GEORGE TOWN, Grand Cayman, March 02, 2020 (GLOBE NEWSWIRE) — StoneCo Ltd. (Nasdaq: STNE) (“Stone” or the “Company”), a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels, today reports its financial results for its fourth quarter and fiscal year ended December 31, 2019.To our shareholders:In the fourth quarter of 2019, we continued to see strong fundamental growth in our business. Our TPV growth accelerated to 51.4% year-over-year (vs 49.8% last quarter) and our net client additions (excluding Stone Mais) accelerated to 67,300 (compared to 64,100 in the third quarter of 2019). We remained aggressive in the market selling new services, but we maintained our take rate at a relatively stable level of 1.80%. As a result, our total revenue and income during the quarter grew 47.9% year-over-year and we were able to achieve an adjusted net margin of 35.1%, which was our highest margin ever. This enabled us to produce R$264 million of net income and R$275 million of adjusted net income, up 107.7% and 76.4% year-over-year, respectively. I believe our fourth quarter results were a strong finish to our full year as a public company.In the full year 2019, we reached R$129 billion of TPV and our client base grew 84% year-over-year, with greater than 60% growth in 26 out of 27 Brazilian states. We focused on selling new software solutions in 2019 because we believe the combination of software solutions with our integrated financial platform will help our clients manage and grow their businesses better. This year we were able to increase the number of clients using software from 30,000 in the first quarter to over 135,000 by the end of the year. As a result of these combined efforts, I am pleased we were able to produce R$2,576 million in total revenue and income and R$857.1 million in Adjusted Net Income in 2019. We believe we had a great year, but we are focused on making 2020 and beyond even more special for our clients and as a consequence for our long term shareholders.Looking ahead to 2020, we will continue to invest significantly in our operations in order to keep enhancing our clients’ user experience as well as our own efficiency. This will help us continue to build trust and drive strong growth in our client base and offer them more solutions over time with even better value and transparency. Our goal is to become the one-stop-shop for our clients, enabling them to have full financial control of their businesses in the palm of their hands and I believe we are making good progress.For example, at the end of January 2020, we reached 79,000 open digital banking accounts (4X more than 3Q19) and we had over 5% of our total active clients using our credit solution. In addition to all that, our partnership with Grupo Globo just released its initial marketing campaign under the brand TON, targeting micro-merchants and autonomous workers, an attractive client base where we believe we can redefine service levels and customer relationships and that can become a potential big upside for our future.We are very excited for 2020 and we would like to take this opportunity to thank you for your continued support as our backers,Thiago Piau, CEOOperating and Financial Highlights 4Q19
Operating and Financial Highlights 2019Important Developments for Our Strategy Roadmap in 4Q19Financial PlatformOur performance in the acquiring business continues strong. We accelerated our addition of clients (excluding Stone Mais) from 64,100 to 67,300 despite the weak seasonality for client onboarding in fourth quarters. With that, we ended the year with total active clients of 495,100 and intend to continue growing our client base consistently in 2020. Our TPV reached R$40.2 billion in the quarter, with record TPV addition both on a year over year as well as on a quarter over quarter basis. In the hubs, our performance also followed this pattern.Our take rate remained consistent, reaching 1.80% in the fourth quarter, despite a seasonally weak quarter.Regarding credit, we have already disbursed over R$290 million to our clients by the end of 4Q19, with 24,200 active clients and R$166 million of outstanding balance. This has evolved to R$360 million disbursed by the end of January 2020, with 28,600 thousand clients and an outstanding balance of almost R$200 million. We continue to improve our credit offering to be able to offer our product to a larger base in 2020. The growth of our credit solution is being ruled by low delinquency rates, currently at mid-single digits. We also aim to fund our credit solution mostly with third party funding, which enables us to have limited credit risk. We were pioneers in Brazil in structuring FIDCs1 to fund prepayment operations and we are on the same path with credit, as we have already structured a FIDC to fund our credit solution.In banking, we ended 4Q19 with 62,000 open accounts, growing to approximately 79,000 open accounts in January 2020, with a significant portion of clients already liquidating their receivables in our account.The banking account is evolving to become our consolidated financial platform (ABC), integrating the client’s acquiring, banking and credit offerings. By advancing on the platform and including new features and products, we will be able to offer an integrated financial experience to our clients, with all the customer experience that they already know from Stone’s acquiring. We are currently piloting the platform, with over 10,000 clients in the program as of January 2020.SoftwareAt the end of 2019, we had over 135,000 clients with at least one of our software solutions compared to over 100,000 in the previous quarter.Our strategy in software will involve both the offering of software solutions that are integrated to our distribution platform (e.g. reconciliation software), as well as inorganic investments in new software companies that may cross-sell our payments and financial solutions into their client base.We continue to look for great companies with great entrepreneurs to be part of our ecosystem and help us provide the best solutions to merchants.Partnership with Grupo Globo in the Micromerchant SpaceWe received approval from the anti-trust authority and on March 1st, we officially launched the first marketing campaign under the TON brand to serve the micromerchant space. TON will focus on redefining service for micromerchants, as Stone did for SMBs. Its chat customer service is supported by human connection when needed, and its logistics counts with efficient POS delivery and device maintenance for this segment.
Operating and Financial MetricsTable 1: Operating MetricsWe continued to deliver strong operating results in 4Q19 as a result of the high level of investments in the operation throughout the year combined with good execution in the field.Our total base of Active Clients reached 495,100, with strong total net addition of 66,200 in the quarter. Net addition excluding Stone Mais clients was 67,300, representing an acceleration from the 64,100 reported in the prior quarter, despite fourth quarters being seasonally weak for client onboarding. Stone Mais product for micromerchant had a slightly negative contribution to net adds as the team was focused on the launch of the Globo partnership and discontinued investments and customer acquisition efforts behind the Stone Mais brand.Chart 1: Active Client Base (Thousands) (See PDF)
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