StoneCo Ltd (NASDAQ:STNE) Q3 2019 Earnings Conference Call - Final Transcript

Nov 21, 2019 • 05:00 pm ET

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StoneCo Ltd (NASDAQ:STNE) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Stone Company Third Quarter 2019 Earnings Conference Call. By now, everyone should have access to our earnings release. The company also posted a presentation to go along with its call. All material can be found at www.stone.co on the Investor Relations section.

Throughout this conference call, the company will be presenting non-IFRS financial information including adjusted net income and adjusted free cash flow. These are important financial measures for the company, but are not financial measures as defined by the IFRS. Reconciliations of the company's non-IFRS financial information to the IFRS financial information appear in today's press release.

Finally, before we begin our formal remarks, I would like to remind everyone that today's discussion might include forward-looking statements. These forward-looking statements are not guarantees of future performance and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the company's expectations. Please refer to the forward-looking statements disclosure in the company's earnings press release.

In addition, many of the risks regarding the business are disclosed in the company's Form 20-F filed with the Securities and Exchange Commission, which is available now at www.sec.gov. Please note this event is being recorded.

I would now like to turn the conference over to your host, Rafael Martins, Investor Relations Officer at Stone. Please proceed.

Executive
Rafael Martins Pereira

Good evening, everyone, and thank you for joining us today. Joining me on today's call are Thiago Piau, our CEO; Marcelo Baldin, CFO and Lia Matos, Chief Strategy Officer.

On this call, we will present our operational and financial results for the third quarter and give updates regarding our strategic progress and solutions.

I'll pass it over to Thiago to share with you our main highlights and strategic updates. Thiago.

Executive
Thiago Dos Santos Piau

Thank you, Rafael, and good evening everyone. Thanks for joining us today. I will start by going through our main highlights as seen in Slide 3, and we will follow with more detailed updates on our results in the third quarter.

We have continued to deliver very strong results, while evolving fast in our strategic roadmap, of helping our merchants, manage their business better, having access to financial services in a more seamless and transparent way and providing them with the best customer service of Brazil.

We have continued to grow fast, both in the hubs and in digital and integrated partnerships. With TPV addition in hubs accelerating quarter-over-quarter. We posted record net adds of almost 69,000 clients in the quarter, reaching a total active client base of 429,000 merchants while maintaining strong levels of profitability.

We delivered over 62% growth in revenue and 126% growth in adjusted net income. All that with comparable take rate of 1.88% in the quarter and margin above 30%. These results show is that we are on the right track in our strategy to be the partner of choice of our clients, providing them