XP Inc. Nails 2025 Growth, But 2026 Guidance Still at Low End

Date of Call: Feb 12, 2026

Financials Results

• Revenue: BRL 19.5 billion for full year 2025, up 8% year-over-year; Q4 gross revenue BRL 5.3 billion, up 12% YOY and 7% sequentially
• EPS: Adjusted diluted EPS increased 18% during 2025; Q4 adjusted EPS BRL 2.56, up 15% YOY
• Gross Margin: EBT margin in Q4 was 31.3%, up 252 basis points YOY; full year EBT margin 29.6%, expanding 52 basis points YOY
• Operating Margin: Adjusted net margin in Q4 was 26.9%, 9 basis points lower YOY; full year net margin 28.3%, expanding 173 basis points YOY

Guidance:

• Guidance for 2026 gross revenues remains at the bottom end implying ~17% growth YOY.
• Expect to achieve net inflows of BRL 20 billion per quarter in retail.
• Efficiency ratio for 2026 expected to remain broadly in line with 2025 levels.
• BIS ratio target for end of 2026 is 19% to 16% to facilitate capital distributions.

Business Commentary:

Revenue and Profit Growth:

• XP Inc. reported gross revenues of BRL 19.5 billion for 2025, up 8% year-over-year. Adjusted net income for the full year was BRL 5.2 billion, representing a 15% expansion year-over-year.
• The growth was driven by strong performance in Corporate & Issuer Services, enhancements in core processes, and strategic investments in different business areas.

Retail and Wholesale Banking Expansion:

• The company's total client assets, including AUM and AUA, reached BRL 2.1 trillion, representing a 22% growth year-over-year.
• This milestone was achieved despite market share pressure and margin compression in the retail segment, supported by the Wholesale Bank's growth and cross-selling opportunities.

Strategic Focus on Wealth Planning and Technology:

• XP Inc. emphasized its strategy of democratizing wealth planning and financial planning, with 21% of targeted clients tracking their financial planning with an adviser.
• This focus is supported by technology and AI, which enhance adviser capabilities and improve client relationships, contributing to better financial outcomes for clients.

Cross-Sell Product Growth:

• Retail net new money for the fourth quarter was BRL 20 billion, with total net new money across retail and corporate reaching BRL 32 billion.
• Growth in cross-sell products such as insurance, cards, and retirement plans drove market share gains and record contributions, supported by strategic investments and product innovations.

Capital Management and Efficiency:

• The company returned BRL 2.4 billion in capital to shareholders through dividends and buybacks in 2025, maintaining a stable efficiency ratio of 34.7%.
• This reflects disciplined capital allocation and operational leverage from technology investments, supporting continued growth and investment in the business.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed confidence in achieving 2026 guidance, highlighted strong performance in Wholesale Banking (49% revenue growth in Q4), and stated 'we have positioned ourselves to capture future opportunities' and 'we are starting 2026 ready to grow whatever the market scenario.'

Q&A:

• Question from Eduardo Rosman (Banco BTG Pactual S.A., Research Division): Regarding the ambition to become Brazil's leading investment platform by 2033, what metric defines leadership and will more banking capabilities be required?
  Response: Leadership is defined by market share; the plan to achieve it by 2033 is based on the third wave strategy of democratizing wealth planning and different strategies for different client segments.

• Question from Eduardo Rosman (Banco BTG Pactual S.A., Research Division): What does the controlling group entry change practically?
  Response: It strengthens alignment between executives for long-term goals but does not change the management style or governance as the executives were already aligned.

• Question from Thiago Bovolenta Batista (UBS Investment Bank, Research Division): Is the CVM recommendation on internalizing orders positive for XP's RRP business?
  Response: Yes, it is very positive because it removes the cap and allows inclusion of other assets, benefiting XP as the largest market maker for retail clients.

• Question from Thiago Bovolenta Batista (UBS Investment Bank, Research Division): Is the tax hike in Q4 related to structure changes or consumption of tax losses carryforward?
  Response: The higher tax is due to the revenue mix (more banking/investment banking revenues which have higher tax rates), not structure changes or tax loss consumption.

• Question from Gustavo Schroden (Citigroup Inc., Research Division): How is XP performing regarding FGC reimbursements to Banco Master depositors?
  Response: XP is retaining a high percentage (>85%) of the inflow from Banco Master, higher than typical maturing events, though disclosure will be made between net new money and retention.

• Question from Gustavo Schroden (Citigroup Inc., Research Division): Why did NPS decline to 65 points, and how is the company addressing it?
  Response: The drop is attributed to specific events (Ambipar notes and Banco Master news) affecting client sentiment; the underlying business remains strong with NPS expected to recover.

• Question from Guilherme Grespan (JPMorgan Chase & Co, Research Division): Is the strong performance in Corporate Solutions & Issuer Services sustainable in early 2026?
  Response: Yes, the company believes it can maintain the pace due to product evolution and cross-sell capabilities.

• Question from Guilherme Grespan (JPMorgan Chase & Co, Research Division): Are you benefiting from the current risk asset environment driven by foreigners?
  Response: Not significantly yet, as retail volumes are not rising; any impact is still too early to assess, and depends on market moves and potential interest rate cuts.

• Question from Marcelo Mizrahi (Banco Bradesco BBI S.A., Research Division): Will you update 2026 guidance given the current environment?
  Response: No change to guidance; 2026 is expected to be stronger than 2025 with revenue growth close to the guidance range.

• Question from Marcelo Mizrahi (Banco Bradesco BBI S.A., Research Division): What is the RWA growth perspective and any cap?
  Response: Confident that net income will grow faster than RWA in 2026, similar to 2025, with no material change to the guidance.

• Question from Daer Labarta (Goldman Sachs Group, Inc., Research Division): Is the revenue guidance for 2026 (BRL 22.8B to 26.8B low end) still valid implying ~20% growth?
  Response: Yes, the guidance holds for 2026 implying ~17% revenue growth, with no reason to change it for small potential misses.

• Question from Daer Labarta (Goldman Sachs Group, Inc., Research Division): Is the revenue acceleration expected to be back-end loaded?
  Response: Yes, typically results are 40-45% in first half and 55% in second half, with some flattishness in 2025.

• Question from Pedro Leduc (Itaú Corretora de Valores S.A., Research Division): What are the 2026 SG&A priorities and how to reconcile stable efficiency with high teens revenue growth?
  Response: Investments will focus on adviser expansion, technology/AI for productivity and customer service, and international platforms; efficiency ratio will grow in line with revenue guidance.

• Question from Antonio Gregorin Ruette (BofA Securities, Research Division): Why the sharp decline in tax withholding in funds line if not related to revenue mix?
  Response: Cannot comment on individual entity results; the higher overall tax is due to the banking revenue mix, and this line will not be disclosed post-2026 restructuring.

• Question from Antonio Gregorin Ruette (BofA Securities, Research Division): How does AI factor into the shift towards a B2C model?
  Response: AI is used to enhance advisers, not replace them; it improves service quality and productivity, especially in digital segments, but human interaction remains crucial for trust.

• Question from Daniel Vaz (J. Safra Corretora de Valores e Cambio Ltda, Research Division): Has XP changed its product distribution filter after the Banco Master episode?
  Response: XP maintains strict internal controls and only distributes products suitable for client profiles; the event does not indicate a major change in distribution policy.

• Question from Daniel Vaz (J. Safra Corretora de Valores e Cambio Ltda, Research Division): Has client investment behavior changed post-Banco Master?
  Response: No significant change in client mix observed aside from avoiding specific names involved in the fraud, with the broader market share of small/mid-sized banks remaining stable.

Contradiction Point 1

Sustainability of Corporate Revenue Strength

Contradiction on whether the strong corporate revenue performance is expected to continue.

What is your outlook for JPMorgan Chase & Co's performance? - Guilherme Grespan (JPMorgan Chase & Co)

2025Q4: The strong corporate business performance is expected to be sustainable in 2026 due to product evolution and cross-selling capabilities. - [Victor Mansur](CFO)

Is the performance of Corporate Solutions & Issuer Services sustainable early this year? - Daer Labarta (Goldman Sachs)

20251118-2025 Q3: Hedging revenue is linked to issuance, which is influenced by both tax regulation and credit spreads. While 2026 may be volatile, the corporate franchise has multiple revenue lines... - [Victor Mansur](CFO)

Contradiction Point 2

EBIT Margin Trajectory and Timeline

Contradiction on the expected timeline to reach the 30% EBIT margin target.

What is Marcelo Mizrahi's role at Banco Bradesco BBI S.A.? - Marcelo Mizrahi (Banco Bradesco BBI S.A.)

2025Q4: The company is confident that net income will grow faster than risk-weighted assets (RWA) in 2026, as has been the case. The BIS ratio is expected to remain within the target range... by year-end 2026. - [Victor Mansur](CFO)

What is the guidance? - Mario Pierry (Bank of America)

20251118-2025 Q3: While these investments create pressure, reaching the 30% EBIT margin guidance is still seen as possible by the end of 2026. - [Thiago Maffra](CEO) and [Victor Mansur](CFO)

Contradiction Point 3

Outlook for Corporate/Wholesale Banking and Fixed Income Revenue

Contradiction on the sustainability and drivers of strong corporate banking performance.

Can you provide an update on JPMorgan Chase's earnings performance? - Guilherme Grespan (JPMorgan Chase & Co)

2025Q4: The strong corporate business performance is expected to be sustainable in 2026 due to product evolution and cross-selling capabilities. - [Victor Mansur](CFO)

Is the performance of Corporate Solutions & Issuer Services sustainable at the start of the year? - Daer Labarta (Goldman Sachs Group, Inc.)

2025Q3: Hedging revenue is linked to issuance, which is influenced by... tax regulation uncertainty and cheap credit spreads. While volatility is expected in 2026... business is diversified. - [Victor Mansur](CFO)

Contradiction Point 4

Strategic Use of AI in Wealth Planning

Contradiction on whether AI is a tool to enhance advisers or a core driver for a low-cost digital model.

Can you discuss the company's Q3 revenue performance? - Antonio Gregorin Ruette (BofA Securities)

2025Q4: AI is used to enhance human advisers, not replace them. Initiatives include using AI agents to improve adviser-client interactions... - [Thiago Maffra](CEO)

What is your current strategic direction regarding AI? - Marcelo Mizrahi (Banco Bradesco BBI S.A.)

2025Q3: The focus is on enhancing, not replacing, advisers... For lower-income, self-directed clients, fully digital AI solutions exist but are a small part of the business currently. - [Thiago Maffra](CEO)

Contradiction Point 5

Outlook for Corporate Net New Money

Contradiction on the stability and drivers of corporate net new money.

What are your thoughts on the recent earnings report, Guilherme Grespan (JPMorgan Chase & Co)? - Guilherme Grespan (JPMorgan Chase & Co)

2025Q4: The strong corporate business performance is expected to be sustainable in 2026 due to product evolution and cross-selling capabilities. - [Victor Mansur](CFO)

Is the performance of Corporate Solutions & Issuer Services sustainable in the early part of 2026? - Marcelo Mizrahi (Banco Bradesco BBI S.A.)

2025Q2: Negative corporate net new money is due to macro dynamics: banks are requiring investment reciprocity for credit lines. Companies are withdrawing investments from XP to use as collateral for credit from other banks. - [Victor Mansur](CFO)