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    PAGS
    Earnings call· Jun 2026(Q2 FY26)

    PagSeguro Digital Q2 FY26 earnings call PAGS

    Aug 11, 2026 Source

    Executive summary

    PagSeguro Digital Q2 FY26 — Ecosystem Expansion and Resilient Profitability

    PagSeguro Digital delivered a solid second quarter, expanding its multiproduct ecosystem across payments, banking, and credit, which drove client engagement and resilient profitability. Despite a challenging macro environment and higher-than-expected Selic rates, the company maintained its full-year guidance by focusing on financial cost efficiency and operating leverage. The strategy emphasizes deepening client relationships and broader monetization, supported by continued product innovation and disciplined capital allocation.

    Highlights

    5

    • Total payment volume (TPV) reached BRL 133 billion, up 3% year-over-year, showing gradual reacceleration.

    • Total loans increased 31% year-over-year to BRL 5.1 billion, driven by working capital and credit cards.

    • Recurring net income (non-GAAP) grew 2% year-over-year to BRL 576 million.

    • Diluted non-GAAP EPS increased 10% year-over-year to BRL 2.06.

    • Total deposits grew 15% year-over-year to BRL 43 billion, providing a foundation for credit growth.

    Concerns

    5

    • Net revenue, excluding interchange fees, grew only 2% year-over-year to BRL 3.4 billion, lagging TPV growth due to product mix and tough prior-year comps.

    • Total losses increased 9% year-over-year, mainly reflecting credit portfolio expansion and mix evolution.

    • Operating expenses represented 25.9% of total revenue, with Q2 effects related to World Cup broadcast sponsorship and annual collective bargain agreement.

    • The macroeconomic environment remains uncertain, with Selic rate levels creating additional pressure for business performance.

    • Gross profit guidance for the full year is now expected to be at the bottom of the 6%-9% range, down from prior expectations.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year 2026 Performance
    in line with the guidance range
    high materiality
    High
    Total Credit Portfolio Growth
    keep this growth within the expected range for the year
    high materiality
    High
    Gross Profit Growth
    probably reaching the bottom of the gross profit guidance as we post
    high materiality
    Medium
    Diluted Non-GAAP EPS Growth
    within the guidance range for 2026
    high materiality
    High
    Total Cash Dividends
    approximately BRL 1.4 billion
    high materiality
    High
    Basel Ratio Target
    18% to 22% over time
    high materiality
    High
    Long-term Credit Portfolio Goals
    long-term guidance that we published last year
    high materiality
    High

    Operational metrics

    21
    Recurring net income (non-GAAP)
    BRL 576 millionup 2% year-over-year
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Diluted non-GAAP EPS
    BRL 2.06up 10% year-over-year
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Annualized non-GAAP ROE
    15.6%up 30 basis points year-over-year
    Q2 FY26
    Adjusted Basel ratio
    22.5%compared to 24.1% in the first quarter and 29.6% in the second quarter of a year ago
    Q2 FY26
    Capital returned to shareholders
    BRL 2 billion
    LTM

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Share repurchase program executed
    BRL 370 million
    H1 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Dividend per common share
    BRL 0.28
    Q3 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    CapEx
    BRL 1.1 billion
    H1 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    NPL90
    3.4%remaining well below the Brazilian market average of 6.2%
    Q2 FY26
    Total funding
    BRL 47 billionup 10% year-over-year
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Operating expenses as percentage of revenue
    25.9%
    Q2 FY26
    Net revenue, excluding interchange fees
    BRL 3.4 billiongrowing 2% year-over-year and 1% quarter-over-quarter
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Gross profit
    BRL 2 billiongrowing 3% year-over-year and 6% over-quarter
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Cash-in volumes (excluding acquiring-related inflows)
    almost BRL 100 billionincreasing 23% year-over-year and 19% quarter-over-quarter
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Cash-in per active banking client
    BRL 5,700up 27% year-over-year
    Q2 FY26

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Investment penetration (active clients)
    28%increased from 23%
    Q2 FY26
    Insurance penetration (active clients)
    16%increased from 11%
    Q2 FY26
    Credit products penetration (excluding payroll clients)
    6%increased from 4%
    Q2 FY26
    Working capital origination run rate
    BRL 80 millionabove Q2 average and also above the average levels seen in the prior quarters
    July

    METADATA states currency as USD, but all figures in the transcript are consistently stated in BRL.

    Deposits generated on platform
    >90%
    Q2 FY26
    Selic rate assumption
    12.5%now we are looking much more close to 14% or 13.75%
    year-end

    Industry KPIs

    2
    MetricValueDetails
    Capital returnsBRL 2 billionBRL
    Payments volume gdvBRL 133 billionBRL

    Product announcements

    8
    ProductTypeDetails
    Minizinha Vozlaunch
    IOF cashbacklaunch
    Private payroll loanslaunch
    PIX Financelaunch
    Zero fee investmentslaunch
    Private pensions planslaunch
    Collections management toolslaunch
    New insurance productslaunch

    Risks & headwinds

    4
    Challenging macroeconomic environmentyear-to-date, full year

    current Selic rate levels create additional pressure for the performance of the business

    Mitigation: Focusing on efficiency and discipline, looking for different initiatives to boost profitability.

    Selic rate levels higher than expectedfull year

    Expected year-end Selic around 12.5%, now looking closer to 14% or 13.75%.

    Mitigation: Managing pricing, funding, and capital allocation with discipline.

    Product mix impact on revenue growthQ2 FY26

    TPV improved sequentially, but revenues did not budge at the same pace, leading to a 'small dilution' in take rate.

    Mitigation: Balancing growth and defending profitability; managing churn.

    Increased total lossesQ2 FY26

    Increased 9% year-over-year.

    Mitigation: Consistent with strategy to scale credit in a disciplined way while maintaining strong asset quality indicators (NPL90 at 3.4%).

    What to watch in Q3 FY26

    5

    Gross Profit Guidance Achievement

    H2 FY26
    Current2% year-over-year in H1 FY26
    Targetbottom of 6%-9% range for FY26

    Why it matters

    Indicates the company's ability to accelerate profitability despite macro headwinds🌐 and meet its revised full-year targets.

    But again, probably not by the top of the range, but probably reaching the bottom of the gross profit guidance as we post.

    Q&A highlights

    5

    Is the company changing its plans or reducing growth pace for credit given the current macro environment and delinquency levels?

    Management remains confident in its 2029 long-term credit guidance and current strategy. They highlight the low NPLs (3.4% vs. industry 6.2%) as comfort for sustainable growth. They acknowledge macro challenges but are finding workarounds and new products.

    “No, we are still quite confident on everything that we are doing here. In fact, we see the 31% increase on the credit outstanding as a very good number in terms of volume and performance.”

    asked by Arnon Shirazi · answered by Carlos Mauad

    2 min read6 chapters

    Detailed Narrative

    01

    Ecosystem Expansion and Monetization

    PagBank is evolving from a payment-led ecosystem to a broader financial service platform, integrating payments, banking, credit, investments, and insurance. This strategy aims to increase client engagement and monetize relationships across various products, expanding the addressable market and strengthening recurrence of results. The company's current market share in several areas remains below 1%, indicating significant growth potential.

    02

    Product Innovation and Engagement

    Recent product innovations, including Minizinha Voz (AI-powered sales assistant), IOF cashback, private payroll loans, PIX Finance, zero-fee investments, and new insurance products, are designed to deepen client relationships. These initiatives expand banking and financial service offerings, creating cross-sell opportunities and driving higher transaction activity and monetization.

    03

    Credit Portfolio Growth and Risk Management

    The total credit portfolio grew 31% year-over-year to BRL 5.1 billion, primarily driven by working capital and credit cards. The expanded credit portfolio, including merchant prepayment operations, reached BRL 52.4 billion, up 9% year-over-year. Despite this growth, the NPL90 ratio remained low at 3.4%, well below the Brazilian market average of 6.2%, reflecting prudent underwriting and risk governance.

    04

    Funding Optimization

    Total deposits reached BRL 43 billion, up 15% year-over-year, with over 90% generated on-platform. The company achieved its ninth consecutive quarter of funding cost reduction as a percentage of CDI, optimizing liability management and product pricing. This efficient funding structure supports continued credit expansion while maintaining a healthy balance sheet.

    05

    Operational Efficiency and Capital Allocation

    Operating expenses represented 25.9% of total revenue, with year-to-date improvements reflecting a focus on operating leverage. The company is implementing initiatives like process redesign, automation, and AI in back-office and customer care to generate efficiency gains. Capital allocation remains disciplined, with a Basel ratio of 22.5% moving towards a target range of 18%-22%, and BRL 2 billion returned to shareholders over the last 12 months through dividends and buybacks.

    06

    Leadership Update

    Enrique Fragata was welcomed as PagBank's new COO, bringing strong financial sector experience to strengthen execution, efficiency, and operational excellence as the company continues to expand its ecosystem and advance its long-term strategy.

    AI-generated summary of the company’s earnings call. Not investment advice.