What happened

Shares of Brazilian fintech company StoneCo (STNE 0.32%) were flying higher on Wednesday after the company reported results for the first quarter of 2020. Shares were up 28% early, but were still trading 19% higher as of 11:20 a.m. EDT.

While StoneCo has been negatively impacted by the COVID-19 pandemic, the company showed that business is already well along the path toward recovery.

STNE Chart

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So what

StoneCo stock has underperformed the market in 2020 since it does business in Brazil, one of the countries that's been most affected by the coronavirus. StoneCo is a payments provider for many small and medium businesses, so it was logical to assume its business would suffer.

That fear indeed played out. StoneCo's total payment volume (TPV) in the second half of March fell 4% year over year, as Brazil locked down. As a result, the company quickly shifted from high-growth mode to survival. Last quarter, it hired over 500 people -- more than any other quarter ever. This quarter, it cut 20% of its workforce.

This sent the stock down as investors braced for the worst, especially with coronavirus cases still climbing in Brazil. However, StoneCo's business is already surprisingly rebounding. TPV in April was up 9% from last April, while TPV in May (to date) is up 23%.

StoneCo investors braced for the worst but were hit with positive news. That sent this fintech stock flying higher today.

A businessman rides a rocket with cash money exhaust over a multicolored bar chart.

Image source: Getty Images.

Now what

There may be one final nugget to take away from StoneCo's Q1. In the conference call to discuss results, CEO Thiago Dos Santos Piau said the company estimates 50% of all Brazilian e-commerce transactions from mid-March through the end of April were processed through StoneCo in one way or another. If this staggering estimate is anywhere close to reality, it represents a formidable position in a region still very early in its digital-payments journey.