Companies: 10,813     total market cap: โ‚ฌ123.290 T
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StoneCo
STNE
#4310
Rank
โ‚ฌ2.30 B
Marketcap
๐Ÿ‡ง๐Ÿ‡ท Brazil
Country
9,46ย โ‚ฌ
Share price
1.00%
Change (1 day)
-19.70%
Change (1 year)
๐Ÿ’ณ Financial services
Categories
  1. StoneCo
  2. Annual Reports (20-F)
  3. Submitted on 2026-04-23

StoneCo - 20-F annual report


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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
☐    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                         to                          .
OR
☐    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report                          

Commission file number: 001-38714

StoneCo Ltd.
(Exact name of Registrant as specified in its charter)
The Cayman Islands
(Jurisdiction of incorporation or organization)

Block 12D Parcel 33 and 95, 18 Forum Lane, Camana Bay, P.O. Box 10240
Grand Cayman, KY1-1002, Cayman Islands
(Address of principal executive offices)
Diego Ventura Salgado, Chief Financial Officer and Investor Relations Officer
Tel: +55 (11) 3004-9680 –diego.salgado@stone.com.br
Avenida Rebouças, No. 2880, 5th floor—Pinheiros
São Paulo—SP, ZIP Code 05402-500, Brazil
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Class A common shares, par value US$0.000079365 per share
Trading Symbol(s)
STNE
Name of each exchange on which registered
The Nasdaq Global Select Market
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Title of Class
Number of Shares Outstanding
Class A common shares, par value US$0.000079365 per share
232,663,503
Class B common shares, par value US$0.000079365 per share
16,241,164



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒
No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐
No ☒
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 3 of 105 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filers,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large Accelerated Filer ☒
Accelerated Filer ☐
Non-accelerated Filer ☐
Emerging Growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or issued its audit report.
Yes ☒
No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements: ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b) : ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐
International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐
Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No ☒
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TABLE OF CONTENTS
Page
1
13
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PART I
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16
A. [Reserved]
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16
16
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102
103
103
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137
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FORM 20-F 26FY25 
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PART II
179
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PART III
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F-1
FORM 20-F 26FY25 
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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Unless otherwise indicated or the context otherwise requires, all references in this annual report to “StoneCo” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to StoneCo Ltd., together with its consolidated subsidiaries, and Alpha-Logo Serviços de Informática S.A. (“Tablet Cloud”), Agilize Contabilidade Holdings Limited (“Agilize”), Dental Office S.A. (“Dental Office”) and Delivery Much Tecnologia S.A. (“Delivery Much”) being entities on which we have a significant influence and minority interest in but do not consolidate.
The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. “Central Bank” refers to the Brazilian Central Bank (Banco Central do Brasil). References in the annual report to “real,” “reais” or “R$” refer to the Brazilian real, the official currency of Brazil and references to “U.S. dollar” “U.S. dollars” or “US$” refer to U.S. dollars, the official currency of the United States.
FINANCIAL STATEMENTS
We prepare our consolidated financial statements in accordance with the IFRS® Accounting Standards, as issued by the International Accounting Standards Board - IASB (“IFRS Accounting Standards”). We maintain our books and records in Brazilian reais. Unless otherwise noted, our financial information presented herein as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 is stated in reais, our functional and presentation currency. The financial information contained in this annual report includes our audited consolidated financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended December 31, 2025 together with the notes thereto. All references herein to “our financial statements” and “our audited consolidated financial statements” are to our consolidated financial statements.
The financial information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our audited consolidated financial statements.
Our fiscal year ends on December 31. References in this annual report to a fiscal year, such as “fiscal year 2025,” relate to our fiscal year ended on December 31 of that calendar year.
FINANCIAL INFORMATION IN U.S. DOLLARS
Solely for the convenience of the reader, we have translated some of the real amounts included in this annual report from reais into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translated real amounts into U.S. dollars using a rate of R$5.5024 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2025 as reported by the Central Bank. See “—Selected financial data—Exchange Rates” for more detailed information regarding translation of reais into U.S. dollars and for historical exchange rates for the Brazilian real.
FORM 20-F 26FY25 
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SELECTED FINANCIAL DATA
You should read the following selected financial data together with “Item 5. Operating and Financial Review and Prospects”, our financial statements and the related notes appearing elsewhere in this annual report. 
The summary statement of profit or loss data and statement of financial position data as of December 31, 2025 and 2024 and for each of the three years ended December 31, 2025, 2024 and 2023 have been derived from our audited consolidated financial statements prepared in accordance with IFRS Accounting Standards.
In the second quarter of 2025, we entered into two separate agreements to sell Linx Sistemas e Consultoria Ltda. (“Linx Sistemas”) and certain other software assets (together, the “Software Businesses”), and SimplesVet Tecnologia S.A. (“Simplesvet”), resulting in the classification of both businesses as held for sale and discontinued operations (the divestment of Simplesvet was finalized in August 2025, while the Software Businesses transaction was completed in February 2026). Accordingly, the statement of profit or loss presents the net results of continuing and discontinued operations separately for each period presented, with prior periods reclassified as applicable. Assets included in disposal groups classified as held for sale as well as its related liabilities are presented separately as current items in the statement of financial position. Property and equipment and intangible assets are not depreciated or amortized once classified as held for sale. Additionally, cash flows from discontinued operations are included in the consolidated statement of cash flows. Finally, the internal reporting structure and the performance measures were revised to focus on a single consolidated view of our continuing operations and the comparative periods were adjusted to reflect this presentation. For additional information, see “Item 4. Information on the Company — A. History and Development of the Company — Recent Developments”.
FORM 20-F 26FY25 
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Table 1: Income Statement
For the Year Ended December 31,
202520252024 (Recast)2023 (Recast)
(US$) (a)
(R$)
(in millions, except amounts per share)
Net revenue from transaction activities and other services453.1 2,493.1 3,128.93,144.4 
Net revenue from subscription services and equipment rental161.6 889.3 746.2717.4 
Financial income1,820.5 10,017.3 7,676.26,229.3 
Other financial income137.1 754.1 498.3670.1 
Total revenue and income from continuing operations2,572.314,153.812,049.610,761.2 
Cost of services(611.6)(3,365.4)(2,832.5)(2,370.2)
Administrative expenses(167.5)(921.7)(845.5)(902.2)
Selling expenses(390.3)(2,147.8)(1,840.0)(1,432.9)
Financial expenses, net(814.1)(4,479.3)(3,660.2)(3,956.2)
Mark-to-market on equity securities designated at FVPL— — —30.6 
Other income (expenses), net(81.3)(447.5)(386.2)(217.1)
Gain (loss) on investment in associates(0.4)(2.5)0.4(3.7)
Profit (loss) before income taxes from continuing operations507.0 2,789.8 2,485.6 1,909.6 
Income tax and social contribution(75.0)(412.8)(464.9)(355.0)
Net income (loss) for the year from continuing operations:432.0 2,377.1 2,020.6 1,554.6 
Net income (loss) for the year from discontinued operations(6.9)(37.9)(3,527.7)45.8 
Net income (loss) for the year425.1 2,339.2 (1,507.1)1,600.4 
Controlling shareholders from continuing operations429.0 2,360.7 2,016.4 1,549.3 
Non-controlling interests from continuing operations3.0 16.4 4.2 5.3 
Controlling shareholders from discontinued operations(7.4)(41.0)(3,531.6)42.8 
Non-controlling interests from discontinued operations0.6 3.1 3.9 3.0 
Earnings per share of continuing operations
Basic earnings per share for the year attributable to
controlling shareholders (in Brazilian reais)(b)
1.61 8.85 6.68 4.96 
Diluted earnings per share for the year attributable to
controlling shareholders (in Brazilian reais)(b)
1.57 8.63 6.54 4.61 
Earnings per share of discontinued operations
Basic earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)(b)
(0.03)(0.15)(11.70)0.13 
Diluted earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)(b)
(0.03)(0.15)(11.45)0.13 
Other data:
Adjusted net income for continuing operations (in millions)(c)
450.2 2,477.2 2,108.2 1,437.2 
TPV (in billions)(d)
101.9 560.9 516.2 438.3 
Active payment clients (in thousands)(e)
n.a.4,803.5 4,172.7 3,522.1 
(a)
For convenience purposes only, amounts in reais for the year ended December 31, 2025 have been translated to U.S. dollars using an exchange rate of R$5.5024 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2025 as reported by the Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate. See “—Exchange Rates” for further information about recent fluctuations in exchange rates.
(b)
Calculated by dividing net income or loss for the year attributed to controlling shareholders, adjusted for losses allocated to contractual rights and participating instruments, by the weighted average number of ordinary shares outstanding during the year. See note 16 to our audited consolidated financial statements.
(c)
In the table below, we have provided a reconciliation of adjusted net income to our net income (loss) for continuing and discontinued operations for the year, the most directly comparable financial measure calculated and presented in accordance with IFRS Accounting Standards. Note that, as of March, 2023, we stopped adjusting for share-based compensation expenses in our adjusted results.
(d)
Considers all card volumes settled by StoneCo, including Pix QR Code transactions from dynamic POS QR Code and static QR Code from Micro, Small and Medium Businesses (MSMBs) and Key Accounts merchants.
(e)
Considers clients that have completed at least one electronic payment transaction over the preceding 90 days, except for TON active clients which consider clients that have transacted once in the preceding 12 months. Excludes overlap. Does not include clients that use only TapTon.
FORM 20-F 26FY25 
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Table 2: Reconciliation of adjusted net income (loss) for the year with net income (loss) in the consolidated financial statements
202520252024 (Recast)2023 (Recast)
(US$)(a)
R$
(in millions)
Consolidated net income from discontinued operations(6.9)(37.9)(3,527.7)45.8 
Adjustments from net income to adjusted net income from continuing operations:
Amortization of fair value adjustment(c)
10.9 59.8 88.7 96.2 
Software business goodwill impairment loss(f)
28.7 158.0 3,558.0 — 
Other income (expenses)(d)
(8.5)(46.7)4.0 (5.8)
Tax effect on adjustments(e)
(0.1)(0.4)(31.2)(15.9)
Adjusted net income for the year from discontinued operations24.2 132.7 91.9 120.3 
202520252024 (Recast)2023 (Recast)
(US$)(a)
R$
(in millions)
Consolidated net income from continuing operations432.0 2,377.1 2,020.6 1,554.6 
Adjustments from net income to adjusted net income from continuing operations:
Mark-to-market from the investment in Banco Inter(b)
— — — (30.6)
Amortization of fair value adjustment(c)
8.5 46.7 34.1 (3.8)
Other income (expenses)(d)
12.1 66.8 63.9 (72.8)
Tax effect on adjustments(e)
(2.4)(13.3)(10.4)(10.2)
Adjusted net income for the year from continuing operations450.2 2,477.2 2,108.2 1,437.2 
(a)
For convenience purposes only, amounts in reais for the year ended December 31, 2025 have been translated to U.S. dollars using an exchange rate of R$5.5024 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2025 as reported by the Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate. See “—Exchange Rates” for further information about recent fluctuations in exchange rates.
(b)
Mark-to-market on equity securities designated at fair value through profit or loss (FVPL) relates to mark-to-market gains or losses from our investment in Banco Inter, which was accounted for at fair value through profit and loss. In the first quarter of 2023, we divested our stake in Banco Inter. As a result, from 2Q23 onwards, our profit & loss statement no longer includes mark-to-market gains or losses associated with this investment.
(c)
Consists of expenses resulting from the changes of the fair value adjustments as a result of the application of the acquisition method.
(d)
Consists of the fair value adjustment related to associates call option, earn-out, earn-out interests related to acquisitions and gains/losses in the sale of companies. For continuing operations also considers adjustments related to the settlement from our class action. See notes 4.1.2 to our consolidated financial statements for further information.
(e)
Represents the tax effect of pre-tax items excluded from adjusted net income. The tax effect of pre-tax items excluded from adjusted net income is computed using the statutory rate related to the jurisdiction that was impacted by the adjustment after taking into account the impact of permanent differences and valuation allowances, if applicable.
(f)
Refer to Note 11.4 from our audited consolidated financial statements.
FORM 20-F 26FY25 
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Table 3: Balance Sheet
As of December 31,
2025202520242023
(US$)(a)
(R$ millions)
Statement of financial position data:
Assets
Current assets
Cash and cash equivalents and short-term investments1,079.7 5,940.8 5,745.5 5,657.9 
Financial assets from banking solutions337.3 1,855.8 8,805.9 6,397.9 
Accounts receivable from Card Issuers7,501.3 41,275.2 29,231.8 23,895.5 
Credit portfolio365.0 2,008.4 891.7 210.0 
Other current assets244.3 1,344.0 1,290.2 991.3 
Total current assets9,527.5 52,424.2 45,965.1 37,152.6 
Assets classified as held for sale731.1 4,022.8 — — 
10,258.6 56,447.1 45,965.1 37,152.6 
Intangible assets361.1 1,986.9 5,458.1 8,794.9 
Credit Portfolio79.7 438.4 171.4 40.8 
Accounts Receivable from Card Issuers26.7 146.8 116.2 81.6 
Other non-current assets595.8 3,277.7 3,102.7 2,623.7 
Total non-current assets1,063.1 5,849.8 8,848.4 11,541.0 
Total assets11,321.8 62,296.9 54,813.5 48,693.6 
Liabilities and Equity
Current liabilities
Retail Deposits2,015.7 11,091.0 8,704.8 6,119.5 
Accounts payable to clients3,286.2 18,082.0 17,756.7 19,163.7 
Institutional deposits and marketable debt securities(b)
1,050.0 5,777.3 3,066.0 475.3 
Other debt Instruments
520.9 2,866.4 1,903.8 1,404.7 
Other current liabilities471.4 2,594.0 2,102.4 1,668.0 
Total current liabilities7,344.3 40,411.1 33,533.8 28,831.1 
Liabilities associated with assets held for sale144.1 793.0 — — 
7,488.4 41,204.1 33,533.8 28,831.1 
Non-current liabilities
Accounts payable to clients13.2 72.4 50.7 35.5 
Institutional deposits and marketable debt securities(b)
832.0 4,578.2 5,430.0 3,495.8 
Other Debt Instruments
792.4 4,360.1 2,496.1 143.5 
Other non-current liabilities190.3 1,047.4 1,475.6 1,511.8 
Total non-current liabilities1,827.9 10,058.1 9,452.4 5,186.5 
Total liabilities9,316.3 51,262.1 42,986.2 34,017.6 
Total equity2,005.5 11,034.8 11,827.3 14,676.0 
Total liabilities and equity11,321.8 62,296.9 54,813.5 48,693.6 
(a)
For convenience purposes only, amounts in reais for the year ended December 31, 2025 have been translated to U.S. dollars using an exchange rate of R$5.5024 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2025 as reported by the Central Bank. These translations should not be considered representations that any such amounts have been, could have been or could be converted at that or any other exchange rate. See “—Exchange Rates” for further information about recent fluctuations in exchange rates.
FORM 20-F 26FY25 
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EXCHANGE RATES
The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.
On December 31, 2021, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.5805, reflecting a depreciation of 6.9% in the real from December 31, 2020, which continued to be affected by the COVID-19 pandemic. On December 31, 2022, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.2177, reflecting an appreciation of 7.0% in the real from December 31, 2021, mainly due to the high levels of interest rates in the country. On December 31, 2023, the real/U.S. dollar exchange rate reported by the Central Bank was R$4.8413, reflecting an appreciation of 7.8%, mainly due to the high levels of interest rates in the country. On December 31, 2024, the real/U.S. dollar exchange rate reported by the Central Bank was R$6.1923, reflecting a depreciation of 21.8% in the real. On December 31, 2025, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.5024, reflecting an appreciation of 12.5% in the real.
There can be no assurance that the real will not depreciate or appreciate further against the U.S. dollar. For further information regarding exchange rate variations, refer to “Item 3. Key Information— D. Risk Factors— Financial Risks— We are exposed to fluctuations in foreign currency exchange rates.”
The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Brazilian reais per U.S. dollar. The average rate is calculated by using the average of reported exchange rates by the Central Bank on each business day during each annual or monthly period, as applicable. As of April 22, 2026, the exchange rate for the purchase of U.S. dollars as reported by the Central Bank was R$ 4.965 per US$1.00.
YearPeriod-end
Average(a)
LowHigh
20215.5815.3964.9215.840
20225.2185.1664.6185.704
20234.8414.9954.7205.446
2024
6.192
5.392
4.854
6.199
2025
5.502
5.586
5.273
6.209
MonthPeriod-end
Average(b)
LowHigh
October 2025
5.3845.3865.3215.498
November 2025
5.3345.3415.2735.395
December 2025
5.5025.4535.2955.574
January 2026
5.2305.3385.1845.437
February 2026
5.259
5.201
5.138
5.259
March 2026
5.219
5.232
5.160
5.288
April 2026 (through April 22, 2026)
4.965
5.054
4.965
5.166
Source: Central Bank.
(a)
Represents the average of the exchange rates on the closing of each business day during the year.
(b)
Represents the average of the exchange rates on the closing of each business day during the month.
FORM 20-F 26FY25 
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BUSINESS SEGMENT INFORMATION
In the second quarter of 2025, we entered into two separate agreements to sell our Software Businesses and Simplesvet. In connection with these transactions, the businesses were classified as held for sale and as discontinued operations, and their operations have been excluded from continuing operations and segment reporting for all periods presented in this annual report.
Prior to the third quarter of 2025, the Company reported its results under financial and software business segments as well as certain non-allocated activities comprised of non-strategic businesses, including results on its disposal/sale. Following the strategic decision to divest the Software Businesses, these operations were classified as discontinued operations and assets held for sale and thus we revised our internal reporting structure and the performance measures reviewed by our Chief Operating Decision Maker (“CODM”), which comprises our Chief Executive Officer ("CEO”) and Board of Directors, to align with our continuing operations. We therefore manage and report the business as a single operating segment.
Since this segment corresponds to the continuing operations presented in the consolidated income statement of profit or loss, the segment information as of December 31, 2024 and for the years ended December 31, 2024 and 2023 has been retrospectively recast to reflect these changes and to enhance comparability. For further information, see note 1 to our audited consolidated financial statements.
CORPORATE EVENTS
Investments in Software and other Companies
CompanyClosing DateCurrent %ActivitiesAdditional Information
Trinks Serviços de Internet S.A. (Trinks)
Nov/2019 (a)
100.00%
Trinks is an unlisted company based in the State of Rio de Janeiro, Brazil, that develops an integrated solution of management, focused mainly on the beauty service segment.
Originally, we had acquired a 19.90% stake in Trinks. In May 2024, we acquired the remaining shares and became the holder of 100% of the equity stake of the company.
APP Sistemas S.A. (APP)
Aug/2021 (a)
45.73%APP develops an ERP/POS solution focused on the hotel segment.After an initial 20% stake in APP, our ownership was diluted in April 2023 and March 2024 due to new share issuances under a long-term incentive program. In April 2025, we acquired an additional 26.33%. Following a further dilution in February 2026 under the same program, our total stake now stands at 45.73%.
Agilize Contabilidade Holdings Limited (Agilize)Aug/202328.70%Agilize is an unlisted company incorporated in the Cayman Islands, with operations in Brazil, that develops technology that provides online accounting services.Our initial stake in the Brazilian entity, Agilize Tecnologia S.A., was acquired through the conversion of a loan. In November 2024, Agilize reorganized under a new Cayman Islands holding company, Agilize Contabilidade Holdings Limited, and raised capital from new investors (we did not participate in this financing round). Following this restructuring and the transfer of STNE Invest’s shares to StoneCo, our total equity interest was diluted from 33.33% to 28.70%
(a)Closing date of the first step of the step acquisition.
FORM 20-F 26FY25 
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Divestments in Software and other Companies
Since February 2026, we no longer hold an equity stake in Linx Sistemas and certain other assets and entities referred to as our Software Businesses. This segment, which was largely acquired in 2021, was fully divested in February 2026. For additional information regarding the divestment of the Software Businesses, please refer to “Item 4. Information on the Company — A. History and Development of the Company — Recent Developments.”
Since July 2025, we no longer hold an equity stake in SimplesVet. In April 2021, we acquired a 50% interest in SimplesVet, a Salvador-based company specializing in management software for veterinary clinics, pet shops, and independent veterinarians. Following the sale of our entire stake in July 2025, we ceased to be a shareholder in the company.
Since December 2024, we no longer hold an equity stake in Neostore Desenvolvimento de Programas de Computador S.A. (“Neomode”). Neomode offers a sales channel and white label commerce app platform with agnostic integrator to Enterprise Resource Planning (ERP), Point of Sale (POS), e-commerce and gateways with cloud-based solutions. In December 2024, we sold our entire interest in Neomode, ceasing to be a shareholder in the company.
Since February 2024, we no longer hold an equity stake in PinPag. In January 2020, Linx Pay Meios de Pagamento Ltda. (“Linx Pay”) acquired 100% of the equity stake of Ametista Serviços Digitais Ltda., Diamante Serviços Digitais Ltda., Esmeralda Serviços Digitais Ltda. and Safira Serviços Digitais Ltda. (collectively described as “PinPag”). In February 2024, we sold all our interest in PinPag and ceased to be a shareholder in such company. PinPag is a company focused on financial solutions in electronic means of payment.
Since December 2023, we no longer hold an equity stake in Creditinfo Caribbean. In November 2020, we acquired a 53.05% interest in EveryData Group LTD. SEZC (formerly known as StoneCo CI Ltd), EveryData Jamaica Limited (formerly known as Creditinfo Jamaica Ltd), EveryData (Guyana) Inc (formerly known as Creditinfo Guyana Inc) and EveryData (Barbados) Limited (formerly known as Creditadvice Barbados Ltd) (all together described as “Creditinfo Caribbean”). In October 2022, we lost control of Creditinfo Caribbean after a capital contribution by a new investor (after such investment, our stake was diluted to 47.75% of the company). In December 2023, we sold all our remaining interest in Creditinfo Caribbean and ceased to be a shareholder in such company. Creditinfo Caribbean is a private credit bureau company, having as main products credit reports, credit scores, monitoring, international business reports and a suite of value-added services, based in the Cayman Islands, Jamaica, Guyana and Barbados, respectively.
Since June 2023, we no longer hold an equity stake in Cappta S.A. (“Cappta”). Up to June 30, 2023, when we owned 69.58%, Cappta carried out the activities of (i) technology solutions for payments in installments, and (ii) technology solutions for electronic transfers. In June 2023, a reorganization of the businesses was carried out by Cappta (“Cappta Reorganization”). As a result of the Cappta Reorganization, Cappta remained solely with the assets related to the activities of technology solutions for payments in installments, and Stef S.A. (a company incorporated under the Cappta Reorganization) remained with the assets related to the activities of technology solutions for electronic transfers. Subsequently to the Cappta Reorganization, we sold our stake in Cappta, and acquired 100% of Stef S.A.
Since February 2023, we no longer hold an equity stake in Banco Inter S.A. (“Banco Inter”). For additional information regarding our transaction with Banco Inter, please refer to “Item 5. Operating and Financial Review and Prospects — A. Operating Results — Transaction with Banco Inter”.
FORM 20-F 26FY25 
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RECENT CORPORATE DEVELOPMENTS
In the first quarter of 2026, the Company established a corporate structure in Europe comprising two entities incorporated in Luxembourg, Stone ALP Holding SARL and Stone VETC SARL, and one entity incorporated in Switzerland, Stone Capital AG. In connection with this initiative, a Delaware entity, Stone Apex Capital LLC, was also incorporated and is expected to be integrated into this structure at a later stage. As of the date of this annual report, none of these entities have commenced operations and do not have any assets. This structure is intended to facilitate the Company's access to the European capital markets and to carry out financing, treasury and other related activities.
NEW FINANCIAL SERVICES LICENSE
On November 6, 2025, we received from the Central Bank a license to operate a brokerage firm, Stone Distribuidora de Títulos e Valores Mobiliários S.A. (“Stone DTVM”). This license enables Stone DTVM to expand the range of investment products offered to our clients. Notably, the commencement of Stone DTVM’s operations requires the completion of its registration with the Brazilian Securities and Exchange Commission (CVM).
CAPITAL MARKETS EVENTS
Equity Capital Market Events
Our Board of Directors has authorized several share repurchase programs over the last three fiscal years. A summary of these programs and the amount of shares repurchased under these programs up to December 31, 2025 is presented in the table below.
For further information refer to “Item 16E. Purchases of equity securities by the issuer and affiliated purchasers”.
Date of programs approved by the Board of Directors
Maximum amount of repurchase approved (R$)
Amounts actually repurchased under the program (R$) as of December 31, 2025
Status of programs as of December 31, 2025
September-23
300,000292,745Program terminated by Board decision
November-23
1,000,000981,344Program terminated by Board decision
November-242,000,0001,662,291Program terminated by Board decision
May-252,000,0001,946,049
Program terminated by Board decision
December-25
2,000,000—Authorized
On April 14, 2026, our Board of Directors approved the payment of an extraordinary cash dividend of US$2.53 per share (applicable to both Class A and Class B shareholders), to be paid on May 4, 2026 to shareholders of record as of April 24, 2026. Based on shares outstanding as of March 31, 2026, the total amount to be distributed is approximately R$3.08 billion. This distribution follows the closing of the previously disclosed sale of Linx, as reported in our Form 6-K filed on February 27, 2026. The extraordinary dividend represents a one-time distribution of capital proceeds and should not be construed as establishing any policy or commitment regarding future dividends, which will remain at the sole discretion of our Board of Directors.
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INCENTIVE PLAN POOL
In May 2022, our Board of Directors approved an amendment and restatement of our Long-Term Incentive Plan (“LTIP”) for the purpose of the adoption of a new equity-based incentive plan pool, comprised of 19.2 million shares to be granted in the form of restricted stock units (“RSUs”) and performance stock units (“PSUs”) under the LTIP. At the creation of the pool, a portion of it, 5.8 million shares, was approved for the grant of non-recurring long-term incentive plan awards, through RSUs and PSUs , vesting of which is linked to the achievement of our annual goals and the performance of our stock price. Within the plan, 30% of it has a vesting period of 3 years and 70% of 5 years if our goals are met. Each vesting period for PSUs has a stock price trigger at multiples of our stock price, which aligns the incentive with significant shareholder returns. Another portion of the pool, 1.7 million shares, was approved for the grant of regular annual equity incentive compensation through RSUs. The remaining portion of the pool, 11.6 million shares, is being used at our discretion over time, either for recurring annual compensation or related to the non-recurring long-term incentive plan mentioned above. In section “Item 6. Directors, Senior Management and Employees—B. Compensation”, we will show details about the consumption of the pool.
In 2024, we made modifications to approximately 3.9 million PSU awards. The modification introduces alternative conditions as market performance for some PSU awards, and also adds an internal financial metric to all of them. This change increased the fair value of each award, as assessed by the Group at the modification date, resulting in incremental fair value. The modification also extended the vesting periods, adding an average of one year to the PSU awards’ vesting timeline.
In connection with the extraordinary cash dividend announced on April 14, 2026, the Board also approved an increase of approximately 3.8 million shares to the Long Term Incentive Plan pool, to be settled in accordance with the applicable vesting schedules, with the final amount to be announced following the financial settlement of the dividends on May 4, 2026.
ORGANIZATIONAL CHANGES ON MANAGEMENT
In January 2026, the Company announced a strategic leadership transition to ensure operational continuity as it evolves into a comprehensive financial services platform. The following key changes took effect in March 2026:
•Pedro Zinner resigned as Chief Executive Officer and was appointed as an interim member of the Board.
•Mateus Scherer Schwening, formerly Chief Financial Officer and Investor Relations Officer, succeeded Pedro Zinner as our Chief Executive Officer.
•Diego Ventura Salgado, formerly Chief Treasury Officer, was appointed as Chief Financial Officer and Investor Relations Officer.
•Sandro de Oliveira Bassili was appointed as Chief Operating Officer.
•Mateus Costa Biselli resigned as Chief Growth Officer but remained within the StoneCo Group as an executive manager.
•Lia Machado de Matos resigned from her position as Chief Strategy and Marketing Officer.
•André Monteiro resigned from his position as Chief Risk Officer.
•Thomas Gregor Ilg was appointed as Chief Risk Officer.
At the Annual General Meeting held in April 2026 (“2026 AGM”), the following changes were approved:
•Mauricio Luchetti concluded his term as Chairperson and continued his service as a Member of the Board of Directors.
•Gilberto Caldart concluded his term as Vice-Chairperson and continued his service as a Member of the Board of Directors.
•Pedro Zinner was appointed Chairperson of the Board of Directors, after briefly serving as an interim member of the Board.
•Silvio Morais was appointed as Vice-Chairperson of the Board of Directors.
•Marcelo Kopel was appointed as Member of the Board of Directors.
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As a result of the above, the current officers and Directors of the Company are those indicated in section “Item 6. Directors, Senior Management and Employees — A. Directors and Senior Management — Executive Officers”.
SPECIAL NOTE REGARDING NON-IFRS FINANCIAL MEASURES
This annual report presents our adjusted net income (loss) for the convenience of investors. Adjusted net income (loss) is a non-IFRS financial measure. Generally, a non-IFRS financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS Accounting Standards. Adjusted net income (loss), however, should be considered in addition to, and not as a substitute for or superior to, profit (loss), or other measures of the financial performance prepared in accordance with IFRS Accounting Standards.
Adjusted net income (loss) is prepared and presented to eliminate the effect of items from profit (loss) that we do not consider indicative of our continuing business performance within the period presented. We define adjusted net income (loss) as profit (loss) for the period, adjusted for (1) impairment charges (and reversal of impairment charges), (2) amortization of fair value adjustments related to acquisitions, (3) unusual income and expenses, and (4) tax effects of the foregoing adjustments, as described in table 2 to “Presentation of Financial and Other Information—Selected financial data.”
Adjusted net income (loss) is presented because our management believes that this non-IFRS financial measure can provide useful information to investors, securities analysts and the public in their review of our operating and financial performance, although it is not calculated in accordance with IFRS Accounting Standards or any other generally accepted accounting principles and should not be considered as a measure of performance in isolation.
We believe adjusted net income (loss) is useful to evaluate our operating and financial performance as this metric is used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company and from period to period, depending on their accounting and tax methods, the book value of their assets and the method by which their assets were acquired. The below items are adjusted for the following reasons:
1.Goodwill impairment charges are adjusted to our results since it provides a clearer representation of our financial performance by excluding what we believe to be non-recurring and non-cash charges, ensuring a more accurate reflection of our operational profitability and underlying business trends.
2.Amortization of the fair value adjustment relating to acquisitions can vary substantially from company to company and from period to period depending upon the applicable financing and accounting methods, the fair value and average expected life of the acquired intangible assets, the capital structure and the method by which the intangible assets were acquired and, as such, we do not believe that these adjustments are reflective of our core operating performance.
3.Other one-time charges that we believe are not reflective of our core operating performance, which include the fair value adjustment related to associates call option, earn-out and earn-out interests related to acquisitions, gains/losses in the divestment of assets and the settlement related to our 2021 class action.
Following the execution of the agreements related to the divestment of our Software Businesses and Simplesvet in 2025, we have segregated adjustments between those applicable to continuing operations and those solely related to discontinued operations. This presentation has been applied retrospectively to all comparative periods presented. This segregation is intended to enhance comparability and provide investors with a clearer view of the underlying profitability and operational trends of our ongoing core business. For the fiscal years ended December 31, 2025, 2024, and 2023, all impairment charges pertained exclusively to discontinued operations.
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We use adjusted net income (loss) as a key profitability measure to assess the performance of our business. We believe that adjusted net income (loss) should therefore be made available to investors, securities analysts and other interested parties to assist in their assessment of the performance of our business.
Adjusted net income (loss) is not a substitute for net income (loss) for the period, which is the IFRS Accounting Standards measure of earnings. Additionally, our calculation of adjusted net income (loss) may be different from the calculation used by other companies, including our competitors in the payments processing industry, because other companies may not calculate these measures in the same manner as we do, and therefore, our measure may not be comparable to those of other companies. Additionally, this measure is not intended to be a measure of cash available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. For a reconciliation of our adjusted net income (loss), see “Presentation of Financial and Other Information—Selected financial data”. You are encouraged to evaluate our adjustments and the reasons we consider them appropriate.
MARKET SHARE AND OTHER INFORMATION
This annual report contains data related to economic conditions in the market in which we operate. The information contained in this annual report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reliable. Market data and certain industry forecast data used in this annual report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission (“SEC”) website) and industry publications. We obtained the information included in this annual report relating to the Brazilian internet and financial ecosystem, payment solutions, e-commerce markets, and more broadly, the industry in which we operate, as well as the estimates concerning market shares, through internal research, public information and publications on the industry prepared by official public sources, such as (1) the Brazilian Association of Credit Card and Service Companies (Associação Brasileira das Empresas de Cartões de Crédito e Serviços - ABECS), (2) the Central Bank, (3) the Brazilian Federation of Banks (Federação Brasileira de Bancos - FEBRABAN), (4) the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística - IBGE), (5) Reclame Aqui, among others.
Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable we have not independently verified it. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. Please note that from time to time, such sources can review numbers already reported, which can affect the comparability of this annual report to previous reports. In addition, the data that we compile internally and our estimates have not been verified by an independent source. Except as disclosed in this annual report, none of the publications, reports or other published industry sources referred to in this annual report were commissioned by us or prepared at our request. Except as disclosed in this annual report, we have not sought or obtained the consent of any of these sources to include such market data in this annual report.
ROUNDING
We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
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FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this annual report can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “may,” “predict,” “continue,” “estimate” and “potential,” or the negative of these terms or other similar expressions.
Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements regarding our intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, our expectations towards our assets and our ability to manage them efficiently, plans and objectives, including our strategies related to the adoption of new and emerging technologies such as artificial intelligence. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Item 3. Key Information—D. Risk Factors” in this annual report. The statements we make regarding the following matters are forward-looking by their nature:
•Our expectations regarding revenues generated by transaction activities and other services, subscription and equipment rental fees and financial income.
•Our expectations regarding our operating and net profit margins.
•Our expectations regarding significant drivers of our future growth.
•Our expectations regarding the performance of our current and new solutions.
•Our plans to continue to improve our current products and develop new products and the associated investments in technology.
•Our ability to differentiate ourselves from our competition by delivering a superior customer experience and through our network of hyper-local sales and services and other distribution channels.
•Our ability to attract and retain a qualified management team and other team members while controlling our labor costs.
•Our ability to invest more and collect results in the short-term.
•Our plans to expand our footprint and explore opportunities in adjacent sectors and markets.
•Competition adversely affecting our profitability and growth.
•The occurrence of a natural disaster, widespread health epidemic or pandemics, such as the coronavirus (COVID-19) pandemic.
•Fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve.
•General economic, financial, political, demographic and business conditions in Brazil and any other countries we may serve.
•The inherent risks related to the digital payments market, such as the interruption, failure or breach of our computer or information technology systems.
•Our ability to anticipate market needs and develop and introduce new and enhanced products and service functionalities to adapt to changes in our industry.
•Our ability to innovate and respond to technological advances, changes in the regulatory environment and changing market needs and customer demands.
•Our ability to maintain, protect and enhance our brand and intellectual property.
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•Changes in consumer demands and preferences and technological advances, and our ability to innovate in order to respond to such changes.
•Our failure to successfully maintain a relevant omnichannel experience for our clients, thereby adversely impacting our results of operations.
•Our ability to implement technology initiatives successfully and to capture the anticipated benefits of such initiatives.
•Our plans to pursue, conclude and successfully integrate strategic acquisitions.
Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
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CERTAIN TERMS AND CONVENTIONS
A glossary of industry and other defined terms is included in this annual report, beginning on page 188.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.    Directors and senior management
Not applicable.
B.    Advisers
Not applicable.
C.    Auditors
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
A.    Offer statistics
Not applicable.
B.    Method and expected timetable
Not applicable.
ITEM 3. KEY INFORMATION
A.    [Reserved]
B.    Capitalization and indebtedness
Not applicable.
C.    Reasons for the offer and use of proceeds
Not applicable.
D.    Risk factors
The following summarizes the principal factors that make an investment in our company speculative or risky, all of which are more fully described in the risk factors below. This summary should be read in conjunction with the risk factors below and should not be relied upon as an exhaustive summary of the material risks facing our business. The following factors could result in harm to our business, reputation, revenue, financial results, and prospects, among other impacts:
Risks Relating to Our Business, Strategy and Industry
•Our business strategy may not provide us the results we expect and our business could be harmed if we are unable to accurately forecast demand for our products and services and to adequately manage our product inventory.
•Substantial and increasingly intense competition in our markets may harm our business.
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•If we are unable to attract new and retain existing clients, our business, financial condition and results of operations will be adversely affected.
•A decline in the use of credit, debit or prepaid cards as a payment mechanism for consumers or adverse developments with respect to the payment processing industry in general could have a materially adverse effect on our business, financial condition and results of operations.
•Our efforts to expand our product portfolio and market reach may not succeed and may reduce our revenue growth.
•Any acquisitions, investments, partnerships, joint ventures or divestments that we make or enter into could disrupt our business and harm our financial condition.
•Increases in interest rates may harm our business.
•If we cannot pass increases in fees from payment schemes, including assessment, interchange, transaction and other fees, or increases in fees due to macroeconomic factors such as interest rate increases along to our merchants, our operating margins will decline.
Risks Related to Legal and Regulatory Matters
•Our business is subject to extensive government regulation and oversight in Brazil and our status under these regulations may change. Violation of or compliance with present or future regulation could be costly, expose us to substantial liability and force us to change our business practices, any of which could seriously harm our business and results of operations.
•Certain ongoing legislative and regulatory initiatives under discussion by the Brazilian Congress, the Central Bank and the broader payments industry may result in changes to the regulatory framework of the Brazilian financial services industry and may have an adverse effect on us.
•We may not be able to effectively manage credit risk, and our expected credit loss (“ECL”) allowance may be insufficient to cover actual losses, which could have a material adverse effect on our results of operations and financial condition.
•Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws may adversely affect our results of operations.
Risks Relating to Our Operations
•Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks, which could expose us to losses and liability and otherwise harm our business.
•Cybersecurity attacks could result in data breaches and severely damage our reputation, business and financial condition.
•Our systems and our third-party providers’ systems may fail, which could interrupt our service, cause us to lose business and increase our costs.
•Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.
•In a dynamic industry like ours, the ability to attract, recruit, develop and retain key personnel and qualified employees is critical to our success and growth. If we are not able to do so, our business, financial condition and results of operations may be adversely affected.
Financial Risks
•Our financing needs could adversely affect our financial flexibility and our competitive position, and we may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.
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Risks Relating to Brazil
•We are subject to macroeconomic uncertainty, fiscal and political instability in Brazil. Those factors may harm the business cycles and credit risk of our clients and issuing banks and volatility in the overall level of consumer, business and government spending, which could negatively impact our business, financial condition and results of operations
You should carefully consider the risks and uncertainties described below, together with the other information contained in this annual report, in our financial statements, and all other public information released by us from time to time, before making any investment decision. The risks described below are not the only risks we face. Our business, financial condition and operational results may be significantly affected not only by any of the risks set forth below, but also by any other risks that are currently unknown or considered irrelevant by us. Our business, reputation, management, results of operations or financial condition could be harmed if any of these risks materializes and, as a result, the prices of securities issued by us, including our Class A Common Shares, could decline and our investors may lose part or all of their investment.
Risks
Risks Relating to Our Business, Strategy and Industry
Our business strategy may not provide us the results we expect and our business could be harmed if we are unable to accurately forecast demand for our products and services and to adequately manage our product inventory.
Our strategy and challenges are determined by management based on related assumptions, such as, but not limited to, the future market, economic and industry environments; our capacity to execute our strategy; and the regulatory, political and social scenarios where we operate. These assumptions are subject to inaccuracies and risks that might not be identified or anticipated by management. Moreover, under these assumptions, factors beyond our control may make these inaccuracies more significant.
Accordingly, the results and consequences arising from any possible inaccurate assumptions may compromise our capacity to fully or partially implement our strategies, as well as to achieve the results and benefits expected from our business plan therefrom, which might give rise to financial losses and reduce the value creation to our shareholders.
We invest in marketing, technology, people, data, models and our distribution channels based on our expectation of future demand for our services. We must forecast inventory, capital needs, regulatory capital cost, credit losses and expenses, hire employees and place orders sufficiently in advance with our third-party suppliers and contract manufacturers based on our estimates of future demand for particular products or services. An inability to correctly forecast the success of a particular product or service could harm our business. Our ability to accurately forecast demand for our products or services could be affected by many factors, including an increase or decrease in demand for our competitors’ products or services, unanticipated changes in general market conditions, and the change in economic conditions.
Our results of operations and operating metrics may fluctuate and we may generate losses in the future, which may harm our business.
We intend to make significant investments in our business, including with respect to our sales and marketing, development of new products, services, and features; data centers and other infrastructure, development of international operations , and general administration, including legal, finance, and other compliance expenses related to being a public company. If the costs associated with acquiring and supporting new or larger clients materially rise in the future, our expenses may rise significantly. In addition, increases in our client base could cause us to incur losses, because costs associated with new clients are generally incurred upfront, while revenue is recognized thereafter as merchants utilize our services. If we are unable to generate adequate revenue growth and manage our expenses, our results of operations and operating metrics may fluctuate and we may incur significant losses in the future.
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We frequently invest in developing products or services that we believe will improve the experiences of our clients and therefore improve our long-term results of operations. However, these improvements often cause us to incur significant up-front costs and may not result in the long-term benefits that we expect, which may materially and adversely affect our business. For example, our growth strategy contemplates an expansion in our distribution channels and the development of new products and services. Successful implementation of our growth strategy will require significant expenditure before any substantial associated revenue is generated. We cannot assure you that our increased investment in marketing activities will result in corresponding revenue growth.
We make estimates and assumptions in connection with the preparation of our financial statements, and any changes to those estimates and assumptions could have a material adverse effect on our operating results.
In connection with the preparation of our financial statements, we use certain estimates and assumptions based on historical experience and other factors. For example, we take into consideration our assets’ useful lives. While we believe that these estimates and assumptions are reasonable under the circumstances that they are presented, they are subject to significant uncertainties, some of which are beyond our control. Therefore, should any of the estimates and assumptions we use change or prove to have been incorrect, our reported operating results could be materially adversely affected.
Real or perceived inaccuracies in our key operating metrics may harm our reputation and adversely affect our business.
We track certain key operating metrics, including TPV, active payment clients, and adjusted net income, among other metrics, which are not independently verified by any third party. While the metrics presented in this annual report are based on what we believe to be reasonable assumptions and estimates, some of them result from definitional choices involving judgment and could be perceived as inconsistent or as overstating the scale of our businesses. The definition of operational metrics may change over time. Some of our metrics may differ from methodologies used by competitors, limiting comparability.
In addition, limitations or errors with respect to how we measure data, or with respect to the data that we measure, may affect our understanding of certain details of our business and could affect our strategies. If the internal systems and tools we use to track these metrics understate or overstate performance, or contain algorithmic or other technical errors, the key operating metrics we report may not be accurate. If investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our results of operations and financial condition could be adversely affected.
Our business depends on a well-regarded and widely known brand, and any failure to maintain, protect, and enhance our brand would harm our business.
We have developed a well-regarded and widely known brand that has contributed significantly to the success of our business. If we fail to maintain, protect and enhance our brand, our business could be materially and adversely affected and our sales, profitability and results of operations may be adversely affected.
Our brand is predicated on the idea that clients will know and trust us, which is crucial for a financial services company, and find value in building and growing their businesses with our products and services. Maintaining, protecting, and enhancing our brand are critical to retaining and expanding our base of clients and other third-party partners, as well as increasing engagement with our products and services. This will depend largely on our ability to remain widely known, maintain trust, be a technology leader, and continue to provide high-quality and secure products and services.
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Our brand may be adversely affected if we are unsuccessful in carrying out our business activities. We may be unsuccessful in advertising, promotional, and marketing strategies; and in offering new products to meet market demands. If we are unable to market and promote our brand on third-party platforms, such as Globo, Google, Meta or TikTok, effectively, our ability to acquire new merchants would be materially harmed. Changes in the way these platforms operate or changes in their advertising prices or other terms could make the maintenance and promotion of our products and services more expensive or more difficult. In addition, some of our competitors may have marketing investments substantially larger than ours and our end consumers believe that our competitors’ products are more attractive.
Any negative publicity about our industry or our company, the quality and reliability of our products and services, our risk management processes, changes to our products and services, our privacy and security practices, litigation, regulatory activity, and the experience of clients with our products or services, could adversely affect our reputation and the confidence in and use of our products and services. Harm to our brand can arise from many sources, including failure by us or our partners to satisfy expectations of service and quality; inadequate protection of sensitive information; compliance failures and claims; litigation and other claims; third-party trademark infringement claims; employee misconduct; failure to resolve seller and buyer complaints; and misconduct by our associated participants, partners, service providers, or other counterparties. If we do not successfully maintain a well-regarded and widely known brand, our business could be materially and adversely affected.
We have been from time to time in the past, and may in the future be, the target of incomplete, inaccurate, and misleading or false statements concerning our Company, our business, and our products and services. Any of these could damage our brand and materially deter people from adopting our services. Negative publicity about us or our management, including about our product quality and reliability, changes to our products and services, privacy and security practices, litigation, regulatory enforcement, and other actions, as well as the actions of our clients and other users of our services, even if inaccurate, could cause a loss of confidence in us. Our ability to respond to negative statements about us may be limited by legal prohibitions on permissible public communications by us during future periods.
Substantial and increasingly intense competition in our markets may harm our business.
The financial services market is highly competitive. It is characterized by vigorous competition, changing technology, changing customer needs, evolving industry standards and frequent introductions of new products and services and competitors. Our primary competitors include banks, digital banks, lending companies, traditional and newcomer card issuers and merchant acquirers and financial institutions in general. Many of them have significant financial resources and develop different kinds of services.
Additionally, we may also face competition from well-established businesses from outside our sectors that have significant financial resources and experience operating in Brazil. Many of our competitors also have substantially greater financial, technological, operational and marketing resources than we have, which may provide them with significant competitive advantages. Mergers and acquisitions by or among these companies may lead to even larger competitors with more resources. In particular, certain of our competitors in the acquiring market are affiliated with financial institutions that may not incur the sponsorship costs we incur for registration with the payment schemes.
Also, the continued shift from brick-and-mortar to e-commerce presents an additional competitive risk. As consumer spending migrates online, large marketplace platforms are increasingly integrating their own payment processing, banking and credit solutions, reducing the need for independent acquirers. This mix shift within the Brazilian retail market may result in merchants processing a growing share of their transactions through payment infrastructure controlled by the marketplace itself, rather than through our solutions, which could adversely affect our total payment volume and results.
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We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. Competition could result in a loss of existing clients, and greater difficulty in attracting new clients, negatively affecting our growth plans, financial condition and results of operations.
If we are unable to attract new and retain existing clients, our business, financial condition and results of operations will be adversely affected.
Our client base is the cornerstone of our business. Sustaining our growth depends on our ability to continuously attract new merchants and SMBs to our platform while deepening engagement with existing clients mostly across our financial services solutions. If we fail to do so, our revenues may stagnate or decline.
Our clients have no obligation to continue using our products and services. They are generally not bound by long-term contracts and may reduce their payment volumes, cancel subscriptions or migrate to competitors at any time. Recent regulatory developments, including the expansion of open finance frameworks in Brazil, have further lowered switching costs, making retention increasingly challenging.
Our capacity to attract and retain clients may be undermined by several factors, including our failure to anticipate and respond to merchants' evolving needs; a deterioration in the quality, reliability or performance of our platform; insufficient or inadequate support delivered through our Stone Agents and Stone Hubs; pricing that clients perceive as less competitive than alternatives; the launch of superior or more targeted offerings by incumbents, fintechs or new market entrants; and negative publicity or poor client experiences that erode trust in our brand.
Our future success will depend in part on our ability to develop or adapt to technological changes and evolving industries standards. We cannot predict the effects of technological changes on our businesses. If we are unable to develop, adapt to or access technological changes or evolving industry standards on a timely and cost-effective basis, our business, financial condition and results of operations could be materially and adversely affected, such as resulting in impairment of capitalized software for which future economic benefits are no longer expected. We also rely in part and may in the future rely in part on third parties, including some of our competitors and potential competitors, for the development of, and access to, new technologies.
Moreover, we may fail to adopt artificial intelligence technology or to comply with its regulatory framework. It is possible that new laws and regulations will be adopted that would affect the operation of our platform and the way in which we use artificial intelligence technology. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.
Furthermore, some of our competitors may have the ability to devote more financial and operational resources than we can to the development of new technologies and products. If successful, their development efforts could render our products and services less desirable to clients, resulting in the loss of clients or a reduction in the fees we could generate from our service offerings and/or products.
Any one or a combination of these factors could result in client attrition at rates exceeding our expectations, which would adversely affect our business, financial condition and results of operations.
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A decline in the use of credit, debit or prepaid cards as a payment mechanism for consumers or adverse developments with respect to the payment processing industry in general could have a material adverse effect on our business, financial condition and results of operations.
If consumers do not continue to use credit, debit or prepaid cards as a payment mechanism for their transactions or if there is a change in the mix of payments between them, it could have a material adverse effect on our business, financial condition and results of operations, since acquiring remains our most relevant business as of December 31, 2025. We believe future growth in the use of card payment methods (credit, debit and prepaid cards) and other electronic payments will be driven by the cost, ease-of-use, and quality of services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to use electronic payment methods. Moreover, our business, financial condition and results of operations may be negatively impacted if there is an adverse development in the payments industry or Brazilian market in general, such as new legislation or regulation that makes it more difficult for our clients to do business or utilize such payment mechanisms.
For example, the Central Bank has developed an instant payment solution called Pix, which started operating in November 2020. This solution is an alternative for cash, payment slips (Boletos), wire transfers and debit transactions. According to the Central Bank, Pix's share of the total number of transactions rose from 1% in the fourth quarter of 2020 to 52% in the first half of 2025. In terms of Pix’s share of monetary volume, it increased from 1% to more than 26% over the same period. Since then, the Central Bank and competitors have been extending the scope of Pix. For instance, the Brazilian Central Bank is rolling out additional functionalities, such as Pix Parcelado (Pix installments) and Pix Automático (recurring Pix payments), to expand Pix’s use in credit-like and recurring payment situations, including e-commerce and subscriptions. Even though we offer products based on Pix, we cannot guarantee that this revenue line could be enough to offset a decline in the use of card payment methods.
Our efforts to expand our product portfolio and market reach may not succeed and may reduce our revenue growth.
Failure to successfully broaden the scope of products and services that are attractive may inhibit our growth and harm our business. Furthermore, we expect to continue to expand our markets in the future, and we may have limited or no experience in such newer markets. We cannot assure you that any of our products or services will be widely accepted in any market or that they will continue to grow in revenue. Our offerings may present new and difficult technological, operational, regulatory risks, and other challenges, and if we experience service disruptions, failures, or other issues, our business may be materially and adversely affected. Further, our newer activities may not lead to growth or recoup our investments in a timely manner or at all and may require significant management time and attention. If any of this were to occur, it could damage our reputation, limit our growth, and materially and adversely affect our business.
Any acquisitions, investments, partnerships, joint ventures or divestments that we make or enter into could disrupt our business and harm our financial condition.
Acquisitions, investments, partnerships and joint ventures may be part of our corporate development strategy to grow our business. We evaluate and expect in the future to evaluate potential strategic acquisitions, investments, and partnerships or joint ventures with complementary businesses, services or technologies. We may not be successful in identifying acquisition, investments, partnership and joint venture targets. In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire, invest or with which we form a partnership or joint venture, and we may lose merchants as a result of any acquisition, investment, partnership or joint venture. Our competitors may be willing or able to pay more than us for acquisitions, which may cause us to lose certain acquisitions that we would otherwise desire to complete.
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Furthermore, the integration of any acquisition (such as the Reclame Aqui acquisition, as defined in “Item 5—Operating and Financial Reviews and Prospects”), investment, partnership or joint venture may divert management’s time and resources from our core business and disrupt our operations, and such integration may be substantially more costly and time consuming than we had anticipated. Certain acquisitions, investments, partnerships and joint ventures we make may prevent us from competing for certain clients or in certain lines of business and may lead to a loss of clients. We may lose merchants as a result of acquisitions, investments, partnerships and joint ventures.
We may spend time and money on projects that end up not increasing our revenue. To the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves, and to the extent the purchase price is paid with our common shares, it could be dilutive to our shareholders. To the extent we pay the purchase price with proceeds from the incurrence of debt, it would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations. Finally, we may be forced to assume certain liabilities in connection with any acquisitions that we consummate, including unknown and contingent liabilities that we failed or were unable to identify while performing due diligence. We cannot ensure that any acquisition, investment, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.
In addition, we may from time to time pursue divestitures of certain of our businesses or assets as part of our optimization strategy. For example, in July 2025, following a strategic review of our software operations, we announced the sale of Simplesvet, Linx Sistemas and other software assets to third parties, both of which have since closed. These assets together represented a substantial portion of our software segment’s revenue and profitability in 2024. We also continue to evaluate the strategic fit of our remaining software businesses, which may be integrated into our core offerings or operated independently. We may pursue additional divestitures based on management’s evaluation of business strategies, performance or asset valuation. These activities involve inherent risks, including the possibility of completing a sale at lower-than-anticipated valuation levels or on other unfavorable terms, exposure to post-closing claims for indemnification or breach of transition-services obligations, and the operational challenges of separating integrated assets and personnel and redirecting internal resources to transition services, risks and challenges that could adversely affect our financial performance and may affect the market price of our Class A common shares.
Moreover, following the completion of any such divestitures, we may continue to be exposed to legacy liabilities and claims relating to periods in which we owned or controlled the divested businesses. Under Brazilian law, asset sales and other corporate reorganizations do not necessarily shield sellers from claims or penalties arising from pre-closing conduct, and authorities or courts may seek to hold us, our subsidiaries or our current or former directors and officers jointly liable, including on theories of willful misconduct or bad faith. Allegations of this nature, or other legacy claims (including tax, labor, consumer, data protection or anti-corruption matters), could be costly and time-consuming to resolve, could result in significant payments or penalties and could adversely affect our reputation and results of operations.
If we fail to manage our growth effectively, our business could be harmed.
In order to manage our growth effectively, we must continue to strengthen our existing infrastructure, develop and improve our internal controls and risk management, create and improve our reporting systems, and timely address issues as they arise. These efforts may require substantial financial expenditure, commitments of resources, developments of our processes, and other investments and innovations. As we grow, we may not be able to execute as quickly as smaller, more efficient organizations.
The services we render are designed to process very complex transactions and provide reports and other information concerning those transactions, at high volumes and processing speeds. Any failure to deliver an effective and secure service or any performance issue arising from a new service could result in significant processing or reporting errors or other losses. As a result, our growth efforts could result in increased costs and/or we could also experience a loss in business.
FORM 20-F 26FY25 
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If we cannot pass increases in fees from payment schemes, including assessment, interchange, transaction and other fees, or increases in fees due to macroeconomic factors such as interest rate increases along to our merchants, our operating margins will decline.
We pay assessment, interchange and other fees set by the payment schemes for each transaction we process. From time to time, the payment schemes may increase the assessment, interchange and other fees that they charge payment processors. We may also face increases in costs from macroeconomic factors such as a higher interest rate, which affects the financing costs of our prepayment and credit operations. Under our existing contracts with merchants, we are generally permitted to pass these fee increases along to our merchants through corresponding increases in our fees. However, if we are unable to pass through these and other fees in the future due to contractual or regulatory restrictions, competitive pressures or other considerations, it could have a material adverse effect on our business, financial condition and results of operations.
Our holding company structure makes us dependent on the operations of our subsidiaries.
We are a Cayman Islands exempted company with limited liability. Our material assets are our direct and indirect equity interests in our subsidiaries. We are, therefore, dependent upon payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if any, to holders of our Class A common shares, and we may have tax costs in connection with any dividend or distribution. Furthermore, exchange rate fluctuation will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries. See “—Financial Risks— We are exposed to fluctuations in foreign currency exchange rates”, “—Economic uncertainty and political instability in Brazil may harm us and the price of our Class A common shares” and “Item 8. Financial Information—A. Consolidated statements and other financial information—Dividends and dividend policy”.
Risks Related to Legal and Regulatory Matters
We are subject to costs and risks associated with increased or changing laws and regulations affecting our business. Specifically, developments in data protection and privacy laws could harm our business, financial condition or results of operations.
The Brazilian regulatory and legal framework is characterized by its complexity and extensive scope, presenting significant compliance challenges. Our operations are subject to a complex range of laws, rules, and regulations across multiple jurisdictions and regulatory bodies, which significantly dictate our business practices. Some of the federal, state or local laws and regulations in Brazil that affect us regulate: (a) consumer products, product liability or consumer protection; (b) advertising, marketing and sales of products; (c) labor and employment, including wage and hour laws; (d) tax matters or interpretations thereof; (e) data protection and privacy; (f) antitrust and competition; and (g) securities and exchange. The applicable laws, rules, and regulations imposed on us are enforced by multiple different authorities and governing bodies in Brazil, which increases the regulatory and legal complexity.
Under the Brazilian Data Protection Law (Law No. 13,709/18 or Lei Geral de Proteção de Dados) (“LGPD”) and its associated regulations, security breaches that may result in risk of significant damage to data subjects must be reported to ANPD, the Brazilian data protection regulatory body, and to the affected data subjects within 3 business days upon discovery that the incident has affected the personal data. Reporting such incidents may generate relevant costs, including but not limited to financial redress, reputational damage, and investigations, penalties and fines by the ANPD. The imposition of administrative sanctions and fines for non-compliance with the LGPD is governed by ANPD Resolution 4 (dated as of February 24, 2023).
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The Central Bank also has specific legislation on cybersecurity and data protection. On April 8, 2021, the Central Bank approved Resolution 85, which establishes requirements for the engaging of relevant data processing, storage and cloud computing services by payment institutions authorized to operate by the Central Bank and determines the mandatory implementation of a cybersecurity policy. Central Bank Resolution 85 requires payment institutions to establish a formal internal cybersecurity policy and to incorporate specific mandatory clauses into all contracts involving relevant data processing, storage and cloud computing services.
Such a complex and extensive legal and regulatory environment generates high compliance costs and exposes us to compliance and litigation risks. Any failure to comply with applicable laws, rules, and regulations, could result in the suspension or revocation of our licenses to conduct regulated activities and participate in payment schemes. Furthermore, we could be subject to substantial fines (including penalties calculated on a per transaction basis) and to disgorgement of profits. Such non-compliance may also trigger intervention by the Central Bank, insolvency proceedings, or the extrajudicial liquidation of any of our regulated subsidiaries. Regulatory non-compliance may also hinder our ability to offer our products and services effectively. We could be required to modify our business practices and enter into a Conduct Adjustment Agreement with regulatory bodies to bring our operations into compliance. We could also face private litigation and investigations or lawsuits initiated by Brazilian Public Prosecutor Offices. Beyond legal sanctions, any perceived or actual compliance breach could have a significant impact on our reputation as a trusted brand and could cause us to lose existing clients and prevent us from obtaining new clients.
Our business is subject to extensive government regulation and oversight in Brazil and our status under these regulations may change. Violation of or compliance with present or future regulation could be costly, expose us to substantial liability and force us to change our business practices, any of which could seriously harm our business and results of operations.
Certain of our subsidiaries are licensed and regulated under various Brazilian laws and regulations which includes specific regulations such as electronic payments, payment institutions, publicly-held company issuer of securities, financial institutions and trade repositories, among others. For example, we are subject to minimum requirements of paid-in capital stock and net equity, establishment of internal controls and procedures, implementation of risk management structures, observation of know your client, anti-money laundering and counter terrorist financing rules, cybersecurity rules, constitution of ombudsman office and preparation of accounting statements pursuant to the Standard Chart of Accounts of the National Financial System (Plano Contábil das Instituições do Sistema Financeiro Nacional - COSIF), and administrative penalties for noncompliance.
In addition to country law and regulatory framework, the payment schemes’ rules are applicable to us. Each payment scheme has its own rules, which are approved by Central Bank. These rules are complex and extensive. For example, we must follow the Payment Card Industry Data Security Standard, a set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect Cardholder data. Regulators and payment schemes may increase enforcement of obligations, which may require us to review or expand our compliance program, adversely impacting our costs.
The above laws, rules and regulations may be interpreted and applied differently over time, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. For further information regarding these regulatory matters, see “Item 4. Information on the Company—B. Business overview— Regulatory Matters—Regulation of the SPB”.
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The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations.
We are, and may be in the future, party to legal (including class actions), arbitration and administrative investigations, inspections and proceedings arising in the ordinary course of our business or from extraordinary corporate, tax, regulatory or accounting events, involving our clients, suppliers, customers, as well as competition, government agencies, tax and environmental authorities, particularly with respect to civil, tax and labor claims, including those with respect to outsourced employees. For instance, in recent years we have observed an upward trend in the amount of our contingencies for labor related claims, which we expect to continue. Our indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws. Should the ultimate judgments or settlements in any pending litigation or future litigation or investigation significantly exceed our indemnity rights, they could have a material adverse effect on our business, financial condition and results of operations. Further, even if we adequately address issues raised by an inspection conducted by an agency or successfully defend our case in an administrative proceeding or court action, we may have to set aside significant financial and management resources to settle issues raised by such proceedings or to those lawsuits or claims, which could adversely affect our business. See “Item 8. Financial Information—A. Consolidated statements and other financial information—Legal proceedings”
We may face restrictions and penalties under the Brazilian Consumer Protection Code.
Brazil has a series of strict consumer protection statutes, including Law No. 8,078, dated as of September 11, 1990 known as the “Consumer Protection Code” (Código de Defesa do Consumidor), that are intended to safeguard consumer interests and that apply to all companies in Brazil that supply products or services to Brazilian consumers. These consumer protection provisions include protection against misleading and deceptive advertising, protection against coercive or unfair business practices and protection in the formation and interpretation of contracts, usually in the form of civil liabilities and administrative penalties for violations. These penalties are often levied by the Brazilian Consumer Protection Agencies (Fundação de Proteção e Defesa do Consumidor, or “PROCONs”), which oversee consumer issues on a district-by-district basis. Companies that operate across Brazil may face penalties from multiple PROCONs, as well as the National Secretariat for Consumers (Secretaria Nacional do Consumidor, or SENACON).
As of December 31, 2025, we were party to approximately 1,541 proceedings with PROCONs . Additionally, as of the same date, we were subject to approximately 3,893 active judicial claims in Special Civil Court. Should these consumers prevail, or should further claims result in adverse outcomes, we may face reduced revenues due to refunds and fines, which could negatively impact our financial position. The figures mentioned in this paragraph do not consider the companies of the Software Business.
We are subject to regulatory activity and antitrust review and litigation under competition laws.
The Conselho Administrativo de Defesa Econômica (“CADE”) is the Brazilian antitrust authority. Other companies or governmental agencies may allege that our actions violate antitrust or competition laws or otherwise constitute unfair competition. Contractual agreements with buyers, sellers, or other companies and our unilateral business practices could give rise to regulatory action or antitrust investigations or litigation. CADE may perceive our business to have such significant market power that otherwise uncontroversial business practices could be deemed anticompetitive. Any such claims and investigations, even if they are unfounded, may be expensive to defend, involve negative publicity and substantial diversion of management time and effort, and could result in significant judgments against us. In 2023, two of our subsidiaries were exonerated in antitrust procedural inquiries. CADE’s decisions may be adverse to us, having a negative effect on our business model, operating results and financial condition.
FORM 20-F 26FY25 
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We are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations.
The highly automated nature of, and liquidity offered by our products and services make us a target for illegal or improper uses. In addition, Brazil has a high risk of corruption, and we are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations, including the Brazilian Federal Law No. 12,846, dated as of August 1, 2013 (“Clean Company Act”), and the United States Foreign Corrupt Practices Act of 1977, as amended (“FCPA”). Both the Clean Company Act and the FCPA impose liability against companies who engage in bribery of government officials, either directly or through intermediaries. In addition, there have been public reports and statements indicating that the current U.S. administration is evaluating whether to designate certain criminal organizations with operations in Brazil, including groups such as Primeiro Comando da Capital (PCC) and Comando Vermelho (CV), as foreign terrorist organizations (“FTOs”). While no such designations have been made to date, any such action would expand the scope of U.S. enforcement authorities and could subject individuals and entities that are found to have provided “material support” to such organizations, a concept that is broadly defined, to significant criminal and civil liability, thereby increasing regulatory and compliance risks for companies with operations in Brazil. If we make errors, failures, violations or delays in complying with anti-corruption, anti-bribery and anti-money laundering laws and regulations, or if we or any of our employees, contractors, agents, officers or other persons with whom we conduct business have or are deemed to have a nexus to an FTO, we could suffer criminal, administrative and civil liabilities and/or lawsuits, significant fines and penalties, forfeiture of significant assets, or other enforcement action (including from the U.S. Department of Justice) as well as reputational harm.
Certain ongoing legislative and regulatory initiatives under discussion by the Brazilian Congress, the Central Bank and the broader payments industry may result in changes to the regulatory framework of the Brazilian financial services industry and may have an adverse effect on us.
In addition to being complex and extensive, our regulatory and legal environment is continuously changing. There can be no guarantee that we will have sufficient financial and technical resources to comply with changes or successfully compete in the context of a shifting regulatory and legal environment. Changes may be in the form of new laws and regulations, or amendments or changes in interpretations of existing laws and regulations.
Changes could adversely affect us by, for example, increasing competition and costs associated with compliance, requirements, actions, fines, penalties, and enforcements; diverting the attention of some of our senior management team; causing delays in planned product improvements; requiring us to change our processes and operations; reducing the demand or popularity of our products and services; making it difficult for new customers to join our network; limiting our ability to grow; reducing the attractiveness of our products and services; and preventing us from offering existing products and services.
In recent years, the Brazilian government, the Central Bank and other regulatory authorities have introduced significant regulatory changes for financial services which impact or may impact our business, including new rules regarding cybersecurity standards and governance requirements. The Central Bank issued several regulations related to the Brazilian financial services industry, aiming to increase competitiveness in the sector, strengthen risk management, encourage the development of new solutions and the differentiation of products to consumers, and promote the increased use of electronic payment means. Such measures include but are not limited to:
FORM 20-F 26FY25 
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•Pix – in 2020, the Central Bank launched an instant payments ecosystem that enables real-time transactions among individuals and entities on a 24/7 basis (“Pix”). Pix has since become one of the main payment instruments in Brazil and is the preferred alternative to debit and pre-paid transactions. The growth of Pix may have resulted and may continue to result in a loss of interest from our prospective and existing clients in using the payments schemes that we operate, and make it more difficult for us to retain or attract clients. The Brazilian Central Bank and market participants are also rolling out additional functionalities, such as Pix Parcelado (Pix installments) and Pix Automático (recurring Pix payments), to expand Pix’s use in credit-like and recurring payment situations, including e-commerce and subscriptions. As customers and merchants increasingly adopt Pix for both immediate and deferred payments, our transaction volumes, interest income, and fee-based revenues from credit cards and other credit products may decline. For further details on Pix regulation and innovation refer to “Item 4. Information on the Company - B. Business Overview - Pix”.
•Open Finance – in 2020, the Central Bank and CMN published the initial set of guidelines and standards for the implementation of the Open Financial System (“Open Finance”) in Brazil. Stone IP, as a payment institution that provides payment accounts to its clients, is a mandatory participant in certain phases of Open Finance and as a result must comply with the applicable Open Finance regulations, self-regulation and other data guidelines, as well as stringent customer authentication regulations and Brazilian privacy laws such as the LGPD, under which data can only be shared with the explicit consent of the user. Compliance with such regulations may increase our costs and we are at risk of being subject to fines and penalties if we fail to comply. In addition, competitors may use data on our clients for their business goals and provide services to them within Open Finance context. For example, Payment Initiation Service Providers require the initiation of payment transactions without (a) managing a payment account; and (b) intermediating, at any time, the funds transferred in the respective payment transaction. If that were to happen, we may lose clients to competitors, which would harm our business.
•Prudential Conglomerates and Minimum Capital Requirements – in 2021, the Central Bank introduced new rules setting out new accounting criteria applicable to prudential conglomerates headed by payment institutions. Under the new rules, we must maintain minimum capital adequacy ratio in relation to our risk-weighted assets (“RWA”), which are assessed in a manner similar to the Basel Committee on Banking Supervision (BCBS) standards, yet applying specific requirements to address payment-related risks. The Central Bank may introduce additional requirements related to the components of such calculation in the future.
•Brazilian Worker Food Program (Programa de Alimentação do Trabalhador - PAT) - In 2022, the Brazilian Congress introduced the duty of openness and interoperability for the card schemes of Brazilian Worker Food, which was regulated by the Brazilian Decree No. 12,712, enacted as of November 11, 2025. Recently, the criteria for openness and interoperability for those card schemes have been the subject of legal disputes, and the courts may take some time to reach a final decision. If the courts rule that the duty for openness and interoperability of Brazilian Worker Food Program card schemes is unlawful, we may lose clients and revenue to competitors, which would harm our business.
•Central Bank Resolution No. 150/21 also sets forth guidelines for payment scheme settlement. In this context, as a result of Public Consultation No. 104/24, Central Bank Resolution No. 522/25 sought to enhance these rules in three key areas, which will be updated by the payment scheme settlor until May 2026: (i) centralized risk management; (ii) transparency of scheme fees; and (iii) anti-money laundering and counter-terrorism financing (AML/CFT) measures. While these provisions could help reduce participants’ financial exposure—since the settlor would be responsible for residual risks—they may also require acquirers to make additional contributions to the risk management mechanisms set by the scheme.
These measures are in various phases of development, whether as part of legislative or regulatory initiatives and the overall impact of any such reform proposals is difficult to estimate. Additionally, any future legislative or regulatory initiatives that would bring restrictions over the number of installments in credit card operations in Brazil may have an adverse effect on us.
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The discount rates that we charge merchants for the early payment of their card receivables is an example of changing regulations. This prepayment solution represents a significant portion of our financial income. There was some debate about whether the discount rates applicable to early payment of card receivables should be capped under the limits set by Brazilian Decree No. 22,626 of April 7, 1933 (“Usury Law”). Nevertheless, Brazilian Law No. 14,905 of June 28, 2024, amended the Usury Law to explicitly exclude from its scope operations performed by institutions authorized to operate by the Central Bank. Therefore, the cap mentioned above is not applicable to Stone IP’s operations. However, we cannot assure you that there will not in the future be new or amended laws preventing us from providing those operations or limiting the fees we may charge.
As our business grows, we may become subject to more regulations. As we offer new products and services and enter new markets, we may become subject to additional laws, rules and regulations. For example, offering financial products such as loans directly to our clients, including in the form of Stone SCD, or term deposits through Stone SCFI has required us to have additional compliance policies, procedures, regulatory and risk management requirements, as well as a more extensive interaction with the Central Bank, and we may not recover our investments in these new products in a timely manner or at all. For example, we may be unable to attract customers, fail to anticipate competitive conditions or fail to adapt and tailor our services to different markets. The realization of any of the risks above (either alone or in combination) could prevent us from scaling this line of business, impair future revenue streams, and expose us to reputational and regulatory risks, any of which could materially and adversely affect our business and financial condition.
Changes in tax laws, tax incentives, benefits or differing interpretations of tax laws may adversely affect our results of operations.
Changes in tax laws, regulations, related interpretations and tax accounting standards in Brazil, the Cayman Islands or the United States may result in a higher tax rate on our earnings and revenues. If the taxes applicable to our business increase or any tax benefits are revoked, our business could be harmed. For example, in 2015 the Brazilian government increased the rate of PIS/COFINS tax (which is a tax levied on revenues) from 0% to approximately 4.65% on financial income. Additionally, following the approval of Bill of Law (PL) No. 128 in late 2025, the Social Contribution on Net Profit (CSLL) rate applicable to payment institutions was increased, which may further impact our net income. See “Item 5. Operating and Financial Review and Prospects — A. Operating Results — Description of Principal Line Items — Income Tax and Social Contribution” for more information. Our payment processing activities are also subject to a Municipal Tax on Services (ISS). Any increases in ISS rates would also harm our profitability.
The Brazilian Tax Reform, enacted through Constitutional Amendment No. 132/2023 and further regulated by Complementary Laws No. 214/2025 and No. 227/2026, introduces substantial changes to the indirect tax framework applicable to our business and the payment ecosystem in which we operate. The replacement of existing taxes (ICMS, ISS, and PIS/Cofins) with the IBS and CBS, combined with the introduction of a split payment system — under which payment institutions would be responsible for operationalizing the collection of consumption taxes from merchants — may impose significant operational, technological, and compliance burdens on us and on the broader ecosystem of merchants, acquirers, and financial institutions with which we interact. Although certain safeguards have been established for payment institutions, including exemption from tax liability under the split payment framework, key aspects of the reform remain subject to future regulation, particularly regarding ancillary obligations and the specific taxation of the financial sector. The transition period, spanning from 2026 to 2032, introduces a prolonged period of regulatory uncertainty during which we may be required to adapt our systems, processes, and commercial arrangements on an ongoing basis. Any increase in the overall tax burden applicable to our business or to the merchants and partners within our ecosystem, as well as any failure to timely adapt to new rules and requirements, could result in higher costs and materially and adversely affect our business, financial condition, and results of operations.
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We benefit from certain tax incentives granted to technological research and technological innovation development activities, provided for in Law No. 11,196 (“Lei do Bem”). In 2025, Complementary Law (LC) No. 224 was enacted, establishing a 10% reduction in various tax benefits. While initial interpretations of LC No. 224/2025 suggested that such reduction could apply to the incentives provided by Lei do Bem, the Brazilian Federal Revenue Service (Secretaria da Receita Federal do Brasil – RFB) subsequently issued Normative Instruction (IN) No. 2,305, clarifying that the Lei do Bem is excepted from this 10% cut. Our ability to benefit from these incentives still depends on the fulfillment of certain obligations.
Failure to comply with certain obligations in accordance with the applicable rules and/or sending the documentation required for the granting of such incentives, may result in the loss of the right to incentives not yet used and the collection, by the tax authorities, of the amount corresponding to the unpaid taxes as a result of incentives already used, plus fines and interest provided for in tax legislation, without prejudice to any applicable criminal sanctions, which may adversely affect us.
If the tax benefits currently granted expire, are extinguished, or are cancelled, we cannot assure you that such benefits will be renewed or that our subsidiaries will succeed in obtaining new tax benefits on equally favorable terms. If such benefits are not renewed, our business could be adversely affected.
Some tax rules related to collection, ancillary obligations or even changes on tax rates in Brazil can change without prior notice or vacancy period for their implementation. We may not always be aware of all such changes that affect our business and we may therefore fail to pay the applicable taxes or otherwise comply with tax regulations, which may result in additional tax assessments, penalties and interests for our company.
Furthermore, we are subject to tax laws and regulations that may be interpreted differently by tax authorities, judicial or administrative courts and us. The application of indirect taxes, such as sales and use tax, value-added tax, or VAT, provincial taxes, goods and services tax, business tax and gross receipt tax, to businesses like ours is a complex and evolving issue. Significant judgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business. One or more states, or Municipalities, the Brazilian government or other countries may seek to challenge the taxation or procedures applied to our transactions imposing the charge of taxes or additional reporting, record-keeping or indirect tax collection obligations on businesses like ours. New taxes could also require us to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could have a material adverse effect on our business and financial results.
On December 20, 2023, Constitutional Amendment (EC) No. 132/2023 (“Tax Reform”) was enacted, replacing several of the current “indirect taxes” (ICMS, ISS, and PIS/Cofins) with the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS). Further, on January 16, 2025, the President of Brazil enacted Complementary Law No. 214, which further regulates such indirect taxes and other matters, including the establishment of a specific tax collection system.
On January 13, 2026, Complementary Law No. 227 was enacted, which provides for the functioning of the Managing Committee — the government body responsible for overseeing tax collection — and addresses the tax rates applicable to the financial sector. It is important to mention that future regulations will provide for the operationalization of the ancillary obligations as well as key points regarding the taxation of the financial sector.
The split payment system introduces a new tax collection framework where payment institutions would be responsible for operationalizing the collection of consumption taxes from merchants. Some safeguards have been established in favor of payment institutions, such as exemption from tax liability under the split system. This Tax Reform will be subject to a transition phase, lasting from 2026 to 2032. For now, we are unable to foresee when and how the new pending regulations will come, nor how the rules will be applied. Any increases in the overall tax burden applicable to our business could result in higher costs for us and, as a result, materially and adversely affect our profitability.
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Risks Relating to Our Operations
Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks, which could expose us to losses and liability and otherwise harm our business.
We operate in a political and economically volatile country and in a rapidly changing industry. In recent years, we have experienced significant changes to our business, including the launch of new products and services, entering into new areas of activity (credit and banking) and undertaking strategic acquisitions. In addition, the number of clients and their transactions, the complexity and risks of our new products and services, counterparties, suppliers and third-party service providers that work with us has increased. As a result, our risk management policies are challenged to deal with an increasing number of complex risks. For example, we are responsible for vetting and monitoring our clients and determining whether the transactions we process for them are lawful. In this context, our risk management policies, procedures, techniques, and processes may not be partially or fully effective in identifying, monitoring and managing our risks, which may result in financial and reputational losses and liabilities, including civil and criminal.
Because we heavily rely on statistical and artificial intelligence methods in our risk management, we are dependent on data and models. We work with internal data (clients, counterparties, transactions, etc.) and data provided by third parties. In some cases, that information may not be accurate, complete or up to date, which can result in errors. We face model risk because we may, among other reasons, be unsuccessful in determining the appropriate models (i.e., by selecting the wrong variables or not selecting important variables), by failing to choose the appropriate quantitative methods, by failing to detect and properly treat regime changes in the available sample, or by making operational errors in deploying the model to production environment. Quantitative modeling is a central activity of our risk management team. It is especially important to credit risk, market risk and fraud detection and prevention.
Indeed, we face model risk in almost all areas of our business. For example, we are dependent on quantitative modeling to make decisions in areas such as logistics, customer relations and engagement, finance, credit, fraud prevention, marketing and strategy.
Cybersecurity attacks could result in data breaches and severely damage our reputation, business and financial condition.
Our business is vulnerable to cybersecurity attacks, which could have a significant impact on our operations. As we expand our banking and credit business lines, our risk of being subject to cybersecurity attacks increases. Brazilian businesses are particularly subject to frequent cybersecurity attacks. The techniques used to obtain unauthorized, improper, or illegal access to our systems, our data, client data or end-user data, disable or degrade service, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated, may be difficult to detect quickly, and may not be recognized or detected until after they have been launched against a target. These attacks can be carried out by hackers, linked or not to criminal groups, aimed at stealing sensitive data, money, or disrupting our operations.
The cyber risks that we are exposed to include but are not limited to:
•Data theft: Hackers can steal confidential information, such as credit card numbers, bank account information, passwords, and personal identification data.
•Phishing and spear phishing attacks: Phishing attacks can be used to steal confidential information or install malware on our systems.
•Malware: Malware can be used to steal our data or disrupt our operations.
•Ransomware: Ransomware is a type of malware that can restrict our access to our files, data and operations and can demand ransom in exchange for restoring any of the items mentioned.
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•Denial of Service (DDoS) attacks: DDoS attacks can overwhelm our systems, making them inaccessible.
•Social engineering attacks: Hackers can use social engineering to manipulate our employees and gain access to confidential systems and data.
•Software and hardware vulnerabilities: Vulnerabilities in our software and hardware can be exploited by hackers to access the institution's systems.
•Insider attacks: Cyberattacks can also be carried out by malicious employees who have access to confidential systems and data.
Cybersecurity attacks have become more frequent, sophisticated, and riskier. In 2025, Brazil faced a series of cybersecurity attacks that resulted in the illicit transfer of hundreds of millions of Brazilian reais. For instance, the highest profile case was an attack on C&M Software. The fraud involving C&M Software, which occurred between June and July 2025, represented an unprecedented attack on the infrastructure of the Brazilian payment system. Unlike common scams targeting cardholders, this criminal action exploited the company's role as an information technology service provider, which connects medium-sized banks and fintechs directly to the Central Bank for Pix settlement. Through the co-opting of an internal employee and the use of social engineering, the fraudsters obtained privileged credentials and legitimate digital certificates. With this access, they managed to bypass security layers and trigger automated payment orders from the financial institutions' reserve accounts, embezzling an estimated amount between R$800 million and R$1 billion (approximately US$150 million - US$190 million).
The impact of the operation was immediate, forcing the Central Bank to disconnect C&M from the system and paralyzing Pix functionality for thousands of users across various fintechs. The diverted capital was dispersed through a network of "mule" accounts and quickly converted into cryptocurrencies to hinder international tracking. The episode served as a watershed moment for the sector, compelling the regulator to impose much stricter cybersecurity standards and third-party risk monitoring for all entities operating within the vital infrastructure of the national financial system.
Any integration of artificial intelligence in our or any third party’s operations is expected to pose new or unknown cybersecurity risks and challenges. The consequences of a cybersecurity attack could severely harm us through financial and reputational losses, regulatory penalties, and impact on our clients’ business.
An occurrence of a natural disaster, widespread health epidemic or other outbreaks could have a material adverse effect on our business, financial condition and results of operations.
Our business could be materially and adversely affected by natural disasters, such as fires or floods, or other events, such as wars, acts of terrorism, environmental accidents, power shortages, communication interruptions, pandemics or epidemics. These events could cause us to close our operating facilities temporarily. In addition, our net sales could be materially reduced to the extent that a natural disaster, health epidemic or other major event harms the economy of the countries where we operate. Our operations could also be severely disrupted if our clients or other participants were affected by natural disasters, health epidemics or pandemics or other major events. Such events could also negatively impact our clients and other participants’ operations in a way that harms our business.
Our insurance policies may not be sufficient to cover all claims.
Our hedge and insurance policies may not adequately mitigate all the risks to which we are exposed. For example, as of the date of this report, we do not maintain insurance policies contracted specifically for property, business interruptions or cybersecurity. A significant claim not covered by our insurance, in full or in part, may result in significant expenditures by us. Moreover, we may not be able to maintain insurance policies in the future at reasonable costs or on acceptable terms, which may adversely affect our business.
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Our systems and our third-party providers’ systems may fail, which could interrupt our service, cause us to lose business and increase our costs.
We are dependent on the ability of our products and services to integrate with a variety of systems, including but not limited to software, data centers, cloud infrastructures, telecommunications and internet networks. Our card transactions, for example, are dependent on telecommunications, internet, cloud infrastructures and data centers, among others. We depend on the efficient and uninterrupted individual and joint operation of them.
These systems and operations could be exposed to damage or interruption due to, among other things, the occurrence of spikes in user volume, fire, natural disaster, power loss, human errors, telecommunications failure, cyber-attacks, acts of terrorism, vandalism or sabotage, unauthorized entry, hosting disruptions, capacity constraints or computer viruses.
We rely on a combination of our own systems and systems licensed to us by third-party providers. We rely on our subsidiary, Buy4 Processamento de Pagamentos S.A., to provide transaction authorization and settlement, computing, storage, processing and other related services for card transactions. Our operations depend, in part, on our providers’ ability to protect their facilities against damage or interruptions and their continued provision of services, as well as to providing us adequate advanced notice in the event that they decide to close a facility. Our solutions, including hardware and software, interoperate with mobile networks offered by telecom operators and mobile devices developed by third parties. Changes in these networks or in the design of these mobile devices may limit the interoperability of our solutions with such networks and devices and require modifications to our solutions. If we are unable to ensure that our hardware continues to interoperate effectively with such networks and devices, or if doing so is costly, our business may be materially and adversely affected. We utilize data center hosting facilities from third-party service providers to make certain products and services available to our customers. See “Item 4. Information on the Company - D. Property, plants and equipment” for information regarding our data center facilities.
We also rely on card issuers and payment schemes to process our transactions. It is mandatory under the Central Bank rules that Acquirers register daily in trade repositories all card receivables owned by merchants (credit and debit). On the other hand, it is also mandatory that institutions willing to negotiate those receivables also register their contracts in such trade repositories. Therefore, as our group includes an Acquirer (Stone IP) and a financial institution (Stone SCD), it registers the merchants’ receivables through TAG Tecnologia para o Sistema Financeiro S.A. (“TAG”) (a StoneCo company), and its contracts through TAG, CERC Central de Recebíveis S.A. (“CERC”), CIP S.A. (“Nuclea”), and B3 S.A. - Brasil, Bolsa, Balcão (“B3”). Any failure to settle the merchant’s receivables in accordance with the information registered in the trade repository is considered an Acquirers’ misconduct. Under existing rules, while Acquirers may only choose one trade repository, increasing risks due to system failures, financial institutions may choose as many as they want, mitigating system unavailability risks. On June 6, 2021, the interoperability between financial market infrastructures (TAG, CERC, Nuclea and, more recently, B3) was launched under the rules of the Central Bank. Pursuant to applicable rules, the Acquirer must settle the merchants’ receivables in accordance with the information registered in the chosen trade repository and contracts regarding card receivables are only effective and made public when registered in a trade repository. We also rely on the Central Bank’s Brazilian Payment System (Sistema Brasileiro de Pagamentos, SPB) and Instantaneous Payment System (Sistema de Pagamentos Instantâneos, SPI) to receive and send funds electronically in our platform that serves acquiring, banking and credit businesses.
Our systems, our subsidiaries’ systems, and those of third parties have experienced defects, errors, delays, and other difficulties in processing our transactions (for example payment, banking, and credit transactions), communication channels with our clients, and our internal operations. If they experience such problems in the future, they could result in:
•Loss of clients or early termination of customer contracts.
•Loss of revenues, including subscription revenues owed from equipment rentals.
•Loss of merchant and Cardholder data.
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•Loss of reputation resulting from negative publicity.
•Penalties applied by Visa, Mastercard or other payment schemes, including loss of licenses and fines.
•Loss of Central Bank authorizations granted by the Central Bank to operate as a payment institution (instituição de pagamento), a direct credit company (sociedade de crédito direto), a trade repository (entidade registradora), and a financial services company (Sociedade de Crédito, Financiamento e Investimento S.A.) in Brazil.
•Fines or other penalties imposed by the Central Bank, as well as other measures taken by the Central Bank, including intervention, temporary special management, insolvency proceedings, and/or the out-of-court liquidation of Stone IP and any of our subsidiaries to whom licenses may be granted in the future.
•Fines or other penalties imposed by ANPD.
•Exposure to fraud losses or other liabilities.
•Indemnity actions imposed by customers.
•Additional operating and development costs.
•Diversion of technical and other resources.
While much of our processing infrastructure is located in multiple, redundant data centers and clouds, we have some core business systems that are located in only one facility and do not have redundancy. An adverse event that results in the unavailability of such systems or the facilities in which they are located could harm us.
Any changes in systems or networks belonging to third-party providers that degrade the functionality of our products and services may result in additional costs or requirements on us re-establishing the proper level of the functionality, or give preferential treatment to competitive services, including their own services, could materially and adversely affect usage of our products and services.
While we maintain four data centers and cloud infrastructure operating across multiple regions, which provides meaningful resilience within areas under our direct control, we cannot assure that our disaster recovery and business continuity plans are adequate or will function as intended when activated. Our operations also use third-party providers' systems whose own resilience and recovery capabilities are outside our direct control. A failure in any of these dependencies during a recovery scenario could extend our recovery timeline beyond what our plans contemplate. If our disaster recovery or business continuity plans prove inadequate, we could experience prolonged service interruptions, fail to meet settlement obligations, lose Central Bank authorizations and suffer reputational and financial harm.
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Our use of open source software could negatively affect our ability to sell our solutions and subject us to possible litigation.
Our solutions incorporate and are dependent to some extent on the use and development of open source software and we intend to continue our use and development of open source software in the future. Such open source software is generally licensed by its authors or other third-parties under open source licenses and is typically freely accessible, usable and modifiable. Pursuant to such open source licenses, we may be subject to certain conditions, including requirements that we offer our proprietary software that incorporates the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of the particular open source license. If an author or other third-party that uses or distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our solutions that contained or are dependent upon the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our solutions. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition or require us to devote additional research and development resources to change our platform. The terms of many open source licenses to which we are subject have not been interpreted by courts. The potential impact of these terms on our business is uncertain and may result in unanticipated obligations regarding our solutions and technologies.
Furthermore, any requirement to disclose our proprietary source code, termination of open source license rights or payments of damages for breach of contract could be harmful to our business, results of operations or financial condition and could help our competitors develop products and services that are similar to or better than ours.
In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, controls on the origin or development of the software, or remedies against the licensors. Many of the risks associated with the usage of open-source software cannot be mitigated and could adversely affect our business.
Although we believe that we have complied with our obligations under the various applicable licenses for open-source software, it is possible that we may not be aware of all instances where open-source software has been incorporated into our proprietary software or used in connection with our solutions or our corresponding obligations under open-source licenses. We do not have open source software usage policies or monitoring procedures in place. We rely on multiple software programmers to design our proprietary software and we cannot be certain that our programmers have not incorporated open-source software into our proprietary software that we intend to maintain as confidential or that they will not do so in the future.
Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.
Our business involves the collection, storage, processing and transmission of customers’ personal data, including names, addresses, identification numbers, credit or debit card numbers and expiration dates and bank account numbers. Concerns about data security are increased when we transmit information. Electronic transmissions can be subject to attack, interception or loss. Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those of our associated participants, which can impact the confidentiality, integrity and availability of information. In addition, data security threats may derive from human error, fraud and malice on the part of our third-party employees, and accidental technological failure.
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In the scope of our activities, we share information with third parties, including commercial partners, third-party service providers and other agents, which we refer to collectively as “associated participants”, who collect, process, store and transmit sensitive data. Given the rules established by the payment scheme settlors, such as Visa and Mastercard, and applicable regulations, we may be held responsible for any failure or cybersecurity breaches attributed to these third parties insofar as they relate to the information we share with them.
The loss, destruction or unauthorized modification of data of the end users of payment services (e.g., payers, receivers, Cardholders, merchants, and those who may hold funds in their accounts) by us or our associated participants or through systems we provide could result in significant fines, sanctions and proceedings or actions against us by payment schemes, ANPD or third parties. In addition, a significant data breach from our systems and communications could result in payment schemes prohibiting us from processing transactions on their schemes or the loss of Central Bank authorization to operate as a payment institution in Brazil, which could materially impede our ability to conduct business.
Our encryption of data and other protective measures may not prevent unauthorized access or use of data and sensitive data. A breach of our system or that of one of our associated participants may subject us to material losses or liability, assessments and claims for unauthorized purchases with misappropriated credit, debit or card information, impersonation or other similar fraud claims. Misuse of such data or a cybersecurity breach could harm our reputation and deter merchants from using electronic payments generally and our products and services specifically. In addition, any such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits, and result in the imposition of material penalties and fines under state and federal laws or regulations or by payment schemes.
We cannot assure you that there are written agreements in place with every associated participant or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us to obtain reimbursement from associated participants in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. In addition, many of our associated participants are small- and medium-sized agents that have limited competency regarding data security and handling requirements and may thus experience data losses. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation.
We may not be able to successfully manage our intellectual property and may be subject to infringement claims.
Our business relies on a number of forms of intellectual property rights, including trademarks, domain names, software, know-how, trade secrets technologies and other proprietary information, and we use a combination of contractual provisions, confidentiality procedures, and other approaches to establish and protect our intellectual property rights. We have been granted numerous trademarks and software covering our brands and products and have filed, and expect to continue to file, trademark applications before the patent, trademark and software offices in a number of jurisdictions, including the Brazilian Patent and Trademark Office (INPI) seeking to protect newly developed trademarks and products. We cannot be sure that intellectual property rights will be granted with respect to any of our trademarks, applications will be granted, or that any such patent, trademark and software offices shall continue to protect our intellectual property rights with respect to any of our trademarks, applications and products. We may not be able to successfully manage our intellectual property and may be subject to infringement claims.
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Third-parties may challenge, invalidate, circumvent, infringe, misappropriate or otherwise violate any existing or future intellectual property assets requested by, issued to, or licensed by, us. Additionally, our intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, to our business, and as a result, we may be forced to engage in costly redesign efforts, discontinuance of certain service offerings or other competitive harm. There is also a risk that we may, by omission, fail to renew our intellectual property rights on a timely basis in certain jurisdictions. Moreover, others, including our competitors, may independently develop similar technology, duplicate our services or design around our intellectual property, and in such cases, we may not to be able to assert our intellectual property rights against such parties. Furthermore, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which is expensive and time-consuming, could cause a diversion of resources and may not prove successful. Such cases may expose us and negatively affect the use of our intellectual property and we may be prohibited from continuing to exploit them.
Due to the rapid pace of technological change in our industry, aspects of our business and our services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all. The loss of intellectual property protection, the inability to obtain third-party intellectual property or delay or refusal by relevant regulatory authorities to approve pending intellectual property registration applications could harm our business and ability to compete.
We may also be subject to costly litigation in the event our services and technology infringe upon, misappropriate or otherwise violate a third-party’s proprietary rights. Third parties may have, or may eventually be issued, patents, trademarks, trade secrets or other intellectual property that may be infringed upon, misappropriated or otherwise violated by our services, or may otherwise conflict with our own proprietary rights. We may also be subject to claims by third-parties alleging that we have breached any of our applicable copyright, trademark, license usage or other intellectual property licenses or agreements. Any such claim from third-parties may be expensive, time consuming and result in a limitation of our ability to use the intellectual property subject to such claims and may prevent us from registering certain trademarks, domain names, industrial designs, patents or other intellectual property assets. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like ours. Even if we believe that intellectual property related claims brought by such individuals are without merit, defending against such claims is time-consuming and expensive and could result in the diversion of the time and attention of our management and employees. Claims of intellectual property infringement also might require us to redesign affected services, enter into costly settlement or license agreements, pay costly damage awards, change our brands, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our services or using certain of our brands. Even if we have an agreement for indemnification against such costs, the indemnifying party, if any in such circumstances, may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted.
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In a dynamic industry like ours, the ability to attract, recruit, develop and retain key personnel and qualified employees is critical to our success and growth. If we are not able to do so, our business, financial condition and results of operations may be adversely affected.
We are dependent upon the ability and experience of several key personnel who have substantial experience with our operations and in the markets in which we offer our products and services. Many of our key personnel have worked for us for a significant amount of time or were recruited by us specifically due to their industry experience. It is possible that the loss of the services of one or a combination of our senior executives or key managers could have a negative effect on us. On November 13, 2024, the Central Bank enacted Resolution No. 432 that establishes minimum standards for management compensation policies in payment institutions, in line with FSB (Financial Stability Board) Principles for Sound Compensation Practices and their implementation standards. In a similar manner, CMN Resolution No. 5,177, enacted in September 2024, extended to SCDs management compensation standards already applicable to other financial institutions (such as Stone SCFI).
Furthermore, in order for us to successfully compete and grow, we must attract, recruit, develop and retain the necessary personnel who can provide the needed expertise across the entire spectrum of our intellectual capital needs. We also must develop our personnel to provide succession plans for our existing key personnel in order to be capable of maintaining continuity in the midst of the inevitable unpredictability of human capital. However, the market for qualified personnel is competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors. For instance, our Stone Agents are highly trained and, accordingly, we may face challenges in recruiting and retaining such qualified personnel. Our efforts to retain and develop personnel may also result in significant additional expenses, which could adversely affect our profitability. We cannot assure you that qualified employees will continue to be employed or that we will be able to attract and retain qualified personnel in the future. Failure to retain or attract key personnel could have a material adverse effect on our business, financial condition and results of operations.
We may identify material weaknesses in our internal control over financial reporting and, if we fail to maintain effective internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.
We cannot provide assurance that significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future. If we fail to maintain the adequacy of our internal control over financial reporting, as the laws, regulations and policies standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to maintain an effective internal control environment, we could suffer material misstatements in our financial statements, fail to meet our reporting obligations or fail to prevent fraud, which would likely cause investors to lose confidence in our reported financial information. This could, in turn, limit our access to capital markets and harm our results of operations. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from Nasdaq, regulatory investigations and civil or criminal sanctions.
Degradation of the quality of the products and services we offer, including support services, could adversely affect our ability to attract and retain clients and partners and client attrition or a decline in our clients’ growth rate could cause our revenues to decline.
We experience churning in our client base resulting from several factors, including but not limited to business closures, transfers of clients’ accounts and credit products or a reduction in same-store sales. We may not be able to accurately predict the level of churn in the future and our revenues could decline as a result of higher-than-expected churn, which could have a material adverse effect on our business, financial condition and results of operations.
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Our clients expect a consistent level of quality in the provision of our products and services. The support services that we provide are also a key element of the value proposition to our clients. If the reliability or functionality of our products and services is compromised or if the quality of those products or services is otherwise degraded, or if we fail to continue to provide a high level of support, we could see an increase in our client churn and find it harder to attract new clients and partners.
Our growth to date has been partially driven by the growth of our clients’ businesses and the resulting growth in usage of our products and services, mainly driven by TPV and credit disbursements. Should the rate of growth of our clients’ business slow or decline, generated by macroeconomic or industry factors, this could have an adverse effect on volumes processed and on the usage of our products and services, therefore leading to an adverse effect on our results of operations. If we are unable to scale our support functions to address our growth, the quality of our support may decrease, which could adversely affect our ability to attract and retain clients and partners.
We are dependent on a few manufacturers for a substantial amount of our POS devices. We are at risk of shortage, price increases, changes, delay or discontinuation of key components from our POS device manufacturers, which could disrupt and harm our business.
Our acquiring business is dependent on a few manufacturers for a substantial amount of our POS devices. We are constrained by their manufacturing capabilities and pricing as well as general counterparty risk. We may face production delays or escalating costs if they are unable to manufacture enough products at an affordable cost. Further, we could face production delays if it becomes necessary to replace the existing substantial suppliers with more alternative suppliers.
We may also be subject to product recalls or other quality-related actions if such devices, or other products supplied by us, are believed to cause injury or illness, or if such products are defective or fail to meet our quality control standards or standards established by applicable law. If our POS suppliers are unable or unwilling to recall products and fail to meet applicable quality standards, we may be required to recall those products at a substantial cost to us. Recalls and government, customer or consumer concerns about product safety could harm our reputation, brands and relationships with clients, lead to increased costs, loss of revenues (including revenues from equipment rentals and/or decreased transaction volumes), and/or loss of merchants, any of which could have a material adverse effect on our business, results of operations and financial condition.
Additionally, agreements for the components used to manufacture our POS devices are entered into directly by the manufacturer of our POS devices and we do not have agreements with these suppliers. Some of the key components used to manufacture our POS devices, such as the chip, pin reader and battery, come from limited sources of supply in limited countries in Asia. In addition, the geopolitical tensions and risks involving these countries, in particular, Taiwan and China, have been increasing in the last years. The policies and mitigators in place to contain the impacts of potential geopolitical crisis may fail. Due to the reliance of our POS manufacturers on these components, we are subject to the risk of shortages and long lead times in the supply of certain products. If our manufacturers cannot find alternative sources of supply, we could be subject to components shortages or delays or other problems in product assembly. In addition, various sources of supply-chain risk, including strikes or shutdowns, or loss of or damage to our products while they are in transit or storage, could limit the supply of our POS devices.
The materialization of the risks above would harm our ability to provide our POS devices or other services to our merchants on a timely basis. This could damage our relationship with our clients, prevent us from acquiring new clients, and harm our business.
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Our operating results are subject to seasonal fluctuations, which could result in variations in our quarterly profit.
We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues as a result of consumer spending patterns. Historically, our revenues have been strongest during the last quarter of the year as a result of higher sales during the Brazilian holiday season. This is due to the increase in the number and amount of electronic payment transactions related to seasonal retail events. Adverse events that occur during these months could have a disproportionate effect on our results of operations for the entire fiscal year. As a result of quarterly fluctuations caused by these and other factors, comparisons of our operating results across different fiscal quarters may not be accurate indicators of our future performance.
Fraud activities could have a material adverse effect on our business, reputation, financial condition, and results of operations.
The highly automated nature of, and liquidity offered by our products and services make us a target for illegal or improper uses, including fraudulent or illegal sales of goods or services, money laundering and terrorist financing. These types of illegitimate, as well as unlawful, transactions can also expose us to governmental and regulatory sanctions, including outside of Brazil (e.g., U.S. anti-money laundering and economic sanctions violations). In configuring our products and services, we face an inherent trade-off between security and client convenience.
Frauds may occur in all the different financial services segments we operate in. We may be subject to potential liability for fraudulent electronic payment transactions or credits initiated by merchants or others, as well as by clients using our credit or digital banking solutions. In acquiring, merchant fraud includes when a merchant or other party knowingly uses stolen or counterfeit credit, debit or prepaid card, card number, or other credentials to record a false sales transaction, processes an invalid card, or intentionally fails to deliver the merchandise or services sold in an otherwise valid transaction. Payment schemes may identify merchants as questionable or potentially fraudulent through monitoring and audit processes, impose financial penalties on the acquirer and, in certain cases, shift liability from the card issuer to the acquirer. Because we are reducing the period between the card transaction and the receivables anticipation to minutes in some products, the fraud risk tends to increase despite our efforts to contain it. In credit, a common fraud in working capital loans involves using falsification of balance sheets and income statements to inflate actual revenue and hide liabilities to create the illusion of robust financial health, securing higher credit limits. In banking, identity thieves and those committing fraud using bank account numbers may cash out our client balance. In addition, they may also cash out the proceeds from our credit products.
Additionally, we must consider potential liabilities related to privacy and data protection, particularly in cases where personal information is compromised due to fraudulent activities. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. It is possible that incidents of fraud could increase in the future, and our failure to catch such incidents may result in sanctions and/or fines from regulators, lawsuits and the degradation of our reputation. Failure to effectively manage risk and prevent fraud would increase our Chargeback and credit liabilities, default rates on our credit solutions, among others, and subject us to potential fines by regulators. Increases in fraudulent activities using our products and services could have a material adverse effect on our business, reputation as a financial services provider, financial condition, and results of operations.
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We partially rely on Card Issuers or payment schemes to process our transactions. If we fail to comply with the applicable requirements of Visa, Mastercard or other payment schemes, those payment schemes could seek to fine us, suspend us or terminate our registrations, which could have a material adverse effect on our business, financial condition or results of operations.
We rely on Card Issuers and payment schemes to enable card acceptance and, in order to provide this service to our clients, we must pay fees to the payment schemes and Card Issuers, according to the applicable fees defined by the payment schemes regulation. A significant source of our revenue comes from processing transactions through Visa, Mastercard and other payment schemes. The payment schemes routinely update and modify their requirements and may increase or enforce new fees that can be charged by different billing methods, including fees per transaction by using one of their cards. Those changes in the requirements, including changes to risk management and collateral requirements, may impact our ongoing cost of doing business and, in some circumstances, we may not be able to pass through such costs to our clients or associated participants.
Furthermore, if we do not comply with the payment scheme requirements (e.g., their rules), the payment schemes could seek to fine us, suspend us or terminate our registrations that allow us to process transactions on their schemes. On occasion, we have received notices of noncompliance and fines, which have been typically related to transactional or messaging requisites, as well as excessive Chargebacks by a merchant or data security failures on the part of a merchant. If we are unable to recover amounts relating to fines or pass through the costs to our merchants or other associated participants, we would experience a financial loss. The termination of our registration due to failure to comply with the applicable requirements of Visa, Mastercard or other payment schemes, or any changes in the payment scheme rules that would impair our registration, could require us to stop allowing our clients to accept Visa, Mastercard or other payment schemes, which could have a material adverse effect on our business, financial condition and results of operations.
Financial Risks
Our financing needs could adversely affect our financial flexibility and our competitive position, and we may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.
We fund our operations through equity, sale of credit card receivables to third parties (such as commercial banks and investment funds), bank credit facilities, client deposits and financing arrangements. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations.
In the future, our inability to either refinance our debt or to maintain and expand our asset sales programs could have important consequences and significantly impact our business. For example, it could make it more difficult for us to satisfy our operational and financial obligations; respond to unforeseen circumstances; increase our vulnerability to adverse changes in general economic, industry and competitive conditions; require us to dedicate a substantial portion of our cash flow from operations to make payments to debt holders, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; limit our ability to make material acquisitions or take advantage of business opportunities that may arise; expose us to fluctuations in interest rates, to the extent our borrowings bear variable rates of interest; and affect our prepayment and credit business size and growth.
Any debt financing obtained by us could also include restrictive covenants relating to our capital-raising activities and other financial and operational matters. Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under our credit facilities, debentures, bonds and any future financing agreements into which we may enter. If not waived, defaults could cause our outstanding indebtedness under our credit facilities and any future financing agreements that we may enter into under these terms to become immediately due and payable.
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If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. See “Item 5. Operating and Financial Review and Prospects”.
We face risks relating to liquidity of our capital resources.
Liquidity risk, as we understand it, is the risk that we will not have sufficient financial resources to meet our obligations by the respective maturity dates or that we will honor such obligations at an excessive cost or that we will not have funding at a volume and cost appropriate to meet the prepayment and credit products request by our customers. This risk is inherent in our activities.
We have increasingly relied on retail funding from both our clients and retail investors accessed via third-party distribution channels to fund our business activities, such as prepayment of receivables and credit. The liquidity risk that we face has increased and will increase in the future because we expect to scale the retail funding. In this context, the liquidity risk arises from the potential maturity mismatch, for example, between our investments in which our clients’ deposit resources are allocated and the immediate liquidity of our clients’ deposit accounts.
Our capacity and cost of funding may be impacted by a number of factors, such as changes in market conditions (e.g., in interest rates), credit supply, regulatory changes, systemic shocks in the financial sector, and changes in the market’s perception of us, among others.
In scenarios where access to funding is scarce and/or becomes too expensive, and the access to capital markets is either not possible or is limited, we may find ourselves obliged to settle assets not compromised and/or potentially devalued so that we will be able to meet our obligations. If the market liquidity is reduced, the demand pressure may have a negative impact on prices, since natural buyers may not be immediately available. Should this happen, we may have a significant negative goodwill on assets, which will impact our results and financial position. The persistence or worsening of such adverse market conditions or rises in basic interest rates may have a material adverse impact on our capacity to access capital markets and on our cost of funding.
Increases in interest rates may harm our business.
Processing consumer transactions made using credit cards, as well as providing for the prepayment of our clients’ receivables when consumers make credit card purchases in installments, both make up a significant portion of our activities. If Brazilian interest rates increase, consumers may choose to make fewer purchases using credit cards, and fewer merchants may decide to use our prepayment and credit solutions. In addition, rising benchmark rates of either CDI or credit spreads may materially impact our results if we are not able to fully pass such increases to our clients. Furthermore, we may lose clients because of increasing prices.
In addition, we have funded our operations in part through financings that have variable interest rates, whereas we charge most merchants a fixed fee for the prepayment of our clients’ receivables. The mismatches of these operations generate risks. As of December 31, 2025, we had R$17.4 billion in financial liabilities (except leases), including obligations to FIDC quota holders, bank borrowings, bonds, debentures, financial bills and commercial papers, institutional deposits and other financial liabilities, subject to variable interest and return rates, compared to R$12.6 billion as of December 31, 2024. We also sell receivables to third parties on a non-recourse basis, which also have variable interest rates. Accordingly, a cost or maturity mismatch between the funds raised by us and the funds made available to our clients may materially adversely affect our liquidity, financial condition and results of operations.
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For example, on March 17, 2021, the Central Bank began to rapidly raise the SELIC rate, first to 2.75% and then by the end of the year to 9.25% on December 8, 2021. In 2022, the Central Bank continued to raise the rate, reaching a peak of 13.75% on August 3, 2022, where it remained stable. On August 2, 2023, the Central Bank reversed this trend by lowering the SELIC rate to 13.25%, and continued a pattern of reductions ultimately reducing it to 10.50% on May 8, 2024. However, on September 18, 2024, the Central Bank began to increase rates again, increasing the SELIC rate up to a record 15.0% on June 18, 2025. The Central Bank has since eased its approach by decreasing the SELIC rate down to 14.75%, the rate at which it stands as of the date of this annual report.
We are exposed to fluctuations in foreign currency exchange rates.
The Brazilian real is our functional currency. We have foreign exchange risk on any of our other assets and liabilities denominated in currencies or with pricing linked to currencies other than Brazilian real, including certain contract assets. Our currency is volatile and has fluctuated sharply against the U.S. dollar and other strong currencies in the past. The Brazilian government has implemented various economic plans and used several exchange rate regimes, including sudden depreciation, periodic mini-depreciation, floating exchange rate market systems, exchange controls and dual exchange rate markets. It is generally accepted that the current exchange rate regime is a managed floating regime. We cannot predict whether the Central Bank will intervene in the exchange rate market and when and if it will change the exchange rate regime, which may harm our business and results of operations.
Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as our business, results of operations and profitability.
A devaluation of the real relative to the U.S. dollar may create additional inflationary pressures in Brazil, decrease consumer spending, reduce economic growth, and generally restrict access to the international capital markets. It would also reduce the U.S. dollar value of our results of operations. We and certain of our suppliers purchase goods and services from countries outside of Brazil, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of goods and services that we purchase. On the other hand, appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts and balance of payments, as well as weaken the growth of the gross domestic product generated by exports. We hold certain funds in non-Brazilian real currencies and will continue to do so in the future. Accordingly, our financial results are affected by the translation of these non-real currencies into reais. In addition, to the extent that we need to convert future financing proceeds into Brazilian reais for our operations, any appreciation of the Brazilian real against the relevant foreign currencies would materially reduce the Brazilian real amounts we would receive from the conversion.
The exchange rate between the U.S. dollar and the Brazilian real has experienced significant fluctuations in recent years. As of December 31, 2022, the real/U.S. dollar exchange rate was R$5.22, reflecting an appreciation of 7.0% in the real from December 31, 2021. The real/U.S. dollar exchange rate reported by the Central Bank was R$4.84 per US$1.00 on December 31, 2023, which reflected a 7.8% appreciation in the real against the U.S. dollar during 2023. However, the real depreciated throughout 2024, with the real/U.S. dollar exchange rate reported by the Central Bank R$6.19 per US$1.00 on December 31, 2024, which reflected a 21.8% depreciation in the real against the U.S. dollar during 2024. The real then once again appreciated by 12.5% during the course of 2025, with the real/U.S. dollar exchange rate being reported by the Central Bank as R$5.50 per US$1.00 on December 31, 2025. There can be no assurance that the devaluation or appreciation of the real against the dollar and other currencies will not have an adverse effect on our activities.
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We may not be able to effectively manage credit risk, and our expected credit loss (“ECL”) allowance may be insufficient to cover actual losses, which could have a material adverse effect on our results of operations and financial condition.
We are exposed to credit risk from credit provided to our clients, suppliers, and counterparties and credit Card Issuers. Clients may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. General economic factors, such as the increasing levels of inflation, unemployment and interest rates, may result in greater delinquencies that lead to greater credit losses. A client’s ability and willingness to repay us can be negatively impacted not only by economic, market, political and social conditions but by a customer’s other payment obligations and increasing leverage can result in a higher risk that customers will default or become delinquent in their obligations to us. As of December 31, 2025, our credit portfolio amounted to R$2,836 million with provisions for expected credit losses totaling R$389.7 million, compared with a credit portfolio of R$1,207.6 million and expected credit losses of R$144.5 as of December 31, 2024. Also, the concentration of our clients by geography and economic sector may increase our risk.
We mainly rely on the client’s creditworthiness and their ability to generate receivables for repayment of the credit provided by us in some products. Our ability to assess creditworthiness may be impaired if the criteria or models we use to manage our credit risk prove to be inaccurate in predicting future losses, which could cause our losses to rise and have a negative impact on our results of operations. Further, our pricing strategies may not offset the negative impact on profitability caused by increases in delinquencies and losses. Thus, any material increases in delinquencies and losses beyond our current estimates could have a material adverse impact on us.
We face counterparty risk from the providers we engage for financial contracts for hedging, investments and committed funding. Credit Card Issuers are another source of credit risk. If a Card Issuer defaults on the payment scheme and this payment scheme does not pay us the defaulted amount, we will suffer a loss.
Rising delinquencies and rising rates of bankruptcy are often precursors of future write-offs and may require us to increase our reserve for credit losses. Although we regularly review our credit exposure to specific clients, counterparties, Card Issuers and to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to foresee or detect, such as fraud. In addition, our ability to manage credit risk may be adversely affected by legal or regulatory changes, such as restrictions on collections or changes in bankruptcy laws.
In addition, our allowance for expected credit losses may prove insufficient to cover actual losses, even where we identify deterioration in credit quality. Determining the appropriate level of expected credit losses requires significant judgment and depends on assumptions regarding historical loss experience, borrower behavior, portfolio composition and forward-looking macroeconomic scenarios. These assumptions may prove inaccurate, particularly in periods of economic volatility or where abrupt changes in the Brazilian economic environment are not fully captured by our models on a timely basis. In addition, as our credit portfolio grows, the absolute amount of non-performing loans and charge offs may increase, and recently originated loans may perform worse than expected. Because our credit portfolio is relatively recent, the historical data available to calibrate and validate our models under stress conditions is more limited, and management overlays or other qualitative adjustments may not fully address model limitations in novel credit environments. If actual credit losses exceed our expected credit losses allowance, we may be required to record additional provisions, which could have a material adverse effect on our results of operations and financial condition.
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We incur Chargeback and refund liability when our merchants refuse to or cannot reimburse Chargebacks and refunds resolved in favor of their customers. Any increase in Chargebacks and refunds not paid by our merchants may adversely affect our business, financial condition or results of operations.
We are currently, and will continue to be, exposed to financial risks associated with Chargebacks and refunds in connection with payment card fraud or relating to the goods or services provided by our sellers. If a billing dispute between a Cardholder and a merchant is not resolved in favor of the merchant, including in situations in which the merchant is engaged in fraud, the transaction is typically “charged back” to the merchant and the purchase price is credited or otherwise refunded to the Cardholder. If we are unable to collect Chargeback or refunds from the merchant’s account, or if the merchant refuses to or is unable to reimburse us for a Chargeback or refunds due to closure, bankruptcy, or other reasons, we may bear the loss for the amounts paid to the Cardholder.
Our financial results would be adversely affected to the extent these merchants do not fully reimburse us for the related Chargebacks. In addition, our exposure to these potential losses from Chargebacks increases to the extent that we have provided prepayment solutions to such merchants, as the full amount of the payment is provided upfront rather than in installments. We do not collect and maintain reserves from our merchants to cover these potential losses, and for customer relations purposes we sometimes decline to seek reimbursement for certain Chargebacks. Historically, Chargebacks occur more frequently in card not present transactions than in card present transactions, and more frequently for goods than for services. In addition, the risk of Chargebacks is typically greater with those of our merchants that promise future delivery of goods and services, which we allow on our service. If we are unable to maintain our losses from Chargebacks at acceptable levels, the payment schemes could fine us, increase our transaction fees, or terminate our ability to process payment cards. Any increase in our transaction fees could damage our business, and if we were unable to accept payment cards, our business would be materially and adversely affected.
Our balance sheet includes significant amounts of intangible assets. The impairment of a significant portion of these assets would negatively affect our business, financial condition and results of operations.
As of December 31, 2025, our balance sheet includes significant intangible assets that amount to R$1,986.9 million. These assets consist primarily of identified intangible assets and goodwill associated with our acquisitions. We also expect to engage in additional acquisitions, which may result in our recognition of additional intangible assets. Under current accounting standards, we are required to amortize certain intangible assets over the useful life of the asset, while certain other intangible assets are not amortized. On at least an annual basis, we assess whether there have been impairments in the carrying value of certain intangible assets. If the carrying value of the asset is determined to be impaired, then it is written down to fair value by a charge to operating earnings. An impairment of a significant portion of intangible assets could have a material adverse effect on our business, financial condition and results of operations. As a result of our annual impairment test as of October 31, 2025, an impairment loss of R$158.0 million was recognized for the Company’s Cash Generating Unit (“CGU”) 2 – Software, since the estimated recoverable amount of this cash generating unit was lower than the net book value. Similarly, as a result of our annual impairment test as of October 31, 2024, an impairment loss of R$3,558.0 million was recognized for CGU 2 – Software, driven by a reduction in the estimated recoverable amount of this cash generating unit below its net book value, following a strategic review of the Software segment and a reassessment of the achievable synergies with the Financial Services segment. For further information refer to Note 11.4 from our Audited Consolidated Financial Statements.
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Risks Relating to Brazil
We are subject to macroeconomic uncertainty, fiscal and political instability in Brazil. Those factors may harm the business cycles and credit risk of our clients and issuing banks and volatility in the overall level of consumer, business and government spending, which could negatively impact our business, financial condition and results of operations.
We are exposed to general economic conditions that affect consumer spending and changes in consumer purchasing habits in Brazil. A deterioration in general economic conditions, including a rise in unemployment rates or increase in interest rates in Brazil, may harm us by reducing the number or average purchase amount of transactions made using electronic payments, resulting in a decrease in our revenue. In addition, a recessionary economic environment could affect our merchants through higher rates of insolvency and bankruptcy. This could directly expose us to higher default rates within our credit portfolio. As of December 31, 2025, our credit portfolio was R$2,836.3 million, with recorded provisions for expected credit losses of R$389.7 million (compared with a portfolio of R$1,206.6 million and provisions for expected credit losses of R$144.5 million as of December 31, 2024). Beyond direct credit defaults, our merchants are liable for any charges properly reversed by the Card Issuer on behalf of the Cardholder. Our associated participants are also liable for any fines, or penalties, that may be assessed by any payment schemes. If we are not able to collect such amounts from the associated participants, due to insolvency, bankruptcy or any other reason, we may be liable for any such charges. Furthermore, in the event of a closure of a merchant, we are unlikely to receive our fees for any services rendered to that merchant in its final months of operation, including subscription revenue owed to us from such merchant’s equipment rental or software obligations. In turn, we also face a default risk from issuing banks that are counterparty to our receivables pursuant to our card payment arrangements. Accordingly, a default by an issuing bank, due to insolvency, bankruptcy, intervention, operational error or otherwise could negatively impact our cash flows as we are required to make payments to merchants independently of the issuing banks’ payments owed to us. As of December 31, 2025, we recorded estimated credit losses arising from defaults of issuing banks of R$76.9 million relating to estimated losses on such doubtful accounts, compared to R$60.9 million as of December 31, 2024.
A negative economic environment can also affect the financial health of sub-acquirers that operate with us. In the case we pay the sub-acquirers, and it does not pay its merchants for any reason, we must pay these merchants.
Economic uncertainty and political instability in Brazil may harm us.
Brazil’s political environment has historically influenced and continues to influence the performance of the country’s economy. Political crises have affected and continue to affect the confidence of investors and the general public, which have historically resulted in economic deceleration and heightened volatility in the securities offered by companies with significant operations in Brazil. Since 1990, two presidents of Brazil have been impeached: Fernando Collor and Dilma Rousseff. Michel Temer, the president of Brazil between August 31, 2016, to January 1, 2019, was subject to, but successfully defended impeachment processes opened in the Brazilian Congress.
Luiz Inácio Lula da Silva, “Lula,” was elected president in October 2022, for a four-year term starting in January 2023. In Lula’s first days in office, certain groups formed by extreme supporters of the defeated candidate (former president Jair Bolsonaro) performed acts of civil unrest and stormed Brazil’s Supreme Court, Congress and Presidency buildings, conducting acts of violence and destruction. Although these events were extreme and concerning, Brazilian institutions remained functioning and the democratic transition of power was preserved. However, Brazil remains highly polarized, and former president Bolsonaro has since been declared ineligible to run for office until 2030 and, in 2025, was convicted and sentenced to prison for his role in an attempted coup, developments that have contributed to ongoing political tensions and sporadic episodes of unrest.
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A failure by Lula’s administration to implement necessary economic and structural reforms may result in diminished confidence in the Brazilian government’s budgetary condition and fiscal stance, which could result in downgrades of Brazil’s sovereign foreign credit rating by credit rating agencies, depreciation of the real and an increase in inflation and interest rates. This scenario could adversely affect us.
The political environment in Brazil has and is continuing to affect the confidence of investors and the general public, which has historically resulted in economic deceleration and heightened volatility in macroeconomic prices and in the securities offered by companies with significant operations in Brazil. As Brazil approaches general elections scheduled for October 2026, uncertainty regarding the outcome of the elections and future economic and regulatory policies may further increase volatility in the market price of securities issued by Brazilian companies, including our Class A common shares, which may adversely affect our business.
The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as Brazil’s political, regulatory, legal and economic conditions, could harm us.
The Brazilian government frequently exercises significant influence over the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government’s actions may involve, among other measures, monetary, diplomatic, fiscal, credit, energy, and tariff policies; wage and price controls; foreign exchange rate, international trading, and capital controls; blocking access to bank accounts; domestic capital and lending markets; labor and social security regulations; currency devaluations; and capital controls. We have no control over and cannot predict what measures or policies the Brazilian government may take in the future and how these can impact us and our business. We and the market price of our securities may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation:
•Expansion or contraction of the Brazilian economy, as measured by gross domestic product (“GDP”), rates.
•Interest rates and monetary policies.
•Exchange rates and currency fluctuations.
•Inflation.
•Liquidity of the domestic capital and lending markets.
•Import and export controls.
•Exchange controls and restrictions on remittances abroad.
•Modifications to laws and regulations according to political, social and economic interests.
•Fiscal policy and changes in tax laws.
•Economic, political and social instability.
•Labor and social security regulations.
•Energy and water shortages and rationing.
•Other political, diplomatic, social and economic developments in or affecting Brazil.
Uncertainty over whether the Brazilian government will implement reforms or changes in policy or regulation in the future may affect economic performance and contribute to economic uncertainty in Brazil. We cannot predict what measures the Brazilian government will take in the face of mounting macroeconomic pressures or otherwise.
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Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future could harm our business.
In the past, Brazil has experienced extremely high rates of inflation. Inflation and some of the measures taken by the Brazilian government in an attempt to curb inflation have had significant negative effects on the Brazilian economy generally. Inflation and policies adopted to curb inflationary pressures and uncertainties regarding possible future government intervention have contributed to economic uncertainty and heightened volatility in the Brazilian economy and capital markets.
According to the IPCA, Brazilian inflation rates were 4.3%, 4.8% and 4.6% in 2025, 2024 and 2023, respectively. Inflation can increase our costs and expenses, and we may not be able to transfer such costs to customers, reducing our profit and net profit margins. In addition, high inflation rates generally increase Brazilian interest rates and, therefore, the debt service of the portion in reais of our debt, which is indexed to floating rates, may also increase. With this, net profit may decrease. Inflation and its effects related to Brazilian interest rates could, in addition, reduce liquidity in the Brazilian capital and financial markets, which would affect the ability to refinance our indebtedness in those markets.
Some of the measures taken by the Brazilian government to curb inflation have had significant negative effects on the Brazilian economy generally and capital markets. In the past, the Brazilian government’s interventions included the maintenance of a restrictive monetary policy with high interest rates that restricted credit availability and reduced economic growth, causing volatility in interest rates.
Brazil may experience high levels of inflation in the future and inflationary pressures may lead to the Brazilian government intervening in the economy and introducing policies that could harm our business. Future measures by the Brazilian government, including reductions in interest rates, intervention in the foreign exchange market and actions to adjust or fix the value of the real, may trigger increases in inflation, adversely affecting the overall performance of the Brazilian economy.
Inflation and the Brazilian government’s measures to combat inflation have had, and may continue to have, significant effects on the Brazilian economy and on our business. Strict monetary policies, with high interest rates and high requirements for compulsory deposits, can restrict Brazil’s growth and the availability of credit. On the other hand, softer government and central bank policies and declining interest rates may trigger increases in inflation and, consequently, the volatility of economic growth and the need for sudden and significant increases in interest rates.
Inflation, measures to contain inflation and speculation about potential measures can also contribute to significant uncertainty in relation to the Brazilian economy and weaken investor confidence, which can affect our ability to access financing, including access to equity of international capital markets.
Developments and the perception of risks in other countries, including other emerging markets, the United States and Europe, may harm the Brazilian economy and the price of securities issued by companies operating in Brazil, including the price of our Class A common shares.
The market for securities of companies operating in Brazil, including us, is influenced by economic and market conditions in Brazil and, to varying degrees, market conditions in other Latin American and emerging markets, as well as the United States, Europe and other countries and regions. To the extent the conditions of the global markets or economy deteriorate, the business of companies operating in Brazil may be harmed. Developments or economic conditions in other emerging market countries have at times significantly affected the availability of credit to companies with significant operations in Brazil and resulted in considerable outflows of funds from Brazil, decreasing the amount of foreign investments in Brazil.
The decrease in foreign investment in Brazil may adversely affect growth and liquidity in the Brazilian economy, which, in turn, may have a negative impact on us. The interruption or volatility in global financial markets may further increase the negative effects on the economic and financial scenario in Brazil, which may have a material adverse effect on us.
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Besides, crises and political instability in other emerging market countries (such as in Southeast Asia, Russia and Argentina), the United States, Europe or other countries have historically caused volatility in the Brazilian stock market and could decrease investor demand for securities offered by companies operating in Brazil, such as our common shares. As an example, global geopolitical developments have continued to contribute to uncertainty in international economic conditions, financial markets and trade dynamics. More recently, renewed hostilities involving Israel, Iran and the United States, together with continued instability in Gaza and related disruptions affecting commercial shipping routes and regional security dynamics, have further heightened uncertainty in the Middle East. These developments have contributed to volatility in energy prices, shipping and insurance costs, sanctions and trade measures, and broader diplomatic and economic uncertainty in the region. Additionally, policy changes, monetary policy and/or implementation of protectionist policies in the United States and other countries material for the international economic landscape may directly or indirectly impact the economy of the countries where we operate, generating several risks, especially exchange rate, interest rate and increase in the price of commodities, and, consequently, affecting our results.
We cannot guarantee that the United States government will maintain policies aimed at promoting macroeconomic stability, fiscal discipline and domestic and foreign investment, which can have a significant adverse effect on the financial and securities markets in Brazil, on companies operating in Brazil, including us, and in the securities of Brazilian issuers, such as our Brazilian subsidiaries. The political scenario in the United States and its relationship with China and the rest of the world, new elected presidents in other countries in the Latin American region and uncertainties in Europe, as well as potential crises and forms of political instability arising therefrom or any other as of yet unforeseen development, may harm our business and the price of our common shares.
We may be materially and adversely affected by protectionist trade policies and other measures adopted by the current U.S. administration, including the imposition of additional tariffs on Brazilian products and services.
Donald Trump was elected for a second term as President of the United States on November 5, 2024, and took office in January 2025. We have no control over and cannot predict the effect of his administration or policies. Since returning to office, President Trump’s administration has reinforced protectionist economic policies, including the expansion of tariffs on a range of goods from key trading partners such as China, the European Union and Brazil, including a baseline 10% tariff on most imports and higher, “reciprocal” country-and sector-specific rates. In relation to Brazil, for example, the U.S. government imposed a 50% tariff on certain Brazilian imports, including industrial goods, commodities and agricultural products, which took effect, subject to certain exceptions, on August 6, 2025, citing concerns over alleged restrictions on freedom of speech and the political prosecution of former president Bolsonaro. These additional 50% tariffs were subsequently lifted in November 2025 although the 10% baseline tariffs remain in place. In February 2026, however, the U.S. Supreme Court held that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were beyond the President’s statutory authority, vacating significant components of the tariff regime and reinforcing that tariff-setting power resides with Congress. While the decision has limited the legal basis for the broad emergency tariffs originally imposed, legal and policy uncertainty remains as the U.S. administration has signaled intentions to pursue alternative statutory authorities to re-impose or adjust tariffs and may enact across-the-board levies under other provisions of U.S. trade law. President Trump has also publicly threatened further trade actions against Brazil and other BRICS countries based on their association with Russia and their efforts to reduce dependence on the U.S. dollar in international trade. Such measures may have a material adverse effect on both Brazil’s economy and the global economy. In addition, any additional tariffs or the development of a fully-fledged trade war could exacerbate economic tensions globally, disrupt global trade flows, add to economic uncertainty and have a material adverse effect on both Brazil’s economy and the global economy.
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Increased tariffs and the potential for further trade restrictions may lead to a slowdown in global trade and economic activity, with disproportionate effects on emerging markets like Brazil. Such developments could result in greater currency volatility, reduced foreign investment flows, higher inflation, and increased interest rates in affected jurisdictions, including Brazil, all of which can negatively impact credit availability, borrowing costs, and the demand for financial products and services. Given our operations in Brazil’s financial sector, these adverse macroeconomic impacts could result in lower demand for our financial products and increased funding costs. Additionally, any deterioration in U.S.-Brazil trade relations or regulatory shifts impacting cross-border capital flows could restrict our access to international funding sources or affect the value of assets and liabilities denominated in foreign currencies. As a result, ongoing or future policies implemented by the current U.S. administration may have a material adverse effect on our business, financial condition and results of operations.
Any further downgrading of Brazil’s credit rating could reduce the trading price of our Class A common shares.
We may be harmed by investors’ perceptions of risks related to Brazil’s sovereign debt credit rating. Rating agencies, such as Standard & Poor’s, Moody’s and Fitch, regularly evaluate Brazil and its sovereign ratings, which are based on several factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness metrics and the perspective of changes in any of these factors. Recently, the Brazilian political and economic scenario has shown high levels of volatility and instability, including fluctuations in GDP growth, significant fluctuations in the real against the U.S. dollar, increased unemployment and a reduction in expenditure levels and consumer confidence.
The three major rating agencies began to downgrade Brazil’s sovereign credit rating starting in September 2015, causing it to lose its investment-grade status. Despite recent upgrades, Brazil’s sovereign credit rating remains below investment grade. As of the most recent updates, Standard & Poor’s upgraded Brazil’s rating to BB with a stable outlook in December 2023; Moody’s affirmed Brazil’s rating at Ba1 but changed its outlook from positive to stable in May 2025; and Fitch affirmed Brazil’s rating at BB with a stable outlook in July 2024, following an upgrade from BB- in 2023. Consequently, our own credit rating is negatively impacted by Brazil’s below investment grade sovereign credit rating, which impacts negatively on our funding cost, especially in the international markets.
The full consequences of a credit rating downgrade are inherently uncertain, as they depend upon numerous dynamic, complex and inter-related factors and assumptions, including market conditions at the time of any downgrade. We cannot assure you that the rating agencies will maintain their current ratings or outlooks, and such changes could increase our funding costs and adversely affect our results of operations. Any further downgrade of Brazil’s sovereign credit ratings could heighten investors’ perception of risk and, as a result, cause the trading price of our Class A common shares to decline.
Brazilian foreign exchange controls and regulations could restrict conversions and remittances abroad of the dividend payments and other shareholder distributions paid in Brazil in reais arising from our Brazilian subsidiaries.
Brazilian law provides that whenever there is a serious imbalance in Brazil’s balance of payments or reasons to foresee such a serious imbalance, the Brazilian government may impose temporary restrictions on the remittance to foreign investors of the proceeds of their investments in Brazil. Such restrictions may hinder or prevent holders of shares of our Brazilian subsidiaries from converting distributions or the proceeds from any sale of such shares, as the case may be, into U.S. dollars and remitting such U.S. dollars abroad. Any reais so held will be subject to devaluation risk against the U.S. dollar.
In addition, the likelihood that the Brazilian government would impose such restrictions may be affected by the extent of Brazil’s foreign currency reserves, the availability of foreign currency in the foreign exchange markets on the date a payment is due and the size of Brazil’s debt service burden relative to the economy as a whole. We cannot assure you that the Central Bank will not modify its policies or that the Brazilian government will not institute restrictions or delays on cross-border remittances.
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Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on us.
Our performance depends on the overall health and growth of the Brazilian economy. In 2020, Brazilian GDP contracted by 3.3% as a result of the effects of the COVID-19 pandemic, followed by a growth of 4.8% in 2021, and increases of 3.0%, 2.9%, 3.4% and 2.3% in 2022, 2023, 2024 and 2025, respectively. Growth is limited by inadequate infrastructure, including potential energy shortages and deficient transportation, logistics and telecommunication sectors, general strikes, the lack of a qualified labor force, and the lack of private and public investments in these areas, which limit productivity and efficiency. Any of these factors could lead to labor market volatility and generally impact income, purchasing power and consumption levels, which could limit growth and ultimately have a material adverse effect on us.
Risks Relating to Our Class A Common Shares
We are a Cayman Islands exempted company with limited liability. The rights of our shareholders may be different from the rights of shareholders governed by the laws of U.S. jurisdictions and as a result, our shareholders may face difficulties in protecting their interests.
We are a Cayman Islands exempted company with limited liability. Our corporate affairs are governed by our Articles of Association and by the laws of the Cayman Islands. The rights of shareholders and the responsibilities of members of our Board of Directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions and are otherwise not as established as they are under statutes or judicial precedent in some jurisdictions in the United States. Therefore, you may have more difficulty protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the United States. See “Item 10. Additional Information—B. Memorandum and articles of association—Principal Differences between Cayman Islands and U.S. Corporate Law”.
While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court-sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a court sanctioned reorganization (by way of a scheme of arrangement). This may make it more difficult for you to assess the value of any consideration you may receive in such a merger or consolidation (by way of a scheme of arrangement) or to require that the acquirer gives you additional consideration if you believe the consideration offered is insufficient. However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a statutory merger or consolidation to apply to the Grand Court of the Cayman Islands, or the “Grand Court” for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed.
Shareholders of Cayman Islands exempted companies (such as us) have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Articles of Association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
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United States civil liabilities and certain judgments obtained against us by our shareholders may not be enforceable.
We are a Cayman Islands exempted company and substantially all our assets are located outside the United States. In addition, most of our directors and officers are Brazilian nationals and reside or are based in Brazil. A substantial portion of our assets and the assets of these persons are located in Brazil. As a result, it may be difficult to effect service of process upon us or these persons within the United States. A final conclusive judgment of a United States court for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if such judgment: (i) fulfills all formalities required for its enforceability under the laws of the place/jurisdiction where the foreign judgment was issued; (ii) is issued by a competent court and/or authority in the jurisdiction where it was awarded after proper service of process is made on the parties, in accordance with the applicable law, considering that service of process on individuals in Brazil must comply with the Brazilian applicable law, or after sufficient evidence of the parties’ absence has been given, as requested under the laws of the jurisdiction where the foreign judgment was entered; (iii) is not rendered in an action upon which Brazilian courts have exclusive jurisdiction; (iv) is final and binding and, therefore, not subject to appeal in the jurisdiction where it was issued; (v) does not conflict with a previous final and binding decision issued by a Brazilian on the case records of a lawsuit involving the same parties, cause of action and claim; (vi) is apostilled by the appropriate authority of the state rendering such foreign judgment, or is duly authenticated by the appropriate Brazilian consulate; (vii) is translated into Portuguese by a sworn translator in Brazil; and (viii) is not contrary to Brazilian national sovereignty, public policy or public morality. Therefore, it may be difficult to enforce in judgments obtained in U.S. courts based on the civil liability provisions of U.S. federal securities laws against us and our officers and directors who are not resident in the United States. In addition, Brazil does not have a treaty with the United States to facilitate or expedite the enforcement in Brazil of decisions issued by a state court in the United States, which shall necessarily be previously recognized by the Brazilian Superior Court of Justice in order to be effective in Brazil.
Further, it is unclear if original actions predicated on civil liabilities based solely upon U.S. federal securities laws are enforceable in courts outside the United States, including in the Cayman Islands and Brazil.
Courts of the Cayman Islands may not, in an original action in the Cayman Islands, recognize or enforce judgments of U.S. courts predicated upon the civil liability provisions of the securities laws of the United States or any state of the United States on the grounds that such provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final, for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and is not impeachable under Cayman Islands law for fraud, being in breach of public policy of the Cayman Islands or being contrary to natural justice. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere.
As a foreign private issuer we have different disclosure and other requirements than U.S. domestic registrants and we are permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. domestic registrants, including the requirement that a majority of an issuer’s directors consist of independent directors. This may afford less protection to holders of our Class A common shares.
As a foreign private issuer, we are subject to different disclosure and other requirements than domestic U.S. registrants. For example, as a foreign private issuer, in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we rely on exemptions from certain U.S. rules which permit us to follow Cayman Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
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We follow Cayman Islands laws and regulations that are applicable to Cayman Islands companies. However, Cayman Islands laws and regulations applicable to Cayman Islands companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above.
Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although we will be subject to Cayman Islands laws and regulations having substantially the same effect as Regulation Fair Disclosure. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Cayman Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.
Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. We currently prepare our financial statements in accordance with IFRS Accounting Standards. We will not be required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as our financial statements are prepared in accordance with the IFRS Accounting Standards. We are not required to comply with Regulation FD, which imposes restrictions on the selective disclosure of material information to shareholders. In addition, our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our securities.
We cannot predict if investors will find our Class A common shares less attractive because we will rely on these exemptions. If some investors find our Class A common shares less attractive as a result, there may be a less active trading market for our Class A common shares and our share price may be more volatile. See “Item 10. Additional Information—B. Memorandum and articles of association—Principal Differences between Cayman Islands and U.S. Corporate Law”.
Subject to certain requirements, as a foreign private issuer, we are permitted to follow home country practice in lieu of certain Nasdaq corporate governance rules, which include rules relating to board independence, independent director oversight of executive compensation, nomination of directors and other corporate governance matters, such as the requirement that we obtain shareholder approval prior to an issuance of securities (in certain circumstances) in connection with certain events, or being required that a majority of board members be independent, or to have independent director oversight of executive compensation, the nomination of directors and corporate governance matters. To the extent Cayman Islands law does not require us to adopt these corporate governance standards, we are permitted to and may decide to follow (or continue to follow) home country practice in lieu of the above requirements. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Principal Differences between Cayman Islands and U.S. Corporate Law—Corporate Governance”.
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We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses
In order to maintain our current status as a foreign private issuer, either (a) more than 50% of our outstanding voting securities must be either directly or indirectly owned of record by non-residents of the United States or (b) (i) a majority of our executive officers or directors may not be U.S. citizens or residents, (ii) more than 50% of our assets cannot be located in the United States and (iii) our business must be administered principally outside the United States. On June 4, 2025, the SEC published a concept release on FPI eligibility, seeking public comment regarding potential amendments to the FPI definition. There is currently no indication of any timing on any related proposed rulemaking. The release highlights various possible approaches to amending the FPI definition. If the SEC adopts rules amending the FPI definition to include requirements that we may not currently comply with, we may lose our status as a foreign private issuer. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.
The Cayman Islands Economic Substance Act may affect our operations.
The Cayman Islands has enacted the International Tax Co-operation (Economic Substance) Act (as revised), or the Cayman Economic Substance Act. We are required to comply with the Cayman Economic Substance Act. As we are a Cayman Islands exempted company, compliance obligations include filing annual notifications for us, which need to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent required under the Cayman Economic Substance Act. We may need to allocate additional resources and may have to make changes to our operations in order to comply with all requirements under the Cayman Economic Substance Act. Failure to satisfy these requirements may subject us to penalties under the Cayman Economic Substance Act.
There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A common shares.
U.S. shareholders of passive foreign investment companies are subject to potentially adverse U.S. federal income tax consequences. In general, a non-U.S. corporation is a passive foreign investment company (“PFIC”), for any taxable year in which: (i) 75% or more of its gross income consists of passive income; or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Cash is a passive asset for these purposes.
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The determination of whether we are, or will be, a PFIC for a taxable year depends on the application of complex U.S. federal income tax rules, which are subject to various interpretations. While the applicability of the PFIC rules to us is not clear in light of our evolving business activities and the lack of clarity with respect to certain aspects of the rules, based on the composition of our income and assets, including goodwill, we do not believe that we were a PFIC for our 2025 taxable year. Our PFIC status is a factual determination that is made on an annual basis. Because our PFIC status for any taxable year will depend on the manner in which we operate our business, the composition of our income and assets, including the relative growth of our income resulting from our credit activities and the payment processing services we provide, and the value of our assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year. In particular, we note that the sale of the Software Business as well as growth in our credit-related activities relative to our other business lines have increased the risk that we may be treated as a PFIC and, if such growth continues, may result in us being treated as a PFIC in future years. Uncertainty with respect to certain aspects of the PFIC rules and changes to these rules (including the finalization of proposed rules) may also affect our PFIC status. In addition, our PFIC status may depend, in part, on the average value of our goodwill and other intangible assets. Fluctuations in our market capitalization may affect our PFIC status if the value of our assets for purposes of the asset test, including the value of our goodwill and other intangibles, is determined by reference to our market capitalization from time to time (which has been, and may continue to be, volatile), rather than based on other methods.
If we are a PFIC with respect to our U.S. shareholders, U.S. holders would be subject to certain adverse U.S. federal income tax consequences as discussed under “Item 10. Additional Information—E. Taxation—Material U.S. Federal Income Tax Considerations for U.S. Holders”. Investors should consult their own tax advisors regarding all aspects of the application of the PFIC rules.
Judgments of Brazilian courts to enforce our obligations with respect to our Class A common shares may be payable only in reais.
Most of our assets are located in Brazil. If proceedings are brought in the courts of Brazil seeking to enforce our obligations to pay any amounts in respect of our Class A common shares, we may not be required to discharge our obligations in a currency other than the real. Under Brazilian exchange rate laws, an obligation in Brazil to pay amounts denominated in a currency other than the real may only be satisfied in Brazilian currency at the exchange rate, as determined by the Central Bank, in effect on the date the enforcement of the judgment in Brazil is obtained, and such amounts are then adjusted to reflect exchange rate variations through the effective payment date. The then-prevailing exchange rate may not fully compensate non-Brazilian investors for any claim arising out of or related to our obligations under the Class A common shares.
The disparity in the voting rights among the classes of our shares may have a potential adverse effect on the price of our Class A common shares, and may limit or preclude your ability to influence corporate matters. Furthermore, our dual-class capital structure means our shares may not be included in certain indices.
Our ordinary shares have a dual class structure. Each Class A common share will entitle its holder to one vote per share on all matters submitted to a vote of our shareholders. Each holder of our Class B common shares will be entitled to 10 votes per Class B common share so long as the voting power of Class B common shares is at least 10% of the aggregate voting power of our outstanding common shares on the record date for any general meeting of the shareholders. Because of the ten-to-one voting ratio between our Class B common shares and Class A common shares, the holders of our Class B common shares collectively possess a significant amount of voting power of our common shares.
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Future transfers by holders of Class B common shares will generally result in those shares converting to Class A common shares, subject to limited exceptions, such as certain transfers effected to permitted transferees or for estate planning or charitable purposes. The conversion of Class B common shares to Class A common shares will have the effect, over time, of increasing the relative voting power of those holders of Class B common shares who retain their shares in the long term. For a description of our dual class structure, see “Item 10. Additional Information—B. Memorandum and articles of association—Meetings of Shareholders—Voting Rights and Right to Demand a Poll”.
The difference in voting rights could adversely affect the value of our Class A common shares. For example, it could delay or defer a change of control, or investors and potential purchasers of our company may perceive the superior voting rights of the Class B common shares as valuable.
In addition, S&P Dow Jones and FTSE Russell’s eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, excludes companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices. Moreover, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of our common shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our common shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our common shares.
One of our founder shareholders holds a large amount of voting power over our common shares, and as a result has influence over certain of our activities and corporate decisions.
André Street controls directly and indirectly 2.33% of our Class A common shares and 100.00% of our Class B common shares as of March 31, 2026. Accordingly, André Street directly and indirectly controls 7.97% of our outstanding common shares and holds 39.45% of the combined voting power of our common shares. See ”Item 7. Major Shareholders and Related Party Transactions—Major Shareholders.”
As a result of this voting power held by entities affiliated with him, Mr. Street may have the ability to influence matters affecting, or submitted to a vote from our shareholders. Also, the rights granted pursuant to our articles of association and shareholders agreement mean that our founder shareholder is, among other things, able to control any transaction involving a merger with third-parties or change of control until he owns less than 15% of the total voting power of our common shares given their prior written approval will be required in order for us to proceed with such a transaction. See “Item 7. Major Shareholders and Related Party Transactions—Major shareholders—Shareholders Agreement”, “Item 10. Additional Information—B. Memorandum and articles of association—Share Capital” and “Item 7. Major Shareholders and Related Party Transactions—A. Major shareholders” for more information.
The interests of such shareholder may conflict with, or differ from, the interests of other holders of our shares. For example, he may inhibit change of control transactions that benefit other shareholders. He may also pursue acquisition opportunities for himself that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as such shareholder continues to own a substantial number of our common shares (in particular our Class B common shares), he will influence certain of our corporate decisions and together with other shareholders, he may be able to effect or inhibit changes in the control of our company.
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Sales of substantial amounts of our Class A common shares in the public market, or the perception that these sales may occur, could cause the market price of our Class A common shares to decline
Sales of substantial amounts of our Class A common shares in the public market, or the perception that these sales may occur, could cause the market price of our Class A common shares to decline.
Under our Articles of Association, we are authorized to issue up to 630,000,000 shares, of which 248,904,667 common shares are outstanding as of December 31, 2025 (comprised of 232,663,503 Class A common shares and 16,241,164 Class B common shares). We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares would have on the market price of our Class A common shares.
In addition, we have adopted the LTIP, under which we have the discretion to grant a broad range of equity-based awards to eligible participants. In May 2022, we also approved a new incentive plan pool, comprised of 19.2 million shares to be granted in the form of RSUs and PSUs under the LTIP. See “Item 6. Directors, Senior Management and Employees—B. Compensation—Long-Term Incentive Plans (LTIP)”. We have registered on a Form S-8 registration statement all common shares that we may issue under the LTIP. As a result, these can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates and the lock-up agreements described in “Item 10. Additional Information—B. Memorandum and articles of association”, and any other applicable restrictions. Sales of these shares in the public market, or the perception that those sales may occur, could cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions. Also, if a large number of our Class A common shares or securities convertible into our Class A common shares are sold in the public market after they become eligible for sale, the sales could reduce the trading price of our Class A common shares and impede our ability to raise future capital.
A decline in the market price of our Class A common shares could impair our ability to raise additional capital through the sale of our equity securities.
If securities or industry analysts publish inaccurate or unfavorable research, about our business, the price of our Class A common shares, our other securities (issued or sponsored by us) and our trading volume could decline.
The trading market for our Class A common shares and our other securities (issued or sponsored) will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our Class A common shares and our other securities (issued or sponsored) or publish inaccurate or unfavorable research about our business, the price of our Class A common shares and our other securities (issued or sponsored) would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our Class A common shares and our other securities (issued or sponsored) could decrease, which might cause the price of our Class A common shares and our other securities (issued or sponsored) and trading volume to decline.
ITEM 4. INFORMATION ON THE COMPANY
A.    History and development of the company
We are an exempted company with limited liability incorporated on March 11, 2014 under the laws of the Cayman Islands, with the legal name StoneCo Ltd. (formerly DLP Payments Holding Ltd.). Our registered office is located at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands and our office is located at Block 12D Parcel 33 and 95, 18 Forum Lane, Camana Bay, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our main operational hub is located in the city of São Paulo, state of São Paulo, Brazil, at Avenida Rebouças, No. 2880, Postal Code 05402-500. Our telephone number at this address is +55 (48) 9826-0095. For more information regarding our offices refer to “Item 4. Information on the Company—D. Property and Equipment”.
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Investors should contact us for any inquiries through the address and telephone number of our principal executive office and our investor relations team can be contacted at investors@stone.co. Our principal website is www.stone.co. The information contained in, or accessible through, our website is not incorporated by reference in, and should not be considered part of this annual report.
We are a leading provider of financial products and services that empower Brazilian merchants to conduct commerce seamlessly across multiple channels and help them grow their businesses mostly through our payments, banking and credit solutions, with the best service in the industry. With a focus on MSMBs, our goal is to transform their dreams into results.
We believe we were pioneers in challenging the status quo in Brazil, aiming to provide fairer-priced financial services to merchants. In 2017, we became the first non-banking entity to receive authorization from the Central Bank to operate as an Acquirer, through a payments institution license. In addition, we are one of the largest independent merchant Acquirers in Brazil and, according to ABECS data, were among the six largest players based on total card volume in 2025.
We started our journey by providing payment services to small and medium-sized businesses (“SMBs”) through a differentiated business model centered around our client’s needs. Once we believed we had developed the capabilities to serve this segment of the market through payments, we sought to strategically position ourselves to grow both by expanding our product offering to those clients, as well as by expanding into other client segments. Throughout our journey, we made each strategic choices with a targeted focus, serving as a steppingstone to broaden our reach, as described by the “Five Acts of our Evolution”, as detailed below.
Act one: Our beginning
We started Stone by serving SMBs with a very simple payments solution, at attractive prices and with a differentiated business model. Those merchants were often ignored or underserved by the industry at the time and we identified there was a specific need in the market and a large opportunity to address.
In this regard, we developed a strong client-centric culture that sought to delight our clients rather than simply provide them with a solution or service. We created a proprietary, go-to-market approach called the Stone Business Model, which enabled us to control the client experience and ensure that interactions were provided by our people or our technology. The Stone Business Model combines (1) an advanced, end-to-end, cloud-based technology platform; (2) a differentiated hyper-local and integrated distribution approach; and (3) a white-glove, on-demand customer service, as described below.
(1) Advanced, End-to-End, Cloud-Based Technology Platform—We designed our cloud-based technology platform to: (i) help our clients connect, get paid and grow their businesses, while meeting the complex and rapidly changing demands of omnichannel commerce; and (ii) overcome long-standing inefficiencies within the Brazilian payments market. Having a proprietary, cloud-based, end-to-end platform enabled us to develop, host and deploy our solutions very quickly.
(2) Differentiated Hyper-Local and Integrated Distribution—We developed our distribution solution to proactively reach and serve our clients more effectively. In particular, we developed Stone Hubs, which are local operations close to our clients that include an integrated team of sales, service, and operations support staff to reach small and medium-sized businesses locally and efficiently, and to build stronger relationships with them.
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(3) White-Glove, On-Demand Customer Service—We created our on-demand customer service team to support our clients quickly, conveniently, and with high-quality service designed to strengthen our customer relationships and improve their lifetime value with us. Our customer service approach combines: (i) a human connection, through which we seek to address our clients’ service needs in a single phone call using a qualified team of technically trained agents; (ii) proximity, through our Green Angels, team of local support personnel who can serve our clients in person within minutes or hours, instead of days or weeks; and (iii) technology, through a range of self-service tools and proprietary artificial intelligence, or AI, that help our clients manage their operations more conveniently and enable our agents to proactively address merchant’s needs, sometimes before they are even aware of an issue.
At the core of the Stone Business model is our Client Centric Culture. We have cultivated a culture that thrives on innovation, entrepreneurship, and a steadfast commitment to our mission, that we believe helps attract new talent, enables us to achieve our objectives, and provides us a key competitive advantage.
Through the Stone Business Model, we sought to disrupt the market, achieve scale and gain operating leverage. Our client base grew rapidly as we took share from the incumbents reaching more than 4.8 million clients as of December 31, 2025. Once we had established a foothold in the SMB segment with good fundamentals, we began to look at extending and expanding further.
Act two: Expansion into Micro Segment
We envisioned an opportunity to leverage our distribution capabilities and product platform to reach the micro-merchant segment with payments solutions, by developing a lighter version of Stone, which we called “Ton”. Ton’s value proposition is to provide digital-first distribution and client experience, at attractive prices to micro clients. We believe this strategy provided good unit economics to us and attractive offerings to our clients, and we were able to expand our addressable market and gain relevance in the micro-merchant space.
Act three: Expansion into Banking
Operating at scale in both Micro and SMB segments of the market meant we had a significant amount of payment volumes going through Stone platform with our two brands: “Stone” and “Ton”. However, a significant portion of our client’s funds were being deposited and spent elsewhere. For this reason, we saw the opportunity to expand our capabilities into banking by the end of 2020 and beginning of 2021.
We built our own banking platform from scratch, which allowed us to control the development and quality of the client experience. This was also important to make sure that payments and banking were fully integrated into a single solution, enabling us to make bundles on new sales, and scale with minimal incremental cost of acquisition. This approach enabled us to convert payment volumes into deposits, opening a new avenue of monetization while also deepening customer engagement through more integrated financial solutions. By enhancing the overall client experience, we believe that these initiatives strengthen loyalty and drive increased adoption of our services.
Act four: Move upmarket in SMB
Having achieved significant scale in the SMB segment, we recognize that our clients’ operational and financial needs vary meaningfully by size. In particular, medium-sized merchants, the largest and most sophisticated within our segment, are highly profitable but require more robust products and services.
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To address this, we have strategically evolved our go-to-market and product approaches. On the distribution front, we refined our model by deploying dedicated "Sales Specialists" within our hub network to provide a tailored financial services sales experience. On the product side, we identified that extending an immediate credit facility upon a merchant's initial onboarding is a critical driver for both acquisition and subsequent operational growth, and we are actively developing solutions to address this need. Furthermore, because these medium merchants typically manage larger workforces, providing an integrated, seamless payroll management solution is essential.
Ultimately, our strategy centers on building comprehensive ecosystems that seamlessly connect our merchants' financial money flows with their daily operational workflows, thereby driving greater efficiency and long-term engagement. We remain committed to continuously deepening our understanding of our merchants' evolving needs and developing solutions that directly address their operational challenges.
Act five: Credit Deployment
We began to test credit in 2020, but due to several problems and the difficult operating environment during the COVID-19 pandemic, we did not perform well and shut the product down. This impacted our earnings at the time but, ultimately, we recovered almost 100% of the amount disbursed. After that, we worked to completely reestablish our credit operation, based on the learnings from our first trial, with a new team, new technology and new governance.
We sought to have a product that is synchronized with our clients’ business, with daily amortization to reduce our overall risk and to ensure that our growth can be based upon healthy cohorts. Moreover, over the long-term we see credit as part of a powerful self-reinforcing network effect. We also believe that the availability of credit is a key component for clients to increase their reliance on our platform as their main financial services provider, increasing engagement with our solutions and ultimately potentially increasing flow of funds into our financial ecosystem. As we ramp up our client base, we expect payments and banking to help unlock credit supply to clients and ease collections.
Looking at the revenue impact of all five acts together, we can see the power and benefits of our approach. We have been able to keep innovating and evolving to extend our capabilities and expand our market reach. Through this, we effectively diversified our business revenue profile, as each product offer matured within each market segment. Between 2018 and 2025, we have increased the revenues from the five acts, which considers total revenue and income excluding other financial income from continuing operations, at a compound annual growth rate of 33%. We believe we have managed this rapid growth while maintaining high-quality service. In 2025, we had the highest customer satisfaction score among our competitors according to “Reclame Aqui”, with a weighted average score of 9.3 for Stone and Ton, compared to a weighted average of 8.2 for our six main competitors.
Recent developments
In 2021, we acquired Linx to provide integrated software and financial solutions to medium-sized merchants. Post-integration, we concentrated on four high-potential verticals: gas stations, retail, food, and drugstores, aiming to maximize TPV and financial services penetration within our installed base. However, during 2024, we observed that cross-selling financial services was significantly more successful when executed through our specialized financial services channel rather than through the software channel. This impacted not only how the economics were distributed between the financial services and software segments, but also led to our evaluation of strategic alternatives, including identifying potential partners to operate the software businesses. The evaluation process was conducted at the end of 2024 and, by July 2025, we reached an agreement to sell Linx Sistemas and certain other assets (the Software Businesses). The transaction was approved without restrictions by the Brazilian Administrative Council for Economic Defense (CADE) on January 30, 2026 and was completed on February 27, 2026. The total amount received was R$ 3,272.2 million, and the final accounting effects of the disposal will be recognized in 2026. For additional information, see “Presentation — Selected Financial Data”.
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Following the closing of the sale of the Software Business as reported in our Form 6-K filed on February 27, 2026, on April 14, 2026, our Board of Directors approved the payment of an extraordinary cash dividend of US$2.53 per share (applicable to both Class A and Class B shareholders), to be paid on May 4, 2026 to shareholders of record as of April 24, 2026, totaling approximately R$3.08 billion. This represents a one-time event that should not be construed as establishing any policy or commitment regarding future dividends, which will remain at the sole discretion of our Board of Directors.
Key Operational and Financial Highlights
The following is a summary of our key operational and financial highlights:
•In 2025, we processed TPV, including Pix QR Code, of R$560.9 billion, compared with R$516.2 billion in 2024, representing an annual growth of 8.7%.
•In 2025, we generated R$14,153.8 million of total revenue and income from continuing operations, compared with R$12,049.6 million in 2024, representing annual growth of 17.5%; and
•In 2025, net income from continuing operations was R$2,377.1 million and adjusted net income from continuing operations was R$2,477.2 million, compared with R$2,020.6 million net income and R$2,108.2 million adjusted net income from continuing operations in 2024, respectively. See “Presentation of Financial and Other Information” and “Item 5. Operating and Financial Review and Prospects—A. Operating results” for a reconciliation of adjusted net income (loss) to our profit (loss) for the period.
B.    Business overview
Our focus is to serve MSMBs with great solutions, at fair prices, and provide the best customer experience to help them better manage their businesses and sell more.
We currently operate in a single business segment mainly composed of financial services solutions, in which we offer payments, digital banking, and credit solutions, tailoring our Ton offering mostly for micro-merchants, and our Stone solution for SMBs.
Our positioning in the micro-merchant segment, which considers clients with monthly total payment volume (“TPV”) below R$15,000, is to offer easy-to-use solutions and a digital business model with low costs for the clients and good economics for us. In the SMB client segment, which comprises clients with monthly TPV between R$15,000 and R$2 million, we have two different approaches: (i) for clients with simpler operations, we strive to offer an all-in-one Stone solution that combines our merchant-focused payments and banking services; and (ii) for clients with more mature operations, we look to offer more sophisticated solutions mostly through features that connect merchants’ money flows and workflows. Finally, for large clients, we are positioned to have an opportunistic approach focusing on efficiency and profitability, offering more tailor-made solutions.
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Our goal is to be the best and most complete financial operating system for Brazilian merchants, enabling them to manage their financial lives in a seamless and integrated way. We offer our services to both MSMBs (micro-merchants and SMBs) and Key Accounts (comprised of platform services and sub-acquirers), with solutions ranging from payments to digital banking and credit, as detailed below:
•Payment Solutions: Payment collection is streamlined by accepting numerous forms of electronic payments and alternative payment methods (“APMs”), such as payment slips (Boletos) and Pix transactions, and by conducting a wide range of transactions in brick-and-mortar and digital storefronts in a quick and user-friendly manner. We also provide digital product enhancements to help our merchants improve their consumers’ experience, such as our split-payment processing, multi-payment processing, and recurring payments for subscriptions. Additionally, we have our tap on phone solution (TapTon) that allows merchants to sell via their smartphones, opening new opportunities to improve their sales.
•Prepayment Solutions: We help our clients manage their working capital needs and effectively plan for the future by offering them prepayment financing, which consists of making the settlement of a card transaction to our clients at a discount before the settlement is originally due, allowing clients to receive their funds two days after the transaction is approved or as early as the same day. Such working capital solution provides clients with transparency and control over their receivables, enabling them to better manage their cash flow to help their businesses grow.
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Below is an illustration of prepayment workflows in Brazil:
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•Digital Banking Solutions: We offer a digital bank account to our clients, which is tailored specifically for merchants. The bank account can be integrated to the POS to help merchants manage their finances efficiently. In addition, with this digital banking account, merchants can receive and make payments and Pix transfers, issue payment slips (Boletos), pay taxes, and save money, all in a cost-effective and user-friendly way, seeking to increase their cash-flow within the Stone platform, significantly increasing the experience and convenience. Also, we developed multi-user access, permissions and safe authorization processes for those merchants who have employees that help with their workflow. In addition, we provide our clients some insurance solutions, acting solely as a broker. Throughout 2025 we have focused on evolving our banking solution to also connect merchants money flows and workflows. As such we have launched our Payroll feature to help merchants not only manage but to also pay their employees.
•Credit Solutions: We offer an array of credit solutions to merchants, including working capital, credit card and revolving credit. Our working capital and revolving credit products feature an innovative repayment schedule, where clients pay down their loans in line with their performed TPV. In the working capital product revision undertaken since 2021, we introduced monthly installments to help merchants keep up with their repayment schedule. Also, in case sales aren’t keeping pace with the minimum, we offer other multiple payment sources, such as payment slips (Boletos), payment link, Pix transfer, future receivables, or the possibility of using the Stone account balance.
Our Business Model
We believe we have a dynamic mix of core competencies that significantly distinguish us from our main competitors in the Brazilian market. These core competencies are defined in four pillars: (i) Our Unique Culture; (ii) Comprehensive Merchant Platform; (iii) Tech Enabled Distribution; and (iv) Superior Client Service. When combined, these competencies yield a powerful set of competitive strengths that have: (1) enabled us to disrupt legacy practices, older technologies, and incumbent vendors in the Brazilian market; (2) empowered us to launch other technology and financial services solutions; and (3) positioned us favorably to continue to grow our business and expand our addressable market. Below, we will detail each of these four core competencies.
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1. Our Unique Culture
We have proactively fostered and developed a highly-innovative, entrepreneurial, and mission-driven culture that we believe helps attract new talent, enables us to achieve our objectives, and provides a key competitive advantage. Our culture unites our team across numerous functions and focuses our collective efforts on passionately developing technology and disrupting legacy practices, older technologies, and incumbent vendors in order to provide solutions and a level of service that go beyond simply meeting the needs of our clients, and instead seeks to deliver an enhanced overall client experience. Our client-centric culture is built upon the following five pillars, which we convey to our employees, employee candidates, clients, and partners:
•The Reason—Our culture is centered on the fundamental belief that our clients drive everything we do. We also emphasize to our clients that, like them, we have also worked hard to start and grow a new business. We believe that building and maintaining close and active relationships with our clients will improve our ability to innovate, expand our leadership in the market, and grow our business.
•Own It—We expect that all employees present an “owner” mindset and use their intelligence to solve problems with a primary focus on making our clients’ experience great. We constantly strive to recognize exceptional achievement.
•No Bullshit—We encourage respectful candor in all interactions and aim to be straight to the point. We criticize ideas, not people. We expect our teams to always choose the correct path, not the fastest, and to act in a simple and efficient way.
•Team Play—We have learned that people achieve greater results together. We believe that more ideas flourish, are debated better, and questioned more effectively in teams. As a result, we strive to work together and constantly look for people with complementary skills to join our team.
•Live the Ride—We believe we will evolve more effectively by trying new ideas and improving on them with energy and passion. New ideas need to be tested in a controlled way, and only scaled once they have demonstrated authentic promise.
2. Comprehensive Merchant Platform
We believe that building a robust technology stack on scalable platforms is a key element for companies aiming to stay competitive in the dynamic business landscape. Therefore, technology’s transformative impact is evident across industries, reshaping how businesses operate and engage with their audiences due to unparalleled scalability and extensive reach, outperforming conventional operational models.
We understand that client demands are increasingly instantaneous, leading us to digital products and services with self-service, real-time response, automation, and personalization. This is made possible by our technological mindset centered on platforms.
However, our rapid growth initially leaned heavily towards development speed, sometimes at the expense of consistency and reusability. This resulted in the existence of multiple data platforms managed by different teams and implemented across various cloud platforms, for instance. We believe that our platform-focused approach is a key differentiator element for our business, and we are on an ongoing journey to reach our ultimate destination.
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In the last three years, we made substantial strides in integrating these disparate silos. We have united our technology teams, established consistent processes, and developed foundational components. This collaborative effort has culminated in the creation of a unified technology team that builds a cohesive, scalable, and reusable set of platforms known as the Stone Platform, which is structured into four layers:
•Experience: facilitates the creation of intuitive and customizable interfaces, tailored through simple configuration changes to suit different products. We believe the best way to build a long-term competitive advantage is to deeply understand the needs of each of the different segments we operate to build different value propositions. However, to achieve scale while operating with multiple value propositions, we need to provide flexibility to adapt communication, choose features and craft the final experience in a unique way for each segment, with the maximum utilization of reusable components. We plan to expand our platform in three main directions: (i) open ecosystem to enable partners to provide complementary products and services to our clients; (ii) omnichannel lifecycle to connect the increasing new acquisition and relationship channels as we seek to increase cross-selling opportunities and client loyalty; and (iii) personalized offering to facilitate aligning with the increased options introduced by the ecosystem, without overwhelming the client experience.
•Product: encompasses our primary financial service platforms, including payments, banking, and credit. The product platform aims to provide specialized expertise in each business domain through easily integrable and customizable components and features via a set of software development kit (SDKs), application programming interfaces (“APIs”), and services. This allows for the maximum possible reuse of components while providing the capacity for specific configurations and customizations for each segment. This way, we gain flexibility and agility to quickly enter new segments with very low investment. Our product platform will evolve: (i) from payments to an omnichannel checkout; (ii) from credit to a smart cash flow equalizer, by actively providing and proposing alternatives to optimize the use of third-parties’ capital with an almost infinite flow of information that will enable our models to predict cash flow needs; and (iii) from banking to intelligent spending management, with the combination of open finance and AI.
•Operational: empowering our sales, includes client services, marketing, and logistics through dedicated platforms. Our operations are founded on clear and simple principles: deliver the best experience to clients while pursuing operational excellence – and make it all with simplicity. We strive to do this through an integrated suite of proprietary technology solutions that our team uses every day, including: (i) Marco Polo, our platform for sales and distribution, which has an important role in managing our territories, sales pipelines, and clients’ life cycle, helping us to increase the productivity of our sales force; (ii) Green App, our platform for logistics operations across Brazil with capabilities that range from supply chain management to last mile logistics; and (iii) One Platform, that supports our client service operations enabling us to support clients through multiple channels, including chatbots, and to have a more complete view of client’s information.
•Internal: empowering our developer and product teams with platforms that foster agility and a data-centric approach maintaining an unwavering focus on the security, scalability, and availability of our services. This platform is an essential structure for our operations, providing the essential tools and services that empower our developers to remain agile and allowing us to innovate across all product domains. In our client-centric approach, data guides every aspect of our decision making and one critical metric of concern revolves around developer agility. We are deeply committed to building the services that enhance our developers’ productivity, enabling us to promptly respond to the evolving needs of our product team.
An important evolution of this process has been our focus on becoming an AI-first company, centered on three key pillars: productivity, product embedding and growth metrics. By replacing repetitive human-driven processes with scalable AI agents, we are driving improvements in organizational agility and efficiency. Below are selected examples of this evolution:
•Generative AI now supports a substantial portion of our Customer Service operations and parts of the end-to-end journey in digital sales for lower-tier segments. As a result, in Customer Service we reduced operational workload while improving service quality, with CSAT reaching 92% as of December 31, 2025 compared to 90% as of December 31, 2024. In addition, in inside sales, we improved sales funnel conversion despite lower headcount, outperforming internal expectations.
•AI is increasingly embedded into products and workflows, reducing manual workloads while improving speed, allowing teams to focus on higher value activities. For instance, productivity gains have already been observed in certain migration cases, with time-to-market reduced by 2 times.
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•Finally, we are focused on responsible AI adoption, including the implementation of ethical standards and data security practices. To support scalability and governance, we developed our own AI Gateway as a central broker for model management and cost control. We have expanded internal access to AI tools, including making Gemini broadly available across the organization, and have trained more than 5,000 employees through our “Zero Front” literacy program.
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3. Tech-enabled distribution
We sell and distribute our solutions through three different types of channels: (i) Proximity channels, focused mainly on SMBs, in which we leverage our in-person distribution through proprietary hubs and franchised hubs, leading to a closer relationship with our merchants with service differentiation as the main driver; (ii) Digital channels, with the focus on scaling with efficient Customer Acquisition Cost (“CAC”) through our digital, inbound sales and self-onboarding services; and (iii) Strategic Partners, which is composed of our member-get-member channel, focused mainly on micro-merchants, and our Partner Program, focused on SMBs and Key Accounts, with expanded reach as the main driver. We believe we have significant competitive advantages through our distribution capabilities. Our multiple channels allow us to provide service differentiation at scale, as we can dynamically choose the right channel to serve each client in an optimal and tailored manner, balancing growth with unit economics optimization.
i.Proximity Channels:
•Stone Hubs: We distribute our technology and solutions to brick-and-mortar merchants primarily through our Stone Hubs, which are designed to provide hyper-local sales and service to SMB merchants in a designated geographic region. Our hubs are local operational offices that house an integrated team of sales and logistics support personnel. These offices are located in small-and-medium sized cities (or regions of larger cities), which have historically been underserved and disregarded by many of our competitors. We have both proprietary hubs as well as franchised hubs. In December 2025, we had more than 650 Proprietary and Franchised Stone Hubs.
•Proprietary Stone Hub—We establish local operations and send highly trained Stone Agents and Green Angels to develop our operations, train new team members, and ensure that our focus on high-quality service is instilled.
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•Franchised Stone Hub—Our franchise hubs are similar to our proprietary hubs, except that the hub is owned and operated by a local business owner who typically provides local sales and operational support and relationships in the community. These hubs are entirely Stone-branded and operated by highly trained personnel who perform the same duties as personnel working in our proprietary hubs, in accordance with our policies, procedures and internal targets. We can decide to establish a franchise hub instead of a proprietary hub according to a few key parameters such as population density, estimated available TPV and profitability from merchants in the designated area, as well as if we identify an attractive potential partner in the region.
Our hubs are staffed by sales and logistics personnel that include:
•Stone Agents—Our troops-on-the-ground sales team. This is a qualified team, focused mostly on the Small segment within SMBs, who are highly trained to deliver personalized and effective sales and support directly to the doorstep of our clients. We believe that by being close to our clients, we have a unique ability to build strong client relationships, attend to their specific needs and react quickly to changes in each local market.
•Stone Specialists—Also part of our troops-on-the-ground sales team, specialists are part of the career path of an Agent. Specialists are responsible and specifically trained to address the needs of larger SMBs, who have more complex and specific issues and thus the need for more complete financial and management solutions. From 2024 onwards, we have reinforced this function in our hubs, as part of our efforts to increase our penetration in the medium client segment.
Our Stone Agents and Specialists are both supported by an integrated proprietary technology platform, which combines smart routing with merchant behavior mapping, which enables them to provide sales and support services efficiently and effectively.
•District and Hub “Owners”—Our regional sales leadership. This team is composed of highly trained and experienced former Stone Agents that are tasked with opening and managing new hub territories. Regional managers are supported extensively with daily performance indicators and tools provided by our technology platform and management to facilitate active interaction and support with their teams.
We have developed a proprietary method of training and supporting our sales personnel, which we believe has directly increased our team’s results. Our Stone Agents receive extensive training in our company’s culture and operations during their onboarding process, and on an ongoing basis, to help reinforce our client-centric culture and high-performance standards. Our sales personnel have disciplined daily, weekly, and monthly touchpoints with their leaders, along with routine reporting, key performance indicators (KPI) reviews, and other core processes to help ensure they are equipped with the tools and support they need to maximize their effectiveness. The typical daily routine of a Stone Agent involves starting the day with team meetings to align goals and strategies, followed by client meetings focused on driving new sales. In addition, our sales personnel are supported by direct marketing campaigns to help build brand awareness as we enter new markets.
ii.Digital Channels:
•Inbound Sales and Distribution— We also sell our solutions through a similar, highly trained sales team that is centrally located and dedicated to fielding inbound calls as a result of digital advertising campaigns and referrals resulting from network effects of our clients within our hubs, as well as sales leads. This team can manage and onboard a new client in-house.
•Online self-onboarding— Our self-onboarding channel is fast and convenient for merchants that already know which solutions are better suited for them. This method allows merchants to sign up and complete the purchase process on their own, without the need for direct interaction with a sales representative through our user-friendly website and app.
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iii.Strategic Partners
•Partner Program— Our distribution through partners, mainly software providers (ISVs), marketplaces and e-commerce platforms. Different from the channels mentioned above, Partner Program is mainly focused on platform services merchants, within the Key Accounts business segment. Participants within the Partner Program develop vertical-specific software for merchants that help them run their front-of-house functions and back-office operations. We integrate and embed our connection, payment acceptance, and data reconciliation capabilities into their software in order to improve functionality and convenience. Partners may also participate in a portion of the economics generated by payments processed through their software. In December 2025, we had more than 500 Strategic Partners.
•Member-get-member— In 2021, we developed the “Renda-extra” channel, in which any client or person in Brazil that is registered in the channel can refer our Ton solution to merchants in the country, in exchange for a commission. After the referral is made, the Ton team is responsible for the support and logistics to deliver the POS to the client.
An important part of making sure our distribution channels are excelling in their functions is to guarantee we have the right technological assets in place to support them. As we have already detailed in “Item 4. Information on the Company — B. Business Overview — 2. Comprehensive Merchant Platform”, the Stone Platform is structured in four layers, being one of those the Operational Platform. To assist our distribution channels, mainly our hubs, we have developed Marco Polo, our platform for sales and distribution. Marco Polo has an important role in managing our territories, sales pipelines, and client’s life cycle, which we believe helps us to increase the productivity of our sales force.
4. Superior Client Service
We serve and support our clients with fast, convenient, and high-quality customer service with support teams and technology tools that we believe are highly differentiated and have enabled us to maintain high customer service satisfaction. Our service and support functions, processes and tools were designed to embody our strong client-centric culture, continuously strengthen our client relationships, increasing their long-term value. Our client service team is essentially composed of our logistics and our customer support teams.
The first one is divided as below:
•Green Angels Team—This is the team of local and specialized personnel, who provide on-demand logistics support in the field. The Green Angel team is embedded inside our local Stone Hubs, where they interact with Stone Agents and our centralized client relationship team and leverage our cloud-based logistics platform to rapidly respond to the needs of our clients. Once they become aware of an issue, Green Angels commonly travel by motorcycle and reach our clients within minutes or hours to help them in a need instead of taking days or weeks, through mail service, or using a third-party logistics company. Green Angels can deliver terminals, help with installation, set up a merchant’s Wi-Fi connectivity, replace parts, or provide other services.
•Logistics Team—Our logistics team manages the deployment of POS devices and related accessories and uses predictive modeling of merchant behavior to proactively identify potential client logistics service issues. This centralized team manages terminal programming and equipment services, deployment, set-up, technical support, repair and replacement, remote terminal software updates, warehousing and inventory control and reporting. They communicate with and deploy our local Green Angels to provide on-demand support.
Moving to customer support, our mission is to solve the clients’ issues as fast as possible, sustaining their high satisfaction, which can be done through different ways. Below, we will detail each of the solutions our clients can reach to have their problems solved, from the simplest to the most complex ones.
•Stone Self-Service Tools— Our range of apps, online portals, and self-service tools that help our clients check all of their data, manage their operations more conveniently, and solve certain issues by themselves, according to their preference.
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•Servicing through bots— We provide our clients a chatbot named “Lucy” capable of immediately resolving simpler issues, with access to clients information and authorization to execute actions. Brazil is highly conversational – a significant number of clients prefer to contact us via WhatsApp or chat, rather than by phone. This makes our bot a scalable and convenient solution for both our operation and our clients. Our chatbot team is a specialized, centralized and an in-house team responsible for the development and operation of our chatbots. The team’s main goal is to deploy scalable, high quality digital support for our clients with 24/7 availability. It leverages Natural Language Understanding (NLU) and Natural Language Processing (NLP) service providers with our CRM technology in order to build humanized conversation flows that can understand and solve our clients' requests and questions. The first chatbot we designed was made to support Ton’s customer experience operation, and is a key piece of Ton’s operational model, as it enables the customer support to scale up in high speed and low cost, reducing the cost to serve for this segment. In 2024, we made a significant improvement by implementing a proprietary Large Language Model (LLM) platform in our bots, boosting their deflection rates and at the same time improving client satisfaction (CSAT).
•Servicing through hubs— This is usually one of the first ways clients reach us. Through our hubs and franchises, clients can reach to our agents to resolve their day-to-day concerns. Our agents, utilizing the Marco Polo app, have access to the entire spectrum of client information, including historical relationship data, client profitability, and product usage details. Additionally, agents can request services, such as POS maintenance or additional devices, and immediately solve merchants’ issues.
•Servicing through enchanters— In addition to our self-service tools, bots and sales agents, our clients can rely on the expertise of our enchanters. Our enchanters are available through various channels, such as WhatsApp, in-app chat, and phone. Essentially, our clients can reach out to us in their preferred manner, and our unified platform seamlessly manages all interactions. When assisting a client, the enchanter quickly views their information, eliminating the need for time-consuming investigations. This improves efficiency and provides a comprehensive view of the client, from interactions with our sales team to detailed product configurations. There is still plenty of room to gain productivity using AI tools, but we have already started introducing AI to our client relationship team. For example, with AI, we help our enchanters to faster understand clients needs providing them summaries of client's history. This makes us more productive and also improves the quality of our service. In 2025, 90% of the contacts were answered within our internal service level agreement targets for calls and written channels. As a result, 89% of contacts were rated as “excellent” by our clients according to our internal surveys.
Within our enchanters, we have one specialized team that is focused on client retention. This is a centralized team that is responsible for trying to keep clients who are considering canceling the services we provide. If a client contacts our client relationship team to cancel their services, our retention team is instantly notified and receives the demand.
Complementing this reactive approach, we have established a dedicated Strategic Consulting team focused on our SMB portfolio. Unlike the centralized retention group, each consultant in this team manages a specific portfolio of clients, acting as a business advisor. Their mission is to foster deep relationships, drive profitability, and ensure long-term retention through proactive engagement. They maintain an "open-door" policy, being readily available for client needs while also initiating strategic touchpoints to ensure the partnership remains valuable.
We also have an adjacent data analytics group that constantly monitors our clients, uses AI technology to predict potential churn, and proactively identifies possible actions that both our consultants and our client retention team could take to reverse the propensity for churn.
We believe the use of technology to support our customer service team and our focus on self-service tools provide us with scalable customer service operations, while maintaining the quality of our services. In order to do so, we use a range of integrated systems, powered by the Stone Technology Platform, which empowers our client relationship, client retention and Green Angel team, to optimize our customer service and support functions through the Green App and the One Platform.
In the following section we will go over the opportunity we have within the market segments we target and the clients we serve, which we believe we are well-positioned to address through our competitive advantages just described.
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Our Markets
We operate in Brazil, a large and fast-growing market for financial technology solutions. According to IBGE, Brazil nominal GDP and private consumption expenditures (“PCE”) in 2025 were R$12.7 trillion and R$8.1 trillion, respectively, up from R$11.7 trillion and R$7.5 trillion, respectively, in 2024. In 2025, total volume of card transactions increased 10.1% to R$4.5 trillion, while in 2024 it recorded a growth of 10.9% to R$4.2 trillion.
As mentioned in “ — Business Overview — Pix ”, Pix was a key evolution for the payments system in Brazil, promoted by the Central Bank in the end of 2020. The Central Bank launched Pix with the goal of democratizing access to electronic payment methods, contributing to financial and digital inclusion and thus promoting greater digitalization of payments, fostering competition, market efficiency and lowering costs of electronic transactions. Since its launch, Pix transactions have been gaining traction, more than 180 million unique Pix keys registered in the financial system as of December 31, 2025.
The initial wave of Pix, from 2020 to 2022, was primarily driven by Peer-to-Peer (“P2P”) transactions. During that period, individuals increasingly adopted Pix as an alternative to cash and wire transfers, leveraging its instant and cost-free payment functionality. This shift significantly contributed to greater financial inclusion within the ecosystem, leading to a reduction in the volume of cash in circulation.
The next phase of Pix, from 2022 to 2024, was driven by Peer-to-Merchant or Peer-to-Business (“P2M” or “P2B”) transactions, where merchants increasingly adopted Pix QR codes at POS equipment to accept payments. Unlike P2P transactions, Pix QR code payments are typically subject to fees charged by Acquirers. Pix QR code transactions offer three key advantages to merchants: (i) lower costs, as they are not subject to interchange and network fees, (ii) seamless reconciliation with other card transactions processed through the POS system, which is critical for efficient store management, and (iii) ability to instantly confirm whether the transaction has been successfully settled, eliminating the need for customers to send payment receipts to the store owner, streamlining the payment process and avoiding fraud.
After assessing the impact of Pix transactions, we concluded that Pix has two main effects to our business: (i) Pix QR Code has a positive contribution, since this type of transaction has economics comparable to debit transactions, while they also bring higher client engagement within our banking ecosystem, and (ii) Pix P2P transactions have a slightly negative impact, primarily as micro-merchants—who often mix their personal and business finances—have increasingly replaced debit payments with Pix P2P transfers, which are cost free to them.
Considering these dynamics, we regard Pix as a meaningful evolution in the payments landscape. We remain committed to leading innovation within this rapidly developing environment, continuously adapting to future developments. For example, we have already started leveraging on Pix to enhance our products, such as using its volume on the daily amortization schedule of our credit product and by offering products on top of Pix rails such as Pix Parcelado or Pix Financing.
While electronic payments already exceed 90% of PCE by some accounts, in our view the total addressable market extends beyond personal consumption expenditure (PCE) given that intermediate consumption, a significant factor in Brazil, expands the Total Addressable Market (“TAM”) considerably. Also, evidence from other countries with even higher consumption penetration suggests that a competitive environment can remain both healthy and profitable. For example, in the United States, MSMB Take Rates have remained stable over the past 5 years, despite penetration estimates surrounding 120% of PCE (including card TPV and Automated Clearing House (ACH) person-to-business volumes). Furthermore, our analysis of Central Bank Pix data suggests that penetration calculated as such includes transactions from financial intermediation, property investments, agribusiness, and others which are not reflected in final consumption.
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Despite high penetration levels, industry dynamics continue to support profitability improvement. In the United States, challenger Acquirers have continued to gain market share within the industry’s revenue pool. Additionally, our internal econometric analysis of take rate trends across cities and sectors with low cash usage has shown no indication of price reductions due to market saturation in recent years. This trend is driven by the increasing indispensability of Acquirers’ services in areas with higher electronic payment penetration. As electronic transactions representativeness continue to grow, the role of payment service providers becomes more critical for merchants, making their demand for these services more inelastic.
As a result, we believe there still is a big opportunity to continue to grow and increase our presence in the markets we address. According to our most recent internal estimates, as of September 30, 2025, we had a total available market (“TAM”), which considers revenue net of funding costs and provisions for loan losses for MSMBs in Brazil, in the amount of approximately R$32.0 billion for payments, R$33.0 billion for banking as well as almost R$42.0 billion for credit .
As Pix became a relevant payment method, we have incorporated its TAM within payments, as it is a clear opportunity to us. To evaluate this opportunity, we developed internal estimates that take into account Pix P2B and P2P transactions conducted via both dynamic and static Pix QR Codes within certain retail Merchant Category Codes (MCC), as well as Pix P2B transactions also from certain MCCs that can be considered commercial transactions according to internal parameters for average ticket. Based on this analysis, we estimate our addressable Pix market to be approximately R$2.0 billion, already incorporated in the R$32.0 billion mentioned above from payments.
Below, a description of what is being considered in each MSMB business TAM:
•Our TAM for the payments business includes revenues from Net MDR from Pix and credit, debit and prepaid cards, prepayment and POS rental, excluding taxes;
•Our TAM for the banking business includes revenues from floating, interchange fees from credit and debit cards issued by us and other fees such as wire transfer fees; and
•Our TAM for the credit business includes net revenues from working capital loans, revolving credit and credit card financing.
We believe we operate in a market with strong opportunities for long-term sustainable growth. This conclusion is based on several underlying trends that have directly affected the Brazilian retail sector in recent years, including increase in: (1) electronic commerce; (2) sales; (3) number of stores; (4) formalization; and (5) investment in professionalization of businesses by Brazilian companies.
Our Opportunity and Market Share
Analyzing the impact of all “Five Acts of our Evolution” in “Item 4. Business Overview — A. History and Development of the Company”, we see the strengths and benefits of our strategy. We seek to continue innovating and evolving to extend our capabilities and expand our market reach. Through this, we diversified our business revenue offerings, as each product offer matured within each market segment. We expect this pattern to continue, making our company stronger and more resilient.
We estimate that we still have a relevant opportunity ahead with the diversification of our payments business into other solutions such as banking and credit. Considering these products, we estimate that our TAM is higher than R$100 billion in revenues net of funding costs and credit losses in the MSMB segment as of September 2025. We also estimate that the micro segment revenue pool represents more than R$38 billion with a client pool larger than 11 million, while the SMB segment has the largest revenue pool opportunity, with R$69 billion and a client pool of approximately 4 million. Based on our internal estimates and publicly available data, we can see that by successfully executing our “Five acts”, we have the potential to multiply the penetration in our current addressable market. As a result of such expectations, we believe that our market share as of December 31, 2025 on each of our addressable market’s buckets is still small in comparison to our TAM.
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When analyzing the Brazilian card industry specifically, processing volumes were R$4.5 trillion in 2025 according to ABECS data, resulting in a market share for us in 2025 of 10.3%. When considering only our MSMB TPV in comparison to total card industry volume disclosed by ABECS, our market share in 2025 was 9.3% compared with 9.7% in 2024. During 2025, Brazil experienced an acceleration in e-commerce growth relative to physical retail. According to data from ABECS, non-physical (e-commerce) volumes grew by 18.3% in 2025 compared to 2024, whereas physical retail volumes grew by 7.3% over the same period. Given our strategic focus on MSMBs operating primarily in the brick-and-mortar segment, our exposure to e-commerce volumes, which is dominated by marketplaces, remains limited. Excluding e-commerce volumes, our estimated market share in 2025 was 13.8%, based on ABECS data.
While we estimate we have 10.3% market share in merchant acquiring volumes according to ABECS data, we believe we have not yet reached scale on new solutions, with more than 3% market share in digital banking and less than 1% market share in credit for MSMBs when compared to our TAM estimates for each segment as of September 2025.
Our Competition
As we evolve our business model to a multi-product portfolio of solutions consisting mostly of financial services, we face competition from different players, mostly from a variety of payments providers, as well as banks (traditional and neobanks), that have significant financial resources and develop different kinds of services, including gateways, PSPs, other reconciliation providers, banking services and credit operations. We may also face competition from fintechs that offer specific financial solutions.
For information on risks relating to increased competition in our industry, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business, Strategy and Industry—If we cannot keep pace with rapid developments and changes in the markets in which we compete and continue to retain our clients and acquire new ones as rapidly as in the past, the use of our products and services could decline, reducing our revenues.”
Our Competitive Strengths and Advantages
Our operation in financial services combines our proprietary assets, intellectual property, capabilities and business processes to create a differentiated go-to-market approach and value proposition. We believe our business model, which is the combination of our comprehensive merchant platform, tech-enabled distribution and superior client service, disrupted the market and has enabled us to gain significant traction in just over a decade since the launch of our service. Although these remain the pillars of our strategy, we are in a dynamic market, leading us to be in constant evolution, which we can do so in the following manner:
First, through our comprehensive merchant platform, we are expanding our engagement levers, as we have been investing to have a unified technology stack that supports multiple value propositions, allowing us to have a multi segment reach while scaling efficiently. Second, in distribution, as we expand our channels, we can provide service differentiation at scale, as we can dynamically choose the right channel to serve each client. And lastly, from a client service perspective, we strive to serve our clients better by solving their issues faster combined with a good feedback score.
We believe these three pillars provide us with several sustainable competitive advantages that have enabled us to gain market share and will help us grow in the future. The main competitive advantages that our model provides are as follows:
•First Mover Advantage— In order to reach SMBs in Brazil, we disrupted the market through our Stone Business Model, detailed in “Item 4. Information on the Company — A. History and Development of the Company”. As far as we know, no single player had ever tried to do it before in Brazil, and we were the first ones to do so while being profitable. We believe this has brought us significant advantages over time, as we learned a lot from our clients, allowing us to move faster than other players, while keeping very high client satisfaction within our services and products.
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Tech-enabled distribution:
•Extensive Reach to our Clients— Due to our focus on proximity, digital and strategic channels, we have a broad range of ways we can reach our clients. As a result of our extensive range of channels, (i) we cover more than 99% of Brazil’s GDP and all of the 5,570 Brazilian cities and (ii) through our digital channel, we have millions of accesses per month.
•Self-Reinforcing Network Effects— As we grow and expand our distribution and set of solutions, we benefit from self-reinforcing network effects. Our expanding distribution network enables us to reach more merchants, to whom we can offer more solutions. As we expand our client base, launch new solutions and remain constantly committed to being close to our clients, we are able to build stronger relationships, leading to higher client satisfaction scores, which also leads to new learnings and market insights. This creates a very strong network effect, as clients help us develop new features and solutions and they can also refer our solutions to friends and family.
•Low Cost of Acquisition—We believe our model, combined with the power and efficiency of our fully-digital technology platform, enable us to leverage our distribution to acquire new clients and upsell new solutions and services at a low marginal cost as compared to our competitors. We have 6 different sales channels, with more than 650 Proprietary and Franchised Stone Hubs, more than 500 Strategic Partners and millions of accesses per month in our digital channels, as of December 2025. We believe no single player in Brazil has a more extensive distribution network, allowing us to better balance returns and CAC on a client basis.
Superior client service:
•Best Client Service— Through our logistics and customer support we deliver the best experience in the market. The extensive and efficient network our logistics teams provide, leads us to deliver POSs for SMBs in up to 1 business-day and up to 3-days for micro clients. In our customer support, we have a fast call pickup time, where our clients talk to a human enchanter in under 5 seconds. As a result, we have consistently been ranked as the number one in client satisfaction in Brazil, according to Reclame Aqui, as of December 2025.
•Effective Client Support—The digital DNA and cloud-based architecture of our platform enables us to generate, capture, and aggregate a vast array of data across our various business activities. For example, we have developed and deployed machine-learning technologies throughout our company to leverage this data to improve the speed, functionality, and quality of many of our services and operations. For example, we use AI to (1) predict merchant behavior and enable proactive action by our sales and customer support teams, (2) turn long conversations our enchanters had with clients into short summaries that are stored in the client's history, and (3) increase the accuracy of fraud management.
•Greater Understanding of Our Clients—We proactively interact with our clients and seek to understand their business needs in order to develop stronger relationships and serve them more effectively. We believe we are able to do this in a manner that differentiates us from our peers due to the close proximity to our clients, transparency, fast, high-touch, and personalized customer support provided by our in-house customer support team.
Comprehensive merchant platform:
•Implement and Deploy New Capabilities—We utilize our digital, cloud-based architecture and integration capabilities to implement and deploy new features and technologies to our clients and integrated partners. Our technology platform provides the flexibility to do this easily without the need for expensive upgrades, complex conversions, or lengthy service disruptions. This enables us to provide our clients with the latest functionality in a quick and frictionless process. In addition, our architecture and infrastructure are designed for rapid scalability, which enables us to expand our capacity and manage utilization efficiently and cost-effectively.
•Effective Pricing— Due to our merchant-driven culture, we have revamped our pricing system to treat each client on an individual basis, considering specific and regional factors of each client and the full spectrum of solutions desired. Through this comprehensive data, we are able to craft tailored offerings that bundle acquiring, with different prepayment options, Pix, and banking services, each with minimum and target return thresholds, leading to better unit economics per client.
•Unique and Proprietary Data set – Our proprietary model generates data on millions of MSMBs, providing us with unique insights into customer behavior. This data is integrated into our systems, including artificial intelligence and machine learning algorithms to enhance customer support and experience, improve underwriting processes, and differentiate our products and services.
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•Low Cost of Operations—Our business model enables us to operate with a low cost of operations and significant efficiencies. For example, as we developed our own end-to-end technology platform and do not rely on third-party vendors for processing and settlement, we can operate with low marginal transaction costs, while also attending our clients’ needs faster and more effectively. Also, through our Green Angels, we were able to create a reverse logistics ecosystem, in which we collect unused POSs from clients, refurbish them, and bring them back to our system, allowing us to grow with low incremental investments.
•Sustained Growth at Low Marginal Costs — Over the years, we developed foundational assets to enable our growth with low incremental costs. We have successfully reduced our nominal logistics costs per client by approximately 22% from 1Q23 to 4Q25, all while expanding our client base by 72% in the same period. This substantial reduction in costs amidst aggressive growth highlights our ability to leverage economies of scale, optimize logistics operations, and improve our cost structure. Our focus on identifying and addressing the core issues that lead to customer inquiries, coupled with the support of our tech team in implementing these solutions, has led to a decrease of more than 44% in the volume of contacts from our clients from the fourth quarter of 2025 compared with the first quarter of 2023. This approach resulted in a substantial reduction of 45% in cost per client in the same period, while maintaining customer satisfaction at historical levels, with a CSAT (customer satisfaction index) of 89% in 2025. The architecture and various operating advantages of the Stone Technology Platform enable us to run our business increasingly efficiently and with lower incremental transaction costs.
Also, we believe there are competitive advantages that derive from the combination of our business model pillars, as follows:
•Greater Flexibility to Adapt and Innovate, Allowing Full Control of the Client Experience—We strive to be well-positioned to quickly respond to competitive pressures through targeted, localized approaches. The proprietary nature, vertical integration, and control of our model enable us to adapt with greater agility and flexibility than competitors, allowing us to better understand our clients' needs. Also, the ownership of our foundational assets—technology, distribution, and customer service—gives us direct control over the development, deployment, and support of our financial solutions, ensuring an enhanced client experience. This control allows us to deliver high-quality solutions and premium service levels, differentiating us from competitors who rely on outsourced capabilities and third-party vendors that may not share the same client focus.
•Protective Barriers to Replicate—The combination of the various proprietary, vertically integrated elements of our business model, combined with our unique culture are difficult to replicate in full. We believe this provides us with strong protective barriers to entry which may make it difficult for our competitors to replicate our value proposition.
•Increasing Revenue per Customer— Due to our comprehensive set of solutions, we are able to combine them in bundles, increasing client engagement and revenues. When looking at heavy users, which are merchants that use more than three of our financial services solutions, in 4Q25 they represented 41% of our MSMB client base, while they brought more than 2x more revenue when compared to clients that use up to three solutions. Over time, the number of new Active Clients that join Stone with more than three solutions has increased from 17% in 1Q23 to 50% in 4Q25. We believe we have a big opportunity to address as we invest more in client engagement with our features while also making efforts to create and sell more financial services bundles.
•Better Unit Economics— The synergy between our growth strategies, monetization efforts, and efficiency improvements has led to strong unit economics performance, leading to a reduction in Customer Acquisition Cost (“CAC”), while scaling up the number of merchants we bring onboard and increasing contribution margin per client.
•Strong Lifetime Value—We believe we are well positioned to provide high-quality service levels and build strong, local or highly integrated relationships with our clients who value our differentiated approach and value proposition. These enable us to: (1) resist competitive pressures; (2) retain our clients for longer periods; and (3) upsell new solutions to increase our share of wallet. We also believe this enables us to enhance the overall lifetime value of our client portfolio.
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Our Growth Strategies
Our primary mission is to remain focused on empowering our clients to grow their businesses, and help them conduct commerce and run their operations more effectively through our financial services solutions. We believe this focus is a key differentiator for us and an important driver in helping us win and retain clients. We believe we have already come a long way, but there is still a lot of value to be unlocked through “the power of combining”, as follows. For further information on our history and solutions we offer, see “Item 4. Information on the Company—A. History and Development of the Company” and “Item 4. Information on the Company—B. Business Overview—Our Solutions”.
We have defined our growth strategies within 3 priorities: (1) win in the MSMB Market; (2) drive engagement; and (3) scale through platforms. We can also grow our business through (4) entering new markets and (5) selectively pursuing acquisitions. In each of the sections below we will detail how we intend to achieve our next phase.
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1.Win in The MSMB Market
a.True distribution powerhouse allowing multiple segment reach
We believe our distribution network is a key competitive strength that enables us to continue to scale our business, expand our geographic footprint, and increase market penetration. As we have already detailed in section “Item 4. Information on the Company – B. Business Overview – Our Business Model – 3. Tech-enabled distribution” we have a range of channels that we can leverage on to grow our client base. These channels are divided into (i) Proximity Channels, with its main growth driver being the service differentiation it offers through our Proprietary and Franchised Stone Hubs, (ii) Digital Channels, with its main goal to scale with efficient CAC mostly as a result of our marketing efforts in both traditional and digital media, and (iii) Strategic Partners, which we regard as key to expand our reach, mainly due to word of mouth from our existing clients through our member-get-member program and partners such as software providers (ISVs), marketplaces, and e-commerce platforms which also distribute our solutions.
Through our channels, we cover the totality of the cities and the services’ GDP in Brazil, as of December 2025. Despite this, we believe that our business model is far from saturation. According to our internal analysis, all our territories continue to grow across the board, regardless of their maturity levels.
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b.Sustained best service in the industry
Our commitment to customer-centricity has been the cornerstone of our competitive advantage since our inception, when we decided to create a specialized service to provide the best customer experience in the market. In this regard, we have developed multiple channels to interact closely with our clients facilitating the resolution of their issues, and we believe that this is the key to comprehend and effectively address their needs.
In 2025, we served more than 4.8 million customers through (i) our proximity and digital channels and strategic partners, maintaining our values of proximity, (ii) our logistics, and (iii) our customer support team.
The journey of client interaction begins at the moment they sign up for our service through our sales teams, with proprietary and franchised hubs and digital channels. Within one business day for SMBs and three days for micro-merchants, our green angels deliver and set up the contracted products and services, aiming to provide the best experience for the client, so they can start using our products and services immediately. Our customer support team helps clients with their daily needs, both through our in-house and outsourced customer support team, with telephone calls answered in less than 5 seconds. Our customer support team consists of highly trained agents supported by advanced technology and automated solutions, including artificial intelligence driven bots, which improve efficiency in resolving our merchants’ issues.
We believe our on-demand customer service team supports our clients quickly, conveniently, and with high-quality service designed to strengthen our customer relationships and improve their lifetime value with us. Our approach combines human connection, proximity, and technology, through a range of self-service tools and proprietary artificial intelligence, that seeks to help our clients manage their operations more conveniently and enables our agents to proactively address merchants’ needs, occasionally, prior to the awareness of any issue.
Since our inception, we have consistently achieved higher ratings than our competitors on Reclame Aqui, Brazil's leading consumer reputation platform. We measure this by comparing our consolidated Stone and Ton score against a complaint-weighted average of our direct competitors' ratings. Although this does not represent a financial metric, we see this as one of the catalysts for our future growth.
2.Drive Engagement
a.More levers to build price bundles
Our pricing methodology treats each client as unique, taking into account various factors such as location, transaction volume, industry segment, and channel (whether through a hub or our inside sales team). Moreover, we consider the full spectrum of solutions desired by the client, ranging from POS devices to prepayment options (including daily, business days or instant settlement). We also consider whether merchants want to accept Pix QR code payments in the POS and if they want to manage their banking domicile with Stone. Through this comprehensive data, we craft tailored offerings that bundle acquiring, Pix, and banking services, each with minimum and target return thresholds aligned with the individual characteristics of the client.
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In the SMB segment, our engagement equation rests on driving bundles with payments and banking as an entry-point of more product penetration, which has yielded substantive results. Since 2022, the majority of new Stone clients have been onboarded with our payments and banking bundle, serving as a pivotal factor driving the growth of heavy users within our client base. Heavy users, defined as clients utilizing three or more solutions within our financial services ecosystem, have increased substantially, comprising 41% of our client base by December 31, 2025 — a 4-percentage-point increase from December 31, 2024. We believe this upward trajectory is particularly promising as heavy users exhibit an average revenue per client more than 2 times higher than that of regular clients. Moreover, we are seeing consistent improvement across all sales cohorts, maintaining a stable CAC over time. A comparative analysis between clients onboarded in the fourth quarters of 2024 and 2025 reveals an increase of 4 percentage points, from 46% to 50%, in new clients adopting more than three solutions. We believe these trends underscore our commitment to foster sustainable growth and maximize value for both our clients and stakeholders.
We are also beginning to evaluate the possibility of bundling our credit solution with acquiring and banking, thereby enhancing our value proposition for SMBs, particularly more mature clients within this segment, for whom access to a credit limit at onboarding is a key driver of adoption.
b.Strengthen the banking ecosystem
Our banking solution was originally built around a simple but powerful insight: our clients’ payment flows are the natural entry point for a banking relationship. By bundling payments and banking across all payment methods, we have successfully captured a significant share of our clients’ money-in flows, converting transaction volume into deposits and establishing Stone as a key financial partner for a growing number of merchants. While bundling payments and banking remains an important lever — particularly as we deepen our penetration within the larger SMB segment — our focus has evolved significantly beyond capturing inflows from exclusive card-driven businesses.
The next step of our banking strategy is centered on retaining and monetizing money-out flows. SMBs naturally exhibit high cash turnover, as they continuously manage outflows to pay suppliers, employees, and general business expenses. Historically, these outflows have left our ecosystem, limiting our ability to deepen the banking relationship. We are therefore prioritizing the development of solutions that enable our clients to use Stone as their primary hub for performing these payments, with the natural consequence of keeping more deposits within the account and increasing overall engagement with our platform.
Underpinning both of these priorities is a broader product philosophy: we aim to connect money flows with business workflows. Our clients do not simply need a bank account — they need a place to run their businesses. With this in mind, we are evolving our banking solution to address the operational needs of merchants end-to-end. On the money-in side, solutions such as payment links, tap-on-phone functionality, and our RaioX reconciliation tool allow clients to consolidate sales across channels — including platforms and marketplaces — in a single place. On the money-out side, our Payroll solution enables clients to manage their workforce and process salary payments entirely within Stone, while shorter duration credit is key to help our merchants pay their suppliers. Together, these initiatives reflect our conviction that deeper engagement is best achieved not by adding isolated features, but by making Stone a part of how our clients run their businesses every day.
c.Scale working capital solutions to monetize further
Following our mission of being the Brazilian entrepreneur’s best partner and helping them, through our solutions, to invest and manage their business, we identified the credit product as a significant need for business owners. Thus, we developed a user-friendly product aimed at providing a solution to their existing capital needs.
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In 2023, we started testing our new working capital product, and we developed a comprehensive credit structure with new features and a robust monitoring process, collecting data from across the company and the market and we now manage the entire credit system from concession to recovery. The new product creates synergy between platforms, linking our clients account data in our banking platform to the credit card receivables in our payment’s platform, creating an end to end offer.
In the relaunch, we rebuilt both the product and user experience, learning from our initial credit venture. Key improvements include the use of several internal and external data to better assess merchant behavior and risk patterns, monthly installments, replacing the previous lump sum payment and maintaining the retention mechanism. We have integrated retention data into monitoring, enhancing our ability to identify credit issues and offer reschedule options via the app. Enhanced monitoring tools provide real-time data for immediate response to any unusual vintage behavior, and our models now incorporate extensive external data and control points to ensure better decision making and continuous monitoring scoring processes. Also, acquiring collateral is registered at the chamber of receivables before disbursement, and all loans are personally guaranteed by the store’s main shareholder, as we seek to reduce cash evasion risk.
Once the clients are approved for our credit solutions, they can have the credit resources in their account in a couple of days and are able to access all information using the app. The credit acquired is paid through monthly installments by the retention of a percentage of the clients’ daily transactions receivables. If a merchant’s monthly receivables are insufficient to cover an installment, we provide alternative payment options, such as issuing a payment slip (Boleto) or facilitating a Pix transfer, allowing them to supplement the payment and thereby reducing portfolio delinquency.
Another key differentiator of our product is our proactive approach to risk management. If we identify that a client is experiencing difficulties meeting their installment obligations due to lower-than-expected card transaction volumes, we engage with them before default occurs. This allows us to renegotiate the retention rate on receivables or adjust the loan term, minimizing the risk of default while supporting the client’s financial sustainability.
We believe that the expansion into credit provides a substantial incremental revenue opportunity for us and the strong interaction between segments and platforms is a key strength to scale the product in our client base, always with a cautious approach. As a merchant-centric company focused on SMBs, our commitment to supporting our clients extends beyond working capital loans. As such, in 2024 we broadened our portfolio of credit solutions to better serve their evolving needs. We introduced (i) credit cards, our primary solution for addressing the credit needs of micro-merchants, providing them with essential financial flexibility, and (ii) revolving credit, a short-term loan designed to provide flexible access to capital. These expanded offerings reinforce our mission to empower merchants with tailored financial solutions that enhance their growth and financial stability. Also, in 2025 we launched the Pix financing solution to some of our merchants, leveraging on the already approved credit card limit. This solution is a credit-enabled extension of Brazil's Pix instant payment system that allows consumers to pay merchants in full and immediately while repaying the originating financial institution usually with interest-bearing installments.
As of December 31, 2025, our credit portfolio totaled R$2,836.3 million, composed of R$2,540.7 million of merchant portfolio (working capital and revolving credit) and R$295.6 million from credit cards, compared with R$1,207.6 million as of December 31, 2024, composed of R$1,093.5 million of merchant portfolio and R$114.2 million from credit cards. Our non-performing loans, or "NPL", 15-90 days were 4.43% and NPL over 90 days were 5.21%, compared to 2.47% and 3.61%, respectively, as of December 31, 2024. The coverage ratio over NPL 90 days totaled 264%, compared to 331% as of December 31, 2024.Our focus continues to be on disbursing credit to SMB clients. Additional details regarding our credit portfolio can be found in note 6.6 of our Consolidated Financial Statements.
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3.Scale Through Platforms
a.Foundational assets: distribution, logistics, client service and brand
The foundational assets of a company serve as the bedrock upon which its entire operations and success are built, and we believe that our foundational assets are one of the main reasons we are in a favorable position to capture the opportunities we have ahead in the market. Through our (i) sizable distribution model, (ii) our logistics operation, (iii) our strong client service, and (iv) a recognizable brand, we can reach, serve, and engage clients efficiently driving our growth, and long-term success. Below, we detail how we intend to leverage each of our foundational assets to scale our business for multiple segments, with low incremental costs.
First, our unique set of distribution channels are the pathways through which products reach customers. After a merchant becomes our client, the onboarding process begins with our logistics operations, in which they are essential for ensuring efficient supply chain management, timely delivery of products, and a cost-effective distribution. A well-organized logistics network can significantly enhance operational efficiency, reduce costs, and improve customer satisfaction by ensuring that our solutions reach our consumers promptly.
Similar to logistics, our customer service operations play a critical role in building and maintaining strong relationships with customers with a responsive and highly specialized team to address inquiries, resolve issues promptly and proactively, and enhance customer loyalty, thereby contributing to repeat business and positive word-of-mouth marketing.
Last, a strong brand serves as a strong representation of the company's core values, quality, and reputation. We believe it distinguishes the company from competitors, instills trust and credibility among consumers, and creates a loyal customer base. Our marketing department employs a cohesive approach in crafting a 360 degree communication strategy, ensuring that our brand maintains consistent visual elements and key messages across all channels. In line with our strategy, in 2025, we further strengthened our market position through high-visibility sponsorships, including Big Brother Brasil (featuring a 'Break Stone' brand activation) and the Stock Car Pro Series. Additionally, we established a strategic partnership with Luciano Huck as our brand ambassador, encompassing the sponsorship of his nationally televised show, 'Domingão com Huck,' where live client-facing activations showcased our ecosystem. This strategy was complemented by 'Stone On,' our flagship product launch event, all of which contributed to our continued recognition as one of Brazil’s most valuable brands according to the Interbrand annual ranking.
The development of our foundational assets with a strong emphasis on leveraging technology plays a pivotal role in supporting our operations as we seek to enhance efficiency, connectivity, and innovation within our integrated applications.
b.Stone Tech Platform: Build Once, Use Many
Technology plays a fundamental role in expanding our operations, supporting various teams and the expansion of our product portfolio as we execute our strategy. For this reason, having a unified platform is substantial to govern the entire client life cycle, to operate with multiple value propositions and flexibility. Envisioning our expansion, in the past years we have made improvements integrating technology teams, establishing consistent processes, and developing foundational components to create the Stone platform.
As we previously detailed in “Item 4. Information on the Company—B. Business Overview—Comprehensive Merchant Platform”, the Stone Platform is structured into four layers: (i) Experience; (ii) Product; (iii) Operational; and (iv) Internal. Within each of these layers there are multiple platforms, each housing independently deployable services. These allow us to pursue with high scalability and implementation, using our specialized engineering tools, for a customized experience for each type of client.
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Evidence of our efforts towards scaling efficiently through our “Build Once, Use Many” philosophy, is the development of our banking solution. Rather than creating a stand-alone banking application, we focused on building a comprehensive banking platform, designed to serve a variety of applications and client segments. In “Item 4. Information on the Company—B. Business Overview—Comprehensive Merchant Platform” we have further detailed how we have been scaling efficiently within each of our platforms.
c.Scale with reduced incremental investments
Over the more than ten years of our journey, we have cultivated the platforms that underpin our ability to drive our future growth efficiently with minimal incremental costs, our foundational assets. Two main assets that contributed to our growth are our logistics and customer service platforms.
Our logistics platform was developed with a robust and precise infrastructure, and with this firmly established, we have been able to grow our operations with reduced incremental costs. Our logistics cost per client has decreased by 22% all while expanding our client base by more than 70% when comparing the fourth quarter of 2025 with the first quarter of 2023. This substantial reduction in costs amidst aggressive growth highlights our ability to leverage economies of scale, optimize logistics operations, and improve our cost structure.
We have identified similar trends in our client service platform, as we have reduced our cost per client over the past three years. Since the beginning, our approach to client service was not designed towards minimizing costs, but rather towards providing a superior service, through quality and proactivity. Our rationale was firmly grounded in the conviction that preemptive measures are superior to remedial actions, as by proactively addressing the root causes of client inquiries, we could deliver a superior service with remarkable efficiency. We have begun to capitalize on this approach, resulting in a decrease of approximately 45% in our cost per client on a unitary basis, when comparing the fourth quarter of 2025 with the first quarter of 2023. This reduction can be primarily attributed to the diminishing frequency of client interactions with our support services, reflecting the success of our proactive measures in mitigating issues before they arise and efficiency gains in our operations due to the increased application of artificial intelligence.
When examining these trends over time, the synergy between our growth strategies, monetization efforts, and efficiency improvements has yielded significant results, with a reduction in CAC, while scaling up the number of merchants we bring onboard. We remain committed to reducing our CAC in the future.
4.Enter New Markets
We believe our business model is well suited to serve clients in other markets where our technology, solutions, and support model can continue to disrupt traditional vendors and legacy business models. We believe this opportunity exists in:
•New Geographies—We are selectively expanding our reach within Brazil, focusing on markets where untapped client demand aligns with our existing strengths. In the future, we may also seek to grow our business by selectively expanding into new international markets where we can leverage our business model.
•New Sectors—In the future, we may selectively expand into other sectors where we see an opportunity to leverage our capabilities to provide a differentiated value proposition for clients.
•Client Segments—We are a company focused on merchants, but if we believe we have an opportunity to address final consumers within our already existing merchants ecosystem with a strong competitive advantage, we may also seek to do so.
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5.Selectively Pursue Acquisitions
Although we are primarily focused on growing our business organically, we may selectively pursue strategic acquisitions that strengthen our competitive position, enhance operational efficiency, and expand our capabilities. These acquisitions can help us build on our technological capabilities, deepen our expertise, scale our operations, expand our geographic presence, or position us in complementary market segments.
Additionally, we assess opportunistic transactions that could create value, especially in challenging market conditions, focusing on areas that align with our long-term strategy or strengthen our competitive position.
Trends and Challenges
In the dynamic landscape of the financial services, the possibilities for innovation and disruption are ever-present. With the rapid advancements in the regulatory environment in Brazil and in technology, companies have an expansive reach for experimentation. These innovations have the potential to revolutionize traditional services, offering more efficient processes, greater accessibility, and enhanced security. We believe there are various important trends that are impacting the growth and market opportunity for our services in Brazil. These include:
•Increasing Use of Electronic Commerce—Commerce in Brazil is increasingly being transacted through electronic accounts, such as credit, debit, and prepaid cards, eWallets and Pix instead of cash and checks. Our main goal as a financial services company is to allow our merchants to accept all types of payments existent in the market, and thus we need to constantly evolve our solutions to do so. With the launch of Pix in the end of 2020, more volume has been transferred to electronic accounts, leading to a decrease in the amount of cash in circulation. Also, according to the Focus report from the Central Bank, nominal household consumption in Brazil is expected to increase at a compounded annual growth rate between 5-6% each year between 2025 and 2029. We believe this represents one of the key drivers for card volumes growth.
•Increasing Shift to Digital Channels—Consumers and merchants are increasingly conducting commerce through digital channels online and through mobile devices. We believe there is an important opportunity for us considering that both in Brazil and Latin America, e-commerce solutions penetration is still relatively low in comparison to other countries. According to a 2024 study from Payments and Commerce Market Intelligence (PCMI), e-commerce sales in Latam are expected to grow with a CAGR of 24% between 2024-2027. When comparing Brazil to other Latam countries, the growth is on par with the regional average, with e-commerce CAGR between 2024 and 2027 expected to be 19%. Also, according to ABECS, e-commerce in Brazil grew 18.3% in 2025 compared with 2024, while physical retail in the region had a growth of 7.3% in the same period. Thus, there is still a big opportunity to address in this segment.
•More Open Regulatory Environment—The regulatory environment for the payments industry in Brazil has undergone significant changes in the past few years due to a concerted effort by the Central Bank and the Brazilian government to foster innovation and promote more open and fair competition. For example, (i) in 2020, BCB launched Pix, with the goal to streamline the process of completing payment transactions, making it straightforward, convenient, and direct for users, (ii) also in 2020, it enacted the rules for Open Finance in Brazil, which allows customers to authorize financial institutions to share some of their data with other authorized institutions and (iii) in 2025, the Brazilian government enacted Decree No. 12,712, which introduced measures to promote competition in the Worker Food Program (PAT) voucher market, including criteria for opening payment schemes, mandatory interoperability between payment schemes, and caps on interchange and MDR fees, aiming to level the playing field between incumbents and new entrants in this segment . All of these measures have the goal to continue fostering competition. We believe this has created an attractive environment for innovative financial technology providers, such as us, to continue to disrupt the market, bring better solutions to clients, and grow our market share.
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•More Integrated Solutions to Manage Increased Business Complexity—As consumers and merchants in Brazil increasingly connect across multiple channels, such as in-store, online and on mobile devices, an increased amount of data needs to be managed in their front office operations and back office functions. Thus, merchants are demanding better integrated and more seamless shopping and selling experiences, enabling them to manage their various commercial activities across channels on a single technology platform, and to conduct commerce more effectively, with greater functionalities and more sophisticated reporting tools. For example, most vendors in Brazil typically sell, manage, and process their point-of-sale and online solutions separately and on different platforms because they use older legacy technology platforms for point-of-sale transactions, which were not originally designed to incorporate e-commerce or mobile commerce. As a result, SMBs in Brazil typically have a lower penetration of management software use in comparison to other countries. According to a 2024 study from Atlantico, SMBs represent 60% and 46% of the workforce in Brazil and USA, respectively. However, the contribution of SMBs to GDP in Brazil is close to 25%, much lower than the 44% recorded in the USA, proving that there is an opportunity for these businesses to become more efficient, with the use of integrated financial services and software solutions being one way to do so.
•More Robust Technology Platforms, with Easier Connectivity Tools—In order to provide the advanced functionality, seamless omni-channel experience, tighter integration, and better connectivity that merchants are seeking, providers require next-generation technology platforms with cloud-based architectures and more flexible connectivity solutions, such as gateways and APIs, to develop, host, deploy and manage these capabilities in a fast, flexible and cost-effective manner. The older legacy platforms provided by incumbent vendors typically do not have many of these capabilities and can be difficult and expensive to maintain.
•Faster and More Specialized Customer Support—In order to support merchants with advanced technologies, integrated solutions between financial services and multiple sales channels, providers in our market need to utilize more specialized and dedicated customer support operations that can help resolve the complex technical issues they face. The increased complexity that these new technologies can create for merchants requires customer support teams with experience and expertise in working with advanced technologies, advanced diagnostic technology, and the ability and support structure to respond quickly and effectively. Also, there is a significant opportunity to further enhance efficiency in customer support by leveraging AI. Through chatbots, we can already address simpler client issues and provide an initial screening of more complex cases, directing them to a support agent when necessary. This is an approach we are already implementing, and we believe expanding its use will further streamline operations and improve even more our customer support.
•New Business Models To Serve Clients—As consumers and merchants increasingly adopt new technologies for commerce and migrate towards digital channels, new approaches and business models are required to meet the demand for faster, safer, and more convenient commerce-enabling solutions. For example, we believe digital channels, including social media, email, and mobile platforms, provide more opportunities to reach and engage potential customers, while AI can enhance lead qualification, recommend tailored products, and predict customer intent. Together, these technologies enable businesses to not only increase efficiency but also deliver highly targeted, personalized experiences, ultimately driving higher conversion rates and improving overall sales performance.
We believe we are well-positioned to take advantage of these trends and opportunities, and to continue to disrupt the market, bring better solutions to clients, and grow our market share.
Our Solutions
We provide a wide range of solutions and tools for merchants, including a variety of payments, banking, credit and software products with features designed to attract and retain clients, focusing on helping our customers to manage and drive growth in their businesses. As a result of the divestment of software businesses, we are focusing exclusively on solutions from our continuing operations, which encompass our financial services. These solutions are described in the tables below:
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Payments
SolutionDescription
App Store for POSsWe have an application in our POS devices that can provide additional software features to a merchant’s point-of-sale through our open, cloud-based Mamba App store. This enables third-party app developers to deploy new complementary solutions to the point-of-sale for merchants and consumers, such as mobile phone top-up, bill pay, and APM acceptance.
e-Commerce Gateway
Full-featured e-commerce gateway that seamlessly connects e-commerce merchants to the Acquirers of their choice, enabling them to accept a wide variety of electronic payment options. Our clients are provided with a set of robust analytics, reporting and auditing capabilities through their portals.
Omni-Channel Merchant AcquiringWe are a fully licensed, end-to-end omnichannel merchant acquiring solution. With a large basket of features and products, clients are equipped with the tools they need to accept a wide array of electronic payments and effectively and efficiently manage their transaction receivables. Clients can integrate to our platform through multiple channels.
Payment Link
This solution enables customers to make personalized sales by generating an exclusive link for their customers or use a single link to charge multiple people at the same time, as well as permitting them to limit the number of accepted payments and accept major Card Brands and digital wallets, including Apple Pay and Google Pay.
Pix QR CodeOur Pix QR Code is an instant P2M payment solution that enables merchants to accept Pix payments already integrated with the POS and thus enabling merchants to reconcile these transactions together with card receivables.
Point of Sale Gateway
In-store gateway for the point-of-sale that connects merchants to the Acquirers of their choice enabling a wide array of payment options including traditional and APM methods. It also offers clients the ability to integrate their POS with other business management software, such as inventory and tax management solutions.
Prepayment solutions
Cash management solution that allows clients to accelerate the payment of their future receivables, including installment-based receivables up to 12 months. Clients can request and predetermine the payment of their receivables via their client portal, directly on their mobile application, POS device, via email, or over the phone with our dedicated receivables prepayment team. Transactions can be settled in the same day, in working days or up to two days after the transaction is approved, according to the merchant’s choice.
PSP PlatformWe have a sophisticated PSP solution with a quick and simple API integration, enabling omni-channel players and marketplaces to accept a wide array of electronic payments through multiple channels. With a large basket of features and products, clients are equipped with the tools and features they need to grow and manage their business.
Split Payments
Our split payments solution allows software platforms, marketplaces, and partners from various industries to add value to their solutions with sales functionalities that enable a single buyer transaction to be shared among multiple recipients. This feature is available to StoneCo customers who enable sales via credit and debit cards, Pix, and boletos.
Tap on Phone solutionSolution that allows merchants to sell via their smartphones, both Android and iOS, through an app.
Web CheckoutFrictionless e-checkout that simplifies the buying experience leading to increased client conversion.
Banking
SolutionDescription
Digital Banking 
Fully digital banking platform, integrated into our acquiring solution, that enables merchants to get paid and manage their finances more effectively. This platform can provide the automation of cash management through a direct integration with the client’s ERP. It is also integrated with our credit solution.
Debit cardsOur product enables customers to make purchases using funds available in their accounts, as well as withdrawals from automated teller machines (ATMs) within the accredited network. It is also available in a virtual version so that our customers can use it for online purchases in e-commerce.
Pix transfers
Enables clients to send and receive instant money transfers using their digital banking accounts. It allows users to send and receive payments 24/7 via QR codes, phone numbers, or unique identifiers.
Investment solutions
We have introduced time deposit certificates issued by Stone SCFI, through which merchants can invest in a fixed-income investment alternative. This provides customers with a reliable source of returns while contributes to our funding strategy.
Payment Slips (Boletos)Our solution enables clients to accept this payment method by issuing a printed document as well as use our platform to pay payment slips.
Payroll SolutionsProducts designed to enable our clients to manage their employees' working hours and facilitate payroll processing through Pix.
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Credit
SolutionDescription
Working capital We offer an integrated working capital solution with an innovative repayment schedule, where clients pay down their loans in line with their performed TPV.
Credit cardsOur product has a diverse array of features designed to provide customers with flexibility in their day-to-day transactions while aiding in the financial management of their businesses. All functionalities are conveniently accessible through our digital banking app. Customers receive both a physical card for brick-and-mortar purchases and a virtual version for online transactions, ensuring enhanced security for e-commerce endeavors. Our rigorous credit approval process, which blends external and internal data, ensures that credit limits are tailored precisely to each customer's needs.
Revolving loans
A short term and flexible credit facility that enables clients to withdraw, repay, and re-borrow funds up to a predetermined limit directly from their bank accounts.
Software
SolutionDescription
Financial ManagementTools for managing cash flow, expenses, revenues, and financial reporting
Inventory ControlTracking and management of product stock levels and movements
Tax Document IssuanceGeneration and issuance of fiscal invoices and tax documents required by Brazilian law
Reporting & DashboardsCustomizable reports and visual dashboards for business performance monitoring
Customizable ModulesModular system covering CRM, sales, invoicing, purchasing, inventory, and accounting
Online SchedulingSelf-service appointment booking by end customers through digital channels
Patient/Client RecordsDigital profiles storing each customer's history, notes, and service records
CRM & Customer RetentionTools to manage customer relationships and reduce churn through loyalty features
Social Media ManagementScheduling, publishing, and monitoring of posts across major social media platforms
Free App & Website for BusinessesReady-to-use mobile app and website provided to merchants for online visibility
POS & Multi-device CompatibilitySoftware operating across POS terminals, tablets, smartphones, and peripheral devices
Seasonality
We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues as a result of consumer spending patterns. Historically, our revenues have been strongest during the last quarter of each year as a result of higher sales during the Brazilian holiday season. This is due to the increase in the number and amount of electronic payment transactions related to seasonal retail events. Adverse events that occur during these months could have a disproportionate effect on our results of operations for the entire fiscal year. As a result of quarterly fluctuations caused by these and other factors, comparisons of StoneCo’s operating results across different fiscal quarters may not be accurate indicators of its future performance. For additional information, see “Risk Factors—Risks Relating to Our Operations—Our operating results are subject to seasonal fluctuations, which could result in variations in our quarterly profit”.
Raw Materials
We are dependent on a few manufacturers for a substantial amount of our POS devices. We are constrained by their manufacturing capabilities and pricing. We may face production delays or escalating costs if they are unable to manufacture enough product at an affordable cost. Some of the key components used to manufacture our POS devices, such as the chip, pin reader and battery, come from limited sources of supply in limited countries in Asia.
See “Item 3. Information on the Company— D. Risk Factors—Risks Relating to Our Operations—We are dependent on a few manufacturers for a substantial amount of our POS devices. We are at risk of shortage, price increases, changes, delay or discontinuation of key components from our POS device manufacturers, which could disrupt and harm our business”.
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Risk Governance
Risk management is performed by a specific area segregated from business areas and from the area that conducts the internal audit. The Chief Risk Officer is responsible for this specific area and reports to the Company’s CEO.
The risk management area is responsible for the identification, measurement, evaluation, monitoring, reporting and control of the risks to which we are exposed, including the following:
•Credit risk is defined as the potential losses for the Company deriving from: a counterparty’s failure to meet its obligations under the contracted terms, including Card Issuers, holders of credit cards issued by the Company, and working capital loan borrowers; a devaluation or a reduction in remunerations or expected earnings of a financial instrument arising from a deterioration in the credit quality of the counterparty, the intermediary party, or the mitigation instrument; a forbearance of financial instruments; or recovery costs of problem assets.
•Market risk is defined as the potential losses for the Company deriving from changes in prices or rates.
•Liquidity risk is defined as the potential losses for the Company deriving from its inability to: duly honor its expected and unexpected obligations, both current and future, including those arising from guarantees provided, without affecting its daily operations; trade a position at the market price, due to its significant size in relation to the volume normally transacted or due to some market discontinuity; and to convert electronic currency into physical or scriptural currency at the time of the user's request.
•Operational risk is defined as the potential losses for the Company resulting from external events or from failure, deficiency, or inadequacy of internal processes, personnel, or systems.
•Social risk is defined as the potential losses for the Company resulting from the violation of fundamental rights and guarantees or acts harmful to the common interest.
•Environmental risk is defined as the potential losses for the Company due to events associated with environmental degradation, including the excessive use of natural resource.
•Climate risk is defined as the potential losses for the Company caused by events associated with: (i) the transition process to a low-carbon economy, in which the emission of greenhouse gases is reduced or compensated and the natural mechanisms for capturing these gases are preserved (transition climate risk); and (ii) frequent and severe weather or long-term environmental changes, which may be related to changes in climate patterns (physical climate risk).
For more information regarding risks, refer to “Item 11. Quantitative And Qualitative Disclosures About Market Risk”.
In addition to the above risks, the risk management area is responsible for the potential losses arising from interactions between them, regulatory capital management, and business continuity management.
The key governance bodies for risk management are the following:
•The Board and its committees, particularly the Risk, the Finance, and the Audit Committees.
•The Executive Management Committee and its supportive committees, particularly the Internal Risk and the Crises Management Forums.
The key governance elements are as follows:
•Risk and Regulatory Capital Policy. It establishes the governance for risk and capital managements, defining structures and bodies and their respective roles and responsibilities.
•Risk Appetite Statement.
•Risk assessment methodology.
•Risk response policy.
•Incident response policy.
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Compliance
The Compliance area is responsible for Regulatory Compliance, Prevention of Money Laundering and Terrorist Financing (“AML/FT”), and Integrity Compliance. The Compliance manager reports to the Company’s Chief Legal and Compliance Officer. The Regulatory Compliance team is responsible for ensuring the company's regulatory adherence to applicable standards, as well as being the communication channel with regulators. The AML/FT team is assigned for implementation of AML/FT policies and measures, mitigating the risk of one using the Company’s products and services to commit illegal acts. The Integrity team is responsible for receiving and handling complaints, conducting corporate investigations, and contributing to the achievement of institutional objectives honestly and ethically, in compliance with the guidelines of the StoneCo Code of Ethics.
Regulatory Matters
Our business is subject to several laws and regulations that affect payment schemes, payment institutions and financial services, many of which are still evolving and could be interpreted in ways that could harm our business. While it is difficult to fully ascertain the extent to which new developments in the field of law will affect our business, there has been a trend towards increased consumer and data privacy protection. It is possible that general business regulations and laws may be interpreted and applied in a manner that may place restrictions on the conduct of our business. Below is a summary of the most relevant laws that apply to the operations of the Brazilian Payments System (Sistema de Pagamentos Brasileiro, or SPB).
Regulation of the SPB
Our activities in Brazil are subject to Brazilian laws and regulations relating to payment schemes and payment institutions. Law 12,865, establishes the first set of rules regulating the electronic payments industry within the overall SPB and creates the concepts of payment schemes, payment scheme settlors and payment institutions.
In addition, Law 12,865 gave the Central Bank, in accordance with the guidelines set out by the CMN, authority to regulate entities involved in the payments industry. Such authority covers matters such as the operation of these entities, risk management, the opening of payment accounts, and the transfer of funds to and from payment accounts. After the enactment of Law 12,865, the CMN and the Central Bank created a regulatory framework regulating the operation of payment schemes and payment institutions. The framework consists of CMN Resolution No. 4,282, dated as of November 4, 2013; Central Bank Resolution No. 80, dated as of March 25, 2021; Central Bank Resolution No. 150, dated as of October 6, 2021; Central Bank Resolution No. 96, dated as of May 19, 2021, and Central Bank Circular No. 3978, dated as of January 23, 2020, and other related rules and regulations.
Payment Schemes
A payment scheme, for Brazilian regulatory purposes, is the set of rules and procedures that governs payment services provided to the public, with direct access by its users (i.e., payors and receivers). In addition, such payment service must be accepted by more than one receiver in order to qualify as a payment scheme. The main features of payments schemes set out in the Brazilian regulation are the following:
•Payment schemes that exceed certain thresholds are considered to form part of the SPB and are subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain an authorization by the Central Bank.
•Payment schemes that operate below these thresholds are not considered to form part of the SPB and are therefore not subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain an authorization from the Central Bank, although they are required to report certain operational information to the Central Bank on an annual basis.
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•Limited-purpose payment schemes are not considered to form part of the SPB and, therefore, are not subject to the legal and regulatory framework applicable to the payment industry in Brazil, including the requirement to obtain authorization from the Central Bank. Limited-purpose payment schemes are those whose payment instruments are: (a) accepted only at the network of merchants pertaining to the same entity, even if not issued by it; or (b) accepted only at the network of merchants which have the same visual identity, such as franchisees and gas stations chains; (c) intended for the payment of specific public services, such as public transport and public telephone network; or (d) issued and accepted exclusively within the scope of a closed payment scheme and which are intended exclusively for payment of a specific type of product or service, of a restricted set of products or of services aimed at serving a certain economic activity or specialized markets.
•Certain types of payment schemes have specific exemptions from the requirement to obtain authorization from the Central Bank. This applies, for example, to payment schemes set up by governmental authorities, payment schemes set up by certain financial institutions, payment schemes aimed at granting benefits to natural persons due to employment relationships (such as meal vouchers) and payment schemes set up by an authorized payment institution in which financial settlement of payment transactions are carried out exclusively using the book-transfer method.
On October 6, 2021 the Central Bank enacted Central Bank Resolution No. 150, which replaced Central Bank Circular No. 3,682/13 and consolidated the rules on payment schemes. Such Resolution now governs the provision of payment services within the scope of payment schemes that are part of the SPB and establishes new criteria for a payment scheme to be considered part of the SPB. Besides, Central Bank Resolution No. 150 strengthened the governance mechanism to which the payment schemes rules — as released by the payment scheme settlor — are subject to. It not only has expanded the list of themes that, in order to be amended, are subject to prior authorization from the Central Bank, but also determined that the requests for Central Bank’s approval shall be preceded by consultation to the participants of the payment scheme.
Central Bank Resolution No. 150/21 also sets forth guidelines for payment scheme settlement. In this context, as a result of Public Consultation No. 104/24, Central Bank Resolution No. 522/25 sought to enhance these rules in three key areas, which will be updated by the payment scheme settlor until May 2026: (i) centralized risk management; (ii) transparency of scheme fees; and (iii) anti-money laundering and counter-terrorism financing (AML/CFT) measures.
While these provisions could help reduce participants’ financial exposure—since the settlor would be responsible for residual risks—they may also require acquirers to make additional contributions to the risk management mechanisms set by the scheme.
Payment Scheme Settlor
A payment scheme is set up and operated by a payment scheme settlor, which is the entity responsible for the payment scheme’s authorization and functioning. Payment scheme settlors, for Brazilian regulatory purposes, are the legal entities responsible for managing the rules, procedures and use of the brand associated with a payment scheme. Central Bank regulations require that payment scheme settlors must be (i) incorporated in Brazil, (ii) have a corporate purpose compatible with their payments activities and (iii) have the technical, operational, organizational, administrative and financial capacity to meet their obligations. They must also have clear and effective corporate governance mechanisms that are appropriate for the needs of payment institutions and the users of payment schemes. As mentioned above, Central Bank Resolution 150 strengthened the governance mechanism to which the payment schemes rules are subject to, therefore, payment scheme settlors shall observe them in order to maintain their payment schemes in compliance with the applicable regulation.
Payment Institutions
A payment institution is defined as the legal entity that participates in one or more payment schemes and is dedicated to the execution of the remittance of funds to the receivers in payment schemes, among other activities. Specifically, based on the Brazilian payment regulations, payment institutions are entities that can be classified into one of the following four categories:
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•Issuers of electronic currency (prepaid payment instruments): These payment institutions manage prepaid payment accounts for Cardholders or end-users. They carry out payment transactions using electronic currency deposited into such prepaid accounts, and convert the deposits into physical or book-entry currency or vice versa.
•Issuers of post-paid payment instruments (e.g., credit cards): These payment institutions manage payment accounts where the end-user intends to make payment on a post-paid basis. They carry out payment transactions using these post-paid accounts.
•Acquirers: These payment institutions do not manage payment accounts but enable merchants to accept payment instruments issued by a payment institution or by a financial institution that participates in the same payment scheme. They participate in the settlement process for payment transactions by receiving the payment from the Card Issuer and settling with the merchant.
•Payment Initiation Service Provider (“PISP”): These payment institutions provide payment transaction initiation services without requiring the initiation of payment transactions. They accomplish this without (a) managing a payment account; and (b) intermediating, at any time, the funds transferred in the respective payment transaction.
Payment institutions must be authorized to operate in Brazil and must have a corporate purpose that is compatible with payments activities. As for payment schemes, the regulations applicable to payment institutions depend on certain features, such as the annual cash value of transactions handled by the payment institution or the value of resources maintained in prepaid payment accounts. Certain financial institutions have specific exemptions from the requirement to obtain an authorization from the Central Bank to act as a payment institution and provide payment services. Furthermore, certain payment institutions are not subject to the legal and regulatory framework applicable to the payment industry in Brazil. This applies, for example, to payment institutions that only participate in limited-purpose payment schemes. Moreover, payment institutions that provide services in the scope of programs set up by governmental authorities aimed at granting benefits to natural persons due to employment relationships (such as meal vouchers) are required to obtain an authorization from Ministery of Labor and Employment (Ministério do Trabalho e Emprego).
The CMN and Central Bank regulations applicable to payment institutions cover a wide variety of issues, including: (i) penalties for noncompliance; (ii) promotion of financial inclusion; (iii) reduction of systemic, operational and credit risks; (iv) reporting obligations; and (v) governance. The regulation applicable to payment institutions also cover “payment accounts” (contas de pagamento), which are the end-user accounts, in registered (i.e., book-entry) form, which are opened with payment institutions that are Card Issuers of prepaid or post-paid instruments and used for carrying out each payment transaction. Central Bank Resolution No. 96, classifies payment accounts into two types:
•Prepaid payment accounts: Which is destined for the execution of payment transactions in electronic currency available as a result of previously deposited funds; and
•Post-paid payment accounts: Which is destined for the execution of payment transactions which do not depend on the prior deposit of funds.
In order to provide protection from bankruptcy, Law 12,865 requires payment institutions that issue electronic currency to segregate the funds deposited in prepaid payment accounts from their own assets. In addition, with respect to prepaid electronic currency, the payment institutions must hold a portion of the funds deposited in the prepaid payment account in certain specified instruments: either (i) in a specific account with the Central Bank entitled Electronic Currency Correspondent Account that pays interest according to the SELIC Rate; or (ii) in federal government bonds registered with the SELIC. The portion of the prepaid electronic currency that must be held in this form is currently 100%.
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Our Regulatory Position
Some of our subsidiaries perform activities that are subject to Law 12,865 or Law 4,595 and regulations from the Central Bank and the CMN, as applicable, which are Stone IP, Stone Sociedade de Crédito Direto S.A. (“Stone SCD”), Stone SCFI and Stone DTVM. On November 5, 2021, MNLT applied for registration with CVM to become a category B public company (allowed to issue any securities other than shares and depositary receipts or other securities that entitle the holder to purchase shares or share certificates). As required by the applicable regulations, the subsidiaries have submitted operational authorization requests before the Central Bank and CVM, as applicable, which current status follows below:
•Stone IP was granted a license to operate as a payment institution in the Acquirer category on July 3, 2017, in the issuer of electronic currency category on April 24, 2018, in the issuer of post-paid payment instruments category on November 24, 2021 and in the payment initiation service provider category on October 28, 2021.
•Stone SCD was granted a license to operate as a financial institution established as a direct credit company (sociedade de crédito direto) on July 19, 2019.
•MNLT applied for registration to become a category B public company, aiming at being entitled to issue securities other than shares and depositary receipts or other securities that entitle the holder to purchase shares or share certificates, which was granted by the CVM on February 2, 2022.
•Stone SCFI was granted a license to operate as a financial institution established as a credit, funding and investment company (sociedade de crédito, financiamento e investimento) on January 5, 2024.
•Stone DTVM was granted a license by the Central Bank to operate as a brokerage firm established as a securities distribution company (distribuidora de títulos e valores mobiliários) on November 6, 2025. The registration with the CVM is still ongoing.
Pagar.me Instituição de Pagamento S.A. (“Pagar.me”) applied for a license to operate as a payment scheme settlor on February 3, 2017, and as a payment institution in the acquirer and issuer of electronic currency categories on April 7, 2017. Due to changes in the Central Bank regulation, Pagar.me’s payment scheme is no longer subject to the authorization of Central Bank. Therefore, Pagar.me’s authorization request as a payment scheme was dismissed by the Central Bank on June 8, 2017. In relation to the application for a license to operate as a payment institution, Pagar.me required the withdrawal of its request proceedings in 2024 as a result of a decision to migrate acquiring and banking solutions operations from Pagar.me to Stone IP.
Additionally, on October 20, 2020, one of our subsidiaries, TAG, received approval from the Central Bank to operate as a trade repository (entidade registradora) in Brazil, and, therefore, is subject to Brazilian laws and regulations relating to financial assets and securities subject to centralized deposit on central securities depositories or registration in trade repositories, as per Brazilian Federal Law No. 12,810, dated as of May 15, 2013 and its related rules and regulations. The effective date of the rules that established the mandatory registration of card receivables with trade repositories and stated that credit transactions guaranteed by such receivables should be registered with the same trade repository was June 7, 2021.
Moreover, we started issuing post-paid instruments through Stone Cartões Instituição de Pagamento S.A. (“Stone Cartões”). As provided in Central Bank Resolution 80, payment institutions that act as post-paid instrument issuers are not required to file an authorization request until the regulatory threshold is met. Stone Cartões met this threshold in March 2025 and submitted its authorization request to the Central Bank in June 2025.
Upon obtaining authorization from the Central Bank, Stone DTVM must seek specific additional authorizations from the CVM to act as a fiduciary administrator and asset manager. Under current regulations, while the DTVM license is granted by the Central Bank, the performance of certain activities remains subject to CVM’s specific oversight and regulatory requirements.
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Since their licenses to operate were granted by the Central Bank, Stone IP, Stone SCD, Stone SCFI and Stone DTVM have been in compliance with applicable payment and financial laws and regulations.
In addition, Law 12,865 prohibits payment institutions from performing activities that are restricted to financial institutions, which are regulated by Law 4,595. There is some debate under Brazilian law as to whether providing early payment of receivables to merchants could be characterized as “lending,” which is an activity that is restricted to financial institutions. Similarly, there was some debate as to whether the discount rates applicable to this early payment feature should be considered as “interest,” in which case the limits set by the Brazilian Usury Law would apply to these rates. This discussion was formally settled as of June 28, 2024, with the enactment of Law No. 14,905, which expressly removed all institutions under the regulation of the Central Bank from the applicability of the Brazilian Usury Law.
If we fail to comply with the requirements of the Brazilian legal and regulatory frameworks, we could be prevented from carrying out our regulated activities, we could be (i) required to pay substantial fines (including per transaction fines) and disgorgement of our profits, (ii) required to change our business practices or (iii) subjected to insolvency procedures under an intervention by the Central Bank and the out-of-court liquidation of Stone IP, Stone SCD, Stone SCFI and Stone DTVM. We could also be subject to private lawsuits. For additional information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Legal and Regulatory Matters—Our business is subject to extensive government regulation and oversight in Brazil and our status under these regulations may change. Violation of or compliance with present or future regulation could be costly, expose us to substantial liability and force us to change our business practices, any of which could seriously harm our business and results of operations”.
The Central Bank’s regulations also allow payment schemes to set additional rules for entities that use their brands. Since we participate in these third-party payment schemes, we must comply with their rules in order to continue accepting payments from payment instruments bearing their brands.
Regulatory Capital Requirements for Payment Institutions, Minimum Capital and Prudential Regulation
On December 1, 2021, the Central Bank enacted Resolution No. 168, which provides for the accounting criteria applicable to the preparation of the consolidated financial statements of prudential conglomerates of authorized payment institutions and the operating procedures of such documents by financial and payment institutions. This rule created the prudential conglomerate led by payment institutions authorized to operate by the Central Bank, aimed at better addressing risks arising from the activities held by the payment institution and the other ones carried out by other institutions of its economic group.
The main aspects of such Central Bank’s strategy was subject to Public Consultation Notice 78, closed on January 26, 2021, which resulted in the enactment of Resolutions Nos. 197, 198, 199, 200, 201 and 202, all dated of March 11, 2022. According to Central Bank Resolution 197, the prudential conglomerates are now segmented into 3 types depending on whether the conglomerate is composed by financial or payment institution as well as if it is headed by a financial or payment institution:
•Type 1: conglomerates which are composed of both financial and payment institutions, but headed by a financial institution (“Type 1 Conglomerates”);
•Type 2: conglomerates which are not composed of financial institutions; and
•Type 3: conglomerates which are headed by a payment institution and also composed of a financial institution ("Type 3 Conglomerates”). The conglomerate headed by Stone IP has been defined as a Type 3 Conglomerate.
Type 3 Conglomerates shall maintain minimum capital adequacy ratio in relation to its risk-weighted assets ("RWA”), which shall be assessed in a similar manner to the approaches established by the Basel Committee on Banking Supervision (“BCBS”). The main differences between this new method and the one applicable to financial institutions are the concept of a specific RWA component for payment related risks and the consequent review of the components related to credit, market and operational risk.
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In June 2023, the Central Bank published Resolution No. 324, which brought significant changes to the criteria for recognition of credit risk mitigation for banking book exposures that are risk-weighted under the standardized approach, to implement the credit risk mitigation standards of the Basel III reforms and to make payment account balances eligible for recognition as financial collateral.
In respect of the implementation of Basel III reforms, the Central Bank also published Resolution No. 356 on November 2023, which establishes the key components of the new standardized approach for measuring operational risk capital requirements, replacing the three former methodologies (BIA, ASA, ASA2). The new standardized approach is based on two key variables: (i) the Business Indicator (BI), which is a financial-statement-based proxy for operational risk, and (ii) the average historical losses of the Conglomerate. On June 12, 2024, the Central Bank enacted Normative Ruling No. 479, which specifies the BI composition. The new standardized approach is phasing in from 2025 until 2028.
In September 2025, Central Bank launched Public Consultation No. 123/2025 to gather contributions on the creation of the Simplified Liquidity Coverage Ratio (LCRS) — applicable to groups containing at least one financial institution classified in Segments 3 or 4 (S3 or S4) that raise funds from the public through deposits or the issuance of securities — and the expansion of the scope for the Liquidity Coverage Ratio (LCR) to institutions in Segment 2 (S2). The proposal aims to strengthen the capacity of financial institutions to maintain reserves of High-Quality Liquid Assets (HQLA) to withstand liquidity stress periods, ensuring the fulfillment of obligations, business continuity, and the stability of the national financial system. The consultation period ended on November 1, 2025 and the rule is expected to be enacted in 2026.
Additionally, in November 2025, the Central Bank published Joint Resolution No. 14 and Resolution No. 517 establishing a new methodology for calculating the minimum limits for paid-in capital and net equity for authorized entities. Such methodology will primarily consider the activities actually performed, rather than the specific type of institution. The additional capital must be gradually increased by the entities from July 1, 2026 to December 31, 2027.
The Central Bank is responsible for defining which subsidiaries are included in the prudential conglomerate, assessing each entity's risk profile to ensure proper regulatory oversight and capital adequacy within the group. As of January, 2026, the following entities were part of the Prudential Conglomerate: Stone IP, MNLT, Pagar.me, Stone SCD, Stone SCFI, Stone Cartões, Stone DTVM, Stone Pay Meios de Pagamento Ltda., Tapso Fundo de Investimento em Direitos Creditórios Responsabilidade Limitada (“FIDC TAPSO”), Soma III Fundo de Investimento em Direitos Creditórios Responsabilidade Limitada and FIDC ACR I. As per the same date, the minimum Basel ratio defined for the prudential conglomerate was 10.5%.
Post-paid Payment Instruments Financing
On the scope of Law 14,690, also known as “Desenrola Brasil”, the CMN and the Central Bank published a set of rules on December 21, 2023 aimed at regulating the provisions on interest on revolving and installment credit operations and combating the financial over-indebtedness of Brazilian consumers, especially resulting from credit card debts.
As such, the CMN Resolution No. 5,112 of December 21, 2023 (“CMN Resolution 5,112”) provided significant changes in the regulation of revolving loans by revising CMN Resolution No. 4,549 of January 26, 2017. The main changes cover the granting of financing related to the outstanding balances of credit card invoices and other post-paid instruments. Although CMN Resolution 5,112 became effective immediately, its provisions apply only to credit transactions entered into as of January 1, 2024.
In addition, CMN Resolution 5,112 also introduced changes related to the portability of credit operations and the disclosure of information when contracting credit operations, as provided for in other regulations. These provisions will become effective as of July 1, 2024.
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With regards to the Central Bank regulation, Central Bank Resolution No. 365, of December 21, 2023, amended Central Bank Resolution 96, in order to provide greater transparency and visibility for post-paid Cardholders in their relationship with the issuer. As such, issuers were required to adjust the invoices and the communication with their clients. These provisions became effective as of July 1, 2024.
Pix
Pix was created by the Central Bank through Resolution No. 1, issued on August 12, 2020, establishing a real-time payment system designed to make transactions faster, simpler, and more convenient for users. The primary goals of Pix include: (i) enhancing competition; (ii) improving market efficiency; (iii) reducing costs; (iv) straightening security; (v) enhancing client experience; (vi) accelerating the digitalization of the retail payment market, thus promoting financial inclusion; and (vii) overcoming gaps of other payments methods. To ensure proper functioning, the Central Bank issued further regulation on the Pix ecosystem, setting forth operational procedure, technological infrastructure, disclosure requirements and potential penalties to relevant participants.
Pix transactions are processed through the Brazilian Instant Payments System (Sistema de Pagamentos Instantâneos) (“SPI”), a centralized payment infrastructure developed by the Central Bank, and implemented through Central Bank Circular No. 3,985, dated as of February 18, 2020, currently under Central Bank Resolution No. 195, dated as of March 3, 2022.
All financial and payment institutions with a license to operate granted by the Central Bank and which have more than 500,000 Active Client accounts (including checking, savings and payment accounts) are required to be a participant on Pix and on the SPI. The participation by other financial and payment institutions that operate client accounts by the National Treasury Secretariat is optional. This structure ensures broad coverage of the payment system while maintaining regulatory oversight.
On October 29, 2020, the Central Bank issued Resolution No. 30, which amends Central Bank Resolution No. 1 to include new functionalities in the Pix regulations. Among these new functionalities is the Pix Cobrança, through which merchants, suppliers, service providers and other entrepreneurs can issue a QR Code to make instant payments, in points of sale or e-commerce, for example, or collections due on a future date. Another functionality is Pix Agendado, through which users can schedule transactions.
As Pix gained scale in 2021, concerns about security during the usage of this payment method also increased. To address these, Central Bank Resolution No. 142, dated as of September 23, 2021, implemented mandatory frauds records and reports prepared by financial and payment institutions and established nighttime limits, by which users are limited to transactions of up to R$1,000.00 between 8 p.m. and 6 a.m., as a general rule, and a special devolution mechanism to request return of funds in case of frauds and other scenarios was created (“Mecanismo Especial de Devolução” or “MED”).
Moreover, on November 29, 2021, the Central Bank released two features related to cash withdrawal with Pix – Pix Saque (Pix Withdraw) and Pix Troco (Pix Change), which enable users to withdraw cash from any accredited merchant participating in the system, a role traditionally played by ATMs.
In December 2023, the Central Bank issued Resolutions Nos. 360 and 361 addressing the operational rules of its new Pix product called Pix Automático (Pix Automatic), which came into effect on February 28, 2025. Although it is also a product aimed at recurring transfers, the difference between Pix Automático and Pix Agendado (Pix Scheduled) is that Pix Automático will be able to give their consent to payments even if that charge is in a variable amount each month, unlike Pix Agendado the consent is given to a single transfer amount. Pix Automático features a new range of opportunities for institutions whose clients are mainly companies. The Central Bank Resolution No. 402 substituted Resolution No. 360 and made Pix Automático effective on June 16, 2025.
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Additionally, the Central Bank set the standards for Pix transfers initiated by Near Field Communication (NFC) on POS machines, which may significantly reduce the timeframe to initiate a transaction and increase Pix acceptance for face-to-face purchases on merchants. Such functionality has already been implemented and is currently available for Android users.
More recently, the Central Bank published Resolution No. 493, on August 28, 2025, regarding an enhancement of MED. The new MED 2.0 introduces advanced tracking of fraudulent transactions, allowing the recovery of funds across multiple layers of receiving accounts, moving beyond the first account that received the fraudulent transfer. Initially, this mechanism was scheduled for mandatory implementation in February 2026; however, given the complexity of its implementation, the deadline was extended to May 10, 2026, pursuant to BCB Resolution No. 546/2021, so that participants are not subject to the penalties set forth in the Pix Regulation for non-compliance related to the non-implementation of MED 2.0 until May 10, 2026.
Pix’s ecosystem is in constant evolution. As of December 31, 2025, there were almost 180 million active users, 162 million of which correspond to natural persons and more than 16 million legal entities. The Central Bank holds a roadmap designed to incorporate more functionalities to this payment method. Therefore, we are always keeping up with new rules and building new functionalities with the regulator and its stakeholders with the aim to offer the best payment services for our clients. In this sense, on March 27, 2025, the Central Bank announced that it was developing Pix em Garantia (Pix under Guarantee), which will allow clients to use Pix receivables as collateral in credit operations. There is currently no date set for the launch of this functionality. For more information regarding Pix market size, refer to “Item 4. Information on the Company – B. Business Overview – Our Markets”.
Open Finance
On May 4, 2020, the CMN and the Central Bank issued Joint Resolution No. 1, which defined the scope of services and data protection rules for the Open Finance system. Open Finance in Brazil allows customers to authorize financial institutions to share their data on customer record, transactions, products, and services with other authorized institutions, fostering competition, innovation and making the banking sector more efficient.
In this context, membership is mandatory for financial institutions belonging to the prudential segments 1 and 2, according to Central Bank Resolution No. 4,553, dated as of January 30, 2017, as well as for individual institutions or those belonging to conglomerates with more than 5 million customers, and institutions participating in credit portability services. In relation to the sharing of payment transaction initiation services, mandatory membership applies to mandatory participants in Pix, account-holding institutions belonging to conglomerates that include Pix mandatory participants, and payment initiation service providers (PISPs). In addition, if an institution voluntarily joins Open Finance for data sharing, all other entities within its conglomerate must also participate.
The implementation of Open Finance will be gradual, conducted in four phases, as follows:
a.Phase 1: sharing of public data belonging to participating institutions on their access channels and product/service channels related to checking, savings, prepaid payment accounts and to lending transactions;
b.Phase 2: sharing of customer record data and customer transactional data among the participating institutions upon customer’s consent;
c.Phase 3: sharing of payment initiation services, as well as forwarding credit transaction proposals; and
d.Phase 4: expansion of in-scope data to encompass foreign exchange, acquiring, investment, insurance, and open-end private pension transactions.
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Brazilian’s Open Finance ecosystem is one of the biggest in the world, since it aims to share both individuals and legal entities data, as well as payment and credit services. Furthermore, the scope of data also includes foreign exchange, acquiring, investment, insurance, and open-ended private pension transactions. Moreover, Brazil also is developing Open Insurance, a similar initiative in progress, made by SUSEP, Brazilian regulator on the insurance market.
On July 4, 2024, Central Bank Resolution No. 398 amended Joint Resolution No. 1/2020 in order to provide for a payment initiation journey without redirection to the app of the institution that holds the client’s account, in order to improve the payment experience.
In December 2024, the Central Bank issued Normative Ruling No. 575, which published the second Open Finance Monitoring Handbook. The regulation is a measure by the Central Bank to enhance Open Finance compliance rules, detailing the procedures to be followed by the Open Finance Governance Structure for monitoring the performance of the participant institutions.
The transitory governance structure, pursuant to Central Bank Circular No. 4,032, dated as of June 23, 2020 was substituted in 2024. On December 5, 2024, Open Finance was formalized as a legal entity capable of implementing the definitive structure established by Resolution No. 400. Financial and payments market associations have joined the legal entity structure to keep contributing and building a diverse ecosystem, promoting competition and innovation. This includes technical groups, a secretariat and a deliberative council, responsible for discussing and defining key topics such as APIs, security, compliance, and fraud prevention. Decisions made by this structure, which also includes input from financial and payments market associations, are subject to Central Bank review to ensure alignment with regulatory goals.
In December 2025, over 800 institutions were participating in Open Finance, with approximately 153 million active consents. Despite the impressive numbers, the APIs are still being built and implemented gradually, and a lot of adjustments and corrections are being made to enable data and services sharing. Payment and financial institutions are engaged in making the ecosystem prosper, although still facing challenges to establish a truly interoperable ecosystem.
Registration of Card Receivables
On June 27, 2019, a more robust legal framework for card receivables was enacted underneath CMN Resolution 4,734 and the Central Bank Circular 3,952. As a result of these regulations, card receivables due by Acquirers to merchants are subject to registration at trade repositories (entidades registradoras), which aim to facilitate (i) Acquirers to anticipate card receivables originated by other Acquirers, and (ii) such card receivables to be used as collateral in credit transactions.
Although the above mentioned regulations were initially expected to fully come into effect on August 3, 2020, this date was postponed by the Central Bank on different occasions, coming into effect on June 7, 2021.
We explore this opportunity both commercially (through StoneCo) and technologically (through one of our subsidiaries, TAG). In this context, TAG, which was authorized by the Central Bank to operate card receivables registration system on October 20, 2020, became operational by June 7, 2021, when it started to render services of card receivables registration.
When entered into force, the operating trade repositories faced operational challenges to comply with the regulation, mainly regarding interoperability between the registration systems and failures to protect creditor’s collaterals. After several interactions between trade repositories, market participants and the Central Bank, the Central Bank enacted Resolutions 264, 349 and 373 reinforcing duties of trade repositories to (i) ensure the reliability of information, whether owned or interoperated, through recurring reconciliations between registration systems, and (ii) develop mechanisms to protect creditors' collaterals.
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The Central Bank enacted Resolution No. 392, dated as of June 12, 2024, introducing the Financial Asset Catalog, in order to list the types of financial assets subject to registration and centralized deposit services and standardize the information of that should be registered for each type of asset.
Moreover, on December 20, 2024, the Central Bank submitted a Public Consultation to collect comments from the market on capping the interoperability fee for trade repositories for public consultation, aiming at reducing credit costs. As a result of the Public Consultation, the Central Bank issued BCB Resolution No. 472, dated as of May 8, 2025, which established maximum limits for interoperability fees to reduce credit costs with registration of card receivables.
In 2025, the Central Bank enacted BCB Resolution No. 514, dated as of October 21, 2025, which amended BCB Resolution No. 264 to (i) provide cancellation flow for a pre-contracted prepayment of receivables, those in which the contract between the acquirer or payment facilitator and the merchant establishes the payment of transactions in a period shorter than the maximum established by the payment scheme, according to merchant’s decision, and (ii) to oblige clearing and centralized settlement system operators to share the transaction settlement information to the trade for information reconciliation.
We believe that this ecosystem will increase our addressable market for both prepayment and credit solutions, while bringing transparency and more efficiency to the financial market.
Banking
On October 10, 2024, the Central Bank published Consultation No. 108, proposing regulation for banking as a service (BaaS). The regulation aims to enhance transparency in White-label structures, as well as to regulate certain aspects of the relationship between the service provider institution and the clients. On October 28, 2025, the Central Bank enacted Joint Resolution No. 16, which regulates the provision of Banking as a Service (BaaS). This resolution introduced the regulatory concept of BaaS in Brazil and established minimum requirements for its provision by payments and financial institutions authorized by the Central Bank. Financial and payment institutions acting as BaaS providers under Resolution No. 16 must comply with the provisions of the rule by December 31, 2026. We are currently evaluating the potential impacts of this regulation to our operations and will ensure compliance within the deadline for contract adjustments set forth in the rule.
Payment Slips (“Boleto”)
Boleto is a standardized payment instrument that integrates a payment scheme settled by the Central Bank. It can be issued either by a financial or a payment institution (in this case, the payment institution shall be authorized to act as an electronic currency issuer). Operational aspects, fees and other matters are regulated by a convention executed among market associations.
On December 12, 2024, the Central Bank enacted Resolution No. 443, which replaced Central Bank Circular No. 3,598 and consolidated the rules on this payment instrument. The new rule (i) enhances the governance of the Convention to ensure broad participation, aiming to increase diversity in the payment scheme’s decision making process; (ii) explicitly states the interoperability of boleto with other payment schemes; and (iii) introduces the “boleto dinâmico”, a mechanism through which the beneficiary of the funds can be modified following the negotiation of the underlying financial asset, thereby providing greater security for the buyer of the financial asset.
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Throughout 2025, participation in the definitive governance of the Boleto Convention was ensured through the Brazilian Association of Payment Institutions (ABIPAG), securing the representation of independent payment institutions in the establishment of the arrangement's rules. As a result of this participation, significant negotiations were conducted with banking associations, yielding substantial achievements, particularly: (i) voting rights in the deliberations of the governance committee; (ii) the inclusion of guiding principles regarding non-discriminatory access to products and services, equity, equal treatment, transparency, impartiality, and free competition; (iii) the elimination of the monopoly in the provision of registration and settlement infrastructure; (iv) the public disclosure of the arrangement's technical documentation; (v) the requirement for governance committee approval regarding changes to fees and the recovery of operating costs (RCO), as well as prior notification to participants providing a reasonable timeframe for compliance; (vi) the conditioning of data usage by the processing entity on the public and non-discriminatory offering of the resulting products to all participants; and (g) the incorporation of the authorized direct debit (DDA) Convention into the Boleto Convention.
Direct Credit Corporation
CMN enacted Resolution No. 5,050 on November 25, 2022, to regulate online lending fintechs and established new categories of financial institutions (“CMN Resolution 5,050”), such as sociedade de crédito direto – SCD. This is a financial institution that carries out loan transactions, financing and acquisition of credit rights exclusively through an electronic platform, using mainly its own capital as financial source for such transactions. The SCDs are authorized to assign credits related to their own transactions to: (i) financial institutions; (ii) investment funds; or (iii) securitization companies, provided that the quotas of the investment funds and the securitization assets issued by the securitization company are offered exclusively to qualified investors.
The regulatory framework for SCDs is simple and straightforward, considering that such institutions have a limited and less complex scope of activities, focusing exclusively on the extension of borrowings and financing, as well as on the acquisition of receivables, using financial resources that originate either from its own capital or from the BNDES.
Seeking to provide greater legal certainty to this “new credit market” the applicable regulation requires SCDs to select their clients based on consistent, verifiable and transparent criteria, including relevant aspects of credit risk assessment.
The SCDs are authorized to provide ancillary credit services, limited to an exhaustive list set forth in the regulation, encompassing: (i) credit analysis for third-parties; (ii) collection of debts owed by third-parties; (iii) acting as insurance representative in distribution of insurance related to credit transactions; and (iv) issuance of electronic currency and post-paid instruments. Notwithstanding, SCDs are prohibited from having equity interest in financial institutions, and also restricted from raising funds from the public, except for the issuance of shares.
Credit, Financing and Investment Company
Credit, Financing, and Investment Companies (Sociedade de Crédito, Financiamento e Investimento – SCFI) are financial institutions regulated by Law No. 4595 and Resolution CMN nº 5.237. Therefore, they are subject to the other general rules and obligations applicable to financial institutions.
These entities must be incorporated as corporations and are active in medium and long-term lending and investment in the securities market. Many non-bank financial institutions are part of economic conglomerates and operate as the financial arm of commercial or industrial groups. SCFIs can also operate in niches that are not served by bank conglomerates, particularly in loans and financing with specific characteristics, such as higher risk, agreements with merchants, among others.
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Securities Distribution Company
Securities Distribution Companies (Distribuidoras de Títulos e Valores Mobiliários - “DTVM”) are institutions treated as financial institutions for regulatory purposes and regulated by Laws No. 4.728 and No. 4,595 and Resolution CMN No. 5,008. These entities are authorized and supervised by the Central Bank, however, certain of their activities are also regulated by CVM.
DTVMs activities include the underwriting and distribution of securities in the primary and secondary markets, as well as the intermediation of public offerings. Within the scope of asset management and fiduciary services, DTVMs are expressly authorized to establish, organize, and manage investment funds and investment clubs, and may also provide portfolio management and securities custody services. Furthermore, these institutions may act as fiduciary agents, as well as issuing agents for certificates, performing a broad range of administrative and technical advisory roles within the financial and capital markets, among other activities.
Anti-Money Laundering and Terrorism Financing Rules
Our activities in Brazil are subject to Brazilian laws and regulations relating to anti-money laundering (or “AML”), and terrorism financing (“CFT”) rules. These rules require us to implement risk-based policies and internal procedures to identify and qualify clients, employees, suppliers and business partners (KYC, KYE, KYS and KYP, respectively), as well as to monitor and identify suspicious or atypical money-laundering transactions, which must be duly reported to the Financial Activities Control Council (“COAF”) Brazil’s financial intelligence unit.
We comply with the applicable AML laws and regulations and we have implemented required policies and internal procedures to ensure compliance with such rules and regulations, including procedures to report suspicious or atypical activities money-laundering and suspected terrorism financing to COAF. Our employees are aware of and have been periodically trained regarding our policies and internal procedures, which is mandatorily complied with and supervised. The Brazilian AML law specifies the acts that may constitute money laundering crimes, which may subject the agents of these illegal practices to imprisonment, temporary disqualification from managing enterprises up to 10 years and monetary fines.
The Brazilian AML law also sets forth business activities that are required to implement measures to monitor and prevent such crimes (which includes payment and financial institutions), subjecting those who do not comply therewith to warning, monetary fines and the revocation of the authorization to operate given by the competent regulators. Additionally, it created COAF, which has a key role in the Brazilian AML and counter-terrorism financing system, and it is legally liable for the coordination of the mechanisms for international cooperation and information exchange.
We have adopted the internal controls and procedures required by the Brazilian AML/CFT rules, which are focused on:
•Identifying and qualifying our clients, suppliers, employees and business partners.
•Conducting risk-based KYC, KYS, KYP and KYE processes.
•Carrying out a prior analysis of new products and services, under the perspective of money laundering prevention.
•Keeping records of all transactions.
•Reporting to COAF, within one business day and without informing the involved person or any third party: (i) any transaction exceeding the limit set by the competent authority and as required under applicable regulations; (ii) any transaction deemed to be suspicious, as required under applicable regulations; and (iii) at least once a year, whether or not suspicious transactions are verified, in order to certify the non-occurrence of transactions subject to reporting to COAF (negative report).
•Applying special attention to: (i) Politically Exposed Persons; (ii) unusual transactions or proposed transactions with no apparent economic or legal basis; (iii) clients and transactions for which the UBO (ultimate beneficial owners) cannot be identified; and (iv) situations in which it is not possible to keep the clients’ identification records duly updated.
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•Offering AML-CFT training for employees.
•Monitoring transactions and situations that could be considered suspicious for anti-money laundering purposes, which includes checking the compatibility between the volume of funds of a client and such client’s economic and financial capacity, as well as the origin of funds.
•Ensuring that policies, procedures and internal controls are commensurate with the size and volume of transactions.
•The unavailability of goods, values and rights possessed, directly or indirectly, by any individual or legal entity sanctioned by any resolution of the United Nations Security Council.
•Conducting and updating, in every 2 (two) years, risk assessments with respect to clients, employees, partners and suppliers, our business model, transactions, products and services.
•Assessing our AML-CFT program’s effectiveness annually.
On October 1, 2020 the new regulation enacted by the Central Bank with regards to AML/CFT policies came into force. In summary, the new regulation comprises: (i) the Central Bank’s Circular 3,978, which provides new guidelines for the AML/CFT processes and the expansion and the strengthening of the list of PEP (Politically Exposed People); and (ii) the Central Bank’s Circular Letter No. 4,001/20, which sets forth a list of operations and situations that may constitute money laundering and terrorism financing. By the end of 2020, the Central Bank required certain adjustments in our AML-CFT to fully comply with the new guidelines, all of which have been promptly implemented by us and acknowledged/confirmed by the Central Bank. Nevertheless, we are continuously reviewing our AML-CFT program to identify improvement opportunities. See “Item 3. Key Information—D. Risk Factors—Risks Related to Legal and Regulatory Matters—We are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations.”
E-Commerce, Personal Data Protection and Taxes.
In addition to regulations affecting digital payment schemes, we are also subject to laws relating to internet activities and e-commerce, as well as banking secrecy laws, personal data and data protection laws, consumer protection laws, tax laws and other regulations applicable to Brazilian companies generally. Internet activities in Brazil are regulated primarily by Law No. 12,965/2014 (the “Brazilian Internet Act” or “Marco Civil da Internet”), which establishes principles, guarantees, rights and duties for internet users and providers. LGPD (Brazilian General Data Protection Law), in force since September 2020, provides a comprehensive framework for the processing of personal data, including by digital means, with the purpose of protecting the fundamental rights of freedom and privacy. LGPD establishes nine legal bases, in addition to consent, upon which personal data may be lawfully processed, and its administrative sanctions have been fully in effect since February 2023.
LGPD imposes compliance obligations on all natural persons or legal entities, whether public or private, that process the personal data of individuals in Brazil, regardless of where that business or organization itself might be located. Since its enactment, the LGPD has been further developed through ongoing regulatory efforts by ANPD (the Brazilian data protection authority), which has actively issued binding regulations, technical guidelines, and enforcement decisions that continue to shape the applicable compliance framework.
Customer accounts on our digital platform are subject to the LGPD and bank secrecy law (Complementary Law No. 105/01 and Article 17 of the CMN’s Resolution No. 4,893/2021). We are also subject to trademark and software protection rules, and to tax laws and related obligations such as the rules governing the sharing of customer information with tax and financial authorities. In addition, our operations involving the Pix instant payment ecosystem are subject to the Pix regulatory framework issued by the Central Bank (Central Bank Resolution No. 1/2020). It is unclear whether the tax and regulatory authorities would seek to obtain information regarding our customers. Any such request could come into conflict with the data protection rules, which could create risks for our business.
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The laws and regulations applicable to the Brazilian digital payments industry are subject to ongoing interpretation and change, and our digital payments business may become subject to regulation by additional authorities. For further information on the risks relating to regulation of our business, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Legal and Regulatory Matters—Our business is subject to extensive government regulation and oversight in Brazil and our status under these regulations may change. Violation of or compliance with present or future regulation could be costly, expose us to substantial liability and force us to change our business practices, any of which could seriously harm our business and results of operations.”
Consumer Protection Laws
Due to some of our products, we are subject to several laws and regulations designed to protect consumer rights, most notably, the Consumer Protection Code, which sets forth the legal principles and requirements applicable to consumer relations in Brazil, including basic rights, such as access to and modification of personal information, product and service liability, protection against misleading advertising, and the right to clear information regarding products and services. While certain of our historical products and services, primarily those designed to support the business and professional operations of merchants, may fall outside the scope of the CDC, the expansion of our ecosystem over the last year has altered our regulatory profile. By broadening our offering to include a diverse range of financial products, credit solutions, and services specifically tailored for micro-entrepreneurs and individuals, we have increasingly engaged in activities that are subject to the protections and requirements of the Consumer Protection Code. These consumer protection laws could result in compliance costs.
Personal Data Protection
The LGPD establishes comprehensive framework for regulating the processing of personal data in Brazil, encompassing collection, use, processing and storage. Since its enactment, it has introduced significant changes to data protection regulations, impacting all interactions involving personal data, whether in digital or physical environments. The ANPD (Brazilian data protection authority) is the body responsible for overseeing and enforcing the LGPD. Historically, the LGPD has been adopting a predominantly educational approach, prioritizing the publication of guidelines, manuals, and technical studies to foster a culture of data protection. This "guidance-first" posture was also reflected in its initial sanctioning proceedings, which often favored corrective measures and guidance over the imposition of severe financial penalties.
More recently, the ANPD’s enforcement profile has undergone a significant transition toward a more rigorous and assertive supervisory posture. This institutional evolution was solidified in 2025 following the enactment of Provisional Measure No. 1,317/2025, which converted the ANPD into the National Data Protection Agency. This conversion granted the authority the formal status of an independent regulatory agency, endowed with increased technical, administrative, and financial autonomy. This new legal standing empowers the Agency to intensify its oversight of processing activities and reinforces its capacity to impose administrative sanctions for non-compliance with the LGPD.
As part of its rulemaking authority, ANPD has enacted the following resolutions: (a) Resolution No. 15/2024, establishing rules for the communication of security incidents; (b) Resolution No. 18/2024, regulating the role and activities of the “Data Protection Officer”; and (c) Resolution No. 19/2024, approving the regulation on international data transfers and the mandatory content of standard contractual clauses.
Notably, in January 2026, the ANPD and the European Commission issued an adequacy decision recognizing the equivalence between the LGPD and the General Data Protection Regulation (“GDPR”). This decision confirms that Brazil provides a level of protection comparable to the European Union, simplifying international data transfers between these regions.
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ANPD has established a comprehensive roadmap for its upcoming cycles of analysis and enforcement. According to its regulatory agenda, the ANPD’s priority themes for the following years center on high-risk processing activities and emerging technologies. Key areas of focus include the governance and use of artificial intelligence (AI), the processing of biometric and sensitive data, and the enhanced protection of data belonging to children and adolescents. Furthermore, the ANPD is expected to prioritize the regulation of high-risk and large-scale data processing, as well as the improvement of transparency and accountability standards for digital platforms.
Intellectual Property and Licensing
Our services primarily leverage proprietary software and integrated payment systems. We safeguard our intellectual property through a strategic combination of statutory frameworks and contractual mechanisms. Specially we rely on Brazilian Copyright Law and Software Law (Law No. 9,610/1998 and Law No. 9,609/1998, respectively), to protect our source code and creative assets, and the Brazilian Industrial Property Law (Law No. 9,279/1996), to secure our trademarks and trade secrets. Furthermore, we reinforce these legal protections through robust confidentiality and non-disclosure agreements with employees and third parties, complemented by licensed technology from strategic partners.
Trademarks
As of March 2026, our operations in Brazil utilize more than 150 registered trademarks. While 103 of these trademarks are owned directly by Stone Instituição de Pagamento S.A. (“Stone IP”) - including the “Stone” trademark -, the residual portfolio is owned by various affiliates of our Group. Our trademarks are either registered or currently under application with the Brazilian National Institute of Industrial Property (Instituto Nacional da Propriedade Intelectual - “INPI”). As the competent authority, the INPI grants owners exclusive rights of use for a ten-year term, which is subject to successive renewals for additional equal periods. We also hold usage rights for the “Pix” trademark, the instant payment ecosystem managed by the BCB, for which no licensing fees are required.
Domain Names
We have also registered several domain names with NIC.br, Brazil’s internet domain name registry, and domain registrars in the United States and elsewhere, including, among others, “stone.com.br”, “pagar.me”, “stone.co” and “investors.stone.co.”.
Campaigns
We operate under a rigorous regulatory framework regarding the offering and promotion of our services. Our marketing and commercial activities are designed to comply with Central Bank regulations, federal commercial promotion statutes (Law No. 5,768/1971), and self-regulatory codes (Advertising Self-Regulation Code by CONAR - Brazilian Advertising Self-Regulation Council). Management maintains a dedicated focus on legal and regulatory adherence seeking that all advertising and promotional materials meet the required standards of transparency and compliance.
Licensing
We maintain material agreements with major card schemes, such as Visa and Mastercard, which are essential to our operations as an acquirer in Brazil. This arrangements grant us non-exclusive, non-transferable licenses to use certain trademarks, service marks, and logos in connection with our acquiring and payment processing activities in Brazil. Under these license agreements, we are generally responsible for the costs and risks associated with our principal participant, and any applicable fees are determined by the standard rule an regulations established by the respective card schemes.
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Third-Party Rights and Usage
Other trademarks, service marks and trade names appearing in this annual report are the property of their respective owners. For convenience, some of the intellectual property referenced herein may appear without the ® and ™ symbols; however, such omission is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.
Brazilian Worker Food Program (Programa de Alimentação do Trabalhador - PAT)
Law No. 6,321, dated as of April 14, 1976, established the Worker Food Program (Programa de Alimentação do Trabalhador), a public policy that provides tax benefits to employers who finance the purchase of food or meals for their employees. The Federal Government issued Brazilian Decree No. 10,854, enacted as of November 10, 2021, to regulate this program and to grant authority to the Ministry of Labor and Social Security to manage it, among other labor matters.
Over the years, the main method of employers to provide their employees with the funds or vouchers to purchase food or meals within the scope of the Worker Food Program was closed payment schemes. However, Law No. 14,442, dated as of September 2, 2022, amended Law No. 6,321 to modernize this program and to allow the provision of funds for food or meals under this program through open payment schemes. In May 23, 2024, we obtained a Worker Food Program Acquirer license from the Ministry of Labor and Social Security to operate under open payment schemes.
Subsequently, the Federal Government issued Brazilian Decree No. 12,712, enacted as of November 11, 2025, to amend Brazilian Decree No. 10,854 to provide for certain measures, such as: (i) criteria for opening payment schemes; (ii) interoperability between payment schemes; (iii) cap to interchange and MDR fees; and (iv) maximum period for settlement to the merchant within 15 days. The application of these measures is still under discussion in the Courts, and a final decision may take some additional time.
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C.    Organizational structure
We carry out our operations principally through our Brazilian operating companies. A simplified organizational chart showing our current corporate structure, as of March 31, 2026 is set forth below:
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(1)
50% of Reclame Aqui Holding Ltd. is held by VLP Holding Ltd. Reclame Aqui Holding Ltd. has subsidiaries, in which we have 50% of equity interest. For more information, see note 4.1.2 – Subsidiaries of the Group on our Consolidated Financial Statements.
(2)
Previously “Stone Holding Instituições S.A.”, incorporated in 2022 due to a requirement of the Central Bank, to maintain the control of Stone Instituição de Pagamento held by a Brazilian company.
(3)
Previously “Linx S.A.”, the company was transformed into a special purpose entity (SPE) right after the sale of our software division.
(4)
Please refer to Item 4.1.2 – Subsidiaries of the Group on the Notes to consolidated financial statements for more details.
(5)
Vitta has subsidiaries, in which we have 100% of equity interest. Please refer to Item 4.1.2 – Subsidiaries of the Group on the Notes to consolidated financial statements for more details.
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D.    Property, plants and equipment
Properties
As of the date of this annual report, our registered office is located at Block 12D Parcel 33 and 95, 18 Forum Lane, Camana Bay, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our primary operational hubs are located in Brazil. Our São Paulo office supports product development, sales, marketing, finance and business operations and is located at Avenida Rebouças 2,880, Pinheiros, São Paulo/SP, Brazil. Our Rio de Janeiro office supports certain business activities, including customer relations and technology development and is located at Rua do Passeio, No. 38/40, Centro, Rio de Janeiro/RJ, Postal Code 20021-290, Brazil. All offices mentioned above are occupied under lease agreements and collectively comprise approximately 228,000 square feet of office space. In accordance with our business strategy, we also operate several proprietary Stone Hubs across Brazil. We believe that our facilities are sufficient for our current needs.
Additionally, as of December 31, 2025, we leased data center facilities in Rio de Janeiro and São Paulo in Brazil, and in Chicago, Illinois and Atlanta, Georgia in the United States.
We believe that our facilities are suitable and adequate for our business as presently conducted. However, we periodically review our facility requirements and may acquire new space to meet the needs of our business or consolidate and dispose of facilities that are no longer required.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the notes thereto as well as the information presented under “Item 3. Key Information—A. Selected Financial Data.” The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in “Item 3. Key Information—D. Risk Factors.”
A.    Operating results
Overview
As of December 31, 2025 we served more than 4.8 million active payments clients in Brazil mostly bricks-and-mortar but also digital merchants of all sizes and types, although our focus is primarily on targeting the approximately 15.1 million micro, small and medium-sized businesses, or MSMBs, in Brazil. We believe these merchants have been historically underserved and overcharged by traditional banks and legacy providers that use less effective distribution networks through bank branches, and outsourced customer service and logistics support vendors. Our offering currently covers payments, banking and credit and we have reached more than 3.6 million banking active clients —the majority of whom are also payment clients — and a credit portfolio of more than R$2.8 billion as of December 31, 2025.
The following is a summary of our key operational and financial highlights for continuing operations, unless otherwise noted:
•We generated R$14,153.8 million of total revenue and income in the year ended December 31, 2025, compared with R$12,049.6 million of total revenue and income in the year ended December 31, 2024, representing annual growth of 17.5% and compared with R$10,761.1 million of total revenue and income in the year ended December 31, 2023, representing annual growth of 12.0%.
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•We had a net income of continuing operations of R$2,377.1 million and adjusted net income of R$2,477.2 million in the year ended December 31, 2025, compared with net income of R$2,020.6 million and adjusted net income of R$2,108.2 million in the year ended December 31, 2024 and compared with net income of R$1,554.6 million and adjusted net income of R$1,437.2 million in the year ended December 31, 2023. See “Item 3. Key Information—Selected Financial Data” for a reconciliation of adjusted net income (loss) to our profit (loss) for the year.
•We processed TPV of R$560.9 billion, compared with R$516.2 billion in 2024, representing an annual growth of 8.7%, compared with R$438.3 billion in 2023, representing an annual growth of 17.8%.
•In banking, we have reached more than R$11.1 billion in deposits compared with R$8.7 billion in 2024, with an annual growth of 27.4% compared with R$6.1 billion in 2023 with a growth of 42.2%.
•In credit, our total credit portfolio reached R$2,836.3 million as of December 31, 2025, compared with R$1,207.6 million in 2024, representing an annual growth of 134.9%, compared with R$312.8 million in 2023, representing an annual growth of 286.1%.
Business Segment Information
In the second quarter of 2025, we entered into two separate agreements to sell our Software Businesses and Simplesvet. In connection with these transactions, the businesses were classified as held for sale and as discontinued operations, and their operations have been excluded from continuing operations and segment reporting for all periods presented in this annual report.
Prior to the third quarter of 2025, the Company reported its results under financial and software business segments as well as certain non-allocated activities comprised of non-strategic businesses, including results on its disposal/sale. Following the strategic decision to divest the Software Businesses, these operations were classified as discontinued operations and assets held for sale and thus we revised our internal reporting structure and the performance measures reviewed by our Chief Operating Decision Maker (“CODM”), which comprises our Chief Executive Officer ("CEO”) and Board of Directors, to align with our continuing operations. We therefore manage and report the business as a single operating segment.
The segment information for the years ended December 31, 2024 and 2023 has been retrospectively recast to reflect these changes and to enhance comparability. For further information, see “Presentation of Financial and Other Information—Selected financial data.”
Significant Factors Affecting our Results of Operations
Our Business
Our ability to attract, retain, and expand client engagement through a multi-product ecosystem
At the core of our strategy is a customer-centric culture focused on developing strong, long-term relationships through a superior customer service and continuous innovation to build a comprehensive product suite. By deeply understanding our clients’ needs, we can provide tailored solutions that enhance their experience and create lasting value. We believe this approach is fundamental to our ability to not only attract new merchants but also to drive deeper engagement and higher customer satisfaction and retention within our ecosystem.
Client Attraction and Retention: To effectively expand our active client base, we leverage a multi-channel distribution strategy that balances growth and profitability by selecting the most appropriate go-to-market approach for each customer profile. See “Item 4. Information on the Company—B. Business Overview—Business Model—3. Tech-enabled distribution” for additional information. This strategy ensures that our expansion is both strategic and sustainable. Also, our ability to drive activation and engagement within our ecosystem depends on a superior customer service experience and a comprehensive product suite.
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As a result of our local distribution, focus on customer support and broad suite of integrated solutions, we seek to increase cash in from our clients mainly from transaction volumes across our solutions from both new and existing clients, which in turn may contribute to higher banking deposits. These factors are important drivers of revenue growth, as our payments and banking bundle serves as the primary entry point to our financial services ecosystem, and a substantial portion of our revenues is derived from fees earned as a percentage of our clients’ TPV.
For the year ended December 31, 2021, our TPV was R$275.4 billion, growing to R$560.9 billion for the year ended December 31, 2025, with a CAGR of 19.5%, with banking deposits increasing with a CAGR of 49.8% from R$2.2 billion to R$11.1 billion in the same period. At the same time, our number of active payments clients expanded from approximately 1.8 million Payments Active Clients as of December 31, 2021 to more than 4.8 million Payments Active Clients as of December 31, 2025, with a CAGR of 28.4%, as shown in the graphs below:
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Engagement and Monetization: Since 2021, our strategy has revolved around bundling financial solutions to maximize value for our clients while driving engagement and revenue growth. Banking and acquiring bundles are our primary entry point, allowing our clients to seamlessly integrate financial services into their daily operations, while also establishing a strong foundation for deeper product adoption. For example, our banking account provides merchants with a series of money-in and money-out functionalities, including wire transfers, Boletos, Pix, receiving funds from their sales, saving money, among others, as well as having a credit and debit card.
Evidence from our success in this strategy is the steady growth of heavy users - clients who use three or more of our financial solutions – which reached 41% of our client base by December 31, 2025, a 4-percentage point increase from the previous year. Heavy users are particularly valuable, as their deeper engagement with our ecosystem translates into higher revenue generation and stronger client retention.
To further enhance engagement, we are continuously expanding our ecosystem with new product launches. A notable recent example includes our recently introduced payroll solution to help merchants better manage and pay their employees’ salaries and overtime. By continuously innovating and expanding our offerings, we strengthen client relationships, unlock new monetization opportunities, and solidify our position as the one-stop financial partner for MSMBs.
Rapid growth of our credit business and associated credit loss provisioning
The expansion of our revamped credit product is a key pillar of our strategy to enhance our value proposition for MSMBs, complementing our existing banking and acquiring bundles. By seamlessly integrating credit with our broader suite of financial services, we empower businesses with the liquidity they need to grow while increasing client engagement within our platform.
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Besides offering prepayment solutions to our merchants, we can also provide working capital credit solutions to our clients needing further funding to expand their businesses. We leverage our client data to offer this solution in a proactive and cost-effective way. Once onboarded, our clients can access credit through multiple channels in a simple and transparent way. Our credit offering enables our clients to pay back their loans effortlessly through the automatic retention of a percentage of their sales to pay for their monthly installment. Between July 2021 and February 2023, we temporarily stopped the credit issuance for new clients. We have since evolved our credit solution, focusing on building a fully automated process for credit underwriting, as we strive to make our decision models more sophisticated through the enrichment of data, strengthening our team and enhancing our risk policies, among other improvements. We relaunched our working capital credit solution in March 2023.
Our credit portfolio is accounted for in accordance with IFRS 9, which requires the recognition of expected credit loss provisions at the time of loan origination or credit limit expansion. This front loaded accounting treatment creates a timing difference, as we record the full expected loss provision at inception, while the related interest income is recognized over the life of the loan. Accordingly, as we continue to expand our credit portfolio and accelerate client acquisition, this dynamic may temporarily pressure gross profit and margins, reflecting the upfront provisioning expense, while the associated interest income is earned over time. As our lending base grows and matures, we continuously refine our underwriting models, risk assessment processes, and collection strategies to maintain a balanced approach between growth and financial resilience. We have also expanded our portfolio to include credit cards and revolving loans, further diversifying our credit offerings. Refer to “Item 4. Information on the Company—B. Business Overview—Business Model—Our Solutions” for more details.
As of December 31, 2025, our credit portfolio totaled R$2,836.3 million, composed of R$2,540.7 million of merchant portfolio (working capital and revolving credit) and R$295.6 million from credit cards, compared with R$1,207.6 million as of December 31, 2024, composed of R$1,093.5 million of merchant portfolio and R$114.2 million from credit cards. Our non-performing loans, or "NPL", 15-90 days were 4.43% and NPL over 90 days were 5.21%, compared to 2.47% and 3.61%, respectively, as of December 31, 2024. The coverage ratio over NPL 90 days totaled 264%, compared to 331% as of December 31, 2024.
Financing of our working capital solutions to our merchants
We offer different working capital tools, including, prepayment of receivables and credit solutions, supporting merchants’ liquidity needs. Through prepayment, merchants can advance their future expected receivables from credit or debit cards paying a discount rate based on a percentage of the total volume prepaid. The discount rate depends on factors such as merchant size, the maturity of receivables to be prepaid, and local market dynamics. An overall increase in TPV generally increases financial income given an overall increase in the volume of prepayments. Higher levels of installment transactions usually lead to higher demand for our prepayment. On the other hand, a smaller share of credit transactions leads to a decrease in the ratio of financial income from prepayments relative to total revenue and income, since debit card transactions are only eligible for same-day prepayment.
Due to the prepayment and credit solutions offering, optimizing funding costs is a key driver of our healthy margins. Through the date of this annual report, we have funded prepayment and credit to our Active Client base by (i) selling receivable rights owed to us by Card Issuers to banks we hold a commercial relationship with, or to special purpose investment funds, FIDCs that exclusively buy these receivables, (ii) using proceeds from general third-party borrowings, (iii) third-party deposits both from our clients and brokerage platforms, and (iv) using our own capital. For further information on our FIDCs, see “—Description of Principal Line Items—Financial Expenses, Net”. Our funding costs are primarily affected by our capital structure, interest rates, availability of third-party financing on attractive terms, and our ability to continue to attract investment into our FIDCs on appealing terms.
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Economies of scale resulting from our Technology Platform
Our technology platform allows us to expand efficiently, by growing our volumes and increasing the number of clients while reducing marginal operational costs.
The integrated nature of our platform also allows us to operate cost-effectively, reducing the need for operational personnel with a high level of automation. For instance, in 2025, we further optimized our customer support capabilities through the integration of Artificial Intelligence via our proprietary tool, 'Lucy.' See “Item 4. Information on the Company—B. Business Overview— 4. Superior Client Service” for more information. This implementation has not only led to efficiency gains in customer service but has also streamlined resolution times for complex inquiries and significantly enhanced customer sentiment, with Customer Satisfaction Score (CSAT) from our chatbot improving from 90% as of December 31, 2024, to 92% as of December 31, 2025. Also, our Green Angels team of operations and support personnel allows us to improve POS deployment costs as we further penetrate and grow our Active Client base within our Stone Hubs. For further information refer to “Item 4. Information on the Company—B. Business Overview—2. Comprehensive Merchant Platform”.
Interchange and assessment fees
Our revenue from processing services is mainly composed of the Net Merchant Discount Rate, or Net MDR, which is a commission withheld by us from the transaction value paid to the merchant. Our net revenue from MDR is defined as the total MDR charged to our merchants, net of interchange fees retained by Card Issuers, assessment fees charged by payment scheme settlors and sales taxes. Interchange fees are set by the payment schemes according to certain variables, including the type of card product (e.g. credit vs. debit), merchant segment, type of card (e.g., standard, gold, premium, business, others), transaction type (e.g. online vs. POS terminal), and the origin of the card (international vs. domestic). Assessment fees are charged per transaction by the payment scheme settlors, such as Visa and Mastercard, to cover the cost of providing access to their payment network.
We are unable to predict if or when payment schemes will increase or decrease their fees or the extent of such variations. Our standard contract with our clients allows us to re-adjust our rates and tariffs with prior notice to merchants to offset potential increases in interchange fees.
On March 22, 2018, the Central Bank enacted Circular No. 3,887, which issued a cap to interchange fees on debit transactions to 0.8% and maximum average interchange fee of 0.5% on total transaction volume. On September 26, 2022, the Central Bank enacted Resolution No. 246, which extended the regulation issued in 2018, in order to subject the interchange fees applicable to transactions based on both debit and pre-paid instruments, whether e-commerce or present transactions, to a cap. According to the Central Bank Resolution No. 246, effective on April 1, 2023, interchange on debit card transactions is subject to a 0.5% cap, and pre-paid cards, to a 0.7% cap.
Additionally, aiming to reduce asymmetries between debit and pre-paid instruments, the mentioned ruling stated that the payment scheme settlors must establish the same maximum liquidation deadline by Acquirers to the merchants on both schemes. Such change has also become effective on April 1, 2023.
For further information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—If we cannot pass increases in fees from payment schemes, including assessment, interchange, transaction and other fees, or increases in fees due to macroeconomic factors such as interest rate increases along to our merchants, our operating margins will decline” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Certain ongoing legislative and regulatory initiatives under discussion by the Brazilian Congress, the Central Bank and the broader payments industry may result in changes in the regulatory framework of the Brazilian payments and financial industries and may have an adverse effect on us”.
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Timing differential between future revenues generated and investments
Whenever we decide to make strategic investments for growth in our operations, which may include investments in our distribution capabilities, marketing, technology, new financial services and software solutions, among others, we may see temporary impacts in our financial results. These front-loaded investments can lead to lower margins, which typically precede higher growth rates in our operation. For instance, as our credit product is recognized according to IFRS 9, credit provisions are made upfront as soon as the loan is disbursed, while revenues are recognized on an accrual basis according to the term of the loan. As a consequence, periods of accelerated customer acquisition typically lead to higher upfront provisions, which pressure gross profit and gross margin in those periods, even though the associated revenue will be earned over time.
Complement Solutions Offerings through Acquisition and Investment Activity
We have an established track record of investing, acquiring and integrating complementary technology solutions and businesses. Since January 1, 2016, we have made several acquisitions and minority investments, primarily in businesses or technologies that strengthen our solutions offerings.
The financial impact of acquisitions may affect the comparability of our results from period to period. In addition to the revenues and expenses associated with such acquisitions only being included in our financial results for any period upon the closing of the acquisition, we will incur transaction and other expenses associated with acquisitions, including amortization of intangibles relating to those acquisitions, which can negatively impact our profit (loss). Amortization of intangibles related to acquisitions can vary substantially from company to company and from period to period depending upon the applicable financing and accounting methods, the fair value and average expected life of the acquired intangible assets, the capital structure and the method by which the intangible assets were acquired.
In connection with the acquisitions we made over our history, we recorded amortization expense for both continuing and discontinued operations for the years ended December 31, 2025, 2024 and 2023 of R$ 106.4 million, R$ 122.8 million and R$ 92.4 million, respectively, related to the fair value adjustment on intangible assets, primarily software, property and equipment, customer relationship, trademarks and patents and exclusivity rights, in accordance with the acquisition method.
In addition, any goodwill impairment related to acquired assets may also affect the comparability of results between periods. For the year ended December 31, 2024 we recorded a goodwill impairment on the Linx asset of R$3.6 billion. This was followed by an additional goodwill impairment of R$158.0 million for the year ended December 31, 2025. These charges were recognized within the results of discontinued operations and did not impact our income from continuing operations. No impairment charges were recognized during the fiscal year ended December 31, 2023.
Macroeconomic environment
The vast majority of our operations are located in Brazil. As a result, our revenues and profitability are subject to political and economic developments and the effect that these factors have on the availability of credit, disposable income, employment rates and average wages in Brazil. Our results of operations are affected by levels of consumer spending, interest rates and the expansion or retraction of consumer credit in Brazil, each of which impacts the number and overall value of payment transactions, banking and lending activities. For more information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Brazil—Economic uncertainty and political instability in Brazil may harm us and the price of our Class A common shares” and “Item 3. Key Information—D. Risk Factors—Risks Relating to Brazil—Developments and the perception of risks in other countries, including other emerging markets, the United States and Europe, may harm the Brazilian economy and the price of securities issued by companies operating in Brazil, including the price of our Class A common shares”.
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Brazil is the largest economy in Latin America, as measured by gross domestic product, or GDP. The following table shows data for real GDP, inflation and interest rates in Brazil and the U.S. dollar/real exchange rate at the dates and for the periods indicated.
For the Year Ended December 31,
2025
2024
2023
Real growth in gross domestic product
2.3%3.4%2.9%
(Deflation) Inflation (IGP-M)(a)
(1.1%)6.5%(3.2%)
Inflation (IPCA)(b)
4.3%4.8%4.6%
Long-term interest rates—TJLP (average)(c)
8.7%6.9%7.1%
CDI rate (average)
14.3%10.8%13.2%
Period-end exchange rate—reais per US$1.00
5.56.24.8
Average exchange rate—reais per US$1.00(d)
5.65.45.0
Appreciation (depreciation) of the real vs. US$ in the period(e)
12.5%(21.8%)7.8%
Unemployment rate(f)
5.1%6.6%7.8%
Source: FGV, IBGE, Central Bank and B3.
(a)
(Deflation) Inflation (IGP-M) is the general market price index measured by FGV.
(b)
Inflation (IPCA) is a broad consumer price index measured by IBGE.
(c)
TJLP is the Brazilian long-term interest rate (average of monthly rates for the period).
(d)
Average of the exchange rate on each business day of the year.
(e)
Comparing the US$ closing selling exchange rate as reported by the Central Bank at the end of the period’s last day with the day immediately prior to the first day of the period discussed.
(f)
Average unemployment rate for the year as measured by IBGE.
Interest rate
Interest rates have an effect on our ability to generate revenue and directly affect our cost of funds. Higher interest rates can increase household indebtedness, which may hinder our customers’ ability to repay our credit products, and can reduce private consumption, negatively impacting our TPV, while also increasing our funding costs, as most of our third-party funding is linked to the Brazilian’s interest base rate. Usually, when there is an increase in interest rates, and thus, in funding costs, there is a time lag before we are able to pass on price increases to clients, which temporarily pressures our margins. On the other hand, when interest rates go down, we immediately benefit from higher spreads, improving our margins. In the past years we have significantly evolved our pricing policy and internal processes to be able to reprice clients when needed in a faster and seamless way. We will continue to optimize our pricing strategy, guaranteeing we are within the return hurdles established for each client.
Inflation
Inflation has an effect on our obligations towards certain suppliers, such as office leasing and telecommunications providers, whose costs are indexed to inflation rates. However, most of our revenues are naturally hedged against inflation, since if our merchants raise their prices due to inflation, this will positively impact our TPV and, consequently, our revenues. When merchants adjust their prices for inflation, the purchasing power of consumers may be reduced, which may adversely affect our revenue if it results in a reduction in the number and volume of transactions. Subscription fee from software revenues is periodically updated by an inflation index.
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Currency fluctuations
The results of our operations are primarily denominated in reais (R$). However, our results may be subject to currency fluctuations as we hold cash, debts, accounts payable and receivables denominated in foreign currency (primarily U.S. dollars). For example, we process transactions originated from our Active Client base in Brazil with credit cards issued by foreign banks that are settled in a foreign currency. In addition, we purchase items that have their prices partially indexed to U.S. dollars, such as POS devices, other equipment and our data centers. To partially offset our exchange rate risk, we may use derivative contracts. For the year ended December 31, 2025, 2024 and 2023, we had a net foreign currency gain (loss) for continuing operations of -R$13.1 million, R$19.4 million, R$15.2 million, respectively.
Impact of pandemics, widespread health epidemic or other outbreaks
The Brazilian economic outlook may worsen as a result of pandemics, such as novel variants of the COVID-19 pandemic, widespread health epidemics or other outbreaks. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Operations—An occurrence of a natural disaster, widespread health epidemic or other outbreaks could have a material adverse effect on our business, financial condition and results of operations” for information on the impact of the pandemics, widespread health epidemics or other outbreaks on our business.
Acquisitions
Transaction with Reclame Aqui
On February 17, 2022, we acquired 50% of equity interest in Reclame Aqui Holdings Limited (“Reclame Aqui”) for R$230.1 million. Reclame Aqui is an unlisted company based in Cayman Islands, with operations in Brazil, whose main activity is related to a public electronic platform for resolution of conflicts between customers and companies.
We have joined the board of directors of Reclame Aqui with two seats out of four, and have the right to appoint the Chief Financial Officer. We also have a call option to acquire the remaining equity interest on Reclame Aqui to hold 100% of such entity, which can be exercised between January 1, 2027 and July 30, 2027.
The agreement with selling shareholders provides contingent consideration linked to net revenue performance related to 2023 and 2025 fiscal years. The amount of contingent consideration is limited to R$145.5 million.
Description of Principal Line Items
The following is a summary of the principal line items comprising our statement of profit or loss for continuing operations.
Total revenue and income
Our total revenue and income consists of the sum of our net revenue from transaction activities and other services, net revenue from subscription services and equipment rental, financial income and other financial income.
Net revenue from transaction activities and other services
Our net revenue from transaction activities and other services consists of commissions and fees charged for end-to-end processing services we provide, which include the capture, routing, transmission, authorization, processing, and settlement of transactions, carried out using credit, debit and prepaid cards, meal vouchers, payment slips (Boletos), Pix QR Code and other APMs.
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Our net revenue from transaction activities and other services consists mainly of:
•Net MDR on cards and Pix QR Code transactions, which is a commission withheld by us that is discounted from transactions values paid to the merchant, and/or other per-transaction commissions for providing gateway services.
•Revenues related to membership fees. Until December 31, 2023 revenue from membership fees was recognized at agreement inception. From January 1, 2024 onwards, we began to recognize revenues from membership fees deferred through the expected lifetime of the client. The new criteria has been adopted and been applied prospectively.
•Transactional services related to our banking operation, including interchange fees from credit and debit cards issued by us and wire transfer fees.
•Software revenues which are non-recurring by nature, such as setup fees.
•Revenues from our registry of receivables (TAG).
We recognize revenue from transaction activities when the purchase transaction is captured. We recognize revenue from other services when the service is rendered. For more information on our revenue recognition policies, see note 17.1 of our audited annual consolidated Financial Statements. License fees paid to payment schemes are included in the cost of services as discussed below. Our Net MDR revenue is recognized net of interchange fees retained by Card Issuers, assessment fees charged by payment schemes and deductions. Such deductions consist primarily of the applicable Brazilian sales taxes and social security contributions: service tax (ISS); contributions to the Brazilian government’s Social Integration Program (PIS); and contributions to the Brazilian government’s social security program (COFINS). We are required to collect each of the above-mentioned taxes and contributions on our transaction activities and other services.
Net revenue from subscription services and equipment rental
We earn monthly recurring revenue from subscription services and equipment rental, which include rentals of electronic capture equipment, monthly fees charged for the use of our software solutions and other solutions or services, such as reconciliation solutions, business automation, software hosting services and support teams, among other services. Revenue generated by electronic capture equipment rental varies according to the value of the equipment, the quantity of equipment rented to a particular merchant and the location of the merchant. Each subscription service fee is charged as a fixed monthly fee and is either billed and deducted from the merchant’s transaction receivables or is billed to the client monthly. We recognize revenue from subscription services as the services are rendered and from equipment rental on a straight-line basis over the lease term. We also recognize revenues on commissions from our insurance solution within our digital banking offering. The amounts deducted from our revenue from subscription services and equipment rentals consist primarily of the applicable Brazilian sales taxes and social security contributions, including ISS, PIS and COFINS. We are required to collect each of the above-mentioned taxes and contributions on our subscription services and equipment rentals when applicable. 
Financial income
Financial income is generated mainly by (i) fees charged for the prepayment of our clients’ receivables from credit card transactions, (ii) results from our credit operations which are recognized under the effective interest method, and (iii) yield on liquid securities on which we invest cash from client deposits of our digital banking.
Some merchants allow Cardholders to elect to pay for purchases in multiple installments. We allow our merchants to elect early payment of single or multiple installment receivables, less a prepayment fee.
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The prepayment fee included in financial income is charged, in addition to our payment processing transaction fees, as described above under “—Net revenue from transaction activities and other services.” The prepayment fee is recognized as financial income once the merchant elects for the receivable to be prepaid. If the merchant elects prepayment of a receivable on a weekend or bank holiday, the prepayment fee will be recognized in financial income on a daily basis. The expenses we incur in funding the prepayment of receivables and credit operations are included in financial expenses as discussed below. For more information regarding our working capital solutions, see “Item 4. Information on the Company—B. Business Overview—Our Solutions.”
Other financial income
Our other financial income consists principally of interest income and fair value gains (losses) of cash and cash equivalents and short-term investments.
Cost of services
Our cost of services includes transaction costs, depreciation and amortization (“D&A”), personnel expenses related to technology, logistics, customer service, risk, operations and others, costs to deploy merchant equipment, payment scheme license fees, provisions for credit losses and provisions for acquiring and banking losses, and other costs. For further information on these costs, see note 18 to our Consolidated Financial Statements.
•Transaction costs consist of amounts related to processing, data center and cloud costs, operating software, telecommunications costs related to leased terminals and wire transfer costs and other transactional costs related to our banking operations.
•Depreciation and amortization expenses are allocated to cost of services, administrative and selling expenses. Depreciation and amortization included in our cost of services consists mainly of (i) depreciation of equipment leased to merchants, (ii) the amortization of software that we develop internally for use in our operations, (iii) depreciation of data center used in our processing operations and (iv) amortization of right-of-use assets due to the adoption of IFRS 16.
•Personnel expenses include wages, benefits (such as meal and transportation vouchers and medical insurance), variable compensation, overtime, courses and training, social contribution and payroll taxes, including contributions to the Brazilian Social Security Institute (INSS) and the Brazilian Unemployment Compensation Fund (FGTS). Personnel expenses are divided between cost of services, administrative expenses and selling expenses. Personnel expenses included in cost of services relate to customer relations, certain personnel in our technology and risks team, logistics, and other personnel that support our transaction processing and other services.
•Costs to deploy merchant equipment consist of third-party supplier logistics services and internal and external costs related to delivery and refurbishment of leased equipment to merchants and other supply chain costs.
•Payment scheme license fees under cost of services are fees paid to Visa, Mastercard and other card schemes to enable communications between network participants, access to specific reports, expenses related to projects involving the development of new functions, operational fixed fees, fees related to Chargeback restatements and royalties.
•Provisions for credit losses refer to provisions booked for potential defaults from our credit products, mainly working capital loans, revolving credit and credit cards. Provisions for credit losses are booked according to IFRS 9 rules.
•Provisions for our acquiring and banking businesses include provisions related to potential Chargebacks, default by issuers, potential default from subscription fees and risks associated with fraud. Chargebacks may occur due to a variety of factors, such as a claim by the Cardholder or cases of fraud. If we are unable to collect Chargeback or refund from the merchant’s account, or if the merchant refuses to or is unable to reimburse us for a Chargeback or refund due to closure, bankruptcy, or other circumstances, and, we bear the loss for the amounts paid to the Cardholder.
•The portion of our other expenses that form part of our cost of services includes items such as costs from our registry of receivables (TAG) and losses from Chargebacks, which consist of transactions credited back or refunded to the Cardholder in the event a billing dispute between a Cardholder and merchant is not resolved in favor of the merchant.
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Administrative expenses
Administrative expenses represent the amounts that we spend on back-office activities, quality control, indirect relations with our clients and overhead. These amounts consist of certain personnel expenses, third party services expenses, depreciation and amortization and other expenses.
•The portion of our personnel expenses that form part of our administrative expenses relate to our finance, legal, human resources, administrative, courses, events expenses and other administrative personnel, including new software companies’ team.
•The portion of our third-party services expenses include (i) fees paid for professional services, including legal, tax and accounting services, (ii) consultancy fees and (iii) expenses associated with investor relations, register and transfer agent fees, incremental insurance costs, and accounting and legal services.
•The portion of our depreciation and amortization expenses that forms part of our administrative expenses relates to (i) the depreciation of the equipment, furniture, tools and technology used in our head office, back-office, and other operations, (ii) the amortization of acquired intangibles, (iii) the amortization of software developed internally to support our head office and back-office needs and (iv) depreciation of right-of-use of leased assets.
•The portion of our other expenses that form part of our administrative expenses includes items such as facilities, rent, travel, lodging, insurance, reimbursement of staff expenses and office supplies.
Selling expenses
Selling expenses represent the amounts we spend with commercial teams, marketing, publicity, commissions for third-party commercial partners, depreciation expenses and other expenses.
•The portion of our personnel expenses that form part of selling expenses relates to our commercial team which has direct interactions with potential and existing clients. The main portion of this team are individuals who act in a direct sales model.
•The portion of our commissions for third-party commercial sales partners that form part of our selling expenses relates to amounts paid for sales partners or franchisees that act directly with potential clients in some determined areas. These sales partners are generally evaluated and paid in accordance with the delivery of certain indicators.
•The portion of marketing and advertising expenses included in our selling expenses relates to the production and distribution of our marketing and advertising campaigns on traditional offline media, traditional online advertising, the positioning of our products in internet search platforms and expenses incurred in relation to trade marketing at events.
•The portion of our depreciation expenses included in selling expenses relates to the right-of-use of leased assets.
•The portion of our other expenses that form part of our selling expenses includes items such as facilities from our hubs, software expenses arising from tools used by our commercial teams and travel expenses.
Financial expenses, net
Our financial expenses, net include (i) discounts charged to us for the sale of our receivables from Card Issuers either to commercial banks or capital market structures, (ii) interest expense on our other borrowings, (iii) the net amount of foreign currency gains and losses on cash balances denominated in foreign currencies, (iv) the gain or loss on derivative financial instruments not recognized in other comprehensive income, (v) interest expense on client deposits, and (vi) bank services fees.
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To date, we have funded our working capital solutions primarily by (i) selling receivables owed to us by Card Issuers to banks, (ii) selling receivables owed to us by Card Issuers to FIDCs and special purpose vehicles (“SPVs”), (iii) raising debt, either through capital markets or banking facilities, (iv) with our own capital, (v) through the issuance of debentures and financial bills, and (vi) institutional and retail deposits through our finance company, originated from both own and third-party distribution channels. For further information regarding our financial liabilities, see note 6.8 to our audited Consolidated Financial Statements and “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Note on the impact of different funding sources for working capital solutions to our clients on our cash flow statement”.
All of our Institutional Deposits and Marketable Debt Securities and Other Debt Instruments, as of December 31, 2025, 2024 and 2023 were denominated in Brazilian reais, except for: (i) the issuance of our inaugural bonds in June 2021, denominated in US Dollars; (ii) subsequent US Dollar-denominated debt issuances, the proceeds of which were fully swapped into Brazilian reais through cross-currency interest rate swap agreements; and (iii) FIDC ACR I, which was issued in Brazilian reais, but whose contribution was made by a special purpose vehicle denominated in US Dollars — swapped to Brazilian reais. As a result, our net foreign currency exposure on such instruments is hedged, with economic exposure effectively denominated in Brazilian reais.
Mark-to-market on equity securities designated at FVPL
Mark-to-market on equity securities designated at fair value through profit or loss (“FVPL”) relates to mark-to-market gains or losses from our investment in Banco Inter, which was accounted for at fair value through profit and loss. In the first quarter of 2023, we divested our stake in Banco Inter. As a result, from 2Q23 onwards, our profit & loss statement no longer includes mark-to-market gains or losses associated with this investment.
Other operating expenses, net
Other operating expenses, net consist mainly of share-based payments, contingencies, write off and sale of POSs, divestment of assets, donations and miscellaneous income and/or expenses items. For further information around share-based payments, please refer to “Item 6. Directors, Senior Management and Employees—B. Compensation—Long-Term Incentive Plans (LTIP)” and note 20 to our Consolidated Financial Statements.
Gain (loss) on investment in associates
Gain (loss) on investment in associates consists mainly of results from operations from other entities that are not consolidated into our financial statements.
Income tax and social contributions
Current income tax and social contribution tax on net profits
We are domiciled in Cayman and there is no income tax in that jurisdiction. Despite that, some operations abroad can be subject to a withholding income tax at the main rate of 15%.
As of December 31, 2025, the combined rate applied to most entities in Brazil is 34%, comprising the Corporate Income Tax and the Social Contribution on Net Income on the taxable income of each Brazilian legal entity (not on a consolidated basis).
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Our tax assets for the current year are calculated based on the expected recoverable amount, and tax liabilities for the current year are calculated based on the amount payable to the applicable tax authorities. The tax rates and tax laws used to calculate this amount are those enacted or substantially enacted at the reporting date. We periodically evaluate our tax positions with respect to interpreting tax regulations and, when appropriate, establish provisions. Due to the nature of income tax and social contributions in Brazil described above, where income tax and social contributions are payable on a legal entity basis as opposed to on a consolidated basis, tax losses for one subsidiary entity cannot be used to offset income tax owed by other subsidiary entities.
Complementary Law No. 224/2025, enacted on December 26, 2025, provides for an increase in the Social Contribution on Net Income (CSLL) rates applicable to certain financial institutions. Under this law, the CSLL rate applicable to payment institutions (IP) and direct credit companies (SCD) will increase from 9% to 12% for the period from April 1, 2026 to December 31, 2027, and to 15% effective January 1, 2028. For credit, finance, and investment companies (SCFI), the CSLL rate will increase from 15% to 17.5% for the period from April 1, 2026 to December 31, 2027, and to 20% effective January 1, 2028.
Deferred income tax and social contributions tax on net profits
The accounting records of deferred tax assets on income tax losses and/or social contribution loss carryforwards, as well as those arising from temporary differences, are based on technical feasibility studies which consider the expected generation of future taxable income, taking into account the history of profitability for each subsidiary individually. In accordance with the Brazilian tax legislation, and as a general rule, loss carryforwards can be used to offset up to 30% of taxable profits for the year and do not expire.
Our deferred tax income (expenses) are mainly generated by our net tax operating loss (gain) and by expenses with tax credits offset or to be offset.
As a result of the enactment of Complementary Law No. 224/2025, the balances of deferred tax assets and deferred tax liabilities include the effects of the increase in CSLL rates on temporary differences expected to be realized or settled after the effective dates of the new rates. As of December 31, 2025, such effects amounted to R$ 76.9 million, of which R$ 50.9 million was recognized in profit or loss for the period and R$ 26.0 million in other comprehensive income.
See note 9 to our audited annual Consolidated Financial Statements.
Tax Incentives
Similar to other Brazilian companies across multiple industries, we benefit from certain tax and other government-granted incentives associated with technological innovation under Lei do Bem, which enable us to reduce the Corporate Income Tax base. For the effective tax rate reconciliation, see note 9 to our Consolidated Financial Statements.
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Results of Operations for the Years Ended December 31, 2025, 2024 and 2023
The following table sets forth our statement of profit or loss for the years ended December 31, 2025, 2024 and 2023.
For the Year Ended December 31,
20252024Variation
(R$)		Variation
(%)		2023Variation
(R$)		Variation
(%)
R$ millions, except amounts per share
Statement of profit or loss data:
Net revenue from transaction activities and other services2,493.1 3,128.9 (635.7)(20.3)%3,144.4 (15.5)(0.5)%
Net revenue from subscription services and equipment rental    889.3 746.2 143.2 19.2 %717.4 28.7 4.0 %
Financial income10,017.3 7,676.2 2,341.1 30.5 %6,229.3 1,446.9 23.2 %
Other financial income754.1 498.3 255.8 51.3 %670.1 (171.8)(25.6)%
Total revenue and income from continuing operations14,153.8 12,049.6 2,104.2 17.5 %10,761.1 1,288.5 12.0 %
Cost of services(3,365.4)(2,832.5)(532.9)18.8 %(2,370.2)(462.3)19.5 %
Administrative expenses(921.7)(845.5)(76.2)9.0 %(902.2)56.7 (6.3)%
Selling expenses(2,147.8)(1,840.0)(307.8)16.7 %(1,432.9)(407.0)28.4 %
Financial expenses, net(4,479.3)(3,660.2)(819.1)22.4 %(3,956.2)296.1 (7.5)%
Mark-to-market on equity securities designated at FVPL— — — n.a.30.6 (30.6)(100.0)%
Other income (expenses), net(447.5)(386.2)(61.3)15.9 %(217.1)(169.1)77.9 %
Loss on investment in associates(2.5)0.4 (2.9)n.m.(3.7)4.1 n.m.
Profit (loss) before income taxes from continuing operations2,789.8 2,485.6 304.2 12.2 %1,909.6 576.0 30.2 %
Income tax and social contribution(412.8)(464.9)52.1 (11.2)%(355.0)(109.9)31.0 %
Net income (loss) for the year2,377.1 2,020.6 356.5 17.6 %1,554.6 466.0 30.0 %
Controlling shareholders from continuing operations2,360.7 2,016.4 344.3 17.1 %1,549.3 467.2 30.1 %
Non-controlling interests from continuing operations16.4 4.2 12.2 290.5 %5.3 (1.0)(20.8)%
2,377.1 2,020.6 356.5 17.6 %1,554.6 466.2 30.0 %
Controlling shareholders from discontinued operations(41.0)(3,531.6)3,490.6 (98.8)%42.8 (3,574.4)n.m.
Non-controlling interests from discontinued operations3.1 3.9 (0.8)(20.5)%3.0 0.9 30.0 %
(37.9)(3,527.7)3,489.8 (99)%45.8 (3,573.5)n.m.
Earnings per share of continuing operations
Basic profit per share for the year attributable to controlling shareholders (R$)
8.85 6.68 2.17 32.5 %4.96 1.72 34.7 %
Diluted profit per share for the year attributable to controlling shareholders (R$)
8.63 6.54 2.09 32.0 %4.61 1.93 41.9 %
Earnings per share of discontinued operations
Basic earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)
(0.15)(11.70)11.55 (98.7)%0.13 (11.83)n.m.
Diluted earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)
(0.15)(11.45)11.30 (98.7)%0.13 (11.58)n.m.
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TPV and Payments Active Clients
The following table sets forth our TPV and Active Clients for the years ended December 31, 2025, 2024 and 2023:
For the Year Ended December 31,
20252024Variation
(R$)		Variation
(%)		2023Variation
(R$)		Variation
(%)
TPV (in R$ billion)560.9 516.2 44.7 8.7 %438.3 77.9 17.8 %
Payments Active clients (in thousands)4,803.5 4,172.7 630.8 15.1 %3,522.1 650.6 18.5 %
As discussed in “—Significant Factors Affecting our Results of Operations,” TPV is one of the main drivers of revenue for our business. Growth for the year ended December 31, 2025, both in TPV and Payments Active Clients, was driven mainly by strong addition of MSMB clients (micro, small and medium-sized businesses).
For the Year Ended December 31,
20252024Variation
(R$)		Variation
(%)		2023Variation
(R$)		Variation
(%)
Net revenue from transaction activities and other services2,493.1 3,128.9 (93.7)(20.3)%3,144.4 (15.5)(0.5)%
Net revenue from subscription services and equipment rental889.3 746.2 22.019.2 %717.4 28.8 4.0 %
Financial income10,017.3 7,676.2 2,341.130.5 %6,229.3 1,446.9 23.2 %
Other financial income754.1 498.3255.8 51.3 %670.1(171.8)(25.6)%
Total revenue and income from continuing operations14,153.812,049.6 2,104.217.5 %10,761.1 1,288.5 12.0 %
MD&A for the Year Ended December 31, 2025 compared to the Year Ended December 31, 2024
The following discussion and analysis covers our results of operations for the years ended December 31, 2025 and 2024. Unless otherwise indicated, the discussion below refers to our continuing operations. Following the divestiture of Software Businesses, the related results have been classified as discontinued operations in accordance with IFRS 5. A separate discussion of the results from discontinued operations is included below.
Total revenue and income
Total revenue and income was R$14,153.8 million for the year ended December 31, 2025, an increase of R$2,104.2 million or 17.5% from R$12,049.6 million for the year ended December 31, 2024. Total revenue and income growth in 2025 was mostly driven by (i) higher client monetization, mainly MSMBs, as a result of strategic repricing initiatives implemented in early 2025 to mitigate CDI hikes, as well as (ii) active client base growth and (iii) an increase in credit revenues.
Net revenue from transaction activities and other services
Net revenue from transaction activities and other services was R$2,493.1 million for the year ended December 31, 2025 a decrease of R$635.7 million or 20.3% from R$3,128.9 million for the year ended December 31, 2024. This decrease was attributable to ongoing pricing optimizations between card MDRs and prepayment revenues across our bundled offers, a process consistent with our strategy since the end of fiscal year 2024. While this negatively impacts net revenue from transaction activities and other services, it positively contributes to financial income. This effect was partially offset by higher revenues from Pix QR Code and the growth of our transactional banking solutions.
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Net revenue from subscription services and equipment rental
Net revenue from subscription services and equipment rental was R$889.3 million for the year ended December 31, 2025, an increase of R$143.2 million or 19.2% from R$746.2 million for the year ended December 31, 2024. This increase was primarily attributed to higher software and equipment rental revenues.
Financial income
Financial income for the year ended December 31, 2025 was R$10,017.3 million, an increase of R$2,341.1 million or 30.5% from R$7,676.2 million for the year ended December 31, 2024, as a result of higher prepayment and credit revenues, with the latter contributing with R$653.4 million to financial income in 2025, compared with R$223.1 million in 2024. Prepayment revenues increased significantly as a result of the following factors: (i) pricing policy adjustments undertaken in the period, (ii) ongoing pricing optimizations between card MDRs and prepayment revenues as stated above in “—Net Revenue from Transaction Activities and Other Services,” and (iii) higher prepaid volumes. These effects were partially offset by lower floating revenues from deposits, which were introduced as an alternative funding source in our operation as part of our liability management strategy since the beginning of fiscal year 2025.
Other financial income
Other financial income was R$754.1 million for the year ended December 31, 2025, up R$255.8 million or 51.3% from R$498.3 million for the year ended December 31, 2024, due to a higher average CDI, which increased from 10.83% in 2024 to 14.26% in 2025, combined with a higher average cash balance in the period.
Cost of services
Cost of services for the year ended December 31, 2025 was R$3,365.4 million, an increase of R$532.9 million, or 18.8%, from R$2,832.5 million for the year ended December 31, 2024. Cost of services as a percentage of total revenue and income was 23.8% for the year ended December 31, 2025, 0.3 percentage points higher than the 23.5% reported in the year ended December 31, 2024. The nominal increase in our cost of services was primarily driven by higher (i) provisions for loan losses, which totaled R$312.3 million in 2025 compared with R$89.8 million in 2024, (ii) depreciation and amortization (D&A) and (iii) logistics costs.
Administrative expenses
Administrative expenses for the year ended December 31, 2025 were R$921.7 million, an increase of R$76.2 million or 9.0% from R$845.5 million for the year ended December 31, 2024. Administrative expenses as a percentage of total revenue and income were 6.5% for the year ended December 31, 2025, 0.5 percentage points lower than the 7.0% reported for the year ended December 31, 2024 as a result of operating leverage. The nominal increase in our administrative expenses was primarily driven by higher expenses relating to (i) personnel, (ii) depreciation and amortization, and (iii) third party services.
Selling expenses
Selling expenses were R$2,147.8 million for the year ended December 31, 2025, an increase of R$307.8 million or 16.7% from R$1,840.0 million for the year ended December 31, 2024, due to higher investments in (i) our distribution channels and (ii) marketing. Selling expenses as a percentage of revenues were 15.2% for the fiscal year of 2025 compared with 15.3% for the fiscal year of 2024.
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Financial expenses, net
Financial expenses, net were R$4,479.3 million for the year ended December 31, 2025, an increase of R$819.1 million from R$3,660.2 million for the year ended December 31, 2024. This increase was mainly a result of a higher average CDI Rate for the period from 10.83% in 2024 to 14.26% in 2025, combined with higher funding needs. This effect was partially offset by the use of deposits as a funding source, which were introduced as an alternative funding source in our operation as part of our liability management strategy since the beginning of fiscal year 2025.
Other income (expenses), net
Other operating expenses, net were R$447.5 million for the year ended December 31, 2025, an increase of R$61.3 million or 15.9% from R$386.2 million for the year ended December 31, 2024. This increase was mainly a result of higher share-based compensation expenses.
Profit (loss) before income taxes
As a result of the foregoing explanations, profit before income taxes was R$2,789.8 million for the year ended December 31, 2025, a variation of R$304.2 million compared to a profit before income taxes of R$2,485.6 million for the year ended December 31, 2024. The nominal increase in profit before income tax was mostly as a result of consolidated revenue growth, being partially offset by higher cost of services and financial and operating expenses.
Income tax and social contribution
Income tax and social contribution was an expense of R$412.8 million for the year ended December 31, 2025, compared with R$464.9 million for the year ended December 31, 2024, mainly due to higher benefits from (i) “Lei do Bem” (Law 11,196/05) incentives, (ii) benefits from the recognition of deferred tax assets and (iii) tax effect from goodwill amortization.
For further information about our income taxes, see note 9 to our audited consolidated financial statements.
Net income (loss) for the year from continuing operations
As a result of the foregoing effects, net income from continuing operations was R$2,377.1 million for the year ended December 31, 2025 compared to a net income of R$2,020.6 million for the year ended December 31, 2024. The nominal increase was a result of the same items mentioned for Profit/ Loss before income taxes, combined with lower income tax and social contribution.
Net income (loss) from discontinued operations
Net loss from discontinued operations was R$37.9 million for the year ended December 31, 2025 compared with a net loss of R$3,527.7 million for the year ended December 31, 2024. This decrease in net loss was primarily attributable to a R$3,558.0 million goodwill impairment loss recognized in the fourth quarter of 2024 related to our software Cash Generating Unit ("CGU") following our annual impairment testing, which did not recur in the same magnitude in 2025. For more information, see Note 11.4 to our Audited Consolidated Financial Statements.
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Adjusted net income
Adjusted net income for continuing operations was R$2,477.2 million for the year ended December 31, 2025, an increase of R$369.0 million or 17.5% from R$2,108.2 million for the year ended December 31, 2024. The higher adjusted net income is mainly explained by the improvement in adjusted gross profit of 13.5% year over year, as a result of the repricing initiatives implemented in early 2025 to mitigate CDI hikes combined with the use of deposits as a funding source, which were introduced as an alternative funding source in our operation as part of our liability management strategy. These effects were partially offset by higher operating expenses.
Adjusted net income for both continuing and discontinued operations was R$2,609.9 million, an increase of 18.6% compared with R$2,200.0 million recorded for the year ended December 31, 2024.
Adjusted basic EPS
Adjusted basic EPS for both continuing and discontinued operations was R$9.71, increasing R$2.44 per share or 33.6% for the fiscal year ended December 31, 2025, compared with the fiscal year ended December 31, 2024. The annual increase in adjusted basic EPS outpaced Adjusted Net Income growth by 1.8x, due to R$3.0 billion executed in share repurchases throughout fiscal year 2025, reducing our total outstanding share count by 40.3 million.
MD&A for the Year Ended December 31, 2024 compared to the Year Ended December 31, 2023
Total revenue and income
Total revenue and income was R$12,049.6 million for the year ended December 31, 2024, an increase of R$1,288.5 million or 12.0% from R$10,761.1 million for the year ended December 31, 2023. Total revenue and income growth in 2024 was driven by a 17.8% increase in total TPV, combined with a higher Active Client base.
Net revenue from transaction activities and other services
Net revenue from transaction activities and other services was R$3,128.9 million for the year ended December 31, 2024 a decrease of R$15.5 million or 0.5% from R$3,144.4 million for the year ended December 31, 2023. This decrease was attributable to lower membership fees revenues, following a change in our internal methodology. From January 1, 2024 onwards, we began to recognize revenues from membership fees deferred through the expected lifetime of the client (see note 17.1.1.1 to our 2024 audited annual Consolidated Financial Statements). Up to December 31, 2023, revenues were recognized fully at agreement inception. The new criteria has been adopted prospectively. As a result, revenues from membership fees contributed with R$124.8 million to our transaction activities and other services revenue in 2024, compared with R$315.9 million in 2023. This effect was partially offset by the growth of our transactional acquiring and banking revenues, with total TPV growing 17.8% year over year.
Net revenue from subscription services and equipment rental
Net revenue from subscription services and equipment rental was R$746.2 million for the year ended December 31, 2024, an increase of R$28.7 million or 4.0% from R$717.4 million for the year ended December 31, 2023. This increase was primarily attributable to higher equipment rental, being partially offset by the divestment of Creditinfo (4Q23) and PinPag (1Q24).
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Financial income
Financial income for the year ended December 31, 2024 was R$7,676.2 million, an increase of R$1,446.9 million or 23.2% from R$6,229.3 million for the year ended December 31, 2023, as a result of higher (i) prepaid volumes, (ii) credit revenues, which contributed with R$223.1 million to financial income in 2024, compared with R$38.8 million in 2023, and (iii) floating interest from our banking solutions.
Other financial income
Other financial income was R$498.3 million for the year ended December 31, 2024, a decrease of R$171.8 million or 25.6% from R$670.1 million from the year ended December 31, 2023, mainly due to lower average CDI, decreasing from 13.21% in 2023 to 10.83% in 2024, combined with a lower average cash balance year over year.
Cost of services
Cost of services for the year ended December 31, 2024 was R$2,832.5 million, an increase of R$462.3 million, or 19.5%, from R$2,370.2 million for the year ended December 31, 2023. Cost of services as a percentage of total revenue and income was 23.5% for the year ended December 31, 2024, 1.5 percentage points higher than the 22.0% reported in the year ended December 31, 2023. The increase in our cost of services was primarily driven by higher (i) D&A and logistics costs, as we continue to expand our Active Client base, (ii) higher provisions for loan losses, which totaled R$62.1 million in 2023 and R$89.8 million in 2024, and (iii) higher investments in technology and operating software.
Administrative expenses
Administrative expenses for the year ended December 31, 2024 were R$845.5 million, a decrease of R$56.7 million or 6.3% from R$902.2 million for the year ended December 31, 2023. Administrative expenses as a percentage of total revenue and income were 7.0% for the year ended December 31, 2024, 1.4 percentage points lower than the 8.4% reported for the year ended December 31, 2023. The decrease in our administrative expenses was primarily driven by (i) the divestment of Creditinfo (4Q23) and PinPag (1Q24), combined with lower (ii) facilities and (iii) third party services expenses. These effects were partially offset by higher expenses with our personnel. As a percentage of revenues, administrative expenses decreased due to efficiency gains in our business.
Selling expenses
Selling expenses were R$1,840.0 million for the year ended December 31, 2024, an increase of R$407.0 million or 28.4% from R$1,432.9 million for the year ended December 31, 2023, primarily attributable to higher investments in (i) our salespeople, (ii) marketing and (iii) partner commissions.
Financial expenses, net
Financial expenses, net were R$3,660.2 million for the year ended December 31, 2024, a decrease of R$296.1 million from R$3,956.2 million for year ended December 31, 2023. This decrease was mainly due to a lower average CDI Rate year over year, decreasing our cost of funding, combined with our decision to reinvest more of our cash generation towards the funding of our operation. CDI Rate in Brazil decreased from an average of 13.21% in 2023 to an average of 10.83% in 2024. This effect was partially offset by higher funding needs from our prepayment and credit operations.
Mark-to-market adjustments on equity securities designated at FVPL
In 1Q23, we divested from our stake in Banco Inter. As a result, from 2Q23 onwards, our profit & loss statement no longer includes mark-to-market gains or losses associated with this investment. Mark-to-market gains in our investment in Banco Inter were null in 2024, compared to R$30.6 million in the year ended December 31, 2023.
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Other income (expenses), net
Other operating expenses, net were R$386.2 million for the year ended December 31, 2024, an increase of R$169.1 million or 77.9% from R$217.1 million for the year ended December 31, 2023. This is mainly related to the reversal of earn-out provisions in the year ended December, 2023 which did not occur again in 2024.
Profit (loss) before income taxes
As a result of the foregoing explanations, profit before income taxes was R$2,485.6 million for the year ended December 31, 2024, a variation of R$576.0 million or 30.2% compared to a profit before income taxes of R$1,909.6 million for the year ended December 31, 2023. The increase was a result of a growth in total revenue net of financial expenses, partially offset by higher SG&A and other expenses.
Income tax and social contribution
Income tax and social contribution was an expense of R$464.9 million for the year ended December 31, 2024, compared to R$355.0 million for the year ended December 31, 2023, mainly due to the growth of taxable income in 2024 compared to 2023.
For further information about our income taxes, see note 9 to our audited consolidated financial statements.
Net income (loss) for the year
As a result of the foregoing effects, net income was R$2,020.6 million for the year ended December 31, 2024 compared to a net income of R$1,554.6 million for the year ended December 31, 2023. The increase in net income was a result of the same items mentioned for Profit (loss) before income taxes above. See “Presentation of Financial and Other Information—Selected financial data” for a reconciliation of adjusted net income (loss) to our profit (loss) for the period.
Net income (loss) from discontinued operations
Net loss from discontinued operations was R$3,527.7 million for the year ended December 31, 2024 compared to a net income of R$45.8 million for the year ended December 31, 2023. This decrease can be primarily attributed to an impairment in our Software Businesses in 2024 in the amount of R$3,558.0 million.
Adjusted net income
Adjusted net income from continuing operations was R$2,108.2 million for the year ended December 31, 2024, an increase of R$671.0 million from R$1,437.2 million for the year ended December 31, 2023. The higher adjusted net income is mainly explained by the improvement in total revenue and income net of adjusted financial expenses of 21.4% year over year, as a result of the growth of our operations, combined with efficiency gains in administrative expenses. These effects were partially offset by higher selling expenses and cost of services.
Adjusted basic EPS
Adjusted basic EPS for both continuing and discontinued operations was R$7.27, increasing R$2.31 per share or 46.6% for the fiscal year ended December 31, 2024, compared with the fiscal year ended December 31, 2023.
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B.    Liquidity and capital resources
The following discussion of our liquidity and capital resources is based on the financial information derived from our Consolidated Financial Statements.
Liquidity
Our sources of liquidity have primarily been derived from our (i) sale of our receivables from Card Issuers to commercial banks, (ii) sale of receivables to structured entities such as SPVs and FIDCs, (iii) bank borrowings, (iv) capital contributions and cash flows from operations, (v) debentures and financial bills, and (vi) institutional and retail deposits through our finance company, originated from both own and third-party distribution channels. Our primary capital needs related to funding include: (a) funding our working capital and credit solutions to clients; (b) purchase of POS equipment; (c) investment in product development; and (d) selective acquisitions. We believe our current working capital is sufficient for our present requirements.
The following table is a summary of the generation and use of cash in the years ended December 31, 2025, 2024 and 2023.
For the Year Ended December 31,
202520242023
R$ millions
Liquidity and Capital Resources:
Net cash provided by (used in) operating activities676.6 (3,621.4)1,647.7 
Net cash provided by (used in) investing activities(1,759.6)1,587.5 (845.4)
Net cash provided by (used in) financing activities930.6 5,040.6 (148.8)
Effect of foreign exchange on cash and cash equivalents(22.9)44.5 10.3 
Change in cash and cash equivalents(175.3)3,051.2 663.8 
Our cash and cash equivalents include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three months or less, which have an immaterial risk of change in value. For more information, see note 5 to our Consolidated Financial Statements.
Short-term investments include bonds and other short-term investments. Our short-term investments were R$1,119.1 million as of December 31, 2025, R$517.9 million as of December 31, 2024 and R$3,481.5 million as of December 31, 2023. For more information, see note 6 to our Consolidated Financial Statements.
We regularly evaluate opportunities to enhance our financial flexibility through a variety of methods, including, without limitation, through the issuance of debt securities and time deposits, entering into additional credit lines, and the sale of receivables. As a result of any of these actions, we may be subject to restrictions and covenants in the agreements governing these transactions that may place limitations on us, and we may be required to pledge collateral to secure such instruments.
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Cash Flows
Our net cash provided by (used in) operating activities has consisted of net income (loss) for the period adjusted for certain non-cash items including software business goodwill impairment, depreciation and amortization, share-based payments expense, fair value adjustment in derivatives, fair value adjustments in financial instruments at FVPL, accrued interest, monetary and exchange variations, net, allowance for expected credit losses, provision (reversal) for contingencies, deferred income tax and social contribution, loss (gain) on sale of subsidiaries among other non-cash items, as well as changes in our operating assets and liabilities, the cash amounts of income taxes and social contributions and interest paid, and net interest income that we receive during the period.
Our net cash provided by (used in) investing activities has consisted of amounts paid on our purchase of property and equipment, purchases and development of intangible assets, acquisition (redemption) of financial instruments, cash received on disposal of non-current assets, acquisition of interest in associates and subsidiaries and cash received (paid) in acquisitions.
Our net cash provided by (used in) financing activities has consisted of the net amount from institutional deposits and marketable debt securities and other debt instruments, amortization of lease liabilities, repurchases of our own shares and acquisitions and other events with non-controlling interests in our invested companies. For further information on third-party funding, see “—Institutional Deposits and Marketable Debt Securities and Other Debt Instruments”.
Note on the impact of different funding sources for working capital solutions to our clients on our cash flow statement
In addition to offering prepayment of receivables to our clients, we provide working capital through other solutions such as loans and credit cards to SMBs. A natural consequence of TPV growth is the corresponding increase in both Accounts Receivable from Card Issuers and Accounts Payable to Clients. When we make a prepayment to our clients as part of our working capital solutions offering, we derecognize our accounts payable by the corresponding prepaid amount plus our fees earned by providing such prepayment service. In order to fund our prepayment operations, we predominantly use one of the following sources of funding (i) the sale of our receivables from Card Issuers on a non recourse basis to third-parties, including banks, financial institutions or other vehicles not controlled by us, (ii) the issuance of financial bills, debentures and other kind of financial obligations such as loans, (iii) institutional and retail deposits originated from both own and third-party distribution channels, (iv) the issuance of senior and/or mezzanine quotas by FIDCs which we may or may not control and therefore consolidate, as applicable and/or (v) own capital from capital contributions or cash flows from operation. These funding options lead to different effects on our balance sheet and statement of cash flows:
(i)     Sale of receivables: the sale of receivables results in the derecognition of our Accounts Receivable from Card Issuers. As a result, when a prepayment operation is funded through the true sale of receivables, both Accounts Receivable from Card Issuers and Accounts Payable to Clients are derecognized from our balance sheet in the same amount and the combined effect to our cash flows is a positive operational cash flow equivalent to our net fees earned by providing such prepayment service.
(ii)    Issuance of FIDC senior and/or mezzanine quotas: when we launch a new FIDC that we control in order to raise capital and therefore consolidate, the amount raised from senior and/or mezzanine quota holders less structuring and transaction costs will be recognized on our balance sheet as cash and as a liability to senior and/or mezzanine quota holders. We then transfer our receivables from Card Issuers from our operating subsidiary to the FIDC and use the cash to fund our prepayment operations. As a result of consolidating the FIDC in our financial statements, the Accounts Receivable from Card Issuers held by the FIDC remain on our consolidated balance sheet. This set of transactions generates a positive impact on our cash flows from financing activities in the amount received by the FIDC from senior and/or mezzanine quota holders less structuring and transaction costs. However, since Accounts Receivable from Card Issuers remains on the balance sheet but the Accounts Payable to Clients are derecognized, these transactions also cause a negative impact on our cash flow from operations. The net effect of impacts in cash flow from operations and cash flow from financing activities is positive.
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(iii)    Issuance of financial bills, debentures or other kind of financial obligations such as loans: when we issue a financial bill, a debenture or take a private loan, the effect on our balance sheet and statement of cash flows is similar to the issuance a FIDC that we consolidate.
(iv)    Institutional and retail deposits:
•Institutional deposits: When we use institutional deposits to fund our prepayment operation, our Accounts Receivable from Card Issuers remain on our balance sheet, whereas our Accounts Payable to Clients are derecognized, causing a negative impact on our cash flow from operations. However, our cash flow from financing is positively impacted in the amount of the inflows from the deposits raised. The net effect of impacts in cash flow from operations and cash flow from financing activities is positive.
•Time deposits from retail clients: When we use time deposits from retail clients to fund our prepayment operation, as with institutional deposits, our Accounts Receivable from Card Issuers remain on our balance sheet, whereas our Accounts Payable to Clients are derecognized, causing a negative impact on our cash flow from operations. At the same time, our cash flow from operations is also positively impacted by the amount of time deposits raised from clients. The net effect we have in our cash flow from operations from the aforementioned movements is positive. It is important to highlight that, as we increasingly leverage retail deposits from our clients as a funding source, these deposits cease to generate floating revenue for us, which has a negative impact on our top line. However, this shift also reduces our need to access external funding sources, such as issuing debt or selling receivables, resulting in lower average cost of funding. This dynamic reflects an accretive trade-off between revenue and funding costs, contributing to a more efficient capital structure over time.
(v)    Deployment of our own capital: when we use our own capital to fund prepayment operations, we do not sell our receivables from Card Issuers and they remain on our balance sheet. However, our Accounts Payable to Clients are derecognized, and therefore these transactions cause a negative impact on our cash flow from operations.
Net cash provided by (used in) operating activities
For the year ended December 31, 2025, net cash provided by operating activities was R$676.6 million, primarily as a result of:
•Net income of R$2,339.2 million combined with non-cash expenses consisting primarily of (i) R$1,002.8 million inflow from depreciation and amortization; (ii) R$1,286.6 million inflow from accrued interest, monetary and exchange variations, net (iii) R$297.0 million inflow from share-based payments expenses and; (iv) R$204.0 million outflow from fair value adjustment in derivatives. The total amount of adjustment to net income from non-cash items for the year ended December 31, 2025 was R$3,137.8 million, resulting in R$5,477.0 million net income adjusted by non-cash items.
•Net cash from changes in working capital totaled an outflow of R$ 4,800.4 million, and is composed mainly of (i) R$9,559.5 million inflow from trade accounts receivable, banking solutions and other assets, (ii) R$12,245.5 million outflow from changes related to accounts receivable from card issuers, accounts payable to clients and interest income received, net of costs, (iii) R$1,555.7 million outflow from payment of interest and income taxes, and (iv) R$558.7 million outflow from other working capital changes.
For the year ended December 31, 2024, net cash used in operating activities was R$3,621.4 million, primarily as a result of:
•Net loss of R$1,507.1 million combined with non-cash expenses consisting primarily of R$3,558.0 million from software business goodwill impairment, R$949.4 million from depreciation and amortization, fair value adjustment in derivatives of R$486.0 million, share-based payments expenses of R$232.7 million and allowance for expected credit losses of R$143.5 million. The total amount of adjustment to net income from non-cash items for the year ended December 31, 2024 was R$5,204.5 million, resulting in R$3,697.4 million net income adjusted by non-cash items.
•Net cash from changes in working capital totaled an outflow of R$7,318.8 million, and is composed mainly of the following inflows: (i) R$810.7 million from trade accounts receivable, banking solutions and other assets, (ii) R$361.7 million from trade accounts payable and other liabilities, and (iii) R$54.5 million from prepaid expenses; and the following outflows: (iv) R$6,910.9 million from changes related to accounts receivable from card issuers, accounts payable to clients and interest income received, net of costs, (v) R$956.6 million from payment of interest and income taxes, (vi) R$670.8 million from credit portfolio, (vii) R$6.5 million from recoverable taxes and taxes payable, and (viii) R$1.0 million from other working capital changes.
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Net cash provided by (used in) investing activities
Net cash used in investing activities in the year ended December 31, 2025 was R$1,759.6 million, compared to R$1,587.5 million of net cash provided by investing activities for the year ended December 31, 2024. Net cash used in investing activities for the year ended December 31, 2025 is explained by the following outflows: (i) R$1,188.6 million of capital expenditures (being R$705.6 million from purchases and construction of property and equipment and R$483.0 million from purchases and development of intangible assets), (ii) R$570.2 million from acquisition of short-term investments, and (iii) R$0.8 million net effect related to acquisitions of subsidiaries completed in the current and prior periods.
Net cash provided by investing activities in the year ended December 31, 2024 was R$1,587.5 million, compared to R$845.4 million of net cash used in investing activities for the year ended December 31, 2023. Net cash provided by investing activities for the year ended December 31, 2024 is explained by (i) R$2,994.6 million inflow from sale or maturity of short-term investments, (ii) R$57.5 million inflow from disposal of equity securities, and (iii) R$1.7 million related to proceeds from the disposal of non-current assets. These effects were partially offset by (iv) R$1,271.8 million outflow of capital expenditures (being R$764.5 million from purchases and construction of property and equipment and R$507.3 million from purchases and development of intangible assets), and (v) R$194.6 million net outflow related to acquisitions of subsidiaries completed in the current and prior periods.
Net cash provided by (used in) financing activities
Net cash provided by financing activities in the year ended December 31, 2025 was R$930.6 million, compared to net cash provided by financing activities of R$5,040.6 million for the year ended December 31, 2024. Net cash provided by financing activities in the year ended December 31, 2025 is explained by the following inflows: (i) R$2,868.5 million from proceeds from other debt instruments, except lease, net of payments, (ii) R$1,374.5 million from proceeds from institutional deposits and marketable debt securities, net of payments, and (iii) R$17.7 million from premium received in options over own shares. These effects were partially offset by the following outflows: (iv) R$2,987.0 million from repurchase of our own shares, (v) R$245.6 million from payment of derivative financial instruments designated for hedge accounting, (vi) R$79.7 million from payment of principal portion of leases liabilities, and (vii) R$17.8 million from capital events related to non-controlling interests. For more information on institutional deposits and marketable debt securities, please refer to note 6.8.3 to our Consolidated Financial Statements.
Net cash provided by financing activities in the year ended December 31, 2024 was R$5,040.6 million, compared to net cash used in financing activities of R$148.8 million for the year ended December 31, 2023. Net cash provided by financing activities in the year ended December 31, 2024 is explained by the following inflows: (i) R$3,872.4 million from proceeds from institutional deposits and marketable debt securities, net of payments, and (ii) R$2,947.9 million from proceeds from other debt instruments, except lease, net of payments. These effects were partially offset by the following outflows: (iii) R$1,587.3 million from repurchase of our own shares, (iv) R$112.8 million from payment of derivative financial instruments designated for hedge accounting, (v) R$69.0 million from payment of principal portion of leases liabilities, and (vi) R$10.6 million from capital events related to non-controlling interests. For more information on institutional deposits and marketable debt securities, please refer to note 6.8.3 to our Consolidated Financial Statements.
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Institutional Deposits and Marketable Debt Securities and Other Debt Instruments
As of December 31, 2025, we had outstanding institutional deposits and marketable debt securities and other debt instruments in the aggregate amount of R$17,582.1 million. The following table contains a summary of our third-party debt and quota holder obligations as of December 31, 2025 and 2024:
Average annual interest rate %Earliest original date of issuanceOriginal maturityCurrent portionNon-current portionDecember 31, 2025
Bonds
3.95% USDJun/21Jun/282.0 1,118.7 1,120.8 
Debentures
CDI (a) + 1.75%
Nov/23Oct/26393.8 — 393.8 
Financial bills
CDI + 0.68% to CDI + 0.90%Jun/24Jun/26 up to Sep/292,249.6 3,171.2 5,420.7 
Total debentures, financial bills and commercial papers2,643.3 3,171.2 5,814.5 
Obligations to open-end FIDC quota holders
CDI + 0.15%Jul/23Not applicable435.0 — 435.0 
Time deposits
100% of CDI to 110% of CDIJul/24Jan/26 up to Sep/272,697.0 288.3 2,985.2 
Total institutional deposits and marketable debt securities5,777.3 4,578.2 10,355.5 
Obligations to closed-end FIDC quota holders
12.75%Jan/24Jan/31— 2,196.3 2,196.3 
Bank borrowings and working capital facilities
CDI + 0.75% to CDI + 1.68%Dec/24Feb/26 up to Aug/282,839.4 2,021.6 4,860.9 
Leases
105.1% to 151.8% of CDINot applicableJan/26 up to Jun/3327.1 142.3 169.4 
Total other debt instruments2,866.4 4,360.1 7,226.6 
Average annual interest rate %Earliest original date of issuanceOriginal maturityCurrent portionNon-current portionDecember 31, 2024
Bonds
3.95% USDJun/21Jun/282.3 1,256.0 1,258.3 
Debentures
CDI (a) + 1.75%
Nov/23Oct/2623.7 999.5 1,023.2 
Financial bills
CDI + 0.68% to CDI + 0.90%Jun/24Jun/26 up to Nov/28— 2,954.4 2,954.4 
Receivables backed securities
CDI + 1.30%Sep/23Sep/262.2 99.4 101.7 
Total debentures, financial bills and commercial papers25.9 4,053.4 4,079.3 
Obligations to open-end FIDC quota holders
CDI + 0.40%Jul/23Not applicable418.3 — 418.3 
Time deposits
CDI + 0.25% to 110% of CDIMay/24Jan/25 up to Jun/262,619.5 120.6 2,740.1 
Total institutional deposits and marketable debt securities3,066.0 5,430.0 8,496.0 
Obligations to closed-end FIDC quota holders
12.75%Jan/24Jan/31— 1,988.6 1,988.6 
Bank borrowings and working capital facilities
CDI + 0.75% to CDI + 1.74%Jan/24Jan/25 up to Dec/271,853.9 310.4 2,164.3 
Leases
105.1% to 151.8% of CDINot applicableJan/25 up to Jun/2949.9 197.1 247.0 
Total other debt instruments1,903.8 2,496.1 4,400.0 
(a)
 "CDI” Rate (Brazilian Certificado de Depósito Interbancário), which is an average of interbank overnight rates in Brazil. The average rate of December 31, 2025 was 14.3% (2024 – 10.8%).
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Bilateral loan facilities
In addition to own capital and receivable rights securitization, we fund our capital needs through bilateral loan facilities. As of December 31, 2025, we had R$4,860.9 million (compared with R$2,164.3 million as of December 31, 2024) outstanding under such loan agreements.
Issuance of Inaugural Bonds
On June 11, 2021, we issued our inaugural dollar bond, raising US$500 million in 7-year notes, issued in minimum denominations of US$200,000 and integral multiples of US$1,000 in excess thereof. The principal amount of the bonds is payable on June 16, 2028 (the maturity date). The bonds accrue interest at 3.95%, payable semi-annually in arrears on June 16 and December 16, commencing on December 16, 2021. Between June and August, 2021, we entered into a hedge to mitigate our currency risk. On July 1, 2024, we announced a tender offer and consent solicitation, which expired on July 30, 2024. As a result, we successfully tendered an aggregate principal amount of US$294,558,000, representing 58.91% of the outstanding notes. Additionally, the Company solicited consents from note holders for proposed amendments to the indenture, which included, among other things, the elimination of substantially all restrictive covenants, various events of default, and related provisions. The amendments also allowed the Company to substitute itself as the principal debtor under the notes with a new debtor, which was effectively executed on August 28, 2024, replacing itself with Stone IP. For further information, see note 6.8.4.1 to our Consolidated Financial Statements.
Debt Capital Market Events
During the third quarter of 2025 our subsidiary MNLT S.A. (“MNLT”) completed a tender offer through which approximately 60% of the outstanding debentures previously issued were repurchased. On November 8, 2023, MNLT had concluded its first corporate issuance of debentures in the Brazilian capital markets, placing R$1 billion with a three year maturity at CDI + 1.75% payable annually. The debentures are guaranteed by both Stone IP and by us.
Capital Expenditures
Capital expenditures comprise purchases of intangible assets and property and equipment.
In the year ended in December 31, 2025, we invested R$1,188.6 million in capital expenditures, of which R$705.6 million are related to purchase and construction of property and equipment mainly for POS devices and other equipment, and R$483.0 million of purchase and development of intangible assets which are mainly related to software development.
In the year ended in December 31, 2024, we invested R$1,271.8 million in capital expenditures, of which R$764.5 million are related to purchase and construction of property and equipment mainly for POS devices and other equipment, and R$507.3 million of purchase and development of intangible assets which are mainly related to software development.
We estimate that our capital expenditures for 2025 will be primarily for purchases of property and equipment (mainly relating to purchases of POS and other equipment to lease to our client base and IT equipment) and intangible assets (mainly relating to software licenses and compensation expenses of software developers that we capitalize). We expect to meet our capital expenditure needs for the foreseeable future from our cash flows from operations and our existing cash and cash equivalents.
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Off-balance sheet arrangements
As part of our ongoing business, we have agreements to sell Accounts Receivables from Card Issuers with multiple counterparts (banks, conduits, FIDCs, etc) in a mix of both spot and committed basis. Under such agreements, we sell our accounts receivables on a fully non-recourse basis and pass to our counterparts all the risks and benefits of such assets. The future cash flow is paid directly from escrow agents to our counterparts and therefore we derecognize such assets from our balance sheet.
Contractual obligations
Our contractual obligations at December 31, 2025 were as follows:
Payments Due By Period(a)
Less than one yearBetween 1 and 2 yearsBetween 2 and 5 yearsOver 5 years
Institutional deposits and marketable debt securities5,777.8 3,793.3 1,151.7 — 
Other Debt Instruments3,022.6 3,460.1 1,232.0 2,558.5 
Total8,800.4 7,253.4 2,383.7 2,558.5 
(a)
Amounts refer to contractual undiscounted cash flows.
Our contractual obligations at December 31, 2024 were as follows:
Payments Due By Period(a)
Less than one yearBetween 1 and 2 yearsBetween 2 and 5 yearsOver 5 years
Institutional deposits and marketable debt securities3,068.2 4,680.5 1,366.1 — 
Other Debt Instruments1,940.0 626.8 954.2 2,774.1 
Total5,008.2 5,307.3 2,320.3 2,774.1 
(a)
Amounts refer to contractual undiscounted cash flows.
Capital Structure
In 2025, we reviewed our proprietary capital allocation framework to assess our capitalization adequacy. During this review, we maintained our three core principles but adjusted the calculation for our Managerial Total Capital Ratio to better align with Central Bank rules. Below, we describe the three constraints incorporated into our framework and the recent changes made:
1.Managerial Total Capital Ratio: As of December 31, 2025, we revised our minimum managerial capital ratio to 17% of risk-weighted assets (RWA), down from 20% as of December 31, 2024. The managerial capital ratio metric considers RWA from the prudential conglomerate, as defined in “Item 4. Information on the Company - B. Business Overview - Regulatory Capital Requirements for Payment Institutions.” Regulatory Capital can be simplified as consolidated equity less intangible assets and deferred tax assets, adjusted by their respective risk weights.
2.Credit Ratings: Our credit metrics are aligned with industry peers, ensuring we maintain at least our current global ratings, with the potential for an upgrade should Brazil’s sovereign rating improve.
3.Positive Adjusted Net Cash Position: We are committed to maintaining a positive adjusted net cash position, reinforcing financial stability.
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According to the developed framework, before returning capital to shareholders, we will prioritize liquidity and financial resilience by adhering to a conservative asset-liability management approach, ensuring that funding maturities significantly exceed asset maturities.
We expect to return excess capital to shareholders over time when value-accretive growth opportunities are not immediately available. Furthermore, we will continue to reassess this framework on an annual basis.
C.    Research and development, patents, and licenses, etc.
Our research and development focuses on developing an integrated suite of advanced technologies designed to provide differentiated financial services capabilities and seamless omnichannel commerce client experiences in a more secure, all-in-one environment, that is developed to operate in a completely digital environment and enables us to develop, host, and deploy our solutions, conduct a broad range of transactions seamlessly across in-store, online and mobile channels, manage our distribution hubs and franchisees, and optimize our client support functions—all in a fully digital, fully integrated, and holistic manner.
D.    Trend information
The information referred to below considers our current expectations about future events, and trends that may impact our business. Actual results for our industry and performance could differ substantially. For further information related to our forward-looking statements, see “Forward-Looking Statements”, for a description of certain factors that could affect our industry in the future and our own future performance, see “Item 3. Key Information—D. Risk Factors” and “Item 4. Information on the Company — B. Business Overview — Trends and Challenges”.
E.    Critical Accounting Estimates
Our consolidated financial statements are prepared in conformity with IFRS Accounting Standards. In preparing our audited consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in our consolidated financial statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates. Our significant accounting policies are described in each of the notes within our audited consolidated financial statements, except general accounting policies not related to subjects treated in specific notes, which are described in note 2.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.    Directors and senior management
Board of Directors
We are managed by our Board of Directors and by our senior management, pursuant to our Articles of Association and the Cayman Companies Act.
Our Board of Directors is responsible for, among other things, establishing our overall strategy and general business policies, supervising management, appointing and removing our executive officers, and appointing our independent auditors.
Each director shall be appointed for a term ending at the next annual general meeting following such appointment, unless they resign or their office is vacated earlier pursuant to the Articles of Association, provided, however, that such term shall be extended in the event that no successor is appointed (in which case such term shall be extended to the date on which such successor has been appointed). Directors appointed by the Board of Directors hold office as interim directors until the next annual general meeting. Our directors do not have a retirement age requirement under our Articles of Association.
Currently, 9 out of 10 of the members of our Board of Directors are independent. See “Presentation of Financial and Other Information—Corporate Events—Board Changes” for more detailed information.
The following table presents the names of the current members of our Board of Directors:
Name Age Position 
Pedro Zinner
52
Director and Chairperson
Silvio José Morais(1)(2)(3)
63
Director and Vice-Chairperson
Antonio Silveira
49
Director
Diego Fresco Gutierrez(2)(3)
56
Director
Gilberto Caldart(3)(4)
67
Director
José Alexandre Scheinkman(4)
78
Director
Luciana Ibiapina Lira Aguiar(2)(4)
52
Director
Luis Henrique Cals de Beauclair Guimarães(1)
59
Director
Marcelo Kopel(3)(4)
61
Director
Mauricio Luis Luchetti(1)
67
Director
(1)
Member of our People and Compensation Committee.
(2)
Member of our Audit Committee.
(3)
Member of our Finance Committee.
(4)
Member of our Risk Committee.
The following is a brief summary of the business experience of our directors. Unless otherwise indicated, the current business address for our directors is Harneys Fiduciary (Cayman) Limited, Fourth Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.
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Pedro Zinner has been a member of our Board of Directors since March 2026. After briefly serving as an interim member of the Board, he was appointed as a member and as the Chairperson of our Board at the 2026 AGM. He was our Chief Executive Officer from March 2023 to March 2026. Prior to that, from 2017 to 2022, Mr. Zinner was the Chief Executive Officer of Eneva S.A. (“Eneva”), one of the leading power-generation companies in Brazil and, from March 2022 to December 2022, Pedro was a Board member of StoneCo. Pedro holds more than 25 years of experience in strategy, risk management and finance and has led Eneva through its transformation journey during five years to position the company as a leading integrated energy corporation in Brazil. Zinner joined Eneva in 2016 as Chief Financial Officer to be at the forefront of its financial restructuring and initial public offering. Prior to that Zinner has served as Chief Executive Officer of Parnaiba Gas Natural, Brazil's largest on-shore gas producer, and held executive positions at BG Group, in the United Kingdom, as group treasurer and head of tax. Pedro also headed the mining company Vale's Treasury and corporate finance functions and served as global head of corporate risk management in Switzerland. Earlier in his career, Zinner held senior roles in investment banking at Banco Icatu. Pedro holds a Master of Business Administration from Chicago Booth Graduate School of Business and a BA in Economics from Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ).
Silvio José Morais is a member of our Board of Directors, a position he has held since 2023, and has been the Vice-Chairperson of our Board since April 2026. In May 2024, he became a member of our Audit Committee. Prior, he was also an Interim Chief Financial Officer between September 2022 and May 2023. Prior to joining StoneCo, he served as Controller at Ambev SA from 1998 to 2019, where he was responsible for the Financial Reporting, Internal Controls, Pension Plan and Direct tax. Between 1988 and 1998, he had also held job positions at Ambev S.A. Between May 2018 and April 2019 he served as an alternate member of ITAUSA’s board of directors. Between 2008 and 2019 he also served as Officer at IAPP – Instituto Ambev de Previdência Privada, and between 2019 and 2022 its board member. Mr. Morais is a board member (since 2017) and an Executive Director (Since 2018) of Fundação Antonio e Helena Zerrenner. Since May 2019 he is board member at Falconi Participações S.A. that controls Falconi Consultoria, a consultant firm specialized in management. Mr. Morais received a degree in business management at FACE-PR, a postgraduate degree in Finance at FAE Business School, and an MBA degree in Controllership from Fipecafi – USP.
Mauricio Luis Luchetti is a member of our Board of Directors, a position he has held since 2022. He served as the Chairperson of our Board from April 2024 to April 2026. Mauricio is an independent member of the YDUQS board of directors, where he coordinates the People and Governance Committee, and a member of the Monitoring and Performance Committee. He is also an independent member of the board of directors of Agrogalaxy, where he coordinates the People Committee and participates in the Audit Committee. Mr. Luchetti is also an independent member of the board of directors of Construtora Tenda and coordinates the People Committee. He was an independent member of the boards of directors of other publicly held Companies of JBS S.A., Taesa S.A, Tempo Assist, Mangels and Nutriplant. From 1985 to 2003, he was part of the beverage company Ambev S.A., where he held positions as executive of People and Management and Regional executive of Operations. From 2003 to 2006, he worked at the Votorantim S.A., where he served as Corporate Director at Holding VPAR and as COO at Votorantim Cimentos S.A. He has also been a partner at Galicia Investimentos since 2007. Mr. Luchetti holds a bachelor’s degree in Business Administration from PUC-RJ and is a post-graduate in Finance and Human Resources at Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ).
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Gilberto Caldart is a member of our Board of Directors, a position he has held since 2023. He served as the Vice-Chairperson of our Board from 2024 to April 2026. Gilberto is a Senior Client Partnerships & Relationships and former President of International Markets at Mastercard, having worked more than 14 years at such company. In the latter position, he was responsible for the management of all markets and customer related activities outside of North America and Canada and was a member of the Mastercard’s management committee. Prior to this appointment, Mr. Caldart was president of Mastercard Latin America and Caribbean region, where he led efforts to place the company at the forefront of the payments industry in the region. Before joining Mastercard, he spent 26 years at Citigroup in various leadership positions in Brazil and New York. Most notably, he led the Citi Consumer Business in Brazil (Retail Banking, Consumer Finance and Cards) for over six years. During his time at Citigroup, Mr. Caldart served on the boards of Credicard and Redecard, playing a critical role in the restructuring of the Credicard Group and on the Redecard IPO transformation. Mr. Caldart is a graduate of the Harvard Business School Advanced Management Program. He also has an MBA from Duke University, Fuqua School of Business and a Bachelor’s degree in Business Administration and Accounting from the University of Rio Grande do Sul, Brazil. Gilberto is the Vice-Chairperson of our Board since April 2024.
Antonio Silveira is a member of our Board of Directors, a position he has held since 2024. He is currently the Chief Technology Officer at Attentive, the leader in AI-powered mobile marketing solutions, enabling some of the world’s most popular brands to deliver personalized experiences to customers across the marketing funnel. Before joining Attentive, he served as Chief Technology Officer at Nextdoor from 2019 until 2023, the largest neighborhood social network platform, where he led the engineering organizations through significant expansion and took Nextdoor public on the New York Stock Exchange in 2021. He has also held senior leadership positions at GoDaddy from 2013 to 2019, where he was Vice President of Engineering, responsible for developing new vertical products, modernizing the technology stack, and leading several acquisitions that contributed to a significant revenue expansion and customer growth. Mr. Silveira has also held senior roles at Yahoo from 2008 to 2013, overseeing communications engineering for Yahoo Mail, Messenger, and Global User Profiles, and at Globo.com from 2001 to 2008, where he led multiple strategic initiatives in the digitalization of several Globo Organization’s media companies and their programming. Mr. Silveira holds a Bachelor’s degree in Industrial Engineering from Universidade Gama Filho, specializing in software engineering processes, and an MBA in Finance from IBMEC Business School.
Diego Fresco Gutierrez is a member of our Board, a position he held since 2021. He is currently a board member of Itaú Chile, Itaú Colombia, and Teya Holdings Ltd; in those entities he also serves in their respective Audit Committees as well as other Board committees. He chaired the Audit Committee of Votorantim Cimentos S.A. from 2023 to 2025 where he was a member from 2019 to 2023. Between 2014 and 2021, he was a member and financial specialist of the Audit Committee of Itaú Unibanco Holding. Previously, he was a partner at PricewaterhouseCoopers in São Paulo (2000-2013). Between 1998 and 2000, he held various positions at PricewaterhouseCoopers in Uruguay and in the United States. From 2013 to 2021 he was a member of the Commission on Governance of Financial Institutions of the IBGC. He graduated in Accounting in 1994 at Universidad de la República Oriental del Uruguay. Diego is a Certified Public Accountant registered in the state of Virginia and an Accountant registered with the Conselho Regional de Contabilidade – SP in Brazil.
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José Alexandre Scheinkman is a member of our Board, a position he held since 2024. Scheinkman is the Charles and Lynn Zhang Professor of Economics at Columbia, Theodore Wells ‘29 Professor of Economics (emeritus) at Princeton, and Research Associate at NBER. Previously, Scheinkman was Alvin H. Baum Distinguished Service Professor and Chair of the Department of Economics at the University of Chicago, Blaise Pascal Research Professor (France), Visiting Professor at Collège de France, and Vice-President in the Financial Strategies Group of Goldman, Sachs. Scheinkman is a Member of the National Academy of Sciences, Fellow of the American Academy of Arts and Sciences, Fellow of the American Finance Association, and recipient of a John Simon Guggenheim Memorial Fellowship and of a “doctorat honoris causa” from the Université Paris-Dauphine. In 2014, he was awarded the CME Group-MSRI Prize in Innovative Quantitative Applications. Scheinkman’s most current research is on the economics of forest preservation in the Brazilian Amazon. He was born in Rio de Janeiro and participates actively on debates concerning economic and social policy in Brazil. He is a member of the board of directors of Cosan S.A., a Brazilian company engaged in the production and distribution of sugar, ethanol, energy and logistic services, and the board of directors of TAG, a provider of infrastructure for Brazilian financial markets.
Luciana Ibiapina Lira Aguiar is a member of our Board of Directors, a position she has held since 2020, Ms. Aguiar is also the founder partner of Alma Law (law firm) and since March 2023 she is an Independent Member of the Audit Committee of Volkswagen Financial Services. Previously, Ms. Aguiar was the Managing Partner of Bocater Advogados (law firm in Brazil) and a tax partner in this firm for seven years. Ms. Aguiar was previously a member of the Tax Department at PwC, from 1994 to 2012 and Tax Partner at PwC from 2009 to 2012, where she was responsible for tax audit and tax consulting, with relevant knowledge of auditing standards, tax and accounting legislation, and regulation of publicly held companies. Ms. Aguiar holds bachelor degrees in Law, Economic Sciences and Accounting Sciences and a Master in tax law degree from Fundação Getulio Vargas. Between 2015 and 2020, she was a Professor at Lato Sensu Graduate Program at FGV Direito SP.
Luis Henrique Cals de Beauclair Guimarães is a member of our Board of Directors, a position he has held since 2025. He is an experienced executive with a strong background in leadership across major global companies in the energy, infrastructure and oil and gas sectors. From 2023 to 2025, he served as a board member at Vale and led the Allocation and Projects Committee. In 2025, he assumed the role of Chairman of the board at Samarco. Between 2024 and 2025, he also served as a board member at Cosan, and from 2020 to 2023, he was the CEO of Cosan while being board member of Rumo, Compass, Comgas, Moove and Raízen. Prior to that, he held the position of CEO at Raízen from 2016 to 2020, and CEO of Comgas from 2013 to 2015. Earlier in his career, he was the Chief Operating Officer of Raízen’s Downstream division from 2011 to 2012. From 2004 to 2011, Mr. Guimarães held various C-level global positions at Shell Lubricants International, based in London and Houston. A statistician with an MBA, Mr. Guimarães has also served as a board member or chairman of several influential associations in Brazil, including IBP, ABEGÁS, and ABRASCA (currently).
Marcelo Kopel is a member of our Board of Directors, a position he has held since April 2026. He is an advisor for finance, risk, and business strategy in the banking and payments sectors. He currently serves on Finance and Risk committees and advises Boards of Directors for companies in these industries. Mr. Kopel served as CFO of CVC Viagens (2021–2023) and as CFO of Nubank (2020–2021). In these roles, he was responsible for Treasury, Controller, Business Planning & Analysis, Capital Markets, Purchasing, General Services, and Legal. Previously, he held senior executive positions at Itaú Unibanco, where he was Head of Cards Issuing (2017–2019) and Director of Investor Relations and Market Intelligence (2014–2017). His extensive experience in the financial sector includes tenures as CFO of Redecard S.A., CFO of Citibank in Brazil, and CFO of the Credicard Group. Mr. Kopel also brings significant international expertise, having served as the Latin America CFO for ING Bank, where he oversaw financial functions across ten countries, including Argentina, Chile, Mexico, and Colombia. Mr. Kopel holds a bachelor’s degree (BA) from Fundação Armando Alvares Penteado (FAAP).
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Alternate Directors
Our Articles of Association provide, as allowed by the Cayman Companies Act, that any director may, subject to the conditions set thereto, appoint a person as an alternate to act in his/her place, to remove the alternate and appoint another in his/her place. Unless the appointing director limits the time or scope of the appointment of the alternate director, the appointment is effective for all purposes until the appointing director ceases to be a director or removes the alternate director.
Executive Officers
Our executive officers are responsible for our management and representation. Following the leadership transition in March 2026, Mateus Scherer Schwening assumed the role of CEO. Having been with the Company since its early days, he has played a central role in capital allocation, financial strategy, risk management, and the execution of Stone’s banking and credit initiatives. Our leadership team—appointed by the Board for indefinite terms—combines extensive expertise in finance and technology, backed by a long history of collaboration and strategic execution.
The following table lists our current executive officers:
NameAgePosition
Diego Ventura Salgado
42
Chief Financial Officer and Investor Relations Officer
Fabio Vieira Kapitanovas
48
Chief People Officer
Gregor Ilg
57
Chief Risk Officer
Mateus Scherer Schwening
30
Chief Executive Officer
Raúl Pierre Renteria
52
Chief Technology Officer
Sandro de Oliveira Bassili
55
Chief Operating Officer
Tatiana Malamud
56
Chief Legal and Compliance Officer
The following is a brief summary of the business experience of our executive officers. Unless otherwise indicated, the current business addresses for our executive officers are in the city of São Paulo, state of São Paulo, Brazil, at Avenida Rebouças, No. 2,880, Postal Code 05402-500 and in the city of Rio de Janeiro, state of Rio de Janeiro, Brazil, at Rua do Passeio, No. 38/40, Centro, Postal Code 20021-290.
Mateus Scherer Schwening is our Chief Executive Officer since March 2026. He also served as our Chief Financial Officer and Investor Relations Officer from June and July 2023 until March 2026. Mr. Schwening has been a partner at StoneCo since 2015. At StoneCo, he has been responsible for Treasury, Capital Allocation and Strategic Projects in connection with new investments, mergers and acquisitions, capital raises, compensation, among others. Prior to joining the company, he served as an equity analyst for Nucleo Capital, from 2013 to 2015. Mr. Scherer completed a Bachelor of Science (BS) in Economics at Insper.
Diego Ventura Salgado is our Chief Financial Officer and Investor Relations Officer since March 2026. He previously served as our Chief Treasury Officer from May 2021 to March 2026. Mr. Salgado is a former Executive Director in the Latam Debt Capital Markets team at JP Morgan, where he worked for nine years, having worked before in correlated areas at Santander and Monsanto. During his career he has specialized in fixed income and capital structure matters, being responsible for the origination, structuring and selling of multiple transactions varying from plain vanilla investment grade to high yield debt offerings, syndicated loans, securitizations, acquisition financing, hybrid instruments, debt re-structuring and ratings processes for various companies in different sectors both in Brazil and globally. Diego holds both a bachelor’s and master’s degree in Economics from Ibmec and Insper, respectively.
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Fabio Vieira Kapitanovas is our Chief People Officer since November 2023. Before joining us in November 2023, Mr. Kapitanovas was the Global Vice President at KraftHeinz, where he led both Global Business Services and the Global Center of Excellence in Amsterdam from 2020 until 2023. Prior to KraftHeinz, Mr. Kapitanovas worked at AB-Inbev as the Global Vice President of Management Systems from 2018 until 2020, after 19 years in Ambev, where he joined as Global Management Trainee back in 2010 and held several different roles from logistics, operations to business services and served as People and Management Vice President from 2014 to 2018. Mr. Kapitanovas has a bachelor’s degree in Mechanical Engineering from Escola Politécnica - Universidade de São Paulo and a series of Executive Leadership programs in the universities of Insead, (2008), Wharton (2008), MIT (2012) and Michigan (2015).
Gregor Ilg is the Chief Risk Officer at StoneCo, where he joined in November 2022 responsible for the credit area with the mandate to relaunch the Company’s credit program until February 2026. He brings over three decades of experience in credit risk management, portfolio strategy, and commercial banking across leading financial institutions in Brazil. Mr. Ilg spent more than twenty years at Banco Santander Brasil, where he held successive statutory director and senior executive positions overseeing credit admission, portfolio governance, and risk strategy for corporate and SME segments. He holds a degree in Agricultural Engineering from the University of Campinas (UNICAMP) and a postgraduate specialization in Business Administration from Fundação Getulio Vargas (FGV). Mr. Ilg is fluent in Portuguese, English, German, and Spanish.
Raúl Pierre Renteria is our Chief Technology Officer since February 2025. Raúl has over 20 years of experience in software engineering, data science, and strategic management. Before joining Stone he served as CTO of OLX Brazil, largest Brazilian classified marketplace, leading initiatives that impacted more than 50 million monthly users, aligning business growth with innovation through a high scale tech and data agenda which included the merger with ZAP/Viva Real. Raúl also held roles at Microsoft for almost 10 years, at Office and Bing divisions managing and developing innovative product solutions for different geographic markets. He holds a PhD in computer science with a focus on statistical learning from Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), where he is also an associate professor.
Sandro de Oliveira Bassili is our Chief Operating Officer since March 2026. Sandro has been working at the StoneCo group since October 2021 and has also served as our Chief People and Management Officer and Chief Operating Officer of the Software business. Mr. Bassili is the former VP of People of Anheuser-Busch Inbev and member of the Board of Advisors for Grupo Boticário. He spent 27 years with Anheuser-Busch Inbev in different positions. After 19 years of experience in Sales and Marketing, Mr. Bassili had the opportunity to work as VP of People of Latin America North at ABInbev from 2011 to 2014, based in São Paulo. From 2015 to 2018, based in New York, he led the People organization for North America at ABInbev. In June 2020, Mr. Bassili joined Grupo Boticário, one of the biggest beauty companies in Brazil, leading the People, Corporate Affairs, Legal and Transformation Office departments until October 2021. Mr. Bassili holds a Business Administration degree from PUC-GO.
Tatiana Malamud is our Chief Legal and Compliance Officer since August 2022. Ms. Malamud has 30 years of experience as in-house counsel and head of legal departments of financial institutions, as well as a practicing lawyer in the banking and capital market areas. She worked at Banco Bozano Simonsen, Banco Santander, Banco Safra and Banco Original, and she was a partner at Barbosa Müssnich Aragão Advogados, and founding partner at Malamud Altit Advogados, where she worked before joining the company. Ms. Malamud has a bachelor’s degree in law from University of State of Rio de Janeiro – UERJ, and an LLM from Columbia Law School.
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B.    Compensation
Compensation of Directors and Officers
Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere. For the year ended December 31, 2025, the aggregate compensation expense for the members of the Board of Directors and StoneCo’s executive officers for services in all capacities was R$116.1 million, which includes both benefits paid in kind and variable compensation.
Our executive officers, directors and management receive fixed and variable compensation as well as benefits which are in line with market practice in Brazil. The fixed component is set on market terms and adjusted annually.
The variable component consists of share-based compensation (including both share- and cash-settled awards) as discussed below and certain annual cash performance-based compensation.
We have not entered into any service contracts with our directors to provide for benefits upon termination of employment.
Employment agreements
None of our executive officers have entered into employment agreement with us.
Long-Term Incentive Plans (LTIP)
Certain of our employees and other service providers receive share-based compensation under our long-term incentive plans described below. Prior to our initial public offering, we maintained long-term incentive plans that related to shares of our subsidiaries, which, as described throughout this section, were replaced with the StoneCo Long-Term Incentive Plan (LTIP) in connection with the consummation of our initial public offering. All shares underlying awards granted under such plans were exchanged for our Class A common shares. The LTIP is administered by the people and compensation committee of our Board of Directors or another committee as may be designated by the Board of Directors.
On September 1, 2018, we adopted the LTIP to enable us to grant equity-based awards to our employees and other service providers with respect to our Class A common shares. At the time of adoption, we reserved a maximum share capacity under the Plan of 7,442,316 Class A common shares (which represents a pool that was approved by our pre-IPO shareholders for equity incentives to our key employees).
In order to better align incentives between our employees and our shareholders and to retain our talent, the Board approved additional share pools, under the LTIP since the initial adoption of the LTIP. In February 2021, the Board approved an additional share pool under the LTIP of 2,426,906 shares, from which we granted RSUs to certain key employees to incentivize and reward such individuals. These awards were scheduled to vest over a one- to ten-year period.
In May 2021, the Board approved an additional share pool under the LTIP of 4,070,000. We granted Performance Share Unit (PSUs) to certain key employees under the LTIP to incentivize and reward such individuals, which vesting is based on the achievement of a specified Total Shareholder Return (TSR). These awards were scheduled to vest over a five-year period.
On May 31, 2022, the Board approved an amendment and restatement of the LTIP for the purpose of adopting a new equity-based incentive plan pool, comprised of 19.2 million shares to be granted in the form of RSUs and PSUs under the LTIP. A portion of the pool, 5.8 million shares, was approved for the grant of non-recurring long-term incentive plan awards, vesting of which is linked to the achievement of our annual goals and the performance of our stock price, of which 30% is to be vested in 3 years and 70% in 5 years if our goals are met. Each vesting period has a stock price trigger at multiples of our stock price, which aligns the incentive with significant shareholder returns. Another portion of the pool, 1.7 million shares, was approved for the grant of regular annual equity incentive compensation.
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In 2024, the Group made modifications to 3.9 million PSU awards. The modification introduces alternative conditions as market performance for some PSU awards, and also considers an internal financial metric (adjusted by any potential capital distributions) to all of them. This change results in a higher fair value for each award, as measured by the Group through the assessment of both original and modified award fair values at the modification date, leading to an incremental fair value. This modification was also accompanied by an extension of the vesting periods, leading to a weighted average increase of one year in the vesting timeline for the PSU awards.
Assuming achievement of these vesting conditions, awards will be settled in, or exercised for, our Class A common shares. If the applicable vesting conditions are not achieved, the awards will be forfeited for no consideration.
As of December 31, 2025, there were RSUs and PSUs and stock options outstanding with respect to 17,590,651 Class A common shares, including 43,773 stock options with a weighted average exercise price of US$ 24.71. The remaining portion of the pool, 5,299,721 shares, will be used in the future at our discretion either for recurring annual compensation or related to the non-recurring long-term incentive plan mentioned above.
In connection with the extraordinary cash dividend announced on April 14, 2026, the Board also approved an increase of approximately 3.8 million shares to the Long Term Incentive Plan pool, to be settled in accordance with the applicable vesting schedules, with the final amount to be announced following the financial settlement of the dividends on May 4, 2026.
C.    Board practices
Committees of the Board of Directors
Our Board of Directors has four standing committees: the audit committee, the people and compensation committee, the finance committee and the risk committee.
Audit Committee
The audit committee, which consists of Diego Fresco Gutierrez, Luciana Ibiapina Lira Aguiar and Silvio José Morais, assists our Board of Directors in overseeing our accounting and financial reporting processes and the audits of our financial statements. In addition, the audit committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. Diego Fresco Gutierrez is the chairperson of the committee. The audit committee consists exclusively of members of our Board of Directors who are financially literate, and Diego Fresco Gutierrez, Luciana Ibiapina Lira Aguiar and Silvio José Morais are considered “audit committee financial experts” as defined by the SEC. Our Board of Directors has determined that Diego Fresco Gutierrez, Luciana Ibiapina Lira Aguiar and Silvio José Morais satisfy the “independence” requirements of Section 5605 of the Corporate Governance Rules of Nasdaq and Rule 10A-3 under the Exchange Act. SEC and Nasdaq rules with respect to the independence of our audit committee require that all members of our audit committee must meet the independence standard for audit committee membership within one year of the effectiveness of the registration statement for our initial public offering. The audit committee consists entirely of independent directors as of the date of this annual report. The audit committee is governed by a charter that complies with applicable Nasdaq rules, which charter is posted on our website.
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People and Compensation Committee
The people and compensation committee is composed of Silvio José Morais, Mauricio Luis Luchetti and Luis Henrique Cals de Beauclair Guimarães. Silvio José Morais is the chairperson of the committee. The people and compensation committee assists the Board of Directors in reviewing and approving the compensation structure, including all forms of compensation and identification of corporate goals and objectives to evaluate our directors and executive officers. The committee reviews the total compensation package for our executive officers and directors, considering the relevant goals and objectives, and recommends to the Board of Directors for determination of the compensation of each of our directors and executive officers. The committee will also periodically review and approve any long-term incentive compensation or equity plans, programs, policies, plans or similar arrangements, annual bonuses, employee pension and benefits plans, as well as review our management succession planning periodically with the Chief Executive Officer and periodically review and assess risks arising from our employee compensation policies and practices. As permitted by the listing requirements of Nasdaq, we have opted out of Nasdaq Listing Rule 5605-5(d) which requires that a compensation committee consist entirely of independent directors. Currently, all members of our people and compensation committee are independent directors and such committee is governed by a charter that is posted on our website.
Finance Committee
The finance committee, which consists of Silvio José Morais, Diego Fresco Gutierrez, Gilberto Caldart and Marcelo Kopel, assists the Board of Directors with decisions regarding matters within the areas of their experience and expertise, which may include but are not limited to management of our exposure to financial risk; our capital allocation and capital management strategy, including the cost of capital, capital structure, investments and returns; our indebtedness, debt management and capital markets operations and goals relating to our financial position. Silvio José Morais is the chairperson of the committee.
Risk Committee
The risk committee is composed of Marcelo Kopel, Luciana Ibiapina Lira Aguiar, José Alexandre Scheinkman and Gilberto Caldart. Marcelo Kopel is the chairperson of the committee. The risk committee assists the Board of Directors in overseeing our capital management and risk management frameworks, including risk appetite and overseeing our compliance with legal and regulatory requirements associated with them.
Foreign Private Issuer Status
We currently follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of Nasdaq in respect of the following:
•The requirement under Section 5605(d) of Nasdaq listing rules that a compensation committee comprised solely of independent directors governed by a compensation committee charter oversee executive compensation. Currently, all members of our people and compensation committee are independent directors.
•The requirement under Section 5605(e) of Nasdaq listing rules that director nominees be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors.
•Nasdaq Rule 5635, which requires that a listed issuer obtains shareholder approval prior to an issuance of securities in connection with: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) transactions other than public offerings. Pursuant to the laws of the Cayman Islands and our Articles of Association, we are not required to obtain any such approval.
•Rule 5250(b)(3) and Rule 5250(d), which require certain disclosures of third party director and nominee compensation and distribution of annual and interim reports, respectively. As allowed by the laws of the Cayman Islands, we are not required to disclose such compensation or distribute reports in the manner specified by such rule.
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Cayman Islands law does not impose a requirement that the board consists of a majority of independent directors or that such independent directors meet regularly without other members present. Cayman Islands law does not impose specific requirements on the establishment of a compensation committee or nominating committee or nominating process.
D. Employees
As of December 31, 2025, 2024 and 2023 we had 16,367, 16,793 and 17,091 full-time employees, respectively. As of December 31, 2025, 3,613 of these employees were based in our offices in São Paulo, 2,806 of these employees were based in our offices in Rio de Janeiro, and 9,948 were based in other cities elsewhere in Brazil and in other countries, mainly in Latin America and the Caribbean. We also engage consultants as needed to support our operations. Lastly, as of December 31, 2025, 3,743 of the total of 16,367 employees were related to Linx.
The table below breaks down our full-time personnel by function as of December 31, 2025:
Number of
Employees		% of TotalNumber of
Employees
Function 
2025
2024
2023
Administrative
1,678 10.3 %2,063 2,227 
Operations
4,701 28.7 %4,297 4,472 
Technology and Product Development
4,455 27.2 %4,573 4,800 
Sales and Marketing
5,533 33.8 %5,860 5,592 
Total
16,367 
100%
16,793 17,091 
Our employees in Brazil are affiliated with the labor unions of independent sales agents and of consulting, information, research and accounting firms for the geographic area in which they render services. We believe we have a constructive relationship with these unions, as we have never experienced strikes, work stoppages or disputes leading to any form of downtime.
None of our executive officers have entered into employment agreements with us.
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E.    Share ownership
The following table presents the beneficial ownership of our shares owned, on the base date of March 31, 2026, by our current directors and officers, based on publicly available information disclosed via Forms 3 filed with the SEC. Other than those persons listed below, none of our directors or officers beneficially own any of our shares.
Shares Beneficially Owned
% of Total Voting Power(1)
Class AClass B
Shares%Shares%
Antonio Silveira
1(*)—— %
(*)
Diego Fresco Gutierrez4,122(*)—— %(*)
Diego Ventura Salgado86,244(*)—— %(*)
Fabio Vieira Kapitanovas3,878(*)—— %(*)
Gilberto Caldart7,301(*)—— %(*)
José Alexandre Scheinkman
32,486(*)—— %(*)
Luciana Ibiapina Lira Aguiar5,085(*)—— %(*)
Luis Henrique Cals de Beauclair Guimarães
—— %—— %(*)
Marcelo Kopel
(**)
(**)
(**)
(**)
(**)
Mateus Scherer Schwening30,710(*)—— %(*)
Mauricio Luis Luchetti67,534(*)—— %(*)
Pedro Zinner218,577(*)—— %(*)
Raúl Pierre Renteria
0(*)—— %(*)
Sandro de Oliveira Bassili17,511(*)—— %(*)
Silvio José Morais60,458(*)—— %(*)
Tatiana Malamud10,564(*)—— %(*)
Thomas Gregor Ilg
39,495(*)—— %(*)
(*)
Means less than 1%.
(**)
As of the date of this Annual Report, the number of shares beneficially owned by Mr. Kopel has not been publicly disclosed, as his Form 3 has not yet been filed with the SEC.
(1)
Percentage of total voting power represents voting power with respect to all of our Class A common shares and Class B common shares, as a single class. Holders of our Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share.
F. Disclosure of a registrant’s action to recover erroneously awarded compensation
In February 2026, we approved a new compensation recoupment policy (replacing the policy of November 3, 2023). Please see Exhibit 97.1 to this annual report.
We have not been required to prepare an accounting restatement at any time during or after our last completed fiscal year and no recovery of awarded compensation is required pursuant to our compensation recoupment policy.
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.    Major shareholders
The following table and accompanying footnotes present information relating to the beneficial ownership of our Class A common shares and Class B common shares as of March 31, 2026. We are not aware of any other shareholder that beneficially owns more than 5% of our common shares nor of any arrangements the operation of which may at a subsequent date result in a change of our control.
The number of common shares beneficially owned by each entity, person, executive officer or director is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days through the exercise of any option, warrant or other right.
Except as otherwise indicated, and subject to applicable community property laws, we believe that each shareholder identified in the table below possesses sole voting and investment power over all the Class A common shares or Class B common shares shown as beneficially owned by the shareholder in the table. Percentages in the table below are based on 229,177,062 outstanding Class A common shares and 14,051,164 outstanding Class B common shares as of March 31, 2026.
Shares Beneficially Owned
% of Total Voting
Power(1)
Class AClass B
Shares%Shares%
5% Shareholders
André Street(2)
5,345,607 2.33 %14,051,351 100.00 %39.45 %
Madrone Partners L.P.(3)
25,339,276 11.06 %— — 6.85 %
Entities affiliated with BlackRock, Inc.(4)
33,534,943 14.63 %— — 9.07 %
(1)
Percentage of total voting power represents voting power with respect to all of our Class A common shares and Class B common shares, as a single class. Holders of our Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share.
(2)
Includes: (i) 2,255,325 Class A common shares and 1,286,022 Class B common shares held by VCK Investment Fund Limited (SAC A) (“VCK A”), a segregated account of VCK Investment Fund Limited (SAC); VCK A is a fund controlled by Andre Street de Aguiar (“Mr. Street”); (ii) 2,764,208 Class A common shares held by Cakubran Holdings Ltd., a company controlled by VCK A; (iii) 12,765,329 held by ACP Investments Ltd., which is also controlled by VCK A; and (iv) 326,074 Class A common shares held directly by Mr. Street. The business address of VCK A is at Caystone Solutions Ltd., Goldman’s Bay Corporate Center, P.O. Box SP-61567, 2nd floor, West Bay Street, Nassau, The Bahamas.
(3)
The information in the above table concerning Madrone Partners L.P. was obtained from through public filings, including a Form 13F filed with the SEC by Madrone Advisors, LLC on February 13, 2026 reporting beneficial ownership as of December 31, 2025 and a Schedule 13D/A filed on December 18, 2020 by Madrone Partners, L.P. Consists of common shares held of record by Madrone Partners, L.P. Madrone Capital Partners, LLC is the general partner of Madrone Partners, L.P. Thomas Patterson, Greg Penner and Jameson McJunkin are managing members of Madrone Capital Partners, LLC and may be deemed to have voting and dispositive power over the shares held by Madrone Partners, L.P. The address of each of these entities is 1149 Chestnut Street, Suite 200, Menlo Park, CA 94025.
(4)
The information in the above table was obtained through public filings, including the sum ownership of our Class A common shares disclosed in Form 13Fs filed by entities affiliated with BlackRock Inc, as of December 31, 2025. The address of BlackRock, Inc.'s principal business office is 50 Hudson Yards, New York, NY 10001.
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Shareholders Agreement
The Shareholders Agreement grants certain board nomination rights to our founder shareholders, which are also included in our Articles of Association, and certain consent rights such that for so long as founder shareholders own at least 15% of the voting power of our common shares then outstanding, we agree not to take, or permit our subsidiaries to take, certain actions, such as incurring indebtedness in excess of our net equity, entering into a transaction that would result in a Change of Control (as defined therein), entering into a merger, consolidation, reorganization or other business combination, taking any steps to liquidate or declare bankruptcy or insolvency, issue any capital shares other than pursuant to the Long Term Incentive Plan (LTIP), acquire or dispose of assets in excess of 20% of our fair market value, or approve any annual compensation of officers and directors, without the approval of our founder shareholders. Additionally, for as long as the entities bound by the Shareholders Agreement and their affiliates hold at least 5% of the total voting power of our outstanding share capital, our founder shareholders and their designated representatives will have certain information and access rights to our management. See “Item 6. Directors, Senior Management and Employees—A. Directors and senior management—Board of Directors.”
On April 28, 2023, in connection with our corporate restructuring, our founder shareholders executed an irrevocable waiver to formally waive certain rights provided under our Articles of Association and the Shareholders Agreement (“Waiver”), including their rights to nominate/appoint/remove designees/directors to or from our Board of Directors and their consent rights in relation to a merger, consolidation, reorganization or other business combination other than with third-parties and any amendments to our Articles of Association, which they had already agreed and committed not to exercise since November 29, 2022.
In the context of the Waiver and of the board transition announced in 2024, the relevant parties entered into an amendment to the Shareholders Agreement (“Amendment to the Shareholders Agreement”) in order to: (i) reflect and formalize the commitments made under the Waiver; and (ii) grant certain additional rights (that are subject to certain circumstances set forth in the Shareholders Agreement) to the signatories of the Shareholders Agreements, such as: (a) the right to nominate/appoint at least 1 designee/director (or if the size of the Board is increased to more than 11 members, 10% of the total number of directors, rounded upward to the nearest whole number); and (b) the right to elect and appoint a director to act as the chairperson of Board. For a copy of the Amendment to the Shareholders Agreement, please refer to exhibit 4.10 to this annual report.
For avoidance of doubt: (i) the rights mentioned in item “ii” of the paragraph above are subject to the relevant shareholders holding at least a certain percentage (as indicated in the Shareholders Agreement) of the total voting powers of the shares of the Company; and (ii) the right to nominate/appoint a director means the right to submit such nominated/designated director for the approval of the Annual General Meeting of the Company.
B.    Related party transactions
As of December 31, 2024 and 2025, we had no outstanding loans with investees. As of December 31, 2023, such loans amounted to R$0.6 million. In March 2024, the loan between the companies STNE Par and Trinks Serviços de Internet S.A. (“Trinks”) was settled. No loans have been granted to any of our directors or executive officers.
As of December 31, 2025, there is no allowance for expected credit losses on related parties’ receivables. No guarantees were provided or received in relation to any accounts receivable or payable involving related parties.
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Cost Services Agreements
Our subsidiary Stone IP entered into an agreement with our associates Tablet Cloud, APP, Dental Office and Trinks. Under this agreement, Stone IP operates in the electronic means of payment market, accrediting commercial establishments to accept cards with credit and debit functions (multiple or not) as a form of payment upon acquisition of goods and/or services in Brazil (“Transactions”), providing technological solutions, means of connection and/or other related services to capture, processing, transmit and settling Transactions.
The agreement refers to the contracting of accreditation services and accreditation expenses between Stone IP and associates. The amounts that the associates pay under such agreements are based on accreditation services only.
Registration Rights Agreement
We have entered into a Registration Rights Agreement with our founder shareholders (Cakubran, ACP Investments and VCK A), Madrone Partners L.P. (“Madrone”) and our directors and officers.
At any time that our founder shareholders and Madrone are no longer subject to lock-up agreements entered into with the underwriters of our initial public offering, subject to several exceptions, including underwriter cutbacks and our right to defer a demand registration under certain circumstances, our founder shareholders and Madrone may require that we register for public resale under the Securities Act all common shares constituting registrable securities that they request be registered so long as the securities requested to be registered in each registration statement have an aggregate estimated market value of at least $25 million.
If we propose to register any of our securities under the Securities Act for our own account or the account of any other holder (excluding any registration related to employee benefit plan, a corporate reorganization, other Rule 145 transactions, in connection with a dividend reinvestment plan or for the sole purpose of offering securities to another entity or its security holders in connection with the acquisition of assets or securities of such entity), our founder shareholders and Madrone and certain of our executive officers, are entitled to notice of such registration and to request that we include registrable securities for resale on such registration statement, and we are required, subject to certain exceptions, to include such registrable securities in such registration statement.
In connection with the transfer of their registrable securities, the parties to the Registration Rights Agreement may assign certain of their respective rights under the Registration Rights Agreement under certain circumstances. In connection with the registrations described above, we will indemnify any selling shareholders and we will bear all fees, costs and expenses (except underwriting discounts and spreads).
Related Person Transaction Policy
Our related person transaction policy states that any related person transaction must be approved by our audit committee before being submitted to the Board for final decision. In determining whether to approve or ratify a transaction with a related person, our management will consider all relevant facts and circumstances, including without limitation the commercial reasonableness of the terms, of the transaction the benefit and perceived benefit, or lack thereof, to us, opportunity costs of alternate transaction, the materiality and character of the related person’s direct or indirect interest and the actual or apparent conflict of interest of the related person. Our management will not approve or ratify a related person transaction unless it has determined that, upon consideration of all relevant information, such transaction is in, or not inconsistent with, our best interests and the best interests of our shareholders.
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Indemnification Agreements
We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law.
C.    Interests of experts and counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A.    Consolidated statements and other financial information
See “Item 18. Financial statements.”
Legal proceedings
We are involved in disputes arising in the ordinary course of our business. Any claims against us, whether meritorious or not, can be time-consuming, result in costly litigation, require significant management time and result in the diversion of significant operational resources.
We are subject to a number of judicial and administrative proceedings in the Brazilian court systems, including civil, labor, tax and other proceedings, which we believe are common and incidental to business operations in Brazil, in general. We recognize provisions for legal proceedings in our financial statements, in accordance with accounting rules, when we are advised by independent outside counsel that (i) it is probable that an outflow of resources will be required to settle the obligation and (ii) a reliable estimate can be made of the amount of the obligation. Provisions for probable losses arising from these matters are estimated and periodically adjusted, based on the analysis and legal opinion of our external and internal legal advisors. Factors considered include legal precedents, the merits of the claim, potential outcomes and, for individually non-significant lawsuits of a similar nature, a portfolio approach based on historical loss data.
Potential losses related to civil and labor claims are estimated based on the nature of the lawsuits. Tax claims, as well as individually significant civil and labor lawsuits, or those of a non-repetitive nature, are assessed on a case-by-case basis to determine the probability and amount of potential loss, with reliance on the analysis and legal opinion of our independent outside counsels. Individually non-significant civil and labor lawsuits of a similar nature are estimated utilizing a portfolio approach, based on the most recent 12-month average loss for these types of claims and actual historical costs incurred in similar cases.
As of December 31, 2025, we have provisions recorded in our financial statements in connection with legal proceedings for which we believe a loss is probable in accordance with accounting rules, in an aggregate amount of R$214.9 million and have made judicial deposits in an aggregate amount of R$ 16.7 million. However, legal proceedings are inherently unpredictable and subject to significant uncertainties. If one or more cases were to result in a judgment against us in any reporting period for amounts that exceeded our management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. See “Risk Factors—Risks Related to Legal and Regulatory Matters—The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations”. For further information, see note 14 to our Consolidated Financial Statements.
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Civil matters
As of December 31, 2025, we were party to 11,784 judicial and administrative proceedings of a civil nature, including those we filed. These proceedings primarily relate to claims from clients related to service disruptions, contract disputes and alleged damages. We recorded a provision of R$37.3 million for the portion of these lawsuits considered as a probable loss. While we believe our provisions are adequate, litigation is inherently unpredictable, and the ultimate resolution of these matters may differ from our current estimates. For further information, see note 14.3 to our Consolidated Financial Statements.
Labor matters
As of December 31, 2025, we were party to 2,890 labor-related judicial and administrative proceedings. In general, we are subject to recurrent lawsuits, primarily falling in two categories: (i) labor claims by former employees and (ii) labor claims brought forth by former employees of outsourced companies contracted by the Group. These claims commonly center around issues such as the claimant’s placement in a different trade union and payment of overtime. The initial value of these lawsuits is asserted by the former employees at the commencement of the legal proceeding. We recorded a provision of R$108.0 million for the portion of these lawsuits considered as a probable loss. While we believe our provisions are adequate, litigation is inherently unpredictable, and the ultimate resolution of these matters may differ from our current estimates. For further information, see note 14.3 to our consolidated financial statements.
Tax and social security matters
As of December 31, 2025, we recorded a provision of R$69.6 million, regarding tax and social security matters in our audited financial statements. Under business combination rules, we recognized a provision for tax treatments adopted when calculating income tax and social contribution on net income.
During 2023, 2024 and 2025, we received tax assessments issued by a municipal tax authority related to the allegedly insufficient payment of tax on services rendered. As of December 31, 2025, the updated amount of such claims is R$265.8 million, compared to R$41.6 million as of December 31, 2024. The cases, classified as possible losses, are being challenged at the administrative level of the court.
Material proceedings with adverse director, management or affiliate
None.
Class Action
On November 19, 2021, Ronald F. Ray filed a putative securities class action against StoneCo Ltd., Thiago dos Santos Piau, Lia Machado de Matos, Rafael Martins Pereira and Marcelo Baldin. On December 7, 2021, Landon Depue filed a substantially similar complaint against the same parties. On January 18, 2022, six potential class members moved for consolidation of both actions and for appointment as lead plaintiff (Tulsi Chaulagain, Indiana Public Retirement System, Audrey Holdings Group Limited, Bandana Neupane Poudel, Tan Seh Yii, and Paul Foden). On May 2, 2022, the Court consolidated the related actions and appointed Indiana Public Retirement System as Lead Plaintiff.
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Lead Plaintiff filed an Amended Complaint on August 7, 2022. The Amended Complaint added as Defendants Andre Street de Aguiar and Eduardo Cunha Monnerat Solon de Pontes. The Amended Complaint alleges, among other things, that Defendants made misrepresentations regarding the risks and profitability of its credit product and failed to disclose changes to our credit check process. Lead Plaintiff alleges that these purportedly material misstatements and omissions artificially inflated the value of our stock. We moved to dismiss the Amended Complaint, and on September 25, 2024, the court granted in part the motion to dismiss, dismissing several categories of alleged misstatements from the case, but allowing allegations regarding statements about the selectivity of the credit scoring process over time and the effects of COVID-19 and Brazil’s new registry laws on delinquency rates to move forward. This ruling only found that accepting Lead Plaintiff’s allegations as true, they were sufficient to state a claim, but the court made no determination as to the factual accuracy of the allegations. On November 21, 2024, the individual defendants (Thiago dos Santos Piau, Lia Machado de Matos, Rafael Martins Pereira, Marcelo Bastianello Baldin, André Street de Aguiar and Eduardo Cunha Monnerat Solon de Pontes) were dismissed from the action by stipulation with Lead Plaintiff.
As of December 31, 2025, the Lead Plaintiff agreed to a settlement of R$ 145.3 million, of which R$ 96.6 million was covered by insurers. The full amount has been deposited into the court escrow account and recognized in the statement of profit or loss under other income (expenses), net (see note 18 from our Audited Consolidated Financial Statements). The settlement was approved by the court on February 27, 2026. Certain investors have filed an opt-out action in the southern district of New York. We have moved to dismiss the opt-out action for, among other reasons, attempting to revive claims that were dismissed in the class action.
Dividends and dividend policy
The future determination to pay dividends will be made at the discretion of our Board of Directors and will depend on various factors, including applicable laws, our results of operations, financial condition, future prospects and any other factors deemed relevant by our Board.
Under the Cayman Companies Act and our Articles of Association, a Cayman Islands company may pay a dividend out of either its profit or share premium account, but a dividend may not be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. According to our Articles of Association, dividends can be declared and paid out of funds lawfully available to us, which include the share premium account. Dividends, if any, would be paid in proportion to the number of common shares a shareholder holds. For further information, see “Item 10. Additional Information—E.Taxation—Cayman Islands Tax Considerations”.
Additionally, please refer to “Risk Factors—Risks Relating to Our Business, Strategy and Industry—Our holding company structure makes us dependent on the operations of our subsidiaries”. Our ability to pay dividends is directly related to positive and distributable net results from our Brazilian subsidiaries. If, due to new laws or bilateral agreements between countries, our Brazilian subsidiaries are unable to pay dividends to Cayman Islands companies such as us, or if Cayman Islands companies such as us become incapable of receiving them, we may not be able to make dividend payments in the future.
B.    Significant changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.
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ITEM 9. THE OFFER AND LISTING
A.    Offer and listing details
Not applicable.
B.    Plan of distribution
Not applicable.
C.    Markets
Our common shares have been listed on the Nasdaq Global Select Market under the symbol “STNE” since October 25, 2018. Following StoneCo's business combination with Linx closed on July 1, 2021, we launched a sponsored Brazilian Depositary Receipts (BDRs) program (“Sponsored BDR Program”), in accordance with the regulation of CVM. In December, 2024, we decided to discontinue the Sponsored BDR Program and initiated the procedure to cancel such program. The BDRs under the Sponsored BDR Program ceased to be traded on the Brazilian stock exchange (B3) on March 14, 2025.
On June 11, 2021, we issued our inaugural dollar bond, raising US$500 million with accrue interest at 3.95%, payable semiannually, due in 2028. The bonds are traded on the stock exchanged operated by Singapore Exchange Securities Trading Limited, or the SGX-ST. During 2024, we launched a tender offer pursuant to which we repurchased 58.9% of the outstanding bonds. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and capital resources—Issuance of Inaugural Bonds."
D.    Selling shareholders
Not applicable.
E.    Dilution
Not applicable.
F.    Expenses of the issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A.    Share capital
Not applicable.
B.    Memorandum and articles of association
The following description of our share capital summarizes certain provisions of our Articles of Association. Such summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of our Articles of Association. Prospective investors are urged to read the exhibits incorporated by reference for a complete understanding of our Articles of Association.
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General
We are a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies. Our constitutional documents consist of our Articles of Association. Our corporate purposes are unrestricted and we have the authority to carry out any object not prohibited by any law as provided by Section 7(4) of the Cayman Companies Act, or the Cayman Companies Act generally.
Our affairs are governed principally by: (1) our Articles of Association; (2) the Cayman Companies Act; and (3) the common law of the Cayman Islands. As provided in our Articles of Association, subject to Cayman Islands law, we have full capacity to carry on or undertake any business or activity, do any act or enter into any transaction, and, for such purposes, full rights, powers and privileges.
The following is a summary of the material provisions of our shares and our Articles of Association. This discussion does not purport to be complete and is qualified in its entirety by reference to our Articles of Association. The form of our Articles of Association is incorporated by reference to this annual report.
Share Capital
Our Articles of Association authorize two classes of common shares: Class A common shares and Class B common shares. Any holder of Class B common shares may convert his/her shares at any time into Class A common shares on a share-for-share basis. The rights of the two classes of common shares are otherwise identical, except as described below.
Our authorized share capital is US$50,000 divided into 630,000,000 shares of a par value of US$0.000079365 each.
The authorized but unissued shares are presently undesignated and may be issued by the Board of Directors as common shares of any class or as shares with preferred, deferred or other special rights or restrictions.
As of December 31, 2025, 232,663,503 Class A common shares and 16,241,164 Class B common shares were issued and fully paid.
Treasury Shares
As of December 31, 2025, we held 65,342,853 Class A common shares in treasury, which are included in the 232,663,503 class A common shares outstanding.
Class A and Class B Common Shares
Holders of our Class A and Class B common shares who are nonresidents of the Cayman Islands may freely hold and vote their shares.
The following summarizes the rights of holders of our Class A and Class B common shares:
•Each holder of Class A common shares is entitled to one vote per share on all matters to be voted on by shareholders generally, including the election of directors.
•Each holder of Class B common shares is entitled to 10 votes per share on all matters to be voted on by shareholders generally, including the election of directors.
•The holders of our Class A common shares and Class B common shares are entitled to dividends and other distributions as may be recommended and declared from time to time by our Board of Directors out of funds legally available for that purpose, if any.
•Upon our liquidation, dissolution or winding-up, each holder of Class A common shares and Class B common shares will be entitled to share equally on a pro rata basis in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities.
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The Articles of Association provide that at any time when there are Class A common shares in issue, Class B common shares may only be issued pursuant to: (a) a share split, subdivision or similar transaction or as contemplated in the Articles of Association; or (b) a business combination involving the issuance of Class B common shares as full or partial consideration. A business combination, as defined in the Articles of Association, would include, amongst other things, a statutory amalgamation, merger, consolidation, arrangement or other reorganization.
Share Repurchase
The Cayman Companies Act and the Articles of Association permit us to purchase our own shares, subject to certain restrictions. The Board of Directors may only exercise this power on our behalf, subject to the Cayman Companies Act, the Articles of Association and to any applicable requirements imposed from time to time by the SEC or Nasdaq, the applicable stock exchange on which our securities are listed. For additional information regarding our share repurchase programs, see “Item 16E. Purchases of equity securities by the issuer and affiliated purchasers”.
Preemptive or Similar Rights
The Class A common shares and Class B common shares are not entitled to preemptive rights upon transfer and are not subject to conversion (except as described below under “—Conversion”), redemption or sinking fund provisions.
Conversion
At the option of the holder, a Class B common share may be converted at any time into one Class A common share. In addition, each Class B common share will convert automatically into one Class A common share upon any transfer, whether or not for value, except for certain transfers described in the Articles of Association, including transfers to affiliates, one or more trustees of a trust established for the benefit of the shareholder or their affiliates, and partnerships, corporations and other entities owned or controlled by the shareholder or their affiliates. Furthermore, each Class B common share will convert automatically into one Class A common share and no Class B common shares will be issued thereafter if, at any time, the voting power of outstanding Class B common shares represents less than 10% of the aggregate voting power of the Class A common shares and Class B common shares then outstanding.
No class of our common shares may be subdivided or combined unless the other class of common shares is concurrently subdivided or combined in the same proportion and in the same manner.
Transfer of Shares
Subject to any applicable restrictions set forth in the Articles of Association, any shareholder of ours may transfer all or any of his/her common shares by an instrument of transfer in the usual or common form or in the form prescribed by Nasdaq or any other form approved by our Board of Directors.
The Class A common shares are traded on the Nasdaq stock exchange in book-entry form and may be transferred in accordance with the Articles of Association and rules and regulations of Nasdaq or of any recognized stock exchange on which our securities are listed.
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However, our Board may, in its absolute discretion, decline to register any transfer of any common share which is either not fully paid up to a person of whom it does not approve or is issued under any share incentive scheme for employees which contains a transfer restriction that is still applicable to such common share. The Board of Directors may also decline to register any transfer of any ordinary share unless:
•A fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as the Board may from time to time require is paid to us in respect thereof.
•The instrument of transfer is lodged with us, accompanied by the certificate (if any) for the common shares to which it relates and such other evidence as our Board may reasonably require to show the right of the transferor to make the transfer.
•The instrument of transfer is in respect of only one class of shares.
•The instrument of transfer is properly stamped, if required.
•The common shares transferred are free of any lien in favor of us.
•In the case of a transfer to joint holders, the transfer is not to more than four joint holders.
If the directors refuse to register a transfer they are required, within two months after the date on which the instrument of transfer was lodged, to send to the transferee notice of such refusal.
Transmission of Shares
Our Articles of Association provide provisions for the transmission of shares where a person becomes entitled to a share in consequence of the death or bankruptcy of a shareholder. These provisions include, amongst other things, provisions relating to Class B common shares and that no conversion is applicable upon transmission of such shares to a new holder who must be an affiliate (as defined in the Articles of Association) of the previous holder.
Limitations on the Rights to Own Securities
As provided in our Articles of Association, our Class A common shares may be issued to individuals, corporations, trusts, estates of deceased individuals, partnerships and unincorporated associations of persons. Our Articles of Association contain no limitation on the rights to own our shares and no limitation on the rights of non-Cayman Islands residents or foreign shareholders to hold or exercise voting rights.
Directors
We are managed by our Board of Directors. The Articles of Association provide that, unless otherwise determined by a special resolution of shareholders, the Board will be composed of 5 to 11 directors, with the number being determined by a majority of the directors then in office. There are no provisions relating to the retirement of directors upon reaching an age limit.
Each director shall be appointed and elected for such terms as the resolution appointing him/her may determine or until his/her death, resignation or removal, subject to any applicable provision set forth in the Articles of Association.
A director is not required to hold any shares in the Company by way of qualification nor is there any specified upper or lower age limit for directors either for accession to or retirement from the Board.
The Board of Directors may also delegate any of its powers to committees consisting of such director(s) or other person(s) as the Board thinks fit, and from time to time it may also revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may from time to time be imposed upon it by the Board.
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Appointment, Disqualification and Removal of Directors
Subject to our Articles of Association, directors shall be elected by an ordinary resolution of the shareholders.
Each director holds office for a term ending at the next annual general meeting unless they resign or their office is vacated earlier, provided that such term shall be extended in the event that no successor is appointed in which case such term shall be extended to the date on which such successor has been appointed.
Except as otherwise provided for in the Shareholders Agreement, before the expiration of his/her term of office, a director may only be removed for cause by ordinary resolution in accordance with the provisions of our Articles of Association. Cause shall mean, in relation to a director, the occurrence of any of the following events: (a) the person’s conviction by final judgment issued by a competent court or declaration of guilt before a competent court with respect to any offense considered an intentional crime or punishable by detention, or a torpid act, intentional fraud, improbity, theft or anti-ethical business conduct in the jurisdiction involved; (b) fraud, theft, financial dishonesty, misappropriation or embezzlement of funds by the person, whether before or after the date of his or her election, that adversely affects us; (c) breach or willful misconduct by the person in the performance of its obligations, including, among others, (i) uninterrupted or repeated omission or refusal to perform the obligations and duties established in our Articles of Association or in the applicable laws, (ii) incapacity, by the person, to comply with the obligations and duties as a result of an alcohol or drug addiction; or (d) willful misconduct that causes material damages to or that adversely affects our financial situation or commercial reputation.
See “Item 7. Major Shareholders and Related Party Transaction—A. Major Shareholders—Shareholders Agreement” for additional information regarding appointment, disqualification and removal of Directors.
Executive Officers
Our executive officers are primarily responsible for the day-to-day management of our business and for implementing the general policies and directives established by our Board of Directors. Our Board is responsible for establishing the roles of each executive officer.
The Articles of Association provide that the Board of Directors may appoint such officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Board may think fit. Unless otherwise specified in the terms of his/her appointment an officer may be removed by the Board of Directors.
Power to Allot and Issue Shares and Warrants
Subject to the provisions of the Cayman Companies Act, the Articles of Association and without prejudice to any special rights conferred on the holders of any shares or class of shares, any share may be issued with or have attached to it such rights, or such restrictions, whether with regard to dividend, voting, return of capital or otherwise, as the Board of Directors may determine. Any share may be issued on terms that, upon the happening of a specified event or upon a given date and either at our option or the option of the holder of the share, it is liable to be redeemed.
The Board of Directors may issue warrants to subscribe for any class of shares or other securities of ours on such terms as we may from time to time determine.
We will not issue shares or warrants to bearer.
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Subject to the provisions of the Cayman Companies Act, the Articles of Association and, where applicable, the rules of Nasdaq or any recognized stock exchange on which our securities are listed and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all of our unissued shares shall be at the disposal of the Board of Directors, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, provided that no shares shall be issued at a discount below par value.
Neither we nor the Board of Directors shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others whose registered addresses are in any particular territory or territories where, in the absence of a registration statement or other special formalities, this is or may, in the opinion of the Board, be unlawful or impracticable. However, no member affected as a result of the foregoing shall be, or be deemed to be, a separate class of members for any purpose whatsoever.
Power to Dispose of Our Assets of or Any of Our Subsidiaries
While there are no specific provisions in the Articles of Association relating to the disposal of our assets or any of our subsidiaries, the Board of Directors may exercise all powers and do all acts and things which may be exercised or done or approved by us and which are not required by the Articles of Association or the Cayman Companies Act to be exercised or done by us in general meeting, but if such power or act is regulated by us in general meeting, such regulation shall not invalidate any prior act of the Board which would have been valid if such regulation had not been made. 
Borrowing Powers
The Board of Directors may exercise all of our powers to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and uncalled capital of ours and, subject to the Cayman Companies Act, to issue debentures, bonds and other securities of ours, whether outright or as collateral security for any debt, liability or obligation of ours or of any third party.
Compensation
The directors shall be entitled to receive, as ordinary compensation for their services, such sums as shall from time to time be determined by the People and Compensation Committee, Board of Directors or us in general meeting, as the case may be, such sum (unless otherwise directed by the resolution by which it is determined) to be divided among the Directors in such proportions and in such manner as they may agree or, failing agreement, either equally or, in the case of any Director holding office for only a portion of the period in respect of which the compensation is payable, pro rata. The Directors shall also be entitled to be repaid all expenses reasonably incurred by them in attending any Board of Directors meetings, committee meetings or general meetings or otherwise in connection with the discharge of their duties as Directors. Such compensation shall be in addition to any other compensation to which a Director who holds any salaried employment or office with us may be entitled by reason of such employment or office.
Any director who, at our request, performs services which in the opinion of the Board of Directors go beyond the ordinary duties of a director may be paid such special or extra compensation as the Board may determine, in addition to or in substitution for any ordinary compensation as a Director. An executive director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such compensation and such other benefits and allowances as the Board of Directors may from time to time decide. Such compensation shall be in addition to his/her ordinary compensation as a director.
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The People and Compensation Committee and/or the Board of Directors may establish, either on its own or jointly in concurrence or agreement with our subsidiaries or companies with which we are associated in business, or may make contributions out of our monies to, any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or former Director who may hold or have held any executive office or any office of profit with us or any of our subsidiaries) and former employees of ours and their dependents or any class or classes of such persons.
We may also pay, enter into agreements to pay or make grants of revocable or irrevocable, whether or not subject to any terms or conditions, pensions or other benefits to employees and former employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or former employees or their dependents are or may become entitled under any such scheme or fund as mentioned above. Such pension or benefit may, if deemed desirable by the People and Compensation Committee and/or the Board of Directors, be granted to an employee either before and in anticipation of, or upon or at any time after, his or her actual retirement.
Loans and Provision of Security for Loans to Directors
We shall not directly or indirectly make a loan to a director or a director of any holding company of ours or any of our respective close associates, enter into any guarantee or provide any security in connection with a loan made by any person to a Director or a director of any holding company of ours or any of our respective close associates, or, if any one or more Directors hold(s) (jointly or severally or directly or indirectly) a controlling interest in another company, make a loan to that other company or enter into any guarantee or provide any security in connection with a loan made by any person to that other company.
Disclosure of Interest in Contracts with Us or Any of Our Subsidiaries
With the exception of our office of auditor, a director may hold any other office or place of profit with us in conjunction with his/her office of director for such period and upon such terms as the Board of Directors may determine, and may be paid such extra compensation for that other office or place of profit, in whatever form, in addition to any compensation provided for by or pursuant to the Articles of Association. A director may be or become a director, officer or member of any other company in which we may be interested, and shall not be liable to account to us or the members for any compensation or other benefits received by him/her as a director, officer or member of such other company. The Board may also cause the voting power conferred by the shares in any other company held or owned by us to be exercised in such manner in all respects as we think fit, including the exercise in favor of any resolution appointing the directors or any of them to be directors or officers of such other company.
No director or intended director shall be disqualified by his/her office from contracting with us, nor shall any such contract or any other contract or arrangement in which any director is in any way interested be liable to be avoided, nor shall any director so contracting or being so interested be liable to account to us for any profit realized by any such contract or arrangement by reason only of such director holding that office or the fiduciary relationship established by it. A director who is, in any way, materially interested in a contract or arrangement or proposed contract or arrangement with us shall declare the nature of his/her interest at the earliest meeting of the Board of Directors at which he or she may practically do so.
There is no power to freeze or otherwise impair any of the rights attaching to any share by reason that the person or persons who are interested directly or indirectly in that share have failed to disclose their interests to us.
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A director shall not vote or be counted in the quorum on any resolution of the Board of Directors in respect of any contract or arrangement or proposal in which he/she or any of his/her close associate(s) has/have a material interest, and if such director shall do so, his/her vote shall not be counted nor shall such director be counted in the quorum for that resolution, but this prohibition shall not apply to any of the following matters:
•The giving of any security or indemnity to the director or his/her close associate(s) in respect of money lent or obligations incurred or undertaken by him/her or any of them at our request of or for our benefit or any of our subsidiaries.
•The giving of any security or indemnity to a third party in respect of a debt or obligation of ours or any of our subsidiaries for which the director or his/her close associate(s) has/have himself/herself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security.
•Any proposal concerning an offer of shares, debentures or other securities of or by us or any other company which we may promote or be interested in for subscription or purchase, where the director or his/her close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer.
•Any proposal or arrangement concerning the benefit of our employees or any of our subsidiaries, including the adoption, modification or operation of either: (i) any employees’ share scheme or any share incentive or share option scheme under which the Director or his/her close associate(s) may benefit; or (ii) any of a pension fund or retirement, death or disability benefits scheme which relates to Directors, their close associates and employees of ours or any of our subsidiaries and does not provide in respect of any Director or his/her close associate(s) any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates.
•Any contract or arrangement in which the Director or his/her close associate(s) is/are interested in the same manner as other holders of shares, debentures or other securities of ours by virtue only of his/her/their interest in those shares, debentures or other securities.
Proceedings of the Board of Directors
The Articles of Association provide that subject to the provisions of the Cayman Companies Act, the Articles of Association, the applicable stock exchange rules and any directions given by Ordinary or Special Resolution, our business and affairs will be managed by, or under the direction or supervision of, the Board of Directors. The Board of Directors shall have all the powers necessary for managing, and for directing and supervising, our business and affairs. A duly convened meeting of the Board of Directors at which a quorum is present may exercise all powers exercisable by the Board. Subject to the provisions of the Articles of Association, the Board may regulate their proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairperson shall have a second or casting vote.
Chairperson and Vice-Chairperson
The Board of Directors will have a chairperson nominated by our reference shareholder for so long as our reference shareholder holds at least 25% of the voting power of all shareholders, and where our reference shareholder no longer holds at least 25% of the voting power of all shareholders, a majority of our Board of Directors shall elect and appoint a chairperson. A Vice-Chairperson may be elected, by the majority of the directors, to act in the absence of the Chairperson at Board meetings.
The period for which the Chairperson and/or the Vice-Chairperson shall hold office shall be determined in accordance with the Articles of Association. The Chairperson shall preside as Chairperson at every meeting of the Board of Directors at which he/she is present. Where the Chairperson is not present at a meeting of the Board of Directors, the Vice-Chairperson, if any, shall act as Chairperson, or in his/her absence, the attending directors of the Board may choose one director to be the chairperson of the meeting.
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Alterations to the Constitutional Documents and Our Name
To the extent that the same is permissible under Cayman Islands law and subject to the Articles of Association, our Articles of Association may only be altered or amended, and our name may only be changed, with the sanction of a Special Resolution of ours together with the consent of the founder shareholders as set out in our Articles of Association.
Liquidation Rights
If we are voluntarily wound up, the liquidator, after taking into account and giving effect to the rights of preferred and secured creditors and to any agreement between us and any creditors that the claims of such creditors shall be subordinated or otherwise deferred to the claims of any other creditors and to any contractual rights of set-off or netting of claims between us and any person or persons (including without limitation any bilateral or any multilateral set-off or netting arrangements between us and any person or persons) and subject to any agreement between us and any person or persons to waive or limit the same, shall apply our property in satisfaction of its liabilities pari passu and subject thereto shall distribute the property amongst the shareholders according to their rights and interests in us.
Changes to Capital
Pursuant to the Articles of Association, we may from time to time by ordinary resolution:
•Increase our authorized share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe.
•Consolidate and divide all or any of our share capital into shares of a larger amount than its existing shares.
•Convert all or any of our paid-up shares into common shares and reconvert those common shares into paid-up shares of any denomination.
•Subdivide our existing shares or any of them into shares of a smaller amount, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived.
•Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.
Mergers and Consolidations
Our Articles of Association provide that subject to the Cayman Companies Act and the rules of any applicable stock exchange, we will, with the approval of a special resolution, have the power to merge or consolidate with one or more constituent companies, upon such terms as the directors may determine, provided that any such merger or consolidation that involves the transfer of shares and/or assets of the Company or any of its subsidiaries to any third party shall require the consent of the founder shareholders.
Meetings of Shareholders
Special and Ordinary Resolutions
Special resolutions must be passed in accordance with the Cayman Companies Act, which requires that resolutions must be passed by at least two-thirds of our shareholders who are entitled to vote in person or by proxy at a general meeting where notice specifying the intention to propose such resolution as a special resolution has been duly given.
Under the Cayman Companies Act, a copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands.
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An ordinary resolution, by contrast, is a resolution passed by a simple majority of the votes of our members as, being entitled to do so, vote in person or, in the case of members which are corporations, by their duly authorized representatives or by proxy at a general meeting of which notice has been duly given.
A resolution in writing signed by or on behalf of all members shall be treated as an ordinary resolution duly passed at a general meeting of ours duly convened and held, and where relevant as a special resolution so passed.
Voting Rights and Right to Demand a Poll
Subject to any special rights, restrictions or privileges as to voting for the time being attached to any class or classes of shares at any general meeting: (a) on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorized representative shall have one vote for every share which is fully paid or credited as fully paid registered in his/her name in our register of members, (each Class B common share shall entitle the holder to 10 votes on all matters subject to a vote at our general meetings) provided that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for this purpose as paid up on the share; and (b) on a show of hands every member who is present in person (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy shall have one vote. Where more than one proxy is appointed by a member which is a clearing house or its nominee(s), each such proxy shall have one vote on a show of hands. On a poll, a member entitled to more than one vote need not use all his/her votes or cast all the votes he/she does use in the same way.
At any general meeting, a resolution put to the vote of the meeting is to be decided by poll save that the chairperson of the meeting may, pursuant to the applicable stock exchange listing rules, allow a resolution to be voted on by a show of hands. Where a show of hands is allowed, before or on the declaration of the result of the show of hands, a poll may be demanded by (in each case by members present in person or by proxy or by a duly authorized corporate representative):
•At least two members.
•Any member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting.
•A member or members holding shares in the Company conferring a right to vote at the meeting on which an aggregate sum has been paid equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.
Should a clearing house or its nominee(s) be a member of ours, such person or persons may be authorized as it thinks fit to act as its representative(s) at any meeting of ours or at any meeting of any class of members of ours provided that, if more than one person is so authorized, the authorization shall specify the number and class of shares in respect of which each such person is so authorized. A person authorized in accordance with this provision shall be deemed to have been duly authorized without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house or its nominee(s) as if such person were an individual member including the right to vote individually on a show of hands.
Where we have knowledge that any member is, under the applicable stock exchange rules, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.
Subject to any special rights or restrictions as to voting then attached to any shares, at any general meeting every shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative not being himself or herself a shareholder entitled to vote) shall have one vote per Class A common share and 10 votes per Class B common share.
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Annual General Meetings
As a Cayman Islands exempted company, we are not obligated by the Cayman Companies Act to call annual general meetings; however, our Articles of Association provide that we must hold an annual general meeting each year other than the year of adoption of our Articles of Association. Such meeting must be held at least once every calendar year and take place at such place as may be determined by the Board of Directors from time to time.
As a condition of admission to a shareholders meeting, a shareholder must be duly registered as our shareholder at the applicable record date for that meeting and all calls or installments then payable by such shareholder to us in respect of our Class A common shares must have been paid.
Members Requisition of Meetings
No shareholder has the right to request the directors to convene a general meeting, however shareholders collectively holding more than two-thirds of the voting power of our shares may convene a general meeting if there are no directors.
Notices of Meetings and Business to Be Conducted
An annual general meeting of ours shall be called by not less than 20 clear business days’ notice in writing, and any other general meeting of ours shall be called by not less than 10 clear business days’ notice in writing. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and must specify the time, place and agenda of the meeting and particulars of the resolution(s) to be considered at that meeting and, in the case of special business, the general nature of that business.
Except where otherwise expressly stated, any notice or document (including a share certificate) to be given or issued under the Articles of Association shall be in writing, and may be served by us on any member personally, or by posting it by airmail or by air courier service to such member’s registered address, or by electronic mail to any electronic mail address of such member, or (in the case of a notice) by advertisement in the newspapers, or by placing it on our website. We intend to give notice of each general meeting of shareholders by publication on our website and in any other manner that we may be required to follow in order to comply with Cayman Islands Law, the applicable stock exchange rules and SEC requirements.
Although a general meeting of ours may be called by shorter notice than as specified above, every general meeting may be deemed to have been duly called if it is so agreed by all of our members, in the case of an annual general meeting, or by members holding two-thirds of the voting power of our shares, in the case of an extraordinary general meeting, entitled to attend and vote thereat.
All business transacted at an extraordinary general meeting shall be deemed special business. All business shall also be deemed special business where it is transacted at an annual general meeting, with the exception of certain routine matters which shall be deemed ordinary business.
Quorum for Meetings and Separate Class Meetings
The quorum for a general meeting shall be one or more shareholders holding not less than one-third in aggregate of the voting power of all shares in issue and entitled to vote, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights, the necessary quorum shall be persons holding or representing by proxy not less than two-thirds of the issued shares of the applicable class.
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Proceedings at General Meetings
Our Articles of Association provide that no business shall be transacted at any meeting unless a quorum is present at the time when the meeting proceeds to business and continues to be present until the conclusion of the meeting. One or more shareholders holding not less than one-third in aggregate of the voting power of all shares in issue and entitled to vote, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, shall represent a quorum.
Proxies
Any member of ours entitled to attend and vote at our meeting is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member who is the holder of two or more shares may appoint more than one proxy to represent him/her and vote on his/her behalf at a general meeting of ours or at a class meeting. A proxy need not be a member of us and shall be entitled to exercise the same powers on behalf of a member who is an individual and for whom he/her acts as proxy as such member could exercise. In addition, a proxy shall be entitled to exercise the same powers on behalf of a member which is a corporation and for which he/she acts as proxy as such member could exercise if it were an individual member. On a poll or on a show of hands, votes may be given either personally (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorized in writing, or if the appointor is a corporation, either under seal or under the hand of a duly authorized officer or attorney. Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Board of Directors may from time to time approve, provided that it shall not preclude the use of the two-way form. Any form issued to a member for appointing a proxy to attend and vote at an extraordinary general meeting or at an annual general meeting at which any business is to be transacted shall be such as to enable the member, according to his or her intentions, to instruct the proxy to vote in favor of or against (or, in default of instructions, to exercise his or her discretion in respect of) each resolution dealing with any such business.
Accounts and Audit
The Board of Directors shall cause proper books of account to be kept of the sums of money received and expended by us, and of our assets and liabilities and of all other matters required by the Cayman Companies Act (which include all sales and purchases of goods by us) necessary to give a true and fair view of the state of our affairs and to show and explain our transactions.
Our books of accounts shall be kept at our head office or at such other place or places as the Board of Directors decides and shall always be open to inspection by any director. No member (other than a director) shall have any right to inspect any account, book or document of ours except as conferred by the Cayman Companies Act, Nasdaq listing rules or ordered by a court of competent jurisdiction or authorized by the Board.
The Board of Directors shall from time to time cause to be prepared and laid before us at our annual general meeting the consolidated statements of financial position, profit or loss, comprehensive income (loss), cash flows and changes in shareholders’ equity (including every document required by law to be annexed thereto), together with a copy of the directors’ report and a copy of the auditors’ report. Copies of these documents shall be sent to every person entitled to receive notices our general meetings under the provisions of the Articles of Association together with the notice of annual general meeting, not less than 10 days before the date of the meeting.
We shall appoint auditor(s) to hold office from time to time and with such duties as may be agreed with the Board of Directors. The appointment of and provisions relating to auditors shall be in accordance with any applicable law and Nasdaq listing rules.
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The auditors shall audit our financial statements prepared in accordance with generally accepted accounting principles of IFRS Accounting Standards or such other standards as may be permitted by Nasdaq.
Principal Differences between Cayman Islands and U.S. Corporate Law
The Cayman Companies Act was modeled originally after similar laws in England and Wales but does not follow subsequent statutory enactments in England and Wales. In addition, the Cayman Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Cayman Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Cayman Islands Company Law
We were incorporated in the Cayman Islands as an exempted company on March 11, 2014, subject to the Cayman Companies Act. Certain provisions of Cayman Islands company law are set out below but this section does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of the Cayman Companies Act and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar.
Protection of Non-controlling Shareholders
The Grand Court may, on the application of shareholders holding not less than one-fifth of our shares in issue, appoint an inspector to examine our affairs and report thereon in a manner as the Grand Court shall direct.
Subject to the provisions of the Cayman Companies Act, any shareholder may petition the Grand Court which may make a winding-up order, if the court is of the opinion that this winding up is just and equitable.
Notwithstanding the U.S. securities laws and regulations that are applicable to us, general corporate claims against us by our shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by our Articles of Association.
The Cayman Islands courts ordinarily would be expected to follow English case law precedents, which permit a minority shareholder to commence a representative action against us, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority and the wrongdoers themselves control us, and (3) an irregularity in the passing of a resolution that requires a qualified (or special) majority.
Exempted Company
We are an exempted company with limited liability under the Cayman Companies Act. The Cayman Companies Act distinguishes between ordinary resident companies and exempted companies. Where the proposed activities of a company are to be carried out mainly outside of the Cayman Islands, the registrant can apply for registration as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
•An exempted company does not have to file an annual return of its shareholders with the Registrar of Companies.
•An exempted company’s register of shareholders is not open to inspection.
•An exempted company does not have to hold an annual general meeting.
•An exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance).
•An exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands.
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•An exempted company may register as a limited duration company.
•An exempted company may register as a segregated portfolio company.
•An exempted company may register as a special economic zone company.
We are subject to reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers.
Company Operations
An exempted company such as us must conduct its operations mainly outside the Cayman Islands. An exempted company is also required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorized share capital.
Share Capital
Under Cayman Companies Act, a Cayman Islands company may issue ordinary, preference or redeemable shares or any combination thereof. Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called the share premium account. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangements in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association, in such manner as the company may from time to time determine including, but without limitation, the following:
•Paying distributions or dividends to members.
•Paying up unissued shares of the company to be issued to members as fully paid bonus shares.
•Any manner provided in section 37 of the Cayman Companies Act.
•Writing off the preliminary expenses of the company.
•Writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.
Notwithstanding the foregoing, no distribution or dividend may be paid to members out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.
Subject to the provisions of the Companies Act, a company limited by shares or a company limited by guarantee and having a share capital may, if authorized to do so by its articles of association, by special resolution reduce its share capital in any way.
Financial Assistance to Purchase Shares of a Company or its Holding Company
There are no statutory prohibitions in the Cayman Islands on the granting of financial assistance by a company to another person for the purchase of, or subscription for, its own, its holding company’s or a subsidiary’s shares. Therefore, a company may provide financial assistance provided the directors of the company, when proposing to grant such financial assistance, discharge their duties of care and act in good faith, for a proper purpose and in the interests of the company. Such assistance should be on an arm’s-length basis.
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Purchase of Shares and Warrants by a Company and its Subsidiaries
A company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a member and, for the avoidance of doubt, it shall be lawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articles of association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, such a company may, if authorized to do so by its articles of association, purchase its own shares, including any redeemable shares; an ordinary resolution of the company approving the manner and terms of the purchase will be required if the articles of association do not authorize the manner and terms of such purchase. A company may not redeem or purchase its shares unless they are fully paid. Furthermore, a company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any issued shares of the company other than shares held as treasury shares. In addition, a payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless, immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.
Shares that have been purchased or redeemed by a company or surrendered to the company shall not be treated as canceled but shall be classified as treasury shares if held in compliance with the requirements of Section 37A(1) of the Cayman Companies Act. Any such shares shall continue to be classified as treasury shares until such shares are either canceled or transferred pursuant to the Cayman Companies Act.
A Cayman Islands company may be able to purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. Thus there is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases. The directors of a company may under the general power contained in its memorandum of association be able to buy, sell and deal in personal property of all kinds.
A subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.
Dividends and Distributions
Subject to a cash-flow solvency test, as prescribed in the Cayman Companies Act, and the provisions, if any, of the company’s memorandum and articles of association, a company may pay dividends and distributions out of its share premium account. In addition, based upon English case law which is likely to be persuasive in the Cayman Islands, dividends may be paid out of profits.
For so long as a company holds treasury shares, no dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made, in respect of a treasury share.
Protection of Minorities and Shareholders’ Suits
The Grand Court of the Cayman Islands may, on the application of shareholders holding not less than one-fifth of the shares of StoneCo in issue, appoint an inspector to examine our affairs and report thereon in a manner as the Grand Court shall direct.
Subject to the provisions of the Cayman Companies Act, any shareholder may petition the Grand Court of the Cayman Islands which may make a winding-up order, if the court is of the opinion that this winding up is just and equitable.
Notwithstanding the U.S. securities laws and regulations that are applicable to StoneCo, general corporate claims against StoneCo by its shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by StoneCo’s Articles of Association.
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The Cayman Islands courts ordinarily would be expected to follow English case law precedents, which permit a minority shareholder to commence a representative action against StoneCo, or derivative actions in StoneCo’s name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority and the wrongdoers themselves control StoneCo, and (3) an irregularity in the passing of a resolution that requires a qualified (or special) majority.
Disposal of Assets
There are no specific restrictions on the power of directors to dispose of assets of a company, however, the directors are expected to exercise certain duties of care, diligence and skill to the standard that a reasonably prudent person would exercise in comparable circumstances, in addition to fiduciary duties to act in good faith, for proper purpose and in the best interests of the company under English common law (which the Cayman Islands courts will ordinarily follow).
Accounting and Auditing Requirements
A company must cause proper records of accounts to be kept with respect to: (i) all sums of money received and expended by it; (ii) all sales and purchases of goods by it; and (iii) its assets and liabilities.
Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.
If a company keeps its books of account at any place other than at its registered office or any other place within the Cayman Islands, it shall, upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law (revised) of the Cayman Islands, make available, in electronic form or any other format, at its registered office copies of its books of account, or any part or parts thereof, as are specified in such order or notice.
Exchange Control
There are no exchange control regulations or currency restrictions in effect in the Cayman Islands.
Stamp Duty on Transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies save for those which hold interests in land in the Cayman Islands.
Inspection of Corporate Records
The members of a company have no general right to inspect or obtain copies of the register of members or corporate records of the company. They will, however, have such rights as may be set out in the company’s articles of association.
Register of Members
A Cayman Islands exempted company may maintain its principal register of members and any branch registers in any country or territory, whether within or outside the Cayman Islands, as the company may determine from time to time. There is no requirement for an exempted company to make any returns of members to the Registrar of Companies in the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. However, an exempted company shall make available at its registered office, in electronic form or any other format, such register of members, including any branch register of member, as may be required of it upon service of an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Act (as revised) of the Cayman Islands.
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Register of Directors and Officers
Pursuant to the Cayman Companies Act, a company is required to maintain at its registered office a register of directors, alternate directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within 30 days of any change in such directors or officers, including a change of the name of such directors or officers.
Winding-Up
A Cayman Islands company may be wound up by: (i) an order of the court; (ii) voluntarily by its members; or (iii) under the supervision of the court.
The court has authority to order a winding-up in a number of specified circumstances including where, in the opinion of the court, it is just and equitable that such company be so wound up.
A voluntary winding-up of a company (other than a limited duration company, for which specific rules apply) occurs where the company resolves by special resolution that it be wound up voluntarily or where the company in general meeting resolves that it be wound up voluntarily because it is unable to pay its debt as they fall due. In the case of a voluntary winding-up, the company is obliged to cease to carry on its business from the commencement of its winding-up except so far as it may be beneficial for its winding-up. Upon appointment of a voluntary liquidator, all the powers of the directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.
In the case of a members’ voluntary winding up of a company, one or more liquidators are appointed for the purpose of winding-up the affairs of the company and distributing its assets.
As soon as the affairs of a company are fully wound up, the liquidator must make a report and an account of the winding-up, showing how the winding-up has been conducted and the property of the company disposed of, and call a general meeting of the company for the purposes of laying before it the account and giving an explanation of that account.
When a resolution has been passed by a company to wind up voluntarily, the liquidator or any contributory or creditor may apply to the court for an order for the continuation of the winding-up under the supervision of the court, on the grounds that: (i) the company is or is likely to become insolvent; or (ii) the supervision of the court will facilitate a more effective, economic or expeditious liquidation of the company in the interests of the contributories and creditors. A supervision order takes effect for all purposes as if it was an order that the company be wound up by the court except that a commenced voluntary winding-up and the prior actions of the voluntary liquidator shall be valid and binding upon the company and its official liquidator.
For the purpose of conducting the proceedings in winding up a company and assisting the court, one or more persons may be appointed to be called an official liquidator(s). The court may appoint to such office such person or persons, either provisionally or otherwise, as it thinks fit, and if more than one person is appointed to such office, the court shall declare whether any act required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons. The court may also determine whether any and what security is to be given by an official liquidator on his/her appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the court.
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Reconstructions
Reconstructions and amalgamations may be approved by a majority in number representing 75% in value of the members or creditors, depending on the circumstances, as are present at a meeting called for such purpose and thereafter sanctioned by the courts. Whilst a dissenting member has the right to express to the court his or her view that the transaction for which approval is being sought would not provide the members with a fair value for their shares, the courts are unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management, and if the transaction were approved and consummated the dissenting member would have no rights comparable to the appraisal rights (that is, the right to receive payment in cash for the judicially determined value of their shares) ordinarily available, for example, to dissenting members of a United States corporation.
The Cayman Islands Economic Substance Law
The Cayman Islands enacted the International Tax Co-operation (Economic Substance) Act (as revised), or “The Economic Substance Act,” together with related Guidance Notes and Regulations. We are required to comply with the economic substance requirements and file annual reports in the Cayman Islands as to whether or not we are carrying out such relevant activities and if we are, we must satisfy an economic substance test.
Takeovers
Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than 90% of the shares which are the subject of the offer accept, the offeror may, at any time within two months after the expiration of that four-month period, by notice require the dissenting members to transfer their shares on the terms of the offer. A dissenting member may apply to the Cayman Islands courts within one month of the notice objecting to the transfer. The burden is on the dissenting member to show that the court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority members.
Mergers and Similar Arrangements
The Cayman Companies Act permits mergers or consolidations between two Cayman Islands companies or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
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Where the merger or consolidation is between two Cayman Islands companies, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution (usually a majority of 66 2/3% in value) of the shareholders of each company and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Cayman Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation. Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the director of the Cayman Islands company is required to make a declaration to the effect that, having made due inquiry, he is of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the company in any foreign jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or property or any part thereof; and (iv) that no scheme, order, compromise or similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Moreover, Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies, in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedure of which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question (if a shareholder scheme) must be approved by shareholders representing three-fourths in value of each class of shareholders with whom the arrangement is to be made or (if a creditor scheme) a majority in number of each class of creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each class of creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
•The company is not proposing to act illegally or beyond the scope of its corporate authority and the statutory provisions as to majority vote have been complied with.
•The shareholders have been fairly represented at the meeting in question.
•The arrangement is such as a businessman would reasonably approve.
•The arrangement is not one that would more properly be sanctioned under some other provision of the Cayman Companies Act or that would amount to a “fraud on the minority.”
Squeeze-out Provisions
When a takeover offer is made and accepted by holders of 90.0% of the shares to whom the offer is made within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may be made to the Grand Court but is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
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Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits
Maples and Calder (Cayman) LLP, our Cayman Islands counsel is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
•A company is acting or proposing to act illegally or beyond the scope of its authority.
•The act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained.
•Those who control the company are perpetrating a “fraud on the minority”.
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Corporate Governance
Cayman Islands law restricts transactions between a company and its directors unless there are provisions in the articles of association which provide a mechanism to alleviate possible conflicts of interest. Additionally, Cayman Islands law imposes on directors’ duties of care and skill and fiduciary duties to the companies which they serve. Under our Articles of Association a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the applicable stock exchange rules, and unless disqualified by the chairperson of the relevant meeting, the interested director may vote in respect of any transaction or arrangement in which he or she is interested. The interested director shall be counted in the quorum at such meeting and the resolution may be passed by a majority of the directors present at the meeting.
Indemnification of Directors and Executive Officers and Limitation of Liability
The Cayman Companies Act does not limit the extent to which a company’s articles of association may provide for indemnification of directors and officers, except to the extent that it may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Articles of Association provide that we shall indemnify and hold harmless our directors and officers against all actions, proceedings, costs, charges, expenses, losses, damages, liabilities, judgments, fines, settlements and other amounts incurred or sustained by such directors or officers, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his/her duties, powers, authorities or discretion, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil, criminal or other proceedings concerning us or our affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law (the “DGCL”) for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided in our Articles of Association.
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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company. Accordingly, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not improperly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. However, this obligation may be varied by the company’s Articles of Association, which may permit a director to vote on a matter in which he/she has a personal interest provided that he/she has disclosed that nature of his/her interest to the board of directors. With respect to the duty of directors to avoid conflicts of interest, StoneCo’s Articles of Association vary from the applicable provisions of Cayman Islands law mentioned above by providing that a director must disclose the nature and extent of his/her interest in any contract or arrangement, and following such disclosure and subject to any separate requirement under applicable law or the listing rules of the Nasdaq, and unless disqualified by the chairperson of the relevant meeting, such director may vote in respect of any transaction or arrangement in which he/she is interested and may be counted in the quorum at the meeting. In addition to the above, under Cayman Islands law, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has. As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings.
A director of a Cayman Islands company also owes to the company duties to exercise independent judgment in carrying out his/her functions and to exercise reasonable skill, care and diligence, which has both objective and subjective elements. Recent Cayman Islands case law confirmed that directors must exercise the care, skill and diligence that would be exercised by a reasonably diligent person having the general knowledge, skill and experience reasonably to be expected of a person acting as a director. Additionally, a director must exercise the knowledge, skill and experience which he or she actually possesses.
A general notice may be given to the board of directors to the effect that (1) the director is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm; or (2) he/she is to be regarded as interested in any contract or arrangement which may after the date of the notice to the Board be made with a specified person who is connected with him/her, will be deemed sufficient declaration of interest. This notice shall specify the nature of the interest in question. Following the disclosure being made pursuant to our Articles of Association and subject to any separate requirement under applicable law or the applicable stock exchange listing rules, and unless disqualified by the chairperson of the relevant meeting, a director may vote in respect of any transaction or arrangement in which he/she is interested and may be counted in the quorum at the meeting.
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In comparison, under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself/herself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he/she reasonably believes to be in the best interests of the corporation. He/she must not use his/her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
Shareholder Proposals
Under the DGCL, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The DGCL does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the Board of Directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Cayman Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association.
Cumulative Voting
Under the DGCL, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under Cayman Islands law, our Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any fewer protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
As described in further details above, the office of a director shall be vacated automatically if, among other things, he or she (1) becomes prohibited by law from being a director, (2) becomes bankrupt or makes any arrangement or composition with his or her creditors, (3) dies or is in the opinion of all his/her co-directors, incapable by reason of mental disorder of discharging his or her duties as director (4) resigns his/her office by notice to us or (5) has for more than six months been absent without permission of the directors from meetings of the Board of Directors held during that period, and the remaining directors resolve that his or her office be vacated.
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Transactions with Interested Shareholders
The DGCL provides that; unless the corporation has specifically elected not to be governed by this statute, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that this person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting shares or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail itself of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that the board of directors owes duties to ensure that these transactions are entered into bona fide in the best interests of the company and for a proper corporate purpose and, as noted above, a transaction may be subject to challenge if it has the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding-Up
Under the DGCL, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. If the dissolution is initiated by the board of directors it may be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company resolves by ordinary resolution that it be wound up because it is unable to pay its debts as they fall due. The court has authority to order winding-up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Under the Cayman Companies Act, we may be dissolved, liquidated or wound up by a special resolution of shareholders (requiring a two-thirds majority vote).
Variation of Rights of Shares
Under the DGCL, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate of incorporation provides otherwise. Under our Articles of Association, if the share capital is divided into more than one class of shares, the rights attached to any class may only be varied with the written consent of the holders of two-thirds of the shares of that class or the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.
Also, except with respect to share capital (as described above), alterations to our Articles of Association may only be made by special resolution of shareholders (requiring a two-thirds majority vote).
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by our Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in the Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.
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Handling of Mail
Mail addressed to us and received at our registered office will be forwarded unopened to the forwarding address, which will be supplied by us. None of us, our directors, officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding address.
C.     Material contracts
For information concerning our material contracts, see “Item 4. Information on the Company,” “Item 5. Operating and Financial Review and Prospects,” “Item 7. Major Shareholders and Related Party Transactions—A. Major shareholders—Shareholders Agreement” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”
Except as otherwise disclosed in this Annual Report on Form 20-F (including the Exhibits), we are not currently, and have not been in the last two years, party to any material contract, other than contracts entered into in the ordinary course of business.
D.     Exchange controls
The Cayman Islands currently has no exchange control restrictions.
In Brazil, the right to convert dividend payments and proceeds from the sale of shares into foreign currency and to remit such amounts outside Brazil is subject to restrictions under foreign investment legislation, which generally requires, among other things, that the relevant investments have been registered with the Central Bank.
Under current Brazilian legislation, whenever there is a serious imbalance in Brazil’s balance of payments or there are serious reasons to foresee a serious imbalance, temporary restrictions may be imposed on remittances of foreign capital abroad. For further information on Brazilian exchange controls, see “Presentation of Financial and Other Information—Selected financial data” and “Item 3. Key Information—D. Risk Factors.”
E.     Taxation
The following summary contains a description of certain Cayman Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of our Class A common shares. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to hold the Class A common shares, is not applicable to all categories of investors, some of which may be subject to special rules, and does not address all of the Cayman Islands and U.S. federal income tax considerations applicable to any particular holder. The summary is based upon the tax laws of the Cayman Islands and regulations thereunder and on the tax laws of the United States and regulations thereunder and the other authorities described below as of the date hereof, which are subject to change.
Holders of our Class A common shares should consult their own tax advisors about the particular Cayman Islands and U.S. federal, state, local and other tax consequences to them of the acquisition, ownership and disposition of our Class A common shares.
Cayman Islands Tax Considerations
Pursuant to section 6 of the Tax Concessions Act (as revised) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Cabinet that:
(a)    No law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciations shall apply to us or our operations; and
(b)    No tax be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable by us: (i) on or in respect to our shares, debentures or other obligations; or (ii) by way of withholding in whole or in part of any relevant payment as defined in section 6(3) of the Tax Concessions Act (as revised).
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Our undertaking is for a period of 20 years from April 26, 2016.
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
Payments of dividends and capital in respect of our Class A common shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A common shares, nor will gains derived from the disposal of our Class A common shares be subject to Cayman Islands income or corporation tax.
There is no income tax treaty or convention currently in effect between the United States and the Cayman Islands.
Material U.S. Federal Income Tax Considerations for U.S. Holders
The following section is a description of the material U.S. federal income tax consequences of the ownership and disposition of our Class A common shares, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular person’s decision to hold our shares.
This summary applies only to U.S. Holders (as defined below) that hold our Class A common shares as capital assets for tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Internal Revenue Code of 1986, as amended, or the “Code,” known as the Medicare contribution tax, and tax consequences applicable to U.S. Holders subject to special rules, such as:
•Certain financial institutions.
•Insurance companies.
•Real estate investment trusts or regulated investment companies.
•Dealers or traders in securities that use a mark-to-market method of tax accounting.
•Persons holding Class A common shares as part of a hedging transaction, straddle, wash sale, conversion transaction or other integrated transaction or persons entering into a constructive sale with respect to the Class A common shares.
•Persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar.
•Tax-exempt entities, including an “individual retirement account” or “Roth IRA”.
•Persons that own or are deemed to own ten percent or more of our Class A common shares, by vote or value.
•Persons holding our Class A common shares in connection with a trade or business conducted outside of the United States.
•Partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes.
If an entity that is classified as a partnership for U.S. federal income tax purposes holds our Class A common shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding our Class A common shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the Class A common shares.
This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations, all as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.
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A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of our Class A common shares and is:
•An individual that is a citizen or resident of the United States;
•A corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
•An estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our Class A common shares in their particular circumstances.
Taxation of Distributions
In the event that we do pay dividends, and subject to the discussion below under “—Passive Foreign Investment Company Rules” distributions paid on our Class A common shares, other than certain pro rata distributions of Class A common shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations (including as discussed below under “—Passive Foreign Investment Company Rules,”), dividends paid to certain non-corporate U.S. Holders may be eligible for taxation as “qualified dividend income” and therefore may be taxable at rates applicable to long-term capital gains so long as our Class A common shares are listed and trade on Nasdaq or are readily tradable on another established securities market in the United States. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their particular circumstances.
The amount of a dividend will generally be treated as non-U.S.-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt of the dividend.
Sale or Other Disposition of Common Shares
Subject to the discussion below under “—Passive Foreign Investment Company Rules”, for U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of our Class A common shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the Class A common shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the Class A common shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to various limitations.
Passive Foreign Investment Company Rules
A non-U.S. corporation will be a PFIC for any taxable year in which either (i) 75% or more of its gross income consists of “passive income”, or (ii) 50% or more of the average quarterly value of its assets consist of assets that produce, or are held for the production of, “passive income”. For this purpose, subject to certain exceptions, passive income includes interest, dividends, rents, and certain gains from transactions. Cash is a passive asset for these purposes. A non-U.S. corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, more than 25% (by value) of the stock.
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The determination of whether we are, or will be, a PFIC for a taxable year depends on the application of complex U.S. federal income tax rules, which are subject to various interpretations. While the applicability of the PFIC rules to us is not clear in light of our evolving business activities and the lack of clarity with respect to certain aspects of the rules, based on the composition of our income and assets, including goodwill, we do not believe that we were a PFIC for our 2025 taxable year. Our PFIC status is a factual determination that is made on an annual basis. Because our PFIC status for any taxable year will depend on the manner in which we operate our business, the composition of our income and assets, including the relative growth of our income resulting from our credit activities and the payment processing services we provide, and the value of our assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year. In particular, we note that the sale of the Software Business as well as growth in our credit-related activities relative to our other business lines have increased the risk that we may be treated as a PFIC and, if such growth continues, may result in us being treated as a PFIC in future years. Uncertainty with respect to certain aspects of the PFIC rules and changes to these rules (including the finalization of proposed rules) may also affect our PFIC status. In addition, our PFIC status may depend, in part, on the average value of our goodwill and other intangible assets. Fluctuations in our market capitalization may affect our PFIC status if the value of our assets for purposes of the asset test, including the value of our goodwill and other intangibles, is determined by reference to our market capitalization from time to time (which has been, and may continue to be, volatile), rather than based on other methods. Moreover, there can be no assurance that the Internal Revenue Service, or the “IRS” will agree with our conclusion.
If we were a PFIC for any year during which a U.S. Holder holds our Class A common shares, we generally would continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds Class A common shares, even if we ceased to meet the threshold requirements for PFIC status.
If we were a PFIC for any taxable year and any of our subsidiaries, consolidated affiliated entities or other companies in which we own or are treated as owning equity interests were also a PFIC (any such entity, a “Lower-tier PFIC”), U.S. Holders would be deemed to own a proportionate amount (by value) of the shares of each Lower-tier PFIC and would be subject to U.S. federal income tax according to the rules described in the subsequent paragraph on (i) certain distributions by a Lower-tier PFIC and (ii) dispositions of shares of Lower-tier PFICs, in each case as if the U.S. Holders held such shares directly, even though the U.S. Holders had not received the proceeds of those distributions or dispositions.
If we were a PFIC for any taxable year during which a U.S. Holder held our Class A common shares, the U.S. Holder may be subject to adverse tax consequences. Generally, gain recognized upon a disposition (including, under certain circumstances, a pledge) of our Class A common shares by the U.S. Holder would be allocated ratably over the U.S. Holder’s holding period for such shares. The amounts allocated to the taxable year of disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year and an interest charge would be imposed on the tax on such amount. Further, to the extent that any distribution received by a U.S. Holder on its Class A common shares exceeds 125% of the average of the annual distributions on the Class A common shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above.
In addition, if we were a PFIC or, with respect to a particular U.S. Holder, were treated as a PFIC for the taxable year in which we paid a dividend or for the prior taxable year, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply.
Alternatively, if we were a PFIC and if our Class A common shares were “regularly traded” on a “qualified exchange”, a U.S. Holder could make a mark-to-market election that would result in tax treatment different from the general tax treatment for PFICs described above. Our Class A common shares would be treated as “regularly traded” in any calendar year in which more than a de minimis quantity of our Class A common shares were traded on a qualified exchange on at least 15 days during each calendar quarter. The Nasdaq is a qualified exchange for this purpose.
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If a U.S. Holder makes a mark-to-market election, the holder generally will recognize as ordinary income any excess of the fair market value of its Class A common shares at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the Class A common shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the holder’s tax basis in the Class A common shares will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of Class A common shares in a year when we are a PFIC with respect to our U.S. shareholders will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). Because the mark-to-market election only applies to marketable stock, however, it would not apply to a U.S. Holder’s indirect interest in any of our subsidiaries that were also determined to be PFIC.
If a U.S. Holder owns Class A common shares during any year in which we are a PFIC, the holder generally must file an annual report containing such information as the U.S. Treasury may require on IRS Form 8621 (or any successor form) with respect to us, generally with the holder’s federal income tax return for that year.
U.S. Holders should consult their tax advisers concerning our potential PFIC status and the potential application of the PFIC rules.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisers regarding the application of the U.S. information reporting and backup withholding rules.
Information with Respect to Foreign Financial Assets
Certain U.S. Holders who are individuals (and certain entities) may be required to report information on their U.S. federal income tax returns relating to an interest in our Class A common shares, subject to certain exceptions (including an exception for Class A common shares held in accounts maintained by certain U.S. financial institutions). U.S. Holders should consult their tax advisers regarding the effect, if any, of this requirement on their ownership and disposition of the Class A common shares.
THE ABOVE DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND DISPOSITION BY U.S. HOLDERS OF OUR CLASS A COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES OF THEIR PARTICULAR SITUATION.
F.     Dividends and paying agents
Not applicable.
G.     Statement by experts
Not applicable.
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H.     Documents on display
We are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains an internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
I.     Subsidiary information
Not applicable
J.    Annual Report to Security Holders
If we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual report to security holders in electronic format in accordance with the EDGAR Filer Manual.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
General
Our activities expose us to market, liquidity and credit risks. The Risk Management Area carries the Group’s financial risk management. Our overall market risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.
Credit Risk
Credit risk is defined as the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group’s third-parties, include counterparties in financial contracts (positions classified in cash and cash equivalents, derivative financial instruments for hedging, loans portfolio to customers and deposits with banks and other financial institutions), and in operating activities (accounts receivable from card issuers licensed by card schemes, including outstanding receivables and commitments, suppliers and financial guarantees granted to third parties).
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed in accordance with our internal policies. Investments of surplus funds and the use of derivative instruments are only conducted with carefully selected financial institutions.
Accounts receivable from Card Issuers
Card Issuers once accepted by the networks issue cards that when transact are processed by Acquirers like us. Card Issuers have different risk profiles.
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With frequency associated with the availability of new information or new financial indicators of Card Issuers, the Company carries out assessments of these companies, aiming to identify potential risks. Payment scheme networks have credit risk mitigation mechanisms that vary by network that are available to Acquirers like the Group. To date, the Group has not incurred any significant loss from Card Issuer receivables.
Credit portfolio
Merchant Portfolio and credit cards are available solely to individuals and businesses that are existing customers through acquiring or banking.
Merchant portfolio loans rely on the main repayment source and collateral future receivables of customers while credit card line limits may be unsecured. Such line is generally a portion of the total credit line available to a particular customer based on credit appetite and risk rating.
Market Risk
Market risk is the risk of financial loss resulting from changes in the fair value or future cash flows of financial instruments due to changes in market conditions.
In the ordinary course of business, the Group executes financial transactions that are subject to market variables and, therefore, exposed to market risk.
Interest Rate Risk
The Group’s interest rate risk arises from mismatches among certain assets (mostly cash and equivalents, short-term investments, accounts receivables and the credit portfolio) and liabilities (institutional deposits and marketable debt securities, and other debt instruments) with different benchmarks (fixed or linked to CDI, the Brazilian benchmark for floating rate) and maturity dates. We may mitigate our exposure by executing derivative transactions to match those benchmarks and duration gaps.
Short-term investments, institutional deposits and marketable debt securities, and other debt instruments accrues interest at the CDI Rate, the Brazilian benchmark floating rate, therefore they incur in future cash flow risk, but do not incur in fair value risk.
Foreign Currency Risk
The Group has both assets and liabilities in foreign currencies other than Brazilian real. The foreign currency risk is generated by fluctuations in exchange rates among Brazilian reais and these currencies. We have operations, cash and short-term investments in multiple countries in Latin America, in addition to TPV processed in foreign exchange. However, significant capital expenditures (Pin Pads & POS, and data center equipment) and regular expenses (cloud and software fees) are incurred in U.S. Dollars and Euros. The total foreign currency results on the year ended December 31, 2025 was loss of R$13.1 million, a relatively small financial result, mainly from the interest rate differential on the U.S. Dollar/Brazilian Real, despite high relative currency volatility observed in the same period, showing a well-balanced risk management.
The bonds we issued, as well as other debt in foreign currencies, are hedged on a cash flow hedge arrangement, in which all critical terms of the bonds (U.S. Dollars denomination, coupon payment schedule, and interest rate) are matched with the hedging instrument.
The residual Group’s exposure to foreign currency changes for all other currencies after hedge policy application is not material.
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Risk Assessment: Value-at-Risk and Scenario Analysis
The Company manages and monitors its primary market risk factors - Interest Rate Risk and Exchange Rate Risk - using Value-at-Risk ("VaR”) and/or Stress Testing methodologies. The Company employs these methodologies to quantify how market variables would potentially impact the Group’s financial statements.
Risk FactorAsset/ LiabilityRisk MeasureHorizonValue (in thousands)
Interest ratesAccounts receivables from card issuers, Credit portfolio, Accounts payables to clients and interest rate swapsVaR1 dayR$509
Historical Stress Test(a)
1 dayR$ 5,576
Foreign currency exchangeUSD denominated asset/liabilities/derivatives
Historical Stress Test(b)
2 daysR$60
(a)
The interest rate risk stress test on December 31, 2024 was R$2,906 thousand.
(b)
The foreign currency exchange risk stress test amounted to R$ 288 thousand as of December 31, 2024. Although VaR is no longer utilized for foreign currency risk management as of December 31, 2025, the figure for comparison purposes would be R$ 34 thousand.
Equity Price Risk
Equity price risk is the risk that the fair values of equities decrease as the result of changes in the level of equity and individual stocks. The Group is exposed to equity price risk as it holds, as of December 31, 2025, R$ 24.6 million (compared with R$32.6 million as of December 31, 2024) in equity securities.
Liquidity Risk
Cash flow forecasting is performed for the operating entities of the Group and then aggregated. Rolling forecasts of liquidity requirements are monitored to ensure the Group has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities so that the Group does not breach borrowing limits on any of its borrowing facilities. Such forecasting takes into consideration our debt financing plans, compliance with internal statement of financial position ratio targets and, if applicable, external regulatory or legal requirements. The Group’s main liquidity risk is its potential inability to raise financing to continue its prepayment and credit business. Although the prepayment activity is not an obligation for the Group it is a significant component of its revenues.
Surplus cash held by the operating entities is invested in interest-earning bank accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide adequate margin as determined by the above-mentioned forecasts. As of December 31, 2025, we held short-term investments of R$1,119.1 million (compared with R$ 517.9 million as of December 31, 2024) that are expected to readily generate cash inflows for managing liquidity.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A.    Debt securities
Not applicable.
B.    Warrants and rights
Not applicable.
C.    Other securities
Not applicable.
D.    American Depositary Shares
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
A.    Defaults
No matters to report.
B.    Arrearages and delinquencies
No matters to report.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
A.    Material modifications to instruments
Not applicable.
B.    Material modifications to rights
Not applicable.
C.    Withdrawal or substitution of assets
Not applicable.
D.    Change in trustees or paying agents
Not applicable.
E.    Use of proceeds
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
A.    Disclosure controls and procedures
We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2025. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and (2) accumulated and communicated to our management to allow timely decisions regarding required disclosures.
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B.    Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with IFRS Accounting Standards. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation in accordance with IFRS Accounting Standards. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission’s (2013 framework).
Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025. Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young Auditores Independentes S/S Ltda., an independent registered public accounting firm, as stated in its report.
C.    Attestation report of the registered public accounting firm
Ernst & Young Auditores Independentes S/S Ltda., the independent registered public accounting firm that has audited our consolidated financial statements, has issued an audit report on the effectiveness of our internal controls over financial reporting as of December 31, 2025. Their attestation report on internal controls over financial reporting is included herein.
D.    Changes in internal control over financial reporting
There were no significant changes in our internal control over financial reporting that occurred during the year ended December 31, 2025 that materially affected or are reasonably likely to materially affect our internal control over financial reports.
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Diego Fresco Gutierrez, Luciana Ibiapina Lira Aguiar and Silvio José Morais are audit committee financial experts, as that term is defined by the SEC, and are all independent for the purposes of SEC and Nasdaq rules.
ITEM 16B. CODE OF ETHICS
We have adopted a code of ethics that applies to all of our employees, officers and directors and posted the full text of our code of ethics on the investor relations section of our website, www.stone.co. We intend to disclose future amendments to our code of ethics, or any waivers of such code, on our website or in public filings. The information on our website is not incorporated by reference into this Annual Report on Form 20-F, and you should not consider information contained on our website to be a part of this Annual Report on Form 20-F.
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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the fees billed to us by our independent registered public accounting firm during the years ended December 31, 2025 and 2024. Our independent registered public accounting firm was Ernst & Young Auditores Independentes S/S Ltda. for the years ended December 31, 2025 and 2024.
20252024
(in thousands of reais)
Audit fees8,995.0 6,968.0
Audit-related fees
144.0 550.0 
Other fees256.7 147.0 
Total 9,395.7 7,665.0 
Audit fees
Audit fees are fees billed for professional services rendered by the principal accountant for the audit of the registrant’s annual combined financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. It includes the audit of our financial statements, interim reviews and other services that generally only the independent accountant reasonably can provide, such as comfort letters, statutory audits, consents and assistance with and review of documents filed with the SEC.
Audit-Related Fees
Audit-related fees are fees billed for assurance and related services performed by the principal accountant related to the review of the certain subsidiaries statutory financial statements.
Other fees
For the year ended December 31, 2025, Other Fees include fees related to assurance of financial information of a subsidiary, gap analysis of the accounting process of an affiliate and the access to an electronic technical library (“Atlas”). On December 31, 2024 Other Fees only included fees related to our 2023 Sustainability Report and the access to Atlas.
Audit Committee Pre-Approval Policies and Procedures
In accordance with the requirements of the U.S. Sarbanes-Oxley Act of 2002 and rules issued by the SEC, and in connection with our audit committee (which was undertaken as a result of our initial public offering in October 2018), we introduced a procedure for the engagement of any registered public accounting firm to perform audit or non-audit services for the Company (“Independent Auditor”). The procedure requires that, except for pre-approved services, as determined in our policy, all proposed engagements of the Independent Auditor audit and permitted non-audit services are submitted to our audit committee for approval prior to the beginning of any such services. The pre-approved services refer to audit and/or limited reviews of individual and consolidated financial statements of the Company, and of financial statements of any entity consolidated into group financial statements prepared by the Company, up to a maximum aggregate fee limit of R$750,000.00 per calendar year.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Foreign Private Issuer Status.”
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ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Prior to our initial public offering, we granted Co-Investment Shares to certain key employees that entitled participants to receive a cash bonus which they could use to purchase a specified number of preferred shares in StoneCo Brasil Participações S.A. (formerly DLP Pagamentos Brasil S.A.) (“StoneCo Brasil”), which were then exchanged for common shares in DLPPar Participações S.A. (“DLPPar”), subject to a lock-up period. In connection with our initial public offering, all shares in DLPPar were exchanged for our Class A common shares (subject to a lock-up period) through the execution of a contribution agreement entered into between us and each holder of awards under such plans. In the event of termination of our services, we may, in our sole discretion, repurchase the shares at a discount of the purchase price.
Since September 2023, our Board of Directors has approved the following share repurchase programs covering our outstanding Class A common shares:
Plan Approval Date
Maximum Repurchase Value
Number of Shares Repurchased as of December 31, 2025
Average Repurchase Price (US$)
Total Amount Repurchased (US$ million)
September 21, 2023R$ 300 million5,733,740 10.31 59.1
November 14, 2023
R$ 1.0 billion
13,202,939 13.52 178.5
November 21, 2024
R$ 2.0 billion
29,305,630 9.56 280.3
May 08, 2025
R$ 2.0 billion
21,871,991 16.34 357.3
December 22, 2025R$ 2.0 billion---
Each program was conducted in open market transactions, block trades and/or privately negotiated transactions, subject to market conditions. The program approved on December 22, 2025 has no fixed expiration date and may be adjusted, suspended or discontinued by our Board of Directors at any time following periodic review.
Our Board of Directors authorized management to appoint a broker for the repurchase program of our Class A common shares on our behalf in the open market. Such purchases may benefit from the safe harbors provided by Rule 10b-18 and/or Rule 10b5-1 under the Exchange Act. The actual timing, number, and value of shares repurchased under the repurchase program depend on several factors, including constraints specified in Rule 10b-18, price, general business, and market conditions, and alternative investment opportunities. The repurchase program does not obligate us to acquire any specific number of shares in any period and may be expanded, extended, modified, or discontinued at any time.
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The following table provides information about purchases by us during fiscal year 2025 of our outstanding Class A common shares:
PeriodTotal Number of Shares PurchasedAverage Price Paid per Share (USD $)Total Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number (or Approximate Real R$ Value) of Shares that May Yet Be Purchased the Plans or Programs
January 1 to January 31, 2025(a)
4,942,394 8.39 4,942,394 1,141,358,431
February 1 to February 28, 2025
4,478,338 9.54 4,478,338 894,206,919
March 1 to March 31, 2025
5,720,324 10.49 5,720,324 548,249,556
April 1 to April 30, 2025
3,277,022 10.93 3,277,022 337,709,238
May 1 to May 31, 2025(b)
1,502,67413.291,502,674 1,886,856,013
June 1 to June 30, 2025
934,65314.28934,653 1,812,677,015
July 1 to July 30, 2025
2,329,04514.672,329,045 1,622,784,575
August 1 to August 31, 2025
2,415,683 14.65 2,415,683 1,428,240,135
September 1 to September 30, 2025
821,65818.30821,658 1,347,443,324
October 1 to October 31, 2025
5,396,652 18.05 5,396,652 821,060,676 
November 1 to November 30, 2025
5,541,65517.475,541,655 301,321,127
December 1 to December 31, 2025
2,929,97115.422,929,971 53,953,984
Total
40,290,06913.3440,290,069—
(a) On November 21, 2024, we approved a new share repurchase program to repurchase up to the amount in dollars equivalent to R$2.0 billion of our outstanding Class A common shares. This new share repurchase program replaced the previous share purchase program. From November 1, 2024 to April 30, 2025, we purchased 29.3 million Class A shares.
(b) On May 8, 2025 our Board of Directors approved a new share repurchase program. Under the repurchase program, we could repurchase up to the amount in dollars equivalent to R$2.0 billion of our outstanding Class A common shares. From May 8, 2025 to December 22, 2025, Stone repurchased under this program a total of 21,871,991 shares at an average price of US$16.34 per share, totaling US$ 357.3 million.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
We are subject to the Nasdaq corporate governance listing standards. As a foreign private issuer, however, the standards applicable to us are considerably different from the standards that apply to U.S. listed companies. Under the Nasdaq rules, as a foreign private issuer, we may follow the “home country” practice of the Cayman Islands, except that we are required (1) to have an audit committee or audit board that meets certain requirements, pursuant to an exemption available to foreign private issuers (subject to the phase-in rules described above under “Item 6. Directors, Senior Management and Employees—Audit Committee”) (2) to provide prompt certification by our Chief Executive Officer of any material noncompliance with any corporate governance rules, and (3) to provide a brief description of the significant differences between our corporate governance practices and the Nasdaq corporate governance practice required to be followed by U.S. listed companies.
A summary of the significant differences between our corporate governance practices and those required of U.S. listed companies is included below and under “Item 6. Directors, Senior Management and Employees—C. Board Practices—Foreign Private Issuer Status”.
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Majority of Independent Directors
The Nasdaq rules applicable to U.S. companies require a majority of the Board of Directors to be comprised of Independent Directors. Independence is defined by various criteria, including the absence of a material relationship between the director and the listed company. This is not required by the laws of the Cayman Islands. Our directors meet the qualification requirements of Cayman corporate law, and, although there are no rules to which we are subject that oblige us to have a majority of independent directors, we believe that 9 out of 10 of our directors would be considered independent under the Nasdaq test for director independence.
People and Compensation Committee
The Nasdaq rules applicable to U.S. companies require us to have, and to certify that it has and will continue to have, a compensation committee governed by a written charter addressing the committee’s required purpose and detailing its required responsibilities. This is not required by the laws of the Cayman Islands. Our Board of Directors is responsible for determining the individual compensation of each executive officer, as well as the compensation of our Board and committee members. In making such determinations, the Board will review the performance of our executive officers, including the performance of our principal executive officer, who will be required to excuse him or herself from discussions regarding his/her performance and compensation.
Clawback
In February 2026, we approved a new compensation recoupment policy (replacing the policy of December 2023) that is applicable to officers and certain key employees and sets forth the terms and conditions regarding the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under U.S. federal securities laws applicable to us. For a copy of our compensation recoupment policy, please refer to Exhibit 97.1 to this annual report. We have not been required to prepare an accounting restatement at any time during or after our last completed fiscal year and no recovery of awarded compensation is required pursuant to our compensation recoupment policy.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
We have adopted an insider trading policy that applies to all of our employees, officers and directors and which is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. Information contained on, or that can be accessed through, our website is not part of, or incorporated by reference into, this 20-F, and inclusions of our website address in this 20-F are inactive textual references provided only for your informational reference. We intend to disclose future amendments to our insider trading policy on our website or in public filings. The information on our website is not incorporated by reference into this annual report on Form 20-F, and you should not consider information contained on our website to be a part of this annual report on Form 20-F.
For a copy of our current insider trading policy, please refer to exhibit 11.1 to this annual report.
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ITEM 16K. CYBERSECURITY
At StoneCo, cybersecurity risk management is an integral part of our overall risk management program. Our cybersecurity risk management program is based on industry best practices and on regulatory requirements. It provides a framework for handling cybersecurity threats and incidents and facilitating coordination across different departments of our company. This framework includes steps for assessing the severity of a cybersecurity threat, identifying the source of a cybersecurity threat including whether the cybersecurity threat is associated with a third-party service provider, implementing cybersecurity countermeasures and mitigation strategies, and informing management and our Board of Directors of material cybersecurity threats and incidents.
Our Board of Directors has overall oversight responsibility for our risk management, including cybersecurity risk management. It delegates cybersecurity risk management oversight to the audit and risk committees of the Board of Directors. The audit and risk committees are responsible for overseeing that management has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents. The audit and risk committees also report material cybersecurity risks to our full Board of Directors.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs. Our cybersecurity team, led by our Chief Information and Security Officer (“CISO”) , is responsible for our overall cybersecurity strategy and management. Our CISO and his senior personnel are certified and experienced information systems security professionals and information security managers with many years of experience. Our operational risk team is responsible for challenging the cybersecurity team’s strategy and management. In addition, our cybersecurity team provides training to all employees annually. Our technology team works closely with the risk teams to ensure systems, infrastructure, and data protection according to security strategy. Our technology team is responsible for implementing secure development practices, integrating security from the early stages of the software lifecycle and addressing vulnerabilities, ensuring that technical solutions align with security policies, and the organization's strategic objectives. Our technology and risk teams regularly update the audit and risks committees on the company’s cybersecurity programs, material cybersecurity risks and mitigation strategies. We do not use third parties on an ongoing basis to manage nor operate our cybersecurity processes; but we engaged consultants on an ad-hoc basis for specific engagements.
In 2025, we did not identify any cybersecurity threats that have materially affected our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
For more information about our risk governance and these risks, please see “Item 4. Information on the Company — B. Business Overview—Risk Governance” and “Item 3. Key Information—D. Risk Factors” respectively in this annual report on Form 20-F.
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PART III
ITEM 17. FINANCIAL STATEMENTS
We have responded to Item 18 in lieu of this item.
ITEM 18. FINANCIAL STATEMENTS
See our audited consolidated financial statements beginning at page F-1.
ITEM 19. EXHIBITS
#
DESCRIPTION
1.1
Second Amended and Restated Articles of Association of StoneCo Ltd. (incorporated herein by reference to Exhibit 1.1 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on April 24, 2024)
2.1*
Description of Securities registered under Section 12 of the Exchange Act.
4.1
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.2
Visa Payment Arrangements Participation and Trademark License Agreement, dated as of February 19, 2016 between Visa do Brasil Empreendimentos Ltda. and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 10.2 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.3†
License Agreement, dated as of December 21, 2015 between Mastercard International Incorporated and Stone Instituição de Pagamento, including the Acceptance Letter, dated as of December 21, 2015, from Mastercard International Incorporated to Stone Instituição de Pagamento; the Summary of Licenses Granted, dated as of December 21, 2015; and Supplement to Mastercard License Agreement, effective as of April 19, 2016, between Mastercard International Incorporated and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.4
English translation of the Agreement for Accreditor Participation in ELO Payment Arrangements, dated as of November 3, 2017, between Elo Serviços S.A. and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 4.13 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on April 29, 2020).
4.5
Loan Agreement dated as of May 1, 2018 between Equals S.A. and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 10.4 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.6
Loan Agreement dated as of May 1, 2018 between Equals S.A. and DLP Pagamentos Brasil S.A. (incorporated herein by reference to Exhibit 10.5 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.7
English translation of FIDC AR1 Bylaws, as amended and restated, dated as of June 25, 2018 (incorporated herein by reference to Exhibit 10.6 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.8
English translation of FIDC AR2 Bylaws, as amended and restated, dated as of June 28, 2018 (incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.9†
English translation of the Supply Agreement (Contrato de Fornecimento), dated as of October 15, 2018, by and among PAX BR Comércio e Serviços de Equipamentos de Informática Ltda., Transire Fabricação de Componentes Eletrônicos Ltda. and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form F-1 (File No. 333-227634) filed with the SEC on October 1, 2018).
4.10
First Amendment to the Shareholders Agreement among StoneCo Ltd., Cakubran Holdings Ltd., HR Holdings LLC and VCK Investment Fund Limited SAC A. (incorporated herein by reference to Exhibit 4.10 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on April 24, 2024).
4.11
Registration Rights Agreement between StoneCo Ltd., Cakubran Holdings Ltd., HR Holdings LLC and VCK Investment Fund Limited, Madrone Partners L.P. and the persons listed on Schedule 1 thereto (incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form F-1 (File No. 333-230642) filed with the SEC on April 1, 2019).
4.12
DLP Payments Holdings Ltd. Long-Term Incentive Plan (incorporated herein by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 (File No. 333-230629) filed with the SEC on March 29, 2019).
4.13
StoneCo Ltd Contribution Agreement Plan (incorporated herein by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (File No. 333-230629) filed with the SEC on March 29, 2019).
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#
DESCRIPTION
4.14
English translation of the Amendment to the Indemnity for Non-Competition Agreement and Other Covenants, dated as of September 1, 2020, by and among Nércio José Monteiro Fernandes, StoneCo Ltd. And STNE Par (incorporated herein by reference to Exhibit 10.2 to the Company’s Registration Statement on Form F-4 (File No. 333-248562) filed with the SEC on September 2, 2020).
4.15
English translation of the Amendment to the Indemnity for Non-Competition Agreement and Other Covenants, dated as of September 1, 2020, by and among Alberto Menache, StoneCo Ltd. And STNE Par (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form F-4 (File No. 333-248562) filed with the SEC on September 2, 2020).
4.16
English translation of the Amendment to the Indemnity for Non-Competition Agreement and Other Covenants, dated as of September 1, 2020, by and among Alon Dayan, StoneCo Ltd. And STNE Participações S.A. (incorporated herein by reference to Exhibit 10.4 to the Company’s Registration Statement on Form F-4 (File No. 333-248562) filed with the SEC on September 2, 2020).
4.17
English translations of the Amendment to the Executive Engagement Proposal, dated as of September 1, 2020, by and among STNE Par and Alberto Menache (incorporated herein by reference to Exhibit 10.5 to the Company’s Registration Statement on Form F-4 (File No. 333-248562) filed with the SEC on September 2, 2020).
4.18
StoneCo Ltd. Long-Term Incentive Plan (incorporated herein by reference to Exhibit 99 to the Company’s Registration Statement on Form S-8 (File No. 333-265382) filed with the SEC on June 2, 2022).
4.19
Visa Sponsorship Agreement, dated as of June 7, 2022 between Stone Cartões Instituição de Pagamento S.A. and Stone Instituição de Pagamento (incorporated herein by reference to Exhibit 4.24 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on May 1, 2023).
4.20
Visa Payment Agreement Participation and Trademark License Agreement, dated as of June 7, 2022 between Visa do Brasil Empreendimentos Ltda. and Stone Cartões Instituição de Pagamento S.A. (incorporated herein by reference to Exhibit 4.25 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on May 1, 2023).
4.21
English translation of the Private instrument of non-residential real estate lease agreement, dated as of December 19, 2023, by and among MNLT S.A. and Nobe Empreendimetos e Participações Ltda. (incorporated herein by reference to Exhibit 4.21 to the Company’s
Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on April 24, 2025).
4.22
English translation of the Private instrument of real estate property lease agreement for non-residential, dated as of September 13, 2024, by and among Stone Instituição de Pagamento S.A. and Personale Participações Ltda. (incorporated herein by reference to
Exhibit 4.22 to the Company’s Annual Report on Form 20-F (File No. 001-38714) filed with the SEC on April 24, 2025).
4.23*
English Language Summary of the Linx Share Purchase and Sale Agreement, dated July 21, 2025
8.1*
List of Subsidiaries.
11.1*
Insider Trading Policy
12.1*
Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
12.2*
Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
13.1*
Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
13.2*
Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
15.1*
Consent of Ernst & Young Auditores Independentes S/S Ltda.
97.1*
Clawback Policy
101.INS*Inline XBRL Instance Document
101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104* Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)
*Filed with this Annual Report on Form 20-F.
**In accordance with Rule 402 of Regulation S-T, the information in this exhibit shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
†Confidential treatment of certain provisions of these exhibits has been requested with the SEC. Omitted material for which confidential treatment has been requested has been filed separately with the SEC.
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GLOSSARY OF TERMS
The following is a glossary of certain industry and other defined terms used in this annual report:
•“ABECS” means the Brazilian Association of Credit Card and Services Companies (Associação Brasileira de Empresas de Cartões de Crédito e Serviços).
•“Active Client” includes MSMBs (micro, small and medium-sized businesses) as well as Key Accounts. Considers a merchant that has completed at least one electronic payment transaction with us within the preceding 90 days, except for TON, where we consider merchants that have transacted at least once with us in the preceding 12 months.
•“Acquirer” means a payment institution that, without managing payment accounts, provides the following services: (1) accreditation of receivers for the acceptance of payment instruments issued by a payment institution or financial institution participating in the same payment scheme; and (2) participation in the settlement process of payment transactions as a creditor with respect to the Card Issuer, in accordance with the rules of the payment scheme. The Acquirer receives the transaction details from the merchant’s terminal, passes them to the Card Issuer for authorization via the payment scheme and completes the processing of the transaction. The Acquirer arranges settlement of the transaction and credits the merchant’s bank account with the funds in accordance with its service agreement with the merchant. The Acquirer also processes any Chargebacks that may be received via the Card Issuer regarding consumer transactions with merchants.
•“ANPD” means the National Data Protection Authority (Autoridade Nacional de Proteção de Dados).
•“APIs” means application programming interfaces, a set of clearly defined methods of communication between different software components, which, together with our SDKs and other tools, enables developers and resellers to create applications that can easily connect and integrate with our payment processing technology platform.
•“APMs” means alternative payment methods, and includes any payment method used by customers that is not a credit or debit transaction involving a major payment scheme. APMs include, but are not limited to, local meal voucher schemes and payment slips (Boletos).
•“Articles of Association” means StoneCo’s amended and restated memorandum and articles of association adopted by special resolution passed on October 11, 2018, as amended on a Special Resolution passed on August 29, 2023.
•“BDRs” means Brazilian Depositary Receipts (BDR).
•“Board” or “Board of Directors” means the board of directors of StoneCo.
•“Banking” refers to our digital bank solution and includes insurance products.
•“Banking Active Clients”: clients who have transacted at least R$1 in the past 30 days.
•“Boleto” means a printable document issued by merchants that is used to make payments in Brazil. Payment slips (Boletos) can be used to pay bills for products or services, utilities or taxes. Each payment slip (Boleto) refers to a specific merchant and customer transaction, and includes the merchant’s name, customer information, expiration date and total amount due, plus a serial number that identifies the account to be credited and a barcode so the entire document can be read and processed by a Brazilian ATM. A payment slip (Boleto) can be paid in cash at a bank teller, at an ATM or by bank transfer. Our payment platform and merchant account can be used to pay payment slips (Boletos).
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•“BNDES” means the Brazilian Economic and Social Development Bank (Banco Nacional de Desenvolvimento Econômico e Social).
•“Cardholder” means an applicant (either an individual or an entity) for a credit, prepaid or debit card that has been approved by a Card Issuer. The Cardholder may use their card at any affiliated merchant.
•“Card Brand” means the name of the payment scheme settlor that is printed on the issued branded credit, debit and/or prepaid cards.
•“Card Issuer” means a payment institution or a financial institution that acts as issuer of cards and administrator of prepaid/postpaid payment accounts or deposit accounts operated by such institutions in a certain payment scheme and that meets the brand qualification requirements to issue branded credit, debit and/or prepaid cards. Card Issuers are also responsible for collecting amounts spent with branded credit, debit and/or prepaid cards from Cardholders.
•“CDI” means the Brazilian interbank deposit (certificado de deposito interbancário).
•“CDI Rate” means the rate of the CDI, which is an average of interbank overnight rates in Brazil.
•“Chargeback” means a claim where the consumer makes a purchase using a payment card and subsequently requests a reversal of the transaction amount from the Card Issuer on the basis of a commercial claim (for example, if the goods are not delivered, or are delivered damaged). Chargebacks occur more frequently in online transactions than in in-person transactions, and more frequently for goods than for services.
•“CMN” means the Brazilian National Monetary Council (Conselho Monetário Nacional).
•“COFINS” means the Brazilian government’s social security program (Contribuição para o Financiamento da Seguridade Social).
•“Consolidated Financial Statements” means our audited annual consolidated financial statements included elsewhere in this annual report.
•“Coverage ratio” is calculated as accumulated loan loss provision expenses over NPL over 90 days.
•“Cayman Companies Act” means the Companies Act (as revised) of the Cayman Islands.
•“CVM” means the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários).
•“Digital” solutions concentrate our OMS, e-commerce platform, ads and impulse solutions such as search, recommendation, reengagement and retargeting tools.
•“ERP” means enterprise resource planning.
•“eWallet” means a digital wallet that offers clients the ability to make payments online using a variety of payment methods, including credit or debit cards, without having to type in the card details each time.
•“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
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•“FIDC” means a Receivables Investment Fund (Fundo de Investimento em Direitos Creditórios), an investment fund legal structure established under Brazilian law designed specifically for investing in credit rights receivables. FIDCs (and quotas representing interests therein) are regulated by the rules and regulations of the CMN and the CVM; in particular Resolution No. 2,907/01 of the CMN, and CVM Instruction No. 356/01, as amended from time to time, including by CVM Instruction No. 489/11 and CVM Instruction No. 531/13.
•“Financial Services” refers to the combination of our financial services solutions to clients, serving both MSMBs and Key Accounts and includes payments, digital banking and credit.
•“gateway” means an online application that connects an e-commerce point of sale to the payment processor enabling online payment transactions.
•“heavy user” is an Active Client that uses three or more financial services solutions.
•“Hubcount” means Hubcount Tecnologia S.A., a subsidiary of Questor.
•“ICMS” means the tax on distribution of goods and services (Imposto sobre Circulação de Mercadorias e Serviços).
•“integrated partners” means PSPs, ISVs and marketplaces.
•“interchange fee” means a fee paid by the Acquirer to the Card Issuer (via the payment scheme settlors) for a transaction established in the scope of a payment scheme.
•“IPCA” National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), which is published by the IBGE.
•“IPO” means our initial public offering.
•“ISS” means the Municipal Tax on Services (Imposto Sobre Serviços).
•“ISV” means integrated software vendor.
•“Key Accounts” refers to operations in which Pagar.me acts as a fintech infrastructure provider for different types of clients, especially larger ones, such as mature e-commerce and digital platforms, commonly delivering financial services via APIs. We breakdown Key Accounts into sub-acquirer clients and platform service clients.
•“Linx” means the companies and business involved in the business combination closed on July 1, 2021.
•“marketplace” means digital platforms that enable sellers and buyers in specific market segments to connect more effectively.
•“merchant” means any person, entity or organization that accepts electronic payment transactions for the payment of goods or services.
•“Merchant Discount Rate” or “MDR” means the fee or commission paid by merchants for the service of capturing, processing, transmitting and settling transactions. The merchant discount rate is applied to the value of each Cardholder’s transaction and includes the interchange fee.
•“membership fees” refer to the upfront fee paid by merchants for all Ton offerings and specific ones for Stone when they join our client base.
•“MSMB” refers to micro, small and medium-sized businesses.
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•“Nasdaq” means the Nasdaq Global Select Market.
•“Net Merchant Discount Rate” or “Net MDR” means the total MDR charged to our merchants, net of interchange fees retained by Card Issuers, assessment fees charged by payment scheme settlors and sales taxes.
•“Non-allocated” comprises other smaller businesses which are not allocated in our Financial Services or Software segments.
•“NPS” means Net Promoter Score and is a widely known survey methodology that measures the willingness of customers to recommend a company’s products and services. It is used to gauge customers’ overall satisfaction with a company’s products and services and their loyalty to the brand, and it is typically based on customer surveys. NPS measures satisfaction using a scale of zero to 10 based on a customer’s response to the following question: “How likely is it that you would recommend StoneCo to a friend or colleague?” Responses of nine or 10 are considered “Promoters.” Responses of seven or eight are considered neutral. Responses of six or less are considered “Detractors.” The NPS, a percentage expressed as a numerical value, is calculated by subtracting the percentage of respondents who are Detractors from the percentage who are Promoters and dividing that number by the total number of respondents. The NPS calculation gives no weight to customers who decline to answer the survey question.
•“OMS” by using our OMS (Order Management System) technology, retailers can meet orders originating from any channel, regardless of where the product is located. Our OMS offers multichannel purchasing processes that integrate stores, franchises and distribution centers, thereby providing a single channel for our customers that decreases inventory shortage and generates more consumer traffic and increased sales.
•“Partner Program” is a sales channel that encompasses a range of client segments that distribute our solutions by integrating our payments and banking platform to their own offerings, such as software providers (ISVs), marketplaces, and e-commerce platforms, having a dedicated team for that.
•“payment institution” means a legal entity that participates in one or more payment schemes and is dedicated to executing, as its principal or ancillary activity, those payment services described in article 6, item III, of Law 12,865/13 to Cardholders or merchants, including those activities related to the provision of payment services. Specifically, based on current regulations, the Central Bank has opted to narrow the definition of payment institutions as set out in Law 12,865/13 to include only those entities that can be classified into one of the following three categories: (1) issuer of electronic money (prepaid payment instruments), (2) issuer of postpaid payment instruments (e.g., credit cards), and (3) Acquirers.
•“payment scheme” means the collection of rules and procedures that govern payment services provided to the public, with direct access by its end users (i.e., payers and receivers). Such payment services must be accepted by more than one receiver in order to qualify as a payment scheme. A payment scheme is established by and operated by a payment scheme settlor.
•“payment scheme settlor” means the entity responsible for the functioning of a payment scheme, for the associated Card Brand and for the authorization of Card Issuers and Acquirers to participate in the payment scheme. Visa and Mastercard are major payment scheme settlors.
•“PIS” means the Brazilian government’s Social Integration Program (Programa de Integração Social).
•“Pix” is the instant payments ecosystem in Brazil developed and operated by the Central Bank and launched in November 2020, through which individuals and merchants can settle transactions and make purchases instantaneously on a 24/7 basis.
FORM 20-F 26FY25 
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•“Pix QR Code” is a peer to merchant (P2M) solution. Considers transactions from dynamic POS QR Code and static QR Code from MSMB and Key Accounts merchants. Both types of PIX can be monetized.
•“platform services” is included in key accounts and encompasses a wide range of business models, including marketplaces, e-commerce platforms, software companies and omnichannel retailers.
•“POS” means a point of sale where a transaction is completed. “POS devices” allow merchants to accept payments where a sale is made, whether inside an establishment or in outdoor or mobile environments.
•“PSP” means payment services providers, which are firms that contract with a merchant to provide them with payment acceptance solutions.
•“Questor” means our subsidiary, Questor Sistemas S.A.
•“reconciliation provider” means a service provider that integrates with, among other agents, Acquirers and gateways in order to provide to merchants with a reconciliation of receivables resulting from their transactions, Chargebacks and refunds. Equals is a reconciliation provider that offers reconciliation solutions.
•“recurring revenue” comprises revenues from monthly subscription fees that we charge our software customers (1) for using our software and (2) the fees we charge for ongoing technical support, help desk services, software hosting services, support teams and connectivity services. The fees (1) and (2) are charged together in a single contract, with an average duration of twelve months, subjected to automatic renewal.
•“SCD” means Direct Credit Society (Sociedade de Crédito Direto), which is a financial institution that carries out loan transactions, financing and acquisition of credit rights exclusively through an electronic platform, using its proprietary capital as a financial source for such transactions.
•“SDK” means software development kit, which is typically a set of software development tools that allows for the creation of applications for software packages or frameworks, hardware platforms, computer or operating systems or similar development platforms.
•“Software” is comprised of three main fronts: (i) Strategic Verticals, comprised of POS/ERP solutions for retail, gas stations, food and drugstores, as well as value added solutions such as fiscal solutions, TEF and CRM; (ii) Enterprise, comprised of POS/ERP solutions for large enterprise clients, as well as digital solutions such as OMS, ads solutions and marketplace hub; (iii) Other Verticals, comprised of POS/ERP solutions in verticals not prioritized for combination with financial services as well as other software solutions.
•“SPB” or “Brazilian Payments System” (Sistema de Pagamentos Brasileiro) means all the entities, systems and procedures related to the clearing and settlement of funds transfer, foreign currency operations, financial assets and securities transactions in Brazil. The SPB includes systems in charge of check clearing; the clearing and settlement of electronic debit and credit orders, funds transfer and other financial assets; the clearing and settlement of securities transactions; the clearing and settlement of commodities and futures transactions; and, since the introduction of Brazilian Federal Law No. 12,865/13, dated as of May 17, 2013, payment schemes and payment institutions.
•“STNE Invest” means STNE Investimentos S.A.
•“STNE Par” means STNE Participações S.A. (entity that was merged into Stone Corporate).
•“Stone Corporate” means Stone Corporate SPE S.A. (formerly known as Linx S.A.).
•“TON” is our solution that is more targeted towards micro-merchants and smaller businesses.
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•“TPV” means total payment volume. Reported TPV figures consider all card volumes settled by StoneCo, including Pix QR Code transactions from dynamic POS QR Code and static QR Code from MSMB and Key Accounts merchants, unless otherwise noted..
•“transaction” means, unless the context otherwise requires, any and all electronic payment transactions for the acquisition of goods and services.
•“transaction volume” means the volume of transactions captured, processed, transmitted, and settled by Acquirers or any other entity responsible for the settlement of transactions.
FORM 20-F 26FY25 
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on Form 20-F on its behalf.
StoneCo Ltd.
Date: April 22, 2026
By:
/s/ Mateus Scherer Schwening
Name:
Mateus Scherer Schwening
Title:Chief Executive Officer
By:
/s/ Diego Ventura Salgado
Name:
Diego Ventura Salgado
Title:
Chief Financial Officer and Investor Relations Officer
FORM 20-F 26FY25 
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Consolidated Financial Statements
December 31, 2025 and 2024 and the three years ended December 31, 2025, 2024 and 2023
With report of Independent Registered Public Accounting Firm
FORM 20-F 26FY25 
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Index to Consolidated Financial Statements
Audited Annual Consolidated Financial Statements
    Page
F-3
F-8
F-10
F-11
F-12
F-13
F-15
Auditor Data Elements
Years ended
December 31, 2025, December 31, 2024, and December 31, 2023.
Auditor NameErnst & Young Auditores Independentes S/S Ltda.
Auditor LocationSão Paulo, Brazil
Auditor Firm ID
1448
FORM 20-F 26FY25 
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Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
StoneCo Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of StoneCo Ltd. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of profit or loss, other comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 02, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
FORM 20-F 26FY25 
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Disposal group classified as held for sale and discontinued operations - Software business
Description of the Matter
As more fully described in note 1.1 to the consolidated financial statements, in the second quarter of 2025, the Board of Directors approved the plan to sell certain subsidiaries (“disposal group”) comprising most of the Software business. As a result, the Company classified and accounted for the disposal group as held for sale and as a discontinued operation in accordance with IFRS 5. As of December 31, 2025, the net carrying amount of the assets and liabilities associated with the disposal group was R$ 3,229,817 thousand, and the net loss for the year ended December 31, 2025 from discontinued operations was R$ 37,900 thousand.
Accounting for the disposal group classified as held for sale and as a discontinued operation is considered a critical audit matter due to the judgment involved in management’s assessment of whether the plan met the criteria for classification as held for sale, the complexity of properly identifying and segregating the net assets and results of operations of the disposal group, judgement involved in management´s assessment of the fair value less cost to sell, and applying the IFRS 5 requirements for presentation and disclosure as a discontinued operation in the financial statements.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls related to management’s assessment that the plan met the criteria to be presented as a discontinued operation, as well as the effectiveness of controls over management’s classification, allocation of the disposal group’s net assets, fair value measurement and disclosure in the Company’s consolidated financial statements. Our audit procedures to test the measurement, presentation and financial statement disclosures of the disposal group included, among others, evaluating management’s assessment of the disposal group’s classification and measurement as held for sale and as a discontinued operation, testing the classification of amounts included in the disposal group by reconciling such amounts to the Company’s accounting records, and assessing the adequacy of the Company’s disclosures in the consolidated financial statements.
Allowance for expected credit losses of the credit portfolio
Description of the Matter
As more fully described in Notes 6.2.1.1 and 6.6 to the consolidated financial statements, the allowance for expected credit losses (“ECL”) of the Company’s credit portfolio was R$ 389,682 thousand as of December 31, 2025. Management estimates the allowance for ECL of the credit portfolio considering delinquency information, internal risk classification and risk parameters (“PD” – probability of default, “LGD” – loss given default and “EAD” – exposure at default). PD is a particularly sensitive assumption in determining the ECL and is based on statistical models that consider both internal and external historical data, behavioral scoring information and forward looking perspectives, among other information.
Auditing the allowance for ECL of the credit portfolio was complex and required the application of significant judgment due to the inherent complexity of the models. Significant assumptions and judgments with respect to the allowance for ECL of the credit portfolio include the determination of PD.
FORM 20-F 26FY25 
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How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls related to the determination of the PD, including the data inputs used in its calculation and the governance and oversight controls over the ECL model.
To test the allowance for ECL of the credit portfolio, our audit procedures included, among others, involving our professionals with specialized skills and knowledge to assist in evaluating whether management's accounting policies meet IFRS 9 requirements, and in testing the models and methodology adopted to determine the ECL and the calculation of the PD. We also evaluated the appropriateness of management’s documentation by testing the principal data inputs due to their relevance within the overall measurement of ECL, and assessed the adequacy of the related disclosures included in the consolidated financial statements.
/s/ Ernst & Young Auditores Independentes S/S Ltda.
We have served as the Company’s auditor since 2016.
São Paulo, Brazil
March 02, 2026
FORM 20-F 26FY25 
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To the Shareholders and the Board of Directors of
StoneCo Ltd.
Opinion on Internal Control Over Financial Reporting
We have audited StoneCo Ltd.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). In our opinion, StoneCo Ltd. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s consolidated statements of financial position as of December 31, 2025 and 2024, and the related consolidated statements of profit or loss, other comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 02, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young Auditores Independentes S/S Ltda.
São Paulo, Brazil
March 02, 2026
FORM 20-F 26FY25 
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Consolidated Statement of Financial Position
As of December 31, 2025 and 2024
(In thousands of Brazilian Reais)
Consolidated Statement of Financial Position as of December 31, 2025 and 2024
Notes December 31, 2025December 31, 2024
Assets
Current assets
Cash and cash equivalents5.24,821,703 5,227,654 
Short-term investments6.31,119,136 517,874 
Financial assets from banking solutions6.71,855,796 8,805,882 
Accounts receivable from card issuers6.4.141,275,188 29,231,820 
Trade accounts receivable6.5.1222,501 390,575 
Credit portfolio6.62,008,436 891,718 
Recoverable taxes8690,285 372,432 
Derivative financial instruments assets6.958,554 156,814 
Other assets7372,634 370,255 
52,424,233 45,965,024 
Assets classified as held for sale1.1.24,022,823 — 
56,447,056 45,965,024 
Non-current assets
Long-term investments6.324,586 32,629 
Accounts receivable from card issuers6.4.1146,776 116,245 
Trade accounts receivable6.5.121,874 25,528 
Credit portfolio6.6438,380 171,401 
Receivables from related parties13.1— 613 
Deferred tax assets9.41,256,150 871,640 
Derivative financial instruments assets6.911,464 103,374 
Other assets7166,555 159,159 
Investment in associates71,614 75,751 
Property and equipment10.31,725,506 1,833,997 
Intangible assets11.31,986,935 5,458,102 
5,849,840 8,848,439 
Total assets 62,296,896 54,813,463 
(continued)
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Consolidated Statement of Financial Position
As of December 31, 2025 and 2024
(In thousands of Brazilian Reais)
Notes December 31, 2025December 31, 2024
Liabilities and equity
Current liabilities
Retail deposits6.8.111,090,985 8,704,809 
Accounts payable to clients6.1.2.3.218,081,964 17,756,720 
Trade accounts payable848,341 672,184 
Institutional deposits and marketable debt securities6.8.25,777,314 3,065,999 
Other debt instruments6.8.22,866,445 1,903,840 
Labor and social security liabilities20.5536,364 578,345 
Taxes payable12899,270 560,250 
Derivative financial instruments liabilities6.994,871 10,593 
Other liabilities215,497 281,073 
40,411,051 33,533,813 
Liabilities associated with assets held for sale1.1.2793,006 — 
41,204,057 33,533,813 
Non-current liabilities
Accounts payable to clients6.1.2.3.272,383 50,674 
Institutional deposits and marketable debt securities6.8.24,578,162 5,429,963 
Other debt instruments6.8.24,360,144 2,496,139 
Derivative financial instruments liabilities6.9176,166 281,177 
Deferred tax liabilities9.4309,136 680,672 
Provision for contingencies14.3214,914 237,406 
Labor and social security liabilities20.582,869 39,515 
Other liabilities264,294 236,822 
10,058,068 9,452,368 
Total liabilities51,262,125 42,986,181 
Equity15
Issued capital15.176 76 
Capital reserve15.214,181,160 14,215,212 
Treasury shares15.3(4,591,288)(1,805,896)
Other comprehensive income15.6(536,073)(287,048)
Retained earnings (accumulated losses)1,973,342 (346,360)
11,027,217 11,775,984 
Other comprehensive loss associated with assets held for sale
1.1.2/15.6
(32,201)— 
Equity attributable to controlling shareholders10,995,016 11,775,984 
Non-controlling interests39,755 51,298 
Total equity11,034,771 11,827,282 
Total liabilities and equity62,296,896 54,813,463 
(concluded)
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Consolidated Statement of Profit or Loss
For the years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Consolidated Statement of Profit or Loss for the years ended December 31, 2025, 2024 and 2023
Notes 20252024 (Recasted)2023 (Recasted)
Continuing operations
Net revenue from transaction activities and other services17.1.1.12,493,094 3,128,8783,144,358
Net revenue from subscription services and equipment rental17.1.1.2889,319 746,196717,432
Financial income17.1.210,017,293 7,676,2046,229,303
Other financial income17.1.3754,135 498,339670,056
Total revenue and income from continuing operations14,153,84112,049,61710,761,149
Cost of services18(3,365,431)(2,832,504)(2,370,159)
Administrative expenses18(921,667)(845,458)(902,191)
Selling expenses18(2,147,751)(1,840,016)(1,432,852)
Financial expenses, net19(4,479,266)(3,660,234)(3,956,164)
Mark-to-market on equity securities designated at FVPL——30,574
Other income (expenses), net18(447,452)(386,244)(217,075)
Total expenses(11,361,567)(9,564,456)(8,847,867)
Gain (loss) on investment in associates(2,456)399(3,669)
Profit (loss) before income taxes from continuing operations2,789,818 2,485,560 1,909,613 
Current income tax and social contribution9.3(566,138)(485,025)(323,421)
Deferred income tax and social contribution9.3153,379 20,085(31,572)
Net income (loss) for the year from continuing operations2,377,059 2,020,620 1,554,620 
Net income (loss) for the year from discontinued operations1.1.2(37,900)(3,527,670)45,800
Net income (loss) for the year2,339,159 (1,507,050)1,600,420 
Net income attributable to:
Controlling shareholders from continuing operations2,360,6932,016,3841,549,289
Non-controlling interests from continuing operations16,3664,2365,331
2,377,059 2,020,620 1,554,620 
Controlling shareholders from discontinued operations(40,991)(3,531,606)42,776
Non-controlling interests from discontinued operations3,0913,9363,024
(37,900)(3,527,670)45,800 
Earnings per share of continuing operations
Basic earnings per share for the year attributable to
controlling shareholders (in Brazilian reais)
16.38.85 6.68 4.96 
Diluted earnings per share for the year attributable to
controlling shareholders (in Brazilian reais)
16.38.63 6.54 4.61 
Earnings per share of discontinued operations
Basic earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)
16.3(0.15)(11.70)0.13 
Diluted earnings (loss) per share for the year attributable to
controlling shareholders (in Brazilian reais)
16.3(0.15)(11.45)0.13 
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Consolidated Statement of Other Comprehensive Income (Loss)
For the years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais)
Consolidated Statement of Other Comprehensive Income (loss) for the years ended December 31, 2025, 2024 and 2023
Notes
2025
2024
2023
Net income (loss) for the year2,339,159 (1,507,050)1,600,420 
Other comprehensive income (“OCI”)
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods:
Changes in the fair value of accounts receivable from card issuers
22.1(502,502)(117,097)98,283 
Tax on changes in the fair value of accounts receivable from card issuers at fair value
195,651 39,873 (33,414)
Exchange differences on translation of foreign operations(11,938)1,749 (24,073)
Changes in the fair value of cash flow hedge44,275 71,657 64,146 
Tax on changes in the fair value of cash flow hedge
(16,062)— — 
Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods:
Net monetary position in hyperinflationary economies8,997 (657)4,316 
Gain on sale of equity instruments designated at fair value through other comprehensive income
6.3 (a)
— 35,647 — 
Changes in the fair value of equity instruments designated at fair value through OCI
6.3 (a) / 22.1
— 1,623 1,912 
Other comprehensive income (loss) that were reclassified to profit or loss in subsequent periods:
Accumulated exchange differences on disposal of foreign operation— — 257 
Other comprehensive income (loss) for the year, net of tax(281,579)32,795 111,427 
Total comprehensive income (loss) for the year, net of tax2,057,580 (1,474,255)1,711,847 
Total comprehensive income (loss) attributable to:
Controlling shareholders
2,038,476 (1,481,821)1,704,317 
Non-controlling interests
19,104 7,566 7,530 
Total comprehensive income (loss) for the year, net of tax2,057,580 (1,474,255)1,711,847 
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Consolidated Statement of Changes in Equity
For the years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais)
Consolidated Statement of Changes in Equity for the years ended December 31, 2025, 2024 and 2023
Attributable to controlling shareholders  
 Capital reserve      
Notes
Issued capital Additional paid-in capital Transactions among shareholders Special reserve Other reserves Total Treasury shares Other comprehensive income 
Other comprehensive loss associated with assets held for sale
Retained earnings (accumulated losses)
 Total Non-controlling interest Total
Balance as of December 31, 202276 13,825,325 (445,062)61,127 377,429 13,818,819 (69,085)(432,701)— (423,203)12,893,906 56,118 12,950,024 
Net income for the year— — — — — — — — — 1,592,065 1,592,065 8,355 1,600,420 
Other comprehensive income (loss) for the year— — — — — — — 112,252 — — 112,252 (825)111,427 
Total comprehensive income— — — — — — — 112,252 — 1,592,065 1,704,317 7,530 1,711,847 
Repurchase of shares— — — — — — (292,745)— — — (292,745)— (292,745)
Equity transaction related to put options over non-controlling interest— — — — 89,475 89,475 — — — — 89,475 (3,904)85,571 
Share-based payments— — (25,851)— 226,713 200,862 25,851 — — — 226,713 (114)226,599 
Shares delivered under share-based payment arrangements— — (47,591)— (4,873)(52,464)53,270 — — — 806 — 806 
Equity transaction with non-controlling interests— — — — — — — — — — — 49 49 
Dividends paid— — — — — — — — — — — (5,983)(5,983)
Others— — — — (208)(208)— — — — (208)— (208)
Balance as of December 31, 202376 13,825,325 (518,504)61,127 688,536 14,056,484 (282,709)(320,449)— 1,168,862 14,622,264 53,696 14,675,960 
Loss for the year— — — — — — — — — (1,515,222)(1,515,222)8,172 (1,507,050)
Other comprehensive income (loss) for the year— — — — — — — 33,401 — — 33,401 (606)32,795 
Total comprehensive income— — — — — — — 33,401 — (1,515,222)(1,481,821)7,566 (1,474,255)
Equity transaction related to put options over non-controlling interest— — — — 26,911 26,911 — — — — 26,911 1,028 27,939 
Repurchase of shares15.3— — — — — — (1,587,332)— — — (1,587,332)— (1,587,332)
Share-based payments— — — — 194,729 194,729 — — — — 194,729 — 194,729 
Shares delivered under share-based payment arrangements— — (62,912)— — (62,912)64,145 — — — 1,233 — 1,233 
Dividends paid— — — — — — — — — — — (10,454)(10,454)
Others— — — — — — — — — — — (538)(538)
Balance as of December 31, 202476 13,825,325 (581,416)61,127 910,176 14,215,212 (1,805,896)(287,048)— (346,360)11,775,984 51,298 11,827,282 
Net income for the year— — — — — — — — — 2,319,702 2,319,702 19,457 2,339,159 
Other comprehensive loss for the year— — — — — — (249,025)(32,201)— (281,226)(353)(281,579)
Total comprehensive income— — — — — — — (249,025)(32,201)2,319,702 2,038,476 19,104 2,057,580 
Repurchase of shares15.3— — — — — — (2,987,034)— — — (2,987,034)— (2,987,034)
Premium received in options over own shares entered into a part of the repurchase program15.4— — — — 17,741 17,741 — — — — 17,741 — 17,741 
Equity transaction related to put options over non-controlling interest— — — — (8,102)(8,102)— — — — (8,102)(9,563)(17,665)
Share-based payments— — — — 157,951 157,951 — — — — 157,951 — 157,951 
Shares delivered under share-based payment arrangements— — (201,642)— — (201,642)201,642 — — — — — — 
Equity transaction with non-controlling interests— — — — — — — — — — — 5,373 5,373 
Dividends paid— — — — — — — — — — — (17,663)(17,663)
Sale of subsidiary— — — — — — — — — — — (8,794)(8,794)
Balance as of December 31, 202576 13,825,325 (783,058)61,127 1,077,766 14,181,160 (4,591,288)(536,073)(32,201)1,973,342 10,995,016 39,755 11,034,771 
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
F-12
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Consolidated Statement of Cash Flows
For the years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais)
Consolidated Statement of Cash Flows for the years ended December 31, 2025, 2024 and 2023
Notes 202520242023
Operating activities
Net income (loss) for the year2,339,159 (1,507,050)1,600,420 
Adjustments to reconcile net income (loss) for the year to net cash flows:
Depreciation and amortization10.41,002,840 949,394 878,181 
Deferred income tax and social contribution9.4(148,483)(38,498)24,585 
Gain (loss) on investment in associates2,456 (399)4,179 
Accrued interest, monetary and exchange variations, net1,286,611 174,079 (195,419)
Provision for contingencies 14.3172,810 61,226 5,825 
Share-based payments expense297,022 232,672 251,239 
Allowance for expected credit losses
6.4.2/ 6.5.2/6.6.4
431,498 143,451 160,195 
Loss (gain) on disposal of property, equipment and intangible assets22.2.5(9,472)29,365 66,200 
Software business goodwill impairment loss11.4157,991 3,558,049 — 
Effect of applying hyperinflation accounting9,024 (184)3,652 
Loss (gain) on sale of subsidiary(53,775)58,244 10,926 
Fair value adjustment in financial instruments at FVPL22.2.1195,252 (441,478)96,563 
Fair value adjustment in derivatives(203,992)485,977 20,320 
Remeasurement of previously held interest on business combination23.3.2(1,986)(7,406)— 
Others— — 1,168 
Working capital adjustments:
Accounts receivable from card issuers(10,550,896)(2,981,844)32,304 
Receivables from related parties1,119 27,974 20,343 
Recoverable taxes(224,281)(244)138,987 
Prepaid expenses(11,624)54,498 41,310 
Trade accounts receivable, banking solutions and other assets9,559,531 810,748 205,105 
Credit portfolio(1,087,130)(670,780)(312,808)
Accounts payable to clients(9,048,434)(8,507,343)(3,382,075)
Taxes payable664,036 (6,259)169,827 
Labor and social security liabilities(20,251)29,991 19,284 
Payment of contingencies 14.3(139,977)(58,939)(34,012)
Trade accounts payable and other liabilities259,346 361,680 (80,024)
Interest paid(1,219,428)(782,437)(749,366)
Interest income received, net of costs22.2.27,353,858 4,578,276 2,766,933 
Income tax paid(336,258)(174,145)(116,134)
Net cash provided by (used in) operating activities676,566 (3,621,382)1,647,708 
(continued)
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Consolidated Statement of Cash Flows
For the years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais)
Notes 202520242023
Investing activities
Purchases of property and equipment22.2.3(705,565)(764,482)(736,244)
Purchases and development of intangible assets22.2.4(482,993)(507,278)(474,053)
Acquisition of subsidiary, net of cash acquired(1,993)(9,054)— 
Sale of subsidiary, net of cash disposed18,523 (4,204)— 
Proceeds from (acquisition of) short-term investments, net(570,233)2,994,587 181,611 
Proceeds from disposal of long-term investments – equity securities— 57,540 220,520 
Proceeds from disposal of non-current assets22.2.52 1,746 536 
Payment for interest in subsidiaries acquired (17,291)(181,365)(37,806)
Net cash provided by (used in) investing activities(1,759,550)1,587,490 (845,436)
Financing activities
Proceeds from institutional deposits and marketable debt securities6.8.36,196,781 6,585,937 1,608,162 
Payment of institutional deposits and marketable debt securities 6.8.3(4,822,308)(2,713,574)(75,004)
Proceeds from other debt instruments, except lease6.8.36,115,526 5,997,721 4,138,209 
Payment of other debt instruments, except lease6.8.3(3,247,016)(3,049,824)(5,447,180)
Payment of principal portion of leases liabilities6.8.3(79,689)(68,971)(72,815)
Payment of derivative financial instruments designated for hedge accounting (245,601)(112,771)— 
Repurchase of own shares15.3(2,987,034)(1,587,332)(292,745)
Premium received in options over own shares entered into a part of the repurchase program15.417,741 — — 
Acquisition of non-controlling interests(154)(146)(1,440)
Dividends paid to non-controlling interests(17,663)(10,454)(5,983)
Net cash provided by (used in) financing activities930,583 5,040,586 (148,796)
Effect of foreign exchange on cash and cash equivalents(22,907)44,544 10,336 
Change in cash and cash equivalents(175,308)3,051,238 663,812 
Cash and cash equivalents at beginning of year5.25,227,654 2,176,416 1,512,604 
Cash and cash equivalents at end of year
1.1.2/5.2
5,052,346 5,227,654 2,176,416 
Change in cash and cash equivalents(175,308)3,051,238 663,812 
(concluded)
The accompanying notes are an integral part of these consolidated financial statements.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Notes to Consolidated Financial Statements
1.    OPERATIONS
StoneCo Ltd. (the “Company”), is a Cayman Islands exempted company with limited liability, incorporated on March 11, 2014. The registered office of the Company is located at 4th Floor, Harbour Place 103 South Church Street, P.O. box 10240 Grand Cayman E9 KY1-1002.
ACP Investments Ltd owns 6.01% of the Company’s voting shares (representing 37.85% of the voting power considering the amount of outstanding shares as of December 31, 2025). Previously, these shares were held by HR Holding LLC, which was dissolved, and the shares were transferred to its sole owner, ACP Investments Ltd whose ultimate parent is VCK Investment Fund Limited SAC A, an investment fund owned by the co-founder of the Company, Mr. Andre Street.
The Company’s shares are publicly traded on Nasdaq under the ticker symbol STNE.
The Company and its subsidiaries (collectively, the “Group”), is a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels and help them grow their businesses with payments, banking and credit.
The consolidated financial statements of the Group were approved for issue by the Audit Committee on March 02, 2026.
1.1.    Disposal group classified as held for sale and discontinued operations
In the second quarter of 2025, the Group entered into two separate agreements to sell Linx Sistemas e Consultoria Ltda (“Linx Sistemas”) and certain other software assets (“Software Businesses"), and SimplesVet Tecnologia S.A. (“Simplesvet”), resulting in the classification of both businesses as held for sale. The transactions have also been classified as discontinued operations. Therefore, the statement of profit or loss presents the net results of continuing and discontinued operations separately for each period presented, with prior periods reclassified accordingly.
In the third quarter of 2025, the agreement to sell Simplesvet was concluded and the sale resulted in a gain of R$ 56,588 recognized as income.
The entities comprised in the Software Businesses are listed below:
•Linx Software Participações em Tecnologia S.A.
•Linx Sistemas e Consultoria Ltda
•Linx Telecomunicações Ltda
•Linx Automotivo Ltda
•Linx Commerce Ltda
•Linx People Ltda
•Linx Saúde Ltda
•Sponte Educação Ltda
•Napse S.R.L.
•Napse Uruguay SAS
•Sociedad Ingenería de Sistemas Napse I.T. de Chile Limitada
•Synthesis Holding LLC
•Synthesis US LLC
•Retail Americas Sociedad de Responsabilidad Limitada de Capital Variable
•Synthesis IT de México Sociedad de Responsabilidad Limitada de Capital Variable
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
1.1.1.    Accounting policy
The Group classifies disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
The condition for classification as held for sale is met only when the sale has been approved by management or - if required by governance rules - the Board of Directors, the asset is available for immediate sale in its present condition, and there is an expectation that the sale will occur within 12 months of the approval. These factors indicate that the sale is highly probable. In case of a delay in the process, demonstrably caused by events or circumstances beyond the Group’s control, and if there is still sufficient evidence of the continued commitment to sell the asset, the classification as held for sale may be maintained.
Assets included in disposal groups classified as held for sale as well as its related liabilities are presented separately as current items in the statement of financial position. Property and equipment and intangible assets are not depreciated or amortized once classified as held for sale.
When a transaction reflects the sale of a component of the Group that represents separate major line of business, it should be considered a discontinued operation, and its results are excluded from the results of continuing operations, presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss. Cash flows from discontinued operations are included in the consolidated statement of cash flows and are disclosed separately in Note 1.1.2 in an aggregated basis between operating, investing and financing activities.
The classification of an operation as a discontinued operation requires that comparative income statements be recasted. This procedure segregates the results of the discontinued operation as if it had been discontinued from the beginning of the earliest comparative period presented.
1.1.2. Software Businesses and Simplesvet
In the second quarter of 2025, the Board of Directors approved the plan to sell Software Businesses and Simplesvet. Both sales were expected to be completed within a year from the date of classification as a disposal group held for sale. These businesses together represent a major line of business and as a result met the requirements to be classified as discontinued operations. In the third quarter of 2025, the agreement to sell Simplesvet was completed.
Immediately before the classification of the businesses as discontinued operation and at each reporting date, the recoverable amount was estimated for assets included in the disposal group. An impairment loss of R$ 157,991 was identified as of December 31, 2025 and was recognized as part of discontinued operations.
Estimating the fair value implies assumptions and estimates that require judgment. In estimating such fair value we have considered the terms of the agreements we entered into as well as estimates about expected timing of the disposals which impact the estimated proceeds of the sale and as well as its discount to present value as of the date of the impairment test. While actual date of the disposal may differ from this estimate of fair value we expect any difference will not result in significant effect in the impairment test performed. The net carrying amount of assets and liabilities of businesses classified as held for sale as of December 31, 2025 is R$ 3,229,817.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The major classes of assets included in the disposal group classified as held for sale as well as the liabilities directly associated with those assets are presented below:
Notes
2025
Assets
Cash and cash equivalents
230,643 
Trade accounts receivable
171,652 
Recoverable taxes
9,173 
Other assets
49,177 
Deferred tax assets9.43,704 
Property and equipment10.367,009 
Intangible assets11.33,491,465 
Total assets classified as held for sale
4,022,823 
Liabilities
Trade accounts payable
54,954 
Other debt instruments6.8.321,369 
Deferred tax liabilities9.4434,903 
Labor and social security liabilities
115,923 
Taxes payable
38,957 
Provision for contingencies14.396,267 
Other liabilities
30,633 
Total liabilities associated with assets held for sale
793,006 
The accumulated balances of other comprehensive income recognized within equity associated with assets held for sale are presented below:
2025
Amounts included in accumulated OCI to be recognized in income upon disposal of the businesses
Net monetary position in hyperinflationary economies20,578 
Exchange differences on translation of foreign operations(52,779)
Total other comprehensive loss associated with assets held for sale(32,201)
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The effects of discontinued operations on the statement of profit or loss of the periods are presented below:
202520242023
Net revenue from transaction activities and other services97,674 87,140165,407
Net revenue from subscription services and equipment rental1,094,009 1,100,7351,107,523
Other financial income19,988 19,96120,923
Total revenue and income from discontinued operations1,211,6711,207,8361,293,853
Cost of services(552,926)(556,623)(612,599)
Administrative expenses(180,799)(285,041)(286,678)
Selling expenses(276,633)(265,459)(265,423)
Financial expenses, net(35,514)(33,372)(43,301)
Software business goodwill impairment loss(157,991)(3,558,049)—
Other income (expenses), net14,725(12,481)(24,137)
(1,189,138)(4,711,025)(1,232,138)
Loss on investment in associates— —(510)
Profit (loss) before income taxes from discontinued operations22,533 (3,503,189)61,205 
Current income tax and social contribution(55,537)(42,894)(22,392)
Deferred income tax and social contribution(4,896)18,4136,987
Net income (loss) for the period from discontinued operations(37,900)(3,527,670)45,800 
Discontinued operations on the statement of cash flows of the periods are presented below:
202520242023
Net cash provided by operating activities221,478 253,022 143,315 
Net cash used in investing activities(192,225)(260,676)(158,931)
Net cash used in financing activities(42,431)(23,577)(21,534)
Effect of foreign exchange on cash and cash equivalents(12,163)2,231(1,323)
Change in cash and cash equivalents(25,341)(29,000)(38,473)
1.2. Operating segments
Until the third quarter of 2025, the Group reported its results under financial and software business segments as well as certain non-allocated activities comprised of non-strategic businesses, including results on its disposal/sale. Following the strategic decision to divest the Software Businesses, these operations were classified as discontinued operations and assets held for sale
As a result, the internal reporting structure and the performance measures reviewed by the Chief Operating Decision Maker (“CODM”), which comprises the Chief Executive Officer ("CEO”) and the Board of Directors, were revised to focus on a single consolidated view of the Group’s continuing operations. Accordingly, the Group is now managed as a single operating segment. Since this segment corresponds to the continuing operations presented in the consolidated income statement of profit or loss, the comparative periods already reflect this presentation.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
2.    GENERAL ACCOUNTING POLICIES
The accounting policies are presented in the corresponding notes throughout the financial statements. The general accounting policies, unrelated to specific notes, are presented as follows.
2.1. Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IASB”).
The consolidated financial statements have been prepared on a historical cost basis, other than some Short and Long-term investments, Accounts receivable from card issuers, Derivative financial instruments, Other liabilities related to contingent consideration and, upon initial recognition, Provision for contingencies of entities acquired on business combinations. The consolidated financial statements are presented in Brazilian Real/Reais (“R$”), and all values are rounded to the nearest thousand (R$ 000), except when otherwise indicated.
2.2. Foreign currency translation
2.2.1. Financial statements in foreign currencies
The Group’s consolidated financial statements are presented in Brazilian Reais, which is the Company’s functional currency.
The Group determines the functional currency for each entity within the Group. The Company’s subsidiaries functional currency is the Brazilian Real, except for the Napse Group for which the functional currency of the different entities are U.S. Dollar, Argentinian Peso, Chilean Peso, Mexican Peso, Nuevo Sol and Uruguayan Peso.
For those entities that use a functional currency other than the Brazilian Real, their financial statements are translated into Brazilian Reais using (i) the exchange rates at the reporting date for assets and liabilities, (ii) average monthly exchange rates for profit or loss, and (iii) the exchange rate at the transaction date for equity transactions. For these entities, exchange gains and losses arising from the translation process are recorded in Other comprehensive income (loss) ("OCI") in “Exchange differences on translation of foreign operations.”
2.2.2. Transactions in foreign currencies
Transactions in foreign currencies are initially recorded by the Group’s entities in their functional currency at the spot exchange rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated into each functional currency using the exchange rates prevailing at the reporting date. Exchange gains and losses arising from the settlement of transactions and from the translation of monetary assets and liabilities denominated in foreign currency are recognized in the statement of profit or loss. These mostly arise from transactions carried out by clients with credit and debit cards issued by foreign card issuers, from the translation of the Group’s financial instruments denominated in foreign currencies and, to a lesser extent, from purchase of products and services denominated in foreign currencies.
2.3. Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. In the event that fulfillment of the arrangement is dependent on the use of specific assets or the arrangement transfers a right to use the asset, such arrangements are defined as leases.
FORM 20-F 26FY25 
F-19
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
2.3.1. The Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets for which the Group opts for recognition exemption. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
2.3.1.1. Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. The estimated useful lives for the right-of-use assets are as follows:
Estimated useful lives (years)
Offices
1-10
Vehicles
1-3
Equipment
1-10
Software
1-3
If ownership of the leased asset is transferred to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.
2.3.1.2. Lease liabilities
At the commencement date of the lease, the Group recognizes under “Other debt instruments” lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments are recognized as an expense in the same period the event or condition that triggered the payment occurred.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the lease liability balance is increased to reflect the accretion of interest and reduced when lease payments are made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
2.3.1.3.     Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of offices, software, vehicles and other equipment (being contracts with a lease term of 12 months or less from the commencement date which do not contain a purchase option). It also applies the low-value assets recognition exemption to leases of office equipment that are considered of low value (below five thousand of U.S. Dollar). Lease payments of short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
2.3.2. The Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
The Group has cancellable month-to-month lease contracts of Pin Pads & Point of Sale (“POS”) to third parties (clients). The leased assets are included in “Property and equipment” in the consolidated statement of financial position and are depreciated over their expected useful lives on a straight-line basis. Income from operating leases (net of any incentives given to the lessee) is recognized on a straight-line basis over the lease term in “Net revenue from subscription services and equipment rental” in the consolidated statement of profit or loss.
2.4. Current and non-current classification
The Group presents assets and liabilities in the statement of financial position based on a current / non-current classification.
An asset is current when it is:
•expected to be realized or intended to be sold or consumed in the normal operating cycle;
•held primarily for the purpose of trading;
•expected to be realized within twelve months after the reporting period; or
•cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when it is:
•expected to be settled in the normal operating cycle;
•held primarily for the purpose of trading;
•due to be settled within twelve months after the reporting period; or
•there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.5. Financial reporting in hyperinflationary economies
As the accumulated inflation rate in Argentina had exceeded 100% over the past three years, the Group adopted IAS 29- Financial Reporting in Hyperinflationary Economies for the Argentine subsidiary Napse S.R.L.
Non-monetary assets and liabilities, shareholders’ equity and amounts in the statement of profit or loss of entities that operate in hyperinflationary economies are adjusted by the change in the general purchasing power of the currency, based on a general price index.
The financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether based on the historical or current cost approach, should be expressed in terms of the current measurement unit at the statement of financial position date.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
2.6. Climate related matters
The Group acknowledges the presence and importance of climate risk and seeks to integrate it as part of the other managed risks. By the nature of its activities, the Group is mainly affected by physical and transition risks indirectly, as a result of the effects of those risks on its customers. Within this context, the Group has the objective of developing its capabilities for identifying, assessing, measuring, monitoring, reporting, and mitigating the potential effects resulting from social, environmental, and climate risks associated with its prioritized products, services, activities, and processes, based on the principles of relevance and proportionality.
The Group's current view is that its business model and its main products are not likely to have a significant impact from the transition to a low-carbon economy. Climate-related matters however may increase the uncertainty in selected estimates and assumptions underpinning some items in the financial statements. Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes and developments, such as new climate-related legislation.
Financial assets may be indirectly impacted by climate-related matters, principally the credit portfolio. Cash flows from customers whose businesses are affected by transition risks and extreme weather events and other physical climate risks may be impacted. However, this risk is mitigated by the diverse and broad base of customers operating in across numerous industries and in different geographical regions in Brazil, and the relative short-term duration of the loans. Extreme weather events might more significantly affect specific cities or geographical areas.
2.7. New standards and amendments to standards and interpretations adopted
The following amendments and interpretations were applicable as from January 1, 2025:
•Amendments to IAS 21: Lack of exchangeability: On August 15, 2023, the IASB issued Lack of Exchangeability which amended IAS 21 - The Effects of Changes in Foreign Exchange Rates (“the amendments”). The amendments introduce requirements to assess when a currency is exchangeable into another currency and when it is not. The amendments require the entity to estimate the spot exchange rate when it concludes that a currency is not exchangeable into another currency.
These amendments had no significant impact on the consolidated financial statements of the Group.
2.8. New standards and amendments to standards and interpretations not yet adopted
The new and amended standards and interpretations that are issued, but not yet effective as of December 31, 2025 are presented below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
2.8.1. IFRS 18 - Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 - Presentation of Financial Statements. IFRS 18 introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new.
It also requires disclosure of management-defined performance measures (“MPMs”), certain profit or loss performance measure, and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements (“PFS”) and the notes.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
In addition, narrow-scope amendments have been made to IAS 7 - Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the options around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards.
IFRS 18, and the amendments to the other standards, are effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively.
The Group is currently reviewing the standard to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements, including the restatement of comparative information.
2.8.2. IFRS 19 - Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to apply its reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS Accounting Standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as defined in IFRS 10, cannot have public accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements, available for public use, which comply with IFRS Accounting Standards.
IFRS 19 will become effective for reporting periods beginning on or after 1 January 2027, with early application permitted.
The Group is not eligible to apply IFRS 19 as it has public accountability.
2.8.3. IFRS 9 - Financial instruments and IFRS 7 - Financial instruments: Disclosures
On 30 May 2024, the International Accounting Standards Board (the IASB or the Board) issued Amendments to the Classification and Measurement of Financial Instruments which amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (the Amendments). The Amendments provide additional guidance and clarity on the following specific matters: date of recognition and write-off of financial instruments and significant characteristics in the assessment of "sole payments of principal and interest" (SPPI Test) for financial assets, and guidance on the assessment of contractual cash flows for financial assets with environmental, social and corporate governance (ESG) and similar features. In addition, the amendments add disclosures relating to equity instruments designated at fair value through other comprehensive income and financial instruments linked to contingent events.
These amendments are effective for years starting on January 1, 2026, early adoption being permitted, with retrospective application. The Group is assessing if the amendments will affect the Group’s consolidated financial statements.
2.9. Pillar 2 in Brazil
In October 2024, Provisional Measure (“MP”) No 1,262/2024 was published as part of the Brazilian government proposal for a partial adoption of the Pillar 2 rules. It imposes a corporate tax surcharge (Additional CSLL) intended to function as Brazil’s QDMTT (Qualified Domestic Minimum Top-up Tax) starting January 1, 2025.
Under the rule, multinational companies with a minimum annual revenue of €750 million must apply a minimum effective tax rate of 15% on adjusted income measured following Pillar 2 rules. Based on the analysis of Group’s consolidated financial statements for the last three years, the Group understands that it meets such revenue threshold.
Additional CSLL will be applied to excess profits computed following Brazilian accounting rules and adjustments consistent with the Pillar 2 global rules. Only profit of the Brazilian entities will be considered to determine QDMTT, therefore does not affect entities of the Group in other jurisdictions.
FORM 20-F 26FY25 
F-23
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The text of the MP was included in law bill that was subsequently approved by Congress and sanctioned by the President into Law 15,079/2024 adapting Brazilian tax legislation to the Global Anti-Base Erosion Rules ("GloBE Rules") of the Organization for Economic Cooperation and Development (“OECD”).
Following the enactment and entry into force of the QDMTT, an assessment was performed in accordance with the OECD Pillar 2 rules and the Brazilian Law. Based on this analysis, the Brazilian entities of StoneCo meet the applicable transitional safe harbour requirements, as the jurisdictional effective tax rate fall within the thresholds established, thereby allowing reliance on the safe harbour and exemption from a full GloBE calculation for the year 2025.
3.    SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements of the Company and its subsidiaries requires management to make judgments and estimates and to adopt assumptions that affect the amounts presented referring to revenues, expenses, assets and liabilities at the financial statement date. Actual results may differ from these estimates.
The judgments, estimates and assumptions are frequently revised, and any effects are recognized in the revision period and in any future affected periods. The objective of these revisions is to mitigate the risk of material differences between estimated and actual results in the future.
Significant assumptions about sources of uncertainty in future estimates and other significant sources at the reporting date are presented in each of the notes along the financial statements.
4.    GROUP INFORMATION
4.1. Subsidiaries
4.1.1. Accounting policy
4.1.1.1. Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Control is achieved when the Group:
•has power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);
•is exposed, or has rights, to variable returns from its involvement with the investee; and
•has the ability to use its power to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
•the contractual arrangement(s) with the other vote holders of the investee;
•rights arising from other contractual arrangements; and
•the Group’s voting rights and potential voting rights.
FORM 20-F 26FY25 
F-24
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction, in “Transactions among shareholders” in equity.
4.1.1.2.    Consolidation of structured entities
Usually, the control of an investee is determined by voting or similar rights of the investor. In some cases, voting or similar rights is not the decisive factor to characterize control. An entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity is denominated as a structured entity. Frequently, the relevant activities of structured entities are directed by means of contractual arrangements. In such cases, an investor’s consideration of the purpose and design of the investee shall also include consideration of the risks to which the investee was designed to be exposed, the risks it was designed to pass on to the parties involved with the investee and whether the investor is exposed to some or all of those risks.
Based on the contractual terms, the Group identified that certain investments meet the definition of a structured entity under IFRS 12 – Disclosure of Interests in Other Entities.
The Group considers the entities listed below to be structured entities that are controlled by the Group. The participation of the Group in each of them is stated as follows:
Outstanding quotas as of December 31, 2025 and 2024
ACR FAST Fundo de Investimento em Direitos Creditórios ("FIDC ACR FAST")
100% of subordinated quotas representing approximately 4% of total (subordinated and senior) quotas
ACR I Fundo de Investimento em Direitos Creditórios ("FIDC ACR I")
100% of subordinated quotas representing approximately 7% of total (subordinated and senior) quotas
SOMA III Fundo de Investimentos em Direitos Creditórios Não Padronizados ("FIDC SOMA III")
100% of subordinated quotas and 100% of mezzanine quotas representing all outstanding quotas
 Stone Fundo de Investimento Multimercado Crédito Privado ("STONE FIM CP")
100% of quotas representing all outstanding quotas
StoneCo Exclusivo Fundo de Investimento em Cotas de Fundo de Investimento Multimercado Crédito Privado ("FIC FIM STONECO")
100% of quotas representing all outstanding quotas
Tapso Fundo de Investimento em Direitos Creditórios ("FIDC TAPSO")
100% of subordinated quotas and 100% of mezzanine quotas representing all outstanding quotas
The by laws of these structured entities were established at their inception to grant significant decision-making authority over these entities. As sole holders of the subordinated quotas, the Group is entitled to the full residual value of the entities, if any, and thus the Group has the rights to their variable returns.
FORM 20-F 26FY25 
F-25
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
In accordance with IFRS 10, the Group concluded it controls all structured entities listed above, therefore, they are consolidated in the Group’s financial statements. FIDCs senior and mezzanine quotas held by third parties, when applicable, are accounted for as a financial liability under “Other debt instruments and Institutional deposits and marketable debt securities” and the remuneration paid to senior and mezzanine quota holders is recorded as an interest expense (Note 6.8).
4.1.2. Subsidiaries of the Group
The consolidated financial statements of the Group include the following subsidiaries and structured entities:
% of Group's equity interest
Entity nameMain activitiesDecember 31, 2025December 31, 2024
Buy4 Sub LLC ("Buy4 LLC")Cloud store card transactions100.00 100.00 
TAG Tecnologia para o Sistema Financeiro S.A. ("TAG")Financial assets register100.00 100.00 
Stone Cartões Instituição de Pagamento S.A. (“Stone Cartões”)Financial services100.00 100.00 
Stone Distribuidora de Títulos e Valores Mobiliários S.A. ("DTVM") (a)
Financial services100.00 — 
Stone Sociedade de Crédito Direto S.A. (“Stone SCD”)Financial services100.00 100.00 
Stone Sociedade de Crédito, Financiamento e Investimento S.A. ("Stone SCFI")Financial services100.00 100.00 
Stone Franchising Ltda. ("Franchising")Franchising management100.00 100.00 
Vitta Saúde Administradora de Benefícios Ltda. (“Vitta Group”)Health services100.00 100.00 
Vitta Serviços em Saúde Ltda. (“Vitta Group”)Health services100.00 100.00 
Vitta Tecnologia em Saúde S.A. (“Vitta Group”)Health services100.00 100.00 
DLP Capital LLC ("DLP Cap")Holding company100.00 100.00 
DLPPar Participações S.A. (“DLPPar”)Holding company100.00 100.00 
Equals Software S.A. ("Equals Software") (b)
Holding company— 100.00 
Reclame Aqui Holding Ltd ("Reclame Aqui Group")Holding company50.00 50.00 
STNE Investimentos S.A. ("STNE Invest") (b)
Holding company100.00 100.00 
STNE Participações em Tecnologia S.A. ("STNE Partec")Holding company100.00 100.00 
STNE Participações S.A. ("STNE Par") (c)
Holding company— 100.00 
Stone Seguros S.A. (“Stone Seguros”) (b)
Holding company— 100.00 
Stone Serviços Financeiros S.A. ("Stone Holding") (d)
Holding company100.00 100.00 
VittaPar LLC (“Vitta Group”) (e)
Holding company— 100.00 
Vitta Corretora de Seguros Ltda. (“Vitta Group”)Insurance services100.00 100.00 
MPB Capital LLC ("MPB")Investment company100.00 100.00 
FIC FIM STONECOInvestment fund100.00 100.00 
FIDC ACR FAST Investment fund100.00 100.00 
FIDC ACR I Investment fund100.00 100.00 
FIDC SOMA IIIInvestment fund100.00 100.00 
FIDC TAPSOInvestment fund100.00 100.00 
STONE FIM CP Investment fund100.00 100.00 
Stone Logística Ltda. ("Stone Log")Logistic services100.00 100.00 
MNLT S.A. (“MNLT”)Merchant acquiring100.00 100.00 
Pagar.me S.A. (“Pagar.me”)Merchant acquiring100.00 100.00 
Stone Instituição de Pagamento S.A. (“Stone IP”)Merchant acquiring100.00 100.00 
Stone Pay Meios de Pagamento Ltda. ("Stone Pay”) (f)
Merchant acquiring100.00 100.00 
Buy4 Processamento de Pagamentos S.A. (“Buy4”)Processing card transactions100.00 100.00 
APP Sistemas S.A. (“APP”) (g)
Technology services45.96 — 
Hiper Software S.A. ("Hiper")Technology services100.00 100.00 
Hubcount Tecnologia S.A. (“Hubcount”)Technology services75.60 75.60 
Linx Enterprise Ltda. ("Linx Enterprise") (e)
Technology services— 100.00 
MLabs Software S.A. (“MLabs”)Technology services51.49 51.49 
Napse IT Peru S.R.L. (“Napse Group”) (h)
Technology services— 100.00 
FORM 20-F 26FY25 
F-26
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
% of Group's equity interest
Entity nameMain activitiesDecember 31, 2025December 31, 2024
O Mediador Tecnologia da Informação S/S Ltda. (“Reclame Aqui Group”) (i)
Technology services— 50.00 
Obvio Brasil Software e Serviços S.A. (“Reclame Aqui Group”)Technology services50.00 50.00 
Questor Sistemas S.A. (“Questor”) Technology services50.00 50.00 
Reclame Aqui LLC (“Reclame Aqui Group”) Technology services50.00 50.00 
Reclame Aqui Marcas e Serviços Ltda. (“Reclame Aqui Group”) Technology services50.00 50.00 
Simplesvet (Note 1.1) (j)
Technology services— 50.00 
STEF S.A ("Stef") (b)
Technology services— 100.00 
Stone Corporate e Holding S.A. (“Stone Corporate”) (k)
Technology services100.00 100.00 
Stone Impulse Ltda. ("Stone Impulse") (l)
Technology services100.00 100.00 
Trinks Serviços de Internet S.A. (“Trinks”)Technology services100.00 100.00 
VHSYS Sistema de Gestão S.A. (“VHSYS”)Technology services50.00 50.00 
(a)Entity Incorporated in December, 2025
(b)Equals Software, Stef and Stone Seguros were incorporated into STNE Invest in December, 2025.
(c)STNE Par was extinguished by merger into Stone Corporate (formerly Linx S.A.) in November, 2025.
(d)Formerly Stone Holding Instituições S.A.
(e)The entities were dissolved in August, 2025.
(f)Formerly Linx Pay Meios de Pagamento Ltda.
(g)In April, 2025, STNE Par, a Group company, acquired additional shares in APP, raising its total ownership to 45.96% and securing control of APP's share capital, achieved through substantive rights that provide the Group with the current ability to direct the relevant activities of APP. STNE Par prior stake was 19.80%. (Note 23.3.).
(h)Dissolved in July 2025.
(i)The entity was dissolved in December, 2025.
(j)The equity interest held by the StoneCo Group in Simplesvet was disposed of in July, 2025.
(k)Formerly Linx S.A.
(l)Formerly Linx Impulse Ltda.
The Group holds call options to acquire additional interests in some of its subsidiaries (Notes 6.1.5 and 6.9) and issued put options to non-controlling investors (Note 6.13.1 (g)).
FORM 20-F 26FY25 
F-27
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
4.1.3. Subsidiaries of the Group classified as held for sale and discontinued operations
In the second quarter of 2025, the Group entered into agreements for the sale of Linx Sistemas and certain other software assets (the “Software Businesses”), resulting in the classification of such businesses as held for sale. In the third quarter of 2025, Linx Par was incorporated as a wholly owned subsidiary of the Group in connection with these transactions (Note 1.1):
% of Group's equity interest
Entity nameMain activitiesDecember 31, 2025December 31, 2024
Linx Automotivo Ltda. ("Linx Auto")Technology services100.00 100.00 
Linx Commerce Ltda. ("Linx Commerce")Technology services100.00 100.00 
Linx People Ltda. ("Linx People")Technology services100.00 100.00 
Linx Saúde Ltda. ("Linx Saúde")Technology services100.00 100.00 
Linx Sistemas e Consultoria Ltda. (“Linx Sistemas”)Technology services100.00 100.00 
Linx Software Participações em Tecnologia S.A. (“Linx Par”)Technology services100.00 — 
Linx Telecomunicações Ltda. ("Linx Telecom")Technology services100.00 100.00 
Napse S.R.L. (“Napse Group”)Technology services100.00 100.00 
Napse Uruguay SAS (“Napse Group”)Technology services100.00 100.00 
Retail Americas Sociedad de Responsabilidad Limitada de Capital Variable (“Napse Group”)
Technology services100.00 100.00 
Sociedad Ingenería de Sistemas Napse I.T. de Chile Limitada (“Napse Group”)Technology services100.00 100.00 
Sponte Educação Ltda. ("Sponte Educação")Technology services100.00 100.00 
Synthesis Holding LLC (“Napse Group”)Technology services100.00 100.00 
Synthesis IT de México Sociedad de Responsabilidad Limitada de Capital Variable (“Napse Group”)Technology services100.00 100.00 
Synthesis US LLC (“Napse Group”)Technology services100.00 100.00 
4.2. Associates
4.2.1. Accounting policy
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but does not have control, or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries. The Group’s investments in associates are accounted for using the equity method.
Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment separately.
The Statement of profit or loss reflects the Group’s share of the results of operations of the associate. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and associates are eliminated to the extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the Statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.
FORM 20-F 26FY25 
F-28
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognize an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognizes the loss within share of profit of an associate in the statement of profit or loss.
In the event of a loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
None of the investments in associates presented significant restrictions on transferring resources in the form of cash dividends or repayment of obligations, during the periods reported.
4.2.2. Associates held by the Group
% Group's equity interest
Entity namePrincipal activitiesDecember 31, 2025December 31, 2024
Delivery Much Tecnologia S.A. (“Delivery Much”)
Food delivery marketplace29.49 29.49 
Agilize Contabilidade Holding Limited ("Agilize Cayman")Holding company28.70 28.70 
Alpha-Logo Serviços de Informática S.A. (“Tablet Cloud”)Technology services25.00 25.00 
APP Sistemas S.A. (“APP”) (a)
Technology services— 19.80 
Dental Office S.A. (“RH Software”)Technology services20.00 20.00 
(a)In April, 2025, STNE Par acquired additional shares in APP, raising its total ownership to 45.96% and securing control of APP's share capital. As a result of this change, the 45.96% was reported in December 31, 2025 under "4.1.2 Subsidiaries of the Group". (Note 23.3.).
The Group holds call options to acquire additional interests in some of its associates (Notes 6.1.5 and 6.9).
5.    CASH AND CASH EQUIVALENTS
5.1. Accounting policy
Cash and cash equivalents in the statement of financial position comprise cash at banks and short-term deposits with a maturity of three months or less from the date of acquisition, which are subject to an insignificant risk of changes in value, and readily convertible into cash.
5.2. Currency denomination
December 31, 2025December 31, 2024
Denominated in R$ (a)
4,772,659 5,157,035 
Denominated in US$ (a)
49,044 70,619 
4,821,703 5,227,654 
(a)As of December 31, 2025, the amount of R$ 4,821,703 relates to continuing operations. As disclosed in Note 1.1.2, Cash and cash equivalents from discontinued operations amount to R$ 230,643, resulting in a total of R$ 5,052,346, as presented in the Consolidated statement of cash flows.
FORM 20-F 26FY25 
F-29
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.    FINANCIAL INSTRUMENTS
6.1. Accounting policy
6.1.1. Financial assets
6.1.1.1.    Description of the different financial assets
The Group holds financial assets for all its businesses due to the nature of its activities. In order to facilitate the understanding of the financial statements and the underlying businesses, the financial asset line items presented in the statement of financial position are shown by business activity that generated the assets, how these are measured, and where in the statement of profit or loss the results generated by such assets are classified.
Line item presented in the statement of financial positionDescription of the related business activityBasis of measurementLine item of the statement of profit (loss) or statement of other comprehensive income (loss) where results generated are presented
Cash and cash equivalents and Short-term investmentsManaging of liquidity of the business
Cash and cash equivalents – Amortized cost

Short-term investments – FVPL (a)
Interest income - Other financial income
Fair value gain or losses - Other financial income
Foreign exchange gain or losses - Financial expenses, net
Financial assets from banking solutionsCorresponds to regulatorily required amounts to be maintained in certain specified assets as reserve requirements for deposits of banking customersDeposits at Brazilian Central Bank ("BACEN") – Amortized cost
Government securities – FVPL
Interest income - Financial income
Fair value gain or losses - Financial income
Accounts receivable from card issuersCorresponds to amounts receivable from card issuers for transactions that acquiring business processes. The balances do not bear interest. Receivables are regularly sold before their maturity as part of the funding strategy
FVOCI (b)
Fair value gain or losses - Other comprehensive income
Cost of funding on sale of receivables - Financial expenses, net
Foreign exchange gain or losses on balances of transactions in foreign currency - Financial expenses, net
Trade accounts receivableCorresponds to amounts due by customers of the acquiring business for subscription services and equipment rental and of the software business for services providedAmortized costAllowance for expected credit losses - Cost of services
Interest and penalties for late payment - Other financial income
Credit portfolioCorresponds to credit (merchant portfolio loans and balances due by credit card) granted to customersAmortized costInterest income - Financial income
Allowance for expected credit losses - Cost of services
Foreign exchange gains or losses on balance of credit card in foreign currency – Financial expenses, net
Derivative financial instruments assetsCorresponds to derivatives entered into to manage the financial risks (mainly interest rate and foreign exchange) inherent to acquiring businesses and related to the funding structureFVPLFair value gain or losses - Financial expenses, net, except for those designated in a cash flow hedge relationship:
Ineffective portion of change in fair value - Financial expenses, net
Effective portion of change in fair value once reclassified from OCI - Financial expenses, net
Long-term investmentsCorresponds to investments in equity interests with no significant influenceFVPL or FVOCIFVPL - Other financial income / Mark-to-market on equity securities designated at FVPL
FVOCI - Other comprehensive income
(a)Fair Value through Profit or Loss (“FVPL”).
(b)Fair Value through Other Comprehensive Income (“FVOCI”).
FORM 20-F 26FY25 
F-30
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.1.1.2.    Initial recognition and measurement
Financial assets are initially recognized at fair value plus costs (except assets at FVPL) on the trading date, and subsequently measured at amortized cost, FVOCI, or FVPL .
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them according to IFRS 9. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model is based on whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within this business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at FVOCI are held within a business model with the objective of holding to collect contractual cash flows and selling.
Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 – Revenue from Contracts with Customers.
To be classified and measured at amortized cost or FVOCI, a financial asset needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at FVPL, irrespective of the business model.
Financial assets at FVPL include financial assets held for trading, financial assets designated upon initial recognition at FVPL, or financial assets mandatorily required to be measured at fair value. Financial assets are considered as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated derivatives, are also considered as held for trading unless they are designated as hedge accounting instrument. Notwithstanding the criteria for financial assets to be classified at amortized cost or at FVOCI, as described above, financial instruments may be designated at FVPL on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Purchases or sales of financial assets that require delivery of assets within a time frame set by regulation or market practice (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
6.1.1.3. Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories, as described as follows:
6.1.1.3.1. Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.
The Group’s financial assets at amortized cost include Trade accounts receivable, Credit portfolio, Receivables from related parties and Other assets, since they are held to collect payments of principal and interest and meet the SPPI test.
6.1.1.3.2. Financial assets at FVOCI with recycling of cumulative gains and losses (debt instruments)
For debt instruments at FVOCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statement of profit or loss similarly to financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss. This category is the most relevant to the Group and it corresponds solely to Accounts receivable from card issuers.
FORM 20-F 26FY25 
F-31
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.1.1.3.3. Financial assets at FVOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
Upon initial recognition, the Group can irrevocably elect to designate its equity investments as FVOCI when they meet the definition of equity under IAS 32 – Financial Instruments: Presentation, and are not held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss, even if the asset is sold or impaired. Dividends are recognized as other financial income in the statement of profit or loss when the right to payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at FVOCI are not subject to impairment assessment.
The Group elected to irrevocably classify some of the equity investments under this category, included in Long-term investments.
6.1.1.3.4. Financial assets at FVPL
Financial assets at FVPL are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss.
This category includes financial assets which the contractual cash flows do not meet the SPPI condition, such as (i) bonds and investment funds under short-term investment (ii) financial assets from banking solutions, (iii) some equity investments, and (iv) derivative financial instruments.
6.1.1.4.    Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized of the consolidated statement of financial position when:
•The contractual rights to receive cash flows from the asset have expired; or
•The Group has transferred its contractual rights to receive cash flows from the asset or has assumed a contractual obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Group has transferred substantially all the risks and rewards of the asset, or (ii) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset where ‘control’ is evaluated by looking to whether the transferee has the practical ability to transfer the asset.
When the Group has transferred its contractual rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
The derecognition of a financial asset by the Group occurs mainly in the definitive assignment of Accounts receivable from card issuers to third parties without substantial retention of risks and benefits of the assigned financial asset and without continuing involvement. The difference between the consideration received by the Group for the financial asset and its carrying amount is recognized under Financial expenses, net.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.1.1.5.    Impairment of financial assets
The Group recognizes an allowance for expected credit losses (“ECLs”) for all financial instruments measured at amortized cost or FVOCI. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For the credit portfolio, the Group applies general approach in calculating ECLs, considering delinquency information, internal risk classification and risk parameters (“PD” – probability of default, “LGD” – loss given default and “EAD” – exposure at default), resulting in three-stage levels.
For all other financial assets subject to ECL, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs, provision matrix and days past due at each reporting date.
See details about ECL estimation procedures in Note 6.2.1.
6.1.1.6.    Write-offs
When there is no reasonable expectation of recovery of a financial asset, considering historical recovery curves, we write-off (in part or in total) the asset together with the related allowance for expected credit loss. Subsequent recoveries of amounts previously written off are accounted for as income in our consolidated statement of income under line Cost of services.
6.1.2. Financial liabilities
6.1.2.1.    Description of the funding strategy including different financial liabilities of the operation
The Group’s different businesses require funding, in particular the financial services business and the credit portfolio, to be able to provide liquidity to customers mainly through the prepayment of the transactions processed by the Group (accounts payable to clients). Different forms of funding are sought, some of which comprise indebtedness presented as financial liabilities in the statement of financial position. The Group also fund its activities by selling accounts receivables on a fully non-recourse basis and passing to the counterparts all the risks and benefits of such assets (Note 6.2.1.2 - Accounts receivable from card issuers). Since the first quarter of 2025, balances held in payment accounts are eligible to be automatically invested daily in time deposits issued by the Group. In addition, the Group has also started to issue time deposits held by multiple counterparties. These balances are used as a funding source. In order to facilitate an understanding of the financial statements and how they relate to the underlying business the financial liabilities line items presented in the statement of financial position are summarized by the business activity that generates such liabilities, showing how they are measured and where their results are classified in the statement of profit or loss.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Line item presented in the statement of financial positionDescription of the related business activityBasis of measurementLine item of the statement of profit (loss) or statement of other comprehensive income (loss) where results generated are presented
Retail depositsAmounts held by banking customers on their payment accounts and time deposits to retail clients. The amounts held by banking customers generally do not result in the recognition of gain or lossesAmortized costInterest expense - Financial expenses, net
Accounts payable to clientsAmounts payable to merchants for transactions for acquiring business processes. The balances do not carry interest. Amounts may be early redeemed of the contractual due date at a discountAmortized costGain from the prepayment of payables at a discount - Financial income
Trade accounts payableCorresponds to payments for payment scheme networks and suppliersAmortized costTransaction and customer service costs, third-party services and facilities expenses - Cost of services, Administrative expenses and Selling expenses
Institutional deposits and marketable debt securities Financing from time deposits and debt securities, including FIDC quotas, when consolidated entitiesAmortized costInterest expense - Financial expenses, net
Foreign exchange gain or losses - Financial expenses, net
Other debt instrumentsFinancing obtained from third parties, leasing and other debt instrumentsAmortized cost and FVPLInterest expense - Financial expenses, net
Foreign exchange gain or losses - Financial expenses, net
Fair value gain or losses - Financial expenses, net.
Derivative financial instruments liabilitiesCorresponds to derivatives entered into to manage the financial risks (mainly interest rate and foreign exchange) inherent to the acquiring business and related to the funding structureFVPLFair value gain or losses - Financial expenses, net, except for those designated as hedge accounting
Ineffective portion of change in fair value - Financial expenses, net
Effective portion of change in fair value once reclassified from OCI - Financial expenses, net
Other liabilities - contingent considerationCorresponds to contingent payments from business combinationsFVPLInterest expenses - Financial expenses, net
Fair value gain or losses - Other income (expenses), net
6.1.2.2.    Initial recognition and measurement
Financial liabilities are initially recognized at fair value plus costs (except liability at fair value through profit or loss) on the trading date and classified as amortized cost or FVPL.
6.1.2.3.    Subsequent measurement
The measurement of financial liabilities depends on their classification, as described as follows.
6.1.2.3.1. Financial liabilities at FVPL
Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL.
Financial liabilities are considered as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9 – Financial Instruments. Separated embedded derivatives are also classified as FVPL unless they are designated and qualify as hedge accounting.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.
Financial liabilities designated upon initial recognition at FVPL only if the criteria in IFRS 9 are satisfied.
This category includes derivative financial instruments and contingent consideration included in other liabilities.
6.1.2.3.2. Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is classified as Financial expenses, net in the statement of profit or loss.
This category includes Accounts payable to clients and all other financial liabilities, except derivative financial instruments and contingent consideration included in other liabilities. This category is the most significant to the Group.
Accounts payable to clients represent amounts due to accredited clients related to credit and debit card transactions, net of interchange fees retained by card issuers and assessment fees disbursed to payment scheme networks as well as the Group’s net merchant discount rate fees which are collected by the Group as an agent.
6.1.2.4.    Derecognition
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
6.1.3. Fair value of financial instruments
The Group measures financial instruments at fair value at each statement of financial position date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
•In the principal market for the asset or liability; or
•In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The Group uses the following hierarchy to determine and disclose the fair value of financial instruments through measurement technique:
•Level I: quoted prices in active markets for identical assets or liabilities;
•Level II: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; and
•Level III: techniques using inputs that have a significant effect on the recorded fair value that are not based on observable market data.
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
6.1.4. Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position, only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
As of December 31, 2025, and 2024, the Group has no financial instruments that meet the conditions for recognition on a net basis.
6.1.5. Derivative financial instruments
From time to time, the Group uses derivative financial instruments as part of its risk management strategy, as defined in the Market Risk Management Policy. It aims to hedge against exposure to fluctuations in exchange rates, interest rates, and other risk factors that may impact its financial operations. These instruments mitigate the effects of adverse market fluctuations and preserve the Group’s financial stability. The derivatives are continuously monitored to ensure compliance with the Group’s internal risk policies and applicable regulatory requirements.
Depending on the instrument and the risk being hedged, derivative strategies may be accounted for as economic hedges or designated for hedge accounting under the categories of fair value hedge accounting or cash flow hedge accounting.
Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered and are subsequently remeasured at FVPL. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Certain agreements entered into by the Group for the acquisition of subsidiaries and associates include call options to acquire additional interests in the investees, which are classified as embedded derivatives. Each of the options is measured at FVPL in accordance with pre-determined formulas and recorded in the consolidated statement of financial position as an asset under Derivative financial instruments (Note 6.9).
6.1.5.1. Cash flow hedge
The Group uses hedge accounting to protect against future cash flow fluctuations arising from exposure to specific risks, such as changes in foreign exchange rates or interest rates.
Cash flow hedge accounting is applied when the hedging relationship meets the required criteria under hedge accounting standards, including proper documentation at the time the hedge is entered into, and provided that the hedge is considered highly effective over time in mitigating the risk of cash flow fluctuations.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The Group regularly reviews hedge effectiveness to ensure that gains or losses on the hedging instruments are appropriately accounted for. Any hedge ineffectiveness identified is immediately recognized in profit or loss for the year.
Depending on the instrument and the risk being hedged, some of the Group’s derivative financial instruments are used as cash flow hedge accounting instruments. The effective portion of gains or losses arising from changes in the fair value of these derivatives are usually recognized in equity, in “Other comprehensive income.” The ineffective portion is recognized in the statement of profit or loss, in “Financial expenses, net.” For the hedged item classified as a financial instrument measured at amortized cost using the EIR method, the amount accumulated in the cash flow hedge reserve is reclassified to profit or loss when the hedged cash flows impact the statement of profit or loss. The method applied by the Group to reclassify the amounts is as follows: (i) the accrual interest portion of the derivative is also measured by the EIR method and recognized in the statement of profit or loss, in “Financial expenses, net”, following the hedged item accrual; and (ii) the remaining amounts related to fair value of hedging instrument is a temporal effect recognized in OCI at each reporting date, ultimately being recognized in profit or loss upon the liquidation of the hedging instrument (Note 6.9.1).
6.1.5.2. Fair value hedge
The Group applies fair value hedge accounting to protect against changes in the fair value of assets or liabilities arising from exposure to specific risks, such as changes in foreign exchange rates or interest rates. In accordance with IFRS, changes in the fair value of both the hedging instrument and the hedged item are recognized directly in profit or loss for the period. This allows gains or losses on the hedging instrument to offset, in whole or in part, the losses or gains on the hedged item.
For a fair value hedge to be accounted for in this manner, the hedging relationship must meet specific criteria, such as formal documentation of the hedging objective and evidence that the hedge is highly effective in offsetting changes in the hedged item's fair value over time.
The Group employs a macro fair value approach for its credit portfolio. This approach involves adjusting the coverage ratio between the hedged items and the hedging instruments as they fluctuate over time. This adjustment is necessary because the Group implements a dynamic hedging strategy, aligned with its approved risk management guidelines.
To effectively manage the dynamic nature of the hedged portfolio, the Group designates its hedges for a period of one month. Each month, the Group de-designates the existing hedge relationships and establishes new ones to ensure continued alignment with market conditions.
The Group conducts regular effectiveness tests for all hedging relationships using the dollar offset or critical terms match approaches, as applicable, to ensure the hedging relationship remains effective. Any hedge ineffectiveness is immediately recognized in profit or loss.
6.1.5.3. Economic hedge
The Group engages in certain hedging transactions to mitigate specific financial risks, such as fluctuations in foreign currencies and interest rates. Some of these transactions are not formally designated for hedge accounting.
Although these derivatives are used to manage economic risks, changes in their fair value are recognized directly in profit or loss for the period without the application of the specific accounting treatments of hedge accounting. This means that the gains and losses generated by these instruments are fully accounted for in profit or loss as they occur, reflecting changes in the fair value of the derivatives.
The decision not to apply hedge accounting to these transactions may be due to considerations such as the administrative cost of the formal documentation required by hedge accounting standards, the nature of the instruments, or the desired operational flexibility. Nevertheless, the Group continues monitoring these instruments to ensure their use aligns with the overall risk management strategy.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.2. Significant judgments, estimates and assumptions
6.2.1. Measurement of loss allowance for expected credit losses
6.2.1.1 Credit portfolio
The Group calculates an expected credit loss (“ECL") allowance for its loans based on statistical models that consider both internal and external historical data, negative credit information and guarantees, among other information addressing the behavior of each debtor. The Group calculates its credit portfolio in three stages:
(i)Stage 1: corresponds to loans that do not present significant increase in credit risk since origination and ECL are determined considering probability of default events within 12 months window;
(ii)Stage 2: corresponds to loans that presented significant increase in credit risk subsequent to origination and ECL are estimated considering probability of default events within the life of the financial instrument;
    The Group determines Stage 2 based on following criteria:
(a)absolute criteria: financial asset overdue more than 30 days, or;
(b)relative criteria: in addition to the absolute criteria, the Group analyzes the evolution of the risk of each financial instrument on a monthly basis, comparing the current behavior score attributed to each client with that attributed at the time of recognition of the financial asset. Behavioral scoring considers credit behavior variables, such as default on other products and market data about the customer. When the credit risk increases significatively since origination, the Stage 1 operations are moved to Stage 2.
    For Stage 2, a cure criterion is applied when the financial asset no longer meets the criteria for a significant increase in credit risk, as mentioned above, and the loan is moved to Stage 1.
(iii)Stage 3: corresponds to impaired loans.
    The Group determine Stage 3 based on following criteria:
(a)absolute criteria: financial asset overdue more than 90 days, or;
(b)relative criteria: indicators that the financial asset will not be paid in full without activating a guarantee or financial guarantee.
    The indication that an obligation will not be paid in full includes the tolerance of financial instruments that imply the granting of advantages to the counterparty following the deterioration of the counterparty's credit quality.
    The Group also assumes a cure criterion for Stage 3, with respect to the counterparty's repayment capacity, such as the percentage of total debt paid or the time limit to liquidate current debt obligations.
Management regularly seeks forward looking perspectives for future market developments including macroeconomic scenarios as well as its portfolio risk profile. Management may adjust the ECL resulting from the models above in order to better reflect this forward looking perspective.
The information about the ECLs on the Group’s Credit portfolio to clients are disclosed in Note 6.6.
6.2.1.2.    Accounts receivable from card issuers
The macroeconomic environment where the Group operates is volatile and card issuers might be negatively impacted. Continuous monitoring of this environment is crucial for the decisions regarding provisioning and how the Group estimates its ECLs. The Group estimates ECLs based on available external and internal information that consider the expected nature and level of risk associated with receivables and the information about the different issuers (including when available, ratings from major agencies). The Group monitors credit risk of issuers.
The information about the ECLs amount on the Group’s Accounts receivable from card issuers are disclosed in Note 6.4.2.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.2.1.3.    Trade accounts receivable
The provision rates are based on days past due for groupings of various client segments that have similar loss patterns (e.g., by product type, customer type and rating).
The provision is initially based on the Group’s historical observed default rates. The Group calibrates to adjust the historical credit loss experience with forward-looking information every year.
The information about the ECLs on the Group’s Trade accounts receivable are disclosed in Note 6.5.2.
6.2.2. Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (“DCF”) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments.
6.3.    Short and Long-term investments
Short-termLong-termDecember 31, 2025
Bonds
Brazilian sovereign bonds71,399 — 71,399 
Structured notes linked to Brazilian sovereign bonds326,168 — 326,168 
Time deposits720,119 — 720,119 
Equity securities (a)
— 24,586 24,586 
Investment funds (b)
1,450 — 1,450 
1,119,136 24,586 1,143,722 
Short-termLong-termDecember 31, 2024
Bonds
Brazilian sovereign bonds46,426 — 46,426 
Structured notes linked to Brazilian sovereign bonds418,120 — 418,120 
Time deposits51,711 — 51,711 
Equity securities (a)
— 32,629 32,629 
Investment funds (b)
1,617 — 1,617 
517,874 32,629 550,503 
(a)Comprised of common shares of unlisted entities that are not traded in an active market. As of December 31, 2025, all assets are recognized at FVPL, while on December 31, 2024, some assets were recognized at FVOCI. The fair value of unlisted equity instruments was determined based on negotiations of the securities. The change in the fair value of equity securities at FVPL was a gain of R$ 8,043 on December 31, 2025 (2024 - gain of R$ 4,131), which was recognized in the statement of profit or loss. The change in fair value of equity securities at FVOCI was R$ nil on December 31, 2025 (2024 - gain of R$ 1,623), which was recognized in the statement of other comprehensive income (loss).

On June 03, 2024, the Group sold its remaining stake in Cloudwalk INC for payment of R$57,540. The gain on the sale of R$35,647 was recognized in other comprehensive income.
(b)Comprised of foreign investment fund shares.
Short-term investments are denominated in Brazilian Reais and U.S. Dollars.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.4. Accounts receivable from card issuers
6.4.1. Composition of accounts receivable from card issuers
Accounts receivable are amounts due from card issuers and acquirers for the transactions of clients with card holders, performed in the ordinary course of business.
December 31, 2025December 31, 2024
Accounts receivable from card issuers (a)
41,175,415 28,833,909 
Accounts receivable from other acquirers (b)
323,461 575,044 
Allowance for expected credit losses(76,912)(60,888)
41,421,964 29,348,065 
Current41,275,188 29,231,820 
Non-current146,776 116,245 
(a)Accounts receivable from card issuers, net of interchange fees, as a result of processing transactions with clients.
(b)Accounts receivable from other acquirers related to PSP (Payment Service Provider) transactions.
Part of the Group’s cash requirement is to make prepayments to acquiring customers. The Group finances those requirements through different sources of funding including the sale of receivables to third parties. When such sales of receivables are carried out to entities in which the Group has subordinated shares or quotas, the receivables sold remain in the statement of financial position, as these entities are consolidated in the financial statements. As of December 31, 2025 a total of R$ 441,323 (December 31, 2024 - R$ 419,099) were consolidated through FIDC ACR FAST and R$ 2,670,380 (December 31, 2024 - R$ 2,561,139) through FIDC ACR I, of which the Group has subordinated shares. When the sale of receivables is carried out to non-controlled entities and for transactions where continuous involvement is not present, the amounts transferred are derecognized from the accounts receivable from card issuers. As of and for the year ended December 31, 2025, the sale of receivables that were derecognized from accounts receivables from card issuers in the statement of financial position represents a relevant funding source used for the prepayment operation.
Accounts receivable held by FIDCs guarantee the obligations to FIDC quota holders.
6.4.2. Allowance for expected credit losses of accounts receivable from card issuers
20252024
At January 160,888 55,619
Addition74,15960,830
Reversal(58,135)(55,561)
At December 3176,912 60,888
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.5. Trade accounts receivable
6.5.1. Composition of trade accounts receivable
December 31, 2025December 31, 2024
Chargeback156,71893,829 
Accounts receivable from equipment rental 134,252111,535 
Accounts receivable from subscription services65,968248,322 
Services rendered22,91446,991 
Receivables from registry operation10,81513,643 
Cash in transit31012,620 
Others24,29520,423 
Allowance for expected credit losses(170,897)(131,260)
244,375 416,103 
Current222,501 390,575 
Non-current21,874 25,528 
6.5.2. Allowance for expected credit losses of trade accounts receivable
20252024
At January 1131,260 117,553 
Addition
117,530 89,882 
Reversal(14,372)(34,151)
Write-off(50,782)(42,024)
Transfer to assets held for sale(12,739)— 
At December 31170,897 131,260 
6.6. Credit portfolio
Portfolio balances by product and maturity:
December 31, 2025December 31, 2024
Merchant portfolio2,540,670 1,093,475 
Credit card295,604 114,156 
Credit portfolio, gross2,836,274 1,207,631 
Allowance for expected credit losses(389,682)(144,512)
Fair value adjustment - portfolio hedge (a)
224 — 
(389,458)(144,512)
Credit portfolio, net2,446,816 1,063,119 
Current2,008,436 891,718 
Non-current438,380 171,401 
(a)The Group holds a portfolio of fixed-rate credit operations exposed to market risk from fluctuations in the Brazilian interest rates. To mitigate this risk, fixed-for-floating interest rate swaps were entered into to protect the fair value of the portfolio against rates variations. These swaps are designated as fair value hedge accounting and, as a result, the interest rate risk of the credit operations is marked to market against profit or loss. As presented in Note 6.1.5.2, the portfolio is dynamically managed, with swap positions adjusted to reflect changes, including prepayment risk.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.6.1. Non-performing loans ("NPL")
Total outstanding of the contract whenever the clients default on an installment:
December 31, 2025December 31, 2024
Merchant portfolioCredit cardTotalMerchant portfolioCredit cardTotal
Balances not overdue2,243,458 262,358 2,505,816 1,006,335 108,930 1,115,265 
Balances overdue by
≤ 15 days52,602 4,503 57,105 17,462 1,390 18,852 
15 < 30 days25,599 3,115 28,714 7,054 676 7,730 
31 < 60 days57,930 3,768 61,698 13,521 865 14,386 
61 < 90 days31,944 3,162 35,106 7,121 647 7,768 
91 < 180 days58,143 7,875 66,018 17,637 1,078 18,715 
181 < 360 days70,994 10,823 81,817 24,345 570 24,915 
297,212 33,246 330,458 87,140 5,226 92,366 
Credit portfolio, gross2,540,670 295,604 2,836,274 1,093,475 114,156 1,207,631 
6.6.2. Aging by maturity
December 31, 2025December 31, 2024
Merchant portfolioCredit cardTotalMerchant portfolioCredit cardTotal
Installments not overdue
≤ 15 days65,395 72,865 138,260 23,083 30,638 53,721 
15 < 30 days122,648 53,381 176,029 36,917 20,075 56,992 
31 < 60 days208,168 47,374 255,542 99,015 19,492 118,507 
61 < 90 days246,118 29,560 275,678 107,068 12,334 119,402 
91 < 180 days567,252 42,860 610,112 268,770 19,019 287,789 
181 < 360 days721,953 25,975 747,928 354,807 10,043 364,850 
361 < 720 days403,906 1,156 405,062 148,084 6 148,090 
> 720 days102,000 — 102,000 25,237 — 25,237 
2,437,440 273,171 2,710,611 1,062,981 111,607 1,174,588 
Installments overdue by
≤ 15 days13,714 2,297 16,011 2,561 514 3,075 
15 < 30 days10,513 1,705 12,218 4,170 211 4,381 
31 < 60 days14,353 2,357 16,710 4,614 512 5,126 
61 < 90 days13,716 2,180 15,896 3,865 344 4,209 
91 < 180 days30,079 5,831 35,910 9,091 706 9,797 
181 < 360 days20,855 8,063 28,918 6,193 262 6,455 
103,230 22,433 125,663 30,494 2,549 33,043 
 Credit portfolio, gross2,540,670 295,604 2,836,274 1,093,475 114,156 1,207,631 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.6.3. Movement between stages - Gross carrying amount
Reconciliation of gross credit portfolio, segregated by stages:
Stage 1December 31, 2024Acquisition / (Settlement)Transfer to stage 2Transfer to stage 3Cure from stage 2Cure from stage 3Write-offDecember 31, 2025
Merchant portfolio993,719 1,538,069 (388,599)(40,000)140,540 10,241 — 2,253,970 
Credit card103,301 181,263 (42,634)(1,712)22,307 1,085 — 263,610 
1,097,020 1,719,332 (431,233)(41,712)162,847 11,326 — 2,517,580 
Stage 2December 31, 2024Acquisition / (Settlement)Cure to stage 1Transfer to stage 3Transfer from stage 1Cure from stage 3Write-offDecember 31, 2025
Merchant portfolio42,471 (22,265)(140,540)(172,561)388,599 7,184 — 102,888 
Credit card8,709 4,114 (22,307)(22,723)42,634 522 — 10,949 
51,180 (18,151)(162,847)(195,284)431,233 7,706 — 113,837 
Stage 3December 31, 2024Acquisition / (Settlement)Cure to stage 1Cure to stage 2Transfer from stage 1Transfer from stage 2Write-offDecember 31, 2025
Merchant portfolio57,285 (4,749)(10,241)(7,184)40,000 172,561 (63,860)183,812 
Credit card2,146 (643)(1,085)(522)1,712 22,723 (3,286)21,045 
59,431 (5,392)(11,326)(7,706)41,712 195,284 (67,146)204,857 
Consolidated 3 stagesDecember 31, 2024Write-offAcquisition / (Settlement)December 31, 2025
Merchant portfolio1,093,475 (63,860)1,511,055 2,540,670 
Credit card114,156 (3,286)184,734 295,604 
1,207,631 (67,146)1,695,789 2,836,274 
Stage 1December 31, 2023Acquisition / (Settlement)Transfer to stage 2Transfer to stage 3Cure from stage 2Cure from stage 3Write-offDecember 31, 2024
Merchant portfolio296,282 791,295 (125,424)(7,276)37,116 1,726 — 993,719 
Credit card3,131 110,119 (11,679)(472)1,960 242 — 103,301 
299,413 901,414 (137,103)(7,748)39,076 1,968 — 1,097,020 
Stage 2December 31, 2023Acquisition / (Settlement)Cure to stage 1Transfer to stage 3Transfer from stage 1Cure from stage 3Write-offDecember 31, 2024
Merchant portfolio12,195 940 (37,116)(59,832)125,424 860 — 42,471 
Credit card— 703 (1,960)(1,768)11,679 55 — 8,709 
12,195 1,643 (39,076)(61,600)137,103 915 — 51,180 
Stage 3December 31, 2023Acquisition / (Settlement)Cure to stage 1Cure to stage 2Transfer from stage 1Transfer from stage 2Write-offDecember 31, 2024
Merchant portfolio1,200 (1,111)(1,726)(860)7,276 59,832 (7,326)57,285 
Credit card— 203 (242)(55)472 1,768 — 2,146 
1,200 (908)(1,968)(915)7,748 61,600 (7,326)59,431 
Consolidated 3 stagesDecember 31, 2023Write-offAcquisition / (Settlement)December 31, 2024
Merchant portfolio309,677 (7,326)791,124 1,093,475 
Credit card3,131 — 111,025 114,156 
312,808 (7,326)902,149 1,207,631 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.6.4. Movement between stages - Allowance for expected credit losses of credit portfolio
Stage 1December 31, 2024(Acquisition) / SettlementTransfer to stage 2Transfer to stage 3Cure from stage 2Cure from stage 3Write-offDecember 31, 2025
Merchant portfolio(68,949)(251,172)194,834 27,814 (28,605)(1,292)— (127,370)
Credit card(7,805)(34,200)22,094 1,337 (4,707)(296)— (23,577)
(76,754)(285,372)216,928 29,151 (33,312)(1,588)— (150,947)
Stage 2December 31, 2024(Acquisition) / SettlementCure to stage 1Transfer to stage 3Transfer from stage 1Cure from stage 3Write-offDecember 31, 2025
Merchant portfolio(19,587)13,055 28,605 124,000 (194,834)(3,587)— (52,348)
Credit card(3,870)(635)4,707 16,336 (22,094)(272)— (5,828)
(23,457)12,420 33,312 140,336 (216,928)(3,859)— (58,176)
Stage 3December 31, 2024(Acquisition) / SettlementCure to stage 1Cure to stage 2Transfer from stage 1Transfer from stage 2Write-offDecember 31, 2025
Merchant portfolio(42,717)(35,471)1,292 3,587 (27,814)(124,000)63,860 (161,263)
Credit card(1,584)(3,893)296 272 (1,337)(16,336)3,286 (19,296)
(44,301)(39,364)1,588 3,859 (29,151)(140,336)67,146 (180,559)
Consolidated 3 stagesDecember 31, 2024(Acquisition) / SettlementWrite-offDecember 31, 2025
Merchant portfolio(131,253)(273,588)63,860 (340,981)
Credit card(13,259)(38,728)3,286 (48,701)
(144,512)(312,316)67,146 (389,682)
Stage 1December 31, 2023(Acquisition) / SettlementTransfer to stage 2Transfer to stage 3Cure from stage 2Cure from stage 3Write-offDecember 31, 2024
Merchant portfolio(57,576)(55,539)43,623 5,097 (4,389)(165)— (68,949)
Credit card(200)(12,765)5,156 403 (372)(27)— (7,805)
(57,776)(68,304)48,779 5,500 (4,761)(192)— (76,754)
Stage 2December 31, 2023(Acquisition) / SettlementCure to stage 1Transfer to stage 3Transfer from stage 1Cure from stage 3Write-offDecember 31, 2024
Merchant portfolio(3,445)(18,465)4,389 41,884 (43,623)(327)— (19,587)
Credit card— (372)372 1,311 (5,156)(25)— (3,870)
(3,445)(18,837)4,761 43,195 (48,779)(352)— (23,457)
Stage 3December 31, 2023(Acquisition) / SettlementCure to stage 1Cure to stage 2Transfer from stage 1Transfer from stage 2Write-offDecember 31, 2024
Merchant portfolio(840)(2,714)165 327 (5,097)(41,884)7,326 (42,717)
Credit card— 78 27 25 (403)(1,311)— (1,584)
(840)(2,636)192 352 (5,500)(43,195)7,326 (44,301)
Consolidated 3 stagesDecember 31, 2023(Acquisition) / SettlementWrite-offDecember 31, 2024
Merchant portfolio(61,861)(76,718)7,326 (131,253)
Credit card(200)(13,059)— (13,259)
(62,061)(89,777)7,326 (144,512)
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.7. Financial assets from banking solutions
As required by Brazilian Central Bank (“BACEN”) regulation, client’s proceeds deposited in payment accounts (“Deposits from retail clients” - Note 6.8.1) must be fully collateralized by government securities, and/or deposits at BACEN through Electronic Money Correspondent Account (“CCME”).
Time deposits from retail clients (Note 6.8.1) and Time Deposits (Note 6.8.2), are subject to compulsory deposit at BACEN based on the amount of such time deposits.
As of December 31, 2025, the amount of financial assets from banking solutions was R$ 1,855,796 (December 31, 2024 - R$ 8,805,882), which of those R$ 1,110,809 (December 31, 2024 - R$ 8,805,882) are fully collateralized by CCME and R$ 744,987 (December 31, 2024 - R$ nil) by compulsory deposits.
6.8. Financial liabilities
6.8.1. Retail deposits
December 31, 2025December 31, 2024
Deposits from retail clients1,543,359 8,274,868 
Deposits in payment accounts994,878 7,633,683 
Deposits in accounts of record (a)
548,481 641,185 
Time deposits from retail clients (b) (c)
9,547,626 429,941 
11,090,985 8,704,809 
(a)This includes balances and transaction values in transit (register accounts) relating to sub-acquirer operations.
(b)Since the first quarter of 2025, balances held in payment accounts are eligible to be automatically invested daily in Time Deposits issued by Stone SCFI. In addition, Stone SCFI also started to issue time deposits held by multiple counterparties, further detailed in Note 6.8.3.
(c)Deposit interest rates are set as % of the CDI and are applied daily or monthly from the deposit date, following a FIFO (First In, First Out) method.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.8.2. Composition of financial liabilities
The table below presents the composition of financial liabilities other than Retail deposits:
Average annual interest rate %Earliest original date of issuanceOriginal maturityCurrent portionNon-current portionDecember 31, 2025
Bonds (6.8.4.1)
3.95% USD
Jun/21Jun/282,043 1,118,724 1,120,767 
Debentures (6.8.4.2)
CDI (a) + 1.75%
Nov/23Oct/26393,779 — 393,779 
Financial bills (6.8.4.3)
CDI + 0.59% to CDI + 0.90%
Jun/24Jun/26 up to Sep/292,249,562 3,171,183 5,420,745 
Total debentures, financial bills and commercial papers2,643,341 3,171,183 5,814,524 
Obligations to open-end FIDC quota holders (6.8.4.5)
CDI + 0.15%
Jul/23Not applicable434,950 — 434,950 
Time deposits (6.8.4.6)
100% of CDI to 110% of CDI
Jul/24Jan/26 up to Sep/272,696,980 288,255 2,985,235 
Total institutional deposits and marketable debt securities5,777,314 4,578,162 10,355,476 
Obligations to closed-end FIDC quota holders (6.8.4.7)12.75%Jan/24Jan/31— 2,196,269 2,196,269 
Bank borrowings and working capital facilities (6.8.4.8)
CDI + 0.75% to CDI + 1.68%
Dec/24Feb/26 up to Aug/282,839,354 2,021,586 4,860,940 
Leases (6.8.4.9)
105.1% to 151.8% of CDI
Not applicableJan/26 up to Jun/3327,091 142,289 169,380 
Total other debt instruments2,866,445 4,360,144 7,226,589 
Average annual interest rate %Earliest original date of issuanceOriginal maturityCurrent portionNon-current portionDecember 31, 2024
Bonds (6.8.4.1)
3.95% USD
Jun/21Jun/282,299 1,255,963 1,258,262 
Debentures (6.8.4.2)
CDI (a) + 1.75%
Nov/23Oct/2623,657 999,538 1,023,195 
Financial bills (6.8.4.3)
CDI + 0.68% to CDI + 0.90%
Jun/24Jun/26 up to Nov/28— 2,954,374 2,954,374 
Receivables backed securities (6.8.4.4)
CDI + 1.30%
Sep/23Sep/262,250 99,447 101,697 
Total debentures, financial bills and commercial papers25,907 4,053,359 4,079,266 
Obligations to open-end FIDC quota holders (6.8.4.5)
CDI + 0.40%
Jul/23Not applicable418,324 — 418,324 
Time deposits (6.8.4.6)
CDI + 0.25% to 110% of CDI
May/24Jan/25 up to Jun/262,619,469 120,641 2,740,110 
Total institutional deposits and marketable debt securities3,065,999 5,429,963 8,495,962 
Obligations to closed-end FIDC quota holders (6.8.4.7)
12.75%
Jan/24Jan/31— 1,988,645 1,988,645 
Bank borrowings and working capital facilities (6.8.4.8)
CDI + 0.75% to CDI + 1.74%
Jan/24Jan/25 up to Dec/271,853,944 310,386 2,164,330 
Leases (6.8.4.9)
105.1% to 151.8% of CDI
Not applicableJan/25 up to Jun/2949,896 197,108 247,004 
Total other debt instruments1,903,840 2,496,139 4,399,979 
(a)     “CDI” Rate (Brazilian Certificado de Depósito Interbancário), which is an average of interbank overnight rates in Brazil. The average rate of December 31, 2025 was 14.26% (2024 – 10.83%).
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.8.3. Changes in financial liabilities
The table below presents the movement of financial liabilities other than Retail deposits:
December 31, 2024AdditionsDisposalsPayment of principalPayment of interestChanges in exchange ratesFair value adjustmentInterestTransfer to liabilities associated with assets held for sale (Note 1.1.2)December 31, 2025
Bonds1,258,262 — — — (52,222)(143,124)— 57,851 — 1,120,767 
Debentures, financial bills and commercial papers (a) (d)
4,079,266 1,979,045 — (718,472)(263,520)— — 738,205 — 5,814,524 
Time deposits (b)
2,740,110 4,156,427 — (4,006,007)(313,585)— — 408,290 — 2,985,235 
Obligations to open-end FIDC quota holders418,324 61,309 — (97,829)(3,451)— — 56,597 — 434,950 
Institutional deposits and marketable debt securities8,495,962 6,196,781 — (4,822,308)(632,778)(143,124)— 1,260,943 — 10,355,476 
Current3,065,999 5,777,314 
Non-current5,429,963 4,578,162 
Obligations to closed-end FIDC quota holders (c)
1,988,645 18,312 — — (285,352)— 187,209 287,455 — 2,196,269 
Bank borrowings and working capital facilities2,164,330 6,097,214 — (3,247,016)(168,084)(192,207)— 206,703 — 4,860,940 
Leases247,004 61,455 (34,473)(79,689)(19,283)(3,548)— 19,283 (21,369)169,380 
Other debt instruments4,399,979 6,176,981 (34,473)(3,326,705)(472,719)(195,755)187,209 513,441 (21,369)7,226,589 
Current1,903,840 2,866,445 
Non-current2,496,139 4,360,144 
(a)On June 19, 2024 the subsidiary Stone SCFI concluded its first issuance of financial bills. After this, Stone SCFI has started the issuance of private financial bills. The principal and interest of all issuances are mainly paid at the maturity indexed to CDI rate.
(b)In the second quarter of 2024, Stone SCFI started the issuance of Time deposits, representing the first issuance of interest bearing deposits following the authorization granted by BACEN to start operations earlier in 2024. The certificates are held by multiple counterparties and maturities up to September 2027. The principal and interest of this type of issuance are mainly paid at the maturity indexed to CDI rate.
(c)This note covers the closed-end FIDC ACR I.
(d)During the third quarter of 2025, the Company continued to execute its liability management strategy aimed at optimizing its capital structure and reducing funding costs. As part of these initiatives, the Company fully prepaid its outstanding Receivables backed securities (“CRI”) and completed a tender offer in which approximately 62% of the outstanding debentures issued by MNLT were repurchased.
December 31, 2023AdditionsDisposalsPayment of principalPayment of interestChanges in exchange ratesFair value adjustmentInterestDecember 31, 2024
Bonds2,402,698 — — (1,610,349)(141,298)520,419 — 86,792 1,258,262 
Debentures, financial bills and commercial papers 1,116,252 2,884,768 — — (172,598)— — 250,844 4,079,266 
Time deposits — 3,564,387 — (889,077)(22,876)— — 87,676 2,740,110 
Obligations to open-end FIDC quota holders452,128 136,782 — (214,148)(12,229)— — 55,791 418,324 
Institutional deposits and marketable debt securities3,971,078 6,585,937 — (2,713,574)(349,001)520,419 — 481,103 8,495,962 
Current475,319 3,065,999 
Non-current3,495,759 5,429,963 
Obligations to closed-end FIDC quota holders53,103 2,325,984 — (50,000)(149,468)— (437,347)246,373 1,988,645 
Bank borrowings and working capital facilities1,321,348 3,671,737 — (2,999,824)(124,490)157,832 — 137,727 2,164,330 
Leases173,683 140,784 (4,623)(68,971)(14,292)6,132 — 14,291 247,004 
Other debt instruments1,548,134 6,138,505 (4,623)(3,118,795)(288,250)163,964 (437,347)398,391 4,399,979 
Current1,404,678 1,903,840 
Non-current143,456 2,496,139 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.8.4. Description of financial liabilities
In the ordinary course of the business, the Group funds its operations through a mix of own cash, debt, institutional and client deposits, and sale of receivables to third parties.
6.8.4.1.    Bonds
The Company issued bonds in 2021, raising USD 500 million in seven-year notes with a final yield of 3.95%. The total issuance was R$ 2,510,350 (R$ 2,477,408 net of the offering transaction costs, which will be amortized over the tenure of the debt). The Group has entered into a hedge to protect its currency risk (Note 6.9.1).
During 2024, a tender offer was executed, repurchasing approximately 60% of the outstanding bonds.
6.8.4.2. Debentures
On November 8, 2023 the subsidiary MNLT concluded its first issuance of debentures placing R$ 1,000,000 with a three- year maturity at CDI + 1.75% p.a. The debentures are guaranteed by both Stone IP and by the Company being the first corporate issuance by the Group in the Brazilian capital markets. During the third quarter of 2025 the Company completed a tender offer through which approximately 60% of the outstanding debentures were repurchased.
6.8.4.3.    Financial bills
The Group issued financial bills through public offerings and private placements, with multiple counterparties and maturities. The principal and the interest are mainly paid at the date of maturity.
6.8.4.4. Receivables backed securities
On September 6, 2023, a Certificate of Real Estate Receivables ("CRI") was issued by Opea Securitizadora S.A., raising R$ 100,000 in a three-year note bearing interest at CDI + 1.30% p.a. The CRI security was backed by commercial notes issued by Stone IP as well as STNE Par. This was the first funding structure of the Group to access retail and with institutional investors. During the third quarter of 2025 the Company fully prepaid its outstanding CRI.
6.8.4.5. Obligations to open-end FIDC quota holders
The FIDC ACR FAST was issued with the Group as a sponsor as well as a quota holder. This was the first open-end fund with third parties, in which the Group holds subordinated quotas, resulting in the consolidation of the whole structure. The main goal of this structure is to access the money market funds sector. Being an open-end fund, redemptions are settled 30 days after requested by quota holders.
6.8.4.6. Time deposits
The Group issues time deposits to fund its operations. The issuances have occurred with multiple counterparties and also through third-party brokers and/or platforms. The principal and the interest are mainly paid at the date of maturity.
Time deposits distributed directly through own platform can have automatic redemption at any time for the Group’s clients and are recognized under Retail deposits.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.8.4.7. Obligations to closed-end FIDC quota holders
FIDC ACR I issued quotas in exchange for a contribution of R$ 2,325,984. The contribution was made by a special purpose vehicle (“SPV”) funded by a revolving facility in which United States International Development Finance Corporation (“DFC”) has invested US$ 467.5 million, funding the Group’s prepayment business through this FIDC. The SPV entered into foreign currency derivatives with financial institutions to convert the receivable denominated in R$ it holds from FIDC ACR I into US$. StoneCo acts as a guarantor for derivative instruments (hedges) entered into by the SPV. Under the terms of the ISDA Master Agreements, StoneCo guarantees SPV’s obligations to financial institutions in the event of certain defined default events of the SPV.
FIDC ACR I has a final maturity of seven years and pays a semi-annual coupon at a fixed rate of 12.75% in R$.
6.8.4.8. Bank borrowings
The Group issues bilateral unsecured term loans, with multiple counterparties and maturities. The principal and the interest of this type of loan are mainly paid at the date of maturity. The proceeds of these loans were used mainly for prepayments to acquiring customers.
6.8.4.9. Leases
The Group has lease contracts for various items of offices, vehicles and software in its operations. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets.
6.8.4.10. Obligations to FIDC TAPSO quota holders
In February 2022, the Group negotiated an amendment of the contract to postpone the payment date of the principal to March 2023. The mezzanine quotas were settled on March 2, 2023. Upon maturity of the mezzanine quotas, in July 2023 the Group negotiated new issuance of FIDC TAPSO senior shares.
In July 2024, there was a full redemption of FIDC TAPSO senior quotas.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.9. Derivative financial instruments
The Group executes exchange-traded and Over-the-counter (“OTC”) instruments to hedge its foreign currency and interest rate exposure. All counterparties are previously approved for OTC transactions following a counterparty policy, and internal committees monitor and control the counterparty risk associated with those transactions.
December 31, 2025
Notional amountAsset
(fair value)		Liabilities
(fair value)		Net
Cash flow hedge
Cross-currency interest rate swap2,772,711 10,524 (73,953)(63,429)
Fair value hedge
Interest rate swap4,539,558 2,083 (139,577)(137,494)
Cross-currency interest rate swap3,868,296 — (6,622)(6,622)
Economic hedge
Non-Deliverable Forward ("NDF")422,085 50,717 (49,954)763 
Interest rate swap14,912,100 4,574 (931)3,643 
M&A derivatives
Call options—2,120 — 2,120 
Total26,514,750 70,018 (271,037)(201,019)
Current(36,317)
Non-current(164,702)
December 31, 2024
Notional amountAsset
(fair value)		Liabilities
(fair value)		Net
Cash flow hedge
Cross-currency interest rate swap3,994,559 214,169 — 214,169 
Fair value hedge
Interest rate swap2,837,758 5,373 (281,177)(275,804)
Economic hedge
NDF15,359 1,784 (9,578)(7,794)
Interest rate swap8,008,992 36,249 (1,015)35,234 
M&A derivatives
Call options—2,613 — 2,613 
Total14,856,668 260,188 (291,770)(31,582)
Current146,221 
Non-current(177,803)
6.9.1. Hedge accounting
6.9.1.1. Cash flow hedge
The Group uses cash flow hedge strategies to mitigate exposure to variability in cash flows arising from interest rates and foreign currency risk. These hedges are applied to foreign exchange risk on recognized assets and liabilities and highly probable forecast transactions.
Further disclosures on the accounting treatment for cash flow hedges are provided in Note 6.1.5.1.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.9.1.2. Fair value hedge
The Group uses fair value hedge strategies to mitigate exposure to changes in the fair value of recognized loans and credit operation arising from interest rate risk. These strategies are implemented using Interest Rate Swaps (IRS) and Cross-Currency Interest Rate Swaps (CCIRS) to modify the interest rate profile of the portfolios, effectively converting fixed-rate instruments to floating-rates, or vice-versa, to align with the Group’s risk management strategy obligations.
Further disclosures on the accounting treatment for fair value hedges are provided in Note 6.1.5.2.
6.9.2. Economic hedge
Included in this classification are any derivatives entered into by the Group in order to economically hedge its exposures for risk management purposes that are not formally designated for hedge accounting.
6.9.3 Breakdown by maturity
The table below shows the breakdown by maturity of the notional amounts and fair values of derivative financial instruments used for hedging purposes:
December 31, 2025
Less than 3 months3 to 12 monthsMore than 12 monthsTotal
Notional
Cross-currency interest rate swap288,940 2,496,356 3,855,711 6,641,007 
Interest rate swap9,438,800 6,472,000 3,540,858 19,451,658 
NDF422,085 — — 422,085 
Total10,149,825 8,968,356 7,396,569 26,514,750 
Asset (fair value)
Cross-currency interest rate swap— — 10,524 10,524 
Interest rate swap1,529 4,188 940 6,657 
NDF50,717 — — 50,717 
Liability (fair value)
Cross-currency interest rate swap(38,102)(5,039)(37,434)(80,575)
Interest rate swap(1,186)(590)(138,732)(140,508)
NDF(49,954)— — (49,954)
Net(36,996)(1,441)(164,702)(203,139)
December 31, 2024
Less than 3 months3 to 12 monthsMore than 12 monthsTotal
Notional
Cross-currency interest rate swap— 1,510,788 2,483,771 3,994,559 
Interest rate swap2,129,636 6,127,456 2,589,658 10,846,750 
NDF15,359 — — 15,359 
Total2,144,995 7,638,244 5,073,429 14,856,668 
Asset (fair value)
Cross-currency interest rate swap— 115,368 98,801 214,169 
Interest rate swap8,037 29,012 4,573 41,622 
NDF1,784 — — 1,784 
Liability (fair value)
Interest rate swap— (1,015)(281,177)(282,192)
NDF(9,578)— — (9,578)
Net243 143,365 (177,803)(34,195)
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.10. Financial risk management
The Group’s activities expose it to market, liquidity and credit risks.
The Risk Management Area carries the Group’s financial risk management.
The Board of Directors has approved policies, and limits for its financial risk management. The Group uses financial derivatives only to mitigate market risk exposures. The Group’s policy is not to engage in derivatives for speculative purposes. Different levels of managerial approval are required for entering into financial instruments depending on their nature and the type of risk associated.
6.10.1. Credit risk
Credit risk is defined as the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group’s counterparties include those in financial contracts (cash and cash equivalents, derivative financial instruments, credit portfolio, and deposits with banks and other financial institutions) and in operating activities (accounts receivable from card issuers, including outstanding receivables and commitments, advances to suppliers, and financial guarantees granted to third parties).
The Group is also exposed to merchant credit risk, which is the possibility of financial loss if the merchant lacks sufficient funds to cover chargebacks, ultimately shifting the liability for the loss to the acquirer.
6.10.1.1. Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed in accordance with the Group’s internal policies. Investments of surplus funds and the use of derivative instruments are only conducted with carefully selected financial institutions.
6.10.1.2. Accounts receivable from card issuers
Card issuers, once accepted by the networks, issue cards that when transacted are processed by acquirers. Card issuers have different risk profiles.
The Group, with frequency associated with the availability of new information or new financial indicators of card issuers, carries out assessments of these companies, aiming to identify potential risks. Payment scheme networks have credit risk mitigation mechanisms that vary by network that are available to acquirers like the Group. To date, the Group has not incurred any significant loss from card issuer receivables.
6.10.1.3 Credit portfolio
Merchant portfolio and credit cards are available solely to individuals and businesses that are existing customers of the Group through acquiring or banking.
Merchant portfolio credit rely on the main repayment source and collateral future receivables of customers while credit card line limits may be unsecured; the line is generally a portion of the total credit line available to a particular customer based on credit appetite and risk rating.
6.10.2. Market risk
Market risk is the risk of financial loss resulting from changes in the fair value or future cash flows of financial instruments due to changes in market conditions.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
In the ordinary course of business, the Group executes financial transactions that are subject to market variables and, therefore, exposed to market risk.
Market risk comprises mainly: foreign exchange, interest rate risk and equity price risk.
6.10.2.1. Interest rate risk
The Group’s interest rate risk arises from mismatches among certain assets (mainly cash and equivalents, short-term investments, accounts receivables, credit portfolio) and liabilities (institutional deposits and marketable debt securities, and other debt instruments) with different benchmarks (fixed or linked to CDI) and maturity dates. The Group may mitigate its exposure by executing derivative transactions to match those benchmarks and duration gaps.
6.10.2.2. Foreign currency risk
The Group has assets and liabilities in foreign currencies. The foreign currency risk is generated by fluctuations in exchange rates among Brazilian reais and other currencies. Operations include cash and short-term investments in multiple countries and total payment volume (“TPV”) processed in foreign exchange. Significant capital expenditures (Pin Pads & POS, and data center equipment) and regular expenses (cloud and software fees) are incurred in US Dollars and Euros. The total foreign currency results on the year ended December 31, 2025 was loss of R$ 13,138 (2024 - gain of R$ 19,381).
The Group uses derivatives elected for cash flow or fair value hedge accounting, to hedge the risk of foreign exchange fluctuation of debt in foreign currencies. All critical terms of the hedged item are matched with the hedging instrument.
The Group’s residual exposure to foreign currency changes for all other currencies considering the hedge instruments entered into is not material.
6.10.2.3. Risk Assessment: Value-at-Risk and Scenario Analysis
The Group manages and monitors its primary market risk factors - Interest Rate Risk and Exchange Rate Risk - using Value-at-Risk ("VaR”) and/or Stress Testing methodologies.
The Group employs these methodologies to quantify how market variables would potentially impact the Group’s financial statements.
Risk FactorAsset/ LiabilityRisk MeasureHorizonValue
Interest rates
Accounts receivables from card issuers, Credit portfolio, Accounts payables to clients and interest rate swaps
VaR1 dayR$509
Historical Stress Test(a)
1 dayR$ 5,576
Foreign currency exchangeUSD denominated asset/liabilities/derivatives
Historical Stress Test(b)
2 daysR$60
For comparison purposes:
(a) The interest rate risk stress test on December 31, 2024 was R$2,906
(b) The foreign currency exchange risk stress test amounted to R$288 as of December 31, 2024. Although VaR is no longer utilized for foreign currency risk management as of December 31, 2025, the figure for comparison purposes would be R$34.    .
6.10.2.4 Equity price risk
Equity price risk is the risk that the fair values of equities decrease as the result of changes in the level of equity and individual stocks. The Group is exposed to equity price risk as it holds, as of December 31, 2025, R$ 24,586 (2024 R$ 32,629) in equity securities (Note 6.3).
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.10.3. Liquidity risk
Cash flow forecasting is performed for the operating entities of the Group and then aggregated. Rolling forecasts of liquidity requirements are monitored to ensure the Group has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities so that the Group does not breach borrowing limits on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, compliance with internal target liquidity and leverage ratios targets and, if applicable, external regulatory or legal requirements. The Group’s main liquidity risk is its potential inability to raise financing to continue its prepayment and credit businesses. Although the prepayment and credit activities are not an obligation for the Group they constitute a significant component of its revenues.
Surplus cash held by the operating entities is invested in interest-earning bank accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide adequate margin as determined by the above-mentioned forecasts. As of December 31, 2025, the Group held short-term investments of R$ 1,119,136 (2024 - R$ 517,874) that are expected to be readily convertible into cash for managing liquidity.
The table below analyzes the Group’s non-derivative financial liabilities to maturity. Derivative financial liabilities are not included in the analysis as their contractual maturities are not essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows.
Less than one yearBetween 1 and 2 yearsBetween 2 and 5 yearsOver 5 years
December 31, 2025
Retail deposits11,090,985 — — — 
Accounts payable to clients18,081,964 72,383 — — 
Trade accounts payable848,341 — — — 
Institutional deposits and marketable debt securities5,777,808 3,793,314 1,151,674 — 
Other debt instruments3,022,579 3,460,090 1,231,999 2,558,497 
Other liabilities215,497 264,293 — — 
39,037,174 7,590,080 2,383,673 2,558,497 
December 31, 2024
Retail deposits8,704,809 — — — 
Accounts payable to clients17,756,720 50,674 — — 
Trade accounts payable672,184 — — — 
Institutional deposits and marketable debt securities3,068,186 4,680,530 1,366,089 — 
Other debt instruments1,939,982 626,789 954,211 2,774,095 
Other liabilities281,073 236,822 — — 
32,422,954 5,594,815 2,320,300 2,774,095 
6.11. Fraud risk
The Group's exposure to fraud risk is the risk that misuse, or wrongful or criminal deception will lead to financial loss for one of the parties involved on acquiring, banking and credit transactions that the Group is required to cover. These fraud transactions include unauthorized use of lost or stolen cards, fraudulent applications, fraudulent cash-outs, counterfeit or altered cards, and the fraudulent use of a cardholder's card number for card-not-present transactions.
The Acquirer (the Group) has significant exposure due to scheme rules. The Group, as the Acquirer, is primarily and often jointly liable to the card schemes for financial losses resulting from disputes (Chargebacks), regardless of the merchant's fault or final liability.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Consequently, the Group is frequently required to cover fraudulent transactions and commercial disputes (Chargebacks) due to:
•Acquirer liability to card schemes: The Acquirer is the initial guarantor for all Chargebacks, particularly for card-not-present (CNP) fraud and commercial disputes in card-present and not-present. The Group bears the responsibility to recover these funds from the merchant.
•Scheme penalties: The Group is also exposed to card scheme fines and penalties for elevated fraud rates in its merchant portfolio, including presentment fraud.
The Group is also exposed to potential liability if fraudulent agents use false identities to access credit and banking products, which could increase credit risk exposure as well as the liability towards clients and third parties in case of any damages. Criminals are using increasingly sophisticated methods to engage in illegal activities. Failure to effectively manage risk and prevent fraud would increase credit liabilities and default rates of credit solutions, and subject the Group to potential fines by regulators.
6.12. Financial instruments by category
6.12.1. Financial assets by category
Amortized costFVPLFVOCITotal
December 31, 2025
Short and Long-term investments— 1,143,722 1,143,722 
Financial assets from banking solutions1,855,796 — — 1,855,796 
Accounts receivable from card issuers— — 41,421,964 41,421,964 
Trade accounts receivable244,375 — — 244,375 
Credit portfolio(a)
2,446,816 — — 2,446,816 
Derivative financial instruments(b)
— 70,018 — 70,018 
Other assets139,128 — — 139,128 
4,686,115 1,213,740 41,421,964 47,321,819 
December 31, 2024
Short and Long-term investments — 550,503 — 550,503 
Financial assets from banking solutions 8,805,882 — — 8,805,882 
Accounts receivable from card issuers 9,492 — 29,338,573 29,348,065 
Trade accounts receivable416,103 — — 416,103 
Credit portfolio(a)
1,063,119 — — 1,063,119 
Derivative financial instruments(b)
— 260,188 — 260,188 
Receivables from related parties 613 — — 613 
Other assets109,881 — — 109,881 
10,405,090 810,691 29,338,573 40,554,354 
(a)As of December 31,2025, a portion of the credit portfolio totaling R$ 1,413,600 (December 31, 2024 R$ 511,800) was designated as the hedged item in a fair value hedge. Therefore, the carrying amount includes the change in fair value of the hedged portfolio attributed to changes in the designated hedged risk
(b)Derivative financial instruments as of December 31, 2025 of R$ 63,429 (2024 – R$ R$ 214,169) were designated as cash flow hedge accounting. Therefore, the effective portion of the hedge is accounted in OCI.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
6.12.2. Financial liabilities by category
Amortized costFVPLTotal
December 31, 2025
Retail deposits11,090,985 — 11,090,985 
Accounts payable to clients18,154,347 — 18,154,347 
Trade accounts payable848,341 — 848,341 
Institutional deposits and marketable debt securities10,355,476 — 10,355,476 
Other debt instruments479,898 6,746,691 7,226,589 
Derivative financial instruments (a)
— 271,037 271,037 
Other liabilities249,052 230,738 479,790 
41,178,099 7,248,466 48,426,565 
December 31, 2024
Retail deposits8,704,809 — 8,704,809 
Accounts payable to clients 17,807,394 — 17,807,394 
Trade accounts payable 672,184 — 672,184 
Institutional deposits and marketable debt securities8,495,962 8,495,962 
Other debt instruments2,411,334 1,988,645 4,399,979 
Derivative financial instruments(a)
— 291,770 291,770 
Other liabilities 316,700 201,195 517,895 
38,408,383 2,481,610 40,889,993 
(a) Derivative financial instruments as of December 31, 2025 of R$ 73,953 (December 31, 2024 – R$ nil) were designated as cash flow hedging instruments, and therefore the effective portion of the hedge is accounted for in OCI.
6.13. Fair value measurement
6.13.1. Assets and liabilities by fair value hierarchy
The following table presents an analysis of financial instruments measured at fair value by fair value hierarchy level:
December 31, 2025December 31, 2024
Fair value Hierarchy level Fair value Hierarchy level
Assets measured at fair value
Short and Long-term investments (a) (b)
1,143,722 I /II550,503 I /II
Accounts receivable from card issuers (c)
41,421,964 II29,338,573 II
Derivative financial instruments (d)
70,018 II260,188 II
42,635,704 30,149,264 
Liabilities measured at fair value
Other debt instruments (e)
6,746,691 II1,988,645 II
Derivative financial instruments (d)
271,037 II291,770 II
Other liabilities (f) (g)
230,738 III201,195 III
7,248,466 2,481,610 
(a)Listed securities are classified as Level I and unlisted securities classified as Level II, determining fair value using valuation techniques, which employ the use of market observable inputs.
(b)Sovereign bonds are priced using quotations from Anbima public pricing method.
(c)For Accounts receivable from card issuers measured at FVOCI, fair value is estimated by discounting future cash flows using market rates for similar items.
(d)The Group enters into derivative financial instruments with financial institutions with investment grade credit ratings. Derivative financial instruments are valued using valuation techniques, which employ the use of observable market inputs.
(e)For Other debt instruments, fair value is estimated by discounting future cash flows using contract rates for funding items, and the market value of senior quota liabilities.
(f)These are contingent considerations included in Other liabilities arising on business combinations that are measured at FVPL. Fair values are estimated in accordance with pre-determined formula explicit in the contracts with selling shareholders. The significant unobservable inputs used in the fair value measurement of contingent consideration categorized as Level III of the fair value hierarchy are based on projections of revenue, net debt, number of clients, net margin and the discount rates used to evaluate the liability.
(g)The Group issued put options for Reclame Aqui’s non-controlling interests, in the 2022 business combination. For the non-controlling shareholder amounts the Group has elected as an accounting policy that the put options derecognize the non-controlling interests at each reporting date as if it was acquired at that date and recognize a financial liability at the present value of the amount payable on exercise of the non-controlling interests put option. The difference between the financial liability and the non-controlling interests derecognized at each period is recognized as an equity transaction. The amount of R$ 170,299 was recorded in the consolidated statement of financial position as of December 31, 2025 (2024 - R$ 151,606).
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
As of December 31, 2025 and 2024, there were no transfers between the fair value measurements of Level I and Level II and between the fair value measurements of Level II and Level III.
6.13.2. Fair value of financial instruments not measured at fair value
The table below presents a comparison of the book value and fair value of the financial instruments of the Group, other than those with carrying amounts that reasonably approximate fair values:
December 31, 2025December 31, 2024
Book valueFair valueBook valueFair value
Financial assets
Credit portfolio2,446,816 2,439,204 1,063,119 1,063,362 
2,446,816 2,439,204 1,063,119 1,063,362 
Financial liabilities
Accounts payable to clients18,154,348 16,774,075 17,807,394 16,857,591 
Institutional deposits and marketable debt securities10,355,476 10,098,587 8,495,963 8,380,224 
Other debt instruments311,916 306,875 168,118 167,778 
28,821,740 27,179,537 26,471,475 25,405,593 
6.14. Capital management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern to provide returns for shareholders and benefits for other stakeholders, to maintain an optimal capital structure to reduce the cost of capital, and to have resources available for new opportunities.
In order to manage the capital structure of the Group, a framework is used to compare the Group’s existing capital with quantitative and qualitative indicators, including liquidity, credit ratings, regulatory requirements, and business cash and capital projections. Considering such framework, management can make, or may propose to the Board or shareholders when their approval is required, adjustments to the capital structure through several mechanisms such as repurchase of shares, returning capital to shareholders, distributing dividends, issuing new shares or selling assets to reduce leverage, among others.
The adjusted net cash as of December 31, 2025 and 2024 was as follows:
December 31, 2025 Continuing Operations
December 31, 2024 Consolidated Operations
Cash and cash equivalents4,821,703 5,227,654 
Short-term investments1,119,136 517,874 
Financial assets from banking solutions1,855,796 8,805,882 
Accounts receivable from card issuers41,421,964 29,348,065 
Derivative financial instruments (a)
67,898 257,575 
Adjusted cash49,286,497 44,157,050 
Retail deposits(11,090,985)(8,704,809)
Accounts payable to clients(18,154,348)(17,807,394)
Institutional deposits and marketable debt securities(10,355,476)(8,495,962)
Other debt instruments (b)
(7,057,208)(4,152,975)
Derivative financial instruments(271,037)(291,770)
Adjusted debt(46,929,054)(39,452,910)
Adjusted net cash2,357,443 4,704,140 
(a)Refers to economic hedge of cash and cash equivalents and short-term investments denominated in U.S. dollars, and excludes the effects of call options.
(b)Other debt instruments exclude the effects of leases liabilities recognized under IFRS 16.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Although capital is managed considering the consolidated position, some subsidiaries in Brazil are subject to minimum regulatory capital requirements established by BACEN.
The Group has a dedicated, centralized regulatory capital management team, which reports directly to the Chief Risk Officer who is ultimate responsible for capital adequacy. The structure has the objective of ensuring compliance with the current regulation and capital management processes regulatorily required. Additionally, the area has procedures and routines to plan capital adequacy requirement considering current and potential risks.
7.    OTHER ASSETS
December 31, 2025December 31, 2024
Financial assets
Security deposits
3,350 14,032 
Receivables from the sale of associates and subsidiaries (a)
76,398 55,469 
Suppliers advances
49,394 27,167 
Other financial assets
9,986 13,213 
139,128 109,881 
Non-financial assets
Prepaid expenses (b)
132,039 134,210 
Customer deferred acquisition costs
200,179 227,799 
Salary advances
11,969 12,073 
Judicial deposits
16,652 13,317 
Convertible loans
28,636 12,048 
Other non-financial assets
10,586 20,086 
400,061 419,533 
539,189 529,414 
Current
372,634 370,255 
Non-current
166,555 159,159 
(a)Refers to receivables from the sale of the equity interest in Simplesvet and Pinpag.
(b)Prepaid expenses include, among others, software licenses, marketing expenses, and other services and taxes such as property taxes, insurance, and consulting fees. The amount recognized as an asset on the balance sheet is expensed for the statement of profit or loss are consumed by the Group. As of December 31, 2025, the balance was mainly composed of: Software licenses: R$ 113,167 (December 31, 2024 - R$ 110,116), Media expenses: R$ 7,490 (December 31, 2024 - R$ 1,524) and other prepaid expenses: R$ 11,382 (December 31, 2024 – R$ 22,569.)
8.    RECOVERABLE TAXES
December 31, 2025December 31, 2024
Withholding income tax on finance income 544,298 335,762 
Income tax and social contribution 143,472 19,430 
Others withholding income tax1,658 4,138 
Contributions over revenue— 2,936 
Other taxes 857 10,166 
690,285 372,432 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
9.    INCOME TAXES
9.1. Accounting policy
9.1.1. Current income and social contribution taxes
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the tax authorities. The tax regulations applied are those in force on the statement of financial position date in the countries where the Group operates and generates taxable income.
The Company is domiciled in the Cayman Islands which is an income tax free jurisdiction. Income of StoneCo from some investments outside the Cayman Islands is subject to withholding taxes in the countries where the investments are based. The withholding tax rate is generally 15%, which is treated as an income tax expense when no recovery of the tax withheld is expected.
The combined statutory rate applied to most entities in Brazil is 34%, comprising the Corporate Income Tax (“IRPJ”) and the Social Contribution on Net Income (“CSLL”) on the taxable income of each Brazilian legal entity individually (no consolidated tax returns).
The Group's Brazilian entities recognize IRPJ and CSLL on an accrual basis. According to Brazilian tax regulations, the historical nominal amount of tax losses determined in prior years can be offset against results of subsequent years at any time (i.e., do not prescribe), provided that such offsetting does not exceed 30% of the annual taxable income of the fiscal period in which tax losses are utilized.
Payments are made monthly, in anticipation of the amount which will be due by the year-end.
Complementary Law No. 224/2025, enacted on December 26, 2025, provides for an increase in the Social Contribution on Net Income (CSLL) rates applicable to certain financial institutions. Under this law, the CSLL rate applicable to payment institutions (IP) and direct credit companies (SCD) will increase from 9% to 12% for the period from April 1, 2026 to December 31, 2027, and to 15% effective January 1, 2028. For credit, finance, and investment companies (SCFI), the CSLL rate will increase from 15% to 17.5% for the period from April 1, 2026 to December 31, 2027, and to 20% effective January 1, 2028.
9.1.2. Deferred income and social contribution taxes
Deferred tax assets or liabilities are measured based on the differences between the tax bases of assets and liabilities and the amounts reported in the statement of financial position. Deferred tax assets may be recognized for unused tax loss carryforwards.
Deferred tax assets are recognized only to the extent that it is probable that the Group's Brazilian entities will generate sufficient future taxable profits that will allow for their recovery. The expected realization of deferred tax assets is based on technical studies prepared by the Group that demonstrate expectation of future taxable profits according to management projections.
The income tax and social contribution expense is recognized in the consolidated statement of profit or loss under Income tax and social contribution, except when it refers to items recognized in OCI, in which case the related deferred tax assets or liabilities are also recognized against OCI. In this case, the Group presents these items in the consolidated statement of other comprehensive income net of related tax effect.
Management periodically evaluates positions taken in tax returns with respect to situations where applicable tax regulations are subject to interpretation and recognizes provisions, if appropriate.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Deferred tax assets and liabilities are presented net in the consolidated statement of financial position when there is a legally enforceable right and the intention to offset them upon the calculation of current taxes, generally when related to the same legal entity and the same jurisdiction. Accordingly, deferred tax assets and liabilities in different entities or in different tax jurisdictions are generally presented separately, and not on a net basis.
As a result of the enactment of Complementary Law No. 224/2025, the balances of deferred tax assets and deferred tax liabilities include the effects of the increase in CSLL rates on temporary differences expected to be realized or settled after the effective dates of the new rates. As of December 31, 2025, such effects amounted to R$76,867, of which R$50,897 was recognized in profit or loss for the period and R$25,971 in other comprehensive income.
9.2. Significant judgments, estimates and assumptions
Deferred tax assets are recognized for all unused tax losses to the extent that sufficient taxable profit will likely be available to allow the use of such losses. Significant judgment is required of management to determine the amount of deferred tax assets that can be recognized, based on the likely timing and level of future taxable profits, together with future tax planning strategies.
9.3. Reconciliation of income tax expense
20252024 (Recasted)2023 (Recasted)
Profit before income taxes from continuing operations2,789,818 2,485,560 1,909,613 
Brazilian statutory rate34%34%34%
Tax expense at the statutory rate(948,538)(845,090)(649,268)
Tax effect of income (expense) that are not taxable (deductible) for tax purposes:
Profit from entities subject to different tax rates322,802 313,343 227,842 
Research and development tax benefits ("Lei do Bem") (a)
132,478 44,815 54,195 
Change in deferred taxes as result of increase in CSSL rates (b)
50,897 — — 
Interest payments on net equity (c)
33,660 25,294 — 
Tax effect of goodwill adjustment8,777 — — 
Other tax incentives8,686 13,232 8,121 
Recognition of deferred income tax unrecognized in previous periods8,077 18,779 23,057 
Profit from entities subject to different tax rates - Mark to market on equity securities designated at FVPL— — 10,395 
Use of previously unrecognized tax losses— — 752 
Equity pickup on associates(835)136 (1,421)
Unrecognized deferred income tax(17,461)(34,691)(15,779)
Other permanent differences(11,302)(758)(12,887)
Total tax expense(412,759)(464,940)(354,993)
Effective tax rate15%19%19%
Current income tax and social contribution(566,138)(485,025)(323,421)
Deferred income tax and social contribution153,379 20,085 (31,572)
Total tax expense(412,759)(464,940)(354,993)
(a)Out of the R$132,478, R$39,369 relates to balances from 2024 utilized in 2025 during the final analysis for filing of the annual tax return (ECF), and the remaining amount relates to 2025.
(b)Impact from increase in the Social Contribution on Net Income (CSLL) rates applicable to certain financial institutions, as above described in Section 9.1.1.
(c)Interest on net equity is a shareholder remuneration mechanism calculated by the application of the long-term interest rate on the entity’s adjusted net equity, which is deductible for corporate income tax purposes, if certain requirements are met.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
9.4. Deferred income taxes by nature
December 31, 2024Recognized against other comprehensive incomeRecognized against profit or lossRecognized against goodwill
(Note 23.3.1.1)		Transfer to
assets held for
sale
(Note 1.1.2)		December 31, 2025
Assets at FVOCI219,817 195,651 — — — 415,468 
Losses available for offsetting against future taxable income302,921 — 10,661 — (69,545)244,037 
Other temporary differences384,941 (16,062)118,880 — (51,016)436,743 
Share-based compensation160,248 — 25,169 — — 185,417 
Tax deductible goodwill 5,010 — (5,010)— — — 
Contingencies arising from business combinations40,192 — (1,540)— (38,652)— 
Technological innovation benefit(4,128)— 1,323 — — (2,805)
Intangible assets and property and equipment arising from business combinations(638,728)— 30,500 (3,225)590,412 (21,041)
Temporary differences under FIDC(279,305)— (31,500)— — (310,805)
Deferred tax, net190,968 179,589 148,483 (3,225)431,199 947,014 
December 31, 2023Recognized against other comprehensive incomeRecognized against profit or lossRecognized against goodwillDecember 31, 2024
Assets at FVOCI179,944 39,873 — — 219,817 
Losses available for offsetting against future taxable income343,313 — (40,392)— 302,921 
Other temporary differences302,551 — 82,390 — 384,941 
Tax deductible goodwill 42,625 — (37,615)— 5,010 
Share-based compensation123,211 — 37,037 — 160,248 
Contingencies arising from business combinations36,320 — 3,872 — 40,192 
Technological innovation benefit(9,038)— 4,910 — (4,128)
Temporary differences under FIDC(224,733)— (54,572)— (279,305)
Intangible assets and property and equipment arising from business combinations(676,215)— 42,868 (5,381)(638,728)
Deferred tax, net117,978 39,873 38,498 (5,381)190,968 
9.5. Unrecognized deferred taxes
The Group has accumulated tax loss carryforwards and other temporary differences in some subsidiaries in the amount of R$1,431,023 as of December 31, 2025 (2024 – R$ 147,735) for which a deferred tax asset was not recognized and are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognized with respect of these losses as they cannot be used to offset taxable profits between subsidiaries of the Group, and there is no other evidence of probable recoverability in the near future.
The increase in unrecognized deferred tax assets in the period corresponds to the goodwill arising from the investment in Linx that became tax deductible in the fourth quarter of 2025.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
10.    PROPERTY AND EQUIPMENT
10.1. Accounting policy
All property and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any (Note 10.5). Historical cost includes expenditures that are directly attributable to the acquisition of the items and, if applicable, net of tax credits. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item is material and can be measured reliably. All other repairs and maintenance expenditures are charged to profit or loss during the period in which they are incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.
Assets’ residual values, useful lives and methods of depreciation are reviewed at each reporting date and adjusted prospectively, if appropriate. Gains and losses on disposals or derecognition are determined by comparing the disposal proceeds (if any) with the carrying amount and are recognized in profit or loss. The Group also derecognizes Pin Pads & POS held by customers that have not been used in the past 180 or 360 days, depending on the category of customer.
10.2. Significant judgments, estimates and assumptions
Property and equipment assets include the preparation of estimates to determine the useful life for depreciation purposes. Useful life determination requires estimates in relation to the expected technological advances and alternative uses of assets. There is a significant element of judgment involved in making technological development assumptions, since the timing and nature of future technological advances are difficult to predict.
The Group evaluated the useful life of Property and equipment assets and concluded that no change on the estimates of useful life and residual value of these assets was necessary for the year ended December 31, 2025.
The estimated useful lives for the Property and equipment are substantially as follows:
Estimated useful lives (years)
Pin Pads & POS
5
IT equipment
3 – 5
Facilities
5 – 10
Furniture and fixtures
10
Machinery and equipment
2 – 5
Vehicles and airplanes
5 – 10
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
10.3. Changes in Property and equipment
December 31, 2024AdditionsDisposalsTransfersEffects of hyperinflationEffects of changes in foreign exchange rates
Business combination (Note 23.3)
Transfer to
assets held
for sale
(Note 1.1.2)		December 31, 2025
Cost
Pin Pads & POS2,933,852 636,547 (131,679)— — — — (3,009)3,435,711 
IT equipment300,786 34,925 (3,839)375 (74)(223)191 (112,990)219,151 
Facilities103,227 6,626 (29,393)50 2 (2)73 (42,919)37,664 
Machinery and equipment23,452 3,994 (5,739)(168)8 (83)3 (5,433)16,034 
Furniture and fixtures26,378 2,666 (3,620)814 12 (33)231 (4,803)21,645 
Vehicles and airplane27,479 189 (26,793)— (183)99 — (86)705 
Construction in progress29,687 13,537 (5)(1,071)— 1,127 2 — 43,277 
Right-of-use assets - Equipment4,683 — (57)— — — — — 4,626 
Right-of-use assets - Vehicles21,073 21,265 (2,912)— — 77 — — 39,503 
Right-of-use assets - Offices243,423 40,189 (51,379)— — (691)— (60,450)171,092 
3,714,040 759,938 (255,416)— (235)271 500 (229,690)3,989,408 
Accumulated depreciation
Pin Pads & POS(1,510,032)(611,133)117,018 — — — — 3,009 (2,001,138)
IT equipment(199,531)(42,833)2,667 (20)38 (124)(154)84,342 (155,615)
Facilities(43,638)(15,395)22,074 — 2 (2)(37)29,292 (7,704)
Machinery and equipment(20,702)(6,357)5,101 20 38 1,922 (2)4,629 (15,351)
Furniture and fixtures(9,171)(2,551)2,688 — 12 195 (102)2,721 (6,208)
Vehicles and airplane(8,540)(1,357)9,409 — — (20)— 86 (422)
Right-of-use assets - Equipment(1,006)(2)57 — — — — — (951)
Right-of-use assets - Vehicles(9,757)(12,957)2,443 — — — — — (20,271)
Right-of-use assets - Offices(77,666)(40,337)22,918 — — 241 — 38,602 (56,242)
(1,880,043)(732,922)184,375 — 90 2,212 (295)162,681 (2,263,902)
Property and equipment, net1,833,997 27,016 (71,041)— (145)2,483 205 (67,009)1,725,506 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
December 31, 2023AdditionsDisposalsTransfersEffects of changes in foreign exchange ratesBusiness combinationDecember 31, 2024
Cost
Pin Pads & POS2,359,314 682,308 (107,770)— — — 2,933,852 
IT equipment295,330 34,252 (32,050)2,782 49 423 300,786 
Facilities77,594 6,583 (559)19,609 — — 103,227 
Machinery and equipment23,950 3,863 (4,935)575 (1)— 23,452 
Furniture and fixtures22,684 930 (268)3,006 11 15 26,378 
Vehicles and airplane27,175 346 (47)— 5 — 27,479 
Construction in progress30,962 28,265 (3,568)(25,972)— — 29,687 
Right-of-use assets - Equipment4,880 — (197)— — — 4,683 
Right-of-use assets - Vehicles31,976 18,368 (29,271)— — — 21,073 
Right-of-use assets - Offices179,154 89,022 (24,870)— 117 — 243,423 
3,053,019 863,937 (203,535)— 181 438 3,714,040 
Accumulated depreciation
Pin Pads & POS(1,065,406)(535,996)91,370 — — — (1,510,032)
IT equipment(172,517)(55,960)29,150 — (204)— (199,531)
Facilities(30,507)(14,313)544 — 638 — (43,638)
Machinery and equipment(20,039)(6,890)4,814 — 1,413 — (20,702)
Furniture and fixtures(6,798)(2,390)51 — (34)— (9,171)
Vehicles and airplane(5,468)(3,092)35 — (15)— (8,540)
Right-of-use assets - Equipment(1,150)(53)197 — — — (1,006)
Right-of-use assets - Vehicles(23,302)(14,839)28,384 — — — (9,757)
Right-of-use assets - Offices(65,935)(34,879)23,117 — 31 — (77,666)
(1,391,122)(668,412)177,662 — 1,829 — (1,880,043)
Property and equipment, net1,661,897 195,525 (25,873)— 2,010 438 1,833,997 
10.4. Depreciation and amortization charges
Depreciation and amortization expense has been charged to the consolidated statement of profit or loss as follows:
20252024 (Recasted)2023 (Recasted)
Cost of services770,204 655,272 571,066 
General and administrative expenses104,966 86,317 102,449 
Selling expenses37,231 33,889 41,995 
Depreciation and amortization from continued operations912,401 775,478 715,510 
Depreciation and amortization from discontinued operations90,439 173,916 162,671 
Depreciation and amortization charges1,002,840 949,394 878,181 
Depreciation charge732,922 668,412 585,311 
Amortization charge
269,918 280,982 292,870 
Depreciation and amortization charges1,002,840 949,394 878,181 
10.5. Impairment test
As of December 31, 2025, 2024 and 2023, there were no indicators of impairment of property and equipment. Property and equipment were tested for impairment at the Cash Generating Units (“CGUs”) level in connection with intangible assets and investments in associates (Note 11.4).
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
11.    INTANGIBLE ASSETS
11.1. Accounting policy
11.1.1. Initial recognition
Certain direct development costs associated with internally developed software and software enhancements of the Group’s technology platform are capitalized. Capitalized costs, which occur post determination by Management of technical feasibility, include external services and internal payroll costs. These costs are recorded as intangible assets over the development phase. Research and pre-feasibility development costs, as well as maintenance and training costs, are charged to profit or loss when incurred.
Separately acquired intangible assets are measured at cost on initial recognition. The cost of intangible assets acquired in a business combination corresponds to their fair value at the acquisition date.
11.1.2. Subsequent recognition
The useful lives of intangible assets are assessed as finite or indefinite. As of December 31, 2025 and 2024 the Group holds trademarks, patents and goodwill as indefinite life intangible assets. Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis. Intangible assets with indefinite lives are not amortized. In both cases the intangible asset is tested for impairment whenever there is an indication that their carrying amount may not be recovered. For intangible assets with indefinite lives, the impairment test is annually mandatory.
The carrying amount of an intangible asset comprises of its cost net of accumulated amortization and any impairment losses recognized.
The useful life and the method of amortization for intangible assets with finite lives are reviewed at least at the end of each year or when a change in the use pattern of the asset is identified. Changes in estimated useful lives or expected consumption of future economic benefits embodied in the assets are considered to modify the amortization period or method, as appropriate, and treated as changes in accounting estimates, with prospective effects.
The amortization of intangible assets with definite lives is recognized in profit or loss as an expense consistent with the use of intangible assets.
Gains and losses resulting from the disposal or derecognition of intangible assets are measured as the difference between the net disposal proceeds (if any) and their carrying amount and are recognized in profit or loss.
11.1.3. Impairment test
The Group performs the impairment test of the assets in the scope of IAS 36 - Impairment of assets when (i) it observes an indication that an asset may be impaired or (ii) annually, whenever the entity has non-ready-to-use assets or goodwill. Assets of the Group subject to IAS 36 are intangible assets (including goodwill), property and equipment and investments in associates.
Assets are tested individually, whenever possible, or allocated to CGU or group of CGUs. For the purpose of goodwill impairment testing, goodwill is allocated to the CGU or group of CGUs, which are expected to benefit from the synergies of the business combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those CGU or groups of CGUs.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The impairment test consists of a comparison between (i) the carrying amount of the asset, CGU, or group of CGUs and (ii) its recoverable amount. The recoverable amount of an asset, CGU or group of CGUs is the higher of (i) its fair value less costs of disposal and (ii) its value in use. If the carrying amount exceeds the recoverable amount an impairment loss is recognized.
In determining fair value less costs of disposal, recent market transactions are considered. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses of continuing operations are recognized in the statement of profit or loss as expenses consistent with the function of the impaired asset. Impairment losses can be reversed in future periods, except for impairment losses of goodwill.
See Note 11.4 for details in the model and key assumptions adopted in the annual goodwill impairment test.
11.2. Significant judgments, estimates and assumptions
11.2.1. Estimated useful lives
Accounting for intangible assets requires to estimate the useful life of those assets for amortization purposes. Useful life determination requires estimates in relation to the expected technological advances and alternative uses of assets. There is a significant element of judgment involved in making technological development assumptions, since the timing and nature of future technological advances are difficult to predict.
The Group evaluated the useful life of its intangible assets and concluded that no change of estimate of useful life and residual value of these assets was necessary for the year ended December 31, 2025.
The useful lives for the intangible assets with definite lives are presented below:
Estimated useful lives (years)
Software
3 – 5
Customer relationship
2 – 3
Trademarks and patents
7 – 20
Non-compete agreement
5
11.2.2. Value in use calculation in the impairment test
The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are the most relevant for the impairment test of goodwill recognized by the Group.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
11.3. Changes in Intangible assets
December 31, 2024Additions
Disposals(a)
Software business goodwill impairment loss (b)
TransfersEffects of hyperinflationEffects of changes in foreign exchange ratesBusiness combination (Note 23.3)Transfer to assets held for sale (Note 1.1.2)December 31, 2025
Cost
Goodwill - acquisition of subsidiaries2,078,115 — (13,009)(157,991)— — (1,128)5,464 (1,240,071)671,380 
Customer relationship1,795,256 4,847 (12,638)— (5,343)— — 5,321 (1,612,416)175,027 
Trademarks and patents541,237 8 (1)— — — — — (221,437)319,807 
Software1,419,762 164,703 (125,271)— 399,886 118 (150)6,498 (720,852)1,144,694 
Non-compete agreement26,024 — (1,659)— — — — — (24,365)— 
Software in progress505,014 312,159 (3,240)— (394,543)— — — (17,171)402,219 
Service and operating rigths— 16,418 — — — — — — — 16,418 
Right-of-use assets - Software82,829 1 (17,430)— — — — — — 65,400 
6,448,237 498,136 (173,248)(157,991)— 118 (1,278)17,283 (3,836,312)2,794,945 
Accumulated amortization
Customer relationship(403,324)(39,555)11,059 — 6,539 — (2,354)— 284,511 (143,124)
Trademarks and patents(26,270)(9,400)782 — — — (776)— 3,521 (32,143)
Software(510,936)(195,299)81,097 — (6,539)— (926)— 38,831 (593,772)
Non-compete agreement (17,706)(2,436)1,647 — — — — — 18,495 — 
Right-of-use assets - Software(31,899)(23,228)15,992 — — — 675 — (511)(38,971)
(990,135)(269,918)110,577 — — — (3,381)— 344,847 (808,010)
Intangible assets net5,458,102 228,218 (62,671)(157,991)— 118 (4,659)17,283 (3,491,465)1,986,935 
(a)Includes impairment losses of Software and Software in progress in the amount of R$ 33,804 for cost and R$ 30,891 for accumulated amortization.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
December 31, 2023Additions
Disposals (a)
Software business goodwill impaimentTransfersEffects of hyperinflationEffects of changes in foreign exchange ratesBusiness combinationDecember 31, 2024
Cost
Goodwill - acquisition of subsidiaries5,634,903 — (44,536)(3,558,049)— — 10 45,787 2,078,115 
Customer relationship1,793,696 4,290 (8,054)— — — — 5,324 1,795,256 
Trademarks and patents550,999 2,067 (11,829)— — — — — 541,237 
Software1,334,698 165,040 (172,031)— 79,483 — 2,070 10,502 1,419,762 
Non-compete agreement26,024 — — — — — — — 26,024 
Operating license5,674 — (5,674)— — — — — — 
Software in progress274,608 326,779 (17,230)— (79,143)— — — 505,014 
Right-of-use assets - Software50,558 33,394 (1,121)— — — (2)— 82,829 
9,671,160 531,570 (260,475)(3,558,049)340 — 2,078 61,613 6,448,237 
Accumulated amortization
Customer relationship(343,981)(60,333)990 — — — — — (403,324)
Trademarks and patents(20,219)(9,401)3,350 — — — — — (26,270)
Software(474,163)(190,718)154,787 — (340)(413)(89)— (510,936)
Non-compete agreement(12,834)(4,872)— — — — — — (17,706)
Operating license(5,673)— 5,673 — — — — — — 
Right-of-use assets - Software(19,371)(15,658)3,130 — — — — — (31,899)
(876,241)(280,982)167,930 — (340)(413)(89)— (990,135)
Intangible assets, net8,794,919 250,588 (92,545)(3,558,049)— (413)1,989 61,613 5,458,102 
(a)Includes impairment losses of Software and Software in progress in the amount of R$ 138,337 for cost and R$ 136,433 for accumulated amortization.
11.4. Impairment test
The Group performs its impairment test annually or more frequently if it observes an indication that a potential impairment exists by testing the impairment of the CGUs (or groups of CGUs) that contain goodwill and / or indefinite useful-life intangible assets. In 2024, the Group identified three CGUs. In 2025, following the classification of the Software businesses as assets held for sale (Note 1.1.2.), these businesses were treated as a separate unit, resulting in a total of four CGUs. Goodwill is allocated to three of these CGUs. The table below presents the goodwill and the indefinite useful-life intangible assets allocated to each CGU:
October 31, 2025October 31, 2024
(Recasted)
CGUDescriptionGoodwill allocatedIndefinite useful-life intangible assets allocatedGoodwill allocatedIndefinite useful-life intangible assets allocated
CGU 1 – Financial servicesCompanies related to financial solutions are included in this CGU. The Group considers these companies as a CGU due to the integrated financial solutions provided by them.443,764 14,513 443,764 14,516 
CGU 2 – SoftwareThis CGU includes technological solutions offered to the Group's customers.227,238 27,258 218,766 27,255 
CGU 3 –TAGDue to the specific service related to financial assets registration provided by this enterprise and its independence of the other Group’s CGUs, the Group considers TAG as a separate CGU.— — — — 
CGU 4 – Assets classified as held for sale(a)
This CGU includes assets classified as held for sale.1,398,026 217,916 1,411,735 217,916 
(a)After recognition of impairment loss. Comprises the assets subject to impairment testing related to Software business sale as Note 1.1..
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The recoverable amount of the Group’s CGUs as of October 31, 2025 and as of October 31, 2024 has been determined based on a value in use calculation using cash flow projections from financial budgets approved by Board of Officers, covering a period of five years in 2025 and 2024.
The key assumptions considered in value in use calculation for all of the Group’s CGUs are as follows:
•Free cash flow to equity for the five years forecasted period.
•Average annual growth rate of the free cash flows over the five years forecast period, based on past performance and management’s expectations of market development and on current industry trends and including long-term inflation forecasts.
•Considered a pre-tax discount rate applied to discount future cash flows of 11.20% (2024 – between 11.12% and 11.83%), based on long-term interest rate, country risk premium, industry adjusted beta and other variables.
•Considered a perpetuity growth rate of 5.00% (2024 – 5.00%), based on long-term local inflation and real growth.
11.4.1.Result of annual impairment test as of October 31, 2024
As a result of the Group’s annual impairment test as of October 31, 2024, an impairment loss of R$ 3,558,049 was recognized for CGU 2 – Software, since the estimated recoverable amount of this cash generating unit was lower than the net book value. Although originally associated with CGU 2 – Software, this loss relates specifically to the portion of assets and goodwill reclassified to ‘Assets held for sale’ (presented as CGU 4), following the decision to sell these operations. For CGU 1 and CGU 3, management did not identify an impairment.
The impairment was charged to goodwill of CGU 2 – Software against profit and loss of discontinued operations (Software business goodwill impairment loss). The recoverable amount of CGU 2 on October 31, 2024 was estimated at R$ 4,402,426. After 3 years of the acquisition of Linx, the main asset of CGU 2, and as part of a strategic review performed during the fourth quarter of 2024, the Group revisited the strategy for the Software segment, as well as the achievable potential synergies of that segment with the Financial Services segment. As result of the strategic review, the Group reduced the estimates of both expected revenue growth and of synergies of CGU 2 which resulted in an impairment loss.
The impairment loss was reclassified to loss from discontinued operations for the year ended December 31, 2024.
11.4.2.Result of annual impairment test as of October 31, 2025
As of October 31, 2025, there were no indicators of impairment of finite-life intangible assets for CGU 1, 2 and 3. For CGU 4, management performed an analysis in accordance with the requirements of IFRS 5, considering the fair value less cost to sell of assets specifically related to the Software Business sale. As a result of the analysis, a reduction of the recoverable amount of R$157,991 was identified and recognized as part of discontinued operations as of December 31, 2025.
For CGU 1, 2 and 3, management did not identify an impairment. The Group carried out a sensitivity analysis of the impairment test considering four independent scenarios of key assumptions deterioration, as follows: (i) a decrease of 1,000 basis points in the average annual growth of the free cash flow over the five-year forecasted period; (ii) an increase of 100 basis points in the pre-tax discount rate; and (iii) a decrease of 50 basis points in the perpetuity rate applied after the last year of projected free cash flow. The sensitivity analysis did not indicate an impairment loss on the CGUs carrying amounts.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
12.    TAXES PAYABLE
December 31, 2025December 31, 2024
Income tax (IRPJ and CSLL) (a)
736,479 385,819 
Contributions over revenue (PIS and COFINS) (b)
71,726 95,026 
Withholding income tax66,074 45,896 
Taxes on services (ISS) (b)
11,067 14,802 
Withholding taxes from services taken
5,749 5,230 
Social security levied on gross revenue (INSS)3,437 3,927 
Other taxes and contributions4,738 9,550 
899,270 560,250 
(a)Some income from investment funds is only taxed when redemption occurs. Accordingly, on December 31, 2025, the amount of R$ 746,646 (R$ 365,629 on December 31, 2024) was recorded as income tax on an accrual basis. The expense for current income tax is recognized in the statement of profit or loss under "Income tax and social contribution" against taxes payable. An advance payment of income tax when due is recognized during the tax year as Recoverable taxes (Note 8).
(b)PIS/COFINS and ISS are measured based on the revenues of the Brazilian entities of the Group and are recognized as a deduction to gross revenue.
13.    TRANSACTIONS WITH RELATED PARTIES
Related parties comprise the Group’s parent companies, key management personnel and any businesses which are controlled, directly or indirectly by the founders, officers and directors or over which they exercise significant management influence. Related party transactions are entered in the normal course of business at prices and terms approved by the Group’s management.
The following transactions were carried out with related parties:
202520242023
Sales of services
Associates (legal and administrative services) (a)
23 11 153 
Entity controlled by management personnel (b)
— — 6 
23 11 159 
Purchases of goods and services
Associates (transaction services) (b)
(2,348)(2,642)(3,207)
(2,348)(2,642)(3,207)
(a)Related to services provided to APP in 2025 and 2024, RH Software and Delivery Much in 2025, as well as Trinks in 2024.
(b)Mainly related to expenses paid to APP, Tablet Cloud, and RH Software in 2025 and 2024, Gyramais in 2025, as well as to Trinks and Neomode in 2024, for consulting services, marketing expenses, sales commissions, and software licenses associated with new customer acquisition.
Services provided to related parties include legal and administrative services provided under normal trade terms and reimbursement of other expenses incurred in their respect.
As of December 31, 2025, some officers and directors had subscribed to the Group’s banking solutions. The total amount recognized in Retail deposits is R$ 58 (2024 – R$ 108).
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
13.1. Year-end balances
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
December 31, 2025December 31, 2024
Loans to associate— 613 
Receivables from related parties— 613 
As of December 31, 2025, there is no allowance for expected credit losses on related parties receivables. No guarantees were provided or received in relation to any accounts receivable or payable involving related parties.
13.2. Key management personnel compensation
Management includes executive officers and members of Board of Directors of the Group and compensation consists of fixed compensation, profit sharing and benefits plus any corresponding social or labor charges and or provisions for such charges. Compensation expenses are recognized in profit or loss of the Group. For the years ended December 31, 2025, 2024 and 2023, compensation expense was as follows:
202520242023
Short-term benefits54,266 70,790 64,904 
Share-based payments (Note 20.4)
61,787 66,523 86,215 
116,053 137,313 151,119 
14.    PROVISION FOR CONTINGENCIES
14.1. Accounting policy
Some entities of the Group are party to labor, civil and tax litigation in progress, which are being addressed at the administrative and judicial levels.
Provisions for legal claims (labor, civil and tax) are recognized when (i) there is a present obligation (legal or constructive) as a result of a past event; (ii) it is probable that an outflow of resources will be required to settle such obligation; and (iii) a reliable estimate can be made of the amount of the obligation.
If there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole, even if the likelihood of an outflow for a specific claim included in the same class of obligations may be small. A provision is recognized even if the likelihood of an outflow with respect to any item included in the same class of obligations may be small.
Provisions are measured by the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Provisions are recognized at the present value using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation whenever the effect of the time value of money is material. The increase in the provision due to the passage of time is recognized as Financial expenses, net.
Where the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement, if applicable.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
14.2. Significant judgments, estimates and assumptions
Possible losses are based on the actual historical costs in the respective judicial courts for similar cases. In general, upon final determination, actual losses are a fraction of the total amounts claimed.
For probable losses, individually non-significant lawsuits of a similar nature such as a portfolio, are measured, grouped and provided to cover the losses based on the most recent 12-month average loss for these types of lawsuits. For individually significant losses or those of a non-repetitive nature, the Group continues to assess the probability and the amount of the losses considered probable on a case-by-case basis.
14.3. Probable losses, provided for in the statement of financial position
The Group’s companies are party to labor, civil and tax litigation in progress, which are being addressed at the administrative and judicial levels, as well recognize risks of their activities that may require the recording of provisions. The amount, nature and the changes of the liabilities during 2025 and 2024 are summarized as follows:
CivilLaborTaxTotal
Balance as of December 31, 202335,862 39,705 133,299 208,866 
Additions58,954 72,982 2 131,938 
Reversals(23,939)(31,106)(15,667)(70,712)
Interest4,770 7,656 13,827 26,253 
Payments(31,185)(17,745)(10,009)(58,939)
Balance as of December 31, 202444,462 71,492 121,452 237,406 
Additions111,687 100,120 22,458 234,265 
Reversals(24,506)(34,487)(2,462)(61,455)
Interest8,114 8,362 24,466 40,942 
Payments(102,481)(37,471)(25)(139,977)
Transfer to liabilities associated with assets held for sale (Note 1.1.2)— — (96,267)(96,267)
Balance as of December 31, 202537,276 108,016 69,622 214,914 
14.3.1. Civil lawsuits
In general, provisions and contingencies arise from claims related to lawsuits of a similar nature, with individual amounts that are not considered individually significant. The nature of the civil litigations is categorized according to the primary business of the Group. Substantial provisions are summarized in two business domains, namely (i) acquiring, totaling R$ 21,036 as of December 31, 2025 (2024 - R$ 24,486) and (ii) banking, totaling R$ 12,954 as of December 31, 2025 (2024 - R$ 16,027).
The Group is also involved in a securities class action related to its former credit product. The Group and the lead plaintiff agreed to a settlement of R$ 145,294, of which R$ 96,618 was covered by insurers. The full amount has been deposited into the court escrow account and recognized in the statement of profit or loss under other income (expenses), net (Note 18). The settlement was approved by the court on February 27th.
Certain investors have filed an opt-out action in the southern district of New York. The Group has moved to dismiss the opt-out action for, among other reasons, attempting to revive claims that were dismissed in the class action.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
14.3.2. Labor claims
In the context of Labor Courts, the Group encounters recurrent lawsuits, primarily falling in two categories: (i) labor claims by former employees and (ii) labor claims brought forth by former employees of outsourced companies contracted by the Group. These claims commonly center around issues such as the claimant’s placement in a different trade union and payment of overtime. The initial value of these lawsuits is asserted by the former employees at the commencement of the legal proceeding.
14.4. Possible losses, not provided for in the statement of financial position
The Group has the following civil, labor and tax litigation involving risks of loss assessed by management as possible, based on the advice of the legal counsel, for which no provision was recognized:
December 31, 2025December 31, 2024
Civil
58,457 64,104 
Labor
10,139 2,227 
Tax320,678 95,882 
Total389,274 162,213 
14.4.1. Civil lawsuits
The Group is a party to several legal actions whose subjects are connected to its ordinary operations. In this regard, civil lawsuits have been categorized according to the Group’s primary business fronts, mainly: (i) acquiring, amounting to R$ 8,801 as of December 31, 2025 (2024 - R$ 22,099); and (ii) software, amounting to R$ 35,240 as of December 31, 2025 (2024 - R$ 29,076).
For the software product line, there is significant indemnity lawsuit filed by an indirect supplier, for the utilization of a specific software provided by the partner, amounting to R$ 27,956 as of December 31, 2025 (2024 - R$ 26,835).
14.4.2. Labor claims
The Group frequently receives lawsuits through the labor courts, primarily for two categories: (i) labor claims by former employees and (ii) labor claims by former employees of outsourced companies contracted by the Group (as a secondary obligor). These claims typically revolve around matters such as the claimant’s placement in a different trade union and payment of overtime. An initial value of these lawsuits is claimed by the former employees at the beginning of the proceeding. The actual amounts of possible contingencies when disbursed correspond to a fraction of the amount initially requested by the claimants – this lower fraction is calculated based on the Group’s track record of losses, considering similar cases. As the lawsuits progress, the reported risk amount may change, particularly following new court decisions.
14.4.3. Tax litigations
Between 2022 and 2025, the Group received tax assessment issued by a municipal tax authority relating to the allegedly insufficient payment of tax on services rendered. As of December 31, 2025, the updated amount of the claims is R$ 265,816 (2024 - R$ 41,579).
14.5. Judicial deposits
For certain contingencies, the Group has made judicial escrow deposits, which are legal reserves required by the Brazilian courts as security for any damages or settlements the Group may be required to pay as a result of litigation.
The amount of the judicial deposits as of December 31, 2025 is R$ 16,652 (2024 - R$ 13,317), which are included in Other assets in the non-current assets.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
15.    EQUITY
15.1. Authorized capital
On December 31, 2025 and 2024, the Company’s issued capital totaled R$ 76. The Company has an authorized share capital of US Dollar 50 thousand, corresponding to 630,000,000 authorized shares with a par value of US Dollar 0.000079365 each. The Company is authorized to increase capital up to this limit, subject to approval of the Board of Directors. The liability of each member is limited to the amount from time to time unpaid on such member’s shares.
15.2. Subscribed and paid-in capital and capital reserve
The Articles of Association provide that at any time when there are Class A common shares issued, Class B common shares may only be issued pursuant to: (a) a share split, subdivision or similar transaction or as contemplated in the Articles of Association; or (b) a business combination involving the issuance of Class B common shares as full or partial consideration. A business combination, as defined in the Articles of Association, would include, amongst other things, a statutory amalgamation, merger, consolidation, arrangement or other reorganization.
The additional paid-in capital refers to the difference between the purchase price that the shareholders pay for the shares and their par value. Under Cayman Islands Law, the balance in this account may be applied by the Company to pay distributions or dividends to members, pay up unissued shares to be issued as fully paid, for redemptions and repurchases of own shares, for writing off preliminary expenses, recognized expenses, commissions or for other reasons. All distributions are subject to the Cayman Islands Solvency Test which addresses the Company’s ability to pay debts as they fall due in the natural course of business.
The changes in the number of shares during 2025 and 2024 are summarized below:
Number of shares
Class AClass BTotal
At December 31, 2023295,498,750 18,748,770 314,247,520 
Conversions1,823,680 (1,823,680)— 
At December 31, 2024297,322,430 16,925,090 314,247,520 
Conversions683,926 (683,926)— 
At December 31, 2025298,006,356 16,241,164 314,247,520 
15.3. Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognized in equity.
During the years presented, the Board of Directors approved programs to repurchase outstanding Class A common shares as detailed in the table below:
Date of programs approved by the Board of Directors Maximum amount of repurchase approvedAmounts actually repurchased under the programStatus of programs as of December 31, 2025
November-242,000,0001,662,291Program terminated by Board decision
May-252,000,0001,946,049Program terminated by board Decision
Dec-252,000,000—Authorized
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The table below presents movements of treasury shares:
SharesAmountAverage price
(in R$)
December 31, 2023(5,311,421)(282,709)
Repurchase of shares (a)
(24,090,491)(1,587,332)64.53
Shares delivered under share-based payment instruments (b)
1,166,970 64,145 50.65
December 31, 2024(28,234,942)(1,805,896)
Repurchase of shares (a)
(40,290,099)(2,987,034)75.98
Shares delivered under share-based payment instruments (b)
3,182,188 201,642 66.93
December 31, 2025(65,342,853)(4,591,288)
(a)On December 31, 2025, the amount related to brokerage fees is R$ 9,836 (December 31, 2024 - R$ 1,506).
(b)Including share-based compensation, contingent consideration and non-compete agreement with founders of Linx.
15.4. Premium received in options over own shares entered into a part of the repurchase program
In 2025, the Company entered into prepaid put and call option agreements, which entitled it to receive a certain number of own shares from the counterparty in case of option exercise. The options were not exercised, and the Company received back the value paid in advance at inception of agreement. The premium received in the transaction of R$ 17,741 was recorded in a capital reserve under equity. The options that were exercised were transferred to treasury shares.
15.5. Incentive shares
In 2017, certain key employees were granted incentive shares, or Co-Investment Shares, which entitle participants to receive a cash bonus that they may, at their option, use to purchase a specified number of shares.
The Incentive Shares were subject to up to a 10-year lock-up period, after which the shares became free and clear for transfer. If a participant ceased employment for any reason prior to the end of the lock-up period, the Company had the right (but not the obligation) to acquire the shares for the price originally paid by the participant, less an applicable discount.
As of December 31, 2025, all lock-up restrictions related to the Co-Investment Shares had fully lapsed, and no Incentive Shares remained subject to lock-up.
15.6. Other comprehensive income
Other comprehensive income represents the profit or loss not reported in the statement of profit and loss being separately presented in the financial statements. This includes Group transactions and operations that are not considered realized gains or losses. The table presents the accumulated balance of each category of OCI as of December 31, 2025 and 2024:
December 31, 2025December 31, 2024
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods (net of tax):
Exchange differences on translation of foreign operations(50,494)(38,910)
Accounts receivable from card issuers at fair value(732,605)(425,753)
Changes in the fair value of cash flow hedge - bond hedge(97,319)(125,532)
Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods (net of tax):
Changes in the fair value of equity instruments designated at fair value through OCI
291,623 291,623 
Effects of hyperinflationary accounting20,521 11,524 
Total(568,274)(287,048)
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
16.    EARNINGS (LOSS) PER SHARE
16.1. Accounting policy
Basic earnings (loss) per share is calculated by dividing net income (loss) for the year attributed to the controlling shareholders by the weighted average number of common shares outstanding during the year.
Diluted earnings (loss) per share considers the number of shares outstanding for the purposes of Basic earnings (loss) plus (when dilutive) the number of potentially issuable shares computed following the treasury stock method, as required by IAS 33 - Earnings per share. All numbers of shares for the purpose of earnings per share are the weighted average during each period presented.
For share-based transactions, a calculation is done to determine the number of shares issuable, based on the number of shares granted adjusted by the difference between (i) the weighted average quoted market price during the period, and (ii) the proceeds to be obtained (if any) upon issuance of the shares. As per IAS 33, proceeds for share-based compensation instruments must include, as deemed proceeds, the amount to be recognized as compensation expense in profit and loss in future periods for such instruments.
16.2. Numerator of earnings (loss) per share
In determining the numerator of basic EPS, earnings attributable to the Group is allocated as follows:
20252024 (Recasted)2023 (Recasted)
Net income attributable to controlling shareholders from continuing operations2,360,693 2,016,384 1,549,289 
Numerator of basic EPS from continuing operations2,360,693 2,016,384 1,549,289 
20252024 (Recasted)2023 (Recasted)
Net income (loss) attributable to controlling shareholders from discontinued operations(40,991)(3,531,606)42,776 
Numerator of basic and diluted EPS from discontinued operations(a)
(40,991)(3,531,606)42,776 
(a)There were no adjustments to the numerator for discontinued operations for the purpose of calculating diluted earnings per share.
In determining the numerator of diluted EPS from continuing operations, earnings attributable to the Group is allocated as follows:
20252024 (Recasted)2023 (Recasted)
Numerator of basic EPS from continuing operations2,360,693 2,016,384 1,549,289 
Adjustments for expenses (revenues) related to potential common shares included in the net income attributable to controlling shareholders (a)
— — (79,062)
Numerator of diluted EPS from continuing operations2,360,693 2,016,384 1,470,227 
(a)Diluted earnings per share are calculated by adjusting the numerator of basic EPS, considering adjustments of potentially convertible instruments related to contingent consideration of acquisitions. As of December 31, 2025 and 2024 the Company has no convertible instruments related to contingent consideration.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
16.3. Basic and Diluted earnings (loss) per share
The following table contains the earnings (loss) per share of the Group for the years ended December 31, 2025, 2024 and 2023 (in thousands except share and per share amounts):
20252024 (Recasted)2023 (Recasted)
Numerator of basic EPS from continuing operations2,360,693 2,016,384 1,549,289 
Numerator of basic EPS from discontinued operations(40,991)(3,531,606)42,776 
Weighted average number of outstanding shares266,656,003 301,514,333 312,574,647 
Weighted average number of contingently issuable shares with conditions satisfied203,602 180,846 12,941 
Denominator of basic EPS from continuing and discontinued operations266,859,605 301,695,179 312,587,588 
Basic earnings per share from continuing operations - R$8.85 6.68 4.96 
Basic earnings (loss) per share from discontinued operations - R$ (0.15)(11.70)0.13 
Numerator of diluted EPS from continuing operations2,360,693 2,016,384 1,470,227 
Numerator of diluted EPS from discontinued operations(40,991)(3,531,606)42,776 
Denominator of basic EPS from continuing and discontinued operations266,859,605 301,695,179 312,587,588 
Share-based instruments (a) (Note 16.3.1)
6,626,179 6,757,337 6,679,569 
Denominator of diluted EPS from continuing and discontinued operations273,485,784 308,452,516 319,267,157 
Diluted earnings per share from continuing operations - R$8.63 6.54 4.61 
Diluted earnings (loss) per share from discontinued operations - R$ (b)
(0.15)(11.45)0.13 
(a) Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding, considering potentially convertible instruments.
(b)For discontinued operations, the denominator of diluted EPS is consistent with that of continuing operations, as dilution is assessed based on the denominator from continuing operations.
16.3.1. Detail of potentially issuable common shares for purposes of Diluted EPS
For the year ended December 31, 2025, 2024 and 2023, the potentially issuable common shares consider the difference between the issuable shares under share-based instruments and the number of shares that potentially be purchased at the weighted average market price of the shares during the period with the amount of future compensation expense of those share-based instruments, as presented as follows:
20252024
2023
Shares issuable under share-based payment plans for which performance conditions have already been met13,267,501 13,620,849 13,578,978 
Total weighted average shares that could have been purchased: compensation expense to be recognized in future periods divided by the weighted average market price of Company’s shares(6,773,927)(7,128,723)(8,944,168)
Other total weighted average shares potentially issuable for no additional consideration132,605 265,211 2,044,759 
Share-based instruments6,626,179 6,757,337 6,679,569 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
17.    REVENUE AND INCOME
17.1. Accounting policy
17.1.1. Revenue from contracts with clients
Revenue is recognized when the Group has transferred control of the services to the clients, in an amount that reflects the consideration the Group expects to collect in exchange for those services. The Group applies the following five steps:
•Identification of the contract with a client;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when or as the entity satisfies a performance obligation.
Revenue is recognized net of taxes collected from clients, which are subsequently remitted to governmental authorities.
The revenue from contracts with clients of the Group is presented as follows.
17.1.1.1. Transaction activities and other services
For financial solution, the Group’s core performance obligations are to provide electronic payment processing services including the capture, transmission, processing and settlement of transactions carried out using credit, debit, Pix QR Code and voucher cards, as well as fees for other services. The Group’s promise to its clients is to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the clients’ use (e.g., number of payment transactions processed). Therefore, the total consideration received for services provided to the client is variable despite the price for each transaction being specified by contract. The Group recognizes the transaction fee at a point in time considering the contractual right to bill its clients for each processed transaction.
Revenue from transaction activities is recognized net of interchange fees retained by card issuers and assessment fees paid to payment scheme networks. The Group does not bear the significant risks and rewards, being an agent in those services as follows:
•The Group facilitates the acquisition of payment information and management of the client relationship, it is not primarily responsible for the authorization, processing and settlement services performed by payment schemes networks and card issuers;
•The Group has no latitude to establish the assessment and interchange fees applied to card issuers and payment scheme networks. The Group has the right to increase its merchant discount rate to protect its net commission when interchange and assessment fees are increased by payment scheme networks, or when other factors affects the Group's profitability;
•The Group does not collect the interchange fee that is retained by the card issuer and effectively acts as a clearing house in collecting and remitting assessment fees and payment settlements on behalf of payment scheme networks and clients; and
•The Group does not bear the credit risk of the cardholder (i.e., the client’s customer). It does bear credit risk from the card issuer for the payment settlement and assessment fees. Card issuers are qualified by the payment scheme networks, which guarantee the settlement of processed transactions. Receivables can be considered to be collateralized by the cardholder’s invoice settlement proceeds. As such, the Group’s exposure to credit risk is generally low.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Other services mainly comprises:
•Membership fee from customers is one-time charge for specific products for which there is not a recurring fee for the use of Pin Pads & POS. Revenue up to December 31, 2023 was recognized at agreement inception when all risks and benefits of the transaction are transferred to the customer and the Group obtains the contractual rights related to fee. From January 1, 2024 onwards, the Group recognizes revenues from membership fees deferred through the expected lifetime of the client. The new criteria has been adopted and the Group has applied prospectively because the effect of the change from the old criteria was not material to the consolidated financial statements both for the current and past periods. For further details see Note 17.3.
•Fees charged to customers for services related to banking money-in volumes (transfers received under TED, Pix and “boleto” products and interchange as fees from transactions on other networks using credit and debit card issued by the Group), and money-out volumes (transfers made under products such as Pix Out, wire transfers, bill payments, boletos paid, withdrawals, recharge and other transactions). The revenue is recognized at each transaction date.
17.1.1.2. Subscription services and equipment rental
For software solutions and equipment rental the Group’s core performance obligations are to provide: (a) recurring subscription services, such as reconciliation, business automatization solutions, services to provide the client with the right of use of software in a cloud-based, where the client has no right to end the contract and become the owner of the software, and revenues related to technological support, help desk, equipment rental and software hosting services; (b) non-recurring services, such as implementation services, personalization, training, and other services; and (c) operating leases of electronic capture equipment to clients.
The Group has concluded that it is the principal for purposes of its revenue arrangements, because it controls the services before transferring them to the client.
The Group’s subscription services generally consist of services sold as part of a new or existing agreement or sold as a separate service. The Group’s subscription services may or may not be considered distinct based on the nature of the services being provided. Subscription service fees are charged as a fixed monthly fee, and the related revenue is recognized over time, either as the subscription services are performed or as the services from a combined performance obligation are transferred to the client (over the term of the related transaction and processing agreement).
The Group accounts for equipment rental as a separate performance obligation and recognizes the revenue at its standalone selling price, considering that rental is charged as a fixed monthly fee. Revenue is recognized on a straight-line basis over the contractual lease term, beginning when the client obtains control of the equipment lease. The Group does not manufacture equipment, but purchases equipment from third-party vendors.
17.1.1.3. Contracts with multiple performance obligations
The Group’s contracts with its clients can consist of multiple performance obligations and the Group accounts for individual performance obligations separately if they are distinct (e.g., setup services and subscription fees in the same contract). When equipment or services are bundled in an agreement with a client, the components are separated using the relative stand-alone selling price of the components which is based on the Group’s customary pricing for each element in separate transactions.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
17.1.1.4. Costs to obtain and fulfill a contract
The Group incurs certain costs to obtain and fulfill a contract that are capitalized at the inception of the transaction for new customer contracts, for recurring customers these costs are not capitalized. The cost comprises mainly commissions to sellers in order to obtain a contract and logistic costs to fulfill a contract. The asset recognized is amortized on a straight-line basis over the expected life of merchants. As of December 31, 2025, the Group had a carrying amount of R$ 200,179 (2024 – R$ 227,799) recognized under Other assets and R$ 13,605 (2024 – R$ 5,830 and 2023 – R$ 25,895) as amortization recognized in the statement of profit or loss.
17.1.2. Financial income
Comprised mainly of:
•discount fees charged for the prepayment to clients of their installment receivables. The discount is measured by the difference between the original amount payable to the client, net of commissions and fees charged, and the prepaid amount. Revenue is recognized in full when the amount is prepaid to the client;
•interest income over floating account balances; and
•interest income on loans.
A loan is considered in default if there is any indication that it will not be fully honored even if the loan is not in arrears.
Loans classified as Stage 1 or 2 have interest income recognized by applying the EIR to the gross carrying amount of the asset. Once loans are classified as Stage 3, differently from Stage 1 or 2, interest income is recognized by applying the EIR to the amortized cost balance (net of the corresponding allowance for expected credit losses) rather than to the gross carrying amount. As Stage 3 loans are fully provisioned, the amortized cost is zero, resulting in no interest income recognition at this stage. If a loan impaired is subsequently cured, it is transferred from Stage 3, back to Stage 2 or Stage 1, previously unrecognized interest is recognized in profit or loss.
17.1.3. Other financial income
Comprises interest income and fair value gains (losses) of cash and cash equivalents and short-term investments.
17.1.4. Deferred revenue
The Group records deferred revenue related to hours contracted by clients for rendering of services. Revenue is recognized after provision of service. If billed amounts exceed services rendered plus recognized revenue, the difference is recorded in the statement of financial position as deferred revenue and presented in the statement of financial position as deferred revenue under “Other liabilities.”
The Group records deferred revenue for services paid by the clients but which have not yet been completed under the contract which are recognized in the statement of financial position as deferred revenue under “Other liabilities”.
The amount recognized as deferred revenue in the statement of financial position is recycled to the statement of profit or loss once the promised services are executed.
17.1.5. Sales taxes
Revenues, expenses and assets are recognized net of sales tax, except;
•When the sales taxes incurred on the purchase of goods or services are not recoverable from tax authorities, they are recognized as part of the cost of acquiring the asset or expense item, as applicable;
•When the amounts receivable or payable are stated with the amount of sales taxes included.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The net amount of sales taxes, recoverable or payable to the tax authority, is included as part of receivables or payables in the statement of financial position, and net of corresponding revenue or cost / expense, in the statement of profit or loss.
Sales revenues in Brazil are subject to taxes and contributions, at the following statutory rates:

Rate

Transaction activities and other servicesSubscription services and equipment rentalFinancial income
Contribution on gross revenue for social integration program (“PIS”) (a)
 0.65% - 1.65%
0.65% - 1.65%
0.65%
Contribution on gross revenue for social security financing (“COFINS”) (a)
3.00% - 7.60%
3.00% - 7.60%
4.00%
Taxes on service (“ISS”) (b)
2.00% - 5.00%
2.00% - 5.00%
—
Social security levied on gross revenue (“INSS”) (c)
4.50%——
(a)PIS and COFINS are contributions levied by the Brazilian Federal government on gross revenues. These amounts are invoiced to and collected from the Group’s customers and recognized as deductions to gross revenue (Note 17.3) against tax liabilities. PIS and COFINS paid on certain purchases may be claimed back as tax credits to offset PIS and COFINS payable. These amounts are recognized as Recoverable taxes (Note 8) and are offset on a monthly basis against Taxes payable (Note 12) and presented net, as the amounts are due to the same tax authority.
(b)ISS is a tax levied by municipalities on revenues from the provision of services. ISS tax is added to amounts invoiced to the Group’s customers for the services the Group renders. These are recognized as deductions to gross revenue (Note 17.3) against tax liabilities. The ISS stated in the table is applicable to the city of São Paulo and refers to the rate most commonly levied on the Group’s operations.
(c)INSS is a social security charge usually levied on employees' wages. Companies in some economic sectors can calculate INSS based on their revenues. The subsidiaries Hiper, Buy4, Vitta Tecnologia em Saúde S.A. and Questor have this option to pay INSS at a rate of 4.50% on gross revenue when this is a more favorable basis compared to social security tax on payroll regime.
17.2. Significant judgments, estimates and assumptions
17.2.1. Expected life of merchants
The Group estimates the expected life of two different classes of merchants in order to recognize equipment rental revenue on a straight-line basis and as a fixed monthly fee, as well as recognize the amortization of the costs of obtaining and fulfilling contracts with these merchants.
The estimate is revised annually, and is related to the average time expected for the merchants to process transactions with the Group, over the customers' life cycles.
17.3. Timing of revenue recognition
Net revenue from transaction activities and other services and discount fees charged for the prepayment of accounts payable to client are recognized at a point in time, except for membership fees which are recognized over time as mentioned in Note 17.1.1.1. All other revenue and income are recognized over time.
The Group has recognized revenue to those membership fees in the amount of R$228,403 in 2025 (2024 - R$ 124,811). As of December 31, 2025 the Group billed R$ 166,245 in membership fees (December 31, 2024 - R$ 286,266).
Net revenue from transaction activities and other services includes membership fee mentioned above and R$ 46,827 of registry business fee in 2025 (2024 - R$ 54,106 and 2023 - R$ 113,897)
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
18.    EXPENSES BY NATURE
20252024 (Recasted)2023 (Recasted)
Personnel expenses (Note 20.3)
2,676,511 2,416,099 2,130,860 
Transaction and client services costs (a)
1,689,001 1,301,837 1,049,673 
Marketing expenses and sales commissions (b)
1,030,925 874,947 668,017 
Depreciation and amortization (Note 10.4)
912,401 775,478 715,510 
Third party services247,908 223,017 213,652 
Other325,555 312,844 144,565 
Total6,882,301 5,904,222 4,922,277 
(a)Transaction and client services costs include card transaction capturing services, card transaction and settlement processing services, logistics costs, payment scheme fees, cloud services and other costs.
(b)Refers to marketing and advertising expenses as well as commissions paid to sales related partnerships.
19.    FINANCIAL EXPENSES, NET
20252024 (Recasted)2023 (Recasted)
Finance cost of sale of receivables (Note 22.2.2)
2,041,529 2,544,359 3,195,130 
Cost of bond
190,919 263,691 402,229 
Other interest on borrowings and financing
1,731,959 789,562 297,302 
Foreign exchange gains
13,138 (19,381)(15,226)
Other (a)
501,721 82,003 76,729 
Total4,479,266 3,660,234 3,956,164 
(a)The amount refers substantially to fair value adjustments on swap derivatives used as hedges for the Group’s financing activities, receivables and credit portfolio.
20.    EMPLOYEE BENEFITS
The Group offers a combination of fixed and variable compensation, each part of the mix defined based on the nature, scope and seniority of the different job positions, aligned to market practices.
Fixed compensation is payable in cash while variable compensation is paid in cash and/or by granting share-based instruments (as described below). Whereas the variable compensation for sales and operations teams is paid monthly or quarterly in cash, other teams are paid on an annual basis, which consists of a combination of cash payments (“cash bonus”) and share-based instruments with a four-year vesting schedule (“equity bonus”). The Group may also grant incentives as part of a hiring package to attract specific talent to the senior management team.
The Group has occasionally granted share-based instruments on an individual or collective basis to reward extraordinary performance (Special Recognition Equity Awards). Such special recognition equity awards are not part of the goals-based variable compensation but rather are granted unilaterally by the Group and have a vesting schedule and /or performance conditions defined on an ad-hoc basis.
The annual “equity bonus”, hiring bonus and special recognition equity awards are part of the Long-Term Incentive Plan (¨LTIP¨) that enables the grant of share-based instruments to employees and other service providers with respect to the Class A common shares.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
20.1. Accounting policy
20.1.1. Short-term obligations
Liabilities in connection with short-term employee benefits are measured on a non-discounted basis and are expensed as the related service is provided.
The liability is recognized for the expected amount to be paid under the plans of cash bonus or short-term profit sharing if the Group has a legal or constructive obligation of paying this amount due to past service provided by employees and the obligation may be reliably estimated.
20.1.2. Share-based payment
The Group has equity settled share-based payment instruments, under which management grants shares to employees and non-employees depending on the strategy described above.
The cost of equity-settled transactions with employees is measured using their fair value at the date they are granted. The cost is expensed together with a corresponding increase in equity over the service period when the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date up to the vesting date reflects the extent to which the vesting period has elapsed and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of the instruments, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an instrument, but without an associated service requirement, are considered to be non-vesting conditions.
The dilutive effect of outstanding share-based instruments is reflected as additional share dilution in the computation of diluted earnings per share (Note 16).
20.1.3. Profit-sharing and bonus plans
The Group recognizes a liability and an expense for bonuses and profit-sharing. Bonus and profit-sharing payable in cash for each individual is determined based on the following factors: corporate goals, department goals and individual performance assessment. The Group recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
20.2. Significant judgments, estimates and assumptions
20.2.1. Share-based payment
Estimating fair value for share-based instruments requires determination of the most appropriate valuation model and underlying assumptions, which depends on the terms and conditions of the grant and the information available at the grant date.
The Group uses the following methodologies to estimate fair value:
•estimation of fair value based on equity transactions with third parties close to the grant date; and
•other valuation techniques including option pricing models such as Black-Scholes;
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
These estimates also require determination of the most appropriate inputs to the valuation models including assumptions regarding the expected life of a share option or appreciation right, expected volatility of the price of the Group’s shares and expected dividend yield.
20.3. Employee benefits expenses
20252024 (Recasted)2023 (Recasted)
Wages and salaries1,650,587 1,521,811 1,337,002 
Social security costs461,911 428,567 342,900 
Profit-sharing and annual cash bonus290,067 252,289 215,062 
Share-based payments273,946 213,432 235,896 
2,676,511 2,416,099 2,130,860 
20.4. Share-based payment plans
As detailed further below the Group has primarily two types of share-based instruments: Restricted Share Units (¨RSU¨) and Performance Share Units (¨PSU¨).
The Group goal-based annual equity bonus is granted entirely through RSUs for approximately 1,900 employees (approximately 13.10% of total employees). The special recognition equity awards are usually granted through a combination of RSUs and PSUs and about 200 employees (approximately 1.38% of total employees) currently have instruments outstanding.
While the majority of RSUs vesting is conditional only to a time condition, a small part vests also depending on certain Group level performance goals. Whereas all PSUs vesting are conditional to market conditions, namely Total Shareholder Return measured based on the quoted market price of the shares of StoneCo at the vesting date.
On December 31, 2025, 42,238 vested RSUs were pending settlement by issuance of shares (December 31, 2024 - 24,686).
The table below outlines the different type of instruments outstanding and changes for the years ended as of December 31, 2025, 2024 and 2023.
Equity
RSUPSUOptionsTotal
Number of shares
Balance as of December 31, 202312,429,557 8,305,048 45,159 20,779,764 
Granted3,649,962 1,329,735 — 4,979,697 
Vested
(1,340,877)— — (1,340,877)
Cancelled(2,034,864)(3,743,400)(1,386)(5,779,650)
Balance as of December 31, 202412,703,778 5,891,383 43,773 18,638,934 
Granted3,629,942 640,354 — 4,270,296 
Vested (a)
(3,999,983)— — (3,999,983)
Cancelled(1,026,782)(291,814)— (1,318,596)
Balance as of December 31, 202511,306,955 6,239,923 43,773 17,590,651 
(a)The Group delivered 3,049,942 treasury shares for the plan beneficiaries after withholding taxes.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
20.4.1. Restricted share units ("RSU")
RSUs have been granted to certain key employees under the LTIP to incentivize and reward such individuals. These awards are equity-classified for accounting purposes and may be granted as part of the annual equity bonus and also as special recognition equity awards (Note 20.4), with a remaining weighted average vesting period of 1.7 years, subject to and conditioned upon the achievement of certain targets which are generally solely service conditions. Assuming these conditions are met, awards are settled through Class A common shares. If the applicable conditions are not achieved, the awards are forfeited for no consideration.
Information on the restricted shares is summarized below (amounts in R$):
RSU
Granted yearVesting period
Weighted average fair value (a)
Weighted average remaining expected life (years)Number of Outstanding Awards
2018(b)
From 4 to 9 years of service
R$ 88.800.78590,781 
2019
From 5 to 10 years of service
R$ 136.081.173,408 
2020
From 5 to 10 years of service
R$ 163.183.12112,403 
2021
From 1 to 10 years of service
R$ 348.492.81468,284 
2022
From 1 to 10 years of service
R$ 49.561.152,760,168 
2023
From 1 to 9 years of service
R$ 52.221.201,553,577 
2024
From 1 to 8 years of service
R$ 76.501.762,492,156 
2025
From 1 to 5 years of service
R$ 54.862.273,326,178 
11,306,955 
(a)Determined based on the fair value of the equity instruments granted and the exchange rate, both at the grant date.
(b)All performance conditions related with this grant were already satisfied.
20.4.2.    Performance share units ("PSU")
PSUs are equity classified for accounting purposes and the vast majority have been granted as part of special recognition equity awards (Note 20.4), with a remaining weighted average vesting period of 2.3 years. PSU grants beneficiaries the right to receive shares if the Group reaches minimum levels of total shareholder return (“TSR”) and internal financial metric for a specific period. If the minimum performance condition is not met the PSUs will not be delivered.
The fair value of the instruments is estimated at the grant date using the Black-Scholes-Merton pricing model, considering the terms and conditions on which the PSUs were granted, and the related expense is recognized over the vesting period. The performance condition is considered for estimating the grant-date fair value and of the number of PSUs expected to be issued, based on historical data and current expectations and is not necessarily indicative of performance patterns that may occur.
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the PSUs is indicative of future trends, which may not necessarily be the actual outcome. The main two inputs to the model were: Risk–free interest rate and annual volatility, based on the historical stock price of the Company and relevant peers. To estimate the number of awards that are considered vested for accounting purposes the calculation considers exclusively whether the service condition is met but TSR target attainment is ignored. If TSR targets are ultimately not achieved the expense will be recognized and not reversed for those PSUs for which the service condition was met.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
Information on the performance shares is as follows (amounts in R$);
PSU
Granted yearVesting conditionsWeighted average fair valueVolatilityRisk-free rateWeighted average remaining expected life (years)Number of Outstanding Awards
2022
From 1 to 5 years of service and achievement of a specified TSR
R$2.71 
76.5% to 83.3%
2.18%to 4.34%
2.173,548,762 
2023
From 1.4 to 5.3 years of service and achievement of a specified TSR
R$4.06 
73.8% to 83.4%
3.95% to 5.60%
2.22842,481 
2024
From 1 to 5 years of service and achievement of a specified TSR
R$11.64 
42.7% to 77.9%
3.72% to 5.32%
2.701,223,892 
2025
From 1 to 5 years of service and achievement of a specified TSR
R$6.33 
55.0% to 67.3%
3.35%% to 4.11%
2.65624,788 
6,239,923 
20.4.3. Options
The Group has granted awards as stock options with an exercise date between three and ten years and a fair value estimated at the grant date based on the Black-Scholes-Merton pricing model.
Information on the stock options is summarized as follows (amounts in R$ and in USD):
Options
Granted yearVesting periodWeighted average fair valueVolatility
Weighted average remaining expected life (years)
Exercisable at year endExercise priceNumber of Outstanding Awards
2018
From 5 to 10 years of service
R$ 59.5950.00 %2.717,077 USD 24.0038,613 
2019
From 3 to 5 years of service
R$ 81.7169.80 %05,160 USD 30.005,160 
43,773 
20.4.4. Share-based payment expenses
The total expense, including taxes and social charges, recognized as Other income (expenses), net for the programs was R$273,946 (2024 - R$ 213,432 and 2023 - R$ 235,896).
20.5. Labor and social security liabilities
December 31, 2025December 31, 2024
Accrued annual payments and related social charges471,438 494,706 
Labor liabilities and related social charges147,795 123,154 
Total labor and social security liabilities619,233 617,860 
Current536,364 578,345 
Non-current82,869 39,515 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
21.    TRANSACTIONS WITH NON-CONTROLLING INTERESTS
During the year ended December 31, 2025, the main transactions of non-controlling interests with the controlling shareholders were: (i) exchange differences on translation of foreign operations of Reclame Aqui R$ (353), (2024- R$ (606) 2023 – R$ (825)), (ii) equity transaction related to put options over non-controlling interest of Reclame Aqui R$ (9,563) (2024 R$ 1,028, 2023 – R$ (3,904)), (iii) equity transaction with non-controlling interests of APP Sistemas R$ 5,373 (2024 R$ nil, Cappta 2023 – R$ 49) (iv) dividends paid to shareholders Simplesvet and Questor R$ (17,663), (2024 - R$ (10,454) 2023 – R$ (5,983)), (v) Sale of subsidiary Simplesvet R$ (8,794) and (vi) Share-based payments R$ nil (2024 – R$ nil 2023 - Cappta R$ (114)).
22.    OTHER DISCLOSURES ON CASH FLOWS
22.1. Non-cash transactions
22.1.1. Operating activities
202520242023
Changes in the fair value of accounts receivable from card issuers at FVOCI(502,502)(117,097)98,283 
Fair value adjustment on equity instruments at FVOCI— 1,623 1,912 
22.1.2. Investing activities
202520242023
Property and equipment and intangible assets acquired through lease (Note 10.3 and 11.3)
61,455 140,784 67,417 
22.1.3. Financing activities
202520242023
Unpaid consideration for acquisition of non-controlling shares425 579 725 
22.2. Items breakdown
22.2.1. Fair value adjustment in financial instruments at FVPL
202520242023
Fair value adjustment on loans designated at FVPL— — (127,137)
Adjustment on FIDC and bank borrowings designated for fair value hedge(187,209)437,347 — 
Fair value adjustment on equity securities designated at FVPL
(8,043)4,131 30,574 
Fair value adjustment in financial instruments at FVPL(195,252)441,478 (96,563)
22.2.2. Interest income received, net of costs
202520242023
Interest income received on prepayment of accounts payable to clients9,395,387 7,122,635 5,962,063 
Finance cost of sale of receivables on accounts receivable from card issuers (Note 19)
(2,041,529)(2,544,359)(3,195,130)
Interest income received, net of costs7,353,858 4,578,276 2,766,933 
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
22.2.3. Purchases and construction of property and equipment
202520242023
Additions of property and equipment (Note 10.3)
(759,938)(863,937)(656,876)
Additions of right of use (IFRS 16) (Note 10.3)
61,454 107,390 33,254 
Payments from previous year(57,413)(65,348)(176,835)
Purchases unpaid at year end50,332 57,413 65,348 
Prepaid purchases of POS— — (1,135)
Purchases and construction of property and equipment(705,565)(764,482)(736,244)
22.2.4. Purchases and development of intangible assets
202520242023
Additions of intangible assets (Note 11.3)
(498,136)(531,570)(515,740)
Additions of right of use (IFRS 16) (Note 11.3)
1 33,394 34,163 
Payments from previous year(5,015)(14,117)(6,593)
Purchases unpaid at year end3,739 5,015 14,117 
Service and operating rights16,418 — — 
Purchases and development of intangible assets(482,993)(507,278)(474,053)
22.2.5 Proceeds from the disposal of non-current assets
202520242023
Net book value of disposed assets (Notes 10.3 and 11.3)
291,703 118,414 96,664 
Net book value of disposed Leases(34,473)(4,623)(21,225)
Gain (loss) on disposal of property and equipment, and intangible assets
9,472 (29,365)(66,200)
Software business goodwill impairment loss(157,991)— — 
Disposal of Pinpag property and equipment, and intangible assets, including goodwill— (59,176)— 
Disposal of Simplesvet property and equipment, and intangible assets(20,585)— — 
Disposal of corporate assets(41,865)— — 
Disposal of Cappta property and equipment, and intangible assets— — 1,767 
Outstanding balance(46,259)(23,504)(10,470)
Proceeds from disposal of non-current assets2 1,746 536 
23.    BUSINESS COMBINATIONS
23.1. Accounting policy
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, including assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure non-controlling interests in the acquiree at fair value or on the basis of its proportionate share in the identifiable net assets of the acquiree. Costs directly attributable to the acquisition are expensed as incurred.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
The assets acquired and liabilities assumed are measured at fair value, classified, and allocated according to the contractual terms, economic circumstances, and relevant conditions as at the acquisition date. The Group identifies and measures the assets acquired and liabilities assumed by the value obtained in preliminary assessments at the acquisition date. The Group has up to 12 months after each of the acquisitions to conclude the assessment and frequently values the assets acquired and liabilities assumed with the assistance of independent specialists. When the valuation is finalized, the Group recognizes the difference between the preliminary amounts and the final amounts related to the acquisition on its statement of financial position and statement of profit or loss, as appropriate.
Subsequently to the initial recognition of property and equipment and intangible assets identified, the Group records the depreciation and amortization over the useful lives defined at the initial recognition based on the preliminary assessments until the final assessments are available.
Contingent liabilities recognized as of acquisition date are measured at fair value. Subsequently, until the liability is settled, cancelled or expires, they are recognized at the higher of the amount initially recognized or the amount that would be recognized under IAS 37.
Any contingent consideration to be transferred by the acquirer is recognized as a liability at fair value on acquisition date. Subsequent changes in the fair value of this liability is recognized in profit or loss. In order to evaluate the contingent consideration, the Group considers different probabilities of scenarios and discounted future contractual cash flows at the interest rates available in the market for similar financial instruments.
Goodwill is measured as the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the fair value of net assets acquired. If the fair value of net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all assets acquired and all liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill and indefinite useful life intangible assets recognized under business combination are tested for impairment at least annually or whenever there is an indication that it may be impaired (Note 11.4).
23.2. Significant judgments, estimates and assumptions
The process of accounting a business combination includes the use of (i) valuation techniques to determine the amounts of intangible assets identified, (ii) estimates to determine its useful life, and (iii) valuation techniques to estimate the contingent consideration included in the total consideration paid to acquire the companies.
23.3. APP acquisition
On April 4, 2025, after buying shares from selling shareholders with significant voting power, the Group obtained control of APP with a 45.96% equity interest. APP was previously an associate and accounted for under the equity method. Immediately prior to the acquisition, the Group held an equity interest of 19.70% in APP which was acquired on August 20, 2021. APP is an unlisted company based in the State of São Paulo, Brazil, that develops an integrated solution of management, focused mainly on the hospitality segment.
FORM 20-F 26FY25 
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Notes to Consolidated Financial Statements
Years ended December 31, 2025, 2024 and 2023
(In thousands of Brazilian Reais, unless otherwise stated)
23.3.1.    Financial position of the businesses acquired
The allocation of assets acquired and liabilities assumed in the business combinations mentioned above are presented below.
23.3.1.1. APP Sistemas
Fair value
APP
(as of April 4, 2025) (a)
Cash and cash equivalents3,740 
Trade accounts receivable912 
Recoverable taxes180 
Property and equipment205 
Intangible assets - Customer relationship(b)
5,321 
Intangible assets - Software(b)
6,498 
Other assets117 
Total assets16,973 
Trade accounts payable245 
Labor and social security liabilities967 
Deferred tax liabilities
3,225 
Taxes payable544 
Dividends payable2,000 
Other liabilities50 
Total liabilities7,031 
Net assets and liabilities (a)
9,942 
Consideration paid
15,406 
Goodwill5,464 
(a)Identification and measurement of assets acquired, liabilities assumed, consideration transferred, and goodwill are final.
(b)The Group carried out a final fair value assessment of the assets acquired in the business combination, as specified in the items (a) above, having identified customer relationship, and software as intangible assets.
23.3.2.    Consideration paid
APP
Cash consideration paid to the selling shareholders5,734 
Previously held equity interest in the acquire, at fair value (a)
4,300 
Non-controlling interest in the acquiree5,372 
Total15,406 
(a)Refers to the interest in APP' shares previously held by the Group. As a result of the step acquisition, the Group recognized a gain of R$ 1,986 for the remeasurement of the previously held 19.8% interest in APP to fair value, of R$ 4,300, compared to its carrying amount, of R$ 2,314.
24.    SUBSEQUENT EVENTS
On July 21, 2025, the Group entered into an agreement to sell its Software Businesses (as defined in Note 1.1), resulting in their classification as assets held for sale. The transaction was approved without restrictions by the Brazilian Administrative Council for Economic Defense (CADE) on January 30, 2026, and completed on February 27, 2026. The total amount received was R$ 3,272,193, and the final accounting effects of the disposal will be recognized in 2026.
FORM 20-F 26FY25 
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