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The
following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and the notes thereto, included elsewhere in this annual report, as well as the information presented under “Presentation
of Financial and Other Information.” The following discussion contains forward-looking statements that involve risks and uncertainties.
Our actual results and the timing of events may differ materially from those expressed or implied in such forward-looking statements
as a result of various factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements”
and “Item 3. Key Information—D. Risk Factors.”
A. Operating
Results
Overview
Consumer
Banking
Wallet
and Banking
As
of December 31, 2025, we had 42.3 million quarterly active consumers, of which 12% were consumers who only opened the app during the
quarter, compared to 38.9 million quarterly active consumers as of December 31, 2024, of which 14% were consumers who only opened the
app during the quarter. As of December 31, 2025, we had 29.8 million consumers with deposits, compared to 27.1 million consumers with
deposits as of December 31, 2024. The deposits held by consumers in our ecosystem (comprised of the sum of “user balance —
payment accounts” and “user balance — CDB” from third-party funds in our consolidated financial statements) totaled
R$28.7 billion as of December 31, 2025, representing an increase of 44% from R$20.0 billion as of December 31, 2024.
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Wallet
and Banking Monetization Model
Our
open platform approach enables consumers to register on file any credit card to fund their payments transactions, such as electronic
transfers and payments (P2P, Pix, P2M, bills and the purchase of digital goods in our PicPay Shop, among others) in a single payment
or in installments. For the year ended December 31, 2025, our PicPay-branded credit card represented 33.7% of the total credit card TPV
captured in our digital wallet. Moreover, our digital wallet model is primarily fee based and asset-light, i.e., we only assume credit
and underwriting risk if these transactions are sourced by our PicPay-branded credit card following the transfer to us of the Banco Original
credit card portfolio, concluded in January 2024. For more information, see “Item 4. Information on the Company—A. History
and Development of the Company—Recent Acquisitions and Corporate Transactions” and “—Acquisitions and New Lines
of Business and Other Developments.”
Our wallet and banking product is mainly monetized when P2P, Pix, and
bill payment transactions are sourced by credit cards. Transaction fees through credit cards charged from the payer can vary from 3.49%
up to 5.49% of the transaction amount (which we recognize as “net revenue from payment transaction activities and other services”
in our statement of profit or loss), while our installment fees (which we recognize as “financial income” in our statement
of profit or loss) can vary from 3.99% up to 5.49% per month of the transaction amount. We receive the total amount charged to the consumer’s credit card already net of interchange fees and the merchant
discount rate from the merchant acquirer involved in the transaction, as illustrated in the chart below. We do not receive fees from
merchants in transactions paid with credit cards in our wallet unless the receiver is a merchant affiliated to the PicPay network, in
which case we charge a merchant discount rate based on the payment volume. In the scenario illustrated in the chart below, the utility
company is the receiver, so we do not charge a merchant discount rate from such company. P2P (closed-loop) and Pix transactions (either
for amounts transferred within our ecosystem or amounts that are transferred outside our ecosystem) funded by balances held in our digital
wallets are free of charge. For more information about instant payment monetization, see “—Instant Payments (P2P and Pix)”
below.
Brazilians
often finance their consumption through installment payments, due to several specific and cultural factors. In our platform, we offer
a wide range of payment methods aiming to facilitate how our consumers will pay for their transactions. We enable consumers to pay several
types of digital wallet transactions in up to twelve installments through their credit card. In Brazil, differently from some other countries,
the credit card settlement period is approximately 30 days. This means that in order to pay instantly our P2P, P2M, and bill payment
transactions when sourced by credit cards and installments, we, as the intermediary of the payment transaction, prepay the credit card
receivables and monetize by charging a take rate to cover prepayment costs.
The
graphic below provides one example of our digital wallet monetization model:
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In
this example, we illustrate a scenario of using a credit card registered on file as a source of funding a bill payment in monthly installments:
● on the bill’s due date (D+0), a consumer uses a credit card on file in their digital wallet to pay a utility bill of R$500.00 in ten monthly installments.
● on the same date, PicPay pays the total amount of R$500.00 to the utility company at no cost, and PicPay charges the consumer’s credit card R$609.23, which consists of a 3.99% transaction fee over the amount of the bill (R$19.95) plus an installment fee of 2.99% per installment over the amount of the bill plus the transaction fee, as amortized (R$89.28 for ten installments). As a result, the total cost for the consumer is R$609.23, payable in 10 installments of R$60.92 per installment); and
● once the consumer makes a monthly installment payment of R$60.92 on its credit card (typically beginning at D+26), the consumer’s credit card issuing bank pays that amount to the merchant acquirer, minus the interchange fee payable to the issuing bank, and the merchant acquirer pays PicPay the installment fee net of merchant discount rate (MDR).
As
shown in the chart below, our Wallet and Banking TPV, which includes instant payments (P2P and Pix), bill payments and other products,
totaled R$141.6 billion in the three months ended December 31, 2025, representing a 27% increase compared to the same period in 2024.
In the fourth quarter of 2025, instant payments represented 90% of our total Wallet and Banking TPV, compared to 89% in the same period
of 2024, mainly driven by higher consumer adoption of Pix transactions. For the year ended December 31, 2025, our Wallet and Banking
TPV totaled R$497.0 billion, representing a 30% increase compared to 2024. For 2025, instant payments accounted for 89% of Wallet and
Banking TPV.
In
the three months ended December 31, 2024, our Wallet and Banking TPV totaled R$111.6 billion, representing a 46% increase compared to
the same period in 2023. For the year ended December 31, 2024, Wallet and Banking TPV totaled R$382.5 billion, representing a 58% increase
compared to 2023. In 2024, instant payments represented 89% of Wallet and Banking TPV, compared to 86% in 2023, reflecting increased
consumer adoption of Pix transactions during the period.
Wallet
and Banking TPV
(R$ million)
(1) Others refer to cash-out products such as cash withdrawal, wire transfers, withdrawal with prepaid cards, and international remittance exchange.
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Instant
Payments (P2P and Pix)
Pix
Finance was a key product that contributed to the increased monetization of our digital wallet since its inception. We have been highly
encouraged by its performance, which continues to scale and gain momentum within our consumer base. As shown in the chart below, for
the year ended December 31, 2025, considering only Pix transactions conducted in our digital wallet using the PicPay Card as a source
of funds, we achieved a total of R$8.8 billion, an increase of 121% compared to the previous year. For the year ended December 31, 2024,
we achieved R$4.0 billion, an increase of 164% compared to the year ended December 31, 2023.
In
the three months ended December 31, 2025, Pix Finance TPV totaled R$2.6 billion, an increase of 70% compared to the same period in 2024.
For the three months ended December 31, 2024, Pix Finance TPV reached R$1.6 billion, an increase of 208% compared to the same period
in 2023. We intend to continue to capture the benefits from the Pix infrastructure combined with increased penetration of our own credit
cards as a source of funding for wallet transactions, since they are important levers to further increase our opportunities to cross-sell
additional products and services while accelerating consumer monetization in our platform.
Pix
Finance TPV
(R$ million)
Financial
Services
Credit
Overview
Until
October 2023, our operations were entirely based on an “asset-light” model, which means that our credit business was focused
only on the distribution of products originated by third-party partners connected in our app, earning commissions from the sale of new
loans, as well as success fees from each loan payment made by our consumers. From October 2023 onwards, we began originating directly
on our balance sheet, a strategic initiative aimed at expanding our product offering and strengthening our consumers’ principality.
This decision was designed to enhance customer engagement and profitability, consolidating our portfolio of strategic products, mainly
on the credit cards and personal loans.
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We
believe that data is a valuable resource to achieve the balance between business economics and risk management controls of our credit
operations. The robustness of our digital wallet enables us to collect a broad range of valuable information that feeds our credit models.
We have approximately 54 million credit cards registered on our platform, including both PicPay-issued cards and third-party cards, which
our consumers use daily for various transactions, such as Pix transfers and bill payments. This ecosystem allows us to build a rich track
of consumers’ transactional behavior, an essential input for assessing their risk profile with us.
In
addition, we have 42.7 million quarterly active consumers. In the year ended December 31, 2025, our active consumers transacted over
R$497 billion in our digital wallet. These consumers maintained an average monthly cash-in of more than R$46.5 billion during the year
ended December 31, 2025. By capturing daily cash-in and cash-out patterns, we gain valuable insights that further strengthen the accuracy
of our data-driven models, as well as continuously enhance our ability to assess risk.
In
addition to the data captured through the transactional activity of our digital wallet, we enrich our database with complementary sources,
such as data coming from the Credit Information System (Sistema de Informação de Crédito), or “SCR”,
of the Brazilian Central Bank, as well as from market credit bureaus. Additionally, we obtain information from over 15.6 million active
consents under Open Finance, where PicPay ranks as the third-largest player in Brazil by number of active consents. Through our account
aggregator feature, we gain a broader view of our consumers’ financial habits, including information held with other institutions,
such as account balances, upcoming and overdue invoices and bank account statements, among other relevant data.
Notes:
(1) As of December 2025. The share of active consents received is based on public information disclosed by Open Finance Brasil.
(2) Total deposits, cash-in, and Wallet and Banking TPV for the period expressed in dollars are based on the real/U.S. dollar
exchange rate of R$5.5024 per US$1.00 as of December 31, 2025. (3) 11% of total Pix transactions which accounts for transactions where
PicPay originated or received the transaction (excluding transactions between PicPay accounts).
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Given
our ability to collect information from our consumers using data provided by our ecosystem and external sources, we have access to more
than 12,000 available data points including:
During
2024, we deployed a new generation of customized credit models, with a focus on credit card and personal loan models. With the use of
our own exclusive behavior credit data, we were able to present up to 3.0 times more accuracy on our models based on the most recent
data from the second quarter of 2024. Accuracy is measured by a statistical test denominated Kolmogorov-Smirnov (KS), which measures
how predictive a model is (in this case, how much does our model manage to distinguish good payers from bad payers), when compared to
the market model (which is only based on the SCR and credit bureaus). Through the use of our model, our unsecured credit offer is 2.3
times higher for consumers who have or had a PicPay credit product at some point in the past than to consumers for which we have limited
historical information (based only on market data (SCR and bureaus)).
Note: (1) KS (Kolmogorov-Sminov) is a statistical test that measures the mode’s ability to discriminate between different data classes, in this case, good and bad payers (distinguishing between those who will not default on a loan and those who will).
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We
approach our risk-management strategy from two complementary perspectives. The first perspective focuses on a portfolio-level analysis:
we maintain a balance of between 40% and 60% of (i) secured products, such as public and private payroll loans, secured credit cards
and FGTS loans, and (ii) unsecured products, including personal loans, buy-now-pay-later and credit cards. Our strategy is focused on
preserving a healthy portfolio balance without compromising profitability.
The
second perspective focuses on an individual-level analysis, emphasizing the assessment of each of our consumer’s risks. In our
credit origination strategy, we operate under the principle that the more we know about a customer, the greater our confidence in making
decisions regarding new financing agreements and credit card limit increases over time. Accordingly, for customers whose transactional
and credit behavior is still unknown, we initially offer only fully collateralized credit lines (secured loans and/or secured cards).
This approach allows us to gradually build their transactional behavioral history over the following months.
Our
credit analysis considers not only several credit performance indicators, such as delinquency ratios, early delinquency ratios, first
payment default, expected losses, income leverage ratio, credit score among others but also take into consideration the expected profitability
and expected returns of such credit concession balanced with the Loss Absorption ratio, which represents all the expected losses over
all the lifetime credit related revenues of a given credit concession. Our credit concession has a risk based pricing strategy, which
has an expected return on allocated capital over 30% and a Loss Absorption rate target between 40% to 60% of each credit concession cohort,
which means that, even if we face an adverse market conditions scenario, such as rising interest rates and higher delinquency levels
in the country, credit loss expenses could come in at twice our base case assumption and we would still be able to reach break-even on
the unit economics of a given cohort.
Beyond
risk mitigation, since 2024, we have offered secured credit cards for our consumer base. In this model, consumers build their own credit
limit by allocating funds within our platform. This product provides us with full control over delinquency: in the event of a late payment,
the outstanding amount is automatically deducted from the balance previously allocated by the consumer. This product allows us to build
consumers’ transactional behavior, identifying whether they pay PicPay Card bills on time using new funds. This approach also provides
valuable insights into customer financial behavior, enabling more precise credit origination and credit limit increase decisions over
time. With respect to consumer loans, we also offer FGTS loans, which are secured by the debtor’s FGTS balance, and payroll loans,
where the loan is secured by payroll deductions, significantly reducing the risk of default.
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Moreover,
we adopt a micro and small limit credit policy (or “Progressive Limits”) for our unsecured credit lines when we are dealing
with consumers of whom we have limited data and credit history. With the purpose to build their credit behavior with us, we start by
granting low credit limits (i.e., R$100 or R$150) and we monitor their behavior through the next months. In that portfolio, we are not
optimizing the concessions for profitability and, given our CAC approach, we seek to maximize the quantity of healthy credit customers.
For those consumers we allow for a loss absorption from up to 100%.
Over
time, we established a gamification approach in order to approve the increase of their credit limits considering three main rules that
must be simultaneously observed: (i) at least 20% of their initial credit card limit approved has been spent; (ii) there are no credit
restrictions with other financial institutions (Credit Bureaus); and (iii) they have fully paid their credit card bills with a maximum
delay of five days.
If
a customer is successful during this gamification stage, they become eligible for an upgrade. This means we gain greater confidence in
their ability to remain current on their obligations with us, and we expand their credit offering by increasing their limits. This process
continues until the customer reaches the most profitable segment, characterized by a loss absorption of up to 50% and access to market-standard
credit limits: a category we call “Standard”, with higher tickets and average terms.
Finally,
our credit recovery process seeks to minimize credit losses from delinquent clients while providing alternatives to those clients who
are having difficulty meeting their payment plans. Our credit recovery is structured along three pillars: Analytics; Solutions; and Technology.
Through those pillars, we seek to offer each customer the right offering in the right channel at the right time to maximize collection
opportunities. Our range of collections products includes early delinquency recovery products (e.g., aditamento, parcelamento do saldo
total), substitution of unsecured products with secured products as well as products offered following renegotiation, which are gaining
importance as our portfolio matures.
The
chart below summarizes and risk management approach:
Consumer
Loans
Total
own and third-party loan origination includes personal loans, buy-now-pay-later, FGTS loans, public payroll loans, private payroll loans,
and auto-secured loans (originated by third-party partners connected in our platform).
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Prior
to October 2023, we only distributed third-party loans in our financial marketplace and did not carry any credit underwriting risk on
our balance sheet, as these loans were financed by other partners (i.e., we acted as an agent for other financial services providers).
In October 2023, we began originating personal loans, public payroll loans, and FGTS loans on-balance sheet. In March 2025, we added
private payroll loans to our portfolio, following the product’s market-wide launch in Brazil.
During
the year ended December 31, 2025, total own and third-party loans originated in our app reached R$11,393 million, representing an increase
of 67% compared to the previous year, when our total loan origination was R$6,836 million.
For
the full year of 2025, secured products, including private payroll loans, public payroll loans, FGTS, and auto-secured loans (originated
by third-party partners connected in our platform) represented 77% of the total loans originated, 16 percentage points of growth when
compared to the previous year. The higher penetration from secured credit products in the origination mix was mainly due to the acceleration
of the private payroll loans during the second half of the year.
During
the year ended December 31, 2024, our loan origination totaled R$6.8 billion, an increase of 187% when compared to 2023. Secured products
represented 61% of the total volume originated in the year, while the remaining 39% was attributed to unsecured credit lines. The higher
participation of unsecured credit lines in the loan mix when compared to the previous year was aligned with our credit underwriting criteria
and return on allocated asset goals for the year.
In
the three months ended December 31, 2025, our own and third-party loan originations totaled R$4.4 billion, representing a 116% increase
compared to the same period in 2024. Secured products represented 88% of total loan originations in the fourth quarter of 2025, compared
to 55% in the same period of 2024, reflecting a significant shift in the origination mix toward secured credit lines.
In
the three months ended December 31, 2024, our loan originations totaled R$2.0 billion, representing a 140% increase compared to the same
period in 2023.Secured products accounted for 55% of total loan originations in the fourth quarter of 2024, compared to 71% in the same
period of 2023, primarily reflecting a higher contribution from unsecured credit lines during the period.
The
chart below sets forth the evolution of our own and third-party loan originations for the periods indicated:
Own
and Third-Party Loan Originations (1)
(R$ million)
(1) For the years ended December 31, 2025, 2024 and 2023, secured loans include FGTS loans, payroll loans, and auto-secured loans, and unsecured loans include personal loans and buy-now-pay-later.
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In
addition, we present the evolution of our quarterly loan origination since the three months ended June 30, 2024, which was marked by
several improvements in our credit underwriting models with the introduction of new variables on top of the robustness of our digital
wallet.
As
reflected in the base-100 curve of the “Over 30 MOB3” delinquency indicator (loans over 30 days past due in the third month
of each consumer cohort), we have been able to consistently improve the quality of our loan origination while maintaining originations
above R$2.0 billion every single quarter during 2025. The evolution of the average monthly spread follows the same trend, demonstrating
that we are pricing credit risk properly while observing healthy levels of loss absorption for consumer cohorts on average.
(1) Monthly Spread: interest rate net of funding costs. (2) Over 30 Mob 3: Cohort balances with more than 30 days overdue at 3 months on book.
Credit
Cards
The
TPV of our PicPay Cards totaled R$58 billion for the year ended December 31, 2025, an increase of 50% compared to the year ended December
31, 2024. For the year ended December 31, 2024, the TPV of our PicPay Cards totaled R$39.2 billion, an increase of 45% compared to the
year ended December 31, 2023. In the three months ended December 31, 2025, the TPV of our PicPay Cards totaled R$17.6 billion, representing
a 42% increase compared to the same period in 2024. In the three months ended December 31, 2024, the TPV of our PicPay Cards totaled
R$12.4 billion, representing a 47% increase compared to the same period in 2023.
PicPay
Card TPV
(R$ million)
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In
addition, we present below the evolution of the PicPay Credit Card TPV, indexed to 100, compared with our main competitors, using the
latest data available from CardMonitor through December 2025. As shown, we have sustained an exceptionally strong growth trajectory since
the fourth quarter of 2023, expanding at nearly twice the rate of the next-best performer, Inter & Co.
This
performance reflects both the increased distribution of cards to our consumers and the higher engagement of our base, which is increasingly
using the PicPay Card as an extension of their daily credit and transactional needs.
Quarterly
Cards TPV Evolution
(100 basis)
Regarding
the performance of the total unsecured credit card portfolio in terms of delinquency and monthly average spreads, we present below its
evolution, using a 100 basis point base, since the second quarter of 2024. The total portfolio shows accelerated growth, driven by the
increasing participation of progressive limits, which increased from approximately 7% in the second quarter of 2024 to around 25% in
the fourth quarter of 2025. Despite the higher-risk profile of this portfolio, spread expansion remains consistent with first roll rate
dynamics, indicating disciplined credit pricing and effective risk management.
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Our
standard portfolio exhibits steady growth with stable credit quality. Spread levels remain broadly above first roll rates throughout
the period, reflecting a more mature customer base and balanced risk-return dynamics. Overall, we achieved portfolio expansion with controlled
delinquency and improving spread-to-risk metrics.
(1) Consider the sum of credit cards within Standard, Progressive Limits, and Upgrade categories. Standard is the standard credit card offered to the customer with a limit and conditions aligned with their income, risk profile, and credit history. Progressive Limits is the entry-level cards aimed at new customers with limited credit history or higher perceived risk. Upgraded reflects customers who have evolved in their relationship with PicPay by building good credit behavior throughout the gamification process and then moved to the “Standard” category. (2) Spread: Interest rate net of funding cost. (3) First Roll Rate: outstanding rolling from current to +1 days past due monthly.
Interest
Earning Portfolio (Credit Card Portfolio)
The
table below sets forth the evolution of our interest-earning portfolio considering our credit card receivables. As of December 31, 2025,
interest-earning installments, revolving, and non-interest-earning balances represented, respectively, 33%, 5%, and 62% of our credit
card portfolio from our Consumer loans. The higher representativeness of earning installment balances compared to the market (based on
data provided by the Brazilian Central Bank) results from transactions using a credit card as a source of funding, such as Pix Credit,
as well as P2P and bill payments.
Interest-Earning
Portfolio
(% of total credit card portfolio)
Note: These balances are as of September 30 and December 31, 2024, March 31, June 30, September 30 and December 31, 2025. Market data was based on information provided by the Brazilian Central Bank.
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Total
Credit Portfolio
As
of October 2023, we started to originate loan products through our own balance sheet. Since then, including the effects of the transfer
of the Banco Original credit card portfolio, we observed a substantial increase in our credit portfolio (gross consumer loans (before
credit loss allowance)), which as of December 31, 2025 totaled R$24.1 billion, an increase of 128% compared to R$10.6 billion as of December
31, 2024 (which is 18 times higher than the total outstanding balance observed as of December 31, 2023).
In
addition, as of December 31, 2025, 51% of our total credit portfolio is related to secured credit products and the remaining 49% is related
to unsecured credit products. Secured credit products include secured cards, FGTS loan, private and public payroll loans, and prepayment
of receivables. Unsecured credit products include personal loans, credit cards, and BNPL. Total credit portfolio refers to the consumer
loans balance from our consolidated financial statements, which includes the balances of both the credit card and loan portfolios.
The
chart below presents the quarterly evolution of our credit portfolio:
Total
Credit Portfolio
(R$ million)
The
chart below highlights the evolution of provisions throughout 2025, reflecting a prudent and consistent approach to credit risk management,
even amid an accelerated portfolio growth.
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The
reclassification of credits from stage 2 to 3 resulted in reductions in the coverage of stages 2 and 3, which is to be expected as the
credits that migrated from stage 2 to 3 had relatively higher coverage than the average of stage 2 and relatively lower coverage than
the average of stage 3. Overall, stage 2+3 coverage reached 62%, which is higher than previous quarters.
Total
Credit Portfolio and Coverage by Stage
(R$ million, %)
We
present below the evolution of the quarterly cost of risk rate, which is calculated as total credit loss allowance expenses in the quarter
divided by the average of the total credit portfolio. The average of our total credit portfolio is the sum of our credit portfolio on
the quarter-end date of the immediately prior quarter and our credit portfolio on the quarter-end date of the current quarter.
As
shown below, our cost of risk reached 3.7% in the three months ended December 31, 2025, practically stable when compared to the previous
quarter. Comparing the last twelve months, our quarterly cost of risk decreased 1.4 percentage points, driven by the accelerated growth
of our credit portfolio and the increased share of secured credit lines in the outstanding balance (from 43% of the total credit portfolio
in 2024 to 51% in 2025). Since we began to operate with credit during the three months ended December 31, 2023, we were still in the
early stages of our credit activities with a portfolio consisting only of FGTS loans and personal loans during that period.
Quarterly
Cost of Risk
(%)
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Below,
we present the coverage of our total credit portfolio, which is defined as our total credit loss allowance balance divided by our total
credit portfolio for the end of each period. As of December 31, 2025, our coverage reached 13.1% compared to 8.2% as of December 31,
2024. The increase over the last twelve months can be mainly explained by the growth and aging of our credit portfolio, as some credits
migrated into stages 2 and 3, which require higher provisions. Given the same reasons explained in the previous paragraph, we are not
considering the coverage ratio from the three months ended December 31, 2023 in the quarterly evolution disclosed below.
Provision
over the total credit portfolio
(%)
Below
is the evolution of the NPL over 90 days past due of our credit portfolio. As of December 31, 2025, our NPL reached 7.2% of the total
credit portfolio.
NPL
over 90 days past due
(%)
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Our
NPL over 90 days past due is calculated as the balance overdue by more than 90 days divided by our total loan portfolio. When our portfolio
grows quickly, this indicator might seem to “improve,” even if the total amount of late loans rises. This is simply a mathematical
dilution effect, not an operational improvement.
In
our case, with the current cycle of accelerated origination, this effect becomes even more pronounced: the NPL remains artificially below
its natural maturity level for a longer period and increases only gradually as our portfolio ages (without indicating any actual decline
in credit quality).
Simple
example:
● Quarter 1: NPL over 90 days past due reaches R$100 and the total credit portfolio reaches R$1,000. Therefore, the NPL over 90 days past due as a percentage of the credit portfolio reaches 10%.
● Quarter 2: NPL over 90 days past due rises to R$150 and the credit portfolio doubles to R$2,000, the NPL drops to 7.5%.
In
this example, the overdue amount increased, but the indicator decreased, which indicates dilution.
In
addition, comparisons with other players require caution, since there are practices that may distort the NPL and affect comparability,
such as the following:
● More aggressive write-offs: institutions that write off loans earlier reduce the NPL “on paper,” even though the loss has effectively occurred.
● Renegotiations: renegotiated loans may temporarily exit the NPL over 90 days past due balance, even when they remain high-risk.
Each
institution applies its own “cure” criteria, creating meaningful asymmetries.
This
is why we also look at the “Stage 3 Formation Rate”, which shows the new contracts entering default during the quarter, capturing
early signs of deterioration before they show up in the NPL over 90 days past due. We believe it is a cleaner and more forward-looking
indicator to anticipate changes in portfolio quality.
Additionally,
in December 2025, we conducted our annual review of expected credit loss (“ECL”) parameters, reflecting the increasing maturity
of our credit portfolios and continuous improvements in our risk management framework and credit models. As part of this review, we implemented
several methodological enhancements, including the following (i) the introduction of renegotiation delinquency tracking, (ii) further
specialization of credit models for newly launched products, (iii) the adoption of more advanced machine learning techniques, and (iv)
the migration from benchmark-based loss given default (“LGD”) assumptions to internally developed LGD models.
Furthermore,
we adopted a stricter policy to accelerate the migration of renegotiated non-performing exposures from stage 2 to stage 3, aiming to
better reflect underlying credit risk and enhance the timeliness of default recognition. As a result of these changes, during the quarter,
approximately R$590 million of exposures previously classified as stage 2 were reclassified to stage 3, leading to an incremental ECL
charge of R$88 million in the three months ended December 31, 2025.
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These
adjustments resulted in a one-off increase of approximately 2.8 percentage points in the stage 3 formation rate in the quarter. Since
it was a one-time movement, we believe that this curve will present normalized levels going forward. Excluding this effect, formation
of stage 3 balances in the last quarter of 2025 would have reached 4.3%.
Stage
3 Formation Rate(1)
(%)
(1) The stage 3 formation rate is calculated considering the stage 3 balance in the end of each period minus the stage 3 balance in the immediately previous period plus write-off migration and reversal due to liquidation.
Our
margin from credit products totaled R$4.9 billion in the year ended December 31, 2025, an increase of 110%, compared to R$2.3 billion
in the year ended December 31, 2024. We calculate margin from credit products as the sum of total revenue from services and financial
income from our credit operations (cards and loans) minus cost of funding from these products. Our margin from credit products
after losses was R$2.3 billion in the year ended December 31, 2025, an increase of 63% compared to R$1.4 billion in the year ended December
31, 2024. We calculate margin from credit products after losses as margin from credit products minus credit loss allowance expenses.
Loss absorption, which is calculated as credit loss allowance expenses divided by the margin from credit products, totaled 52% in the
year ended December 31, 2025.
Margin from Credit Products (R$ million) Margin from Credit Products After Losses (R$ million)
(1) Loss Absorption ratio, which is calculated as the credit loss allowance expenses divided by the total revenues earned from credit products (including non-interest revenues such as loan insurance commissions and interchange fees from credit card transactions).
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Insurance
We
distribute a wide range of insurance products through strategic partnerships with trusted third-party insurers. On September 19, 2025,
we entered into an equity purchase agreement for the acquisition of Kovr, which is a full-service digital insurance company that offers
services for multiple partners. Currently, we distribute digital wallet insurance, mobile insurance, property insurance, home assistance,
auto repairs assistance and car insurance deductible coverage from Kovr, and we receive a commission on insurances sold in our app. Once
this transaction (which is conditioned on the approval of CADE and SUSEP) is complete, PicPay will consolidate full financial results
related to Kovr’s products, as well as other types of products such as private pensions.
Additionally,
we also distribute insurance for Pix transactions (including those funded from other bank accounts), life insurance, health assistance,
personal loan and BNPL insurance, public payroll loan insurance, private payroll loan insurance, public payroll loan (available margin
insurance), income loss insurance (FGTS) and credit card invoice insurance from other partners in our app.
As
a result of our advantageous position as one of the largest digital financial product distributors in Brazil, we reached 9.0 million
active policies as of December 31, 2025.
The
chart below presents the evolution of our insurance policies:
Active
Insurance Policies
(in millions)
Source: Company’s figures and data provided by digital banks in their respective quarterly earnings reports.
Financial
Services Monetization Model
We
monetize our financial marketplace through:
● interchange and late fees and interest paid on our cards;
● distribution and success fees from credit origination through third-party partners;
● interest income from proprietary credit origination; and
● fees from the distribution of other financial products, such as insurance and CDBs from third-party financial institutions through our PicPay Invest platform.
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Business
Ecosystem Operating Highlights
Acquiring
& Banking
To
strengthen our two-sided platform, we introduced key projects in 2023 targeted at our business customers. This initiative began with
the complete migration of our own merchant acquiring platform, enabling us to operate as a full merchant acquirer to capture, process
and settle all card transactions effected in-app. This migration eliminated our reliance on other acquirers and has enabled us
to mitigate certain upfront costs, such as the merchant discount rates charged by acquirers, generating cost efficiencies and gross margin
gains.
As
of December 31, 2025, approximately 400,000 quarterly active businesses accepted PicPay’s payment network. Our total TPV related
to our business ecosystem, or “SMB TPV,” considers the acceptance volume from our merchant acquiring platform (QR Code, Pix transactions received,
e-wallet transactions, processing of instant payments and bill payments made through our platform using third-party credit cards as a
source of fund, payment links, and PoS terminals), our banking solutions for entrepreneurs with a registered PicPay account (including
Pix transactions, bill payments, and prepaid and credit card transactions), and card transactions made through our corporate benefit solutions
(including meals, food, transportation, and other flexible benefits to employees). SMB TPV is an essential measure
of the value of payments successfully processed through our merchant acquiring platform as well as the volume captured through other
PicPay payment solutions for businesses, such as QR Code, e-wallet and Pix. SMB TPV was R$39.6 billion during the year ended December
31, 2025, an increase of 46% compared to the year ended December 31, 2024. For the year ended December 31, 2024, SMB TPV was R$27.1 billion,
an increase of 15% compared to the year ended December 31, 2023. In the three months ended December 31, 2025, our SMB TPV totaled R$10.8
billion, representing a 33% increase compared to the same period in 2024.
In
the three months ended December 31, 2024, our SMB TPV totaled R$8.1 billion, representing a 30% increase compared to the same period
in 2023.
SMB
TPV
(R$ million)
We
believe we can continue to grow our SMB TPV given our multi-pronged go-to-market strategy which includes improving the consumer experience
using our e-wallet and expanding our partnerships with online sellers and platforms and increasing our market share through the acquisition
of online and offline services to offer a broader range of products (including existing products such as QR Code and Pix). Another key
strategy is to leverage our two-sided ecosystem by connecting our 42.3 million active consumers to both online and offline sellers, taking
advantage of our knowledge of their transactional behavior and geolocation as well as AI to target and offer optimized promotions and
campaigns.
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We
monetize our small and medium-sized businesses ecosystem by charging a merchant discount rate (MDR) to SMBs who accept our payments solutions,
and we also generate revenue from terminal rental fees and other service charges related to payments acceptance. Additionally, we monetize
through interest rates charged over prepayment of receivables and from other credit products such as unsecured and secured loans, credit
cards. Finally, we also generate floating revenues from our SMB accounts.
Audiences
and Ecosystem Integration
We
remain focused on our advantages as a unique dual-sided ecosystem anchored on two pillars: (i) monetization of our audiences by leveraging
both our consumers’ and merchants’ customer bases with products and solutions, such as our PicPay Ads, allowing brands and
companies to benefit from our huge audience in app and promote their products and services, as well as offering a miscellaneous of non-financial
products, such as mobile top-ups, digital goods, in-app game and gift cards, and (ii) ecosystem engagement through a platform that allows
online merchants to sell their products and services to more than 42.7 million quarterly active consumers through PicPay Shop. With this
integration, we enable multiple benefits for affiliated merchants, such as customer acquisition, engagement of customers through merchant-funded
discounts and cashback, and the opportunity for PicPay to cross-sell its own credit and payment acceptance products, such as credit cards,
buy-now-pay-later, insurance, as well as our online checkout.
We
monetize PicPay Ads by charging an impression fee for sellers and PicPay Shop by charging take rates from online sellers to accept in-app
purchases from our consumers.
Consolidated
Financial Highlights
Our
total revenue and financial income for the year ended December 31, 2025 totaled R$10,278 million, an increase of 85% compared to R$5,570
million for the year ended December 31, 2024. For the year ended December 31, 2024, our total revenue and financial income was R$5,570
million, an increase of 61% compared to R$3,459 million for the year ended December 31, 2023. Our total revenue and financial income
grew at a CAGR of 72%, from R$3,459 million in 2023 to R$10,278 million in 2025.
Total
revenue and financial income
(R$ million)
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Additionally,
we present below an evolution of our revenue mix on a quarterly basis considering: (i) interest revenues coming from our credit operations
divided by revenues generating from our unsecured credit portfolio (“Unsecured Credit Products”) and our secured credit portfolio
(“Secured Credit Products”); (ii) revenues from our operations linked to our transactional activities, also including the
distribution of products and services in our platform, as well as financial income from third-party credit cards used by our consumers
to conduct transactions in our ecosystem (“Fees, Commissions and Other Services”); and (iii) the difference between the sum
of “Unsecured Credit Products”, “Secured Credit Products”, and “Fees, Commissions and Other Services”
to our total net revenue and financial income (“Float”).
Revenues
coming from our credit operations represented 52% (“Unsecured Credit Products” and “Secured Credit Products”
revenues) from our total net revenue and financial income in the year ended December 31, 2025. Although credit already represents more
than half of our revenue mix, our exposure to unsecured credit lines represents 33% of our total net revenue and financial income, while
the remaining 19% comes from products and services that are free of default risk.
Quarterly
Revenue Mix
(% from the total revenue and financial income)
Notes:
(1) “Unsecured Credit Products” includes interest revenues from the unsecured credit portfolio (personal loans and credit cards).
(2) “Secured Credit Products” includes interest revenues from the secured credit portfolio (FGTS loans and payroll loans).
(3) “Fees, Commissions, and Other Services” includes total net revenue from transaction activities and other services, as well as financial income originating from the prepayment of third-party credit card transactions conducted by our consumers in the ecosystem.
(4) “Float” is calculated as the difference between total revenue and the sum of secured credit products, unsecured credit products and fees, commissions and other services.
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Adjusted
Gross Profit totaled R$3.6 billion for the year ended December 31, 2025, an increase of 29% compared to R$2,751 million for the year
ended December 31, 2024. For the year ended December 31, 2024, our Adjusted Gross Profit totaled R$2,751 million, an increase of 53%
compared to R$1,793 million for the year ended December 31, 2023. Such an increase was mainly due to the expansion of our total revenues
and financial income, offsetting the increase in financial expenses and costs related to transactions activities in the period. Adjusted
Gross Profit is not a measure under IFRS Accounting Standards and should not be considered as a substitute for profit (loss) for the
year or any other measure of operating performance determined in accordance with IFRS Accounting Standards. For a reconciliation of Adjusted
Gross Profit to profit (loss) for the year before income taxes, see “—Other Financial Data.”
Adjusted
Gross Profit
(R$ million)
For
the year ended December 31, 2025, our profit before income taxes was R$317 million, compared to R$346 million for the year ended December
31, 2024, representing a decrease of 8%.For the year ended December 31, 2024, our profit before income taxes was R$346 million compared
to R$2 million for the year ended December 31, 2023. Our Adjusted Profit Before Income Taxes, which was adjusted to exclude certain non-recurring
and/or non-cash items of income and expense, such as the initial recognition of share-based long-term incentive plan expenses; and expenses
related to one-time provision for contingencies. Considering the adjustments referred, our Adjusted Profit Before Income Taxes totaled
R$592 million for the year ended December 31, 2025, an increase of 71% compared to R$346 million for the year ended December 31, 2024.
For our Adjusted Profit Before Income Taxes reconciliation, see “—Other Financial Data.”
Profit before income taxes (R$ million) Adjusted Profit Before Income Taxes (R$ million)
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Our
profit for the year was R$1,142 million for the year ended December 31, 2025, representing an increase of 353% compared to R$252 million
for the year ended December 31, 2024. For the year ended December 31, 2024, profit for the year was R$252 million, an increase of 574%
compared to R$37 million for the year ended December 31, 2023. Such increases were driven by the recognition of deferred tax assets in
the amount of R$889.9 million in the year ended December 31, 2025, based on expectations that PicPay Payment Institution would generate
sufficient taxable profit in the future against which the asset can be realized. We do not expect the recognition of a material deferred
tax assets to recur in the future. Our Adjusted Profit, which was adjusted to exclude certain non-recurring and/or non-cash items of
income and expense. These expenses included: (i) initial recognition of share-based long-term incentive plan expenses; (ii) expenses
related to one-time provision for contingencies; and (iii) initial recognition of deferred tax assets, was R$502 million for the year
ended December 31, 2025, an increase of 99% compared to R$252 million for the year ended December 31, 2024.
Profit for the period (R$ million) Adjusted Profit (R$ million)
Net
Interest Income (NII) and Net Interest Margin After Losses (NIMAL)
Net
Interest Income (NII) reached R$4.9 billion for the year ended December 31, 2025, an increase of 87% compared to R$2.6 billion for the
year ended December 31, 2024. Moreover, our Net Interest Margin After Losses (NIMAL) reached R$2.4 billion during the year ended December
31, 2025, an increase of 37% compared to the year ended December 31, 2024.
For
the year ended December 31, 2024, our NII totaled R$2.6 billion, which is 120% higher compared to 2023. The NIMAL reached R$1.7 billion
in the twelve months ended December 31, 2024, an increase of 47% compared to 2023.
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Net
Interest Income (NII) and Net Interest Margin After Losses (NIMAL) are not measures under IFRS Accounting Standards and should not be
considered as substitutes for financial income or any other measure of operating performance determined in accordance with IFRS Accounting
Standards. For a reconciliation of Net Interest Income (NII) and Net Interest Margin After Losses (NIMAL) to profit before income taxes,
see “—Other Financial Data.”
Net Interest Income (NII)(1) (R$ million) Net Interest Margin After Losses (NIMAL)(2) (R$ million)
(1) We calculate Net Interest Income (NII) as the financial income less interest and other financial expenses.
(2) We calculate Net Interest Margin After Losses (NIMAL) as Net Interest Income (NII) less credit loss allowance expenses.
Principal
Factors Affecting our Financial Condition and Results of Operations
We
believe our operating and business performance is driven by various internal and external factors.
The
most significant internal factors include:
● our ability to attract and retain active consumers and businesses;
● the adoption of our services, the volume of our ecosystem and the network effect;
● our prices and mix of revenues; and
● our costs and expenses.
The
most significant external factors include:
● the Brazilian macroeconomic environment; and
● the Brazilian regulatory environment.
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Our
ability to attract and retain quarterly active consumers and businesses
Consumers
are attracted to our platform by the convenience of financial and non-financial products and services that we offer in our ecosystem.
Our consumers are the foundation of our business, and we are focused on growing their numbers and retaining them. Our revenues are driven
by the number of consumers who are engaged with our platform, the number of products and services each consumer adopts and the aggregate
volume and amount of transactions per consumer across our range of financial and non-financial products and services.
We
believe our capacity to connect the demand of over 42.7 million quarterly active consumers to a diverse range of products and services
offered by hundreds of thousands of merchants across various market segments helps to attract and retain retail customers over time.
In addition, we offer a wide range of acceptance solutions. From transactions via QR Code and Pix to payment link, e-commerce captured
through our online payment checkout (e-wallet) directly integrated with the consumers’ PicPay wallet and point-of-sale terminals
owned by third-party merchant acquirer partners, PicPay caters to the needs of diverse businesses.
To
further support businesses, our solutions also include banking services and own and third-party loan products, such as prepayment of
receivables and working capital loans. These offerings aim to streamline and expand retailers’ businesses, making us an essential
partner, especially for micro, small, and medium-sized businesses. With a comprehensive and innovative approach, PicPay positions itself
as a key partner for the business ecosystem.
We
expect continued growth in quarterly active consumers and businesses driven by the high-quality experiences we provide when they use
our products and services, the result of which we believe is high affinity with our brand.
The
adoption of our services, the volume of our ecosystem and network effect
We
believe that our platform benefits from strong network effects: as more consumers join our app, it becomes more attractive for businesses,
and as more businesses join it, the perception of value proposition for consumers increases. This mutually reinforcing dynamic fuels
accelerated growth of our consumer and business customer base at low cost and resulting in higher engagement and retention. We believe
that the two-sided nature of our ecosystem reinforces the growth of each side of the ecosystem, building a self-sustaining cycle of value
for both consumers and businesses, which are drawn to our platform’s convenience. We believe that as more consumers join our platform,
more businesses and third-party financial institutions will be incentivized to come onboard, which will attract even more consumers.
Furthermore, we believe that our social network drives user engagement by allowing consumers to connect, interact and transact with friends,
families and businesses. We believe that this cycle reinforces the flywheel effect: as more consumers join the social network, the network
becomes increasingly valuable to participants who are motivated to bring their contacts into the ecosystem.
Our
prices and mix of revenues
We
believe that we have a diverse product portfolio that we monetize through a variety of fees, commissions, and financial income.
● Consumer Banking Segment: fees and commissions paid by partners that compensate us for the distribution of their products and services through our app, such as loan origination, investments and insurance sales. We also generate interchange revenues from our credit cards. Financial income includes interest from our credit card loans, and floating. For the years ended December 31, 2025, 2024 and 2023, our Consumer Banking segment accounted for 85.8%, 93.5% and 88.9% of our total revenue and financial income, respectively.
● Small and Medium-Sized Businesses Segment: MDR fees paid by businesses that use PicPay as a payment acceptance method and interchange fees for transactions with our corporate benefits card. Additionally, we generate financial income from floating; and
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● Audiences and Ecosystem Integration Segment: commissions paid by partners to compensate us for generating incremental sales for them at PicPay Shop and impression fees for our Ads solution.
● Institutional Segment: revenues, costs and expenses from financial investments and funding activities at the corporate level.
Our
fees and commissions are tailored for each type of transaction, taking into consideration the product, the source of funds (i.e. balance
held by consumers in their digital wallet or credit card payments), the number and amount of installment payments and other variables.
As
part of our business positioning, transactions generate revenue that vary according to the fee percentage applied to the transaction
value. Accordingly, our results are affected by our pricing policies, our mix of revenues and transaction volume.
Our
Expenses
Through
our ecosystem, we are focused on generating high transaction volume with healthy unitary margins. As such, our ability to control our
costs and expenses directly affects our results. Our primary expenses are:
● transaction expenses: we incur these non-discretionary expenses in order to provide our products and services. The primary components of our transaction expenses are processing fees, risk prevention services, PicPay Card costs, chargeback, operating losses, and others. We constantly review these expenses in order to identify and capture opportunities to create additional efficiencies;
● interest and other financial expenses: these expenses include advance costs (costs we record when we request the advanced payment of receivables from acquirers discounted to present value); consumer balance remuneration (remuneration we pay to consumers on balances held in their digital wallets or digital piggy banks); CDBs; lease interest (interest we pay on installments under our property rental agreements); taxes on financial transactions; default interest (interest paid on late payments to our suppliers); and bank fees (including transfer fees we pay in connection with payments to our suppliers);
● credit loss allowance expenses: include losses associated with our credits receivable from our customers. We expect our credit losses to fluctuate depending on many factors, including transaction volume and credit limits, macroeconomic conditions, the impact of regulatory changes, and the credit quality of loans receivable. Additionally, credit losses also include reversals of provisions and recoveries, where the customer pays us after the write-off of the receivable;
● technology expenses: we incur technology expenses in connection with the availability of our application. These expenses include software expenses and IT services;
● marketing expenses: We incur marketing expenses in connection with the acquisition, activation, engagement and retention of our consumers and businesses, as well as our efforts to increase both brand awareness and consumer experience for our products and services. Our marketing expenses include advertising, cashback, digital marketing, customer acquisition expenses, and commission expenses;
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● personnel expenses: we incur personnel expenses in connection with our business support operations. These expenses include employees’ salaries, benefits, social security charges, and others; and
● administrative expenses: we incur administrative expenses in connection with our business support operations. These expenses generally include administrative expenses, such as third-party services and financial system services, rent, condominium fee and property services, taxes, provisions for contingencies, cost sharing, and others.
The
Brazilian Macroeconomic Environment
We
currently operate exclusively in Brazil, which makes our revenue and profitability directly influenced by internal political and economic
factors. These factors have an impact on the availability of credit, household disposable income, employment rates, and average wages.
Additionally, our results are affected by interest rates and the expansion or contraction of consumer credit, all of which influence
the volume and total value of payment transactions. For example, lower interest rates tend to reduce our funding costs, while the decrease
in unemployment, combined with economic growth, drives an increase in payment volume. Both our operations and the industry are particularly
sensitive to changes in economic conditions.
Brazil
is the largest economy in Latin America, as measured by gross domestic product, or “GDP.” The following table sets forth
certain data relating to GDP, inflation and interest rates in Brazil and the U.S. dollar/real exchange rate as of the dates and
for the years indicated.
Below
we present some macroeconomic indicators for the years ended December 31, 2025, 2024 and 2023.
For the year ended December 31,
2025 2024 2023
Real growth (contraction) in GDP 2.3 % 3.4 % 2.9 %
Inflation (IGP-M)(1) (1.05 )% 6.5 % (3.2 )%
Inflation (IPCA)(2) 4.26 % 4.8 % 4.6 %
Long-term rate – TLP (average)(3) 8.66 % 6.9 % 5.7 %
Interest rate (SELIC)(4) 14.9 % 12.2 % 13.3 %
Period-end exchange rate – reais per US$1.00 R$5.50 R$6.19 R$4.84
Average exchange rate – reais per US$1.00 (5) R$5.57 R$5.39 R$5.00
Appreciation (depreciation) of the real versus US$ in the year(6) 11.15 % (21.8 )% 7.2 %
Source:
FGV, IBGE, Brazilian Central Bank and Bloomberg.
(1) Inflation (IGP-M) is the general market price index measured by the FGV.
(2) Inflation (IPCA) is a broad consumer price index measured by IBGE.
(3) TLP is the Brazilian long-term rate (average of monthly rates for the year) calculated by BNDES.
(4) SELIC (Brazilian Special Clearance and Custody System) is the official interest rate used by the Brazilian Central Bank to conduct monetary policy in Brazil.
(5) Average exchange rate on each business day of the period.
(6) Takes into consideration the U.S. dollar selling exchange rate at closing as reported by the Brazilian Central Bank at the end of the period’s last day and the day immediately prior to the period’s first day.
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The
Brazilian government has recently adopted expansionary economic policies aimed at stimulating credit and income, requiring the Brazilian
Central Bank to maintain a contractionary monetary policy for a fairly prolonged period, given the risks arising from heated demand,
even though current inflation data confirm a path of gradual deceleration in core measures. The Brazilian Central Bank continues to follow
its guidance of maintaining the stability of the SELIC rate, reaching the rate of 15.00% per annum in July 2025, which has been maintained
as recently as December 2025.
With
regard to fiscal policy, the Brazilian government has continued to expand access to the Bolsa Família program (a federal
direct and indirect cash transfer program that integrates social assistance, health, education, and employment benefits to families living
in poverty). In 2024, social spending by the Brazilian federal government increased by 7.8% compared with 2023. In 2025, social spending
by the Brazilian federal government is expected to increase by an additional 1.9% compared with 2024, further expanding its share in
total government expenditures. In addition, the government approved a tax exemption for salaries up to R$5,000, a measure that is expected
to boost consumption in the coming years.
In
the current macroeconomic context, Brazil is maintaining a low level of unemployment, while experiencing a gradual decline in inflation.
In addition, Brazil is enjoying stable credit delinquency rates and higher average disposable income. These factors have together driven
both credit demand and credit supply, even though interest rates remain high.
Inflation
Inflation
has a direct impact on certain contracts entered into with our suppliers. Our primary exposure to inflation arises from payments due
under property rental agreements, as well as contracts related to our data analysis platform, data software, and consulting services,
which may be indexed to inflation. Inflation rates in Brazil are subject to volatility and are influenced by macroeconomic factors beyond
our control. However, historically, inflation adjustments have not had a material impact on the cost of our contracts.
Despite
the negative impact on costs and expenses, inflation may positively affect our revenue, as increases in consumer prices tend to raise
the aggregate value of payments processed through our platform. In addition, the Brazilian economy has been consolidating a process of
gradual deceleration in inflation indices, as a result of the conduct of a contractionary monetary policy over recent years. This movement
is expected to extend over the coming periods, with inflation gradually converging toward the 3.0% target set by the CMN.
Interest
Rates
Interest
rates affect our business through our interest margins, our fee income and our credit losses.
The
Copom acknowledged the scenario of a gradual slowdown in economic activity but highlighted that wage-related pressures persist. In this
context, the Copom indicated that it will maintain a restrictive monetary policy for an extended period, until risks to the convergence
of inflation toward the target are fully mitigated. The Brazilian Central Bank has acted in a cautious manner, reaffirming its commitment
to financial stability and to the proper functioning of the national financial system, with a focus on anchoring expectations.
Gross
Domestic Product (GDP)
The
Brazilian banking sector plays a fundamental role in the country’s economy, especially in the current macroeconomic context. With
the resumption of growth, financial institutions have been reporting positive results, highlighting their relevance and adaptability.
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The
strength of economic activity is evident across various sectors. Agribusiness remains the main driver of growth; however, in recent years—particularly
in the post-pandemic period—the services and industrial sectors have been operating above their productive capacities, driven by
increased demand.
This
environment of economic expansion, combined with a strong labor market and expansionary fiscal policies, has strengthened consumption
and stimulated demand for credit, directly benefiting the banking sector.
Accordingly,
even amid the restrictive conduct of monetary policy by the Brazilian Central Bank, the outlook for the coming years points to economic
growth close to Brazil’s potential GDP, keeping the output gap in positive territory.
Fiscal
Brazil’s
fiscal situation in February 2025 reflects significant challenges, marked by persistent deficits and rising debt. In 2024, the consolidated
public sector recorded a primary deficit of R$47.6 billion, equivalent to 0.40% of GDP, an improvement compared to the R$249.1 billion
deficit (2.28% of GDP) observed in 2023.
To
address such challenges, the Brazilian government implemented a new fiscal framework in August 2023, replacing the previous spending
cap. Such a new regime limits the growth of public expenditures to 70.00% of the real increase in revenues from the previous year, while
also establishing minimum and maximum limits for fiscal spending growth, ranging between 0.60% and 2.50% per year. The goal is to achieve
a primary surplus of 0.50% of GDP in 2025 and 1.00% in 2026.
The
composition of Brazil’s public debt has become more sensitive to interest rate fluctuations due to its high dependence on floating-rate
bonds. With the increase in the Selic rate as a measure to control inflation, debt servicing costs have risen, intensifying fiscal pressure
in line with global fiscal trends. In response, the government announced a fiscal adjustment package aimed at saving R$70 billion in
2025 and 2026, including restrictions on salary increases and benefits.
In
summary, Brazil faces a challenging fiscal scenario, characterized by recurring deficits, rising debt, and inflationary pressures. However,
fiscal reforms are underway, driven not only by government and market interests but also by public demand. The effectiveness of such
measures will depend on their strict implementation and the Brazilian government’s ability to balance fiscal discipline with the
need to foster economic growth.
Moreover,
with the upcoming election year, the current government’s tendency to meet its established targets is strengthening. This outlook
has contributed to a short-term reduction in risk aversion, reflecting increased confidence among economic agents.
Brazilian
Regulatory Environment
The
regulatory environment for the financial services and payments industry in Brazil has undergone significant change in recent years due
to a concerted effort by the Brazilian Central Bank and the Brazilian government to foster innovation and promote open and fair competition.
In 2010, the Brazilian Central Bank and the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica
– CADE) initiated a series of measures that eliminated exclusivity of certain vendors and opened the market to new entrants. Since
then, a new regulatory framework has been developed, such as the means of payments regulation, Open Banking and Pix, the Brazilian Central
Bank’s instant payment system. For more information, see “Item 4. Information on the Company—B. Business Overview—Regulation.”
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In
particular, we believe that our results may be positively affected by the enactment of Open Banking regulations, which are expected to
facilitate integration between financial market participants (including traditional banks and Fintechs) and facilitate the ability of
consumers to obtain financial products.
Acquisitions
and New Lines of Business and Other Developments
On
January 23, 2023, J&F Participações transferred all of its shares in Liga Invest Distribuidora de Títulos e
Valores Mobiliários Ltda., or “Liga Invest,” a brokerage firm and securities dealer, to PicPay Brazil for R$27.4 million.
As a result of this transaction, Liga Invest became a wholly-owned subsidiary of PicPay Brazil. On January 24, 2023, PicPay Brazil made
a capital contribution of R$25.0 million to Liga Invest in exchange for 25,000,000 common shares of Liga Invest. On May 3, 2023 Liga
Invest changed its name to PicPay Invest Distribuidora de Títulos e Valores Mobiliários Ltda.
On
February 2, 2023, our subsidiary Guiabolso acquired all of the quotas in BX from BX Business LLC. The purchase price was R$9.5 million
with earn-out consideration in an amount equal to 25% of BX’s future net profit for each of the years in the five-year period ending
December 31, 2027 up to a maximum amount of R$70.0 million, subject to certain terms and conditions. BX is active in the Brazilian payroll
loan market for public sector employees and business process outsourcing for back-office payroll loans. This acquisition helped us to
broaden our financial ecosystem by expanding our financial products offering to our consumer base.
Also
in February 2023, we entered into the corporate benefits business, which includes offering flexible vouchers (including employee meal
and transportation vouchers, among others), payroll advances, balance sharing between PicPay’s consumers and payroll management.
Through this new business, PicPay consolidates advantages for both employees and human resources departments on a single platform.
In
July 2023, we began consolidating PicPay Invest (formerly Liga Invest), a digital investment platform that was previously controlled
by J&F Participações. Through PicPay Invest, we have expanded investment options within our ecosystem to include CDBs,
fixed income investments, equity investments and P2B (person to business) initiatives, and we intend to develop and offer additional
products over time.
Moreover,
PicPay assumed consumer checking accounts, deposits and investment positions previously managed, owned and operated by Banco Original.
The decision to assume these operations was made to enable both us and Banco Original to focus on our respective core customer segments
while at the same time benefiting from operating and financial synergies in order to increase efficiencies and accelerate the launch
of new products and services. These operations were transferred to us after the third quarter of 2023. Additionally, in January 2024,
the PicPay credit card portfolio was transferred to PicPay from Banco Original and we fully internalized our credit card operations at
the start of 2024. For more information, see “Item 4. Information on the Company—A. History and Development of the Company—Recent
Acquisitions and Corporate Transactions.”
In
July 2022, we gave our consumers the ability to hold cryptocurrency assets on our platform. These assets are legally held by a third-party
custodian. As of December 31, 2022, consumers held cryptocurrency assets on our platform with a fair value of R$12.7 million (US$2.3
million). In October 2023, we began to wind down our cryptocurrency activities and no longer allow our consumers to deposit new cryptocurrency
assets in their wallets. In addition, we required our consumers with existing cryptocurrency balances to transfer their remaining cryptocurrency
assets out of our wallet or liquidate their balances by December 11, 2023. However, under a more favorable regulatory environment, in
July 2025 we resumed cryptocurrency offers on our platform. Such operations are entirely off-balance sheet and structured under a distribution
and commission-based model. Accordingly, we do not hold custody of any cryptocurrencies.
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During
the second quarter of 2024, PicMarket (a digital B2B marketplace developed by Guiabolso Pagamentos in partnership with JBS S.A.) was
transferred to JBS S.A., which is an entity under common control. As of March 20, 2024, the date of the transfer, the asset’s outstanding
balance was R$79.5 million. As consideration for the transfer, JBS S.A. forgave the repayment of R$60.0 million advanced to Guiabolso
between October 2022 and April 2024 to help finance the project. The loss related to such write-off was registered as “other expenses”
in the amount of R$19.5 million in our audited consolidated financial statements in May 2024.
On
September 19, 2025, we entered into an equity purchase agreement for the acquisition of shares representing 100% of the total share capital
of Kovr Participações S.A. and its subsidiaries (including Kovr Seguradora S.A., Kovr Previdência S.A., and Kovr
Capitalização S.A) (collectively “Kovr”) from its controlling shareholders Thiago Coelho Leão de Moura,
Eduardo Viegas Silva, Rrennó Participações Ltda. and Renato Agrícola Rennó, and quotas representing
53% of the total share capital of Estrutural from its controlling quotaholders Katia Regina Nigri Zendron Viegas, Marina Peres Leão
de Moura, and Sarah Grawer Rennó. We were also granted an option to purchase the remaining 47% of Estrutural’s total share
capital. Kovr Participações S.A. is a full-service digital insurance company that offers services for multiple partners,
with products such as affinity, surety, life, financial lines, among others. Estrutural is specialized in the operation of major company’s
captive insurances. The completion of this transaction is conditioned on the approval of CADE and SUSEP.
Business
Segments
As
of December 31, 2025, our organizational structure has four reportable business segments, as follows:
(1) Consumer Banking. Our Consumer Banking business segment includes revenues generated from transaction services provided when a consumer uses a credit card registered in our app to transfer money or make payments into their digital wallet for use in a variety of transactions, such as a P2P payment (instant payment between two PicPay accounts) or Pix (instant payments to any other wallet or bank account). In addition, our digital wallet also offers bill payment solutions, allowing consumers to pay their bills via bank issued payment slips using their registered credit card or account balances in the app. When the bill is paid through the account balance, we receive commission from the bill issuers. When the bill is paid using a credit card registered on file, we receive a transaction fee on a regular credit card transaction, as well as the commission from the bill issuer, which is recognized when the bill is paid.
Our
Consumer Banking business segment also includes:
(a) Loans: (i) own loan origination, through which we earn financial income from the interest that we charge on loans; (ii) access to obtain loans from third-party financial institutions. As a bank correspondent, we receive commissions for the distribution of loans in our app. In the event of a default on a loan distributed from a third-party partner, we are not required to return the commission, hence performance obligation is related to facilitating the connection between consumers and the third party partner;
(b) Credit cards: we recognize the interchange fee from card transactions once the performance obligation (to approve the transaction and process the payment) is considered to be fulfilled, which is almost immediately following the consumer’s card usage. The interchange fee is calculated as a percentage of the transaction amount and is retained from the payments made by us to the acquirer to settle the transaction. Additionally, we recognize financial income from the interest that we charge on revolving and refinanced credit card balances;
(c) Investments products: we receive brokerage fees for the distribution of investment products within our PicPay Invest platform; and
(d) Insurance products: we receive commissions related to the distribution of insurance products from our partners in our financial marketplace.
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(2) Small and Medium-Sized Businesses. We charge a MDR (merchant discount rate) to registered merchants accepting PicPay as a payment network (P2M), through QR Code, Pix, e-wallet or online (e-commerce) checkout. Our performance obligation is to facilitate the transactions by capturing, processing and settling the transactions to merchants. We receive a variable fee based on the number of installments, merchant size and segmentation, which we deduct from the amounts paid to the merchant. Regarding corporate benefits, we receive interchange fees from transactions conducted by our consumers with their corporate benefits cards.
(3) Audiences and Ecosystem Integration. Our Audiences business segment includes commissions received through PicPay Shop (marketplace of non-financial services in app where third-party sellers can sell their products and services to our consumers, including cell phone top-ups, transportation credit, credit on digital platforms, games, clothes, accessories, travel and raffle tickets). We capture a take rate of the gross merchandise volume (GMV) from the third-party sellers, which varies according to the agreement with each seller. We act as an agent in such contracts, offering goods or services of the third-party sellers. Our performance obligation is fulfilled when the consumer uses our app for these transactions and the take-rate is recognized as revenue on that date.
(4) Institutional: Our Institutional business segment includes revenue, costs and expenses from financial investments and funding activities at the corporate level and has the role of managing funding and loans between segments, as well as our cash and liquidity.
Operating
business segments are determined based on information reviewed by our board of directors, which is our chief operating decision maker
(CODM). The CODM monitors the operating results of its business units separately for the purpose of making decisions about resource allocation
and performance assessment.
Components
of Our Results of Operations
Total
Revenue and Financial Income
Our
total revenue and financial income consists of the sum of our net revenues from transaction activities and other services and our financial
income, as detailed below:
Net
Revenue from Transaction Activities and Other Services
Our
net revenue from transaction activities and other services consists of the sum of our revenue from payment transaction activities and
other services and revenue from commissions. We generate revenue from various transaction-related activities that take place on our platform
and that are charged to platform participants, such as our consumers or our business partners. Revenues are recognized net of consumer
incentives considered component of revenues and sales taxes, including:
● Taxes on Services (Imposto Sobre Serviço), or “ISS,” is a municipal tax that varies based on the service provided. Our ISS tax liability ranges from between 2% and 5% of our gross revenues;
● Contribution to the Brazilian government’s Social Integration Program (Programa Integração Social), or “PIS”;
● Contribution to the Brazilian government Social Security Program (Contribuição para o Financiamento da Seguridade Social), or “COFINS.”
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Our
principal revenue generating products and services are:
● Consumer Banking: Revenues generated from transaction services provided when a consumer uses a credit card registered in the app to transfer money or make payments into their digital wallet for use in a variety of transactions such as a Person-to-Person (“P2P”) payment (instant payment between two PicPay accounts) or Pix (instant payments to any other wallet or bank account). In addition, our digital wallet also offers bill payment solutions, allowing consumers to pay their bills via bank issued payment slips using their registered credit card or account balances in the app. When the bill is paid through the account balance, PicPay receives commission from the bill issuers. When the bill is paid using a credit card registered on file, PicPay receives a transaction fee on a regular credit card transaction, as well as the commission from the bill issuer, which is recognized when the bill is paid.
PicPay’s
app gives consumers access to obtain loans from third-party financial institutions. As a bank correspondent, PicPay receives commissions
for the distribution of loans in its app. In the event of a default on the loan distributed from a third-party partner, PicPay is not
required to return the commission hence performance obligation is related to facilitating the connection between consumers and the third
party partner. Regarding credit cards, PicPay recognizes the interchange fee from card transactions once the performance obligation (to
approve the transaction and process the payment) is considered fulfilled, which is almost immediately following the consumer’s
card usage. The interchange is calculated as a percentage of the transaction amount and is retained from the payments made by PicPay
to the acquirer to settle the transaction. Regarding investments, PicPay receives brokerage fees for the distribution of investment products
within our PicPay Invest platform. For insurance products, PicPay receives commissions related to the distribution of insurance products
from our partners in our financial marketplace.
● Small and Medium-Sized Businesses: PicPay charges a MDR (merchant discount rate) to registered merchants accepting PicPay as a payment network (“P2M”), through QR Code, Pix, e-wallet or online (e-commerce) checkout. PicPay’s performance obligation is to facilitate the transactions by capturing, processing and settling the transactions to merchants. PicPay receives a variable fee based on the number of installments, merchant size and segmentation which it deducts from the amounts paid to the merchant. Regarding corporate benefits, PicPay receives interchange fees from transactions conducted by our consumers with their corporate benefits cards.
● Audiences and Ecosystem Integration: mainly refers to other commissions related to:
o PicPay Shop: marketplace of non-financial services in app where third-party sellers can sell their products and services to our consumers including cell phone top-ups, transportation credit, credit on digital platforms, games, clothes, accessories, travel and raffle tickets. PicPay captures a take rate of the gross merchandise volume (GMV) from the third-party sellers which varies according to the agreement with the seller. We act as an agent in such contracts, offering the goods or services of the third-party sellers. Our performance obligation is fulfilled when the consumer uses our app for these transactions and the take-rate is recognized as revenue on that date.
o PicPay Ads: advertising platform designed to enable brands to reach our consumer base through contextualized placements within the app. PicPay receives impression fees paid by merchants affiliated in its network.
Financial
Income
● Consumer Banking: Revenues from installment payments corresponding to the remuneration we earn on credit card payments made in installments by consumers in the digital wallet. Also considers revenues from interest income generated through financial investments (corresponding primarily to the income we earn on funds invested in government bonds and other short-term investments).
● In addition, it also considers revenues generated from interest income that we earn on consumer loans originated on balance and, own credit cards and revenues from other financial investments.
● Small and Medium-Sized Businesses: Revenues generated from fees that we charge over receivables from credit card transactions accepted by registered merchants.
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The
table below summarizes, at a product level, the monetization of our products and services:
Product What we charge Who we charge
Bill Payment Convenience fee over credit card transactions Paying consumer
Bank commission Partner bank
P2P Convenience fee over credit card transactions Paying consumer
Pix Convenience fee over credit card transactions Paying consumer
International Remittance and Exchange Commission fee Partner
BNPL Convenience fee and installment fee Paying consumer
Corporate Benefits Fee over TPV Partner company
Cash Withdrawal Fee per transaction Consumer
PicPay Card Interchange fee Receiving merchant
Interest rates for revolving credit Consumer
Loans from third-parties Commission on loan origination plus success fee on each monthly payment Partner bank
Loans originated through own balance Interest rates according to consumers’ risk level Consumer
Insurance Commission on sale plus on each monthly payment Partner
Investments Brokerage fee on each financial operation Consumer
PicPay Shop Commission fee Partner
P2M MDR over received value Receiving business
PicPay Ads Impression fees Partner
We
recognize interest income pursuant to the amortized cost method based on the applicable term and the effective interest rate charged
on the principal amount. The effective interest rate corresponds to the rate at which estimated future cash receipts are discounted during
the estimated useful life of the financial asset in relation to the net carrying amount of such asset.
Transaction
Expenses
Transaction
expenses correspond to the expenses we incur to provide our products and services, including direct costs. The primary components of
our transaction expenses are:
● Processing Fees: a unitary fee per transaction charged by banks for “cash-in” and “cash-out” transfers (i.e., transfers out of our platform) as well as withdrawals;
● Third-Party Prevention Services: verification and processing expenses we incur in respect of user transactions, such as identity verification and biometry services, among others. These fees are charged on a unitary basis per analysis undertaken;
● PicPay Card Issuance Expenses: credit and prepaid card expenses charged in connection with the issuance of the card and card payments;
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● Chargeback: correspond to amounts returned to consumers that successfully dispute charges in their card statements; and
● Operating Losses: correspond to amounts related to expenses generated by events of fraud and/or operating errors.
Interest
and Other Financial Expenses
Interest
and other financial expenses include:
● Bank fees: including transfer fees we pay in connection with payments to our suppliers;
● Cost of Funding: including interest expenses paid to consumers who deposit funds in Certificates of Deposit (CDB), which are used to lend money to other consumers in the form of loans. Additionally, it also includes expenses with the Brazilian Credit Guarantee Fund (“FGC”);
● Derivative instruments; and
● Others: including lease interest from property rental agreements, tax on financial transactions we pay in connection with CDBs before thirty days of maturity, expenses incurred with foreign exchange rate variations and default interest paid on late payments to our suppliers.
Credit
Loss Allowance Expenses
Include
losses associated with our credits receivable from our customers. We expect our credit losses to fluctuate depending on many factors,
including transaction volume and credit limits, macroeconomic conditions, the impact of regulatory changes, and the credit quality of
loans receivable. Additionally, credit losses also include reversals of provisions and recoveries, where the customer pays us after the
write-off of the receivables.
Technology
Expenses
We
incur technology expenses in connection with the maintenance and development of our app, data analysis and control, server infrastructure,
software licenses, equipment maintenance and provisions.
Marketing
Expenses
We
incur marketing expenses in connection with the acquisition, activation, engagement and retention of our consumers and businesses, as
well as our efforts to increase both brand awareness and consumer experience for our products and services. Our marketing expenses include:
● Advertising: expenses incurred in connection with advertising and TV media, agency fees, search and communication fees;
● Cashback: expenses incurred in connection with promotional programs and sponsorships;
● Digital marketing: including expenses related to sponsorships and marketing campaigns through short message service (SMS);
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● Customer acquisition expenses: expenses incurred in connection with performance media (including Google and Facebook) and member-get-member program (paid referral); and
● Commission Expenses: point of sale commissions, point of sale material and consumer relationship expenses.
Personnel
Expenses
Our
personnel expenses include salaries, benefits, social security charges and other personnel charges incurred in connection with our employees.
Administrative
Expenses
We
incur administrative expenses in connection with our business support operations. Our administrative expenses include:
● Third-Party Services and Financial System Services: includes cleaning services, call center, financial system services, and consulting expenses;
● Rent, condominium fee, and property services: includes rental and condominium payments, as well as utilities, such as water and energy;
● Taxes: correspond to PIS and COFINS expenses;
● Provisions for contingencies; and
● Others: includes travel and accommodation costs, insurance, storage services and corporate events expenses.
Results
of Operations
Year
Ended December 31, 2025 Compared to Year Ended December 31, 2024
The
following table sets forth our consolidated statements of profit or loss information for the years ended December 31, 2025 and 2024:
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Net revenue from transaction activities and other services 1,891.2 1,524.0 24.1 %
Financial income 8,386.6 4,046.1 107.3 %
Total revenue and financial income 10,277.8 5,570.1 84.5 %
Transaction expenses (691.2 ) (493.7 ) 40.0 %
Interest and other financial expenses (3,499.4 ) (1,438.7 ) 143.2 %
Total transaction and interest and other financial expenses (4,190.6 ) (1,932.3 ) 116.9 %
Credit loss allowance expenses (2,528.5 ) (887.0 ) 185.1 %
Technology expenses (502.7 ) (508.6 ) (1.2 )%
Marketing expenses (494.9 ) (333.2 ) 48.5 %
Personnel expenses (1,422.7 ) (1,090.8 ) 30.4 %
Administrative expenses (444.7 ) (234.4 ) 89.7 %
Depreciation and amortization (442.8 ) (292.9 ) 51.2 %
Other expenses (58.9 ) (33.0 ) 78.6 %
Other income 125.4 88.2 42.2 %
Profit before income taxes 317.3 346.0 (8.3 )%
Current income tax and social contribution (655.5 ) (545.6 ) 20.1 %
Deferred income tax and social contribution 1,479.7 451.4 227.8 %
Profit for the year 1,141.6 251.8 353.4 %
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Net
Revenue from Transaction Activities and Other Services by Segment
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Consumer Banking 1,439.6 1,275.8 12.8 %
Small and Medium-Sized Businesses 338.2 164.4 105.7 %
Audiences and Ecosystem Integration 113.4 83.8 35.3 %
Total net revenue from transaction activities and other services 1,891.2 1,524.0 24.1 %
Net
revenue from transaction activities and other services increased R$367.2 million, or 24.1%, to R$1,891.2 million in the year ended December
31, 2025, from R$1,524.0 million in the year ended December 31, 2024. This increase was mainly driven by:
● Small and Medium-Sized Businesses segment: an increase of R$173.8 million, or 105.7%, to R$338.2 million in the year ended December 31, 2025, from R$164.4 million in the year ended December 31, 2024. This increase was mainly due to a R$79.3 million increase in revenues driven by higher acquiring activities over the year, mainly due to the growing traction of our acquiring operations with affiliated small and medium-sized businesses through our brick-and-mortar channels, through the use of POS terminals, smart POS, and TEF solutions; and
● Consumer Banking: an increase of R$163.7 million, or 12.8%, to R$1,439.6 million in the year ended December 31, 2025, from R$1,275.8 million in the year ended December 31, 2024. This increase was mainly as a result of:
o a R$233.2 million, or 72.0%, increase in interchange revenues from our PicPay Card;
o a R$230.1 million, or 196%, increase in revenues from commissions related to the distribution of insurance products in our platform.
These
increases were partially offset by the change in the nature of income from credit card transactions paid through a single installment,
which was previously recorded as net revenue from transaction activities and other services. In 2025, our digital wallet credit card
transactions paid through one single installment were transferred to FIDC PicPay I. Accordingly, income from these transactions began
to be recognized through the appreciation of the subordinated quota, which is classified as financial income.
Financial
Income by Segment
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Consumer Banking 8,913.8 4,386.1 103 %
Small and Medium-Sized Businesses 77.6 26.1 198 %
Audiences and Ecosystem Integration 4.8 1.7 178 %
Institutional 1,172.7 114.9 921 %
Subtotal financial income 10,169.0 4,528.8 125 %
Inter-segment revenues(1) (1,782.4 ) (482.7 ) 269 %
Total Financial Income 8,386.6 4,046.1 107 %
(1) Represents eliminations of inter-segment revenue from funding transactions between our Consumer Banking and Institutional segments for R$1,782.4 million for the year ended December 31, 2025 and R$482.7 million for the year ended December 31, 2024.
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Financial
income (before eliminations of inter-segment revenue from funding transactions between our Consumer Banking, Small and Medium-Sized Businesses
and Institutional segments of R$1,782.4 million and R$482.7 million for the years ended December 31, 2025 and 2024, respectively) in
the year ended December 31, 2025 increased R$5,640.2 million, or 125%, to R$10,169.0 million in the year ended December 31, 2025, from
R$4,528.8 million in the year ended December 31, 2024. This increase was attributable to:
● Consumer Banking segment: an increase of R$4,527.7 million, or 103%, in the year ended December 31, 2025, to R$8,913.8 million from R$4,386.1 million in the year ended December 31, 2024. This increase was mainly due to:
o a R$2,548.6 million, or 202%, increase in revenues from loans to R$3,808.1 million in the year ended December 31, 2025, from R$1,259.5 million in the year ended December 31, 2024;
o a R$683.1 million, or 107% growth of income from credit cards to R$1,324.5 million in the year ended December 31, 2025, from R$641.4 million in the year ended December 31, 2024; and
o the increase in our Consumer Banking segment can also be explained by the change in the nature of income from credit card transactions paid through a single installment, which was previously recorded as net revenue from transaction activities and other services. In 2025, our digital wallet credit card transactions paid through one single installment were transferred to FIDC PicPay I. Accordingly, income from these transactions began to be recognized through the appreciation of the subordinated quota, which is classified as financial income.
● Institutional segment: an increase of R$1,057.8 million, or 921%, to R$1,172.7 million in the year ended December 31, 2025 from R$114.9 million in the year ended December 31, 2024. This increase was mainly driven by increased treasury activities at the corporate level.
Transaction
Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Processing fees (426.7 ) (254.0 ) 68.0 %
Third-party prevention services (83.1 ) (90.6 ) (8.3 )%
PicPay Card issuance expenses (111.9 ) (66.7 ) 67.8 %
Chargeback (33.5 ) (48.6 ) (31.1 )%
Operating losses (36.1 ) (33.8 ) 7.0 %
Total transaction expenses (691.2 ) (493.7 ) 40.0 %
Transaction
expenses increased R$197.6 million, or 40.0%, to R$691.2 million in the year ended December 31, 2025, from R$493.7 million in the year
ended December 31, 2024, primarily due to:
● a R$172.7 million, or 68.0%, increase in expenses related to processing fees to R$426.7 million in the year ended December 31, 2025 from R$254.0 million in the year ended December 31, 2024. Such an increase was mainly due to the higher transaction volume conducted by our consumer base in the ecosystem, as demonstrated by the growth of our total TPV during the year ended December 31, 2025; and
227
● a R$45.2 million, or 67.8%, increase in expenses associated with our PicPay Card issuance to R$111.9 million in the year ended December 31, 2025 from R$66.7 million in the year ended December 31, 2024. The increase of such expense is related to the expanded credit card offer to our consumer base, and partially due to the launch of our PicPay Black Epic card (focused on more affluent consumers with differentiated value proposition).
Interest
and Other Financial Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Bank fees (35.8 ) (27.9 ) 28.3 %
Cost of funding (3,098.1 ) (1,398.5 ) 121.5 %
Others (65.5 ) (12.2 ) 435.5 %
Derivative instruments (300.0 ) — n.m.
Total interest and other financial expenses (3,499.4 ) (1,438.7 ) 143.2 %
n.m.
= not meaningful.
Interest
and other financial expenses increased R$2,060.7 million, or 143.2%, to R$3,499.4 million in the year ended December 31, 2025 from R$1,438.7
million in the year ended December 31, 2024. This increase was mainly due to a R$1,699.6 million, or 121.5%, increase in our cost of
funding to R$3,098.1 million in the year ended December 31, 2025 from R$1,398.5 million in the year ended December 31, 2024. This increase
was mainly attributed to increased funding activities to support the growth of our operations, especially our credit operations, which
increased our cost of funding.
In
addition, this increase is also due to an increase of R$300.0 million in derivative instruments from null in the year ended December
31, 2024, to R$300.0 in the year ended December 31, 2025, mainly due to expenses regarding fair value of swap contracts and mark-to-market
contracts, reflecting the increase in Brazilian interest rates and market volatility during the year. We did not have derivative financial
instruments for accounting and economic hedge purposes in the year ended December 31, 2024.
Credit
Loss Allowance Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Credit loss allowance expenses (2,528.5 ) (887.0 ) 185 %
Credit
loss allowance expenses increased R$1,641.5 million, or 185%, to R$2,528.5 million in the year ended December 31, 2025, from R$887.0
million in the year ended December 31, 2024. The higher credit loss allowance expenses are mainly explained by the growth and aging of
the credit portfolio, as some credits migrated into stages 2 and 3, which require higher provisions.
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For
more information related to our lending transactions, see “—Overview—Financial Services.” The total expected
credit loss (“ECL”) allowance for consumer loans recorded in our statements of financial position were 13% of the total receivable
balance of our consumer loans as of December 31, 2025. ECL refers to the calculation of all financial assets not held at fair value through
profit or loss and is presented in our consolidated statements of financial position as a deduction from the gross carrying amount and
recognized as an expense in our statement of profit or loss. ECLs account for forecast elements, such as undrawn limits and macroeconomic
conditions that might affect our group’s receivables. For more information regarding ECL calculation and recognition, see note
8.3 to our audited consolidated financial statements included elsewhere in this annual report.
Technology
Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Software expenses (438.1 ) (376.8 ) 16.3 %
IT services (64.6 ) (131.8 ) (51.0 )%
Total technology expenses (502.7 ) (508.6 ) (1.2 )%
Technology
expenses decreased R$5.9 million, or 1.2%, to R$502.7 million in the year ended December 31, 2025 from R$508.6 million in the year ended
December 31, 2024. This decrease was mainly due to a decrease of R$67.2 million, or 51.0%, in information technology services to R$64.6
million in the year ended December 31, 2025, from R$131.8 million in the year ended December 31, 2024. Such decrease was mainly due to
lower expenses related to the maintenance of systems on our app, as a result of the maturity of our data collection and app development.
This
decrease was partially offset by an increase of R$61.3 million, or 16.3%, in software expenses to R$438.1 million in the year ended December
31, 2025, from R$376.8 million in the year ended December 31, 2024. Such increase was mainly attributed to an increase in expenses related
to server infrastructure due to infrastructure services contracted under a cloud model and the management of software environments, which
includes processing services provided by cloud providers, management of operating systems and virtual servers, monitoring, backup, and
security measures applied to the software environment, as well as dynamic allocation of our computing capacity based on application demand.
Marketing
Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Advertising (195.2 ) (127.6 ) 53.0 %
Cashback (70.8 ) (39.3 ) 80.1 %
Digital marketing (61.8 ) (38.1 ) 62.0 %
Customer acquisition expenses (164.0 ) (122.6 ) 33.7 %
Commission expenses (3.1 ) (5.5 ) (43.3 )%
Total marketing expenses (494.9 ) (333.2 ) 48.5 %
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Marketing
expenses increased R$161.7 million, or 48.5%, to R$494.9 million in the year ended December 31, 2025, from R$333.2 million in the year
ended December 31, 2024. This increase was primarily due to:
● an increase of R$67.6 million, or 53.0%, in advertising expenses to R$195.2 million in the year ended December 31, 2025 from R$127.6 million in the year ended December 31, 2024 mainly due to higher expenses related to marketing campaigns and communication; and
● an increase of R$31.5 million, or 80.1%, in cashback to R$70.8 million in the year ended December 31, 2025, from R$39.3 million in the year ended December 31, 2024, primarily to leverage cross-selling strategy across our product portfolio, such as the use of the PicPay Card for in-app purchases, as well as to expand our customer base.
Personnel
Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Salaries (491.5 ) (472.8 ) 4.0 %
Benefits (556.9 ) (359.4 ) 54.9 %
Social security charges (372.9 ) (256.2 ) 45.6 %
Others (1.4 ) (2.4 ) (41.6 )%
Total personnel expenses (1,422.7 ) (1,090.8 ) 30.4 %
Personnel
expenses increased by R$331.9 million, or 30.4%, reaching R$1,422.7 million in the year ended December 31, 2025, compared to
R$1,090.8 million in the year ended December 31, 2024. This increase was mainly driven by an increase of R$197.4 million, or 54.9%,
in benefits to R$556.9 million in the year ended December 31, 2025, from R$359.4 million in the year ended December 31, 2024, mainly
due to recognized expenses related to our long-term incentive plan in the year ended December 31, 2025 which amounted to R$210.1
million.
Administrative
Expenses
For the year ended December 31,
2025 2024 Variation
(in millions of R$) (%)
Third-party services and financial system services (243.5 ) (112.6 ) 116.2 %
Rent, condominium fee, and property services (31.0 ) (35.3 ) (12.2 )%
Taxes (3.6 ) (3.5 ) 0.6 %
Provisions for contingencies (110.9 ) (16.9 ) 557.4 %
Others (55.7 ) (66.1 ) (15.7 )%
Total administrative expenses (444.7 ) (234.4 ) 89.7 %
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Administrative
expenses increased R$210.3 million, or 89.7%, to R$444.7 million in the year ended December 31, 2025 from R$234.4 million in the year
ended December 31, 2024. This increase was mainly due to:
● an increase of R$130.9 million, or 116.2%, in third-party services and financial system services, to R$243.5 million in the year ended December 31, 2025 from R$112.6 million in the year ended December 31, 2024, mainly due to higher expenses related to our call center and consultancy and advisory services; and
● an increase of R$94.0 million, or 557.4%, in provisions for contingencies, to R$110.9 million in the year ended December 31, 2025 from R$16.9 million in the year ended December 31, 2024. This increase was mainly due to expenses in the amount of R$34.1 million related to labor taxes payable on bonuses awarded for employee performance in 2023 and 2024 for which our assessment of the expected outcome has been updated and expenses in the amount of R$30.2 million related to Contribution for Intervention in the Economic Domain (“CIDE”) dispute for which our assessment of the expected outcome has been updated.
Depreciation
and Amortization
Our
depreciation and amortization increased R$149.9 million, or 51.2%, to R$442.8 million in the year ended December 31, 2025 from R$292.9
million in the year ended December 31, 2024. This increase was mainly due to increases in amortization expenses related to internally
developed software and software licenses.
Income
Taxes and Social Contribution
Expenses
related to income taxes and social contribution totaled a benefit of R$824.3 million in the year ended December 31, 2025, compared to
an expense of R$94.2 million in the year ended December 31, 2024 representing a change of R$918.5 million, or 975%. This change was mainly
driven by deferred tax assets historically not recognized in the amount of R$890.8 million based on expectations that PicPay
Payment Institution will generate sufficient taxable profit in the future against which the asset can be realized.
Profit
for the Year
As
a result of the aforementioned, our profit for the year ended December 31, 2025 totaled R$1,141.6 million, as compared to a profit of
R$251.8 million in the year ended December 31, 2024.
Year
Ended December 31, 2024 Compared to Year Ended December 31, 2023
The
following table sets forth our consolidated statement of profit or loss information for the years ended December 31, 2024 and 2023:
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Net revenue from transaction activities and other services 1,524.0 1,059.9 43.8 %
Financial income 4,046.1 2,398.7 68.7 %
Total revenue and financial income 5,570.1 3,458.6 61.0 %
Transaction expenses (493.7 ) (438.5 ) 12.6 %
Interest and other financial expenses (1,438.7 ) (1,212.5 ) 18.7 %
Total transaction and interest and other financial expenses (1,932.3 ) (1,651.0 ) 17.0 %
Credit loss allowance expenses (887.0 ) (14.3 ) 6,107.3 %
Technology expenses (508.6 ) (312.1 ) 63.0 %
Marketing expenses (333.2 ) (312.6 ) 6.6 %
Personnel expenses (1,090.8 ) (879.4 ) 24.0 %
Administrative expenses (234.4 ) (136.7 ) 71.5 %
Depreciation and amortization (292.9 ) (169.8 ) 72.5 %
Other expenses (33.0 ) (4.6 ) 611.8 %
Other income 88.2 23.5 275.6 %
Profit before income taxes 346.0 1.7 20,654.2 %
Current income tax and social contribution (545.6 ) (50.8 ) 973.7 %
Deferred income tax and social contribution 451.4 86.5 421.9 %
Profit for the year 251.8 37.4 574.0 %
n.m.
= not meaningful.
231
Net
Revenue from Transaction Activities and Other Services by segment
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Consumer Banking 1,275.8 816.0 56.4 %
Small and Medium-Sized Businesses 164.4 92.0 78.7 %
Audiences and Ecosystem Integration 83.8 76.8 9.1 %
Subtotal net revenue from transaction activities and other services 1,524.0 984.7 54.8 %
Net
revenue from transaction activities and other services increased R$539.3 million, or 54.8%, to R$1,524.0 million in the year ended December
31, 2024 from R$984.7 million in the year ended December 31, 2023. This increase was mainly driven by:
● Consumer Banking segment: an increase of R$459.9 million, or 56.4%, to R$1,275.8 million in the year ended December 31, 2024, from R$816.0 million in the year ended December 31, 2023. Such increase was mainly due to:
o an increase of R$323.7 million is attributed to interchange received from transactions conducted by our consumers with our PicPay Card. Such increase can be mainly explained by the beginning of our activities as a card issuer as of January 2024; and
o an increase of R$95.8 million, or 447.6%, associated with the distribution of insurance products in our platform, to R$117.2 million in the year ended December 31, 2024, from R$21.4 million in the year ended December 31, 2023, mainly as a result of the increase of 251.8% in our active insurance products, to 5.1 million as of December 31, 2024, from 1.5 million as of December 31, 2023.
Financial
Income by segment
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Consumer and Banking 4,386.1 2,198.0 99.5 %
Small and Medium-Sized Businesses 26.1 41.5 (37.2 )%
Audiences and Ecosystem Integration 1.7 10.5 (83.5 )%
Institutional 114.9 156.7 (26.7 )%
Subtotal financial income 4,528.8 2,406.8 88.2 %
n.m.
= not meaningful.
Financial
income in the year ended December 31, 2024 increased R$2,122.0 million, or 88.2%, to R$4,528.8 million in the year ended December 31,
2024 from R$2,406.8 million in the year ended December 31, 2023. This increase was attributable to:
● Consumer Banking segment:
o an increase in financial income related to the beginning of the origination of secured and unsecured loans in October 2023, to R$1,239.3 million in the year ended December 31, 2024 compared to R$27.8 million in the year ended December 31, 2023; and
o additionally, the PicPay credit card portfolio was transferred/acquired from Banco Original in January 2024, generating an additional R$687.8 million in financial interest income in the year ended December 31, 2024.
232
Transaction
Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Processing fees (254.0 ) (246.2 ) 3.2 %
Third-party prevention services (90.6 ) (110.5 ) (18.0 )%
PicPay Card issuance expenses (66.7 ) (39.2 ) 69.9 %
Chargeback (48.6 ) (37.4 ) 29.9 %
Operating losses (33.8 ) (5.2 ) 545.5 %
Total transaction expenses (493.7 ) (438.5 ) 12.6 %
Transaction
expenses increased R$55.1 million, or 12.6%, to R$493.7 million in the year ended December 31, 2024 from R$438.5 million in the year
ended December 31, 2023 primarily due to:
● an increase of R$28.5 million, or 545.5%, in operating losses to R$33.8 million in 2024 from R$5.2 million in 2023, mainly due to (i) higher expenses from fraud and payment transaction cancellations related to ATM withdrawals, which increased R$20.9 million, or 649.0%, totaling R$24.1 million in the year ended December 31, 2024, compared to R$3.2 million in the year ended December 31, 2023; and (ii) higher expenses related to operational failures during payment processing, which increased R$4.5 million, or 345.9%, totaling R$5.8 million in the year ended December 31, 2024, compared to R$1.3 million in the year ended December 31, 2023; and
● an increase of R$27.4 million, or 69.9%, in PicPay Card issuance expenses from R$39.2 million in the year ended December 31, 2023 to R$66.7 million in the year ended December 31, 2024. Such increase reflects the higher volume of cards issued throughout 2024, primarily due to: (i) the migration of the credit card operations from Banco Original to PicPay in January 2024, (ii) the accelerated issuance of credit cards within the small limits credit policy for our consumer base, as well as other important initiatives, such as the increased production of secured cards linked to new product features such as the extra limit, which allows consumers to multiply their credit card limits based on the balance invested in their credit card piggy banks.
Interest
and Other Financial Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Bank fees (27.9 ) (7.8 ) 259.3 %
Cost of funding (1,398.5 ) (1,144.1 ) 22.2 %
Others (12.2 ) (60.6 ) (79.8 )%
Total interest and other financial expenses (1,438.7 ) (1,212.5 ) 18.7 %
Interest
and other financial expenses increased R$226.2 million, or 18.7%, to R$1,438.7 million in the year ended December 31, 2024 from R$1,212.5
million in the year ended December 31, 2023. Such increase was mainly due to a R$254.4 million, or 22.2%, increase in our cost of funding
from R$1,144.1 million in the year ended December 31, 2023 to R$1,398.5 million in the year ended December 31, 2024.
233
Such
increase to our cost of funding was mainly due to higher expenses associated with the remuneration of CDB products contracted by our
consumers, which increased R$272.7 million, or 24.3%, from R$1,123.9 million in 2023 to R$1,396.5 million in 2024, driven by the increase
of 53.3% in our consumers’ deposits, from R$13.0 billion in 2023 to R$20.0 billion in 2024. Moreover, during 2024, we enhanced
both our CDBs with daily liquidity through our consumers’ digital accounts and piggy banks, as well as fixed-term CDBs offered
through our investment platform, PicPay Invest. Such growth became even more significant starting in the second half of 2024, when we
began offering CDBs to consumers outside of our platform through third-party channels.
Credit
Loss Allowance Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Credit loss allowance expenses (887.0 ) (14.3 ) 6,107.3 %
Credit
loss allowance expenses increased R$872.7 million, or 6,107.3%, to R$887.0 million in the year ended December 31, 2024 from R$14.3 million
in the year ended December 31, 2023. This result mainly reflects provisions for on-balance lending transactions beginning in October
2023. For more information related to our lending transactions, see “—Consumer Ecosystem Operating and Financial Highlights—Financial
Services.” The total expected credit loss (“ECL”) allowance for consumer loans recorded in our statements of financial
position were 8.2% of our total receivable balance of consumer loans as of December 31, 2024. ECL refers to the calculation for all financial
assets not held at fair value through profit or loss and is presented in our consolidated statements of financial position as a deduction
from the gross carrying amount and recognized as an expense in our statement of profit or loss. ECLs account for forecast elements, such
as undrawn limits and macroeconomic conditions that might affect our Group’s receivables. For more information regarding ECL calculation
and recognition, see note 8.3 to our audited consolidated financial statements included elsewhere in this annual report.
Technology
Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Software expenses (376.8 ) (247.8 ) 52.0 %
IT services (131.8 ) (64.3 ) 105.1 %
Total technology expenses (508.6 ) (312.1 ) 63.0 %
Technology
expenses increased R$196.5 million, or 63.0%, to R$508.6 million in the year ended December 31, 2024 from R$312.1 million in the year
ended December 31, 2023. This increase was mainly due to:
● an increase of R$129.0 million, or 52.0%, in software expenses to R$376.8 million in 2024 from R$247.8 million in 2023. Such increase was primarily due to higher expenses associated with server infrastructure, which increased by R$87.2 million, or 45.2%, from R$192.7 million in 2023 to R$279.8 million in 2024; and
● an increase of R$67.5 million, or 105.1%, in expenses related to information technology services to R$131.8 million in 2024 from R$64.3 million in 2023. Such increase can be mainly explained by higher expenses with the maintenance and development of our app, which increased by R$40.5 million, or 87.8%, from R$46 million in 2023 to R$86.6 million in 2024, as well as a R$19.7 million increase in expenses related to data analysis and control, mainly due to the enhancement of our credit models with the purpose to offer credit products to a larger consumer base through the analysis of multiple variables to anticipate and manage our consumers’ credit risk, such as their monthly income and their transactional behavior within our platform.
234
Marketing
Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Advertising (127.6 ) (103.8 ) 23.0 %
Cashback (39.3 ) (63.4 ) (38.0 )%
Digital marketing (38.1 ) (28.5 ) 34.0 %
Customer acquisition expenses (122.6 ) (111.9 ) 9.6 %
Commission expenses (5.5 ) (5.1 ) 8.4 %
Total marketing expenses (333.2 ) (312.6 ) 6.6 %
Marketing
expenses increased R$20.6 million, or 6.6%, to R$333.2 million for the year ended December 31, 2024, from R$312.6 million for the year
ended December 31, 2023. This increase was primarily due to:
● an increase of R$23.9 million, or 23.0%, in advertising expenses to R$127.6 million in the year ended December 31, 2024 from R$103.8 million in the year ended December 31, 2023, mainly due to higher expenses related to marketing campaigns and communication, which increased R$43.8 million, or 42.4%, to R$147.1 million in 2024 from R$103.3 million in 2023;
● an increase of R$10.8 million, or 9.6%, in customer acquisition expenses to R$122.6 million in the year ended December 31, 2024 from R$111.9 million in the year ended December 31, 2023. This increase was mainly due to higher performance media expenses, which increased R$16.6 million, or 14.4%, to R$131.0 million in 2024 from R$111.6 million in 2023. Such increase was partially offset by a R$5.8 million decrease in paid referrals (“member-get-member”) expenses due to lower volume of new consumers acquired through referrals; and
● an increase of R$9.7 million, or 34.0%, in expenses associated with digital marketing to R$38.1 million in 2024 from R$28.5 million in 2023. Such increase was mainly due to higher expenses with SMS (Short Message Service) marketing campaigns, which increased by R$7.1 million, or 26.6%, to R$33.7 million in 2024 from R$26.6 million in 2023. Such growth is aligned with the strengthening of our strategies to increase consumer engagement, together with the expansion of products, services, and promotions offered on our platform.
Such
increases were partially offset by a decrease of R$24.1 million in cashback to R$39.3 million in 2024 from R$63.4 million in 2023. Such
decrease is part of our strategy of only offering cashback to encourage our existing consumer base to use higher margin and newly launched
products rather than offering cashback to attract new consumers to our base.
Personnel
Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Salaries (472.8 ) (375.0 ) 26.1 %
Benefits (359.4 ) (295.7 ) 21.6 %
Social security charges (256.2 ) (214.8 ) 19.3 %
Others (2.4 ) 6.2 n.m.
Total personnel expenses (1,090.8 ) (879.4 ) 24.0 %
n.m.
= not meaningful.
235
Personnel
expenses increased R$211.5 million, or 24.0%, to R$1,090.8 million in the year ended December 31, 2024 from R$879.4 million in the year
ended December 31, 2023. The increase was primarily due to higher expenses related to (i) salaries, which increased R$97.8 million, or
26.1%, to R$472.8 million in the year ended December 31, 2024 from R$375.0 million in the year ended December 31, 2023; and (ii) benefits,
which increased by R$63.8 million, or 21.6%, to R$359.4 million in the year ended December 31, 2024 from R$295.7 million in the year
ended December 31, 2023. Additionally, such increase was mainly driven by higher provisions for bonuses related to employee performance
and distribution of results.
Moreover,
during 2023, we focused on accelerating and developing new products and services to increase our retail offerings following the migration
of retail accounts from Banco Original to PicPay, and, as a result, we had lower personnel expenses due to significant expenditures related
to hours worked by our technology developers and engineers that were recorded as capital expenditures and recognized as part of our intangible
assets.
Administrative
Expenses
For the year ended December 31,
2024 2023 Variation
(in millions of R$) (%)
Third-party services and financial system services (112.6 ) (78.4 ) 43.6 %
Rent, condominium fee, and property services (35.3 ) (24.1 ) 46.2 %
Taxes (3.5 ) (1.8 ) 95.8 %
Expenses with provisions (16.9 ) (13.5 ) 24.6 %
Others (66.1 ) (18.8 ) 252.7 %
Total administrative expenses (234.4 ) (136.7 ) 71.5 %
Administrative
expenses increased R$97.8 million, or 71.5%, to R$234.4 million in the year ended December 31, 2024 from R$136.7 million in the year
ended December 31, 2023. This increase was mainly due to:
● a R$34.2 million, or 43.6%, increase in third-party services, which includes accounting and legal consultancy, call center and financial system services, to R$112.6 million in 2024 from R$78.4 million in 2023;
● a R$47.4 million, or 252.7%, increase in others, which includes expenses related to travel and accommodation costs and provisions, to R$66.1 million in 2024 from R$18.8 million in 2023; and
● a R$11.1 million, or 46.2%, increase in rent, condominium fee and property services to R$35.3 million in 2024 from R$24.1 million in 2023.
Depreciation
and Amortization
Our
depreciation and amortization increased R$123.1 million, or 72.5%, to R$292.9 million in the year ended December 31, 2024 from R$169.8
million in the year ended December 31, 2023. This increase was mainly due to increase in amortization expenses related to internally
developed software and software licenses.
Other
Expenses
Other
expenses totaled R$33.0 million in the year ended December 31, 2024, compared to R$4.6 million in the year ended December 31, 2023, an
increase of R$28.4 million, mainly as a result of write-off of fixed assets in the year ended December 31, 2024.
236
Other
Income
Other
income totaled R$88.2 million in the year ended December 31, 2024, compared to R$23.5 million in the year ended December 31, 2023, an
increase of R$64.7 million, mainly as a result of financial income in connection with inflation indexation of tax assets related to withholding
income taxes on income from financial investments in the year ended December 31, 2024.
Income
Taxes and Social Contribution
Income
taxes and social contribution was an expense of R$94.2 million in the year ended December 31, 2024, a variation of R$129.9 million, from
a benefit of R$35.7 million in the year ended December 31, 2023. This variation was primarily due to higher profit before income taxes,
which increased to R$346.0 million in the year ended December 31, 2024 from R$1.7 million in the year ended December 31, 2023.
Profit
for the Year
As
a result of the foregoing, profit for the year ended December 31, 2024 totaled R$251.8 million, as compared to a profit for the year
of R$37.4 million in the year ended December 31, 2023.
Other
Financial Data
Adjusted
Gross Profit
We
calculate Adjusted Gross Profit as our Profit before income taxes, adjusted to exclude the following items of income and expense which
are not variable expenses that fluctuate with payment and lending volume levels and with the sale of our products and services: (i) technology
expenses; (ii) marketing expenses; (iii) personnel expenses; (iv) administrative expenses; (v) depreciation and amortization; (vi) other
expenses; and (vii) other income. However, Adjusted Gross Profit is not a measure under IFRS Accounting Standards and should not be considered
as a substitute for profit (loss) for the year or any other measure of operating performance determined in accordance with IFRS Accounting
Standards. For more information, see “Presentation of Financial and Other Information—Non-IFRS Accounting Standards Measures.”
The
following table sets forth a reconciliation of Adjusted Gross Profit to our profit before income taxes for the years shown:
For the year ended December 31,
2025 (1) 2025 2024 2023
(in US$ thousands) (in R$ thousands)
Profit before income taxes 57,673 317,339 345,972 1,667
Adjustments:
Technology expenses 91,358 502,690 508,600 312,098
Marketing expenses 89,940 494,885 333,180 312,560
Personnel expenses 258,565 1,422,727 1,090,833 879,362
Administrative expenses 80,817 444,686 234,423 136,659
Depreciation and amortization 80,467 442,761 292,911 169,823
Other expenses 10,713 58,946 33,013 4,638
Other income (22,786 ) (125,376 ) (88,153 ) (23,468 )
Adjusted Gross Profit 646,747 3,558,658 2,750,779 1,793,339
(1) For convenience purposes only, amounts in reais have been translated into U.S. dollars at the selling rate as of December 31, 2025 of R$5.5024 per US$1.00, as reported by the Brazilian Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate.
237
Adjusted
Gross Profit Composition
The
expenses in our statement of profit or loss are presented by nature rather than function and, therefore, we are not permitted to present
an IFRS Accounting Standards measure of gross profit in our audited consolidated financial statements. With the purpose to help investors
better understand how this non-IFRS Accounting Standards measure relates to our audited consolidated financial statements, we present
below a table showing the composition of the Adjusted Gross Profit based on the captions from our audited consolidated financial statements.
Our
Adjusted Gross Profit calculation is derived from our net revenue from transaction activities and other services, and financial income;
and excludes transaction expenses, interest and other financial expenses, and credit loss allowance expenses.
The
following table presents the composition of our Adjusted Gross Profit for the years shown:
For the year ended December 31,
2025 (1) 2025 2024 2023
(in US$ thousands) (in R$ thousands)
Net revenue from transaction activities and other services 343,705 1,891,204 1,524,048 1,059,936
Financial income 1,524,175 8,386,620 4,046,096 2,398,710
Total revenue and financial income 1,867,880 10,277,824 5,570,144 3,458,646
Transaction expenses (125,623 ) (691,227 ) (493,676 ) (438,539 )
Interest and other financial expenses (635,976 ) (3,499,396 ) (1,438,664 ) (1,212,478 )
Credit loss allowance expenses (459,535 ) (2,528,543 ) (887,025 ) (14,290 )
Adjusted Gross Profit 646,747 3,558,658 2,750,779 1,793,339
(1) For convenience purposes only, amounts in reais have been translated into U.S. dollars at the selling rate as of December 31, 2025 of R$5.5024 per US$1.00, as reported by the Brazilian Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate.
Net
Interest Income (NII) and Net Interest Margin After Losses (NIMAL)
We
calculate Net Interest Income (NII) as the financial income less interest and other financial expenses. We calculate Net Interest
Margin After Losses (NIMAL) as Net Interest Income (NII) less the credit loss allowance expenses. We consider Net Interest Income
and Net Interest Margin After Losses to be performance measures. However, Net Interest Income and Net Interest Margin After Losses are
not measures under IFRS Accounting Standards and should not be considered as substitutes for financial income for the year or any other
measure of operating performance determined in accordance with IFRS Accounting Standards. For more information, see “Presentation
of Financial and Other Information—Non-IFRS Accounting Standards Measures.”
238
The
following table sets forth a reconciliation of Net Interest Income and Net Interest Margin After Losses to profit before income taxes
for the years shown:
For the year ended December 31,
2025 (1) 2025 2024 2023
(in US$ thousands) (in R$ thousands)
Profit before income taxes 57,673 317,339 345,972 1,667
Adjustments:
Net revenue from transaction activities and other services 343,705 1,891,204 1,524,048 1,059,936
Transaction expenses 125,623 (691,227 ) (493,676 ) (438,539 )
Technology expenses 91,358 (502,690 ) (508,600 ) (312,098 )
Marketing expenses 89,940 (494,885 ) (333,180 ) (312,560 )
Personnel expenses 258,565 (1,422,727 ) (1,090,833 ) (879,362 )
Administrative expenses 80,817 (444,686 ) (234,423 ) (136,659 )
Depreciation and amortization 80,467 (442,761 ) (292,911 ) (169,823 )
Other expenses (10,713 ) (58,946 ) (33,013 ) (4,638 )
Other income 22,786 125,376 88,153 23,468
Financial income 1,524,175 8,386,620 4,046,096 2,398,710
Interest and other financial expenses (635,976 ) (3,499,396 ) (1,438,664 ) (1,212,478 )
Net Interest Margin after Losses (NIMAL) 428,664 2,358,681 1,720,407 1,171,942
Credit loss allowance expenses 459,535 2,528,543 887,025 14,290
Net Interest Income (NII) 888,199 4,887,224 2,607,432 1,186,232
(1) For convenience purposes only, amounts in reais have been translated into U.S. dollars at the selling rate as of December 31, 2025 of R$5.5024 per US$1.00, as reported by the Brazilian Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate.
Adjusted
Profit Before Income Taxes
We
calculate Adjusted Profit Before Income Taxes as our profit before income taxes, adjusted to include or exclude certain non-recurring
and/or non-cash items of income and expense, such as: (i) initial recognition of share-based long-term incentive plan expenses; and (ii)
expenses related to one-time provision for contingencies. Our management believes this measure, along with comparable IFRS Accounting
Standards measures, provides a meaningful view of our underlying operating performance. However, Adjusted Profit Before Taxes is not
a measure under IFRS Accounting Standards and should not be considered as a substitute for profit before taxes for the year or any other
measure of operating performance determined in accordance with IFRS Accounting Standards. For more information, see “Presentation
of Financial and Other Information—Non-IFRS Accounting Standards Measures.”
The
following table sets forth a reconciliation of Profit before income taxes to Adjusted Profit before income taxes for the years shown:
For the year ended December 31,
2025(1) 2025 2024 2023
(in US$ thousands) (in R$ thousands)
Profit before income taxes 57,673 317,339 345,972 1,667
Expenses related to share-based long-term incentive plan(2) 38,179 210,075 — —
Expenses related to provision for contingencies(3) 11,692 64,333 — —
Adjusted Profit before Income Taxes 107,543 591,747 345,972 1,667
(1) For convenience purposes only, amounts in reais have been translated into U.S. dollars at the selling rate as of December 31, 2025 of R$5.5024 per US$1.00, as reported by the Brazilian Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate.
(2) Refers to the recognition of non-cash expenses in the amount of R$205.6 million related to one-time initial expenses of the share-based long-term incentive plan as a result of this offering. This initial recognition of LTIP expenses results from the initial public offering, and is not expected to recur in the future.
(3) Refers to the recognition of expenses related to the establishment of provisions for the following contingencies: (i) expenses in the amount of R$34.1 million related to unpaid labor taxes on bonuses awarded for employee performance in 2023 and 2024 for which our assessment of the expected outcome has been updated; and (ii) expenses in the amount of R$30.2 million related to Contribution for Intervention in the Economic Domain (“CIDE”), a dispute for which our assessment of the expected outcome has been updated. CIDE is a Brazilian federal levy designed to fund government initiatives that regulate, promote, or develop specific sectors of the economy. We do not expect provisions for these contingencies to recur in the future, as the practices that gave rise to the contingencies have been discontinued.
239
Adjusted
Profit
We
calculate Adjusted Profit as our profit for the year, adjusted to include or exclude certain non-recurring and/or non-cash items of income
and expense, such as: (i) initial recognition of share-based long-term incentive plan expenses; (ii) expenses related to one-time provision
for contingencies; and (iii) initial recognition of deferred tax assets. However, Adjusted Profit is not a measure under IFRS Accounting
Standards and should not be considered as a substitute for profit (loss) for the year or any other measure of operating performance determined
in accordance with IFRS Accounting Standards. For more information, see “Presentation of Financial and Other Information—Non-IFRS
Accounting Standards Measures.”
The
following table sets forth a reconciliation of Profit for the year to Adjusted Profit for the years shown:
For the year ended December 31,
2025(1) 2025 2024 2023
(in US$ thousands) (in R$ thousands)
Profit for the year 207,474 1,141,606 251,788 37,355
Adjustments:
Expenses related to share-based long-term incentive plan(2) 38,179 210,075 — —
Expenses related to provision for contingencies(3) 11,692 64,333 — —
Tax effects and recognition of deferred tax assets (4) (166,109 ) (913,996 ) — —
Adjusted Profit 91,236 502,018 251,788 37,355
(1) For convenience purposes only, amounts in reais have been translated into U.S. dollars at the selling rate as of December 31, 2025 of R$5.5024 per US$1.00, as reported by the Brazilian Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate.
(2) Refers to the recognition of after-tax non-cash expenses in the amount of R$210.1 million related to one-time initial expenses of the share-based long-term incentive plan as a result of this offering. This initial recognition of LTIP expenses results from the initial public offering, and is not expected to recur in the future.
(3) Refers to the recognition of expenses related to the establishment of provisions for the following contingencies: (i) expenses in the after-tax related to unpaid labor taxes on bonuses awarded for employee performance in 2023 and 2024 for which our assessment of the expected outcome has been updated; and (ii) expenses related to Contribution for Intervention in the Economic Domain (“CIDE”), a dispute for which our assessment of the expected outcome has been updated. CIDE is a Brazilian federal levy designed to fund government initiatives that regulate, promote, or develop specific sectors of the economy. We do not expect provisions for these contingencies to recur in the future, as the practices that gave rise to the contingencies have been discontinued.
(4) Refers to the (i) recognition of previously unrecognized deferred tax assets historically not recognized as well as the temporary differences of the current period in the amount of R$889.9 million for PicPay Payment Institution based on expectations that it will generate sufficient taxable profit in the future against which the asset can be realized; (ii) tax effects on the share-based long-term incentive plan at PicPay Bank in the amount of R$14 million; and (iii) tax effects on contingencies in the amount of R$10 million.
Operating
Data
In
connection with our management’s analysis of our ongoing business operations, including comparing our performance with that of
our competitors, our management uses certain indicators to measure our performance, including our: (1) total accounts; (2) deposits;
(3) total payment volume (TPV); (4) total cash-in; (5) Wallet and Banking TPV; (6) PicPay Card TPV; (7) Own and Third-Party Loan Originations;
(8) Total Credit Portfolio; (9) SMB TPV; (10) number of quarterly active clients; (11) quarterly average revenue per quarterly active
client (ARPAC); and (12) quarterly average cost to serve per quarterly active client (CTS).
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The
following table sets forth our key business metrics as of and for the years indicated. We review these key business metrics to evaluate
our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
In addition, we present these additional business metrics to assist investors in better understanding our business and how it operates.
For
more information about our key performance indicators, see “Presentation of Financial and Other Information—Key Performance
Indicators.”
As of and for the year ended December 31,
2025 2024 2023
Consolidated
Total accounts (in millions) 67.0 60.2 52.8
Deposits (R$ million) (1) 28,696 19,983 13,038
Total payment volume (TPV) (R$ million) (2) 549,952 421,037 271,164
Total cash-in (R$ million) 483,469 374,212 238,258
Consumer Banking
Wallet and Banking TPV (R$ million) 496,956 382,509 241,460
PicPay Card TPV (R$ million) 58,662 39,227 27,104
Own and Third-Party Loan Originations (R$ million) 11,393 6,836 2,381
Total Credit Portfolio (R$ million) (3) 24,068 10,571 575
Small & Medium-Sized Businesses
SMB TPV (R$ million) 39,618 27,095 23,484
(1) Comprised of the sum of “user balance – payment accounts” and “user balance – CDB” from third-party funds in our consolidated financial statements.
(2) The sum of Wallet and Banking TPV, PicPay Card TPV, PicPay Shop GMV, and SMB TPV is greater than Total TPV due to transactions that are counted in more than one category of TPV. To calculate Total TPV, the sum of Wallet and Banking TPV, PicPay Card TPV, PicPay Shop GMV, and SMB TPV is adjusted to eliminate multiple entries.
(3) Total credit portfolio refers to the consumer loans balance from our consolidated financial statements, which includes the balances of both the credit card and loan portfolios.
As of and for the year ended December 31,
2025 2024 2023
Consolidated
Number of quarterly active clients (in millions) 42.7 39.0 34.6
Quarterly average revenue per quarterly active client (R$) (1) 62.9 37.9 26.0
Quarterly average cost to serve per quarterly active client (R$) (2) 19.1 17.3 14.8
(1) Quarterly average revenue per quarterly active client for the years ended December 31, 2025, 2024 and 2023 is, in each case, the total revenue and financial income in the year divided by four and then divided by the average number of quarterly active clients during the year (for the year ended December 31, 2025, the average number of quarterly active clients is defined as the average between the fourth quarter of 2025 and the fourth quarter of 2024; for the year ended December 31, 2024, the average number of quarterly active clients is defined as the average between the fourth quarter of 2024 and the fourth quarter of 2023; for the year ended December 31, 2023, the average number of quarterly active clients is defined as the average between the fourth quarter of 2023 and the fourth quarter of 2022).
(2) Quarterly average cost to serve per quarterly active client for the year ended December 31, 2025, 2024 and 2023 is, in each case, the total cost to serve in the year divided by four and then divided by the average number of quarterly active clients during the year. For 2025, the average quarterly active clients is defined as the average between the fourth quarter of 2025 and the fourth quarter of 2024. For 2024, the average quarterly active clients is defined as the average between the fourth quarter of 2024 and the fourth quarter of 2023. For 2023, the average quarterly active clients is defined as the average between the fourth quarter of 2023 and the fourth quarter of 2022.
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B. Liquidity
and Capital Resources
Sources
and Uses of Funding
Our
principal sources of liquidity are (1) user balance – CDB and (2) user balance – payment accounts. We primarily use our cash
flow from operations to fund (1) our working capital expenses and (2) our capital expenditures.
Our
cash and cash equivalents totaled R$3.9 billion and R$7.5 billion as of December 31, 2025 and 2024, respectively. We believe that our
current available cash and cash equivalents and the projected cash flows from our operating activities will be sufficient to meet our
working capital requirements and capital expenditure needs in the ordinary course of our business for the next 12 months and beyond.
In
2023, we began offering credit services to our customers. PicPay Brazil and PicPay Bank are under the oversight of the Brazilian Central
Bank and are mandated to meet the capital requirements in line with prevailing legislation. Pursuant to these regulatory standards, our
management actively oversees our assets and liabilities, a critical aspect that involves managing mismatches in maturity dates that may
arise from the expansion of our credit portfolio, and assiduously monitoring our access to liquidity. These efforts are systematic and
include a weekly forum to discuss liquidity needs and market risks, as well as ongoing monitoring of capital requirements and constant
communication with our controlling shareholder regarding our capital needs. The deployment of these credit services through PicPay Bank’s
balance sheet has not altered our principal liquidity sources.
Our
capital management goals are to ensure ongoing compliance with minimum capital requirements set by regulatory authorities, maintain a
capital structure that is appropriate to the risks assumed and to support our group’s operational continuity and stakeholder confidence.
We
are subject to the prudential framework defined by the Central Bank of Brazil (BACEN), in accordance with BACEN Resolution No. 200/22
and BACEN Resolution No. 436/24, which establish capital requirements based on factors such as size, operational complexity, and risk
profile. The lead entity of the prudential conglomerate is PicPay Payments Institution.
For
the year ended December 31, 2024, the PicPay Conglomerate became subject to the most conservative capital levels, equivalent to those
of large banks according to the BACEN classification. Such change resulted in the PicPay Conglomerate falling short of the necessary
capital requirements. In response, the PicPay conglomerate presented a plan to BACEN to meet the requirements. The plan was formulated
with input from financial experts and received formal approval from the Board of Directors as follows:
● executed a capital increase of R$230.0 million, with R$100.0 million on June 28, 2024, and an additional R$130.0 million on September 19, 2024. For more information, see note 20 – Equity of our consolidated financial statements included elsewhere in this annual report.
● established contingency arrangements whereby our group/s controllers are prepared to provide additional capital contributions, should the need arise, to ensure ongoing compliance with BACEN’s regulatory capital requirements.
Our
available regulatory capital is composed of the following tiers, which are the numerators of our capital indices:
● Common Equity Tier I Capital: includes share capital, capital reserves and retained earnings minus regulatory deductions from capital such as intangible assets and deferred tax assets;
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● Tier I Capital: includes Common Equity Tier I Capital plus Additional Tier I Capital such as perpetual subordinated debt
● Total Capital: includes Tier I Capital plus Tier II capital such as fixed-maturity subordinated debt.
Our
Risk-Weighted Assets (RWA), which are the denominator of our capital indices, reflect a bank’s exposure to credit, market, payment
services and operational risks. RWA’s are calculated, for credit risk, for example, by applying different risk weights to different
assets depending on their level of risk, resulting in the Risk-Weighted Assets.
On
December 31, 2025, the total capital ratio was 11.74% (compared to 9.69% on December 31, 2024), which is 1.24 percentage points above
the regulatory requirement of 10.5% (including the conservation buffer of 2.5%), (0.81 percentage points below the minimum regulatory
requirement including the conservation buffer on December 31, 2024).
The
common equity tier I ratio was 9.25% (compared to 9.69% on December 31, 2024), which is 2.25 percentage points above the regulatory requirement
of 7% (including the conservation buffer of 2.5%), (2.69% above the minimum regulatory requirement including the conservation buffer
on December 31, 2024).
We
monitor and forecast our capital needs to maintain compliance with regulatory requirements and internal target capital ratios, maintaining
constant communication with the relevant stakeholders to ensure timely fulfillment of capital needs. As part of this process, subordinated
debts (Tier II) amounting to R$501.6 million were issued in November 2025.
The
following table presents our capital ratios as of December 31, 2025 and December 31, 2024, calculated according to BACEN’s regulation
on capital requirements and accounting, which differs from IFRS Accounting Standards in some respects, notably in the scope of consolidation
and in the calculation of expected losses.
As of December 31,
2025 2024
(in millions of R$)
Tier I 1,893.4 1,098.6
Tier II 508.5 —
Total Capital (Tier I + Tier II) 2,401.8 1,098.6
Risk-Weighted Assets (RWA) 20,460.4 11,342.5
Credit Risk (RWA CPAD) 16,534.4 7,183.6
Market Risk (RWA MPAD) 75.1 28.9
Operational Risk (RWA OPAD) 1,972.2 2,242.9
Payment Service Risk (RWA SP) 1,878.7 1,887.1
CAR (Basel Index) 11.74 % 9.69 %
We
present below an evolution of the composition of our risk-weighted assets and the Basel index evolution since December, 2024.
Risk-weighted
assets and Basel index evolution
(R$ billion, %)
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Cash
Flows
The
table below sets forth our cash flows for the years presented:
For the year ended December 31,
2025 2024 2023
(in millions of R$)
Net cash (used in) from operating activities (3,739.3 ) 2,290.5 1,567.0
Net cash used in investing activities (684.3 ) (2,525.1 ) (537.1 )
Net cash from (used in) financing activities 815.4 327.2 (12.2 )
Net increase (decrease) in cash and cash equivalents (3,608.3 ) 92.6 1,017.6
Year
Ended December 31, 2025, Compared to Year Ended December 31, 2024
Operating
Activities
Our
net cash used in operating activities for the year ended December 31, 2025, was R$3,739.3 million compared to a generation of cash of
R$2,290.5 million for the year ended December 31, 2024. Changes in our operating assets and liabilities were primarily attributable to
the aggregate effect of the following:
● a R$2,533.7 million of cash outflow in “financial assets” for the year ended December 31, 2025, compared to R$146.0 million for the year ended December 31, 2024, related to the acquisition of treasury bonds and its fair value in consequence of changes of Brazilian interest rate.
● a R$13,091.4 million of cash outflow in “consumer loans” related to the expansion of credit origination on our statement of financial position in the year ended December 31, 2025, compared to R$7,053.1 million in the year ended December 31, 2024. This variation occurred primarily due to the expansion of our credit portfolio.
● a cash outflow of R$1,926.5 million as of December 31, 2025 in our trade receivables and other receivables compared to R$520.4 million as of December 31, 2024. This change results from the growth in our card operations, given the time gaps between transaction processing, fund receipt, and accounting recognition. This factor, combined with the expansion of new business lines within our app, contributed to an increase in our trade receivables and other receivables. This increase is consistent with our strategic and operational changes during the period and represents an expectation of future receipts.
● a cash inflow in third-party funds of R$11,355.6 million as of December 31, 2025, compared to R$6,891.7 million as of December 31, 2024. This is related to the funds obtained via our CDBs through our own investment platform as well as through third-party platform distribution.
Investing
Activities
Our
net cash flows used in investing activities were R$684.3 million for the year ended December 31, 2025 compared to R$2,525.1 million for
the year ended December 31, 2024. This decrease was primarily due to the acquisition of credit card operations of R$1,815.0 million from
Banco Original in January 2024.
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Financing
Activities
Net
cash from financing activities was a generation of cash of R$815.4 million for the year ended December 31, 2025, compared to a generation
of cash of R$327.2 million for the year ended December 31, 2024. This increase was mainly due to an amount of R$1,183.4 million from
a share capital increase in 2025 with the purpose to comply with credit requirements established by the BCBS and the Brazilian Central
Bank regulations, in connection with the expansion of our operations.
Year
Ended December 31, 2024, Compared to Year Ended December 31, 2023
Operating
Activities
Our
net cash from operating activities for the year ended December 31, 2024, was R$2,290.5 million compared to R$1,567.0 million for the
year ended December 31, 2023. Changes in our operating assets and liabilities were primarily attributable to the aggregate effect of
the following:
● a R$6,891.7 million of cash inflow in “variations in operating liabilities – third-party funds” related to PicPay Bank CDBs offered to PicPay Brazil consumers in 2024, compared to R$4,263.6 million in 2023. In 2023, we only offered CDBs that were indexed to the CDI and could be redeemed at any time by our consumers. In 2024, in addition to daily liquidity CDBs, we began offering fixed-term CDBs through third-party platforms in addition to our PicPay Invest app, which contributed to an increase in total deposits during the year; and
● a R$2,745.5 million of cash inflow in “variations in operating liabilities – trade payables and other obligations” in 2024 mainly related to credit card transactions corresponding to the amount payable to acquirers in connection with credit and prepaid card transactions compared to a cash inflow of R$266.4 million in 2023. Until December 2023, Banco Original was the issuing bank of our PicPay Card. However, after January 2024, PicPay became the sole issuer of its credit card, assuming obligations with card networks. For more information, see “Item 4. Information on the Company—A. History and Development of the Company—Recent Acquisitions and Corporate Transactions” and “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Acquisitions and New Lines of Business and Other Developments.”
The
aforementioned effects were partially offset by a R$7,053.1 million increase of cash outflow in “consumer loans” related
to the expansion of credit origination on our balance sheet in 2024, compared to R$533.2 million in 2023. We began originating credit
in October 2023, and the transaction gained more traction in 2024. Additionally, on January 26, 2024, PicS Holding acquired certain outstanding
credit card assets from Banco Original. The transaction included only balances from customers with a less than 20 days past due credit
position and has been accounted for as asset acquisition. As a result of such transaction, the credit card operations of our retail customers
are now managed by PicS Holding.
Investing
Activities
Our
net cash flows used in investing activities were R$2,525.1 million for the year ended December 31, 2024 compared to R$537.1 million for
the year ended December 31, 2023. This increase was primarily due to the:
● acquisition of credit card operations of R$1,815.0 million in the year ended December 31, 2024, from Banco Original on January 2024; and
● acquisition of intangible assets of R$521.2 million for the year ended December 31, 2024, related to internally and externally developed software, in connection with our continuing development of improvements to our digital solutions compared to R$497.4 million for the year ended December 31, 2023.
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Financing
Activities
Net
cash from financing activities was R$327.2 million for the year ended December 31, 2024, compared to net cash used in financing activities
of R$12.2 million for the year ended December 31, 2023. This increase was mainly due to R$230.0 million that was invested in PicS Holding
by J&F Participações on June 28 and September 19, 2024, through the issuance and subscription of 230,000,000 quotas,
all nominative and without par value, and a share capital increase of R$105.6 million that was invested in PicS Holding by J&F International
on December 23, 2024, which did not occur in 2023.
Indebtedness
As
of December 31, 2025, we had the following non-convertible subordinated Financial Letters: a fixed-rate
senior Financial Letter in the amount of R$244.1 million and a CDI-indexed subordinated Financial Letter in the amount of R$508.5 million,
maturing on December 22, 2027 and December 28, 2039, respectively.
Capital
Expenditures
In
the years ended December 31, 2025, 2024 and 2023, our capital expenditures (defined as additions to property, plant and equipment and
intangible assets) totaled R$684.3 million, R$582.1 million and R$502.1 million, respectively. Our capital expenditures primarily relate
to our investments in computers and leased assets and in intangible assets related to upgrading and developing our IT systems, software
and infrastructure.
Off-Balance
Sheet Arrangements
Pre-approved
credit card limits (off-balance) totaled R$7.5 billion as of December 31, 2025.
D. Trend
Information
We
believe our operating and business performance is driven by various internal and external factors.
The
most significant internal factors include:
● our ability to attract and retain active consumers and businesses;
● the adoption of our services, the volume of our ecosystem and the network effect;
● our prices and mix of revenues; and
● our costs and expenses.
The
most significant external factors include:
● the Brazilian macroeconomic environment; and
● the Brazilian regulatory environment.
For
more information, see “—A. Operating Results—Principal Factors Affecting our Financial Condition and Results
of Operations.”
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E. Critical
Accounting Estimates
Critical
Accounting Judgements and Key Estimates and Assumptions
Our
audited consolidated financial statements are prepared in conformity with IFRS Accounting Standards, as issued by the IASB. In preparing
our consolidated financial statements, we make certain assumptions, judgments and estimates that can have a significant impact on amounts
reported in our consolidated financial statements. We base our assumptions, judgments and estimates on historical experience and various
other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under
different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates. Our critical accounting judgments
and key estimates and assumptions are described in note 4 to our audited consolidated financial statements included elsewhere in this
annual report.
Recent
Accounting Pronouncements
Standards,
Interpretations and Amendments that are Available for Early Adoption
The
new standards and amendments effective for annual periods beginning on or after January 1, 2025 include the amendments to IAS 21 related
to the lack of exchangeability. Management has assessed these amendments and concluded that they do not have a material impact on the
Group’s consolidated financial statements. In addition, other standards and amendments have been issued but are not yet effective,
including amendments to IFRS 9 and IFRS 7 related to the classification and measurement of financial instruments, amendments arising
from Annual Improvements to IFRS Accounting Standards – Volume 11, and IFRS 18 – Presentation and Disclosure in Financial
Statements, which will be effective for annual periods beginning on January 1, 2027. Management has not early adopted these standards
and amendments and does not expect their adoption to have a significant impact on the Group’s consolidated financial statements,
other than changes in presentation, classification and additional disclosures.