PagSeguro Digital Ltd. (NYSE:PAGS) Q2 2023 Earnings Call Transcript

Eric Oliveira: Hi, Tito, this is Eric. I’ll breakdown the question related to revenues growth in two parts. Starting with the acquiring businesses, we do see an acceleration of TPV growth towards the second half ’23 like we shared our guidance for the first 45 days of Q3. And we do expect to keep gaining market share over the next quarters and years. But we understand that as larger market share we have, the biggest — the bigger markets are the markets where we have SMBs in large accounts, so lower take rates. But the combination with the financial expenses, potential decrease backed by lower interest rates and our funding strategy, the incremental gross profit tends to be very compelling in ’24 onwards. For the financial services, we will have this interchange cap effect during until Q1 ’24, so this will create potentially easy comps for second quarter ’24 onwards.

We also have the compounding effect on the payroll loans as we disburse upfront the cost to underwrite, but we have the compounding effect — effects over the years. And as we keep growing our deposit base, naturally we also have additional float revenues and we also expect to grow our credit portfolio in the short-term and secured products. In mid-term, I think we are working here to further improve our onboarding end-to-end processing credit underwriting, onboarding risk assessment, underwriting and collection to restore and accelerate the underwriting of unsecured products. So this would be the main revenue streams for the both verticals.

Tito Labarta: Great, that’s very helpful, Eric. And Ricardo, thank you for the color there.

Ricardo Dutra: Thank you.

Operator: Ladies and gentlemen, that concludes our question-and-answer session. I would now like to turn the floor over to Mr. Ricardo Dutra for closing remarks. Please, sir, go ahead.

Ricardo Dutra: Thank you everyone for taking the time to participate in our call. See you next quarter. Thank you very much. Good evening.

Operator: The conference has now concluded. Thanks, everyone, for participating. You may now disconnect.