Dannie Eiger

Dannie Eiger explored the dynamics of sales and marketing investments, specifically the Q-on-Q increase as a percentage of sales and the outlook given lower competition in Brazil. He also asked if the acceleration of consumer books in Brazil and Mexico, impacting doubtful accounts, was a consequence of increasing overlap and cross-selling with the marketplace.

Answer

CFO Martín de los Santos attributed the increase in sales and marketing spending primarily to the expansion of social channels and the affiliate program, which saw significant growth in Brazil. He noted that overall marketing investments remain within the historical range of 11-12% of sales. Regarding consumer book acceleration, he explained it was driven by strong advertising for the yielding account and improved credit models for credit card issuance, with marketplace integration also being a significant driver for credit card growth.

Dannie Eiger asked about sales and marketing (S&M) dynamics, specifically the Q-on-Q increase as a percentage of sales, tactical investments due to seasonality, and the outlook given lower competition in Brazil. He also inquired if the pressure on doubtful accounts, due to accelerating consumer books in Brazil/Mexico, was a consequence of increasing overlap between commerce and fintech platforms.

Answer

Martín de los Santos, CFO, attributed the S&M increase (60 bps sequentially, 1.4 bps YOY) primarily to expanding social channels and scaling the affiliate program, which saw significant growth in Brazil. He noted these investments are within the historical 11-12% range and are positive growth drivers. Regarding doubtful accounts, he explained that credit acceleration for yielding accounts is driven by advertising and higher returns, not necessarily marketplace activity. For credit cards, growth is a combination of improved integration of offers in checkout (marketplace as a big driver) and continuously improving credit models' accuracy.