StoneCo Surpasses Market Expectations with 18% Profit Growth in Q4 2024

Brazilian fintech giant StoneCo reported an adjusted net profit of R$665.6 million ($110.9 million) for the fourth quarter of 2024, according to financial results released Tuesday.

The 18.1% year-over-year increase significantly exceeded analyst expectations of R$585.1 million ($97.5 million). The payment processor generated total revenue of R$3.61 billion ($601.7 million) during the quarter, representing an 11.1% growth compared to the same period last year.

This performance aligned with market forecasts and was primarily driven by an 11.2% increase in financial services revenue. StoneCo’s adjusted earnings per share reached R$2.26, marking a 25.8% jump from Q4 2023.

This growth outpaced the rise in adjusted net income due to share repurchases conducted throughout the year. The company maintained strong profitability with an adjusted net margin of 18.4%, up one percentage point from the previous year.

CEO Pedro Zinner highlighted the company’s strong capital position in the earnings report. StoneCo estimates it holds excess capital exceeding R$3 billion ($500 million) as of December 2024.

This figure excludes any potential capital release from the potential sale of its Linx software division. “We expect to return this excess capital to shareholders over time when immediate value-adding growth opportunities are not available,” Zinner stated.

StoneCo Projects Strong Growth in 2025

The company provided optimistic guidance for 2025, projecting adjusted gross profit above R$7.05 billion ($1.18 billion), representing at least 14% year-over-year growth. StoneCo also expects adjusted basic earnings per share to surpass R$8.6, an 18% increase from 2024.

Investors responded positively to the results. StoneCo shares have gained 27.85% year-to-date, reflecting growing confidence in the company’s trajectory. The stock currently trades at an attractive P/E ratio of 8.3, suggesting potential undervaluation compared to industry peers.

Founded in 2012 following regulatory changes in Brazil’s financial sector, StoneCo has established itself as a leading provider of payment processing and financial technology solutions. The company focuses particularly on serving small and medium-sized businesses across Brazil.

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