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DATE

Monday, Aug. 17, 2026, at 5 p.m. ET

CALL PARTICIPANTS

• Investor Relations-Andre Parize
• Chief Executive Officer-Thiago Maffra
• Chief Financial Officer-Gustavo Alejo Viviani

TAKEAWAYS

• Total Revenue and Income -- 5.06 billion Brazilian reais ($944 million), representing 8% growth driven by retail expansion in equities and funds despite market volatility.
• Net Revenue -- 4.88 billion Brazilian reais, up 8.8% year over year.
• Adjusted Net Income -- 1.4 billion Brazilian reais, rising 5% year over year as operating leverage offset higher tax rates.
• Client Assets -- 2.2 trillion Brazilian reais, growing 17% year over year from increased retail and corporate inflows.
• Income before income tax -- 1.5 billion Brazilian reais, up 15% year over year reflecting lower mark-to-market impacts and controlled expenses.
• Adjusted Diluted EPS -- 5.17 Brazilian reais, increasing 9% year over year as share buybacks outpaced net income growth.
• Net New Money -- 28 billion Brazilian reais, comprised of 20 billion Brazilian reais in retail and 8 billion Brazilian reais in corporate and institutional inflows.
• Retail Revenue -- 3.9 billion Brazilian reais, increasing 8% year over year supported by strength in equities and funds platforms.
• Wholesale Bank Revenue -- 32% year-over-year growth, led by a 117% increase in the corporate segment which reached 1.1 billion Brazilian reais.
• Equities Revenue -- 1.1 billion Brazilian reais, rising 11% year over year despite an 8% sequential drop in average daily trading volume.
• Return on Equity (ROE) -- 22.5%, representing an 80 basis point sequential increase.
• Basel Ratio -- 20.3%, remaining above the company target range of 16% to 19% even after capital distributions.
• Efficiency Ratio -- 34.3%, decreasing 30 basis points sequentially due to disciplined expense management.
• Advisory Network -- 18,400 advisors, representing 1% growth year over year.
• Active Client Base -- 4.8 million clients, up 1% year over year.
• Net Promoter Score (NPS) -- 66 points, reflecting a consistent recovery path toward historical levels.
• Fee-Based Assets -- 26% of total client assets, as the company transitions toward an agnostic charging structure.
• Share Buybacks -- 1 billion Brazilian reais executed by the end of June, with another 1 billion Brazilian reais program currently open.
• Capital Distribution -- 2.5 billion Brazilian reais total announced in 2026, including buybacks and 500 million Brazilian reais in dividends.
• Share Cancellation -- 11.8 million shares, representing 2.3% of total outstanding shares to reinforce capital allocation discipline.
• Mark-to-Market Impact -- 420 million Brazilian reais in the first half of 2026, primarily affecting fixed income and investment banking books.
• Fixed Income Mix -- 70% concentration in daily liquidity products, a significant shift from 30% three quarters ago.
• SG&A Expenses -- 1.6 billion Brazilian reais, increasing 5% year over year driven by technology investments in AI and cloud services.
• Corporate Credit Portfolio -- 117% revenue expansion while risk-weighted assets grew 26% over the same period.
• Funds Platform Revenue -- 22% growth year over year, benefiting from management and performance fee bookings.
• Retail Net New Money Guidance -- 20 billion Brazilian reais per quarter on average, maintained as a soft target for the remainder of 2026.

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RISKS

• Maffra stated, "The reduction in fixed income offerings weighed directly on our issuer services segment. Resulting in lower revenues versus both the prior year and the previous quarter," noting that credit spread widening impacted debt capital market volumes.
• Maffra warned that "ongoing global geopolitical tensions and residual market volatility" continued to impact results through the first half of the year.

SUMMARY

Management at XP Inc. (XP +1.55%) reported a strategic transition toward a wealth consultancy model designed to provide comprehensive estate, tax, and succession planning. The company is expanding its financial ecosystem through a new small and medium enterprise platform scheduled for launch on Sept. 1, 2026, which will integrate credit cards, acquiring services, and collateralized lending. Management noted that while market volatility and credit spread widening impacted fixed income and issuer services in the second quarter, underlying momentum remained resilient in equities and the corporate segment. The company is maintaining its capital allocation strategy by returning value through buybacks and dividends while targeting a Basel ratio between 16% and 19%.

• The company plans to launch an AI advisor by September 2026 to enhance the value proposition for digital retail and mass-affluent clients.
• Management indicated that investment advisors are transitioning from a product intermediary model toward a wealth consultant approach.
• The new SMB platform launch on Sept. 1 will include collateral-backed credit and revolving lines with very low risk profiles.
• Maffra reported that "slightly more than 26% of our clients' assets" are now under a fee-based framework.
• The company expects flattish efficiency and compensation ratios for the full year 2026 despite nominal expense increases in the second half.
• Viviani announced the cancellation of 11.8 million shares, representing 2.3% of total outstanding shares, to reinforce capital discipline.
• Maffra noted that the fixed income pipeline began showing signs of normalization toward the end of the quarter, with recovery expected in primary offerings.

INDUSTRY GLOSSARY

• AUA: Assets Under Administration, representing the total value of assets the company manages for clients through its platform.
• AUM: Assets Under Management, the total market value of the investments that a person or entity handles on behalf of clients.
• Basel Ratio: A global standard that requires banks to maintain a minimum amount of capital to ensure they can handle losses and remain solvent.
• NPS: Net Promoter Score, a market research metric that measures customer experience and predicts business growth.
• GCM: Global Capital Markets, the division responsible for debt and equity issuance.
• ADTV: Average Daily Trading Volume, the number of shares or contracts traded on average each day.
• IFA: Independent Financial Advisor, a professional who provides independent advice on financial matters to clients and receives a fee for the service.
• CDI: Interbank Deposit Certificate, the benchmark interest rate for the Brazilian financial market.
• Expert: XP's flagship annual investment event, the largest of its kind in the company's history.

Full Conference Call Transcript

Andre Parize: Before we begin, please take a moment to review the legal disclaimer on page 2 of today's presentation, which addresses forward-looking statements. The full presentation is available for download on our Investor Relations website. And you will find additional materials in the SEC filings section of our IR website. Now I hand it over to Thiago Maffra.

Thiago Maffra: Good evening, Maffra. Thank you, Andre. Good evening, everyone. And thank you for joining our second quarter 2026 earnings call. I would like to begin by welcoming Gustavo Alejo Viviani, our new CFO. He joins us at an exciting time just after the biggest expert in your history, an event that showed how far we have come and how much further we aim to go. Now let's dive into our second quarter 2026 numbers. Beginning with the key highlights of the quarter, client assets combining AUM and AUA reached $2.2 trillion representing a 17% year over year growth. We ended the period with 18.4 thousand advisors, up 1% year over year, while our active client base totaled 4.8 million.

A 1% increase year over year. Gross revenues amounted to $5.1 billion this quarter, up 8% from the same period last year. EBT advanced 15% to $1.6 billion while net income came to $1.4 billion rising 5% year over year. In terms of profitability, our ROE increased 80 bps sequentially to 22.5%. Our capital ratio stood at a comfortable 20.3% reflecting our ability to grow while maintaining disciplined capital and risk management. Also, our EPS grew 9% year over year. Stronger than our net income growth thanks to our capital management and payout strategy. The second quarter of 26 was again marked by ongoing global geopolitical tensions and residual market volatility.

While these headwinds materialized with less intensity than in the previous quarter, they still impacted our results. Particularly through the widening of credit spreads and a reduction in primary GCM offerings. Without these effects, we would have achieved double digit revenue growth with a low teens expansion year over year. This demonstrates that despite the market volatility we faced in the first half of the year, our core businesses continued to perform well with resilient underlying momentum. Towards the end of the quarter, we began to see signs of normalization across markets, with a gradual recovery in the fixed income pipeline. We expect this pipeline to materialize into primary offerings over the coming quarters, depending on the market dynamics.

That said, depending on how these dynamics evolve, we continue to target double digit growth throughout 2026, supported by stronger execution across key verticals and a more diversified revenue base. This quarter, we continued to launch products for both individuals and businesses, and our ecosystem is becoming more complete every day. We have a clear ambition, to be the investment leader in Brazil by 2033, but that leadership will come hand in hand with increasing completeness in everything we offer to our clients. This next growth phase is built on personalized service with a focus on financial, tax and succession planning. Our goal is simple, to be our client's CFO, covering their full spectrum of financial service needs.

Moving on to the next slide. Let's take a look at client assets. During the second quarter of 2026, our total client assets combined with assets under management from our asset management business and AUA from our fund administration business, total approximately $2.2 trillion representing 17% growth year over year. On the right side of the slide, you can see how net new money has evolved. In the second quarter of 2026, we again met our soft target of $20 billion in retail net new money, while corporate and institutional inflows came in at $8 billion Altogether, net new money amounted to $28 billion for the period.

While we posted positive results, and met our soft guidance, we continue to navigate a challenging environment in 2026. We are constantly improving our investment platform and as we have mentioned, enhancing the client experience through numerous initiatives. This combination reinforce our confidence in achieving our ambition of roughly $20 billion in retail net new money per quarter on average. Related to that, it is worth mentioning that our NPS ended the second quarter at 66 points, As mentioned in our previous earnings call, we are on a consistent recovery path from the 1-off events that impacted us in former quarters.

This demonstrates the strength of our brand and the trust clients place in our platform, and it gives us an indication that we will return to historical levels over the next quarters. With that, let's now take a deeper dive into the strategic drivers that are shaping our next growth phase. Our comprehensive financial ecosystem is built around long term relationships. We provide service and personalized advice with excellence across every aspect of our clients' financial lives from investments to banking solutions. Many of our clients have needs well beyond investments. And our mission is to provide them with complete solutions. Under this model, the focus shifts from product distribution to building a personalized financial strategy for each investor.

Looking ahead, we see the role of the investment advisor at XP undergoing a profound transformation. The professional is no longer just an intermediary. Of financial products, but is taking on a role closer to that of a wealth consultant broadly accompanying clients throughout their financial journey. Given this context, it is crucial to understand personal and family goals, such as retirement and long term wealth building. The same logic that guides us on offerings from individuals also extends to our corporate clients. We have recently launched new initiatives targeting the business segment always focused on delivering financial management solutions.

We already have a very robust corporate segment, and now we are expanding our offering, particularly for a small and medium sized enterprise. As we have said over the past few quarters, XP is uniquely positioned for this new market environment. We have the largest and most qualified advisor network in Brazil. Along with a trusted brand and an innovative DNA, a combination that enables our tech lead scaling and keeps us ahead of the market. On the next slide, we share further details on our strategy. Across every client segment we serve, our ambition is to deepen relationships enhance the completeness of our product offering, and fully meet all of our clients' financial needs.

On the individual's side, our focus remains on investments. We continue to deepen our segmentation, offering a specific value proposition for each client layer. We were the first to address a latent market demand and offer a truly model agnostic approach. Today, we have evolved this concept into a comprehensive wealth planning model, 1 that allows us to cover our clients across all their financial needs, from investment allocation to estate planning, succession, and beyond. Under this model, the charging structure naturally aligns as a fee based, which continues to gain traction. We already have slightly more than 26% of our clients' assets under this framework. On top of that, we are expanding our offshore investment capabilities.

And making continued progress on new product launch, including ETFs, and managed portfolios, all fully aligned with our way of serving clients. At the same time, we are adding credit to our solutions shelf that has already expanded meaningfully over the past few years. During which we introduced numerous innovations in banking and insurance. I would like to emphasize that this expansion is the continuation of a well planned strategy, 1 that has been consistently executed over the years with the addition of services and solutions. For businesses, the same logic holds true. And this is where we see the greatest opportunity. Since these companies and their founders have long been underserved by traditional players.

We plan to change that by delivering a complete modern, and a scalable offering. Just as we transform the investment landscape for individuals, we are now about to do the same for businesses. We introduced a new standard of high quality advice, supported by technology and a complete range of products and service designed to tackle the real pain points of a market that has never been fully served. By advising these entrepreneurs with the same depth we bring to individuals, can help them manage and allocate their cash flow more effectively to grow their businesses. We are now expanding and upgrading our commercial coverage while launching new features for businesses.

We recently announced a partnership for POS device and a credit card geared toward small and medium sized enterprise. These are natural extensions of our franchise and a continuation of our strategy that has been underway since 2019 when we obtained our banking license. Finally, I want to emphasize that we execute this strategy with the utmost discipline. Ensuring that every step we take remains firmly aligned with our capital ratios and conservative risk approach. With that, I will now hand the call over to Alejo Viviani to cover the financial section on the presentation.

Gustavo Alejo Viviani: Thank you, Maffra. it is a pleasure to be here with all of you today. I would like to begin by expressing my sincere appreciation for the warm welcome since joining XP. I am thrilled to be part of this journey and I am looking forward to contributing to our next chapter of growth. Now let me walk you through our financial performance for the quarter. Total gross revenue in this second quarter 2026 reached BRL 5.1 billion. Up 8% year-over-year and 3% quarter over quarter. Retail growth in the quarter was driven by equities, funds platform, new verticals and other retail. Which expanded at a rapid pace year over year.

The Wholesale Bank division also delivered consistent growth led by solid performance of our Corporate segment. Now let's move on to retail revenue. Retail revenue totaled BRL 3.9 billion in the quarter, representing an 8% growth year over year and a 3% growth quarter on quarter. Reflecting the impact of fixed income corporate credit in Brazil, already explained. Excluding this mark to market effect, retail revenues would have grown 15% in the first half of 2026. When compared to the same period last year. Showing a resilient underlying momentum. Even with the lower ADTV of equities and futures in the second quarter, equities revenue increased 11% when compared to the same period of last year. Reaching almost BRL 1.1 billion.

Sequentially, equities revenue dropped 2%, while ADTV fell approximately 8% in the same period. Funds platform also posted a strong performance this quarter. Growing 22% year over year and 7% sequentially. Due to the booking of management and performance fees. This quarter. Also, retail annual performance benefited from a stronger contributions from new verticals. And different revenue lines included in other retail. Like float, international platform and FX. Now let's move on to the next slide. Where we will cover how our wholesale bank is evolving. Our wholesale segment, including corporate, issuer services and institutional revenues, grew 32% year over year and 3% sequentially.

The market deterioration that began in March and prevailed through April, combined with the lower risk appetite from investors, led to a sharp decrease in the number of new fixed income offerings. Particularly tax exempt fixed income instruments. The reduction in fixed income offerings weighed directly on our issuer services segment. Resulting in lower revenues versus both the prior year and the previous quarter. Despite this reduced number of offerings, the corporate segment posted another strong result. With revenues growing 117% year-over-year, and 22% sequentially. Our ability to cross sell and deliver a broader set of solutions to our corporate clients such as derivatives, FX and credits, continued to support our revenue growth.

Finally, our institutional business grew year over year. And was relatively flat sequentially, like retail equities the segment reflects lower trading volumes during the quarter. Now let's shift our focus to SG&A and efficiency ratios. Our SG&A totaled BRL 1.6 billion in the second quarter, increasing 5% year over year and 2% quarter over quarter. On the right hand side of the slides, our last 12 months efficiency ratio stood at 34.3%. An increase of 30 basis points year over year and a decline of approximately 30 basis points sequentially. This quarter, we delivered a good efficiency ratio against a more challenging revenues backdrop.

As we move into the second half of the year, we expect the typical effects that lift both revenues and expenses. Such as bonus provisions and the expert event. Despite these effects, we continue to closely monitor the pace of our SG&A and we still target to deliver a flattish efficiency ratio on a year over year basis for full year. Moving to earnings before taxes now. Our adjusted earnings before taxes totaled BRL 1.6 billion in the second quarter 2026, up 15% year over year and 10% quarter over quarter. We delivered 32% adjusted EBT margin, expanding on both a quarterly and a yearly basis.

Lower mark to market impacts positive performance across several of our segments and controlled expenses all contributed to operating leverage. Which resulted in a higher EBT and EBT margin this quarter. On the next slide, we present our net income. Adjusted net income reached BRL 1.4 billion in the second quarter, representing a 5% increase compared with both the prior year and the prior quarter periods. Net margin was 28.3% in the second quarter 2026, up around 50 basis points sequentially and down around 100 basis points year over year. And our tax rate for the quarter was sequentially higher due to the mix of results.

Stronger performance results from the corporate line, and less negative mark to market impact from the warehousing book. Now let's move on to the next slide to talk about our earnings per shares. And returns. Our adjusted diluted earnings per shares increased by approximately 9% year over year at a faster pace than our net income growth, reflecting the execution of our share buyback program. On the right hand side of the slide, you can see our adjusted annualized return on tangible equity and return on equity. Given our lower Basel ratio sequentially both metrics are higher this quarter when compared to the previous 1.

With that, I move on to the next slide to talk about our capital management strategy. During the second quarter, we continued executing our share buyback program. As of the end of June, we have executed BRL 1 billion and closed the previous buyback program. We still have another open program of BRL 1 billion. Which we continue to execute strategically. Combining the 2 buyback programs and approximately BRL 500 million in dividends distributed in June we reached nearly BRL 2.5 billion in capital distribution, already announced in 2026. Additionally, I would also like to announce that we will be canceling approximately 11.8 million, 2.3% of our total outstanding shares.

Further reinforcing our commitment to discipline capital allocation returning value to our shareholders. Now let's move on to the second part of our capital management strategy, on the next slide. I would like to turn to our capital ratio and risk weighted assets. Closed the quarter with a Basel ratio of 20.3%. And a CET1 ratio of 17.1%. As mentioned in our previous earnings calls, throughout 2026, we will operate the business with a high Basel ratio. However, we are comfortable bringing it down to our target range of 16% to 19% while still maintaining comfortable capital buffer. On the right hand side of the slide, we show our RWA. The main growth driver was credit RWA.

Mostly associated with our corporate business. it is worth noting that while total RWAs grew around 26% year over year, Our corporate revenues expanded 117% over the same period. This shows that we will continue to evaluate and seize growth opportunities as they arise. While maintaining our focus on risk return criteria. And with that, we can move on to the Q&A section Thank you.

Operator: Daniel, please go on.

Daniel Vaz: Hi, guys. Good night. And thank you for taking my question. Alejo Viviani, welcome aboard. Hope you have the most success in XP. Like to hear a little bit more about volatility and I guess we are we are heading to an election period. And I will be curious to hear what your expectations for the volatility and your revenues, mostly if you could break down into the retail revenues and also for the corporate? Because corporate, we are seeing a very strong first half. You delivered close to BRL 1.1 billion.

So trying to understand whether that is a level on the corporate side that could even go higher compared to the first half of the year as you have more opportunities for maybe self-hedging, derivatives FX, and also, protection for rates ahead of the October and November, election period and also, breaking down in retail and corporate would be very good to hear about that. Thank you.

Operator: Thank you for your question, Vaz.

Thiago Maffra: This is Thiago. Yes. About volatility, it is important to mention that usually when we have a high volatility, it is positive in terms of volumes and revenues for some businesses. Especially when we look at the institutional desks or retail trading clients, if volumes pick up as we have for most of the markets between 30-50% market share, volumes pick up, we make more money. So, yes, when you look especially just 2 business lines, institutional and retail traders, we expect higher revenues on the second semester. About corporate, revenues, I believe we have been investing in this business since 2021. So the business has been growing year over year.

On a very conservative way So for example, we had this year a lot of events We did not have any exposure for these names, so we have a very high quality credit portfolio. The derivative business is growing. Energy among FX and a lot of other businesses, are growing. So we believe this level of corporate business is a normal level for the future. Okay? I know it was very strong. But we expect that Q3 also is strong for corporate. So it is part of the business that is growing. Okay? So it is a normal level looking forward.

Daniel Vaz: Alright. Thank you.

Thiago Maffra: Alright. Thank you. Okay.

Operator: Next question is from Eduardo Rosman from BTG. Rosman, you can go on.

Eduardo Rosman: Hi, everyone. I have a couple of questions here about the wholesale banking business. If you can share with us, what are your expectations on how relevant this business could become within XP as a whole over the next few years. If you think you already have the right teams and all the alignment in place, you know, to expand the lending business? If not, to know what is still needed, you know, to get there. And finally, if you could share your view about, you know, payout ratio medium term. Right? I think, in the short term, I think you mentioned you still expect to pay more than 50%, you know, in the form of dividends and buybacks.

But given that you expect to use more your balance sheet in the future, you know, should we expect any change in that? Thanks a lot.

Thiago Maffra: Thank you for the question, Rosman. Taking the first question about the wholesale. We do not have any change in strategy. The strategy that we started 4 years, 5 years ago. So we will continue to grow step by step on the business. So we received a lot of questions. if Gustavo was coming here because we are planning a shift on credit basis, but that is not the case. Of course, he has great background on different areas of banking, including the wholesale, but also retail. As you can see, all the, I would say, banking business for both individuals and companies, they are growing in the past years, insurance as well.

So the strategy is to complete the ecosystem and to serve our clients as a whole, and we will continue to do that. So you guys probably saw that we announced that we are launching a platform for SMBs. it is going live on September 1. Okay, with cards acquiring credit with collateral and so on, a lot of different products. So it is part of the evolution of the business. So there is no big shift in strategy. there is no big shift on credit. We are not going to start to grow the credit portfolio in a very different pace. So it is I would say, more of the same.

Of course, when we compare ourselves with the other banks, we still have a lot of room, like, to build new business lines. To grow, but it is gonna be step by step always being cautious on credit, always being cautious on risk. So and about people, would say that we have most of the people that we need, most of the capabilities, Of course, as you know very well, the company we were born as a broker dealer folks on individuals, folks on investments. So it took us, I would say, 4 or 5 years to get to this point. Where we are comfortable on building new business lines.

We can always bring, and we are always looking to bring people that complement our capabilities and our skills. it is always gonna be part of the business. And Gustavo Alejo Viviani, who is 1 of these examples, for sure, he will help us not only on the wholesale, but also on the individual part, on investments, and on everything. So yes, I believe we are ready to grow and to execute the strategy that we have been executing in the past years. Not sure if you want to share something, Alejo.

Gustavo Alejo Viviani: I am saying that today, he is here, listening, but next time he will be up to speed. And it has been 2 weeks with us, and it has been great. Like, a lot of, like, good discussions already. So I am happy to have you here. Hi. Hi, I hope you are doing well. A real pleasure to reconnect with you. Well, I am entering my third week, so, in this great company. So I am energized. I am genuinely pleased to be part of such a remarkable growth story. So, the strategy is written. We are not changing the strategy. I am just being and will be part of this, this growth story, so part of the team.

I saw a very strong team. Focused team. And very strong metrics in terms of credit. So, we have all set to keep growing at a good pace and with good profitability. Very good to talk to you again.

Thiago Maffra: And To take your second question about payout. As we mentioned, we have a guidance to get our BIS ratio between 16 and 19. Today, we are above 20%. Meaning that we will have, like, to distribute more capital throughout the year. We already executed a billion buyback. We have another billion open that we are executing at these levels. We already execute $BRL 500 million in dividends. So totaling and assuming that we execute the billion that is open, 2.5, I believe this year, we are going to be higher than 50% for sure. Otherwise, we do not get below 19. So you can expect more buybacks or more dividends throughout the year.

Depending on the price that we have during the year. At this price, of course, we lean toward buybacks more than dividends. So that is the idea today. Thank you. Thank you both. Thanks a lot.

Operator: Okay. Next question is from Mario Pierry from Bank of America. Mario, you may proceed.

Mario Pierry: Hey, guys. Good evening. Thanks for taking my question. Alejo Viviani, yep, welcome. Good luck to you. it is nice to be talking to you again. Let me ask you a question on what you talked about the retail revenues would have increased 15%, excluding the impact of the mark to market So we are estimating that is about BRL 420 million impact on revenues in the in the first half of the year. Is that correct? Because I think you had discussed that the impact was close to BRL 400 million in the first quarter. So are we is it fair to assume that the impact in the second quarter was very marginal?

Thiago Maffra: it is Thiago here. I will take the question. So yes, your math is right. It was around $420 million I would say it was below BRL 300 million on the first quarter, and the other part on the second. So would say BRL 150-160 million on the second quarter. Okay? So K. that is those are the numbers. Thanks. that is clear. So Maffra, then when we look, I would imagine, right, this is this was an impact on your fixed income revenues.

So I looked at your fixed income fees, I get an average of about 89 basis points first half of 26 down from 99 basis points first half of last year So this is primarily this drop is primarily because of changing mix Yes.

Mario Pierry: There are 2 effects there.

Thiago Maffra: Okay? The first 1 is what you mentioned, mix. We have never seen, a mix so much concentrated on Selic post-fixed instruments and with very short term duration mostly on daily liquids products. So that is 1 of the biggest problems with fixed income revenues today. But there is also when we say that we lost more than BRL 400 million on mark to market. it is mainly on the book from our investment banking. Okay? And if you take into consideration that there was almost no market for GCM for that debt capital markets on second quarter.

There was also a huge impact on the primary market fees So the impact on the second quarter was almost the same quarter if you consider the revenue we lost on primary market and the mark to markets on the secondary market. So it was a very low volume We have done less in a quarter than we do in a month. Okay, when you compare Q2 with Q1. Okay? So it was a huge drop on primary market. We are seeing that stabilizing again on Q3 on a lower level than in the past, but Better than Q2. Okay?

Mario Pierry: So those are the impacts when you look Because remember, there is revenue split between primary market on retail and investment banking and that is why the mark to market is there. So they are 2 impacts here. Okay. And just a clarification on this daily liquidity product. What percentage does it represent of your assets today, your fixed income assets? Roughly?

Thiago Maffra: Yeah. We do not open the mix by type of product, but today, out of everything that we sell, on the fixed income platform, I would say that almost 70%, it is on daily liquidity prod, 70. Okay? 7-0. So that number was 30% I would say, 3 quarters ago, 4 quarters ago. Okay? So that is the it is a huge change on mix. And remember that when we sell a daily liquid CG or kind of products, we get a daily accrual on a very low take rate. So we have 2 effects here. When you sell corporate bond, you make duration times spread. Upfront when you sell daily liquidity product.

You get a daily accrual on a lower level. So it is a double impact here. Okay. And you are not seeing any changes on that mix in the short term? Not yet. If you look at the fund platform, we started to see more stable level and it is early to say an improvement, but we are seeing an improvement on funds. But I believe we are close to the turning point here. But early to say that we are already there. Okay. Thank you very much.

Operator: Okay. Next question is from Chito Labarta from Goldman Sachs.

Tito Labarta: Okay. Thanks. Good evening. Maffra, Alejo Viviani, also welcome. To see you here. A couple questions also. I guess following up on Mario's question on the mark to market right? I mean, do you expect any more impact going forward? Or do you think we are at a point that we can see retail revenues growing around that 15% level going forward, or could there still be more impact Right? Just to understand, like, what is the real, like, underlying growth of the retail revenues that we can kind of factor in going forward. And then second question, just there was a bit of a jump on the JV and associates.

It was, like, about BRL 30 million, BRL 32 million higher than last quarter. Just was there anything significant there to highlight to understand that jump? Thank you.

Operator: Thanks for your question, Tito.

Thiago Maffra: About your first question, we have reduced a lot our books because remember, it is mainly from the, primary, book from investment banking and also the, what we call, facilitation, the secondary bridging flow book for retail clients, clients. So we have reduced a lot the book during the first half of the year. But it is part of the business. We still have a big book. Remember, we have 30 to 40% market share here on this kind of instrument. So we always keep a book. If we see another spread widening the same size it happened in the past, we are going to lose less than we lost in the first half because the book's smaller today.

But we are going to lose something. We are not seeing the spreads there at the same level for, I would say, 2 months. It opens and close 5 bps, 10 bps, so that is not much. Okay? But we you are seeing a stable level right now. Let's see. If there is no big change you should expect no mark to market provisions in the future. But, again, the book's smaller, but it is part of the business So I cannot guarantee that we are not going to lose or make money in the Okay? Your second question was On the shared profit from JVs and associates they had, like, a BRL 32 million quarter over quarter. Yeah.

Remember that we have invested a lot of money on IFAs, on asset managers, and some other businesses in the past. Most of these businesses, they are growing, so you should expect this line to grow year over year. And there is a seasonality because remember, part of these businesses, they are asset managers. Usually, you have performance fees at the end of the semesters. So that is what explain most of the increase there. But, again, we put a lot of money into these businesses. They should grow over the years. Okay? Great. Thank you, Maffra. that is clear.

Operator: Okay. Next question is from Neha Agarwala from HSBC. Neha, you may proceed.

Neha Agarwala: Hi. Thank you for taking my question. Just quick clarification on the cost side. You have shown very good control over costs, both in COGS and OpEx. Can we just dig a bit deeper to understand what are the key levers that you are using and what can we expect in 2027? Where do you see additional room for optimization if any? Or it will be more revenue play in 2027. Thank you.

Operator: Thank you for your question, Neha, When we think about our SG&A for the future, remember that at the beginning of the year, we said that you should expect a flattish efficiency ratios, compensation ratios for the year.

Thiago Maffra: that is the case so far. Remember that there is a seasonality historically on our revenues, the second half of the year is usually stronger than the first half, meaning that if we keep the same efficiency ratios, you should expect SG&A to grow nominally in nominal terms on the second half of the year. Okay? So on top of that, on Q3, we have Expert so it is a big cost for us. So you should expect cost to pick up a little bit on second half. But, again, you can expect flattish efficiency ratios and compensation ratios. And how should we think about 2027 in terms of further room for cost optimization?

Should cost efficiency continue to remain flattish going into 2027, or do you see room for it to come down? I would say flattish is a good but remember that we are building a lot of new business lines, new channels, growing. So it is not a commitment that we will gain efficiency or be flat but I would say flat is a good assumption. Super clear. Thank you so much.

Operator: Next question is from Marcelo Mizrahi from Bradesco. Marcelo, please make your question.

Marcelo Mizrahi: Hello, everyone. Congratulations for the results, and thanks for the opportunity. So my question is regarding the margin gross margins. Also, to understand, so the dynamic has been changing. So, gaining margin on the fees, on the rebates, which is dynamic of the of the channels. But we are seeing the gross margin is pretty stable. So this quarter was pretty strong. We expect going forward these gross margins going up? In the next quarters with the dynamics of the mix that we probably the company will have in the next quarters? Thank you.

Thiago Maffra: Yeah. We have a lot of operational leverage when we think about the business, and it is the same case when we think about the channels. So when we look on the long run, you could expect gross margins to improve. But remember that the mark to market also impact this kind of ratios because when we have more than BRL 400 million reais on our top line that there is no correlation to our sales channels or to IFAs. It just distorts a little bit the ratios the companies the commission ratios and so on. So that is the main explanation. Okay.

Operator: Next question is from Pedro Leduc from Itau. LeDuc, you may proceed.

Pedro Leduc: Thanks, everyone. Congrats on navigating this challenging quarter. I want to go back a little bit to the SG&A side You have been very clear about the seasonality in the second half. We can clearly see you investing here more behind people. But then I go back to a conversation we had earlier in the year that you are looking to revamp your tech based, you know, client facing, especially for the mass-affluent or the base of the clients and where you were maybe losing a little bit of traction.

And when I think about the flat efficiency and you are paying out for more people, you also have to boost the tech slash AI investment deck So question is, are you being able to accommodate both here in these figures that you are talking about? And where are you in this upgrade that you meant to do in the basic, you know, channel or service facing technology. Thank you.

Thiago Maffra: Yeah. Great question. When you look especially when you look the first half of the semester, you see non people, SG&A growing a little bit more. it is mainly technology. Okay? So technology is growing a lot, and it is mainly concentrated on AI, on servers, cloud, and so on. So we have been able to manage investing on this new technology while maintaining the efficiency ratios And about the segment that you mentioned, we always talk about our when we simplify in 3 segments, the digital retail segment, the affluent clients, and the private bank clients. And you are right.

We have been creating a value proposition for this retail digital clients in the past, I would say, more than a year. We are about to launch an AI advisor I would say, this month or beginning of next month. Because today, as we have a more complete shelf of products, including banking, and insurance and so on, we are able to provide a good service and have a good economics, which is smaller ticket size clients. So you can expect especially in 2027, the number of clients coming from this segment to accelerate. So I would say 2027 is a good year to take a look at the segment. Amazing. Thank you for the update, and talk soon.

Operator: Okay. Next question is from Arnon Shirazi from Citi. Arnon, you may proceed.

Arnon Shirazi: Hi, all. Good evening. My question is still on expenses. When analyzing people expenses, I can see that salary has been increasing 23% year-over-year while the headcount grew 13%. Is there any change in compensation recently Also, we see a lower magnitude of share based compensation. Just trying to see the moving pieces here. Thank you.

Thiago Maffra: it is hard to segregate salaries from the bonds and total compensation and so on. I would say the best way of looking is the compensation ratio because the mix of people is very different. That we are hiring and so on. So look at the total compensation I would say that is the best way of analyzing people cost. Including also the RSUs, and so on. Okay. Got it. Thanks.

Operator: Okay. Next question is from Guilherme Grespan from JPMorgan. Grespan, you can go on.

Guilherme Grespan: Thank you, guys. Good evening. I am here with Gustavo. Thank you for the 2 quick follow ups on our side. Maffra. First 1, just confirming issuer services. I think you mentioned that a primary markets has rebounded a little bit versus the second quarter, but still at very soft levels compared to last year. I just want to confirm that is kind of the message for the third quarter. And then my actual question is more a follow-up on the SME strategy going forward. You mentioned a little bit the credit card strategy.

You have the POS partnership, but focusing specifically on the credit side of the business, what is going to be the strategy here? it is gonna be credit plus working capital, or working capital? Is it going to be with collateral or not. Do you plan to do government related programs? Just want to understand the mindset for lending specifically. Thank you.

Thiago Maffra: Thank you for the question. About the first question, yes, you are right. Q3, when we think about again, we are talking about debt capital markets, GCM. Okay? If you look funds and other products, they are performing well. So but when we look GCM, that is a big chunk of our issuer service. it is better than Q2, but softer than the recent past, OK, or especially when we compare to 2025 that the volumes were all time high. So it is recovering, but at a softer level. Okay? The second part, SMBs. Yes. Strategy when we go to credit here, remember that we are not aggressive even on corporate clients.

So as we are going down, we are going to be even more conservative. Okay? So it is always with collateral. Yes. We are joining some government programs, other credits with collateral, from cards, from other receivables. So it is always going to have some collateral. Okay? Of course, we can have a very small revolving lines, but the main part here is with collateral and very low risk. So that is the strategy when we think about credit for these segments here. So not big risks, not clean. So we are going to go step by step here. that is clear. Thank you.

Operator: Okay. Thank you, everyone. So here is the time that we are going to finish the call. Thank you for joining us today. We will keep in touch. Any further questions, the IR team is more than happy to address. And see you next quarter. Thank you.