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PICS
Earnings call · Jun 2026 (Q2 FY26)

PicS N.V. Q2 FY26 earnings call PICS

Aug 24, 2026 Source

Executive summary

PicS N.V. Q2 FY26 — Strong Profitability and Strategic Revenue Mix Shift

PicPay delivered robust Q2 FY26 results, surpassing guidance across key profitability metrics, driven by strong revenue growth and significant operating leverage from AI adoption. The company is strategically rebalancing its revenue mix towards lower-risk streams and expanding its credit portfolio with disciplined, intentional risk-taking, while maintaining strong asset quality and coverage. The recent acquisition of Cover (now CAV) is poised to accelerate insurance ambitions and contribute meaningfully to future earnings.

Highlights

6

  • Credit portfolio reached BRL 31.9 billion, 3% above the high end of guidance.

  • Managerial revenues were BRL 3.7 billion, 3.6% above guidance.

  • Adjusted net income reached BRL 283 million, 15.5% above guidance.

  • Total revenues grew 67% year-over-year to BRL 4.1 billion.

  • Adjusted ROE increased to 20.2% from 15.5% in the prior quarter.

  • Adjusted efficiency ratio improved by 210 basis points sequentially to 44.8%.

Concerns

3

  • NPL over 90 days increased to 9.8% due to portfolio aging and intentional risk-taking, not underlying deterioration.

  • Stage 3 coverage decreased from 77% to 74.1% primarily due to the Desenrola program's FGO guarantee, not a change in portfolio quality.

  • Q3 IFRS net income is expected to decline 5% sequentially to BRL 255 million, and adjusted net income 6% to BRL 265 million, due to a Q2 tax benefit normalization, not operational deterioration.

Guidance & targets

CategoryTargetConfidence
Total credit portfolio
approximately BRL 34.7 billion
high materiality
High
Quarterly cost of risk
3.9% to 4.1%
medium materiality
High
Managerial revenues
approximately BRL 4 billion
high materiality
High
Net interest income
approximately BRL 2.1 billion
high materiality
High
Gross profit
approximately BRL 1.3 billion
high materiality
High
IFRS earnings before taxes
approximately BRL 360 million
high materiality
High
Adjusted EBITDA
approximately BRL 378 million
high materiality
High
IFRS net income
approximately BRL 255 million
high materiality
High
Adjusted net income
approximately BRL 265 million
high materiality
High
Total capital ratio
approximately 14%
high materiality
High
Common equity Tier 1 ratio
12% to 12.5%
high materiality
High
Funding cost
around 95% of CDI
medium materiality
Medium
Efficiency ratio
around low 40s 30s
high materiality
Medium
Cover (CAV) net income contribution
BRL 80 million to BRL 100 million
medium materiality
High

Product announcements

ProductTypeDetails
Brokerage platformlaunch
Tap on phonelaunch
Marketing AI agents (SMBs)launch
Second-generation WhatsApp and in-app agentsupdate
Official plug-in in Claude and OpenAI ecosystemsmilestone

Deals & partnerships

Cover Acquisition of a full-service insurance platform with over 100 products, an experienced executive team, and established distribution channels.

The acquisition of Cover (now rebranded as CAV) was finalized on August 3, after obtaining all necessary regulatory approvals. This strategic move enhances PicPay's product development speed, underwriting expertise, and distribution reach in the insurance sector. Cover's independence and partnerships will be maintained.

Risks & headwinds

Increase in NPL over 90 days and Stage 3 Q2 FY26

NPL over 90 days increased to 9.8%; Stage 3 reached 12.9%.

Mitigation:Primarily driven by portfolio aging and intentional risk-taking in private payroll loans, not underlying quality deterioration. Early NPL improved to 7.5%. Stage 3 portfolio is more than 75% provisioned. Expect NPL over 90 days to converge to low teens by year-end due to aging.

Decrease in Stage 3 coverage ratio Q2 FY26

Stage 3 coverage decreased from 77% to 74.1%.

Mitigation:Primarily related to the Desenrola renegotiation program, where loans benefit from FGO guarantee (50% coverage), reducing LGD and provisioning requirements. This does not reflect a deterioration in portfolio quality. Expect coverage to move back toward the high 70% range in coming quarters.

Sequential decline in Q3 net income Q3 FY26

IFRS net income expected at BRL 255 million (down 5% QoQ); adjusted net income at BRL 265 million (6% below Q2).

Mitigation:Not driven by operational deterioration, but by Q2's significant positive impact from the Lei do Bem tax incentive. Q3 effective tax rate normalizes back to Q1 levels.

Impact of higher unemployment on private payroll loans Longer term

Private payroll loan vintages could withstand a 70% increase in delinquency rates to breakeven.

Mitigation:Market consensus expects unemployment to remain stable (5.4% to 6% through 2027). Even pessimistic scenarios (6.5-7.2%) are historical levels that did not imply heavy credit deterioration. The company dynamically adjusts origination to maintain asset quality.

What to watch in Q3 FY26

NPL over 90 days trajectory

by year-end FY26
Current 9.8%
Target Converging to low teens by year-end

Why it matters

This metric is expected to rise due to portfolio aging and intentional risk-taking, and its convergence to Stage 3 levels will indicate the stabilization of delinquency dynamics.

we are still expecting NPLs to continue to be impacted by the aging effect, right? So we are expecting by the end of this year, the NPLs over 90 days could be more around, let's say, low teens.

Q&A highlights

Could you quantify the benefits of the Desenrola program in Q2 on NPL and cost of credit, and should we expect further benefits in Q3?

The Desenrola program positively impacted Q2 cost of risk by BRL 59 million (5% of total cost of credit) and reduced NPL over 90 days by 117 basis points. It also lowered Stage 3 formation by reducing outstanding balances by BRL 260 million. While some additional positive impact is expected in Q3, it will be more limited than in Q2.

“in terms of cost of risk, the [ this ] generated a positive impact of approximately BRL 59 million which is equivalent to around 5% of our total cost of credit in the quarter.”

asked by Mario Pierry · answered by Andre Cazotto

3 min read 7 chapters

Detailed narrative

CFO Transition and Leadership Continuity

Andre Cazotto has successfully transitioned into the Chief Financial Officer role, succeeding Rodrigo Couto as part of a planned succession. Cazotto brings over 20 years of experience in payments and financial services, having previously led capital markets for PicPay's NASDAQ listing. Rodrigo Couto will continue to serve as a special advisor through year-end, ensuring a seamless leadership transition and continuity in financial strategy.

Strategic Revenue Mix Shift and Diversification

PicPay is actively rebalancing its revenue streams, with 71% of total revenues now derived from no or lower credit risk sources, an increase from 63% a year ago. This shift is driven by growth in float, hedge accounting, fees, commissions, and secured/partially secured credit products. This diversification strategy allows the company to balance growth across more mature collateralized portfolios while selectively expanding into higher-risk segments with controlled limits and maintaining targeted risk-adjusted returns.

AI-Driven Operational Efficiency and Productivity

Artificial Intelligence is a key driver of PicPay's operational leverage and efficiency gains. The company's headcount has remained flat since October 2025, with a previously projected 10% increase for 2026 now not expected to materialize due to AI-driven productivity. AI is deployed in customer-facing agents for task execution and SMB marketing, as well as internally for credit underwriting models (expected 15-20% benefit), coding support, and quality assurance, leading to a 70% reduction in token costs.

Expansion and Management of Private Payroll Loans

The private payroll loan portfolio has grown significantly to BRL 7.2 billion, encompassing over 3.6 million contracts. PicPay has resumed increasing originations in growth clusters for this product, following the resolution of initial operational issues and the implementation of new features. While this intentional risk-taking and portfolio aging are expected to contribute to higher NPLs, the product continues to deliver attractive marginal ROEs and risk-adjusted returns within the company's approved risk appetite.

Ecosystem Expansion and Enhanced Customer Engagement

PicPay continues to expand its ecosystem, offering a broad range of services from shopping and food delivery to investments and iGaming, which now serves 2.7 million clients. This comprehensive platform drives higher user engagement and facilitates cross-selling of financial products. The investment platform has grown to over 280 products, including a newly launched brokerage platform, and Epic credit cards have achieved 23% penetration among eligible customers, with 80% actively using associated benefits.

Asset Quality Dynamics and Provisioning Adequacy

The increase in NPL over 90 days to 9.8% and Stage 3 to 12.9% is primarily attributed to the natural aging of the portfolio and a deliberate strategy of intentional risk-taking in private payroll loans, rather than a deterioration in underlying quality. Early NPL improved to 7.5%. Stage 3 coverage, though slightly down to 74.1%, remains robust, with the reduction linked to the Desenrola program's FGO guarantee, which lowers provisioning requirements for renegotiated loans.

Solid Funding Base and Capital Position

PicPay's funding base expanded 10% quarter-over-quarter to BRL 35.8 billion, supported by diversified funding sources including digital platform deposits and capital market issuances. The cost of funding saw a modest increase to 96.2% of CDI due to new securitized structures. The company maintains a strong capital position with a total capital ratio of 17.6% and a CET1 ratio of 15.6%, providing ample headroom above regulatory requirements even after the capital consumption from the Cover acquisition.

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