PagSeguro Digital "Feedback from event with CFO; Updating estimates post 1Q"

Research evidence excerpt

PagSeguro Digital "Feedback from event with CFO; Updating estimates post 1Q"

Online vs. offline channels and client coverage: SMB TPV remains

predominantly offline (~90%), with online volumes concentrated in other

verticals (e.g., gaming, music, marketplaces).

Funding costs management and account remuneration: PAGS provided

details on changes to remuneration structures, including tiered limits by

balance and duration, measures applied to CDs and checking. Their full impact

should be reflected in 2Q results (implemented mid-quarter). Checking

account balances are expected to remain broadly stable QoQ going forward.

Credit origination trends and quarterly outlook: Origination is accelerating

and expected to continue growing, although growth rates should moderate.

Revenue contribution from credit is expected to ramp up over the coming

quarters in line with origination trends. WK product offers an integrated value

proposition for entrepreneurs, including instant settlement and a bundle of

services.

Future credit contribution and risk posture: Credit should progressively

increase its contribution to revenues throughout 2026, including products such

as WK loans and credit cards, with a gradual scaling of the secured card

portfolio. The company also highlighted a conservative stance toward

provisioning for new vintages.

Cost of risk, NPLs, and provisioning: Management indicated an expected cost

of risk in the ~6-8% range by 2029, with potential increases in provisions and

NPLs as the portfolio evolves.

Fraud prevention in credit origination: The WK product is offered to the

existing customer base, leveraging KYC processes, risk models, and

disbursements restricted to accounts with the same ownership, reducing

exposure to fraud through synthetic or third-party accounts.