XP - Earnings Call - Q3 2025

Transcript

Speaker 1

Good evening, everyone. I'm Andrew Parize, Investor Relations Officer at XP, and it's a pleasure to be here with you today. On behalf of the company, I'd like to thank you all for your interest and welcome you to our third quarter 2025 earnings call. Today's presentation will be led by our CEO, Tiago Maffra, and our CFO, Victor Mansur, who will both be available for the Q&A session right after the presentation. If you would like to ask a question, please use the raise hand feature on Zoom, and we will address them in the order we received. We also offer the option of simultaneous translation to Portuguese. If you'd like to activate it, please click the button below. Before we begin, please refer to our legal disclaimers on page two, where we provide additional information regarding forward-looking statements.

You can also find more information in the SEC filing section on our IR website. Now, we'll turn it over to Tiago Maffra. Good evening, Maffra.

Speaker 0

Thank you, André. Good evening, everyone. I appreciate you all joining us today for the third quarter 2025 earnings call. 2025 has been a very important year for XP as we have achieved significant progress on our agenda of excellence. From the launch of the new way to attend and serve clients, implementing a culture to better understand clients' financial cycles as part of the main KPIs, new and more intelligent segmentation to a brand new app with much more features and easier data access, and new credit card offering. These few examples demonstrate our focus to become the leader in investments in the country, while bringing a completely new approach on how Brazilians invest. Despite these advances we have made in different areas, the year has still proven to be challenging.

Even with these challenges, our team is fully committed to keep evolving our business to deliver growth and profitability under different circumstances. Now, going to the main KPIs, the first one is client assets, AUM and AUA, for which we posted BRL 1.9 trillion, a 16% growth year over year. Total advisors accounted for BRL 18.2 trillion, representing a small decrease year over year on the back of many of them becoming employees and our more restrictive policy, which requests higher standards of commercial behavior and productivity. On activity clients, we posted 4.8 million clients, with a 2% growth year over year. It's important to mention that we have been growing on core client segments, high income and private banking. For some quarters, we were not investing to capture and maintain low retail clients since it was too expensive to serve them in our old model.

Now, after some tests, we are almost ready to resume growth in this segment. We already see early stages of development on how to better serve the segment with profitability. Let's wait some quarters to be sure about the way we design to attend retail clients, and maybe we'll see the overall number of clients growing again as this dynamic evolves. In the quarter, gross revenues marked BRL 4.9 billion, representing 9% growth year over year. EBIT is 10% higher year over year, making BRL 1.3 billion. These results were positively impacted by the more constructive dynamics in corporate and insurance service segments. Following this positive trend, our borderline also posted an impressive growth year over year, reaching BRL 1.33 billion and representing a 12% growth when compared to the same period last year, which represents a new record.

On profitability, we achieved 23% ROE during the quarter, a flat performance year over year. This represents our commitment to deliver profitability even in more challenging market scenarios. On capital ratio, we maintained a very comfortable level of 21.2%, which represented an increase of 180 basis points quarter over quarter. Regarding diluted EPS, we posted 13% growth year over year, another quarter in which it grew faster than net income, driven by our share buyback program execution. Now, let's see more details on the next slides. Our total client assets, combined with the assets under management from our asset management business and with the AUA from our fund administration business, totaled over BRL 1.9 trillion, which represented a 16% growth year over year. On the right hand of the slide, we show how net new money related to client assets developed in the period.

This quarter, we achieved BRL 20 billion in retail net new money and BRL 9 billion in corporate and institutional, which combined represented BRL 5 billion lower than last year, but three times higher than last quarter. On the retail side, we started to see the early signs of progress on our agenda of excellence we mentioned before, lower noise of some events we had during the first half of the year, and better GCM activity towards the end of the quarter. All this combined positively impacted the inflows coming from individuals. Additionally, despite the maintenance of the same market dynamics during the third quarter of the year, we saw better net new money figures, both from SMEs, which are incorporated in retail figures, and large corporates. Recent developments in our product range offering and more positive capital markets activity translated into higher net new money for both segments.

We are constantly improving our investment platform and, as we mentioned before, enhancing clients' experience through advisor initiatives. This combination reinforced our confidence to achieve our target of around BRL 20 billion in retail net new money per quarter. On the next slide, we will explore our retail strategy. As I mentioned earlier, 2025 has been a year of significant progress in our agenda of excellence. We are constantly enhancing our way of serving clients with the aim of once again disrupting the market with our value proposition focused on service level. Going back to our foundation, XP disrupted the investment industry in Brazil by democratizing access to investments through an open and comprehensive platform of products and service. In a second stage, we scaled this innovative business model by building the largest and most qualified base of financial advisors in the market.

We have come this far by offering best-in-class investment products built by top market specialists. Now, we are once again disrupting how Brazilians invest by democratizing access to high-quality wealth planning, a service that until now has been reserved for high-net-worth clients of multi-family offices. We delivered personalized and premium planning for clients with more than BRL 3 million, scaling financial planning for those with over BRL 1 million, and offering goal-based investment planning for clients with less than BRL 1 million. Our approach is holistic, encompassing the complete financial lives of our clients: assets, liabilities, expenses, and savings. Tax and estate planning solutions are also considered. In the end, we are serving our clients with top-tier solutions for both their personal and business finance. We are doing this at scale, powered by proprietary technology we have developed over the past years.

This technology enables process standardization, scalability, and consistent quality in our service model. Examples include our CRM system, proprietary allocation platform, and sales activity management, among others, all of them powered by AI. Some of these process KPIs are shown here, proving that this journey towards excellence is gaining traction day by day. Additionally, combined with all this progress I have just mentioned, we are leading another change in the industry by having an agnostic business model. We are able to serve clients in the way that best fits their needs and preferences. The fee-based model already accounts for 21% of total retail AUC. It started in the wealth service segment, which still has more representativeness in the model, but we are accelerating in the other segments from this year on. We will still capture considerable growth coming from this new way to serve.

It will happen in the medium term as we are transforming our business model and our value proposition. Nevertheless, we strongly believe that it will give us a sustained competitive advantage in the long run. Finally, XP once again is a pioneer. We are not only leading this redefinition on how clients are served, but we are also uniquely positioned to capture future growth coming from these changes in client behavior and new market trends. Retail cross-sell has been one of our focuses to diversify revenue streams during the last years. During Q3, we achieved important milestones in this business segment. Starting with credit card, TPV grew 9% year over year, marking BRL 13.1 billion during Q3. As we anticipated last quarter, at the end of Q2, we launched new products targeting affluent and private banking clients.

We estimate that with this new segmentation, each one of them with a unique value proposition, we should grow faster in the coming quarters. Life insurance retail premium posted 25% growth year over year in Q3. As we have mentioned in the past, our insurance business is still in its early stage. Given its significant expansion potential, we expect it to continue growing. On retirement plans, our client assets posted 15% growth year over year in Q3 and reached BRL 90 billion. We keep expanding our sales force and our product offering to increase our relevance in this industry. As mentioned before, we see a lot of potential in the life insurance business segment, with a significant addressable market to penetrate in the coming years. Credit posted 11% growth year over year in Q3, achieving BRL 83 million in NII. In new products, we consider FX, global investments, digital accounts, and consortium.

Altogether, they presented 24% growth year over year, with revenues reaching BRL 250 million this quarter. Beyond consortium, we also saw FX and digital accounts posting relevant growth this quarter. Moving to the next slide, we will address our wholesale bank evolution. Taking GCM into consideration, this quarter we saw a sequential increase in industry volumes when compared to the previous quarter. This growth was pretty much concentrated in the last half of the period, backed by the progress in the tax discussion regarding tax exempt and incentivized instruments. In the third quarter of 2025, we had 10% market share in that capital markets distribution. We still have a robust pipeline of fixed income offerings, and depending on market conditions, we might see these mandates materializing into real deals still in 2025.

Regarding XP Broker Dealer, it was another positive quarter, and we kept leadership in the local industry with 17% market share. On corporate securities, this quarter we kept about the same size of our corporate securities book with BRL 33 billion. The quarter started with possible changes in taxation of tax exempt fixed income instruments and finished with many companies taking advantage of low credit spreads to issue new debt. Next year, we can possibly see an increase in volatility and therefore a reduction in corporate clients' appetite for new offerings. Our strategy, that being the case, is to increase this warehouse book in the last quarter of 2025 to sell it to our retail clients during the next year. As a final message, I would like to once again emphasize our ability to disrupt the market. We are the pioneers of this transformation trend, bringing clients' unique value proposition.

Our innovative offering, combined with an agnostic business model and strong capital discipline, positions us as a distinctive player that successfully combines growth potential, profitability, and risk management. I would also like to reinforce that our ecosystem today is far more complete than it was just a few years ago, and there are multiple opportunities to be explored across all our businesses. We are confident that by executing this strategy, we will achieve our goals of market leadership in investments and deliver sustainable long-term growth. Now, I will hand it over to Victor, who will provide a deeper look into our financial performance this quarter, and I will be back for the Q&A session. Thanks, Mafra. Thank you all for being here today. Now we'll discuss our financial performance for the third quarter.

Starting with gross revenues, we posted gross revenue of BRL 4.9 billion, with 9% growth year over year and 6% growth quarter over quarter. In retail, revenues reached BRL 3.7 billion, representing 6% growth year over year and 4% growth quarter over quarter. Institutional revenues were stable at BRL 304 million, flat year over year, and slightly decreased quarter over quarter. Corporate and industry servers delivered an outstanding performance, reaching a historic record of BRL 729 million, with 32% growth year over year and 33% growth quarter over quarter. This was driven by strong capital markets activity, followed by our leading position in corporate client solutions, which we will discuss in more detail in the next slides. Now, starting with retail revenue, the performance was mainly driven by floating from both check and investment accounts, which benefited from higher average volumes and higher interest rates during the period.

Second, new verticals included in other retail, such as international investments and global accounts, which delivered strong results. Lastly, it's important to mention that this quarter also includes the revenue of the export event. With that, the other retail category totaled BRL 757 million, marking 24% growth year over year, 19% growth quarter over quarter, offsetting our weaker performance from other product lines due to lower EDTV and shorter duration. Now, let's move to the next slides with corporate and industry services. This was the best quarter in our history. The outstanding performance was driven by a pickup in DCM activity compared to the previous quarter and the continued development of our corporate client franchise. Industry services posted BRL 323 million, stable year over year, and 21% growth quarter over quarter. Corporate revenues reached BRL 406 million, representing 77% growth year over year and 46% growth quarter over quarter.

The strong growth reflects our increasing capability to deliver solutions to large corporate clients, particularly in hedging solutions. Moving on to the next slides, we will explore SG&A and efficiency ratios. SG&A expenses totaled BRL 1.7 billion in the quarter, representing 10% growth year over year and 7% growth quarter over quarter. We remain committed to investing in areas we consider critical for long-term growth, including sales force expansion, marketing, and technology, as highlighted by Maffra earlier. These initiatives are designed to enhance the client journey and elevate our overall service level. While this strategy may lead to a stable or slight softer efficiency ratio in the short term, we see these investments as fundamental to sustain our competitive edge over time. Our last 12 months' efficiency ratio was 34.7%. Compared to last year, the ratio improved by 79 basis points.

As usual in the third quarter, results also reflect the impact of the export event, which once again proved to be an outstanding opportunity to connect with our stakeholders. From another angle, the impact of it in the current efficiency ratio was approximately 70 basis points. Moving on to the next slide, let's see our EBT. As a result, our EBT was BRL 1.3 billion, representing 10% growth year over year and remaining sequentially stable. The EBT margin expanded 47 basis points on the annual comparison, while compressing 103 basis points quarter over quarter. Now, looking at the net income, we reached BRL 1.3 billion, a 12% growth year over year and a 1% increase quarter over quarter. The net margin expanded 106 basis points on annual comparison and compressed 112 basis points sequentially, closing the third quarter of 2025 at 28.5%. Now, let's focus on capital management.

This year, we have been highly active in returning capital to our shareholders. In 2025, we repurchased BRL 2 billion, of which BRL 850 million occurred after the end of the third quarter, and therefore are not reflected in the accounting metrics we are presenting today, such as ROE and EPS. Today, we are announcing the retirement of all outstanding treasury shares bought back during the year, and the new BRL 1 billion share buyback program to be executed over the next 12 months. On top of that, we are also announcing a dividend of BRL 500 million to be paid in 2025. This represents BRL 2.4 billion in capital return to shareholders in 2025, approximately 50% payout if you analyze our net income. If considered the new buyback program, the payout ratio would be around 70% for the year. Let's focus on earnings per share on ROE detail over the next slides.

In the third quarter, our diluted EPS once again outpaced net income growth, reaching BRL 2.47 per share, supported by our activity capital distribution strategy through share buybacks. In this quarter, EPS grew 13% year over year and remained stable quarter over quarter. On the right-hand side of the slide, ROT stands at 28% and ROE at 23%. It is slightly lower than last quarter since we had a capital generation without a corresponding distribution. Assuming the execution of the new BRL 1 billion buyback program and BRL 500 million dividend payment, ROT and ROE would have been 30% and 24%, respectively. Now, moving to the next slide. To conclude my presentation, our capital ratio ended the third quarter at 21.2% and the CT1 at 18.5%, well above peers' average and the regulatory requirements. This comfortable capital position gives us a strong edge to navigate different scenarios and be ready for the becoming volatility.

Also, during 2026, we expect to have the opportunity to deploy capital in a more efficient manner. It's important to remember that we maintain our guidance for a BS ratio between 16%-19% for the end of 2026. Now, talking about risk, on the right-hand side of the slide, you can see that our RWA totaled BRL 108 billion, representing a 13% growth year over year and a 6% increase quarter over quarter. Finally, our VAR stood at BRL 29 million, or 12 basis points of equity. Even in a quarter of outstanding performance from our wholesale business, we maintain a very conservative risk profile. In this quarter, it's worth to mention that our balance sheet grew 6%, but adjusting it for retirement plans and security funding, its growth would have been lower than the CDI for the period.

This increase in retirement plans is associated with a one-off bulk migration we did from other insurance companies to our own, and we do not expect to see it in other quarters. Besides that, as you can see, we kept our market RWA stable and decreased our VAR sequentially, reinforcing our position as a robust ecosystem with strong risk recycling capabilities. Now, we can go on to the Q&A. Okay, starting with our Q&A session, the first question is from Eduardo Housman from BTG. Housman, you may proceed. Hi, hi everyone. I have a couple of questions here on the wholesale business. Right? Results were pretty strong this quarter. Should we expect a similar performance in the fourth quarter, or do you think, you know, a slowdown should be expected? Right?

My second question is on what Maffra mentioned, right, during the call, the strategy to increase the warehousing book in the fourth quarter. If you can give us a little bit more details, you know, because you also mentioned that corporate spreads are very low, so would not that be a risky strategy in an election year? Thanks. Hello, Housman. How are you? Thank you for your question, and good evening, everyone. We are seeing the wholesale banking with a good performance for Q4. As we mentioned earlier in the last call, we have seen the second half of the year stronger than the first half of the year, especially for the wholesale bank. Hi, Housman. This is Victor.

Talking about credit spreads first, we think that the credit spreads are really tight, and the probability that they can go a bit more wider over the end of the year and next year. There is a lot of net inflow in fixed income funds that keep putting pressure in the spreads. It is important to remember that our strategy is to hold high-quality assets, and the velocity of turnover of a portfolio is higher than the average of the industry. We are not as susceptible to credit spread volatility as the rest of the competition. In terms of RWA, we expect to sell a bit of what we bought over the third quarter. Depending on the performance of the DCM, warehouse a bit more to go through the first quarter of 2026.

As we all know, the first quarter usually is a quarter of lack of activity in DCM. So it's important to us to have assets to sell in the beginning of the year. No, perfect. Crystal clear. Thanks a lot. Okay, next question is from Yuri Fernandes, JP Morgan. Yuri, you may proceed. Thank you, Pariz. Hello, good evening, everyone. Just to follow up on Housman's on corporate, can you remind what was the 46? I think you mentioned hedging strategy, but I'm not sure what was it. So just trying to understand a little bit again, the corporate inside corporate initials, the 46% quarter over quarter increase. And on bonus, this line was a little bit heavier this quarter, but coming from a, I would say, a softer base, right? When we go to the nine months, I think total bonus is up 8-9% over year.

Not a big increase. If you can comment a little bit on what to expect on people expenses, like salaries, just to get some idea on SG&A, I would appreciate it. If you want to comment on bonuses also, I think it's also a good point given it was a little bit higher this quarter. Thank you. Hi, Yuri. Thank you for your question. This is Victor. First, talking about the corporate performance, it's important to remember the corporate business is tied to the DCM activity. One of the main drivers of P&L in corporate is hedge solutions to companies issuing debt. For example, a company issues a debt, tax-exempt corporate bond, inflation-linked bond, and it does not want the exposure to inflation. It hedges against us in CDI plus. That is one of the businesses and is highly correlated with DCM activity.

Also, another business that is really important is the originator of credit operations that will be securitized and sold to clients in the next quarters. If you go to our credit portfolio, you'll see that it's flattish. Basically, we sold quasi-sovereign bank notes, and we originated corporate operations, but those operations will be securitized and sold to clients the same as we did in other quarters. Now moving to bonus, it's normal to see the bonus going higher after the performance of investment banking going higher the way it did over the quarter. Part of that is explained by performance in wholesale banking. Another part is explained by the new hires over the year. We hired almost 500 new employees, mostly on sales force expansion over the year. This is one part of the drivers of salary growth and bonus provisions. No, super clear, Victor.

Thank you very much. Thank you and congrats on the net new money improvement for the quarter. Okay, next question is from Mario Pierre, Bank of America. Mario, you may proceed. Hey, guys, good evening. Let me ask two questions as well. First one, when we look at your retail revenues growing 6% year over year, but if we double-click on that, we see that fixed income revenues actually contracted year over year. I have them contracting 2% even as the AUC grew 22%. So it means there was like significant pressure on take rates. Can you explain why that happens? Right? Because when we look at fixed income revenues, we're growing like 40%, I think, on average for the past like six quarters. So just trying to understand if there was a one-off event that impacted fixed income revenues.

Then my second question is related a little bit to what Yuri asked, but you know, when we look at your EBT margin, it had been expanding for the past like three quarters, I think, and this quarter it contracted because of the pickup in expenses. And you're running below your guidance, right? Your medium-term guidance of about, I think, 30-32% or 29-32%. Just trying to get a sense here also, like, should we expect the trend to start to improve in the next quarters, or do you think that the EBT guidance, it's something for more like for the end of 2026? Thank you. Hello, Mario. This is Thiago. I will take the first question. I can answer the second one and Victor complement myself here.

About the fixed income revenue, the main problem here is if you look at the take rate for investments, if you compare Q4 last year to Q3 this year, it's down 10 basis points overall. Okay? It is a huge draw here, drawdown. If you look at only fixed income, 20 basis points. Okay? It is a big decrease in take rate. It is mainly explained because first one, mix. Okay? If you look at CGs with daily liquidity, they used to represent 25% of the new allocations. Okay? 25% today is 45% because of the high-selling rate. We are selling almost half of everything that we sell for fixed income. It is CGs with daily liquidity. If you compare the revenue we make here, it is basically a daily spread on CGs with daily liquidity against duration times spread. Okay? It is a completely different revenue stream. Okay?

The second one is shorter duration. Okay? Right now, everyone is only buying very short-term durations. Okay? When you combine the mix of more CGs with daily liquidity and short-term duration, we are selling a lot more volume in fixed income, but with a lower take rate. About your second question, we are investing in Salesforce expansion. We are investing in SMB. We are investing in technology. We are doing a lot of investments this year, and we are planning to do more investments next year. I would say that it's still possible to get to the, and at the end of next year, to the guidance we gave.

But you see, because in the past, I would say two years or even more, we have been gaining a lot of efficiency quarter after quarter, I would say that right now we should be more flattish when you look at the next quarters because we are investing more. Okay? Still doable to get to the guidance by the end of the next year. Very clear, Maffra. Thank you. Next question is from Gustavo Cherolding, Citi. Gustavo, you may proceed. Hello, guys. Thanks for the opportunity. I have two questions as well. The first one is, sorry to insist in this Salesforce that you guys mentioned, but because if I'm not wrong, you mentioned something around 500 new employees, and most of them related to Salesforce. But when we analyze the total number of advisors that you have, it is decreasing, right?

Year on year, and stable quarter on quarter at 18,200 advisors, including IFAs and XP's employees. I'd like to understand what kind of Salesforce are you hiring, and if it is possible to reconcile with this total number of advisors. My second question is related to financial expenses. We saw a decent decrease quarter on quarter and year on year, so 28% below quarter on quarter, 45% decrease year on year. Despite this higher CDI rate, we could see that there was a reduction of BRL 1.5 billion in borrowings. My question is, this reduction is related to these lower borrowings, or are there different reasons behind this decrease in financial expenses? Thank you. Okay, I will take the first one. About the total number of IFAs, as Victor mentioned, we are hiring more internal advisors here.

It's because when you look at the IFA, the B2B network, they have been converting some of the IFAs into employees because of the change in regulation that has been happening, I would say, for over a year now. The second part, it's because we have been part of the third wave that we mentioned a lot here on quality, the way we serve clients. We have been focused a lot more on quality. More skilled IFAs. Okay? We have been, I would say, even forcing some of the low-quality IFAs to leave the network. We have been increasing on what we call AAA advisors, and we have been decreasing on what we call C&D curve of IFAs. Okay?

Those are the main reasons why you do not see the number of IFAs growing, but as we do not open the number of what we call AAA IFAs here, this number has been increasing. We have been focusing more on more qualified advisors. Hi, Gustavo. This is Victor taking the second part about the financial expenses. Just remembering here, we went to our organization of our conglomerate over the last year, changing the bank to the top of the business, and that had an important effect in financial expenses and also in other revenues. When a debt that was a corporate debt inside a holding matures and it is rolled over for a debt inside of the bank, it gets out of the financial expense lines and goes inside of net interest margin. It is just a geographic effect.

It goes from the debt to be a reductor of revenues. That is also why other revenues are lower quarter over quarter. You are going to see that the change between lines, they are closer to each other. That is the main effect, just a geographic movement between lines. It is also important to note that the bank debt is much cheaper than a corporate debt. You do have this geographic movement, but also the overall cost of debt of the company is considerably lower when you compare 2024 to 2025. Very clear, guys. Thank you. Okay, next question is from Danielle Vass from Safra. You may proceed, Danielle. Thanks. Hi, everyone. Good evening. Thanks for the opportunity of making questions. I wanted to follow up on Mario's question on fixed income. Instead of looking on the 2% drop, I wanted to talk about the 7% drop quarter over quarter.

I mean, DCM activity improved, right? We saw that on your insurance services. Net new money improved. Warehouse of security did increase, and we had higher business days, right? It is probably that you distributed higher volume to the clients, no? I heard you on the mix change, but this, I mean, was this a quarter over quarter change? The CDs with daily liquidity went up from 25% to 45% in one quarter. Just wanted to touch base on that again if you could explore a little more what the change quarter over quarter means. If I may follow up on the guidance, I wanted to check on your comment, Maffra, if you are able to get on the fourth quarter of next year on your EBIT margin instead of the full year. Is that correct? Did I understand well? Thank you. Hi, Danielle.

This is Victor taking the first part here in fixed income. If you remember a few questions ago, I told that we sold quasi-sovereign banking notes from our warehouse book, and we warehoused corporate bonds. Basically, that is what happened in real life when Maffra said that clients are buying short-term floating rates. That is what's happening. The products originated by the DCM markets over the quarter are still in your books, and we are going to sell them over the fourth quarter and first quarter of next year. What we sold are short-duration banking notes. That is why we see this behavior in the revenue quarter over quarter. In the guidance, if you can comment on the fourth quarter or full year of EBIT margin. Sorry for that. Yes, we still think that it's possible to target that next year.

We don't give guidance quarter by quarter, so it's hard to say what's going to be Q1 or Q2 or Q4 next year, but we still think that the 30% is still doable. Okay, thanks, guys. Okay, next question from Thiago Batista, UBS. Thiago, you may proceed. Hi, guys. Quite late for the results. Can you hear me? Hello? Yes, we are, Thiago. Okay, okay. Sorry, sorry, Maffra. So I have two questions. The first one on the buyback, the intention of the 1 billion buyback is to be concluded this year. I know that depends on the price of the shares, etc., but the initial intention is to conclude this this year. The second one about the IOC in the equity business. We saw that this quarter or the third Q, the IOC was basically flattish curve Q. We have the Bovespa in the all-time high now.

I've already seen, not exactly in the third Q, but more recently, clients trying to move the money towards more risk investments like equities, or not yet, or maybe we need to see Selic rate at, let's say, single digits or something like this. So my question is, are you already seeing this migration from fixed income to high-risk investments? Hi, Thiago. This is Victor. First, on the share buyback. The buyback program is open, and we are going to be buying over the next 12 months. The same as before, we are going to wait for the best opportunity to deploy the capital and maximize the return to our shareholders.

We cannot give you an idea when it will be complete or if it will be the beginning of next year or the end of this year, but I can guarantee you that we are going to be buying everything the same as we did in all the other programs we opened. Yeah. Just to complement Victor on the payout strategy here, if you guys see, we still have a very high biz ratio, and we mentioned that we would like to bring it down to something between 16-19 by the end of next year. That is still the case, but why we are not giving more money back to the market right now is because we believe we will have good opportunities next year. It is going to be a volatile year, and for sure, we will have opportunities to do more buyback next year.

That is why we are not deploying or paying out more capital right now. Okay. About the second part of your question, we do not see a big changing mix yet, okay, because remember that the retail clients, they are a little, of course, it is our job here to help them not to have this behavior, but they are a little bit lagging. Okay. Once we start to see rate cuts and other things, price moving up and so on, people start to move money from one asset class to another. Okay. We are seeing a stronger funds platform right now, especially primary offering for closed or open end funds, REITs, and so on. The demand has been increasing for that type of products, but not yet for equities or for some other products. Okay.

I would say that we are not in a point that we could say that we are seeing a lot of change in the portfolio. As we mentioned for fixed income, it's still the opposite. People are moving even more money to daily liquidity products, CDs, because they are seeing 15%. I would say that we are not there yet. Thank you, Maffra, Mansur. Next question is from Tito Lombardo, Goldman Sachs. Tito, you may proceed. Hi, good evening, guys. Thanks for the call. I'm taking my questions. A couple of questions also. First, a follow-up on the corporate revenues, right? You mentioned it's related to hedging solutions for companies issuing the tax-exempt bonds. Is this a function of, I guess, companies just anticipating tax reform so that remains strong in the second half of the year, but potentially subsides next year?

Or do you think that there's more sustainability to that? The second question, you saw it jump in retail inflows, right? I mean, 20 billion, which is more or less what you've been saying, but it was up significantly from last quarter. Was there anything significant to read into this? Is this just normal volatility, or should that begin to accelerate from here? Just any color you can give on how that continues to evolve. Thank you. Hi, Tito. The first one about corporate revenues. Hedging is related to issuance, but I think the issuance, they are a function of the risk of the new tax regulation, but also the level of credit spreads. It's really cheap to raise debt here right now, and next year will be extremely volatile.

I think companies are moving ahead and doing whatever they need to do in terms of ION this year. Also, there's not only hedging solutions. We have power trading, cash management, FX operations, and the credit originates to sell, as we commented before. I think what the hedging solution was one that gave a bit of highlights for the quarter, but there is still a lot of revenue lines inside of the corporate franchise. I will take the second one about net new money. Of course, we have been doing a lot of things here, especially on what we call the third wave on increasing the level of service, the value proposition that we deliver to our clients. We mentioned a lot today on the presentation about that.

We have been democratizing the wealth service business to all our retail clients here for the past, I would say, year or a year and a half. We have been developing a lot of technologies, CRM, AI capabilities. I would say that the level of service that we are delivering to our clients right now, it's much better than it was a year or two years ago and much better than most of our competitors, talking about, of course, here, our retail clients. We are delivering a level of service that nobody provides in the industry in Brazil. That is why we are calling the third wave. It is early to say that that is moving a lot the needle here. I would say that is more like a medium-term impact. We are around BRL 20 billion.

We have been saying that's the level for the past quarters. I don't see any reason right now to change that for up or down here. We are seeing BRL 20 billion as the level for the next quarters. Again, BRL 16 billion, BRL 18 billion, BRL 22 billion, or BRL 23 billion for us is the same BRL 20 billion. You could see one quarter higher than that, one quarter lower than that. That's helpful, Maffra. If I can, just one follow-up on that, right? Just on the revenue guidance, you had said 10% for this year. I mean, expectations are that you'll probably be below that, but then also thinking on your 2026 guidance, the bottom end, BRL 22.8 billion would be like a 20% jump. I mean, is that still real?

What would need to happen for that to be realized, or is that likely some downside risk just given the tougher macro that we've seen since you initially gave that guidance? Thank you. Yeah. As we mentioned the last earnings call, the second half of this year is going to be stronger than the first half in terms of growth, top-line growth. As the first half was soft, it's going to be hard for us to get to the 10%, but we can get close to that. For 2026, I would say it's almost the same rationale here because as 2025 was a little bit soft, next year we are going to have to grow, not to give like a number here, but 17-20%. Okay. Still doable, but we might be a little bit short to the guidance next year.

But if we are short, it's for a bit, not for much. Okay. Very helpful. Thanks, Maffra. Okay. Next question is from Marcelo Mizrahi, Bradesco BBI. Marcelo, you may proceed. Hello, guys. Thank you for the opportunity. My question first, the first one is regarding the workdays. I want to understand how the workdays impacted the revenues in terms of the other retail revenues, in terms of platform revenues. What's the main impact here? If looking forward, if we will see a reduction of these lines. The other question is regarding the investments. You guys are talking about investment in technologies. We were seeing a lot of platforms investing in AI tools, digital tools, and also the channel totally a robot, digital channel.

Are you guys already working on that using AI to advise or to give advice to the clients, especially to the clients that are the lower income or the lower tickets to bring them a better service and to increase engagement and the revenues? Thank you. I'm Zahid. This is Victor. Thank you for our question. First here on business days. As expected, business days gave us a positive impact in terms of floating and trading days. This was compensating the negative way in terms of lower EDTV for equities and the shortening duration that Mafra explained in the fixed income platform. Those effects go in opposite directions, and the mix overcomes in terms of business days. That is basically what happens.

That is why we see equities and fixed income a bit down and other retail, which have the floating company, a bit up over the quarter. On the second question, Mizahi, yes, we have been working a lot with AI on different verticals here. I will mention some of them. The first one is internal productivity. It can be for engineers. It can be for management people. We have been working on operations, on customer experience. We have a lot of use cases live right now, more on the productivity side. The second one, we have been trying, I would say the idea here is not to replace advisors, but how we enhance our advisors using different agents. It can be relationship agents, AI agents, of course. It can be transactional agents.

We have been creating a lot of this type of agents to give more productivity and to increase the level of service that we deliver to our customers. I would say a third one, we have been investing a lot on portfolio allocation of our customers. We have been creating more rules. We have been creating a centralized portfolio allocation, and we are using a lot of technology to make it happen. There are many use cases here. Some are already at scale, some at very early stage. Another one that is already at scale. Today, we listen, read, hear everything that our advisors, especially internal advisors today, 100% of them. We can classify all the conversations, all the interactions with our customers. It is a product offering if it is only a relationship activity.

The level of information and sales management that we have today, it's very, very high. We will continue to invest on that, but again, not to replace advisors, okay, but to enhance them. Of course, when you go to very small clients, more like a digital or what we call here self-direct clients, then you can have like a fully deployed AI solution, but that's a very small part of our business today. It could grow in the future. Again, the focus here is how we enhance the advisors and how we free them to focus 100% of their time on relationship, not on operations or allocation or other activities that do not generate value for our customers. Very good. Thank you very much. Okay, we're up the hour. I'd like to thank you once again for participating in our earnings call.

Our team will be more than happy to attend any further questions you may have. Have a good night, and we're going to keep in touch. Thank you.