StoneCo: End of Growth, Start of Credit Concerns

Research evidence excerpt

StoneCo: End of Growth, Start of Credit Concerns

IdeaM

Conference Call Highlights

Guidance. Stone reaffirmed full‑year 2026 guidance, despite acknowledging a more

challenging macro backdrop and a higher‑for‑longer rate environment, which is weighing

more heavily on smaller merchants. Importantly, the guidance assumes a year‑end Selic of

12.5%, versus current expectations closer to 14%. Management noted that each 100 bps

move in rates impacts pre‑tax earnings by R$200–250 million. As a result, they indicated

results are currently tracking toward the lower end of the guidance range, with the results

weighted toward the second half of the year and driven primarily by compounding in

credit revenues and, more importantly, execution improvements in client retention.

TPV Growth. The primary focus is to reaccelerate TPV growth through improved

retention and lower churn, particularly among clients onboarded during 2025, where

churn pressure has been most acute. To address this, Stone is conducting a full review of

product bundles and pricing, with a clear emphasis on simplification, transparency, and

reduced friction across channels. Early signals are constructive: management highlighted

that April leading volume indicators show improvement, suggesting initial traction from

these initiatives, though it remains too early to call a definitive trend. Overall TPV

remained constrained by a weaker macro for small merchants, Stone’s lower relative

exposure to faster‑growing digital sales, and elevated churn that is still being actively

addressed.

Active Clients. Stone simplified its disclosure framework to better reflect its evolution

into a broader financial platform rather than a pure payments company. The client base is