Lia Matos: Yeah, so I’m going to take this question. I think, Daniel, so in terms of the growth prospects for software, as Mateus said at the beginning, right? I think there is a mix — a little bit of a mixed bag when we talk about the software business standalone. In the Investor Day, we communicated sort of the software business fragmented in three buckets. Number one, the four key priority verticals. Number two, the enterprise business. And number three, the other software assets that we have not prioritized in terms of cross-sell of financial services at this point. I think in the first bucket those core priority verticals there’s a lot that we’re doing in terms of driving the integration of software and financial services.
We really have set three key priorities there and we believe that there is a vast opportunity for us to continue to grow. Naturally, this growth will come from two drivers. Number one, our ability to penetrate Financial Services to the current installed software base, but also as we improve our go-to-market, improve our wholesales process, improve our value proposition around products. We expect to also continue to drive growth on software revenues standalone. The bucket that we have not prioritized in terms of the other verticals and other software assets that also has a pretty healthy growth and we see it continuing to grow at healthy levels going forward. I think the dynamics in the enterprise business is a little different because we already have a pretty large market share there, so I think we can expect less growth from the enterprise business going forward.
So it’s hard to talk about one single answer in terms of the software business. It’s really those three main buckets that I have just mentioned. Mateus, maybe you can talk a little bit about margin evolution.
Mateus Scherer: Yeah, for sure. So I think we touched upon this in the Investor Day as well and also in the answer about administrative expenses. But when it comes to efficiency in the software as a standalone segment, there is a lot to be done in terms of implementing a shared services center and also the zero-basic budget in there. I think 2023 was the first year that we ran the ZBB. But it was mostly focused on the Financial Services segments. We’re now rolling it out for this software segments as well. And that’s why we guided that when you look at the EBITDA margins for the software segments, we reached mid-teens in 2023 and we should be significantly above the 20% threshold for 2024. Most of that will most likely be driven by efficiency in OpEx and loss from top line of the software standalone, like Lia said.
Daniel: Great. Thank you very much.
Lia Matos: Thank you, Daniel.
Operator: Next question from Jorge Kuri with Morgan Stanley. You can activate your microphone.
Jorge Kuri: Hi, everyone, thanks for taking my questions. I have two questions. The first one is on your NPL ratio on slide 10, the way you measure it is the — what do you consider to be non-performing is the total amount of the loan outstanding or only the installment that was missed? And then I’ll ask my second question. Thank you.
Mateus Scherer: Thank you for the question. Kuri, for the first one, in the slide 10, we measured the full amount of the loan. And then on foot — on the note 6.6.1, you have also the information regarding the amount of only the installment that was passed through. So we have both information, but in this slide this is the full amount of the loan.
Jorge Kuri: Great. Thank you very much. And then my second question is regarding on the news on Andre Street. Thanks for telling those shares, that still loans on the company which if I understood correctly, is around 7% of economic value. My question is, with this announcement, is there any modification or existing lockup that he has on those shares? Is he able, if he wanted to? I’m not saying he will, theoretical. Is he able to sell all of the shares at any point in time? Or is there any sort of like local — lock-up agreement? And then also, is there — now or will there be, with this move, a non-compete agreement signed with Mr. Street?
Pedro Zinner: Hi, Jorge, Pedro speaking. I think, regarding the first question, I don’t believe there are any changes at all, right? On the second point, I think our non-compete is actually being elaborated in which we will give — he will not engage in any business that competes for Stone’s primary activities in Brazil. So — and this non-compete should be ready before the AGM, which is expected to be held on April 23. So you’re going to see more flavor of that in the documents for the AGM.
Jorge Kuri: Thank you, and that’s very clear. But just to clarify the first part, when you say there is no changes, it means that he doesn’t have any lock-up on his shares?
Mateus Scherer: That’s right. Correct.
Jorge Kuri: Okay. Got it. Thank you very much.
Operator: There are no questions at this time. This concludes the question-and-answer session. I will now turn over to Pedro Zinner, CEO at StoneCo for final considerations.
Pedro Zinner: Well, thank you very much everyone for participating in the call. And as I mentioned in the letter, I appreciate the value of our shareholders. Hope to see you again next quarter. Thank you very much.
Operator: This concludes today’s presentation. Thank you for participating.
