XP 2025 Q1 Earnings Revenue Grows 7.2% as Net Income Rises 20%

XP(XP) reported its fiscal 2025 Q1 earnings on May 21st, 2025. XP Inc. posted strong financial results for Q1 2025, with earnings per share (EPS) surpassing expectations at $2.31, reflecting a 22.9% increase from the previous year. The company maintained its positive trajectory by raising guidance for Q2 2025, anticipating significant growth in vehicle deliveries and revenue. XP Inc. continues to demonstrate robust performance amid market challenges.

Revenue
The total revenue of XP increased by 7.2% to $4.34 billion in 2025 Q1, up from $4.05 billion in 2024 Q1. Net revenue from services rendered reached $1.65 billion. Meanwhile, net income from financial instruments at amortized cost experienced a loss of $902 million. In contrast, net income from financial instruments at fair value through profit or loss was a substantial $3.60 billion. Overall, total revenue and income amounted to $4.34 billion.

Earnings/Net Income
XP's EPS rose 22.9% to $2.31 in 2025 Q1 from $1.88 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $1.24 billion in 2025 Q1, marking 20.1% growth from $1.03 billion in 2024 Q1. The Company has sustained profitability for 7 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS growth is impressive, showcasing XP's financial resilience.

Post-Earnings Price Action Review
The strategy of purchasing XP shares following a revenue miss and holding them for 30 days has historically led to poor performance. This approach resulted in a significant negative return of -41.08%, which starkly contrasts with the benchmark return of 30.75%. The strategy's excess return was -71.82%, and the compound annual growth rate (CAGR) was -13.71%, highlighting substantial losses over the backtested period. Additionally, the strategy experienced a high maximum drawdown of -69.70% and a Sharpe ratio of -0.27, indicating considerable risk and negative returns. Such metrics emphasize the challenges faced when employing this strategy, underscoring the need for careful evaluation before making investment decisions.

CEO Commentary
He Xiaopeng, Co-Founder, Chairman & Chief Executive Officer, expressed optimism about XPeng's performance, noting a record 94,008 deliveries in Q1 2025, up 331% year-over-year. He attributed this success to systemic enhancements across organization, product development, and technology. Xiaopeng highlighted XPeng's commitment to AI-driven innovation, stating, "Our growth potential is just starting to emerge," and emphasized the importance of democratizing technology. He announced upcoming launches, including the Mona M03 Max and G7, which aim to expand market reach. The CEO conveyed confidence in XPeng's ability to maintain momentum and achieve profitability in Q4 2025, driven by continuous R&D and technology advancements.

Guidance
For Q2 2025, XPeng expects total vehicle deliveries between 102,000 and 108,000 units, representing a year-over-year increase of 237.7% to 257.5%. Revenue is anticipated to range from RMB17.5 billion to RMB18.7 billion, reflecting a year-over-year growth of 115.7% to 130.5%. The CEO indicated that the company aims to double sales growth for the year and achieve profitability in Q4 while generating substantial free cash flow for the entire year.

Additional News
XP Inc. recently announced a new share repurchase program, allowing for the repurchase of its Class A common shares valued up to R$1 billion in the open market or through privately negotiated transactions. This initiative, starting May 21, 2025, and potentially continuing until December 31, 2026, aims to leverage XP's existing cash for funding repurchases. The board of directors has sanctioned management to appoint a broker for executing the repurchase in the open market, potentially utilizing safe harbors provided by SEC rules. The program's timing and volume of share buybacks will be influenced by market conditions and investment opportunities, reflecting XP's commitment to enhancing shareholder value amid evolving market dynamics.