StoneCo Ltd (NASDAQ:STNE) Q3 2019 Earnings Conference Call - Final Transcript
Nov 21, 2019 • 05:00 pm ET
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question today will come from Jorge Kuri with Morgan Stanley. Please go ahead.
Hi, congrats everyone on the numbers. Two questions, if I may. The first one is on the TPV for the quarter, can you help us understand to what extent the addition of record number of clients, still needs to be reflected in TPV, sort of what level of backlog do you think you are building up on TPV? How did the -- clients were added during the quarter? Do you have a disproportionate amount of clients added at the end of the quarter, so we should expect them to start contributing more towards the fourth quarter of the year and beyond?
And the second question is on subscription and -- rentals and subscriptions -- subscription, sorry, which did pretty well and it was all according to my numbers, up 16% on a per active merchant basis, to what extent this is a success in monetizing some of the non -- some of the software and other products that you provided? Or is it just much better POS business given the growth in merchants? Thank you.
Thiago Dos Santos Piau
Hi, Jorge. Thank you for your questions, great questions. So let me start with some comments about TPV and then we'll move to these subscription revenue line. So, first regarding TPV, you were right, there is some effect of the sharp increase in net adds that resulted in some clients not transacting the full quarter. And there are some effect of the growth in the countryside of Brazil too and we expect a ramp-up of that TPV over the fourth quarter. So you're right.
And overall comments regarding TPV, is that we are growing TPV very fast on a quarter-over-quarter basis. So you will see that the quarter -- the growth from the first quarter to the second quarter was a little bit bigger than the growth from the second quarter to the third quarter.
And to see TPV, we have to split this in two different dynamics. One is digital channels integrated partnerships and we'll talk a little bit about this and the hubs. So when you see digital and integrated partnership channels, so we are growing fast every quarter, but these -- in this third quarter, we saw some pressure in the very big accounts, in terms of pricing pressure of the incumbents. So that's why the growth in the third quarter, in the big accounts are a little bit small -- smaller than the growth in the first quarter to the second quarter. So there is some volatility in the big account operation. We made some adjustments in the way that we handle key accounts. So we already have part of that growth volume back now in the fourth quarter.
When you talk about the hubs, then we are accelerating growth every quarter. So, we are accelerating growth in the hubs, again, mainly because of how powerful