StoneCo: 1Q26 in line; limited revenue generation, deteriorating asset quality

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StoneCo: 1Q26 in line; limited revenue generation, deteriorating asset quality

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StoneCo

1Q26 in line; limited revenue generation,

deteriorating asset quality

Maintain Rating: BUY | PO: 23.00 USD | Price: 9.70 USD

Weakening trends in both payments and banking 14 May 2026

Non-GAAP net income of R$549mn (+3% YoY, -22% QoQ) came in line with BofAe. The Equity

modest YoY growth reflects weakening trends across both payments and banking

Mario Pierry

verticals. In payments, TPV growth decelerated further, pressured by softer economic Research Analyst

activity and churn, while payments take-rate declined at the margin QoQ. In banking, an BofAS +1 646 743 0047

unexpected increase in the NPL ratio drove a sharp rise in provision charges (5x YoY), mario.pierry@bofa.com

outpacing the strong growth in credit revenues (3x YoY). Employee layoffs and Antonio Ruette >>

provisions led to an increase in COGS, pressuring gross profit, which remained flat YoY. Research Analyst Merrill Lynch (Brazil)

Opex grew faster than gross profit, resulting in 2% YoY decline in adjusted EBT. +55 11 2188 4225

antonio.ruette@bofa.com

Augusto Uehara >>Trends in 1Q26 point to the lower end of ’26 NI guidance Research Analyst

Adj. gross profit annualizes to R$5.9bn, below R$6.6–7.0bn guidance for ‘26, while adj. Merrill Lynch (Brazil)

EPS annualizes to R$8.8, also below R$10.8–11.4 guidance. The underperformance is +55augusto.uehara@bofa.com11 2188 4651

primarily driven by seasonality and unexpectedly higher provisions, while weaker TPV Ernesto Gabilondo >>

growth was already anticipated by mgmt. Looking ahead, mgmt. expects a gradual Research Analyst

Merrill Lynch (Mexico)

improvement in cost of risk (with focus on secured credit lines) and stronger TPV growth +52 55 5201 3428