XP(XP -0.34%) reported second quarter 2025 results on Aug. 18, 2025, delivering record net income of BRL1.321 billion, up 18% year over year, and a return on equity of 24.4%. Total client assets under management and administration reached BRL1.9 trillion, up 17% year over year, while gross revenues rose 4% to BRL4.7 billion, and diluted EPS increased 22% year over year. The following highlights focus on profitability drivers, capital allocation, and channel diversification shaping the long-term investment case.
XP net margin expands to record high
Net income margin reached 29.7% in the quarter, with SG&A expenses growing 10% year over year due to ongoing investments in technology and marketing. The Common Equity Tier 1 (CET1) capital ratio rose to 18.5%, well above the Brazilian sector average of 12%, providing significant capital flexibility.
"Net income reached BRL1.3 billion, an 18% increase year over year and a 7% increase quarter over quarter. Net margin expanded by approximately 130 basis points quarter over quarter and 320 basis points year over year, reaching 29.7% in 2Q 2025. In your revenue mix for this quarter, higher secondary market activity compensated lower volumes on investment banking, impacting our effective tax rate. This translated into a new record high net income for a quarter, with significant EPS growth."
-- Victor Mansur, CFO
This margin expansion, despite investment banking headwinds, demonstrates the resilience and scalability of XP’s diversified business model, supporting long-term value creation even in challenging market conditions.
XP capital allocation boosts shareholder returns
XP maintained a BRL1 billion share buyback program and committed to distributing over 50% of net income in both 2025 and 2026. Diluted EPS grew 22% year over year, outpacing net income growth due to the shrinking share base from buybacks.
"Combined, their volumes should be above 50% of net income for 2025 and 2026. We already have a share buyback program of BRL1 billion to be executed until next year, and new announcements will be made according to the Board of Directors' decision. Moving to the second part of capital management on the next slide. This is the last topic of my presentation. And we can see on the left-hand side that our BIS ratio in a very comfortable level of 20.1%. On the same rationale, our CET1 is at 18.5%, which is way higher than peers' average of 12%."
-- Victor Mansur, CFO
This disciplined capital deployment supports robust shareholder returns while preserving a strong regulatory buffer for future growth or macroeconomic uncertainty.
Channel diversification drives asset growth
XP increased active clients by 2% year over year to 4.7 million, with more than half of new asset inflows now coming from internal advisers and the Registered Investment Adviser (RIA) model, a shift from exclusive reliance on the B2B Independent Financial Adviser (IFA) channel in 2021.
"If you go back a few years, I would say that the main one was channel diversification. Back in 2021, we only had one channel, what we call the B2B, the IFA channel. Today, we have the internal advisers. We have the RIA model. So if you look the numbers today, more than half of the net new money is coming from the new channels. And we keep investing in increasing the number of internal advisers, the number of IFAs on our network. So one of the, levers here."
-- Thiago Maffra, CEO
This evolution in distribution channels enhances the durability of XP’s growth and supports its market leadership ambitions.
Looking Ahead
Management reaffirmed its target of approximately 10% full-year revenue growth for 2025 and aims for an average of BRL20 billion in retail net new money per quarter, subject to macroeconomic conditions. The company expects to complete its remaining BRL1 billion share buyback and continue distributing over 50% of net income through dividends and repurchases in 2025 and 2026. Management anticipates higher revenue acceleration in the second half of 2025 compared to the first half.
