Fintech StoneCo Rides Brazil’s Cashless Wave with 19% Revenue Surge

StoneCo Ltd. (NASDAQ: STNE), a leading Brazilian financial technology firm specializing in payment processing and banking solutions, reported a first-quarter adjusted net profit of R$554 million ($92.3 million), marking a 23% year-over-year increase, according to its earnings release.

The growth stemmed from a 13.9% rise in total payment volume to R$133.5 billion ($22.3 billion), fueled by adoption of Pix instant payments and expanded banking services for small businesses.

Revenue climbed 19% to R$3.67 billion ($611.7 million), with financial services contributing R$3.3 billion ($550 million). Pix transactions via QR codes soared 95%, processing R$16.5 billion ($2.75 billion) as Brazil’s central bank-backed system reshapes commerce.

Traditional card payments grew 10.2% to R$103 billion ($17.2 billion), reflecting StoneCo’s dual-track strategy in a market where cash still dominates 35% of transactions.

The firm’s credit portfolio reached R$1.45 billion ($241.7 million), up 20% quarterly, while deposits jumped 38% to R$8.3 billion ($1.38 billion).

Despite rapid lending growth, 90-day nonperforming loans held at 4.57%, with reserves covering 256% of impaired assets. “Our risk framework prioritizes sustainability over short-term gains,” CEO Pedro Zinner stated, noting 3.2 million banking clients now use StoneCo’s integrated financial tools.

StoneCo Strengthens Position in Brazil’s Fintech Landscape

Software solutions revenue rose 11% to R$409 million ($68.2 million) as potential buyer Totvs reengaged talks after earlier stalled negotiations. The segment’s strategic review continues alongside R&D investments targeting omnichannel commerce tools.

Capital discipline remained central, with R$2.4 billion ($400 million) spent on share buybacks over twelve months, boosting earnings per share growth to 1.5x net income expansion.

StoneCo’s gross profit margin held steady at 43.6%, aided by pricing adjustments and operational efficiencies. Operating expenses grew 15%, slower than revenue, while net debt stayed manageable at 2.61 times EBITDA.

The firm’s focus on micro and small businesses-which comprise 99% of Brazilian enterprises-positions it to capture shifts toward digital payments, projected to grow 14% annually through 2028.

Banking adoption trends proved critical, with 36% more clients using deposit accounts year-over-year. Term deposits now represent 58% of total funds, lowering financing costs as Brazil’s benchmark Selic rate sits at 10.5%.

Analysts note StoneCo’s ecosystem-blending payments, credit, and banking-creates cross-selling opportunities while reducing customer acquisition costs, a key advantage in Brazil’s fragmented fintech landscape.

The results underscore how Brazil’s payment revolution, accelerated by Pix’s 2020 launch, benefits vertically integrated providers. With Pix handling 35% of electronic transfers nationally, StoneCo’s QR code solutions help merchants avoid card network fees.

This drives both client savings and improved processor margins. As inflation cools to 3.7%, policymakers anticipate renewed investment in digital infrastructure, potentially widening StoneCo’s runway in its core market.

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