XP (NASDAQ:XP) released first-quarter financial results and hosted an earnings call on Monday. Read the complete transcript below.

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Summary

XP Inc. reported strong financial performance in Q1 2026 with client assets reaching 2.1 trillion reais, a 21% year-over-year growth, and gross revenues at 4.9 billion reais, up 8% year-over-year.

The company announced a new 1 billion reais buyback program and 500 million reais in dividends, reflecting strong capital management and shareholder returns.

Despite global market volatility affecting credit spreads, the company maintains confidence in achieving double-digit growth for the year, supported by a diversified revenue base and strategic initiatives.

Operational highlights include a 1% increase in advisors and a 2% increase in active clients, with an emphasis on expanding retail and private banking segments.

A leadership transition was announced with Gustavo Vallejo appointed as the new CFO, succeeding Victor Mansour, who remains a partner and will support new ventures.

Full Transcript

Andre Parese (Investor Relations Officer)

Good evening everyone. I'm Andre Parese, Investor Relations Officer at XP and thank you for joining us and welcome to our first quarter 2026 earnings call. Today's presentation will be delivered by our CEO Thiago Mafra and our CFO Victor Mansour, and right after the presentation they will be both available for the Q and A session.

To ask a question during the Q&A and A session, use Zoom's Raise Hand feature. We will address your questions in the order they are received Live translation into Portuguese is available. Click the button below if you would like to enable it. Before we begin, please see the legal disclaimer on page two of today's presentation for information regarding forward looking statements. The presentation is available for a download on our Investor Relations website with further details in the SEC filings section of our IR website.

To begin the presentation, I will now turn it over to Thiago Mafra. Good evening Mafra.

Thiago Mafra

Thank you Andre. Good evening everyone and thank you for joining us for the first quarter 2026 earnings call. Let's begin by reviewing the key highlights of the quarter. Client assets combining AUM and AUA reached 2.1 trillion reais which represents a 21% year over year growth. We ended the period with 18.3 thousand advisors, up 1% year over year, while our active client base totaled 4.8 million, a 2% year over year increase. This quarter gross revenues came in at 4.9 billion, up 8% year over year.

EBIT also grew 8% to $1.4 billion and net income reached 1.3 billion, rising 7% year over year. On profitability, our ROE achieved 21.7% for the quarter. Our capital ratio remained at a comfortable 20.7%. More importantly, these results reflect our ability to grow our business while maintaining disciplined capital and risk management. I would also like to highlight that today we are announcing a new buyback program of 1 billion reais. As of now, we have executed almost half of the currently 1 billion open program.

Additionally, we are also declaring 500 million reais in dividends to be paid in June. Victor will provide more details in his presentation. Now moving to our diluted EPS, it grew 9% year over year, outpacing net income growth. We enter 2026 with solid momentum largely driven by the global macro environment as weaker US dollar and a rotation toward non US assets boosted emerging markets inflows which helped improve Brazil market dynamics and enabled us to sustain the growth momentum built in the second half of last year.

However, as you know, the environment changed in March. Increased global volatility pressured local market sentiment while domestic red spreads widened at the same time driven by technical factors. These developments were external to our underlying performance. Excluding these external factors, we would have delivered even stronger results achieving double digit EPS growth we saw the spread spread trend continue into April. However, we now see a better balance between buyers and sellers in the market, leading spreads in a more stable phase.

Despite this widening in April, we do not expect an impact on the same magnitude as we saw in the first quarter. Said that we still see our business growing double digits this year. Additionally, we are now seeing the early stages of an interest rate easing cycle. While the pace of easing is expected to be more gradual than previously anticipated, rates are still at high levels and despite global uncertainties, there is still room for further cuts.

This ongoing easy cycle, even if it is lower, supports our business momentum as this positively impacts investors risk appetite and turnover velocity. The short term volatility we mentioned earlier may have briefly slowed our growth momentum towards the end of this quarter. Even so, we are confident we can return to double digit growth supported by stronger execution across key verticals and a more diversified revenue base. Our unique scale and differentiated retail investments platform provides a competitive edge unmatched by any other player in the market.

In addition, we now operate within a much broader ecosystem and our corporate segment has definitely reached new standards that extend beyond pure investment banking. Together, these strengths helped partially offset the impact of higher volatility referenced earlier, reinforcing retail investments and corporate as important drivers of growth and diversification. Finally, the powerful combination of service excellence, strong client relationships and financial performance, together with a sales force that has aligned incentives and robust capabilities, corroborates our conviction that disciplined execution backed by governance and technology will

drive our performance. Ultimately, our ability to execute this strategy is what will enable us to achieve our long term objectives in all our divisions regardless of the current macroeconomic environment. Now moving to the next slide, in the first quarter of 2026, our total client assets combined with assets under management from our asset management business and AOA from our fund administration business totaled over 2.1 trillion, representing a 21% growth year over year.

We are strategically positioned for our next growth phase and remain focused on our ambition to become Brazil's leader in Investments by 2033. To achieve that goal, despite external uncertainties, we are executing a strategy built to consistently deliver double digit growth. We are also constantly investing in our ecosystem and advisors in strengthening what is already Brazil's largest and most sophisticated investment platform. We are the only player that can lead the democratization of access to first class financial services supporting clients with a holistic approach built on financial and wealth planning, delivered at scale and with strong

governance. The market has recognized these capabilities as we were recently named for the eighth consecutive year the best financial advisory platform. With that, let's move to the next slide. On the left hand side of this slide you can see how Net New money related to client assets performed at the start of 2026 in Q1 we posted 19 billion of organic retail net new money while corporate and institutional came in at negative 4 billion bringing the total for the quarter to approximately 14 billion.

So we reais again reached our guidance of around 20 billion in retail net new money per quarter.

During the first quarter of the year clients received FGC-related inflows. It's important to highlight that that these payments were not included in the Net New money calculation as the related adjustments were made exclusively to our client assets base. As you can see on the right hand side of the slide, the high retention levels of roughly 80% following these FGC-related inflows reflect the consistent execution of our advisors and and the strength of our brand related to that.

And as we mentioned last quarter our NPS was impacted by one off effects related to credit events and Banco Master. They temporarily affected a specific group of clients and consequently our overall NPS first quarter's NPS is still impacted by them due to a calculation methodology using moving averages. However, we are already on a consistent recovery path and more recent indicators were positive. With NPS coming around 70, we expect to return to historical levels by year end, demonstrating the strength of our brand and the trust clients place in our platform.

Lastly, I would like to take a closer look at our retail strategy and share a bit more detail about this area of the business Investments or core franchise remain solid, supported by healthy underlying trends and continue to serve as a key driver of our results. We are further strengthening what we view as the market's best and most comprehensive product platform while also improving advisor productivity. This progress is underpinned by excellence in relationship management and a more intelligent disciplined allocation process.

Following our refined client segmentation, we develop tailored servicing models for each segment ensuring our approach is aligned with distinct needs for each client group. In retail clients we have developed a new value proposition grounded in goal based investing and managed portfolios. With that, we are already seeing improvements in this segment supported by margin accretive dynamics. Our strategy is to extend this approach to other client layers using technology, process and governance as key enablers to scale in a profitable way.

In high income or core segment, we deliver a distinctive value proposition having been true pioneers in in democratizing access to financial and wealth planning in Brazil. In addition to our differentiated advisory model, we were the first player to offer a truly agnostic servicing model enabling us to address this latest client demand. We also continue to expand our sales channels, invest in new products and service and enhance the client journey by by providing the best tools available in the market.

In private banking, we continue to gain market share by enhancing our offering and leveraging our broader ecosystem to address clients needs more comprehensively. We have evolved into a full service wealth manager serving clients both individual and corporate needs, supported by a robust product platform and and a highly skilled team. As our private banking franchise matures, we are becoming increasingly well positioned to compete with larger players in this segment.

In addition, our private segment has become a fundamental part of our ecosystem serving as an important source of cross selling opportunities and referrals for other businesses. Among the three growth drivers that directly impact our business take rates are the only variable that we do not control 100% as product mix and asset turnover are driven by investor sentiment and market momentum. On the other hand, our other growth drivers are fully within our control and support our long term journey.

We have also partially offset the stake rate effect through revenue diversification, growth in advisory fee based models and expansion into new verticals. Before I hand over to Victor, I want to quickly comment on the 6K we just released. Today we are announcing that Gustavo Vallejo has been appointed as XP's new CFO. This is part of a thoughtful and well planned transition marking a new chapter for XP as the bank continues to grow within our ecosystem.

Alejo is a seasoned executive with a remarkable track record and his expertise will be instrumental to our expansion strategy. We are truly pleased to welcome him to our team. I also want to take this moment to express my gratitude to Vitor. Over more than a decade he has been a central figure in XP's journey. His dedication and contributions have been fundamental to the growth and development of this company. Vitor will remain part of XP ecosystem supporting us in new ventures ahead.

I sincerely thank him for everything he has built here and I wish him every success in what comes next. Thank you Vitor.

Victor Mansour (CFO)

I would like to thank Mafra Benchimol, all our partners and shareholders for the trust they deposited me throughout all those years. I have been in the company for almost 15 years and time passed quickly. When we are building something that matters, that's what we have done at XP changed the way Brazilian invested and related to money. After almost 15 years I decided to step out but will continue as a partner, member of board of several investments in your portfolio and contributing to XP ecosystem in new ways.

This transition was carefully planned if XP long term vision always guiding our decisions. I would also like to thank the people who made this journey possible, especially all the incredible team I got to work very closely during my tenure as CFO. To each of you, thank you. It's been a genuine honor.

I'm sure that the best is still ahead. Thanks and now let's review our financial performance. I would like to begin by noting that in this quarter we are introducing our new managerial P&L, a revenue breakdown that more currently reflect how we operate the company. Under this framework, we are organizing our business lines into two main segments, retail and wholesale. Along with this change, the institutional business has been incorporated into into the wholesale division, aligning the reporting structure with the profile of clients we serve within this segment.

Additionally accompanying the final phase of restructuring, the other revenue line has become less relevant over the years and ceases to exist, being incorporated in the net interest rate margin across our business lines. If this, we provide a clearer, more consistent view of our operational structure and revenue generation. As a part of the same process, our proprietary funds were transferred to the bank structure. Consequently, we will no longer present a few whole tax adjustments.

Instead, we now report our managerial results with other tax equivalent reclassifications consistent with the approach already adopted by other market players. This change improves the understanding for results. Analyze the market views more closely if the way we manage the company. All figures shown throughout this presentation have been retrospectively adjusted to preserve comparability across periods. Finally, it's important to note that these new adjustments are IFRS compliant if no changes to our gross revenue, net income or capital metrics.

Given that context, let's now move to the quarter results. Total gross revenue in the first quarter reached 4.9 billion, up 8% year over year and down 7% quarter over quarter the year growth was driven by AptX retail, new verticals and other retail its new ventures and floating expanding at a rapid pace. The wholesale bank division also delivered growth year over year. Now let's move to retail revenue. Retail revenue totally 3.8 billion in the quarter, representing a 10% growth year over year and a 2% decline quarter over quarter, reflecting the impact in corporate credit in Brazil already explained before.

Building on the market momentum that began in the second half of 2025, we saw increasing equity volumes driven by higher a DTV in equis and futures. Consequently, ATR revenues increased 13% quarter over quarter and 22% when compared the same period of last year reaching almost 1.2 billion. As a result, ACTRI revenue increased its shares of total gross revenue breakdown both year over year and versus the prior quarter reaching 31% in the first quarter in 2026.

Also, retail benefited from strong contributions from float and new verticals which are reported in the other retail line and gaining representativeness during the quarter. Now let's move on to the next slide where we'll talk through how our wholesale banking is evolving. As we mentioned earlier, we now include our institutional business in the wholesale segment. Taken together, these three business lines grew 26% year over year. DCM market figures showed a reduced volume on taxes and fixed income offers in the first quarter of 2016.

If that issue services revenues were down. Following the same rationale of retail fixed income on corporate segment, we posted another solid result reaching almost 500 median and in revenues. Due to high volatility, we were able to serve our clients with more trading solutions if derivatives and effects boosting revenues. This reinforced the consolidation of our franchise which developed meaningful through the years becoming important factor for ecosystem and an important driver in terms of growth and diversification.

Finally, our institutional business grew both year over year and quarter over quarter. The segment the same as retail actions benefited from higher trading volumes during the quarter. Now let's shift our focus to SG&A and deficiency ratios. As mentioned earlier, we are introducing a new disclosure methodology which is better aligned to market peers and increase our results comparability. We can find a reconciliation and additional details about the new methodology in the appendix if that Our SGA totaled 1.6 billion in this quarter, increased 14% year over year and declining 6% quarter over quarter.

On the right hand side of the slide, our last 12 months efficiency ratio was 34.6% representing an year over year increase of 100 basis points. The short term increase was caused by market events that temporarily impact our revenues in the first quarter. As previously explained. As commented before, we expect to see a normalization of the ratios throughout the year ending 2026 if a flattish number when compared to 2025. Move on to EBIT now. Our adjusted EBITDA totaled $1.4 billion in the first quarter, up 8% year over year and down 14% quarter over quarter.

The adjusted EBIT margin was 30% stable versus the prior year and lower quarter over quarter. As mentioned in the previous slide, market events impacted revenues and therefore our EBITDA and EBITDA margin in the first quarter of 2026. On the next slide we will see our adjusted net Income Adjusted net income in the first quarter totaled $1.3 billion, representing a 7% increase year over year and remaining roughly stable sequentially. Net margins were 27.8% in 1K 26, down 30bps year over year and 122bps higher sequentially.

Let's move on the next slide to talk about capital management, I will start by discussing capital returns during the first quarter of the year. We continued execution on our share buyback program and as of now we have executed almost half of it. As Mafra mentioned earlier today, we announced a new buyback program of 1 billion reais and also the payment of 500 million reais in dividends to be paid on June 18th. Combining the dividends and the two buyback programs, we get to almost 2.5 billion reais in capital distribution already announced in 2026.

Now let's move on the second part of our capital management strategy. On the next slide, our adjusted diluted EPS increased approximately 90% year over year reflect the execution of our share buyback program. This allowed our EPS to expand at a faster pace than net income. On the right hand side of the slide you can see our adjusted analyzed ROT and roe. Given our higher BIS ratio than last quarter, both metrics are lower this quarter than the last quarter.

If we were operating the business with 17.5% BIS ratio, which is the midpoint of our guidance, our ROT and ROE would have been around 30% and 24% respectively. Let's move on to the next slide. To give some additional details on our capital management, I would like to turn to our capital ratio under our risk weight assets. Before going through the numbers, I want to highlight that even in a quarter marked by elevated volatility across both local international markets, our disciplined risk management approach translated into a well controlled risk profile with lower VAR and flat HRWA.

Our VAR declined sequentially, closing the quarter at 14 base points, 3 basis points lower than prior quarter. Our IAA ended the first quarter at $122 billion up 3% quarter over quarter credit RWA remained essentially stable. Market RWA grew just 2% in the quarter, both expanded at a lower pace than our revenues and the main trigger of expansion of risk was the operational risk weight assets. Despite the market dynamics we mentioned, our risk is under control, our balance sheet is sound and we expect that to remain the case throughout the year consistent with what we have communicated to the market.

Finally, we closed the quarter with a BAS ratio of 20.7% which is above our guidance of BAS ratio of 16 to 19% by the end of the year. As communicated last quarter. We enter 2026 with a comfortable capital position that give us flexibility to navigate different scenarios and remain well positioned in any potential volatility coming from internal or external markets throughout the year, even though we know this is a higher capitalization level than the company requires to operate.

And we are committed to reach our guidance by the end of the year. And if that, we will now move to the Q and A session.

Operator

Okay, now we're going to start the Q and A. The first question is from Chito Lavarta, Goldman Sachs. Chito, please. Thanks.

Chito Lavarta

Parisi. Good evening. Mafra Victor, thanks for the call and taking my questions. And Vitor, you know, good luck on your future endeavors. Thanks for all the help last few years.

So maybe a couple questions, maybe just one, I guess. Can you give a little bit more color Victor Mafra and the decision to step down and the new incoming and just understand a little bit more some of the rationale behind that. And then second question, you talked a little bit about the widening of the credit spreads, but just to understand, do you expect that to recover maybe completely

in 2Q, would that take a little bit longer just to think about how that can impact your revenues for not just 2Q but also for the rest of the year. Thank you.

Thiago Mafra

Good evening everyone and thank you for the question.

Cito, the first question about why, what's the reason behind the move of Victor is a transition that we have been discussing for I would say a few months or like a half year to do this transition, to find someone with more background in banking and the banking products that we have been developing for both individuals and capital markets on the wholesale bank. So it was a well planned transition and you guys know the change that happened at Santander.

And there was an opportunity to bring Gustavo Vallejo, who has more than 30 years of background in corporate, in credit,

on credit for individuals and as a CFO. So it was an opportunity to bring someone with the background that we were looking for. So Vitor is an important partner of the company. He has been with us for 15 years. He will continue to be a partner of the company and will help us on new ventures in the company in the future.

About the second question, We didn't have any credit loss because it's mainly tradable fixed income that we have market to market on the positions. You guys know very well what happened on the credit market since the beginning of the war in March 2026. There was a widening on the credit spreads even for AAA names, AA names. So we lost some money on March 2026 to market as you mentioned. We didn't realize most of this loss. We don't expect the market to recover on Q2 because if you take a look on what happened in April, there was also widening on the spreads much smaller than March 2026 than the first quarter.

We do not expect any impact on Q2 because our ecosystem and the other business line will compensate even more than what we lost in April. In May we saw the credit spread stabilizing but we don't expect them to start closing this quarter. But let's see what happened. But for the year we don't expect any further impacts on top line growth. That's why we are confident that we can deliver double digit growth for the year. And if you take a look on what happened, just one off on widening of spreads on Q1 2026, if we take that off we would probably be at low teens very close to what we have planned.

Because all the business lines beside the credit spread, the widening on credit spreads and the primary market on gcm besides these two business lines, all the business they are like in line with what we have planned for the year.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.