XP Earnings Call Summary (Q3 2025)

1Key Financial Results and Metrics

Total Client Assets: BRL 1.9 trillion, up 16% year-over-year.

Gross Revenues: BRL 4.9 billion, a 9% increase year-over-year.

Earnings Before Tax (EBT): BRL 1.3 billion, up 10% year-over-year.

Net Income: BRL 1.33 billion, a 12% increase year-over-year, marking a new record.

Return on Equity (ROE): 23%, flat year-over-year.

Diluted Earnings Per Share (EPS): BRL 2.47, up 13% year-over-year.

Capital Ratio: 21.2%, with a CET1 of 18.5%, well above regulatory requirements.

2Strategic Updates and Business Highlights

Client Segmentation and Services: XP is enhancing its service offerings, focusing on high-income and private banking clients while preparing to re-enter the retail segment with a more profitable model.

New Product Launches: Introduction of a new credit card and improvements in wealth planning services for various client tiers.

Corporate & Issuer Services: Achieved a record revenue of BRL 729 million, driven by strong capital markets activity.

Investment in Technology: Ongoing investments in technology and sales force expansion, with a focus on AI to enhance client service and operational efficiency.

3Forward Guidance and Outlook

Net New Money Target: Aiming for around BRL 20 billion in retail net new money per quarter, with confidence in achieving this target based on recent positive trends.

Earnings Guidance: While growth is expected to be strong in the second half of 2025, achieving the full-year guidance of 10% growth may be challenging due to a softer first half.

2026 Projections: Anticipating a growth rate of 17% to 20% for 2026, though there may be some downside risk due to macroeconomic conditions.

4Bad News, Challenges, or Points of Concern

Adviser Count Decline: Total advisers decreased to 18,200, attributed to a shift in policy towards higher standards and converting some independent financial advisers (IFAs) to employees.

Fixed Income Revenue Pressure: Fixed income revenues contracted by 2% year-over-year and 7% quarter-over-quarter, primarily due to a shift in product mix towards lower-margin offerings.

Expense Growth: SG&A expenses increased by 10% year-over-year, raising concerns about efficiency ratios, which may remain stable or slightly softer in the short term.

5Notable Q&A Insights

Wholesale Business Performance: Management expects strong performance to continue into Q4, but acknowledges potential volatility in the market.

Hedging Solutions: Corporate revenues were boosted by hedging solutions related to tax-exempt bonds, but there are concerns about sustainability in the face of potential tax reforms.

Client Behavior: There is currently no significant migration from fixed income to equities, with clients still favoring short-term fixed income products due to high SELIC rates.

Investment in AI: XP is leveraging AI to enhance adviser productivity and client engagement, particularly for smaller clients, while maintaining a focus on improving adviser capabilities rather than replacing them. This summary captures the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session during XP's Q3 2025 earnings call.