusted profit before income taxes |
704,167 |
|
62,330 |
|
4,534 |
|
398,188 |
|
45,467 |
|
3,360 |
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes and social contributions |
(197,602) |
|
(14,871) |
|
34 |
|
(118,521) |
|
(6,494) |
|
(5) |
Adjusted net income for the period |
506,565 |
|
47,459 |
|
4,568 |
|
279,667 |
|
38,973 |
|
3,355 |
StoneCo Ltd.
Notes to unaudited interim condensed consolidated financial statements
June 30, 2024
(In thousands of Brazilian Reais, unless otherwise stated)
| 21.2. | Reconciliation of segment adjusted net income for the period with net income in the consolidated financial
statements |
|
Six months ended June 30, |
|
Three months ended June 30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Adjusted net income – Financial Services |
874,650 |
|
506,565 |
|
453,347 |
|
279,667 |
Adjusted net income – Software |
71,672 |
|
47,459 |
|
43,999 |
|
38,973 |
Adjusted net income – Non allocated |
1,251 |
|
4,568 |
|
(202) |
|
3,355 |
Adjusted net income |
947,573 |
|
558,592 |
|
497,144 |
|
321,995 |
|
|
|
|
|
|
|
|
Adjustments from adjusted net income to consolidated net income (loss) |
|
|
|
|
|
|
|
Mark-to-market from the investment in Banco Inter |
— |
|
30,574 |
|
— |
|
— |
Amortization of fair value adjustment (a) |
(25,693) |
|
(69,393) |
|
(13,405) |
|
(35,720) |
Other income (loss)(b) |
(58,375) |
|
(3,126) |
|
12,936 |
|
10,978 |
Tax effect on adjustments |
8,391 |
|
16,254 |
|
1,626 |
|
9,958 |
Consolidated net income |
871,896 |
|
532,901 |
|
498,301 |
|
307,211 |
| (a) | Related to acquisitions. Consists of expenses resulting from the changes of the fair value adjustments
as a result of the application of the acquisition method. |
| (b) | Consists of the fair value adjustment related to associates call option, earn-out and earn-out interests
related to acquisitions, reversal of litigation of Linx and divestment of assets and loss of control subsidiaries. |
Expiration and public offering results
On July 31, 2024, StoneCo Ltd. concluded
the tender offer for its outstanding 3.95% senior notes due 2028, the offer to purchase and consent solicitation dated July 1, 2024. The
principal amount of outstanding debt was US$500,000, the aggregate amount tendered was US$294,558 and the percentage of the aggregate
principal amount outstanding repurchased was 58.91%.
Repurchase shares
During the month of July, the Company
repurchased 9,670,688 Class A shares for a total consideration of R$ 724,227.
StoneCo (NASDAQ:STNE)
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