XP Inc. (NASDAQ:XP) Q2 2023 Earnings Conference Call August 14, 2023 5:00 PM ET

Company Participants

Antonio Guimarães - IR

Thiago Maffra - CEO

Bruno Constantino - CFO

Conference Call Participants

Geoffrey Elliott - Autonomous

Eduardo Rosman - BTG

Thiago Batista - UBS

Tito Labarta - Goldman Sachs

Neha Agarwala - HSBC

Operator

Antonio Guimarães

Good evening everyone. I'm Antonio Guimarães, Investor Relations in XP Inc. On behalf of the company, I'd like to thank you all for the interest and welcome you to our 2023 Second Quarter Earnings Call. Today, we have here with us our CFO, Bruno Constantino; and our CEO, Thiago Maffra. We will all be available for the Q&A session right after the presentation. [Operator Instructions]

We also have the option of simultaneous translations to Portuguese. So, there's the button on the Zoom if you want to turn on the translation. And before we begin our presentation, please refer to our legal disclaimers on page two on which we clarify forward-looking statements. Additional information on forward-looking statements can also be found on the SEC Filings section on the IR website.

So, now I'll pass the word to Thiago Maffra. Good evening, Maffra.

Thiago Maffra

Good evening everyone. Thank you for joining us today on our 2023 second quarter earnings call. It's a pleasure to be here with you tonight. I would like to start with a brief introduction to this quarter's operational and financial highlights and also give you a bit of context of where we are in terms of our long-term strategy we talked about in the last quarter.

In the second quarter of 2023, we achieved a key milestone, surpassing BRL1 trillion in client assets. Client assets have grown at a 30% CAGR since the IPO. Coupled with this historic milestone, we estimate we have gained approximately 30 bps in market share in investments in individuals year-to-date and approximately 60 bps in the last 12 months despite a very tough macro environment condition.

For the second quarter, earnings before tax was BRL968 million, up 12% year-over-year, where our continued efforts to improve operation leverage resulted in 198 bps of additional margin expansion.

Net income was BRL977 million, up 7% year-over-year, driving our net income margins up 91 bps year-over-year. Annualized retail take rate was 1.3%, up nine bps quarter-over-quarter.

Return on average quite, a key profitability measure for XP, rose 334 bps sequentially to 22%, and our diluted earnings per share of BRL1.83, increased 24% over the first quarter.