Good evening, everyone. Thank you for standing by. Welcome to StoneCo's First Quarter 2025 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 online at investors.stone.co. Throughout this conference call, the company will present certain non-IFRS financial information, including adjusted net income, adjusted gross profit, adjusted net cash, adjusted basic EPS, and ROE. These are important financial measures for the company, but are not financial measures as defined by IFRS. Reconciliations of the company non-IFRS financial information to the IFRS financial information appears in today's press release. Finally, before we begin our formal remarks, I would like to remind everyone that today's discussion may 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 at www.sec.gov. In hindsight, I would like to highlight that the company is restricting the number of questions to two per analyst. Joining the call today is Stone's CEO, Pedro Zinner; the CFO and IRO, Mateus Scherer; the Strategy and Marketing Officer, Lia Matos; and the Head of IR, Roberta Noronha. I would now like to turn the conference over to your host, Pedro Zinner. Please proceed.

Thank you, operator, and good evening, everyone. I'd like to begin by reaffirming our annual goals and expressing how pleased I am with our first quarter performance. It was another successful chapter in our journey, marked by disciplined execution and continued progress toward our long-term objectives. This quarter, we focused on profitability, executing a new cycle of price adjustments across our client base in response to the yield curve increase observed in the second half of last year. At the same time, we continued to develop solutions and features that truly make a difference in our clients' lives. I believe our results reflect the strength of our client-centric approach, disciplined execution, and a rational competitive environment. When we take a step back and look at our performance in the context of our 2025 guidance, it becomes clear that we are on the right path. In the first quarter of 2025, we grew gross profits by 19% year-over-year, driven by effective repricing execution and a reduction in our average funding spreads. This result outpaces the 14% annual gross profit growth outlined in our guidance. On the EPS front, we accelerated year-over-year growth to 36%, significantly above the 18% growth implied in our full-year outlook. This acceleration was primarily driven by strong adjusted gross profit growth, improved efficiency in administrative expenses, and a more balanced distribution of marketing spends throughout the year. In addition, we repurchased R$843 million or 15.1 million shares during the quarter, including 5.7 million shares repurchased in March, which were not included in the share count used in our guidance. Over the past 12 months, our distribution yield reached 12%, underscoring our strong conviction in our strategy, our business, and our ability to execute. As a reminder, in our last earnings call, we laid out a disciplined capital allocation strategy based on three restrictive pillars, above which we would return excess capital to shareholders. With the close of 2024, we reached R$3 billion in excess capital. Of that, approximately R$1 billion has already been returned through share repurchases year-to-date. Today, we are announcing a new share repurchase program of up to R$2 billion, replacing the previous program. This move reaffirms our commitment to the framework and distribution policy we shared with you just a few months ago. With that, I believe we are well-positioned to continue executing our strategy, achieving our goals, and generating long-term value for our shareholders. Now, I'll turn it over to Lia, who will take you through our first quarter results in more detail. Lia?

Thank you, Pedro, and good evening, everyone. Diving into our first quarter '25 results, we're very excited with the milestones we have achieved. Such results reflect our execution in a less favorable macroeconomic environment with interest rates trending higher and we believe we have been successfully navigating this challenging scenario. On Slide 4, we highlight our main financial metrics on a consolidated basis. As you can see, we have shown good traction in revenues, gross profit, and bottom line. Our revenues grew 19% year-over-year and 2% quarter-over-quarter, despite seasonality in 4Q, resulting in revenues usually reducing sequentially in first quarters. This trend shows that we are on the right path. Our repricing initiatives have started to yield positive results despite the fact that it impacted in the quarter only partially. Adjusted gross profit also grew 19% year-over-year and decreased 3% on a sequential basis, mostly on lower quarter-over-quarter TPV, timing mismatch between the increase in prices and cost of funding, and on higher cost of services. Finally, our adjusted net income grew 23% year-over-year and decreased 17% quarter-over-quarter. This sequential reduction was mainly a result of our lower adjusted gross profit combined with higher investments in our distribution channels and higher effective tax rates. Looking on a per-share basis, adjusted basic EPS was R$1.97 per share, 36% higher year-over-year and 13% lower sequentially. The better per share performance compared to nominal net income is a result of our commitment to returning excess capital to our shareholders, with R$2.4 billion returned in share buybacks over the last 12 months and R$843 million in this quarter. On Slide 5, we dive deeper into our Financial Services segment performance. Starting with our payments business for MSMBs. Our MSMB payments active client base increased 17% year-over-year and 4% quarter-over-quarter to 4.3 million clients. We…

Thank you, Lia, and good evening, everyone. On Slide 10, we detail the evolution of our consolidated P&L on an adjusted basis. As Lia mentioned, total revenue grew 19% year-over-year and 2% sequentially. This quarter, I'd like to reemphasize a notable shift within our revenue composition. Beginning in late 2024, we've optimized our bundled offerings, significantly shifting revenue from transactional revenues to financial income. Consequently, financial income has increased notably, while transactional revenue has decreased on both quarterly and yearly comparisons. As we've consistently highlighted, that's another reason why it's important to track gross profit rather than individual revenue lines for a comprehensive understanding of our business. Now, moving to our costs and expenses lines. Cost of services increased 15% year-over-year, translating to a decrease of 90 basis points as a percentage of revenues. This was driven primarily by lower provision for loan losses, reflecting reduced provisioning requirements as we aligned working capital provisions more closely with our expected credit loss models and efficiency gains in customer service. Administrative expenses increased 5% year-over-year, resulting in a reduction of 90 basis points as a percentage of revenues as a result of continued cost discipline within G&A expenses. Selling expenses increased 12% year-over-year and down 100 basis points as a percentage of revenues. This decrease was primarily due to a more balanced distribution of marketing spend throughout the year. Financial expenses increased 23% year-over-year, representing a 90 basis point rise as a percentage of revenues. This increase was primarily driven by the higher average CDI during the periods. On the other hand, our cash sweep strategy allowed us to begin using client deposits as an additional funding source, which helped partially offset this impact by contributing positively to our funding costs. Our other expenses line increased by 109% year-over-year or 140 basis points, primarily driven by a positive non-recurring share-based expense reversal recorded in the first quarter of '24. Our effective tax rate was 19.7% in the quarter, down from 20.6% in first quarter '24 and in line with the level provided in our guidance. The year-over-year decrease was driven primarily by higher benefits from Lei do Bem combined with unutilized tax loss carryforwards generated in the sale of PinPag in first quarter '24, which did not happen again this quarter. Turning now to Slide 11. Our adjusted net cash position was R$3.8 billion at the quarter-end, representing a sequential decrease of R$0.9 billion. This decrease mainly reflects ongoing share repurchase totaling R$843 million in the quarter, in addition to investments to grow our credit book. Before we move on to questions, I'd like to thank everyone for your continued support. We remain fully committed to executing our strategy and creating sustainable long-term value for our clients, team and shareholders. With that said, we're now ready to open the call up to questions.

Okay. At this time, we are going to open it up for questions and answers. [Operator Instructions] Our first question comes from Tito Labarta with Goldman Sachs.

Hi. Good evening, Pedro, Lia, Mateus. Thank you for the call and taking my question. A couple of questions. One, just on the outlook for TPV growth, right, because you're seeing the card TPV growth growing high-single-digits, low-double-digits, if you strip out the key accounts. How do you think about that growth? And then, also the PIX TPV growth, right, still strong year-over-year, kind of stable-ish quarter-over-quarter. I know you have the seasonality, but just to see how you think about the outlook for TPV growth, both within the MSMB and key accounts and within without PIX. And then, my second question, we saw the announcement from Totvs that now you guys are in negotiation for Linx. Just any color you can provide about that in terms of timing? I'm sure you can't discuss valuation at this point, but yeah, just any color you can provide there? And if you were to sell Linx, what would you potentially do with the proceeds of that? Thank you.

Hi, Tito. Lia here. Thank you for your questions. I'm going to take the TPV question and then pass it over to Pedro. So, regarding TPV trends, talking first about MSMB TPV, there are three key points to highlight. First is that our long-term guidance already implies some deceleration on TPV growth. So, the guidance that we provided for 2027 on TPV last quarter implies a 14% CAGR. So, this growth performance that we see is in line with this trend that we have already talked about. The second fact is that, naturally, in response to higher interest rates, as Mateus mentioned, we have implemented a broader repricing this quarter across our client base. These repricing efforts, they have performed very well, better than we expected, but some level of churn is always inevitable. So, this will modestly impact TPV growth in the short term. Third, obviously, macroeconomic environment does remain challenging. So, it's still a little bit early to say the full extent of its impact in the year. So, the message regarding the year is that TPV growth will decelerate somewhat. But overall, general trend regarding TPV is very much in line with our long-term guidance. Regarding PIX, we continue to see PIX strongly cannibalizing on debit volumes. This is also what we see on the industry. So, when we look at ABEX industry data, for example, it does point out to very different behavior in terms of growth when we talk about credit card volumes versus debit volumes. And that is consistent also with what we observe in our base, right? So, PIX TPV cannibalizing on debit volumes, which is why we see the stronger pace of growth for PIX TPV versus card TPV. Regarding key accounts, I think nothing really different to say about key account TPV trends other than what we've already said. It's not the focus of our strategy. So, the majority of our investments, both in product roadmap and in go-to-markets are focused on MSMB clients. That said, our platform does address needs of some large enterprise clients and we do serve those clients on an opportunistic basis. But those are not the focus of our strategy. And because, normally, these clients can shift very large volumes very quickly, that tends to be a more volatile TPV behavior. So, you can see kind of strong shifts quarter-on-quarter. Those shifts have little impact on gross profit, but they do impact overall TPV. So, I think those are the general trends in TPV that we can highlight. And I'll pass it over to Pedro to talk about transaction.

Sure. Thank you, Lia. Thank you, Tito. Well, I think, as you all know -- as you noted, we have entered with -- into an exclusivity agreement with Totvs to negotiate the sale of the asset. I think, at this stage, I think it's really hard to provide any additional details regarding the valuation, as you already highlighted, or the duration of the exclusivity period. I think what we can say is that negotiations are progressing positively. However, given the complexity involved in the transaction of such a magnitude, I think there are a lot of factors that still need to be negotiated and agreed upon. And therefore, I think it's still challenging to specify an exact timeline for reaching a final agreement, but be certain that we'll keep the market informed as the discussions moves ahead. On the allocation side, I think it's hard to talk about the future, given the uncertainty in terms of the closing of the transaction. What I can say is, if we were to make the decision today, I think we would do exactly what we're doing in terms of share buybacks. Because, when we assess the long-term implied returns of repurchasing shares, at current levels, we believe that buybacks represent a very attractive use of capital and seem to be value-accretive in terms of decisions for shareholders. So, that's the position as of today. Okay. Thank you.

Okay. No, perfect. Thank you, Pedro. That's a helpful color on that. Maybe if I can, just one quick follow-up on the TPV with Lia. Just on the cannibalization of debit, do you see a lot more room for cannibalization there? Any way to quantify that? And have you seen any cannibalization of credit, particularly with the PIX financing at all? So, has it impacted credit at all?

Hi, Tito. So, I think the answer to the first part of your question is yes. I think we can continue to expect debit volumes to be cannibalized by PIX. When you look at ABEX industry data versus Central Bank data, it also points to that direction because debit card TPV in the industry is sort of flattish, right? It was flattish throughout last year and it had actually a slight decrease in the first quarter. And when you look at PIX growth data, it's a very different trend. It's a strong growth. So, I do believe that this trend will continue. But also let's not forget that PIX cannibalizes on debit volume, but it also cannibalizes on cash. So, in general, it's accretive for us because PIX volumes become more deposits in the banking ecosystem and we continue to monetize on PIX. So, I think that's the first part of the answer. The second part is, no, we do not see any cannibalization on credit volumes and neither the industry trends are suggestive of that either, right? When you look at ABEX data for credit card TPV growth, it's 13.5% in the first quarter, which is a healthy growth level and it's not suggestive in our view of PIX cannibalization of credit volumes in the industry either.

Okay. That's clear. Thank you, Lia.

Thanks, Tito.

Our next question comes from Mario Pierry with Bank of America.

Hi, guys. Good afternoon. Congratulations on the quarter. I wanted to explore a little bit more about your price increases. As you mentioned, right, like you started repricing in the beginning of this year because of the yield curve had widened last year. Now, we're seeing the opposite trend, right? We're seeing the yield curve tighten. What does it mean for your outlook for prices? Would you consider passing on some of the benefits to your clients maybe later in the year? I ask this because, as you mentioned, right, Lia, you are -- seems like you're losing some market share. It seems like you're growing slightly below the industry. You said that churn has increased. So, trying to understand from your perspective, if you're seeing -- if you eventually see lower funding costs because of the lower rates in Brazil, if you consider repricing your clients? And if we can explore a little bit more also like what percentage of your clients have been repriced already? Like you said, you started fairly late repricing beginning of this year. What percentage of your client base has already been repriced? Thank you.

Hey, Mario. Mateus here. Thanks for the question. So, the first part of the question regarding whether we plan to pass through or change the pricing policy, given the recent movements in terms of the yield curve, I think the short answer here is no. So, just to give a step back and a little bit of a recap, we decided to do a really extensive repricing wave in the first Q. But in terms of magnitude of the adjustments, when we did the repricing wave, we basically targeted the yield curve of the half of the year, which back then was around 15%. If we were to look at the yield curves nowadays, again, it's really close to that. It's 14.7%, 14.8%. So, the impacts of the yield curve tightening now are not big in the short run. I think it's the curve of the second half that really tightens. But that was not built into the repricing waves that we did back then. So, it really doesn't move the needle. The only thing that, I would say, disagree with your question is that in terms of market share, we're not actually losing market share when we look at the target segment, which is MSMBs. So, market share was about flattish in the quarter. If you were to look at a longer-term window for the past 12 months, we actually gained like 0.1% or 0.08% market share. And again, like Lia said, in terms of our plan, that's pretty much what was embedded in the plan. The plan embeds a 14% CAGR until 2027. So, the expectation was always to keep a healthier pricing policy, focus on profitability, and not on growth at any cost. And I think the final piece of the question in regards to the extent of the base that was already repriced, the vast majority of the base was already repriced. Last earnings call, I think the message that we provided was that in our Stone brands, pretty much all the repricing wave was done. In the second Q, we did the repricing in our Ton brand as well. Results were also really good when we look at the churn levels versus the price increases that we did. There are still a few waves to be done in the second Q, but they are really small. I think the vast majority of the base was already repriced.

That's clear. Mateus, let me ask you then on the market share. As you mentioned, like your market share has been stable then. You used to be a story of gaining market share, right? How do you see your ability to grow your market share in the next couple of years?

Mario, just to complement on Mateus point regarding market share trends, the 14% implied CAGR in our long-term TPV guidance does mean that we believe we will continue to grow above the industry and gain share, albeit at a slower pace than in the past. That's natural as we have achieved a significant level of scale and our presence in the MSMB segment. So, I think that's the first message that we want to really convey. So, the net positive market share gains on a yearly basis, albeit at a lower level than historically to us, is in line with our plan. Now to your question on what are the drivers, right, I think the drivers are really the continuation of the execution of our plan of bringing more solutions to our clients. So, more and more, we believe that we have new levers to pull regarding how we address the pain points of our clients and how we actually price those solutions from a bundling and offering strategy perspective. So, that's the first -- and I would say most important element is the element of how we believe we will continue to differentiate ourselves in the way that we serve our clients from a product, from an offering, and from a service perspective. I think the second important element, let's not forget that Stone is also about a big differentiator around our distribution capabilities, where more and more we're driving the organizations towards a unified growth and distribution approach, really leveraging data and technology. So, we want to be, I would say, more and more assertive over time in terms of addressing the pockets of growth opportunities that we still see in the market, like the more scale we achieve, the more sophisticated we need to be, right? So, we need to have very clear visibility on granular market data and where the growth opportunities are. And by implementing a more unified go-to-market approach, really leveraging market data and technology, we believe that we still have opportunities to grow. So, distribution is also an important part of the equation as it has always been in our business model.

Okay. No, that's very clear. Thank you very much.

Thank you, Mario.

Our next question comes from Neha Agarwala with HSBC. You can open your microphone.

Hi. Can you hear me?

Yes, Neha. We can hear you. Hi.

Perfect. Hi. Congratulations on the numbers. Just a quick follow-up on the previous questions, and sorry to harp on that. What I cannot piece together is expectation of further slowdown, deceleration in TPV growth. And I'll tell you why because you have already done the depricing in the 1Q already. So, if there was a churn, you would see that more in 1Q. So -- and acknowledging that all the players in the market have been quite aggressive in terms of repricing. Everybody's pushing the pricing up. So, why should volume decelerate in the MSMB segment in the coming quarters? That is something that I'm still not very clear about. Second question is on competition. Do you see with players like Mercado Pago being more aggressive, growing very strongly in Brazil acquiring, also adding some salespeople on the ground, adding some software, moving up market? Do you see that having any impact on your core MSMB segment? And also, we saw that Fiserv is entering Brazil. They did us a transaction recently. And do you think that could be competition with their offering of Clover? Could that be a competition on the software side of the business that you've been trying to build out with the key verticals? So, any thoughts on that would be very helpful.

Hey, Neha. Mateus here. I'll take the first part of how you piece together, typically, growth deceleration over the short term versus the repricing has been done in the first Q, and then pass it over to Lia to talk about the other part of the question. So, on the first piece, two things here. So, the first one is that when you think about the impacts of repricing, it's right that we did the majority of the repricing waves in the first Q, but they were done throughout the quarter. So, in terms of the impact of churn, even though it's small, you have the full impact on the following quarters, right? There is some lag. And the second thing is that, when you talk about the growth generally decelerating over the medium to long term, it's not only about the repricing waves. I think the repricing waves are important in the short-term, but not material when we look at the longer-term. I think there is also a matter of the overall size of the business here, which again was already embedded in the plan. So, given the size of the company, it's natural that, on a percentage basis, the growth rates over the long-term will be somewhat smaller, right?

Perfect. Maybe just to elaborate on competitive dynamics, Neha, to -- on the question regarding global players entering the market, we haven't really seen, to be honest, any relevance of such global players becoming like important on the competitive dynamics. That said, we do monitor competitive dynamics very, very closely and very, very granularly because of the data capabilities that we have through our operational platform. We can really understand what the local competitive dynamics is. So, on to the second part of your question regarding local players, deploying a similar distribution strategy as ours, I mean, we do see that in some specific regions, in some specific areas. But it's again not very significant when we think about the SMB focus that we have, which is, let's not forget that we're continuously moving our distribution approach upwards towards a specialist distribution that can really address the larger SMBs with a very differentiated service level and offering. So, I think the message here is, yes, players are replicating our model. We are continuously running to stay ahead. And staying ahead is about how we evolve the model, how we use technology, and how we use data to be really precise on addressing where the pockets of growth are. Regarding your point about product, we talked about this extensively in Investor Day. We are evolving our Stone solution to address workflow needs of our clients. That's going to be -- there's a pillar of software in this strategy, right, where we connect financial workflows with business workflows of our clients. We don't talk about this so much as being software, but Stone is evolving more and more towards being a software and a management solution for our clients as well. So -- and I think we have the advantage that we're very close to those clients already, our distribution covers 99% of GDP, and we already have a pretty clear picture on where the market opportunities are throughout Brazil.

Very clear, Lia. If I can just follow up on that? So, I do understand that the reason why Stone gained a lot of market share in the SME segment is because of the reach that you just mentioned and the good quality service that you provided. But what Mercado Pago was saying that they're seeing very strong volumes and that is because of the more comprehensive suite of products that they are providing, and one of that product is credit, right? They are being quite active in terms of giving credit to the merchants that are working with them. Do you feel that there is probably going to be more pressure, given competition to do, be more active in credit? And do you see any risk in that sense or do you see any pricing pressure coming from more intense competition in the SMB space?

Neha, I'll take the first part of the question and then Lia may jump in to complement. So, for the pricing piece of the question, the short answer is also no. So, when you look at the pricing environment, it's pretty much stable. And I think the repricing waves are a good indication of that. In the end of the day, I think there was a big worry with market participants on whether the market was going to be rational with these interest rate increases and I think what we saw pretty much for the industry as a whole was everyone repricing and being pretty much rational in terms of pricing. In terms of credit, I'll begin and then Lia may add. It's true that credit is a very important piece of the equation. I think when you mentioned a few competitors that we're seeing, I think we're talking about different client profiles here. So, in terms of our core SMB clients with the average sizes that we operate, I don't think there are too many other players focused on our target niche. But again, I think the general concept that you provided, which is credit being a very important part of the offering is undeniable. And on that front, when you look at the progress on our credit book, again, there is a big challenge in terms of our long-term plan. But I think if you look at the performance since the Investor Day, we're pretty much online or even slightly better than what we anticipated on that front. So, that's progressing well.

Yeah. I would have nothing to add, Neha. I think Mateus said it all.

That's great. Very clear. Thank you so much for your comments.

Thank you, Neha.

Our next question comes from Guilherme Grespan with JPMorgan.

Thank you so much, team, for the presentation and the questions. The first question -- two questions on our side. The first one is related to net cash. There was a pretty decent decline in net cash, almost R$1 billion. I understand almost R$900 million is going to be buyback. But all the rest, basically, all the net income you generated in the quarter, you didn't convert into cash and you explained the presentation, right, you put several balance sheet items that kind of dragged the cash conversion. But my question is more looking forward. I just want to understand if those items were one-off of the quarter. And next quarter, if you print again, I don't know, R$0.5 billion in earnings, we're going to see R$1 billion in cash generation is going to revert this cash conversion or if it's something that is going to last and you basically did not convert and it's not going to happen in the second Q. And then, the second question is related to take rates. I just want to have your sense on how should we think about take rates, net of funding cost into the second quarter. I think you have the benefit of repricing not having impacted the full quarter, right? So, probably the gross financial income is going to move up, but at the same time, the financial costs are going to continue to move up [indiscernible] move higher. So, just want to understand how you think about this net take rate, already net of funding cost, if we should see it going up or down? And by the way, congratulations on the repricing. If it's worth anything, we appreciate more of the profitability than market share. Okay. Thank you.

Thanks, Grespan. Thanks for the question as well. So, I'll take both. The first one was around net cash. So, I think you pretty much touched upon the answer here. So, when you look at the quarter, there were both seasonal and also -- seasonal effects and also some one-offs. In terms of the one-offs, we had some prepaid expenses related to our contract with Grupo Global. So, as you may well know, this year, we were also subject to the contract agreements and we're doing Big Brother Brasil and a few other shows. And most of the disbursement around this contract happened in the first Q. And also, when you look at the other balance sheet lines, especially the higher labor and social security liabilities affect, that's really much related to the payment of variable compensation, which happens in the first Q. And again, when you look at the following quarters, we don't have both effects. So, I think the dynamics is similar to what you described, which is cash generation should be higher than net income, of course, excluding the effect of credit and buybacks, right? The second question around take rates. So, to be really honest, I think we're looking less and less into take rates internally because it's becoming harder, given the shifting lines that we have. You saw in the earnings release that we did a big movement in terms of advancing with our cash-sweeping strategy, which shifts lines between financial income and financial expenses net. So, the metric that we're looking more now is, of course, adjusted gross profit. When you look at the adjusted gross profit in relation to TPV, then we saw an increase from the first Q to the first Q already. It came from 1.18% to 1.23%, so a 5 bps increase. That was pretty much the effect of both the repricing and also some seasonality as, in the 4Q, we have higher mix of debit. When we look at the second Q, given that the repricings were done throughout the quarter, we should expect some level of increase, but again, we need to keep in mind that even though we have the full effect from the repricing waves, we also have a higher interest rates in the second Q as compared to the first Q, right? So, that's why it's not such a big jump, but that's the general trend there.

That's clear. Thank you, Mateus.

Our next question comes from Renato Meloni with Autonomous Research.

Hi, everyone. Congrats on the results here, and thanks for taking my question. So, just first on your deposit strategy, right? So, there was this big shift compared to the last quarter on your time deposits. Do you think you have achieved the right mix here, or do you still expect to grow time deposits? And are you still going to be reaping benefits from lower-cost of funding based on deposits here or we are already seeing most of it, right? And then just still on this, are you facing more competition from other peers? We've seen some higher yields being announced recently. So, I wonder if that's affecting your strategy and if you're rethinking anything there. And then, just a quick follow-up on financial income. I wonder if you can break down how much of the financial income growth came from repricing and how much was just from the reclassification from transactional revenues. Thank you.

Thanks, Renato. I'll take the first and the last piece of the question and then Lia may add on the competition side. So, first on the cash-sweeping effects, I think it's worthwhile to give a little bit of a step back here on the strategy around deposits as a whole. So, as we anticipated in the last earnings call, this first Q is started to really roll out the cash-sweeping strategy, which basically consists on migrating our retail deposits towards time deposits. Just as a reminder, whenever we do that, on one hand, we lose the financial income we have from the floating on our deposits, but that is more than offset by the gains that we have in financial expenses net because we don't need to use other funding sources, right? In terms of the quarter, this R$6.3 billion is a big step in terms of the migration of the cash-sweeping, but it's not the end results. I think the remainder of the deposit base, the vast majority should also be migrated over the coming months as well. But in terms of the P&L impact, given that we did this migration towards the end of the quarter, the impacts on our P&L in the quarter were minimal, so really immaterial. And we should see the effects -- this effect on the P&L on the coming quarters. Just as a reminder, we lose 100% of CDI on our revenue. We gain our cost of funding. So, the net result should be around 75 basis points to 125 basis points per year that we gain on the amount of deposits that we migrate. And with that, I think you can make the math on the impact on the P&L going forward. The second question, I think, was on financial income, if we can break down the effects of the bundling. Again, I think the message here is pretty similar to the take rate question, which is it's really hard to break down because there are too many moving pieces now. We had the migration between transactional revenues towards financial income, but we also have other effects, right, the credit portfolio growing, the cash-sweeping strategy. So, I think the best way to understand is not on a line-by-line basis, but rather looking towards the combined gross profit or the combined revenue streams.

Perfect. So, let me just complement the question -- on your question around competition. I think, almost every week, we see new offerings regarding investment products in the market. So, it is a very dynamic space, I would say. But our take and we have tested ourselves different offerings as well and tested conversion and elasticity. What we observed is that for our client profile, which is a merchant, the investment product is important, but very much from the perspective of saving for specific purposes, right? So normally, these promotions, they will tend to be more impactful when we talk about consumer banking and less on business banking. So, I mean, nothing really new. We have ourselves tested different offerings. And from our perspective, the really important aspect of this offering is to give our clients the opportunity to save for different objectives within the Stone ecosystem. That's much more important than the actual spreads.

That's pretty clear. Thanks, everyone.

Thank you, Renato.

Our next question comes from Daniel Vaz with Safra.

Congrats on the results. Two on my end. I think about the repricing during the quarter, you did several adjustments, right? So, you arrived in a higher take rate from that. But I want to ask if it's fair to assume that you should still increase take rates in the next quarter, as we would see the full impact from the repricing, right? You -- probably you did part of -- on January, part on February. So, wanted to take the full impact from the repricing on the next quarter if it is positive. And if also is there any further adjustments on any specific niche of customers that you would do? And a follow-up to Renato's question and Mateus's answer about the net positive effect, right? So, you have potential lower floating revenues and lower funding costs. Can you give us a color about this conversion you already did in the first quarter if has any positive effect already or should we expect that from the second quarter going forward? Thank you.

Hey, Daniel. Thanks for the question. So, the first one around the effects of repricing, you are right in the concept, which is we made the repricing waves throughout the first Q. So, the full effect will be felt on the second Q. Also, a small reminder on that end is that we did the full repricing waves for the Stone product in the first Q. On the Ton product, they were done throughout the second Q. So, there will also be some leftover for the third Q as well. Again, in terms of the metric, we're not looking at take rates internally anymore. The metric that we're tracking is gross profit versus TPV. And on that front, the message is the one that you just said, which is given that the full effects will be felt in the second Q, there is still some room for improvement there. The second part of the question, just to make sure that I got, I think it's whether the effects of the cash-sweeping were significant on the first Q or whether we should feel those effects on the second Q?

Yeah, that's it.

Yeah. So, on that front, even though we did the migration of a significant part of the deposits on the first Q, they were done really towards the end of the quarter. So, from a P&L perspective, we had a minimal impact in the first Q. Most of the benefits will also be felt from the second Q onwards.

Right. And I believe that you mentioned about R$20 million for every R$1 billion conversion in the last quarter. Is it right, like pre-tax benefits?

Yeah. It's from 75 basis points to 125 basis points over the volume that we migrate per year. So, if you do the math, it's pretty much around those levels.

Okay. Thanks again.

Our next question comes from Marcelo Mizrahi with Bradesco BBI. You can open your microphone.

Hi, guys. Congratulations for the results. My question is related to the volume. So, in the conference calls of many companies like Visa and some malls, they were referred about the impact of Easter on their volumes of sales. So, my question here is to understand the impact of Easter in the TPVs and volumes of Stone during the first quarter and the potential impact on the second quarter. So, could you give us some color about the volumes year-to-date, putting April together with the first quarter, or some color about that? Thank you.

Hi, Marcelo. Thanks for the question. So, no specific trends on our side. I think that possibly has to do with the profile of the client base. When we talk about our overall industry, there is a big proportion of volumes that come from large retail that we serve very minimally, right? So, we -- I think no specific trends to highlight there.

Okay. Thanks.

Thank you.

Our next question comes from Thiago Paura with BTG.

Hi, everyone. Thanks for the opportunity here to ask a question. I have one on the credit front. Maybe a follow-up of another questions made previously. We just saw another quarter of very strong growth in the credit portfolio. I mean, 20% on a sequential basis. So, my question is really about better understanding the competitive advantage you believe Stone has in this segment, especially after the restructuring phase, the product went through. Mateus mentioned that the niche that Stone is targeting could be slightly different from other peers. But just try to understand how do you believe your approach or your underwriting model differs from -- differ from other players who might be offering similar products to the similar client base and what you considered to be your structural advantage on this front to support your 2027 guidance you are committed to on the credit portfolio? Thank you.

Thank you, Thiago. Let me elaborate a little bit taking a step back and talking about overall credit strategy. I think I'm going to address some of your points in this answer. So, first, I think there's two pieces -- two important pieces that are somewhat distinct within the credit strategy. First, regarding our longer duration working capital loan, this is really the product that we have developed and perfected and continue to evolve over time to serve the needs of our small and medium clients, so the larger, more sophisticated SMBs. And while we continue to pursue growth there through a digital approach, we're incrementally investing in what we call our credit specialist distribution. So, part of this specialist distribution is focused around credit. So, this really has enabled us to make the right types of offer for those larger SMB clients. Again, on the product experience, I think we've talked about this many times, it is very differentiated for an SMB because they repay really according to their sales. So, this alignment that the product provides, I think, is a differentiated aspect that we have observed since the beginning of our credit offerings. So, I think we continue to be optimistic on the growth trend there. And when we look at the portfolio growth, that is the big driver of growth, right, that we have observed. But there is a second part to the credit strategy that is less mature, more recent, but we're also seeing very positive results. And I think there's a lot of work to do, but -- and it's really regarding addressing what we call shorter-duration credit solutions. They address different types of needs of our clients. For example, when we talk about credit cards that we are scaling, although, at still less mature levels than we compare with working capital loans, this product is much more suited for micro clients. They have more consumer-like needs. So, I think there's a lot for us to do on the credit card side and it will address more the base of the pyramid when we talk about the profile of clients. But even when we go back to our SMB clients, we have seen also very positive response from our clients in terms of the offerings of products that we have developed around -- shorter-duration products that we have developed around fixed rails. For example, helping them pay suppliers, giving them more terms or some short-term loans to pay suppliers, or even overdraft solutions. So, there's kind of a group of shorter-term duration products that we are developing for SMBs as well. So, I think the message is, there's a lot to do. We continue to be optimistic about our long-term guidance. And the differentiation really will be about the way that we offer the product, the product experience itself, and our distribution approach.

Perfect. Thanks. Thanks, Lia. Thanks very much.

Thank you.

There are no questions at this time. This concludes the question-and-answer session. I will now turn over to Pedro Zinner, CEO at StoneCo for final considerations.

Well, thank you very much for you all for participating in our call. Hope to see you again in the next quarter. Thank you very much.

This concludes today's presentation. You may disconnect. And have a nice evening.