Stone Co (STNE) Reports Q4 earnings

Full Year results out. Good results, with great operating leverage, and opportunities to continue high growth through the new “ton”, financial platform, and software.

Key Takeaways:

  1. Active clients, 495100 - up 84% yoy
  2. TPV - R$40.2 billion - up 51.4% yoy
  3. 2019 net margin - 33.3%, up 11.6 % yoy
  4. Adj net income $857.1 M, up 150% yoy
  5. revenue up 63% yoy.
  6. Take rate 1.8% - down 8 bps yoy

PAYMENTS - Increased market share to estimated 8%, up 2% over the year.

FINANCIAL PLATFORM AND SOFTWARE

Financial platform in pilot mode with 10 000 clients.
Digital banking platform has 79 000 accounts.
135 000 software clients, up 35 000 in 3 months.

ton - NEW MICRO MERCHANT BUSINESS

  1. Launched March 1, 2020.
  2. Strong focus on CAC efficiency, as Stone Co has a good handle on micro customer LTV.
  3. Offering complete ecosystem of financial products.
  4. Offering Stone Co. business model to micro-merchants.

ACHIEVEMENTS

  1. 100 new hubs opened to 345 hubs nationally.
  2. recruitment - 109 k applications through Recruta recruitment program.
  3. Develop banking and credit business

LEADERSHIP LESSONS LEARNED FROM 2019

  1. Should of accelerated investments earlier in 2019.
  2. Software solutions still at small scale. Need to focus on growing rapidly.
  3. Could of cross sold products (software) more actively.
  4. Could of invested in social and sustainability projects.
  5. Delay in launching ton.
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LEADERSHIP LESSONS LEARNED FROM 2019

1) Should of accelerated investments earlier in 2019.
2) Software solutions still at small scale. Need to focus on growing rapidly.
3) Could of cross sold products (software) more actively.
4) Could of invested in social and sustainability projects.
5) Delay in launching ton.

I’ve got a LOT of respect for a management team that would be so open about this.

And… the results are pretty nice too.

Rob
Rule Breaker / Market Pass / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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These are good results and validates what we are seeing across PagSeguro and Mercadolibre.

Mercadolibre and Stone Co seemed to have performed the strongest with their beats whilst PagSeguro appeared a notch weaker and missed with their results.

I like STNE but MELI is my horse in this race with equally strong results, a larger TAM and greater risk diversity (across a broader LatAm geo and a broader solution set).

Ant

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