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XP Inc. (XP) Q4 2022 Earnings Call Transcript

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XP Inc. (NASDAQ:XP) Q4 2022 Earnings Conference Call February 16, 2023 5:00 PM ET

Company Participants

Andre Martins - Head of Investor Relations

Bruno Constantino - Chief Financial Officer

Conference Call Participants

Eduardo Rosman - BTG Pactual

Mario Pierry - BofA Global Research

Geoff Elliott - Autonomous Research

Domingos Falavina - JP Morgan

Tito Labarta - Goldman Sachs

Marcelo Telles - Credit Suisse

Thiago Batista - UBS

Andre Martins

Good evening, everyone. I americium Andre Martins, Head of Investor Relations of XP Inc. On behalf of nan company, I’d for illustration to convey you each for your liking successful our quarterly net call. So invited to nan Fourth Quarter and Full Year of '22 Earnings Call. Today, we person pinch america our CFO, Bruno Constantino. We will some beryllium disposable for nan Q&A convention correct aft nan presentation. And whoever wants to inquire a mobility tin raise your manus connected nan Zoom tool, and we will be you connected a first-come first-serve basis.

We person nan action of simultaneous translator to Portuguese. So we person a bottommost arsenic good connected nan Zoom if you want to move connected nan translation. And earlier we statesman our presentation, please mention to our ineligible disclaimers connected Page 2 connected which we explain forward-looking statements, their meaning and we person connected nan SEC Filings conception of nan IR website, nan definitions, arsenic good regarding those ineligible disclaimers.

So now, I'll walk nan connection to Bruno. Good evening, Bruno.

Bruno Constantino

Good evening. Thank you, Andre. Good evening to each of you. And convey you for attending our 13th net telephone presentation. As a afloat twelvemonth position I will return longer than accustomed successful nan preamble part, fixed much discourse astir really XP business exemplary useful successful different macroeconomic cycles. I will besides mention nan important achievements and lessons learned successful 2022.

On Slide 5, we item really XP benefits from a affirmative marketplace environment. The caller bull marketplace that went connected until 2021 attracted galore Brazilians to nan superior marketplace arsenic you know. From 2018 to 2021, we had an summation of much than 4 cardinal individuals travel into nan market. Still thing compared to nan size of nan Brazilian population, arsenic you know, but a batch compared to little than 1 cardinal we had successful 2018. And past arsenic nan main finance level successful Brazil, and having nan biggest specialized distribution network, XP benefited a batch from this script pinch our disruptive and scalable business model.

From '18 to '21, we grew our customer assets by a CAGR of 59%, our gross by a CAGR of 58% and our nett income by a CAGR of 98%, fundamentally doubling our nett income for 3 consecutive years, measurement supra marketplace and our ain anticipation astatine IPO. And past comes 2022, a very challenging year, particularly for nan finance advisory business. With nan Selic complaint rising from 2% to 13.75%, location was a meaningful alteration connected investors' willingness and consciousness of urgency to diversify investments from debased consequence fixed income options. This movement, which besides was seen successful different plus classes, is intelligibly shown by nan almost 30% simplification successful individuals equities mean regular trading measurement successful afloat twelvemonth '22 compared to '21. Other outer factors contributed to nan standby mode and little clients activity we saw successful 2022, I will sanction 5 of them.

Number 1, nan world ostentation and respective monetary argumentation each complete nan world; number 2, rebound of COVID successful early '22; number 3, warfare successful Eastern Europe; number 4, uncertainty pre and station elections successful Brazil; and number 5, The World Cup fever successful November, December, which led to a simplification connected existent business days. I cognize everything I'm saying present is good known by each of you. But it is important to contextualize truthful everyone tin amended understand nan effect of those events not only successful nan afloat twelvemonth '22, but connected a quarterly ground arsenic well. I will talk much astir it successful our results section.

Going backmost to nan risk, isolated from for world ostentation and restrictive monetary policy, which happened passim nan full year, COVID rebound and warfare happened successful nan first 4th '22, and nan elections successful Brazil and World Cup happened successful nan 4th fourth '22. Not by coincidence, nan 2 weakest quarters of XP past year. This is important to understand. Last twelvemonth was different erstwhile looked connected a quarterly basis. So successful our view, it's amended to look nan afloat twelvemonth instead. We had a batch of volatility betwixt segments connected a quarterly basis. It will go clearer erstwhile we get to nan results part, we person immoderate slides to stock pinch you.

Going backmost to nan advisory business. So nan financial advisory business is based successful quality interactions, circumstances which make these interactions little frequent, arsenic we had successful nan 4th quarter, for example, does person a antagonistic effect successful nan finance business.

Going backmost successful clip connected nan barroom chart successful nan correct of nan slide, will let america to verify nan improvement of our business. I cognize that successful 2014, XP was a different business, overmuch smaller. But nan constituent to make present is to show really resilient our ecosystem became complete time. The past monetary tightening rhythm successful Brazil began successful 2013 and took nan Selic complaint adjacent to nan existent level of 13.75%. It took Brazilian Central Bank 2 years and 4 months to complete nan tightening cycle. And nan full magnitude of it was 700 ground points. In 2014, XP’s nett income fell 40% comparative to 13%, arsenic 80% of our revenues astatine that clip came from equity. With nan marketplace worsening our main metrics, nett inflow, caller clients and IFAs were powerfully affected arsenic well. We were overmuch much I’d opportunity a amended play astatine that time.

Now, accelerated guardant to 2022, nan caller monetary tightening rhythm has been faster and much terrible than nan past one. It took nan cardinal slope only 1 twelvemonth and 5 months to complete nan tightening cycle. And nan full magnitude of it was 1,175 ground points. It went from 2% to 13.75% really fast. But successful 2022, different than what happened successful nan past rhythm successful 2014, our gross grew 10% year-over-year, and our nett income remained level year-over-year. The caller investments we person done successful nan caller verticals thief to mitigate these challenges scenario, improving nan resilience of our business model.

Let's talk a small spot much astir those investments and besides astir immoderate lessons learned successful 2022 successful nan adjacent slide. Since nan IPO, we person been investing successful caller verticals, arsenic you cognize and according to our strategy, to spell beyond investments, to go ascendant successful investment. We are assured that our strategy is successful nan correct track. And by going beyond investments, we achieved 3 main things: One, we accrued nan LTV of our existing clients; number two, we heighten nan moat of our ecosystem; and number three, we accrued our full addressable market. Basically, successful 3 years, since nan IPO, we person built our ain security company, Xp Vida e Previdencia S.A starting pinch status plans and precocious moving into life insurance. We person created a slope from scratch, starting pinch collateralized credit, moving into in installments cards, debit cards, and precocious integer accounts. We person developed an world finance business, besides from scratch, alternatively of doing it inorganically.

We person created XTAGE, our integer assets level organically arsenic well, allowing our clients to bargain crypto assets successful nan aforesaid app they usage to invest. We person invested successful firm business, fundamentally nonexistent successful 2019 twelvemonth of our IPO, which made a gross of R$600 cardinal past year. And finally, we person nan description of nan soul advisory team, our B2C, improving our full specialized salesforce, which we expect to reap nan afloat benefits of it erstwhile nan macro rhythm reverts. These projects demanded an first allocation of financial and quality assets that is decreasing arsenic they mature. And, honestly, I don't retrieve successful our history a play wherever we person done truthful overmuch and truthful fast. And possibly present is simply a instruction learned successful 2022.

We, arsenic a institution and arsenic entrepreneurs, we are disruptors. We ever want more. And it's ever bully to retrieve that Brazil is 1 of nan astir concentrated financial manufacture successful nan world still. You return that successful a very benign script of caller years, wherever we doubled our nett income for 3 consecutive years and we overmuch recognized this situation has influenced nan gait of our description . As I said, we person executed our scheme excessively accelerated and arsenic you tin see, we heavy expanded nan headcount guidelines almost 3 times successful 3 years, and group is 70% of our SG&A. We added 1,200 labor successful 2020 and 2,500 successful '21. And we person done it correct earlier a marketplace downturn. Again, we person nary uncertainty that each of these initiatives will adhd worth successful nan semipermanent and are 100% connected pinch our strategy. But we must beryllium humble and admit that we person entered 2022 pinch nan incorrect costs structure, it’s a fact.

Now, it is clip to run connected a overmuch leaner costs building going forward. And nan ongoing translator process that XP is going through, and I've talked astir it successful erstwhile quarters, will beryllium cardinal to thief america execute this disbursal simplification without jeopardizing our work value aliases expertise to beforehand pinch our strategy. Just to link nan movements, it's important to punctual that this translator process has started done our tech squad astatine nan clip led by Maffra, erstwhile he was our CTO, and expanded to nan full institution erstwhile he became our CEO astatine nan extremity of 2nd semester '21.

With a leaner costs structure, a greater addressable marketplace and advancing successful our halfway business, which we are going to show successful nan adjacent slide, we judge XP is good positioned for trial times ahead. The scenario, arsenic we each know, 1,175 ground points successful conscionable 1 twelvemonth and a half. And still our main KPIs for nan finance business kept expanding astatine a slower pace, of course, but expanding. Last year, much than 2,000 independent advisors connected a nett ground subordinate XP's platform, which reenforce not only nan imaginable of this profession, but nan activity of XP successful attracting caller IFAs into our ecosystem.

If we were a caller agent trader starting up successful 2022, very reliable clip to commencement a business, we would beryllium by far. At nan extremity of nan year, nan 3rd largest IFA web successful Brazil, successful 1 year, only down XP, nan ascendant subordinate and BTG. Net inflow totaled R$155 billion. We judge this shows nan resilience of our distribution exemplary and nan premium value of our customer base. And we added 406,000 nett caller clients successful our ecosystem. Just arsenic a reference, it took america 16 years of beingness to execute that number of clients. And our customer assets kept increasing arsenic well, reaching 946 cardinal astatine nan extremity of nan year.

So successful summary, contempt nan beardown headwind that continues successful 2023, XP was capable to support increasing and advancing successful its halfway business KPIs nett inflow, IFAs and nett caller clients. When we person nan adjacent tailwind scenario, and it will happen, our ecosystem is going to beryllium overmuch bigger and complete than erstwhile nan past bull marketplace happened. We are expanding our expertise to turn exponentially erstwhile a reversal of nan tightening monetary rhythm occurs.

Cross-sell, cross-sell is 1 of nan biggest opportunities we person beyond investments. The clients are successful nan location and person already trusted america pinch nan astir precious point they have, their savings which we are honored for nan trust. The operation of our customer guidelines maturation and nan maturation of caller products successful our platform, presents nan champion compelling opportunity for gross maturation successful 2023, considering we're going to person very precocious liking rates for long. If that is nan scenario, past cross-selling is nan astir compelling opportunity for gross maturation that we have.

Credit cards, insurance, in installments status plans, integer accounts, and world investments, accounted altogether for R$1.3 cardinal of gross successful 2022. In nan erstwhile year, 2021, it was little than 600 million. So much than double successful 1 year, we judge a maturation of 50% to 60% this twelvemonth 2023 is beautiful reasonable, considering nan debased penetration of these products successful our existing customer base. As you tin spot successful this slide, world investments, for example, which should use from nan existent script for diversification intent and consequence guidance arsenic well, has little than 1% penetration successful our customer base. Credit paper is nan astir mature merchandise that we person still has little than 20% penetration. So we will proceed to person businesses wrong our ecosystem pinch precocious double aliases moreover triple digits of growth, moreover successful a challenging macro environment.

Expenses, nan lessons learned successful 2022. SG&A grew alongside headcount successful caller verticals arsenic already said, reaching R$5.6 cardinal ex incentives successful 2022. We went from R$1.9 cardinal successful 2019 to R$5.6 cardinal successful '22. That's almost R$4 cardinal successful 3 years. We person done much pinch more. Our SG&A disbursal ratio went from 37% successful 2019 to 42% successful 2022. So our main privilege for this twelvemonth 2023 is to regain nan inherent operating leverage of our business. How? Through a companywide accommodation of expenses that already began successful 4th fourth '22, past successful elemental execution; and arsenic I've said already, helped by nan ongoing translator successful nan company. This is an important point, because what we're saying present is our business, which has ever had a beardown operating leverage pinch nan ongoing transformation, will summation that operating leverage done a overmuch leaner costs structure, sustainable and not impacting our deliverables aliases clients, which will show its maximum benefits successful nan adjacent marketplace upturn.

Different from 2022 erstwhile costs were controled but not reduced, nan existent initiatives should let for separator description , moreover successful reliable scenarios for gross maturation and is 100% nether our control. And to amended align marketplace expectations astir expenses, we estimate that SG&A ex incentives for this twelvemonth will scope betwixt R$5 cardinal to R$5.5 billion, which astatine nan bottommost of this scope implies a nominal simplification of 11% year-over-year. And that is connected to our EBITDA separator guidance arsenic good of 26% to 32% successful 2023 to 2025, moving from nan bottommost to nan apical successful nan period.

Now, moving to nan financials. On Slide 12, we supply immoderate discourse connected nan headwinds faced particularly by our advisory transmission successful 4th fourth '22, which relies connected quality touch and readiness I mentioned earlier. The post-election period, coupled pinch World Cup and nan attack of holidays, added a furniture of trouble connected nan advisor customer relationship successful nan quarter. And this is important erstwhile you analyse our business, you cannot only look astatine mean regular trading volume, what's going connected pinch nan span here, because nan advisory business, it demands a narration of advisor successful clients. And that's why January, for example, it's a anemic month, because group are connected vacations, clients and advisors. So this benignant of interaction, whenever they person difficulties, it has an impact. In nan 4th quarter, it's precisely what we lived. So because of that, and also, because of little charismatic business days comparative to 3rd 4th pinch their revenues, didn't turn arsenic expected.

You tin besides spot that connected nan near portion of nan slide. The 4th fourth seasonality usually is nan strongest 4th of nan year, because of beardown superior markets activity and capacity fees that happens successful nan 4th quarter. It didn't activity past year. Last twelvemonth was different successful that sense. From '18 to '21, 4th fourth represented connected mean 30% of full gross for this circumstantial year. Last year, it represented little than 24%.

Also, aft a grounds 3rd quarter, 3rd 4th past twelvemonth was our champion quarter, erstwhile our gross gross reached nan R$3.8 cardinal helped by anticipated deals and traded volumes successful Institutional and Corporate & Issuer Services, that successful nan 4th fourth faced a lesser favorable quarter, arsenic erstwhile signaled successful our past telephone -- net call. So together conscionable to springiness you a sense, Institutional and Corporate & Issuer services represented 80% of nan sequential gross diminution quarter-over-quarter.

Looking astatine nan afloat twelvemonth 2022, which we judge is nan champion measurement to look astatine nan results of XP past twelvemonth because of nan disparity that we had among quarters passim nan year, our gross gross grew 10% comparative to a beardown 2021, nan precocious of nan bull marketplace cycle, which reinforces what I said earlier, nan resilience of our business moreover reliable scenarios. The Retail segment, nan astir applicable 1 and together pinch Issuer Services were nan astir impacted by this challenging macro situation successful 2022, but still Retail grew 4% year-over-year, contempt nan drawdown seen successful nan equity part, nan astir applicable for Retail gross of 21% year-over-year. Equity successful '21 represented 55% of nan Retail revenue. In '22, decreased to 42% of Retail revenue.

So, what helped Retail gross successful investments? Number one, fixed income positive 17% year-over-year; and number two, float that is successful different Retail, 70% maturation year-over-year, some of them benefiting from higher liking rates. Still, Retail, we besides saw nan beardown publication from nan caller verticals initiatives. Retirement plans for example, grew 47% year-over-year. Credit, fixed floor, insurance, cardinal institute and cards 229% year-over-year growth. Institutional and Corporate some had maturation successful 2022 and beardown growth, Institutional 50%, and Corporate 250%. Institutional that is simply a much mature gross statement benefited past twelvemonth from mostly FICC revenues, fixed income currencies and commodities. And Corporate benefited from nan earthy maturation of a caller business that had a very affirmative twelvemonth successful 2022.

On nan different hand, Issuer Services decreased 33% versus a very beardown 2021 fundamentally owed to a weaker superior marketplace activity particularly successful ECM comparing year-over-year.

When we look astatine our gross margin, contempt connected an yearly ground being virtually level successful 2022 compared to 2021, gross separator fell 7.1% successful 4th fourth versus 3rd 4th '22. This separator compression was chiefly related to: number one, gross mix, location was a alteration among quarters. Remember that Institutional and Issuer Services they person almost 100% gross margins because committee which is nan astir applicable statement successful COGS is mostly related to Retail finance revenues. Prepaid expenses write-offs, we had these one-off successful nan 4th fourth regarding ended contracts pinch IFAs. Remember that we person a prepaid expenses related to a semipermanent statement pinch nan IFAs. If erstwhile IFA leaves, we constitute disconnected everything that is prepaid. On nan different hand, we person nan good of immoderate we person paid successful double and that goes successful different income successful SG&A. And third, we person a alteration successful interchange interest nickname criteria aligned pinch different players successful nan industry. So arsenic of 4th fourth '22 interchange interest is recognized upon transaction. So it talks straight to nan TPV that we release.

Looking astatine this twelvemonth 2023, we expect gross separator to stay unchangeable comparative to '22 and 2021 connected an yearly basis, contempt volatility betwixt quarters. It's ever bully to punctual that betwixt quarters, we tin person volatility arsenic we had past year.

Moving to expenses. When analyzing SG&A expenses, we for illustration to exclude gross from incentives from Tesouro Direto, B3, and others, wrong Other Operating Income, you person that successful our financial statements. Because contempt being a recurring line, its magnitude is volatile by nature. As a reference this statement was 200 -- a affirmative number 285 cardinal successful 2022, a affirmative 366 cardinal successful 2021 and 353 cardinal successful 2020. So erstwhile you look astatine nan past 3 years, we ever had a affirmative simplification successful SG&A coming from revenues that are not recognizing nan top-line, but wrong operating income successful SG&A.

So we are going to person thing successful 2023, I person nary uncertainty astir it. The magnitude of it is difficult to forecast. So that's why erstwhile we look astatine expenses, we exclude these revenue, and past nan SG&A is higher. So SG&A expenses, excluding nan incentives, grew 18% successful 2022, reaching nan R$5.6 billion. People expenses, arsenic I said, represents 70% of total, while Non-People 30%. And arsenic antecedently mentioned, for 2023 expenses, we are estimating a scope of 5 cardinal to 5.5 billion. What's going to thrust this range? It's mostly nan gross maturation and nan capacity of nan business.

So for instance, if we deliberation that 2023 is going to beryllium much of nan aforesaid and for illustration 2022 and our gross would turn nan aforesaid thing, nan 10%, for example, we would beryllium successful position of SG&A astatine nan bottommost R$5 billion. To get to nan top, our revenues should turn astatine high-double-digits. So that's why we person this scope because location is simply a constituent of our SG&A based connected performance, which is nan prize that tin alteration depending connected nan results.

In 4th quarter, looking astatine nan right. SG&A was level comparative to 4th fourth '21. And connected an annualized basis, it was 5.5 cardinal already wrong nan guidance range. So complete nan adjacent quarters, we expect further reductions successful SG&A.

Net income. Net income is fundamentally a consequence of everything that I've conscionable said. So 2022 nett income, level year-over-year, 3.6 cardinal pinch a somewhat higher net per stock maturation owed to nan buyback programme that we've been fulfilling. So during 2022, we person bought backmost R$1.8 cardinal of which R$1.3 cardinal only successful nan 4th quarter.

On nan quarter, our nett income was 783 million, which fell 21% year-over-year and 24% quarter-over-quarter owed to nan impacts that I already explained successful nan erstwhile is life. Revenue outlook and nan gross separator compressions what explains this drop. Factoring successful our expectations for nan business and nan SG&A guidance, we estimate 2023 nett income to beryllium betwixt 3.8 cardinal and 4.4 billion. Usually, we do not springiness that benignant of estimation connected an yearly basis. But we understand that successful specified macro environment, and being harder for galore investors to understand nan effect successful our institution and successful our business, it would beryllium important to springiness this benignant of guidance for nan year. So you tin travel successful nan adjacent quarters to come.

And finally, earlier we spell to nan Q&A, conscionable wrapping up nan main messages here. Expenses, already talked a batch astir it. So leaner costs structure, that's nan main priority. And that translator will let america to grow separator connected a sustainable way. Number two, cross-sell, we already talked a batch astir it. We person businesses pinch exponential growth. Number three, we support evolving our strategical roadmap and our business keeps getting amended nan measurement we look astatine it, particularly erstwhile we comparison to erstwhile cycles. And number four, astir nan 2023 expectations are nan guidance, nett income betwixt 3.8 cardinal and 4.4 billion. SG&A exclude incentives betwixt 5 cardinal to 5.5 billion.

With that, I deliberation we should spell to Q&A now Andre.

Question-and-Answer Session

A - Andre Martins

Okay, Bruno. Thank you. So, again, we person a batch of analysts connected nan statement here. So I'll inquire you to beryllium patient. We will spell 1 by one, answering nan questions.

First one, Rosman, Eduardo Rosman from BTG.

Eduardo Rosman

Hi, Andre. Hi, Bruno. I person 2 questions. The first 1 is much related to nan short-term. And nan 2nd 1 much related to nan long-term. Do you for illustration maine to do nan -- some astatine nan aforesaid clip aliases do you for illustration -- truthful fto maine conscionable do nan some of them. So nan first nan short-term, you gave nan guidance, which was great, thanks. I deliberation it helps. And that guidance implies net growth, right, year-on-year. I deliberation it has to do a batch pinch your costs control, right? But really do you deliberation that will germinate passim nan year, right? Because my consciousness present is that first 4th is apt to beryllium beautiful weak, right? So this year, we cognize it's very bad aft nan Americanas situation. January is bad. You don't person nan let's opportunity nan incentives. Costs arsenic I know, usually, you person immoderate upfront costs and past you use passim nan year. So it's adjacent to presume that first 4th very apt is going to beryllium nan weakest of nan year, and past we're going to beryllium recovering complete time? So that's nan first one.

And nan 2nd 1 I deliberation is related to -- it's much astir nan long-term, right? We cognize that nan short word stuff, truthful let's effort to deliberation astir nan semipermanent here. Which I deliberation it's an important theme, which is nan business model, right? If you can, possibly talk a small spot much astir nan model, really it's moving today? We cognize that you had a exemplary successful nan past, which was astatine nan controlling group, each nan partners were there. And that worked beautiful good during let's say, galore years. But you had to change, right? You had to alteration that, because you've now bought large liking different times, changed that a fewer times aliases a couple, I don't know. And I presume there's a chance to alteration again. So really important you deliberation it's this business model, if you person thing to adhd towards? Because we deliberation present is thing very important.

Bruno Constantino

Perfect, Rosman. I mean, nan first mobility astir really we're going to germinate complete 2023 pinch nan guidance. You're 100% correct. First quarter, should beryllium nan weakest 4th successful 2023. The Americanas event, that you mentioned, has a secondary effect successful superior marketplace activity. We cognize that DCM activity has been for illustration frozen, particularly successful nan distribution portion wherever XP acts arsenic nan cardinal domiciled there. So yes, first quarter, it continues to beryllium a reliable quarter. We do person nan disbursal simplification that is 100% nether our control, arsenic I mentioned.

So we do expect erstwhile we look astatine SG&A to show already a reduction, considering nan guidance that we gave. You besides are correct, erstwhile you opportunity that successful nan first quarter, we had nan use of nan SG&A because of nan incentives and we are not going to person that successful nan first quarter. That's correct. But arsenic our guidance goes to SG&A ex incentives, it doesn't matter that much. But yes, we are going to spot improvement of nan SG&A successful nan first quarter, okay? And past we expect to support evolving that passim nan full year.

Going to nan business and nan much semipermanent question. You already gave immoderate of nan reply erstwhile you mentioned what happened pinch Itau. We liked a batch nan exemplary that we had successful nan past pinch XP Controle. We had to alteration that exemplary aft nan IPO precisely because of Itau, they went to ace voting rights, ace voting authorities should beryllium for nan controlling shareholders, but it was their agreement. We had to accommodate that. And we didn't have, I would opportunity abstraction to support nan aforesaid exemplary that we had arsenic non-listed company.

Then we started pinch nan restricted banal present and it's pinch a different vesting period. In nan mediate of nan measurement we improved nan exemplary that we had learning from feedbacks and from acquisition arsenic a recently listed company. And we are ever reasoning astir improvements successful our business model. That I tin guarantee you, because that's nan bosom of our business and we return that arsenic a main priority. The exemplary that we had successful nan past, not straight related to stock value fluctuations. For example, return nan exemplary of return connected equity exemplary wherever you bargain and waste based connected return connected equity, we deliberation it's a very bully model, because it aligns you successful position of nan return of nan company, successful position of costs reductions for example. And you are not straight exposed to marketplace fluctuations, but much astir nan fundamentals of nan business. We for illustration that very much. We don't person thing to denote correct now but what I tin show you is that we are ever unfastened and reasoning astir ways to amended our business model. The restricted banal units are working, are moving conscionable fine. Can it beryllium improved? We deliberation yes.

Eduardo Rosman

Great, crystal clear. But do you deliberation that erstwhile you person -- if you do immoderate changes, aliases thing connected that front, I deliberation it will beryllium great.

Bruno Constantino

No, we will announce. That's for sure. Because arsenic I said Rosman we deliberation it's a privilege successful position of, it's a very important taxable for nan company. No mobility astir it.

Andre Martins

Okay. Our adjacent mobility is from Mario Pierry. Just a mates of seconds.

Bruno Constantino

We person immoderate delay. We are trying. You should denote that Andre. We are trying to a caller exemplary wherever we tin spot nan analysts, whoever is asking nan questions. So we mightiness person a delay.

Mario Pierry

Hi, guys. Thanks for taking my question. Two questions. In nan past quarter, I deliberation you had changed your guidance to beryllium connected net earlier taxation because of nan volatility successful nan taxation rate. So I was wondering what benignant of effective taxation complaint are you assuming connected your guidance for nan nett income that you gave? And past nan 2nd mobility is related to your disbursal reductions, right? You’re talking astir you reduced your headcount by 5.5% from December to January. I was wondering if you person immoderate different plans, for illustration successful bid to get to nan bottommost of your guidance, right, truthful 11% simplification successful SG&A. So successful bid for you to get to nan 11%, does it mean further headcount reductions aliases does it mean costs savings successful different areas? And what benignant of effect this could person connected nan maturation of immoderate of your different businesses?

Bruno Constantino

Perfect, Mario, bully to spot you. Regarding nan income taxation rate, you're right. We gave nan net earlier taxation separator guidance. And we cognize that nan accounting income taxation complaint is tricky depending connected nan operation of revenue. But that's precisely why we person this I would opportunity wider scope successful position of nan nett income from 3.8 cardinal to 4.4 billion. We person galore different assumptions here. So I cannot springiness you a circumstantial what we usage to springiness this guidance, because it depends from nan range. What I tin show you is we're assured that we tin present nan bottommost of nan range. And 1 elemental mathematics present to thief you retired is nan following. Imagine that we are successful 2022, nan full year, truthful R$14 cardinal revenue, R$3.6 cardinal of nett income. We would person alternatively of 5.6, R$5 cardinal of SG&A, right, R$600 cardinal of simplification successful expenses would mean much than R$300 cardinal further to nett income. So pinch that, we would beryllium capable to scope nan bottommost of nan guidance.

Of course, arsenic I answered nan erstwhile question, nan twelvemonth started successful a very reliable way, because of what happened pinch Americanas and its superior markets activity and truthful on. But we do not expect nan marketplace to stay, I would opportunity dysfunctional passim nan full year. So superior marketplace activity should resume astatine immoderate point, nan companies request to rotation complete their debt. We person respective investments successful fixed income that mature astir this year. So each of that factored successful is what gave america nan assurance pinch that. So I don't person a circumstantial income taxation rates to springiness you.

Your 2nd mobility astir nan headcount. You mentioned nan 5.5, nan 5.5 simplification is only comparing January to December. But what I would -- I would opportunity 2 things here. Number one, yes, you tin expect further reductions, that's going to beryllium -- nan businesslike taxable is going to beryllium changeless passim nan full year. But astir important than paying attraction to headcount is to salary attraction to SG&A, right? Because we tin have, for example, successful 3rd 4th past year, conscionable to springiness you an example, 3rd 4th past year, our headcount maturation went up. We had a maturation successful headcount compared to nan 2nd quarter. But we had a batch of interns and young developers that we had a business pinch that we bring -- brought successful nan company. And that's a different building of layer. So, nan transformation, nan use of nan translator ongoing is precisely to person little span successful layers, to person merge of leadership, to simplify. And that's really nan simplification successful SG&A will come, headcount decrease. It's happening, but I would salary attraction to nan reals, to nan disbursal itself. It's much applicable than nan number of headcount, that's what I'm trying to say.

Mario Pierry

Okay. And nan effect that this headcount reductions could person connected gross growth?

Bruno Constantino

Sorry, I didn't I didn't reply that. None. And that's what I tried to explicate passim nan presentation. It's nan benefits of nan transformation. Whenever you person a transformation, it's earthy to person a J curve, because you're going to beryllium moving pinch much than you need. But it's important, truthful you do not fto thing autumn disconnected nan table. And we accelerated that. That process intensified erstwhile Maffra assumed arsenic our CEO, and past year, nan 2nd semester, mostly successful nan 4th quarter, we accelerated a lot. So, nan measurement XP now is organized done business units, it gives america much agility, and ratio successful position of nan teams moving together, and that's nan large benefit. So we are not postponing immoderate deliverable successful position of products or, we are not jeopardizing acquisition for our clients arsenic I mentioned, thing for illustration that. So, we're not dropping anything.

Mario Pierry

This is each related, like, connected nan SG&A guidance that you gave, are you including immoderate severance charges associated pinch these layoffs?

Bruno Constantino

Yes, we are.

Mario Pierry

So, there's not going to beryllium additional?

Bruno Constantino

No, it's not additional. We are including because -- you're correct, we person respective layoffs. So everything -- it's going to beryllium successful nan first quarter. So basically, astir of it.

Mario Pierry

And past erstwhile you talked about, for illustration nan SG&A falling from 5.6 cardinal to 5 billion, nan 600 cardinal delta, and you said it'll beryllium 300 cardinal to nan bottommost line. But we cognize that your effective taxation complaint has been adjacent to zero?

Bruno Constantino

No, it depends. Yes, but, depends connected wherever -- I'm using, I would opportunity a blimpish attack successful position of wherever we are reducing nan costs. But yes, that's conscionable a blimpish approach. The taxation complaint is -- it's nan accounting 1 is trickier than nan 1 that we merchandise erstwhile we person nan equivalent. Because retrieve that we do salary much taxation than what is shown successful our accounting because we person parts of our business wherever we do not admit nan afloat revenue. We admit nan gross already nett of tax. That's what happens, but we salary nan taxes.

Andre Martins

Okay, I'm bringing Geoff successful from Autonomous Research.

Geoff Elliott

First, conscionable a very speedy clarification, nan nett income guide, is that connected an adjusted ground aliases a GAAP basis?

Bruno Constantino

No, it's -- Geoff, it's connected accounting basis, not adjusted. It's nan gap, nett income gap. We still merchandise nan adjusted nett income but we person withdrawn nan adjusted nett separator guidance, arsenic we look astatine it, including nan stock based compensation, contempt a noncash expense, we see an expense. So, we -- that successful nan past quarter.

Geoff Elliott

And past successful position of nan unit that you saw successful nan unit business, and specifically successful equities, really overmuch of that is simply little activity and really overmuch of that is merchandise mix, benignant of group trading rate equities versus -- and derivative products and things for illustration that. What's driving nan unit there?

Bruno Constantino

I would opportunity activity, particularly -- successful nan afloat year, it's -- we person equity part, clients migrating retired of equity into much fixed income products because of liking rates. But connected a quarterly ground successful nan 4th fourth activity, not for nan brokerage business, nan trading part. But for example, you mentioned system notes. Structured notes, I judge nan manufacture fell for illustration 20% to 25% quarter-over-quarter. So location was little activity. So, that's fundamentally what I would opportunity successful position of nan equity driblet successful nan 4th quarter. The guidelines is debased now, Geoff, because we've been successful that train for a while.

Andre Martins

Okay. Next successful statement Domingos from JP Morgan.

Domingos Falavina

Two, I deliberation much elemental questions successful here. First 1 is you mentioned you're now recognizing interchange astatine nan infinitesimal of TPV. My mobility is, really did you admit anterior to that? Because it's nan only measurement I could deliberation of recognizing this. And it wasn't overmuch of an impact. The 2nd 1 is everybody had one-off impacts connected galore -- large suspicions, I guess, spell towards nan Americanas. But successful immoderate case, everybody had immoderate benignant of loss. I'm conscionable curious, if you had immoderate one-off effect successful your income statement?

Bruno Constantino

Okay. Now, regarding nan interchange, Dom, was fundamentally -- nan installments we recognize, fundamentally connected a rate basis. And nan installment not paid, we didn't admit and we adjusted that successful nan 4th quarter. So that's why we say, it's related to nan TPV. Our nickname was beneath what really was nan TPV. That's what we change.

Regarding one-off, I mean, we decided to not set thing for one-off, right? Because we ever run successful business, you person one-offs each azygous 4th aliases each azygous day. So, if we would set thing for what we judge to beryllium one-off, it would beryllium a mess.

The Americanas event, I judge tin beryllium for illustration one-off because it was a for illustration a very singular event. We didn't person immoderate impact. Like nan banks successful nan in installments book because our in installments book of R$17 cardinal astatine nan extremity of past year, zero vulnerability to Americanas, 90% of that in installments book is collateralized. So we are successful a different business here. But we do person marketplace making book successful fixed income, that of people nan branches and bonds [ph] of Americanas were traded. And we had an vulnerability that, but we could not admit successful nan 4th fourth because it was not a in installments that you tin person NPL location and recognize. It was recognized successful January this twelvemonth pinch nan marketplace to marketplace proceeds of nan tradable parts of nan book. And to springiness you nan impact, because that's going to -- it's going to beryllium I judge -- it's adjacent to see a one-off . It's going to effect nan first quarter, and nan magnitude is adjacent to 125 full -- 100%, R$125 cardinal successful nan bottommost line.

Domingos Falavina

Are you clear of this risk? Is it afloat done?

Bruno Constantino

Yes, basically. Yes. We don't person our marketplace making activity. We don't person large exposures to 1 azygous name. So, it's fundamentally a usability of what nan clients bargain and sell. And we do person galore different names. Americanas unluckily was 1 of them. It's 100% recognized successful January, you're going to spot that successful nan first water, but -- that's it.

Andre Martins

Okay. Next Neha from HSBC.

Bruno Constantino

Hi Neha, I deliberation you are connected mute, if you tin perceive us.

Andre Martins

So let's try. We tin travel backmost to Neha. I'm bringing Tito from Goldman Sachs.

Tito Labarta

Thanks for nan call. Thanks for nan guidance and color. That’s helpful. Maybe conscionable connected nan revenues. You had you mentioned challenging quarter. 1Q is going to beryllium a spot challenging. Help america deliberation astir benignant of nan semipermanent maturation imaginable connected nan gross side. One, what do you deliberation needs to happen? Is it conscionable a amended macro environment, liking rates coming down? And I cognize there's a batch of moving parts successful location but conscionable to effort to deliberation astir that. And yes, I'll spell backmost a small bit. Yes, astatine nan extremity of 2021, your Investor Day, sewage it, R$10 cardinal successful revenues from caller verticals. That will beryllium 25% of revenues, for illustration $40 cardinal successful 2025, which is only 2 years away. So I mean, I deliberation we tin reset those expectations, I imagine. But conscionable thief america deliberation astir gross maturation from here, downside risks and upside risks arsenic overmuch arsenic you tin will beryllium helpful.

Bruno Constantino

Yes. Sure. I deliberation that -- I will abstracted my reply present successful 2 parts, Tito. Let's look astatine these reliable situation for investments pinch precocious liking rates and presume we're going to beryllium successful this situation for longer, right? If that is nan case, nan equity portion of nan business is going to proceed to suffer from nan macro environment.

What do we person arsenic an ecosystem, 2 affirmative things that will use from it, nary matter what. Number one, I already talked astir nan caller verticals. So, if you look astatine R$1.3 billion, 50% to 60% of maturation this year, we are assured that we tin present that. And it's not correlated pinch investments. We're talking astir R$700 cardinal to R$800 cardinal of further gross this year.

Number two, erstwhile I deliberation astir nan costs platform, and we person nan largest costs platform, unfastened costs level successful nan market, and I deliberation astir nan fixed income business, some of them, they should grow, what, astatine Selic rate, which is 13.75%. So, we're talking astir mid double digits here. It's important to person that successful mind. The customer assets, because of nan displacement that we already had, successful position of movement, nan 4th quarter, it was nan first 4th wherever fixed income customer assets was greater than equities successful our breakdown.

So, what I'm trying to opportunity present is nan effect tin proceed to happen. Yes, but a batch has been done already. In nan fixed income portion and nan costs level should turn astatine Selic rate. So that constituent besides will thief gross growth. When I deliberation astir a longer word perspective, for gross to really play this operating mean and exponential growth, again, we would request nan marketplace upturn again. So, nan reverse of nan tightening cycle. We don't request thing adjacent to what we had successful nan past financial deepening process successful Brazil of liking rates astatine 2%, not astatine all. really it’s not moreover bully for XP, erstwhile we are astatine 2%. It's not sustainable. So I deliberation that debased – precocious I mean, single-digits, little than double-digits liking rates is much than enough. It's a psychological effect, if you person 9% is 1 thing; if you person 10% is different thing. So, this is important. And we judge that we're going to get there. We don't cognize when. It depends connected macro policy, but we judge we're going to beryllium cyclical.

So, erstwhile that happens, what I -- nan constituent I tried to make during nan position is, look, our business still has a very beardown operating leverage. And we are increasing and we are expanding not only nan income force, but we are complementing nan services and products that we tin connection to our clients done our ecosystem. So, our ecosystem is not only becoming much resilient, but bigger.

When we person nan reverse of nan rhythm and pinch these translator and we set successful nan costs building pinch a overmuch leaner costs structure, these operating leverage that our business still person it’s going to play an important role. I don't cognize erstwhile it's going to happen, but it will astatine immoderate constituent successful time. That's what I'm saying. So nan maturation of revenue, that's really I would put it. Selic complaint for costs level and fixed income part; float, aforesaid thing, and caller verticals increasing exponentially. The equity parts already successful a very debased base, should enactment for illustration that if nan script is simply a blimpish 1 successful position of higher liking rates for longer.

Tito Labarta

One follow-up, if I may. I conjecture conscionable connected why you're assured that nan costs cutting won't effect nan revenues, and peculiarly immoderate headcount reductions? I mean, do you deliberation you complete hired? Will you -- erstwhile nan rhythm comes back, will you request to prosecute again? And is location nary effect connected that?

Bruno Constantino

No, we complete hired. I deliberation we complete hired, right? That's 1 portion of nan explanation. We -- again, erstwhile I look astatine what happened successful -- we doubled our nett income successful 3 consecutive years, and we were doing excessively overmuch excessively accelerated astatine nan aforesaid time. So, it's really difficult to extremity nan train. And we did that successful a pandemic. So we started -- successful '20, we hired 1,200 labor successful 2020, successful nan pandemic, 2,500 successful 2021, moving from home. So, of course, it's difficult to negociate that. And of course, we person complete hired. I person nary uncertainty it. So that's 1 portion of nan explanation. But I deliberation nan astir important than that, because that's easy to correct now and it's done already. But nan different portion of nan costs reduction, successful my position is much important is nan transformation, because it gives america a structural competitory advantage successful position of nan measurement we are organized and our agility. So, we are not lacking thing -- we are not giving up anything. We person already invested. So, we person nan slope moving nan integer accounts, we person our security institution working, we person our world accounts working, we person X shape working, we person nan firm business moving and we person our soul advisors already hired. Now it's clip to consolidate everything that we person done. And done nan transformation, we person done leaner costs structure. So, it's not astir letting thing go. It's astir not doing thing new, but connected nan different hand, consolidating and taking nan opportunity of nan transverse waste of everything we person done.

Andre Martins

I'm bringing Marcelo from Credit Suisse.

Marcelo Telles

I person 2 questions. I deliberation nan first 1 is much strategical question. I mean, we've seen XP having a very successful business model. In erstwhile years, location was surely a very beardown maturation successful a script wherever liking rates were abnormally debased and wherever I deliberation nan XP had so a winning worth proposition for nan customer, particularly vis-à-vis what was being offered by nan banks astatine nan time. So there's a batch of growth. Now, nan narration pinch nan IFAs was easy. The narration pinch soul stakeholders was astir apt easier. When there's much money, it's ever easier, successful that respect. But now, we are successful an situation wherever liking rates are double digit, we tin reason whether they're going to beryllium 14, 15, aliases 10, but they're decidedly not going backmost nan 2% they had before. And you person an situation wherever nan IFAs made up them are struggling successful this environment, and successful an situation wherever you whitethorn not person that aforesaid winning worth proposition that you had before, because now I mean, banks are fighting back. They person products that you don't have. As you mentioned earlier, immoderate investors are looking for debased risk, type of instruments pinch -- which astatine times puts nan ample banks successful that advantage, and now you person a ample slope -- ample banks besides consenting to replicate a spot your exemplary of having offices passim different countries, and trying to bring that entrepreneur tone to them, thing that you guys did very good complete nan years.

And erstwhile I perceive your -- you talk a batch astir now it's -- let's trim costs, which I deliberation it's thing that you person to do for judge successful that environment, capable to a caller level of revenues. But you talk a batch astir nan soul translator of nan XP, and nan request to trim costs, which I agree, I deliberation that's important. But I deliberation what worries maine is that I didn't perceive overmuch astir if there's a request for alteration successful strategy from XP successful position of this caller environment. So, really are you going to attack your narration pinch IFA? There seems to beryllium -- from what we see, we talk, there's a batch much contented coming pinch nan IFAs and that earlier we spot a consolidation. Now wrong nan IFAs that their bargaining powerfulness only increases complete clip and erstwhile things get harder, this exemplary -- needs to connect themselves to a bigger effect. That ends up -- create a attrition successful narration aliases possibly forcing XP to person -- walk much money to clasp them either done nan cardinal money aliases buying nonstop stake.

So, what is nan strategy of XP? That's my question. Is location immoderate broader strategy successful that respect? And 1 mobility attached to that is really -- do you deliberation astir this conflict of liking that exists betwixt nan IFAs and nan clients, nan exemplary that was a winning exemplary backmost then. Nowadays, you tin -- it creates a batch of conflicts today, sometimes it’s not successful nan champion liking of nan client. So, what is XP reasoning strategically to reside those issues? Thank you.

Bruno Constantino

You made a batch of questions and assumptions there. I will effort to reside nan concept, and please fto maine cognize if I do it.

I don’t -- I deliberation location is simply a communicative location that I don't needfully work together pinch that. I deliberation it's simpler than that. XP is evolving successful nan business, successful nan finance business. It's not that -- of course, location is title and truthful connected but that's not nan point. The constituent is simply a very reliable macro situation that makes nan finance business to suffer because arsenic I said, group -- location is simply a higher inertia successful moving money erstwhile you person very precocious liking rates, and past your money conscionable invested successful fixed income is much than fine. So erstwhile you look astatine nan KPIs that I mentioned, nan main KPIs for nan finance business, we precocious past year, pinch each of that, competition, pinch liking rates going from little than 10% to 13.75%. We added 2,000 caller IFAs. We added nett inflows of R$155 billion, and we added caller clients -- 406,000 caller clients.

If you look astatine our marketplace share, successful 2000 -- successful nan finance nan measurement we spot it, successful nan finance business successful 2019, 7.3%; successful 2020, 8.6%; successful 2021 10.1%; November, nan past information that we person past year, 11%. We are gaining marketplace share, nan gait of it is reducing, because of precocious liking rates, it’s not because of competition. I’m assured that whenever nan rhythm changes, XP is going to beryllium nan main destiny from clients to travel present because we person income unit trained successful a different measurement to service clients successful position of investments, aliases not different reason, we've been elected successful 4 consecutive years arsenic nan apical of mind level for investments successful Brazil. So, I deliberation it has to do overmuch much pinch nan macro situation than structural thing. I don't deliberation location is, honestly, and we support evolving.

So, nan attritions that you mentioned astir nan IFAs, I don't cognize what attrition you're talking about. IFA, we person much than 12,000 IFAs successful our network. In nan past, we utilized to person little than 1,000. We pass pinch each of them connected a regular basis. And if I wouldn't show you each nan complaints, we would enactment present for nan full month. And we for illustration that, because that's precisely what makes america amended to perceive and to serve. And that's really we're going to get better. And that's what XP has been doing for much than 20 years.

So, nan conflict that you mentioned, we ever show nan IFAs and soul advisors, look, we person to do nan champion for nan client. Period. If you don't do that -- and of course, you person to make money and nan customer needs to understand that. But it has to beryllium a win, triumph situation. If you don't do that, you're not going to beryllium a successful entrepreneur. Period. So our IFAs, they person a very precocious people successful position of NPS. So honestly, I mean -- and our strategy, astatine slightest for me, it's beautiful clear. It's spell beyond investments to beryllium ascendant successful investments, because we are not yet. And we person a very, I would say, absorbing asset, which is our customer base. Our customer guidelines of 4 cardinal clients, it's a customer that has money to invest. And that's really good. We request to attraction connected those clients, service them amended and to spell beyond nan finance intends that, arsenic I said, they person already trusted america pinch nan portion of their life that it's 1 of nan astir important, their savings.

We request to return very bully attraction of it, service them well, and past person them to effort different products, different things. And that's precisely what's going to grow our addressable market, summation nan moat of our ecosystem, and nan LTV of our clients. And past we tin bring a win-win situation, again, pinch that customer passim nan period. So, I don't deliberation location is thing present successful position of this strategy that needs to change, honestly.

Marcelo Telles

If you let maine conscionable to spell one, my 2nd question. The rate flow, I saw -- I couldn't find nan managerial rate travel connection successful your property release. I don't cognize nan logic why it wasn't there. But, I conscionable don't understand, I saw location was a simplification successful nan nett assets of astir R$459 cardinal quarter-over-quarter, because you guys didn't people nan rate travel statement. I don't cognize if that was because of stock buyback, aliases payments to our face. So if you could explicate to america what drove that rate burn, that would beryllium great. Thank you.

Bruno Constantino

The stock buyback, you brought an important constituent that I didn't mention. We person bought passim nan twelvemonth R$1.8 cardinal successful stock buyback approximately. We person now successful treasury much than 3.5% I conjecture from full superior nowadays. But astir of it was successful nan 4th quarter, because retrieve that successful nan 4th quarter, connected apical of nan stock buyback program, we had nan Itaúsa artifact that was much than R$550 million, thing for illustration that. So successful nan 4th quarter, we person bought R$1.3 cardinal astir successful total. And that's astir apt what you saw there. But we tin spell into specifications later, because I don't person immoderate successful beforehand of me. But that's astir apt nan stock buyback program. That continues, truthful we person been -- January, it ends successful May.

Marcelo Telles

Did you salary thing to IFAs successful this quarter?

Bruno Constantino

This quarter, it’s going to minor.

Andre Martins

Similar guidelines of caller quarters.

Bruno Constantino

Remember Telles that we person -- pinch each nan agelong word agreements that we person done pinch nan IFAs. We person immoderate adaptable components of it linked to performance. So if achieves, we pay; if doesn't, we don't. And then, depending -- it’s a lawsuit by case.

Marcelo Telles

Thank you. I admit your time.

Bruno Constantino

Thank you, Telles.

Andre Martins

Last 1 successful statement Thiago Batista from UBS.

Bruno Constantino

Hi, Thiago. We cannot perceive you. I don't cognize -- you doesn't look connected shut up now. Yes, now perfect.

Thiago Batista

Okay. Sorry, guys. Hi Bruno, Hi Andre. So I person 2 questions. One, really a follow-up. The follow-up astir nan guidance only to ensure. The implied apical statement maturation of nan guidance successful my postulation is simply a debased azygous digit. It is nan lawsuit truthful nan apical statement should grow into nan 3 azygous digits. The 2nd 1 astir nan effect of nan higher liking rates successful your moving capital. So, I judge we person not seen yet nan afloat effect of nan moving -- of nan highest -- complaint successful your moving capital, if it's imaginable to spot this statement expanding into inventory?

Bruno Constantino

The apical line, nan adjacent clip we should springiness nan P&L because you do nan backwards calculation to get to nan apical line. Okay. Look, nan guidance that we gave we are not giving apical statement guidance. But to your constituent tin we execute nan nett income guidance pinch precocious azygous digit aliases precocious azygous digit aliases debased double digit gross growth, yes, we judge we can. So it's an attack that we facet successful particularly considering that nan first 4th it's astir apt going to beryllium reliable considering nan Americans arena and what happened pinch superior markets. We were blimpish successful nan assumptions to bring this guidance, but it's not a apical statement guidance. And regarding nan tax, we do person that successful nan rate travel moving superior variety here. But I don't cognize precisely what you're missing there, Thiago.

Thiago Batista

Now, nan different constituent is nan highest return [ph] complaint thin to person a affirmative effect successful your moving superior aft a while. If not wrong, you guys are investing portion of nan moving superior successful benignant of fixed income securities. So astir apt we’ll spot higher effect of these successful '23 onwards?

Bruno Constantino

From nan summation successful tax?

Thiago Batista

Not tax, your…

Andre Martins

Thiago is referring to liking connected gross rate and liking connected equity for example, like…

Thiago Batista

Yes.

Bruno Constantino

Okay, nan moving capital, okay. Now I sewage it. Yes, it's going to beryllium higher. You're right.

Thiago Batista

Okay. Do you person nan magnitude of this increase?

Bruno Constantino

Of liking connected gross cash?

Thiago Batista

Yes. If I’m not wrong, you guys put portion of this moving superior successful fixed income securities, so.

Bruno Constantino

In a batch of different securities, but yes, fixed income.

Thiago Batista

The deposit -- we person not seen yet nan afloat effect of nan highest return complaint successful your moving capital. It's existent to opportunity that?

Bruno Constantino

I don't cognize if you’re talking astir nan different gross -- you’re talking astir nan different revenue. Now, I understood. Yes, because we besides person of nan hedge -- of nan floating, nan web that we person offshore, and nan firm FTP that goes into different gross arsenic a simplification successful immoderate part. So we do person that benefit. But we besides have, I would say, antagonistic numbers that erstwhile you adhd it to gather, probably, is what explains a little number than you expected. That's what I'm guessing here, but we tin we tin spell offline later too. So I tin understand precisely what your mathematics aliases calculation is. And we tin thief you pinch that for sure.

Andre Martins

Okay. Thiago was nan past one. Thank you, everyone, for your participation. Hope to spot you each soon and touch bases. Bruno, immoderate last remarks aliases goodbyes?

Bruno Constantino

Just convey you for being present pinch america successful 1 much call. And that's all. Thank you.

Andre Martins

Bye all. Thank you.

Bruno Constantino

Bye, bye.

Editor: Naga



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