StoneCo stock slumps after Q1 earnings, revenue miss Wall Street consensus
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StoneCo (NASDAQ:STNE) stock dropped 6.0% in Monday after-hours trading following weaker-than-expected Q1 earnings and revenue. Still, the Brazilian payment technology company stuck with guidance for 2024 and for medium-term growth that it issued in November.
Q1 total revenue and income of R$3.08B (US$600M), missing the consensus of ~R$3.11B, dropped from R$3.25B in Q4 2023 and climbed from R$2.71B in Q1 2023. The Y/Y increase was primarily driven by a 16% increase in financial services revenue, mainly from active client base growth and higher monetization from clients in its micro-merchant, small, medium segment (“MSMB”) segment.
Adjusted EPS of R$1.42, trailing the average analyst estimate of ~R$1.44, declined from R$1.76 in the previous quarter and jumped from R$0.75 in the year-ago period.
Q1 total payment volume of R$114.3B fell 5.6% Q/Q and increased 17.9% Y/Y. MSMB segment TPV of R$93.4B fell 5.1% Q/Q and rose 18.4% Y/Y. MSMB net additions were 204.9K vs. 192.2K in Q4 2023.
Stoneco (STNE) reaffirmed its guidance for 2024 and growth through 2027. It expects MSMB TPV to exceed R$412B in 2024 and R$600B in 2027, representing CAGR of 13%. Adjusted net income is still expected to top R$1.125B in 2024 and R$4.3B in 2027, or CAGR of 31%.
Adjusted EBITDA of R$1.51B dropped from R$1.56B in the prior quarter and increased from R$1.25B a year ago. Adjusted EBITDA margin slipped to 49.0% from 49.8% in Q4 2023 and climbed from 46.1% in Q4 2023. The Q/Q decline stemmed from lower seasonal revenue and a change in its internal accounting methodology for membership fees, combined with higher selling expenses as a percentage of revenue. Those negative effects were partly offset by lower other operating and administrative expenses as a percentage of revenue.
“In financial services, Stone performed well in all client offerings. Starting with payments, we posted strong continued TPV growth (including PIX) with an almost flat sequential growth rate,” the company said.
The software business showed progress, it continued. “Revenue growth was modest, with verticals software (priority verticals + other verticals) revenues growing two digits purely organic, mitigated by enterprise software – which remained a revenue detractor.”
Conference call at 5:00 PM ET.