Welcome to PagSeguro Digital earnings call for the 1Q of 2024. The slide presentation for today's webcast will be available on PagSeguro Digital's Investor Relations website at investors.pagbank.com. Please be advised that all participants will be in listen-only mode. After the presentation, to ask a live question, please use the Raise Hand button to join the queue. Once your name is announced, a request to activate your microphone will appear on your screen. Please ask all questions at once. Alternatively, you can also write your questions directly into the Q&A icon located on the lower right part of your Zoom screen. Today's conference is being recorded and will be available on the company's IR website after the event is concluded. I would now like to turn the call over to your host, Erick Oliveira, Head of IR. Please go ahead, sir. Hello, everyone. Thanks for joining our 1Q 2024 earnings call. After the speaker's remarks, there will be a question and answer session. Before proceeding, let me mention that any forward-looking statements included in the presentation or mentioned on this conference call are based on currently available information and PagSeguro Digital's current assumptions, expectations, and projections about future events. While PagSeguro Digital believes that the assumptions, expectations, and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those included in PagSeguro Digital's earnings presentation or discussed on this conference call for a variety of reasons, including those described in the forward-looking statements and risk factor sections of PagSeguro Digital's most recent annual report on Form 20-F and other filings with the Securities and Exchange Commission, which are available on PagSeguro Digital's Investor Relations website at investors.pagbank.com. Finally, I would like to remind you that during this conference call, the company may discuss some non-GAAP measures, including those disclosed in the presentation. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. The presentation of this non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered separately from or as a substitute for our financial information prepared and presented in accordance with IFRS, as issued by the IASB. For more details, the foregoing non-GAAP measures and the reconciliation of these non-GAAP financial measures to the most directly comparable IFRS measures are presented in the last page of this earnings presentation and earnings release. With that, let me turn the call over to Ricardo. Thank you. Hello, everyone, and thanks for joining our 1Q 2024 earnings call. Once again, I have the company of Alex, our CEO, and Artur, our CFO. On this first section, I will share the main operational and financial highlights for the quarter. Starting with slide 4, total revenue grew 15% year-over-year, reaching BRL 4.3 billion, all-time high result for our 1Q, with a strong TPV and revenue growth in all client segments, and our gross profit margin was 40.6%. We also reached the all-time high net income in non-GAAP basis of BRL 522 million, a 33% year-over-year growth. On the last bullet in the bottom of the slide, we can see our EPS reached BRL 1.63, 36% higher than Q1 2023, also an all-time high. Moving on to slide 5, we reached 31.4 million clients by the end of March, with 17.3 million active clients. We also had an all-time deposits level, reaching BRL 30.6 billion, an impressive 64% increase year-over-year. This strong result proves the power of our value proposition, which has been contributing to increase of client engagement and has a positive impact on lowering of cost of funding, which increases prepayment spreads and net interest margin for our credit portfolio, and consequently, our profitability. Worth to say, our one-stop-shop solution has been acknowledged under the PagBank brand, as we were recognized as the best bank in Brazil by different institutes, such as Forbes and Dinheiro, among others. On slide 6, we share some highlights of the payments and banking units. In the first column, in payments, we had a strong growth, and our TPV reached BRL 112 billion, a 27% year-over-year growth, reinforcing our strategy of keep growing in a profitable way. On the banking side, in the mid column, we can see our cash-in reached BRL 66.1 billion, a 48% growth year-over-year, aligned to our strategy to stimulate our clients to use PagBank as their primary account. Our credit portfolio grew 8% quarter-over-quarter to BRL 2.7 billion, driven by the expansion of our credit underwriting on secured products. Also, in Q1, among all products we have launched or enhanced, I would like to highlight the launch of our business insurance for merchants and the PagBank Partnership Program, our payment solutions embedded in the most relevant software-as-a-service providers. Finally, we also took the decision to gradually resume, in the H2 of 2024, the offer of working capital loans for merchants and overdraft account offerings for merchants and consumers. Now, I pass the word over to Alex for the commentaries on the business units' highlights for the quarter. Thank you. Thank you, Ricardo. Hello, everyone. On this section, we'll be breaking down our business unit performance through the 1Q of 2024. Starting with payments on Slide 8, we show that our merchant acquiring business keep growing through the combination of our superior value proposition and the broad reach of our sales channel, positively impacted by our sales force expansion that has started in the last year. We have been able to accelerate TPV growth faster than the industry, driven by our main merchant segments. TPV reached BRL 112 billion in Q1 2024, growing 27% year-over-year, with TPV per merchant growing 37% on a yearly basis. Continuing our strategy to expand our payments business focus on merchants profile with better engagement and profitability, we observed a 5% growth year-over-year of our active merchants on a 30-day criteria, when excluding Nano Merchants. Moving on to Slide 9, let's look further into MSMB segment, which gathers micro merchants with monthly TPV up to BRL 15,000 and small and medium merchants business with monthly TPV from BRL 15,000 up to BRL 1 million. MSMB's TPV grew 24% year-over-year, reaching BRL 77.6 billion in the 1Q of 2024. The strong merchants' gross adds positively contributed to this performance, combined with higher productivity in our hubs and geographic expansion. We present an unparalleled value proposition to MSMB in Brazil. Our comprehensive approach embraces a broad reach of sales channel, ensuring maximal exposure and accessibility for merchants. With instant settlement, we offer the cheapest working capital source, empowering business to thrive without financial strain. Fast POS delivery and replacement ensures uninterrupted service, while our seamless integration of payments and banking simplifies transactions, enhancing efficiency and engagement. Additionally, we are also happy to share that PagVendas, our ERP software, has surpassed 1 million users, showing how we remain committed to innovation and customer satisfaction. Moving on to the next slide, here on Slide 10, we show how our TPV from the LMEC segment has performed, comprised by large merchants, e-commerce, and cross-border clients. In the 1Q of 2024, this segment posted a 35% TPV growth in comparison to Q1 2023, reaching BRL 34.2 billion in transactions. We are increasing our share of wallet on large merchant segment that gathers business with monthly TPV above BRL 1 million, driven by the development of an integrated omni-channel payments platform, embedded with management software solutions from more than 350 software partners from the new PagBank Partnership Program. Our online segment posted a strong TPV growth, with e-commerce boosted by our strategy to unreveal Pix QR Code and Tap on Phone for e-commerce platforms. Leveraging facial authentication helped to enhance security measures in online transactions, ensuring trust and reliability. Furthermore, our cross-border unit, under the brand PagSeguro International, is connecting foreign merchants with Latin American buyer, fostering a seamless experience and enriched global commerce ecosystem. Moving on to the banking business, our strategy to provide seamless experience, combining payments, value-added service, and banking through multiple interface for merchants and consumers, continue to drive engagement up. This engagement increase resulted in over BRL 60 billion in PagBank cash-in, composed by Pix P2P, wire transfers, deposits through boleto and invoices into PagBank accounts from other financial institutions. Finally, cash-in per active client, an important indicator of our client engagement, grew 44% year-over-year, reaching BRL 3.9 thousand per client. Our active bank clients base reached 16.9 million clients, a 4% year-over-year growth.... We also present in this slide the breakdown of active customers' growth by product, which demonstrate the increasing penetration of our financial products and service, and how powerful the value proposition of our banking platform is. The number of clients using investments and credit products clearly stands out, growing 85% and 235% respectively, compared to Q1 2023. On slide 12, we share that deposits were up 64% compared to the 1Q of 2024, reaching a record of almost BRL 31 billion, boosted by our AAA rating attributed by S&P Global, which enhanced our CDs distribution among retail and institutional investors, and on and off platform. Checking accounts balance, the cheapest funding source and a key performance indicator to measure client engagement, grew 37% year-over-year. Annual percentage yield for checking accounts and total deposits remained so compelling, creating a unique engine, connecting pricing power without harming profitability by lowering the average cost of funding for the company. We remain so excited about the Brazilian payments opportunity, and have a privileged position of holding a solid balance sheet and low cost of funding like big banks, while demonstrating speed and superior product user experience like Fintechs. Moving on to the next slide. Slide 13 shows that our credit portfolio resumed growth since Q3 2023, and this quarter it reached BRL 2.7 billion, with increasing share of secured products now representing more than 70% of our book loan, promoting financial inclusion, education, and important financing lines to our clients through this product. We successfully passed through the pandemic, the rising of Brazilian interest rates, and one of the worst credit cycles in the country, with no negative impacts in our financial results and without compromising our long-term growth strategy. During this period, we took the opportunity to completely review our credit cycle fundamentals, enhancing our onboarding process, fraud prevention, risk assessment, underwriting, and collection policies and procedures. The results were fully captured by the relevant improvement in our asset quality, lowering our NPL 90 from 18% to 4.5% in 12 months, and now we see an opportunity to gradually resume the credit underwriting of other credit lines in the H2 of 2024, such as working capital loans and overdraft account limits. Now, I turn over to Artur for the financial highlights of the 1Q of 2024. Artur, please. Thanks, Alexandre. Hello, everyone, and thank you for joining us in the call. In this last section of our presentation, I will share the consolidated financial results for the 1Q of 2024. Here on slide 15, I'm proud to announce an all-time high quarterly non-GAAP net income, which reached BRL 522 million, growing 32% versus Q1 2023, with non-GAAP earnings per share at BRL 1.63. Net income on a GAAP basis achieved BRL 483 million in the 1Q of 2024, growing above 30% year-over-year, with earnings per share on a diluted basis, marking BRL 1.50, BRL 0.37 better than the same period of last year. This result was especially driven by a strong operational and financial performance, as shown in the coming slides. Moving on to slide 16, Q1 2024, total revenue and income growth accelerated to 15% on a yearly basis, positively impacted by higher volumes from acquiring. Consolidated gross profit margin keeps trending up, reaching 40.6% over the total revenue, as we have been successful in balancing growth and profitability, driven by the execution of our strategy, focus on clients with better unit economics and higher engagement. Looking at our business segments in the graph on the right side, payments revenue reached BRL 3.9 billion, at 18% year-over-year growth, with a gross profit margin at 39%. Banking revenue grew BRL 40 million quarter-over-quarter, mostly driven by interest income from credit, float, and cash position, combined to service fees linked to higher client engagement. Gross profit for our banking segment reached 60% in the quarter. It is important to highlight that the gross profit margin in banking is higher than payments, even based on our strategy of underwriting secure credit products that naturally presents low yields, combined to high yields paid on deposits to attract and engage new clients. In the next slide, we share how our discipline in capital allocation has been an important tool to balance growth and profitability, leading to higher value creation with an earnings before tax growth of 35% this quarter versus the same quarter of last year. I would like to pick up three specific lines to comment. Even with a TPV growth of 27% year-over-year, financial costs grew 1.7% in the same year-over-year comparison. That resulted in a leverage of approximately 250 basis points over total revenue and income. In nominal terms, Q1 2024's cost was BRL 14 million lower than Q4 2023. This performance was positively impacted by our successful deposit franchise that reduced our average cost of funding. Total losses fell more than 18% year-over-year, mainly due to relevant developments on KYC and onboarding processes, decreasing fraud and chargeback amounts. On top of that, the better quality on the credit portfolio reduced the level of loan loss provision in the quarter. Operating expenses were flattish versus Q4 2023 and grew 21% year-over-year, driven by higher personnel expenses due to the strengthening of our sales force and additional marketing investments to acquire new payment clients and distribute financial services. The strategy behind the capital allocation is to create efficiencies and support the company, especially in the growth cycles. Moving on to slide 18, we show how solid is our capital structure for this spikes momentum. Equity position expanded to BRL 13.8 billion, with the returned earnings representing 61% of this total, which demonstrates the success of our strategy of best balancing growth and profitability. Cash and financial investments ended the 1Q of 2024 with BRL 8.8 billion, twice as seen in Q1 2023. In the last week of March, we anticipated fundraising from April. That increased cash position in Q1 2024. Going forward, the cash and financial investments position are expected to run between 40%-50% of equity balance. On the final slide, we would like to reinforce our guidance for 2024, but acknowledging we started the year in a very good pace. We expect total payment volume to achieve between BRL 441 billion-BRL 457 billion, with healthier gross profit margin above 40% over total revenue and income. The guidance on gross profit margin was updated to above 40%, as we are no longer excluding other financial income from the calculation. We consider this view more appropriate and a fair reading of our net financial results. Net income on non-GAAP basis should be between BRL 2.05 billion-BRL 2.15 billion, considering the similar level of 2023's effective tax rate. Following up, CapEx should be between BRL 2 billion-BRL 2.2 billion, and D&A plus POS write-offs amount between BRL 1.9 billion-BRL 2 billion. Now, let me give the word back to the operator, and we will start the Q&A session. Thank you for the presentation. We'll now begin the Q&A session for investors and analysts. If you wish to ask a question, please press the Raise Hand button. If your question has already been answered, you can leave the queue by clicking on Put Your Hand Down. There's also the possibility to ask your question through the Q&A icon on the lower right side of your screen. You may select the icon and then type your question with your name and company. Written questions that are not addressed during the earnings call will be returned by the investor relations team. Wait while we poll for questions. Our first question comes from Mario Pierry from Bank of America. Please, Mr. Pierry, the microphone is open. Hi, guys. Hi, guys. Good afternoon. Congratulations on the results. Let me ask you two questions. One, when we look at your growth, right, your TPV growth, we're seeing the large corporate segment growing faster than the MSMB. Could you explore a little bit the profitability of both segments and, you know, in taking consideration also the ability to grow deposits and, you know, like, looking beyond just payments, right? Like, so how do you see the profitability of both segments on a holistic approach? And then the second question is related to your comments that you're ready to accelerate some lending in the H2 of the year. That you said working capital for merchants and overdraft for merchants and consumers. Can you give us any-... Any visibility on how big do you think this portfolio can be? And why are you feeling confident now that, you know, that you wanna accelerate the lending? Because, again, when we look at the economy in Brazil, it's doing okay, it's not doing great. But however, you know, I think maybe you have been working on your credit models, and you have been preparing yourselves to start lending. So, like, just give us, like, you know, the reasons why you're ready to accelerate lending. Thank you. Hi, Mario, this is Ricardo. Thank you for the question. Good to hear you. So starting with our first question about the TPV in these two different segments. You're right when you say that large merchants is growing faster than the MSMB. Growing 35% and MSMB growing 24%, the blended is grew 27%. I guess it is important just to take advantage and highlight that we grew 27% while the market grew close to 11%. So we keep gaining share, being more profitable, increasing engagement, so the performance is very well as we can see in Q1. First thing here, when you say large merchants, in our criteria here, it's not the same as large merchants that we hear from other players. That's the first thing. So sometimes you say large merchants, people think about the Walmart from Brazil, a large merchant with a very, very small spread. Not the case here, but of course, they have lower profitability when compared with MSMB. The other advantage that we have from the large merchants, that they bring deposits. So when you look at the merchant in a more complete or holistic way, we may have lower margin in the acquiring, but a higher deposit base, that's gonna help our cost of funding to be lower and to be... In Q1 was 94% of CDI. So if you look only in the acquiring, large merchants are less profitable there than MSMB, but if you look in a holistic way, they're still less profitable, not that much, because they bring other advantages that we need to put into the account, into these two different segments. Going to your second question, which is kind of related to the first one, we, as you said, the economy is doing okay, and our decision to go for these unsecured products is because regardless if the economy is doing well or not, we have good clients over here. So it doesn't mean that if the economy is doing bad, that our clients will have delinquency. So that's not the case. We have good clients here. We have these large clients that they are kind of stable, and they are looking for credit. So what we've been doing in the last, I would say, 2 years, is to improve the processes, improving the backup, the back-office operations, improving our collection process, and then we think it's time for us to resume the offer of these two products. So the working capital for SMBs, I guess you're expecting that we give more color on that, but the working capital for SMBs, the duration is gonna be around 15 months. Interest rates will, it will be different depending on the client, so it will be customized for each client. And of course, will be higher than what we charge for the prepayment, because in the prepayment, we don't have any risk. In overdraft, we're gonna offer for merchants and consumers. The limits are small and lower than 30 days, because that's the dynamics of this product. And interest rate, as allowed by regulation, is up to 8% per month. So that's what we have so far for these two products. That's very clear. Let me follow up really quick, Dutra, in terms of the size that you think this portfolio can get to, until the end of the year. And then when you talk about the market share, right, you're gaining market share, you know, do you think this is a temporary thing, or do you think it's a structural thing? You know, and the question is, you know, clearly Cielo, it's going through some changes, right? In terms of controlling. So maybe they are a little bit distracted operationally, I don't know. So, like, the question is: Do you think you have the ability to continue to gain share? Thanks. Hi, Mario. Well, regarding the size of the portfolio, it's too early for us to give any guidance at this point because we are at the very, very early stage. So we're gonna start, then we're gonna follow the performance, and then as we have a credit portfolio with unsecured products, a little bit bigger than what we, we have today, that, of course, is very small today, we can give more color on that. But it's too early for, for us to give you any guidance about the size of the portfolio and so on. But we, we will resume in H2 2024, at the beginning of the H2. And regarding the gaining share in TPV and our growth, I guess what we're seeing right now is all the investments we've been doing in the last years. We've seen that it's maturing more and more. So all the investments we've been doing, the account with the products that we're launching for PagBank, different cards, CD. So we see that this integrated offer is really paying off. And we see that the same momentum that we saw in Q1, a very strong momentum in Q2 as well. On Mother's Day, the beginning of May 2024, Mother's Day in Brazil, we had the TPV record in the history of the company, and we've been keeping growing in the 2Q in a very strong way as well. So good momentum. I don't see any big change looking forward, and as you said, there are some other companies that are making some restructuring and so on, and we keep accelerating. Sales productivity has been growing. So I mean, I don't see any changes in the short term, the momentum of the company in terms of TPV. Very clear. Thank you very much. Thank you, Mario. Our next question comes from Tito Labarta from Goldman Sachs. Please, Mr. Labarta, the microphone is yours. Hi, good evening. Thank you for the call. Thank you for my question, and congrats on the results. A couple of questions also. Just on your net income guidance for the year, you know, just annualizing this quarter, you'll already be at the high end of that guidance. We could read that two ways. One, you expect earnings to remain flattish for the rest of the year, or do you think there could be some upside risk to that guidance? I mean, just assuming earnings will continue to improve from here. And then second question, just on the expense side, you know, expenses were kind of flattish on the quarter, but if you look, it was other expenses that fell quite a bit, while personnel and the selling expenses were up around 8%-9%. Just to understand that dynamic going forward, if you can give some color on those different expense line items and the different growth rates that we can expect. Thank you. Hi, Tito. Thank you for the question. I'll take the first one, and then the second one, I'm gonna pass to Artur to answer. But the first one, regarding the guidance, you're right, we are in the top of the guidance in Q1, if you look at the guidance we gave for the full year. In all KPIs, we are performing better than the guidance, but it's only the 1Q. We only had 25% of the year, the first two months, so it's too early for us to make any change in the guidance at this point. But we are confident that we will be ready and we'll be able to reach the top of the guidance. So there is no, let's say, any sign that we may have problems in the near future. But, as I said, it's too early for us to change any guidance at this point. I'll pass the word to Artur. Hey, Tito, good to talk to you. So regarding to our operating expenses, we are managing in a disciplined way all the costs that we have and the expenses, too. So we achieved it in this quarter, 16.4% of our revenue, and that's the level that we are expecting also going forward. And if we compare to Q1 2023 and Q4 2023, was a similar level. So that's the reason our management is controlling the expenses here. And remembering that in operating expenses, we include personal expenses, marketing and advertising, and other administrative expenses. Okay, so, so the best way to think about that is as a percent of revenues, and it, it should remain stableish from here. Thank you, Tito. Our next question comes from John Coffey from Barclays. Please, Mr. Coffey, you may proceed. Great. Thank you very much for taking my question. The first one, and unless I missed it, I don't think that you gave your, I think, your TPV growth for the first three weeks of April. I think that's been a tradition you've had for the past few quarters. Is that something you can disclose? Hi, John. We are not disclosing information about Q2 at this point, but it's been strong. It's been similar levels to what we had in Q1. And as I said in the previous questions here, in first week of May, in Mother's Day in Brazil, we had the historical TPV record of the company, in the whole history of the company. So, so far, good momentum and, and similar levels of growth of TPV at this point. All right, thank you. And I just had one related follow-up. When we think about the growth in Q1 of TPV, which was, you know, very high, and especially pretty high versus the 21% I think you gave for January. I think that 21% reflected the first three weeks of January. So you really saw a step up, maybe in that last week of January, plus February, March. Can you just describe a little bit more about what's going on here? Is this new sales teams who have ramped up? Are there any other factors that we should be thinking about that will help us shape our ideas of where TPV growth can go for the remaining three quarters? Hi, John. Well, there are some reasons that we are growing at this level. I would say one of them is that our value proposition is really maturing. You know, sometimes things take a while to take off, so clients really understand the powerful combination of payments and banking. They understand when they use our device or POS to sell, the money goes straight to the digital account instantly, right after the sale, the money that stays in the account, they have high yields. They have a card that is easy to use. It's easy to understand the history of the transactions, the reconciliation that they offer. So I would say the value proposition is really maturing. Also, our sales productivity has been growing in the past quarters. The sales team understand as time passes by, they understand better and better all of our proposition, and of course, the productivity also increase. And we also had an increase in marketing. So it's a combination of different levers, I would say, to deliver this kind of growth. So there is no silver bullet. That's the other way to answer it. There is no silver bullet. It's a mix of different things, and things are really maturing here. All the investments we've been doing in the PagBank and all the features clients are using, understanding, and as I said, a good momentum, good momentum. All right. Thank you. Thank you. Our next question comes from Brian Keane from Deutsche Bank. Please, Mr. Keane, your microphone is open. Congrats on the results. Maybe just on the 1Q results, I know they were higher than what we were expecting in consensus. Were they also higher than what you guys were forecasting internally, and anything you would point to that drove maybe the upside surprise versus your internal forecast? Hi, Brian. Thank you for the question. It is higher than what we thought, or what we had forecasted. We've been seeing a strong growth in TPV. I guess even the industry didn't expect to grow 11% in 1Q. The industry grew very strong in Brazil, if you look at the 11.4% in 1Q. So we thought that we would not grow at that pace, so we were kind of positive surprised. We also were able to have very good management in financial expenses, regardless of these discussions about interest rates, what's gonna be the interest rates by the end of the year. So we were able to managing very well the financial expenses and, and of course, managing the margins. Our credit portfolio is also maturing and growing. After many quarters, we saw this increase of 8% of the credit portfolio, growing from BRL 2.5 billion to BRL 2.7 billion. Yeah, so good dynamics here in terms of growth and profitability and some positive surprises, to be honest. Got it. No, that's helpful. And then just a follow-up question on the net income margins. Just thinking about the rest of the year, I see the full guidance, but is there any seasonality to think about as we go through the fiscal year between second through fourth quarter on margins? Is there any different levels of cadence we should think about, or should it be pretty similar as the 1Q, kind of the margin we saw? Hi, Brian. We expect margins to be similar or even a little bit higher. Usually in Q4, because of seasonality and because of the higher mix of debit, margins sometimes go down. Because this is seasonality of the quarter, people use more debit cards. The debit card, the debit TPV gains share in the mix in Q4. But, looking forward in Q2, Q3, we don't see any change. We don't see any different margin than what we had in Q1. It should be similar or even is slightly higher than what we had in Q1. Great. Congrats again on the solid results. Thank you, Brian. Our next question comes from Neha Agarwala from HSBC. Please, Mr. Neha, your microphone is on. Hello. Thank you for taking my question. Congratulations on the solid results. I have two questions at my end. First, on the SMB segment, specifically. Previously, you used to break down the MSMB segment. So could you just give us a bit more color on how the SMB segment per se has been growing? And have you been opening any new hubs in the last few quarters or increasing the sales force to further penetrate the SMB segment? So any color on that? And my second question is on Pix. The TPV growth was extremely strong, and I believe you do not include Pix volumes in your acquiring TPV. But could you give us a sense of what percentage of your total acquiring TPV would roughly be the Pix volumes? I believe previously you mentioned anything like 2%-3% of the total acquiring TPV. So if you could provide color on that. Thank you so much. Hi, Neha. On the... We really are not breaking down the MSMBs. We are giving this full this blended information about these two. This segment, I would say, sometimes the micro becomes a small company, so it's hard, sometimes it's hard even to divide that. So that's why I decided to give the information together. But I would say to you that SMB is growing a little bit faster than the micro, because of course, they have a higher TPV when compared to micro, and our sales force in the hubs are focused on SMBs. We did not increase the sales force too much in Q1, but we did have an increase. It's part of the plan to keep it growing. We see the opportunity. We think the growth is accretive to the result. We have a very good paybacks, so that's why we decided to increase sales force a little bit in Q1. Regarding Pix, of course, Pix helped in the growth, but even if you're not considering Pix, we would be—the growth will be higher twenties. So it doesn't mean that because of the Pix, we had this strong growth. So it's very. I'll tell you that it's a very healthy growth with large part of the growth still coming from cards, coming from credit cards, coming from installments. So, as I said before, the 11.4% from that industry reported in the growth doesn't have Pix. So, industry is really maturing here. We're gonna know a week or 10 days from now, we're gonna know the penetration of credit cards in the Brazilian consumption, because we're gonna have the report about the Brazilian consumption a week from now. We expect that the penetration is growing, is increasing. So, good, good, good momentum, good things happen at the same time. And I'll tell you, the, the growth, regardless of the breakdown between micro, SMB, Pix or cards, the growth is very strong and very stable throughout these different segments. Thank you, Dutra. Very clear. Congratulations again. Thank you, Neha, very much. Our next question comes from Kaio Prato, from UBS. Please, Mr. Prato, you may proceed. Hello, good evening. Thanks for the opportunity to ask questions. I have two on my side, please. First, on your revenues, regarding the financial income, this quarter, it was basically flat versus last quarter, even with the seasonality. So, solid numbers, basically the historical high again this quarter. And even look at the financial yield, like excluding the financial expense, it was better than expected. So just wondering if you can share with us, what are the drivers behind that, and if you are seeing prepayment penetration rising at some point, please? And then I'll follow up with my second question. Hi, Kaio. Thank you for the question. Regarding the financial income and financial expenses or the spread of this two different lines of the PNL when compared to TPV, you're right. Even with the seasonality play against us, because in Q4, you have we have Christmas, Black Friday, the thirteenth salary in Brazil. So even with this seasonality that doesn't help in Q1, we are able to grow our financial income, and we were able to manage better the financial expenses because of the way that we work here in the treasury department, the way that we are managing the financial expenses, I would say. So, and of course, we should take into consideration the deposits. When you see deposits growing 64% year-over-year, it also helps to lower the cost of funding. So at the end of the day, is a better, better financial income, the way we're managing our pricing version, and managing better the expenses, which includes increased deposits. So no, no big change, no one-offs. It's just part of the dynamic of the business. And Caio, it's Artur speaking, only to take advantage on what Dutra said, and only to stabilize the same level that we manage this financial income plus financial expenses or excluding financial expenses. I incentivize you to include other financial income, because our expenses also includes the cost of deposits that are invested in treasury bonds, for example, okay? So, in our view, the best way to understand our financial result is considering financial income plus other financial income, less financial expenses. That's the result is a little bit better than you are seeing in your calculation. Okay, very clear. Thanks a lot. And then, my follow-up question is on costs, please, if I may. We are seeing it growing at a slower pace than your TPV as well, both year-on-year and quarter-on-quarter. It's a good number. So just would like to understand, what are the main drivers of these efficiency gains here that we are seeing, as it has been reducing as a percentage of TPV? And what else can we expect going forward in terms of efficiency? And finally, we saw a reduction in other expenses this quarter, I think by almost 40%. Just if you can share some thoughts here, the drivers behind that, please. Thank you. Well, it's Artur again. Talking about expenses, you're right. We grew our revenue by 15% this quarter versus Q1 2023, and our total cost and expenses grew 12%. So we could leverage around 70 basis points when we compare to our revenues, so the total cost by revenue. We are leveraging the- The cost that we have. The main drivers on this performance was related to, especially financial costs. As we mentioned, we are doing a great job on managing these, these costs through banking insurances, and especially, bringing more deposits to the company. That's driven us to have more deposits in Q1 versus Q4 2023. Total losses also create a good leverage to us. All the developments that we did in KYC and onboarding process, and also in the transactional process, provided to us better chargeback numbers. Total losses in credit also performed well. In other operating expenses, as I mentioned, before, we could have a good number in terms of, other, expenses. That means administrative expenses. In personnel expenses and marketing, we are now in a growth cycle, and we are investing more in strengthening our sales force, investing in marketing, that is an important tool to the company to acquire new clients, and also distribute digital services. Reinforcing our brand PagBank, that is quite new in the market, and we need to invest in promote this brand to the clients. Okay, thank you. Okay, thank you, Kaio. Our next question comes from Sheriq Sumar, from Evercore ISI. Please, Mr. Sumar, your microphone's open. Yeah, hi. Thanks a lot for taking my questions. I have two questions here. So on the competitive dynamics, I just want to follow up on that. Are you seeing any threats from international players? Because Fiserv from, uh, with Clover, is trying to enter into this market. And, are there other new players where you're seeing, like, increasing competition? And, what's been PagBank's response, so on that? Hi, Sheriq. Thank you for the question. I'll split the answer in two parts. The first one, related to the international players. We don't see any international player coming to the market and getting market share or growing faster than us, or let's say, getting market share from players. And one of the reasons, I would say the main reason, is because we've got to have an integrated solution if you wanna grow in Brazil. If you just come with a pure acquirer, you're probably gonna get some market share from big players with a very, very low margins, and that's not the way that it will work. So we believe really in the integration between payments and banking, and making the bank more and more complete as time passes by. The end game is to get the principality of the client in terms of the banking account, because then it's a very virtual cycle where the money stays here, because the cash-in is through the POS and the cash-out is gonna help through a card, and then we get interchange revenue. So that's the beauty of the business here that we have by having an integration. So that's the part of the answer for the international. And I would take advantage, because that's also the part of the answer for the second part, for the local players here. We don't see... We are not seeing big changes in competitive dynamics here. We have a very clear competitor in the micro and in the small business, and then another one in the medium business, I would say. So they are the two competitors who've been competing the last years. The incumbents from the big banks, they, are stable in terms of market share or losing a little bit, and we don't see that changing that much. So to be honest, the competition is very similar from what we've been seeing in the last quarters. And we are in this growth cycle because things are maturing. We increased our sales force a little bit. Sales productivity in the hubs is growing. So- Payments. Online payments is also growing. So, I mean, good, good... We are having this different leverage. So but going back to your question, no big changes in the competition, not even from international players or local players. Thank you so much. Yeah, and my follow-up is on the active merchant side. It's nice to see that it was flat sequentially. That's a two-part question here. So A, is like, how much more runoff can we see on the nano merchant side? And B, is there a possibility for you to break down what is the composition of large merchants, micro and SMB within the 6.5 million? Hi, Sheriq. We don't give the disclosure, and also, to be honest, there is no definition in the market about what is large, what is medium, what is... And then even if we decide to give this information, it's kind of messy because it's different comparison when you look to other players. But we are not disclosing this number. In terms of nano, you're right, it's kind of stable. We expect that this number of active merchants could be stabilized in the following quarters. But to be honest, nano merchants, although they have-- they might be millions in our base, they are responsible only for 1.5% of our TPV. So it's very, very small volumes, and we do believe that we should keep working in the micro and the SMBs- ... where we have this competitive digital advantage by having the bank. We know how to handle these clients. They have good margins, and they are growing. So the main goal here is to get more TPV from the clients that we have in the base as well, and get a share of wallet from other competitors. These merchants might be eventually splitting the volumes between us and another player and convince them to use us. So that's the main dynamics here: getting new clients, starting from the micro and SMBs. Nanos, they have lots of volumes in terms of clients, but very, very small volumes in terms of TPV, in terms of money. So the idea is to keep working with micros and increasing the share in these clients. Thank you so much. Thanks a lot for taking my question. Thank you very much. Our next question comes from Daniel Vaz from Safra. Please, Mr. Vaz, your microphone is open. Hi. Hi, everyone. Congrats on the results. A couple of questions here. So I saw that your personal expenses increased significantly. You attributed that to the increase of sales force. Also, marketing expense followed the same trend, right? So if you could elaborate a bit more on this increase. So how many salespeople did you hire, and if you expect to hire more throughout the year? So what's the strategy behind this? Are you willing to penetrate further in specific niches or maybe increase cross-selling on banking and related products? So are we talking about a hunter profile or a farmer profile of this personnel, so as you need to improve service or lower churn? So if you could elaborate a bit more and give us more color, it would be very helpful. Thank you. Hi, Daniel, this is Alexandre. We are not actually disclosing the number of salespeople we have in the field. What we can say at this point is that the increase we did in our sales force were specific geographic locations that we felt that we were under-penetrated, comparing to our average penetration. And also, what also drove our TPV growth was the maturing of the investments we've done in our online payments, cross-border payments platforms, all based in putting together a superior value proposition in all of these segments. So, we believe that we have reached a very good level of productivity in our sales force, and also by investing in all the technology that help these people to promote the sales with more intelligence. We not only grew the productivity, but we also shortened the learning cycle of the new teams that we just hired. Got it. Got it. Thank you. It's very helpful. Okay, thank you. Our next question comes from Soomit Datta from New Street Research. Mr. Datta, your microphone is open. Yeah. Hi, guys. Thanks very much, and congratulations on the strong numbers. A couple of questions from me, please. Firstly, can you remind me what is your embedded assumption for Selic for the year end, which feeds into your net income guidance? Obviously, there's been some kind of change of outlook there in the last few weeks, so just curious what is built into the net income guidance, please. And then secondly, could I just take you back to slide 18 in the presentation, just looking at the chart on the right-hand side, where we can see the increase in cash and financial investments. And I was just kind of curious what the implications of this are. You've kind of talked about 40%-50% of cash balance as a percentage of book equity going forward. Are you thinking about using cash on hand to fund prepayments? If you could just talk through the implications of that chart, please, would be super helpful. Cheers. Hey, Soomit, it's Artur speaking. Thank you for your two questions. The first one, related to the expectation for Selic, going forward. What I can tell you is that based on the level that we have today, and we are not expecting too much drop this year, based on the information that we have, we are working hard to manage this, this level of Selic right now, through deposits. So all of our management is focused on bringing more deposits to the company. That is the cheapest, third-party funding source that we have. But the, the guidance remain unchanged because of that, until now. Regarding to- ... The second question related to the level of cash and investments, and financial investments that we have today. In the end of March, only to explain you why we have this BRL 8.8 billion, in Q1 2024, we had a very good opportunity to advance receivables to bank issuers. In the last time on March, we use it in April 2024. That's the reason our cash position increased. Going forward, we are thinking to work around 40%-50% of our equity in cash. And this cash is based on some mandatory deposits that we have in treasury bonds, our fixed account to run the business, and based on our asset liability management, that controls our liquidity risk. So, in terms of, as you mentioned, related to prepayment, yes, we are using the results that we are achieving today to support the growth in the company. That part of this growth also requires more money to prepayment of our merchants. Okay, that's clear. Thank you. Okay, thank you. Our next question comes from James Friedman from Susquehanna International Group. Please, Mr. Friedman, your microphone. Mr. Friedman, activate your microphone, and you can ask your question. Sorry about that. I'm here. Thank you for taking my question. Artur, I wanted to ask about what your message is about the credit portfolio mix, secured versus unsecured. How should we be thinking about that evolution on the secured side going forward? I see you're at 73%, but should this change in the mix continue at this magnitude? Hi, James. As I mentioned before, we are gonna resume these two different products, working capital and overdraft account, in the H2. So, it's gonna be small steps. We are at the very early stage, so I don't think we should consider this mix changing dramatically going forward. So it's gonna be similar to the levels that we have today, because we already have this portfolio of BRL 2.7 billion. The majority of this 2.7 billion is secured, and we don't think that's gonna change in short term. We're going to start in H2, in very small steps. Let's see, as time passes by, we can give more color on that, but the best information I have at this point, I would say to you, the non-secured is gonna be small in short term, so this mix will not change, looking forward for the following quarters. Perfect. And then more generally about the new product rollouts, especially when you look at things like the PagBank Partnership Program or the business insurance for merchants, I'm just curious, how typically do you go to market with those? How are they being sold, and what, in general, has been the consumer or merchant response to the new product rollout? Thank you. Well, the partnership program is based on softwares that we have partnership with more than 300 different software or service providers. So some of them use, or the majority of them use our smart POSs. Remember, our smart POS is an Android one, and then you can install an app. It's kind of the ERP. Let's say you have a parking lot, and then you can use your POS to manage your parking lot, or if you have a restaurant, you can install a different app for your restaurant to take the orders, to split the payments between different people in the same table. And let's say you have a drugstore or a gas station, you can use your software that you already use, combine it with our payment solution. So the distribution of this partnership, we usually distribute the POS, and the merchant decides to use the software they already use or someone recommended to them. So that's the way that it works in terms of partnership. It's a combination between our payment solution with a third-party software. And the insurance that you asked, usually the majority of the insurance we sell through the app, some of them we sell during the onboard, some of them we sell during the cross-sell of different products. Let's say we are asking for a card, and then I can offer you an insurance for your card. If you lose your card, someone uses your card, I can reimburse you. So it depends. We have different types of insurance. For the merchants that we mentioned in the presentation, the sale of this insurance is done through the hubs. When they go there to work with the POS, they can also sell the insurance. That's different channels for different products, depending on the type of the client. Perfect. Thank you. Thank you. Our next question comes from Yuri Fernandes from JP Morgan. Please, Mr. Yuri, your microphone. Thank you, guys, and congrats on the quarter. I have a question on your TPV volume guidance. This was a pretty strong BRL 112 billion, 27 year-over-year. And your guidance is basically BRL 441 billion-BRL 457 billion. If we consider the seasonality for the 1Q, I know it's, it's not the smartest way to see this, but historically, first Q is 20%-22% of yearly TPV. And this would imply more than BRL 500 billion, if you, you know, keep this historical seasonality for the 1Q. And basically, you know, you need to decelerate to maybe industry trends from those 20+ to maybe 12, something around 12, to deliver your guidance. So my question is: how are you seeing your TPV guidance for this year? Like, why not revising? Like, can you surprise us positively, or do you see any deceleration that make, you know, this strong 1Q being kind of a one-off? I have a second question on capital allocation. You know, you report this cash in financials, but when we try to estimate your net cash, you have over BRL 11 billion of, you know, net cash. You are growing your deposits. So just a refresh, like I remember you discussed in the past quarter about doing, you know, a new buyback program, if you have anything on that, if you can have any comment on dividends, M&A, like how... Basically, how to allocate, because you are sitting. It's a good thing, you are sitting a pile of cash, so just asking, like, what should we expect from this money? Thank you. Hi, Yuri. Regarding TPV, you're right. There is definitely upside risk. We just don't wanna change the guidance or give this type of increase in the guidance, because we only had three months of the year. Of course, we are seeing the TPV in April and May, that we look at every day or intraday, but we decided to wait a little bit and see how it will evolve. As I said before, the momentum is strong. We see a strong momentum for the company as a whole, considering TPV, considering banking, considering caching, and definitely there is this upside risk. If we judge that it's time or that is the right thing to do is to revise the guidance, we're gonna do it, but we just think that at this point, it's too early to make any change. And the other thing I would say is that in H2, 2023, our TPV was strong as well. So there could be some hard comps in H2. It doesn't mean that we see risk for our guidance. Again, there's definitely upside risk, be higher than the top of the guidance, but we just wanna wait a little bit, and then maybe in 2Q, we could revise if we think it's time to do so, because the 2Q call is gonna be in August. So from there, we're gonna have more visibility to what happened throughout the year. Hey, Yuri, it's Artur speaking again. So regarding capital allocation, our thinking here is to looking for growth opportunities, especially organically. We analyze a lot of M&As and so on, but we didn't figure out anything that can create any transformation to the company right now. If something appears, we will communicate appropriately. But we are looking forward to grow our product services, in payments, in banking products, to merchants, to consumers, to all our clients. The TPV is growing close to 30%. Our result more than 30% in the quarter. So the cash flow that we are generating, we are reinvesting in the business, because we need to support this momentum. It's a positive momentum for the company. We are growing a lot again, a new cycle of growth for the company, and we decided to use this capital to run the business and support this momentum. Regarding to dividends, we are not discussing any program at this point. And the share buyback program, we still having BRL 45 million in the original plan that we launched a long time ago. I guess it's $45 million, right? $45 million. Exactly. Exactly. Thank you, Dutra. Thank you, guys. Super clear. Congrats again. Thank you. Okay. Thank you so much. Our next question comes from Renato Meloni, from Autonomous Research. Please, Mr. Meloni, your microphone is open. Hi, everyone. Congrats here on the results, and thanks for the space to ask questions. So first, on deposit growth, I'm curious here what you're seeing for the rest of the year. Growth rates are pretty high, so I wonder if you see it similar or maybe decelerating going further into the year. And my second question is just a follow-up on selling expenses. If you look at just at this expense line as a percentage of revenues, it's been going up. But previously in the call, you mentioned that on a consolidated basis we should expect a relatively stable ratio when you're looking at against revenues. But, specifically at selling expenses, do you think, given your growth specs here, this will continue to go up and then it's going to be compensated by lowering other cost lines? Or, everything is pretty much stable on your planning now? Thank you. Hi, Renato. This is Alexandre. Well, thanks for the question on the deposits. Regarding to the deposits, what we can say is that we are working with this integrated value proposition between our payments and banking platform, and this has been very successful to drive deposits up. ... and drive more and more engagement of our payments customers within the banking business. Also, throughout our CDs, high yield CDs offerings, we are also able to capture new customers outside of the relationship of the acquiring business, and also through the payroll loans, we are also bringing new customers that does not have a relationship with the acquiring business, and these new customers are engaging with the account and bringing more deposits. So, we believe that our strategy is in the right way for us to keep growing our deposits on the next quarters. But we don't have a specific guidance for that. It's Artur again. Renato, it's regarding to the selling expenses. And before I talk to selling expenses, I would like to adjust one comment that I did in the Kaio's question. That was related to the leverage I said to total costs and expenses. I mentioned that it was 70 basis points, but we'll have a- we have a leverage of 220 basis points versus Q1 2023. Regarding to selling expenses, we are including in this line, marketing expenses, that we mentioned, we will keep this level of marketing in the coming quarters, because it's totally focused to support this growth, acquiring new clients, and reinforcing PagBank brand in the market. Inside this line, we also have total losses, that, as I mentioned, we are performing very well, and we expect to continue doing this performance going forward. And on top of that, we also have the sales... The cost of sales force. As we mentioned, we are strengthening our sales force, and part of this amount was captured in Q1, part of this amount will be captured in the coming quarters. On top of that, in personal expenses, we have the collective agreement bargaining. That happens in Q2, and all of these items should be considered to project the selling expenses going forward. We achieved BRL 435 million in Q1, and I expect that we have a higher amount going forward, but not too much. Thanks. Just a quick follow-up. When you say, marketing expenses, at the same level, you mean the same financial absolute level, or the same level relative to revenues? At this point, what I can share is the same, the nominal level. Same nominal level. Understood. Yeah. Thanks, and congratulations again for the results. Okay, thank you so much. Thank you. That's all the questions we have for today. I will now pass the line back to Alexandre Magnani for the concluding remarks. Floor is yours. Thank you, everyone, for the participation in our call. We really believe that our business model that combines payments and banking is bringing out the results for a while of our investments we have done during all of these years. We look forward for the next call and to see you again. Bye. Thank you. This does conclude PagSeguro Digital 1Q 2024 earnings conference call. We would like to thank you again and wish you a great evening.