Today, on behalf of the company, I would like to thank you all for your interest and welcome you to our First Quarter 2025 Earnings Call. Today's presentation will be led by our CEO, Thiago Maffra, and our CFO, Victor Mansur, who will both be available for the Q&A session right after the presentation. If you'd like to ask a question, please use the raise hand feature on Zoom, and we will address them in the order we received. We also offer the option of simultaneous translation to Portuguese. If you'd like to activate it, please click the button below. Before we begin, please refer to our legal disclaimers on Page two, where we provide additional information regarding forward-looking statements. You can also find more information in the SEC filing section on our IR website. Now, I'll turn it over to Thiago Maffra. Good evening, Mafra.

Thank you, Andre. Good evening, everyone. I appreciate you all joining us today for our first quarter 2025 earnings call. Let's begin by reviewing the key highlights for the quarter. It is important to mention that we continue to execute our strategy initiatives delivering high results consistently. Starting with Client Assets plus AUM and AUA that we are now disclosing that achieved BRL1.8 trillion posting a 13% growth year-over-year. We accounted 18.1000 (ph) advisers representing 2% growth year-over-year and active client base posted 4.7 million with 2% growth year-over-year. In the quarter, gross revenues posted BRL4.6 billion with 7% growth year-over-year. We delivered solid (ph) ABG growth of 16% year-over-year reaching BRL1.3 billion. And once again, happy to announce that we achieved the all-time high quarterly net income in our history, posting BRL1.236 million. It represents a 20% year-over-year growth. On profitability, we achieved 24.1% ROE during the quarter, with 340 bps expansion versus first quarter ‘24. On capital ratio we market a comfortable level at 19%. It represented an increase of 130 bps quarter-over-quarter. What's important here is, our capacity to grow our business while keeping our capital discipline. Vitor will provide further details on this topic related to new regulation implemented during the quarter. Regarding diluted EPS, we posted 24% growth year-over-year, which corresponds to a faster growth than net income. As we mentioned last quarter, we should take this dynamic into consideration since we are executing our share buyback program strategy. On this topic, I would like to reinforce that we have ended previous program of 1 billion and have canceled the treasury shares. Today, we also have announced a new share buyback program of another 1 billion. It's part of our capital distribution plan aligned with our guidance target of this ratio to operate the business…

Thank you, Maffra. Good evening, everyone. It's a pleasure to be here with you to discuss the financial performance for the first quarter of 2025. Let's begin with the financial highlights for the quarter. Total gross revenues for the quarter reached BRL4.6 billion, representing a 7% increase year-over-year and a 4% decrease quarter-over-quarter. It's important to bear in mind the seasonality of the first quarter due to holidays and summer time. We must pay attention that Retail grew 10% year-over-year, Corporate & Insurance Services, 11% year-over-year and Other posted minus 24% year-over-year. Considering other revenue concept, it's important to understand the predation, conglomerate restructuring effects. Just to recap, before the restructuring, the financial results generated from cash position invested from the issued debt used to be allocated in other revenue and the cost of corporate debt was allocated interest expense on debt. Now if the XP Bank on the top of the local conglomerate, both concepts are allocated as the bank net interest margin. If it wasn't for this effect, other revenue would have been flat year-over-year. Therefore, it's fair to calculate the operational revenues growth, excluding other. In this case, total growth was 9% year-over-year, sustaining that our business are responding to our plan for the year and accelerating for the second half of 2025. The key drivers behind this growth for the year, while retail fixed income, retail new verticals and other retail with our new ventures growing at a fast pace. On the wholesale bank corporate also posted positive growth of 23% year-over-year. As just mentioned, retail revenues grew 10% year-over-year and minus 4% quarter-over-quarter. Retail revenue posted BRL3.4 billion in the quarter, a 10% growth year-over-year and a 4% decrease quarter-over-quarter, due to the seasonality. As expected, fixed income was the main driver in the quarter…

Now we're going to start our Q&A session. The first question is from Eduardo Rosman from BTG. Rosman, you may proceed.

Hi, guys. Good evening, and congrats on the numbers. Two things here. First, on your ROE. Do you think you can continue to increase your ROE towards the 30% level, as we can see on your return on tangible equity? That's the question number one. And naturally, I think it's linked to the second question, which is regarding your payout. I think you mentioned in the last conference call that you could sustain more than 50% payout in the coming years, but you are generating a lot of capital, right, even though you are doing buybacks and growing the results, you generated more capital? So don't you think that 50% or close to that is conservative for the next couple of years? So these would be my two questions. Thanks.

Hi, Rosman. Thank you for the question. First, about the ROE. We said last quarter that we should see over 2025 the risk-weight assets growing at a slower pace than net income. The consequence is slightly higher ROE over this year, next year. And as you say, the ROTE is higher than 30%. And over time, we should close this gap between both of them. Also talking about capital returns, our BIS ratio improved quarter-over-quarter as we said, and this number of 50% of payout since conservative and in this space, should be higher as the same as the last years.

Great. Thanks a lot.

Okay. Next question is from Pedro Leduc, Itau BBA. Leduc, you may proceed.

All right. Thank you so much for taking the questions. Two quick ones. First, on take rates, of course, they were down seasonally Q-on-Q, but you're also undergoing a change knowing the way remuneration goes, fixed variable commissions, etc. So if you can put that into context as well to help us also see how we should see the next quarters evolve on take rates? That's the first. And then the second on the SG&A side, great job there on the total figures. When we look at that because personal and variable was a big component there, if there's some seasonality here or is this really a tighter ship? Just to make sure that we see this line more sustained for these levels throughout the year. Thank you.

Hi, Leduc. Thank you for the question. Beginning with SG&A, then we move to take rate. First, we are a performance based on the company and in the beginning of the year, some business there are more seasonal as investment banking, institutional broker dealer, performance of those business was weaker than in the 4Q. And as they have a compensation that is more volatile, the compensation provisions is lower. But over the year, as those business improve, we may see this number getting a bit higher, the same as 2024, but we are committed to deliver some efficiency in terms of efficiency ratio and bonus ratio even though. Talking about take rate, it was slightly lower than the 4Q. Remembering that 4Q, we have some business lines as actions a bit higher than in the first quarter, due to the average traded volume in B3 and also offered primary offerings of public of listed funds. So, we expected the average number for our take rate to follow the same pace as the last years and should cover a bit over the year, but not as high as the 4Q.

I can take the second part of your question about the different -- it's Thiago here, and good evening. So about the different models that you mentioned, the flat fee against the transactional model, we have seen the fee based model growing in the past years, it was almost zero two years ago. We closed last year, I would say, around BRL40 billion. I'm taking out here what we call WMC, Wealth Management and Consulting business because, of course, they are 100% flat fee. But on the total AUC, excluding this channel, it was BRL40 billion out of almost BRL1 trillion last year. We expect this number to grow to, I would say, around BRL100 billion this year, okay? And what we see in terms of take rate, the take rate goes down a little bit there away when you compare the two models. But the share of wallet increased a lot, okay? So in terms of revenue, I would say, it's almost zero, if not zero, very close to. So but we can bring a lot more money, and we have been investing a lot on flat fee, the fee-based model and also on the consulting model here that we can consolidate costs outside of XP. We have implemented the area on the B2C channel, I would say, two, three months ago. It's growing really fast. Of course, the base was zero, but it's growing. So you can expect the consulting model and the fee-based model to grow in the next -- this year and in the next years.

This was great color. Thank you very much.

Okay. Next question is from Yuri Fernandes from JPMorgan. Yuri, you may proceed.

Thank you, Parize. Good evening. Thank you, Mansur, Maffra. I have a fixed -- first one on fixed income. This was the first quarter that fixed income is above equities, right, and equities has been a drag on your retail revenues. So just trying to think ahead maybe better equity market in Brazil not sure if you just want to discuss lower rates. But when should we see the equity side of your business is start to stabilize? And how do you see the fixed income because I was checking here the historical and equity used to be 3, 4 times bigger to fixed income and now, fixed income has surpassed. So just trying to understand when we should see maybe -- I know they are some kind of natural hedges for each other, but when should we see like a better momentum on those two engines for you? And then just a more specific question on your expected credit losses. When we go to your accounting, we did see an increase on ECL for you this quarter. So just checking if this is related to, I don't know, more warehousing of securities and then you need to build more ECL or if you are seeing some kind of marginal worsening on expected credit losses on any kind of portfolio? Thank you.

Thank you for the question, Yuri, taking the first part here. First of all, when you look at actual revenues, the important part is that the markets need to pick up, not only in performance, but also in traded volume. If you compare quarter against quarter, the average trade volume at B3 was lower that impact us negatively over the quarter. And also, inside of this line, there is primary offering of listed funds, some as real estate funds and other kind of products. So we need to see the markets improving to see this line growing again. Also, it's important to mention that we have a lot of operational leverage inside of the actual lines and we have dominance in several products, as Maffra showed in his presentation. So actions, futures, options, BGRs and then you go, so if markets improve here in Brazil, we should see this line coming rising again. But when you compare fixed income now and fixed income one year or two years ago in XP, I don't think it will return at the same level or decrease over time. Even if you have the interest rates starting to fall a little bit, we still are going to have high interest rates in Brazil, a lot of opportunity in fixed income and also the DCM market in Brazil is growing at a fast pace. This year, we may have lower smaller market than last year, but the trend is very poised for this kind of product.

And just to complement Victor here. The way I like to think about take rate and the mix of revenues between the products, it's basically three points. We have volume that Victor already mentioned. We have -- we are probably at the very close to the bottom of volumes in Brazil. Of course, if they pick up, we will have more revenues. The second one is price. The price didn't change much. We didn't make any money in equities in commissions and so on. So we didn't see any price pressure in any of the types of products in the past years. So what left us to the main point here is mix, okay? So in the past two years, everything shifted from alternatives, REITs and so on, which is to fixed income. Fixed income for reasons you know very well. They have the lowest ROE, ROA possible. So once we start to have a reshuffle in the mix the take rate should go up, okay? But again, as we mentioned in the past earnings calls, we are not taking that into consideration for guidance. But for sure, that's a possible upside if we start to have a better cycle here. Going to your second question about ECL. It was a one-off event with one credit and you should normalize that for the next quarters to around BRL100 million. That's a good proxy for the next quarters.

Super clear, Maffra. And just making triple checking here, like, your ROE message of -- ROE is moving up, our ROTE is moving up, doesn't imply any material change on your current revenue mix, right?

No.

Okay. Thank you very much and congrats.

Okay. Next question is from Gustavo Schroden from Citi. Schroden, you may proceed.

Hi, guys. Good evening, and thanks for taking my question, and congrats on the decent results. I have two questions as well. The first one is still on revenues. Sorry to insist on that, but taking your guidance for the year that you provided last quarter, you mentioned that revenues should grow at least 10%. In this quarter, it grew 7%, although, we saw a strong or a decent growth in the retail of 10% year-on-year. but the gross or the consolidated revenue is still growing below the guidance range. So I believe that as you didn't change our guidance, I believe that you're still believing that. So if you could share with us which line should improve and I mean give us more color of what should we expect in terms of gross revenue growth? Again, you mentioned that I would say that you are more conservative in terms of a take rate especially considering the mix. But as you said, the pie is still growing. So any color on gross revenue growth would be very helpful. And my second question is regarding your, let's say, consolidated tax rate. If I'm not wrong, you paid like a 14.6% this quarter versus 18% last quarter. So, what would explain this lower, let's say, consolidated tax rate? Thank you.

I will take the first one, Schroden. Thank you very much for your question. Yes, we didn't change the guidance of at least 10% growth in revenues for '25. We already knew that the first half of the year, Q1 and Q2, we would face tough comps because of many reasons because the capital markets was very strong last year. We knew that, that would go down. And this year, we are going to grow more on the retail than what we have been delivering on issuer services and corporate. So it was on our budget to have a lower than 10% growth on the first two quarters. To be honest, we are 1% higher than the budget for Q1, okay? So we are very on track, so that was a red plan. The second important point here is to have in mind that the first quarter is always the lowest quarter of the year in terms of revenue, in terms of net income and most -- all the metrics. So you should see all the metrics improving in the next quarters. And we have planned in our budget, higher growth on the second half of the year. So that's why we are comfortable and confident that we can deliver at least 10% growth in revenues. To give you some more color, again, this year different from last year, most of the growth in revenue will come from retail, okay? So especially, because of Issuer Services that's not going to grow this year. The first main point on retail to have in mind is fixed income. We believe that fixed income, as you already saw, was for the first time, the highest revenue among all the products for the first time ever, and we believe that should continue to happen…

Thank you. Taking the second part of the question here about tax, basically, the explanation is business mix, revenue mix. In the 4Q, we had a stronger investment banking issue services line and do seasonality and as expected for everyone else in the market, the Issuer Services business in this quarter was not as strong as the last one. And we supplemented that if the secondary market and warehousing strategy that pay lower taxes than the investment banking business. And basically, over the year, if this scenario is the same, we should have a slightly lower average adjusted tax rate over 2025 against 2024.

Okay, guys. Super clear. Thank you very much.

Oka. Next question is from Mario Pierry, Bank of America. Mario, you may proceed.

Hey, guys. Thanks for taking my questions. I wanted to focus a little bit more on the retail inflows of BRL20 billion. Because we have seen increased activity B3, we're seeing volumes picking up. Are you seeing any signs of improving inflows? If you can discuss a little bit about the inflows that you saw throughout the quarter and what you're seeing at the beginning of the second quarter, I think that will be helpful because, right, you've said many times in the past that you're working to improve productivity of the advisers, but it feels like inflows growing less than or a slower pace than advisers. So just trying to get a better sense from you. Are you seeing increased productivity that are really happening now? And if you're seeing better markets leading to higher inflows? And second question, also related to -- you discussed in the past of drawing to the affluent wealth market? Do you have any data to share with us on that segment? Thank you.

Thank you, Mario for your question. What happened is, I would say that we are still at the same BRL20 billion level, okay? We didn't see -- of course, the number was BRL20 billion and we have been talking that's a fair number for now and will be the same thing for Q2. I cannot say about Q3 and Q4, but that's a good proxy for next quarter. We didn't see an improvement yet on the level of net new money. Again, interest rates they are at peak right now. It will take some time for investors to start moving money from the CDs from the banks to the platforms. We didn't see that accelerating yet. So that's the color we have right now. You mentioned the number of IFAs if you see, it has been flattish I would say, for the past quarters, especially on the B2B channel. Why? Because we have been focusing a lot on the quality of the IFA advisers. So we have been reducing a little bit the number of IFAs, okay? It's increasing on the B2C channel. It's increasing on the consulting, but it increased on the B2B channel on the first -- on the last quarters. We have been focus on expansion on the B2B channel again. So we expect the number of IFAs on the B2B channel to start growing again. We have seen a lot of improvement on the B2C channel. Our challenge here on the productivity side that you mentioned. But our challenge here is how to roll is out to the B2B channel. We have been implementing a lot of tools, training and so on, and we are confident that we are going to capture that in the future. But to be honest with you then capture yet, okay? So that's why you're seeing. We mentioned that came from the new channels. So meaning 40% came from the B2B channel. So we didn't see the improvement there yet, but we are really focused on that, and we expect that we will capture the benefits in the near future.

Okay. That's clear. And the strategy of the affluent wealth market?

Yeah. That's a good question. We have been -- as you saw in the past, we have been investing a lot on the – especially, on the private bank business here. We hired a new CEO for the Private Bank, Cesar, who had a lot of experience running the Citibank, private banking in the U.S. for U.S. clients. He brought a lot of new guys, new leaders for the business. We had, in the past years, zero or negative inflow on that business. And last year was a little bit slightly positive, and this year is going to be much better. So it's going, but it's a long process because when you talk about private bank business, it's about building a franchisee. It's a long-term investment and long-term business. And we are looking very carefully and investing a lot, but it will take some time, make to bring results from the private bank, but we are confident.

Okay. Thank you.

Okay. Next question is from Olavo Arthuzo from UBS. Olavo, you may proceed.

Hi, guys. Thank you for taking the question here. I have basically two questions. And my first one is very, very straightforward because you started to provide the breakdown of total assets. So very quick here. I was just wondering how much the fund service represents of the total assets that you guys disclosed it for this quarter? And my second question is, regarding your growth strategy because after launching the banking initiative a couple of years ago of the checking accounts and then the credit cards, I think one of the main current ones is the consortium, I think that Maffra mentioned. And the numbers, if you take into consideration the whole industry for the consortium have been impressive so far in terms of profitability. So if you could just elaborate a little bit more on the consortium front, especially, thinking about the main goals numbers like the penetration of the product, the ticket and I think your slide number 10, that constructs within those BRL205 this quarter, if I'm not wrong. So how much does the consortium represent on that number for the quarter? So net-net, any more detailed color on this would be very helpful, and thank you very much guys.

Yeah. Thank you, Olavo. I didn't get your first question. So I will start for the second one, and then you repeat your first question. About consortium, it represents a very small revenue yet because the way we recognize the revenues basically the upfront fee, it goes to pay commission. So we make zero when we sell consortium. Then, we have an agreement with the administrators, and we receive a fee monthly by monthly because we have a revenue share with them. So it's more like a recurring revenue during the term of the consortium. So it's a business that we have to build the portfolio to then capture the revenues. We started building the portfolio last year, I would say half of last year. For some of the months, we already produced more than BRL1 billion per month, okay? So it's growing fast. And the way we work the product to be honest, before knowing the product, we didn't like the product because of everything you heard. But once you start working with consortium, as I would say, I structured credit, then it's a good approach. We don't sell consortium as investments for sure, of course. But as a structured credit, it can be very accretive to our clients. We have been doing a lot for private bank clients even for owners of big companies and so on, because you have very cheap interest rates implied when you do the structured way of doing consortium. So that's why it's growing really fast. Again, this year is going to be above BRL100 million. It can go to double of that in revenues. So it's growing really fast. It's going to be a very important revenue stream for the new verticals in the next years. And if you can repeat your first question.

Yes, of course, definitely. It's related to the assets that you guys started to disclose this quarter, which you mentioned the BRL1.8 million. How much does fund services represents of the total assets? Because I understand that the take rate of this type of assets provides a low yield. So just to understand the breakdown of that assets under custody that you have?

Yeah, for sure. Yeah. The most important part of the strategy of having the fund administration business is to provide a full ecosystem to our customers especially the institutional clients and private bank clients because that's part of the investments we have been doing to grow on the private bank business. Why? Because imagine that you have an exclusive fund, discretionary fund here. And XP has to rely on providers to give us the NAV and all the portfolio metrics and so on. And every day, we had problems with that -- with the SLA and with the accuracy of the information and so on. So it's really hard to build a private bank business and institutional business without having fund administration. So that's the main reason why we built the business. As we mentioned, fund administration can go from 5 bps to 20, 30 bps for alternative funds, maybe 70 bps, but that's a low ROA, but the most important part here is to provide a full service to our customers. And the number we opened the number on the slide, if you check there the number was BRL248 billion in AUA, that's the fund administration part.

That’s the number I was searching for. Okay. Thanks. Great, Maffra. Thank you very much.

Okay. So next question is from Tito Labarta from Goldman Sachs. Tito, you may proceed.

Hi. Thanks, Parize. Good evening, Maffra and Victor. Thanks for the call, taking my question. A follow-up question just on the inflows. As you mentioned on the slide, right, you distribute around 50% to 60% of midsize banks funding is distributed through XP. And just given some of the news flow with some of the midsized banks, I guess, Banco Master in particular, but just has that had any impact on your inflows or you are able to replace one bank with another bank's funding just to make sure that that's not having any impact on inflows for you for now? And then my second question, I guess following up a little bit on revenues, particularly equity revenues. I guess what should be the most important driver? Is it just the equity market is doing better. I mean, we have seen good performance this year. Is it B3 volumes picking up? Is it more just focused on volatility or is it the rates coming down, right? Just to get a sense of what should be -- we be looking for in terms of like what can boost those equity revenues at some point in the future? Thank you.

Yeah. If I got your first question, your concern was about if Banco Master was representative on the net new money, so it was not, okay. So not even in revenues, as we mentioned in the last call, it was less than 1% of the total revenues. So it was not relevant. We will see no impact on revenues or on net new money, so no impact.

Great. Thanks.

Tito, talking about revenues, I think conjunction of factor is you need to see volumes picking up and probably you're going to see volumes pick up. If the performance of that has improved over the years. So I think those things come hand-in-hand. And the second is prime offering from listed funds as REITs, real estate funds. That's also important factor inside of the actual lines. And you're going to need to see the market improving a little bit. and those fund is trading above issuing value. I think that is it.

Okay. Perfect. Great. Thanks, Maffra. Thanks, Victor.

Okay. Thank you for participating for our earnings call. We are in an hour now. I'm going to end the call. So we'll be available to answer further questions. Just look for us from the IR team. Thank you so much, and we keep in touch until the next quarter.