XP 2025 Q2 Earnings Strong Performance as Net Income Surges 18.2%

XP (XP) reported its fiscal 2025 Q2 earnings on Aug 19th, 2025, delivering results that exceeded expectations with robust net income growth. The company posted a 18.2% increase in net income to $1.32 billion and raised its revenue guidance in line with strong service and financial performance.

Revenue
XP generated $4.46 billion in total revenue in 2025 Q2, reflecting a 5.6% increase from $4.22 billion in the same period a year ago. The company’s services rendered segment contributed $1.79 billion in net revenue. Meanwhile, financial instruments at amortized cost resulted in a net loss of $854 million, while financial instruments at fair value through profit or loss added $3.52 billion to the total. These figures, when combined, underscore a diversified revenue structure with a strong contribution from financial instruments.

Earnings/Net Income
XP’s earnings per share surged 23.0% year-over-year to $2.50, driven by a net income increase to $1.32 billion, a 18.2% jump from $1.12 billion. The sustained profitability of seven consecutive years demonstrates the company's resilient business model and solid operational performance. This significant earnings growth highlights the company's strong financial standing and effective cost management.

Price Action
The stock price of XP declined 1.17% on the latest trading day and fell 8.20% for the week, with a 6.81% drop month-to-date.

Post Earnings Price Action Review
The performance of a strategy that involved buying XP shares immediately following the earnings announcement and selling them 30 days later was notably underwhelming. Over the past three years, this approach generated a -44.13% return, far below the 62.59% return of the benchmark. The strategy’s negative Sharpe ratio of -0.61 and a maximum drawdown of 0.00% underscore its high-risk profile and poor risk-adjusted returns.

CEO Commentary
Meisong Lai, CEO of ZTO, noted that the company’s core business achieved a parcel volume of CNY9.85 billion, representing a 16.5% year-over-year increase. He emphasized ZTO’s ability to maintain an adjusted net income of RMB2.05 billion despite competitive pressures and pricing challenges. Lai highlighted strategic initiatives such as digitization, intelligent operations, and last-mile efficiency, including automated sorting and direct dispatch. The CEO expressed cautious optimism, underscoring ZTO’s commitment to long-term sustainable growth.

Guidance
ZTO revised its annual parcel volume guidance to a range of CNY38.8 billion to CNY40.1 billion, indicating a 14% to 18% annual growth rate. The company plans to maintain a balanced growth strategy, focusing on quality and profitability while managing unproductive subsidies. Capital expenditure for 2025 is expected to range between RMB5.5 billion and RMB6 billion.

Additional News
Tragically, at least 14 villagers and a mobile police officer were killed in two separate attacks in the Bokkos Local Government Area of Plateau State on July 25, 2025. The attacks occurred as villagers from the Chirang community were returning from Bokkos Market to Mangor Village. A mobile police officer had also been killed earlier in the day at a checkpoint along Richa Road. Community leaders described the situation as “very unfortunate” and an “emergency,” calling for increased security and urging the federal government to establish state police forces to improve safety and prevent further violence.