PagSeguro Digital Ltd. (PAGS): Financial results for Q2 2026
PagSeguro Digital Ltd. (PAGS) furnished an SEC Form 6-K — earnings release. Yes ☐ No ☒ 1 PAGS Reports Second Quarter 2026 Results Non-GAAP Net Income reaches R$576 million, driven by Banking acceleration, TPV recovery and disciplined capital allocation São Paulo, August 11, 2026 – PagSeguro Digital Ltd. (“PagBank”, “we”, “Company”) has announced today it
How this was made
The 30-second read
Why it matters
The earnings beat and strong credit portfolio growth are likely to drive short‑term buying interest, while the modest revenue increase may temper expectations.
Market read
First‑report earnings for a mid‑cap fintech; material numbers and guidance could move the stock and influence the sector.
What to watch
Higher funding costs and potential regulatory changes in Brazil could pressure margins.
Non-GAAP Net Income reaches R$576 million, driven by Banking acceleration, TPV recovery and disciplined capital allocation
Banking revenue, gross profit, credit portfolio, deposits and EPS increased year-over-year, while total revenue growth was 0.4%, payments revenue declined 4.7%, active clients declined and credit loss allowance expenses increased >100%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total Revenue and IncomeGAAP | R$5,080.0 million | 1.5% | 0.4% |
| Total Revenue and Income (ex-ITC)GAAP | R$3,380 million | 1.3% | 1.7% |
| Transaction Activities and Other ServicesGAAP | R$2,057 million | 3.9% | 3.4% |
| Financial IncomeGAAP | R$2,824 million | 0.8% | -2.7% |
| Other Financial IncomeGAAP | R$199 million | -10.9% | 19.3% |
| Gross Profitother | R$1,999 million | 5.8% | 2.8% |
| Gross Profit Margin (ex-ITC)other | 59.1% | 2.5 p.p. | 0.6 p.p. |
| Payments Gross Profitother | R$1,425 million | 9.7% | -4.4% |
| Payments Gross Profit Marginother | 55.8% | 4.1 p.p. | 0.2 p.p. |
| Banking Gross Profitother | R$574 million | -2.7% | 26.2% |
| Banking Gross Profit Marginother | 69.7% | (2.3) p.p. | (1.5) p.p. |
| Total Costs and ExpensesGAAP | R$4,453 million | 1.5% | 0.2% |
| Total Costs and Expensesnon-GAAP | R$4,410 million | 1.6% | 0.2% |
| Cost of Sales and ServicesGAAP | R$2,366 million | 2.0% | -1.9% |
| Selling ExpensesGAAP | R$419 million | 11.8% | -1.2% |
| Credit Loss Allowance ExpensesGAAP | R$70 million | 16.0% | >100% |
| Administrative ExpensesGAAP | R$259 million | 7.0% | 14.3% |
| Financial CostsGAAP | R$1,274 million | -4.9% | -0.4% |
| Operating ExpensesGAAP | R$895 million | 13.3% | 6.5% |
| Operating Expensesnon-GAAP | R$875 million | 14.1% | 6.6% |
| Depreciation and AmortizationGAAP | R$478 million | 3.5% | 5.8% |
| Capital Expendituresother | R$518 million | -8.5% | -2.1% |
| Earnings Before TaxGAAP | R$627 million | 1.0% | 1.7% |
| Earnings Before Taxnon-GAAP | R$670 million | 0.7% | 1.7% |
| Effective Tax RateGAAP | 12.4% | 0.3 p.p. | (0.5) p.p. |
| Income Tax and Social ContributionGAAP | R$78 million | 3.5% | -2.0% |
| Net IncomeGAAP | R$549 million | 0.7% | 2.3% |
| Net Incomenon-GAAP | R$576 million | 0.1% | 1.9% |
| Diluted Earnings per Common ShareGAAP | R$1.96 | 1.9% | 10.1% |
| Diluted Earnings per Common Sharenon-GAAP | R$2.06 | 1.3% | 9.7% |
| Return on Average EquityGAAP | 14.9% | (0.1) p.p. | 0.3 p.p. |
| Return on Average Equitynon-GAAP | 15.6% | (0.2) p.p. | 0.3 p.p. |
| Total Clientsother | 34.1 million | 0.4% | 3.1% |
| Total Active Clientsother | 17.1 million | -1.2% | -3.3% |
| Active Merchantsother | 6.2 million | -0.6% | -0.3% |
| Active Banking Clientsother | 16.9 million | -1.0% | -2.7% |
| Total Payment Volumeother | R$133.4 billion | 4.0% | 3.0% |
| TPV per Merchantother | R$21.4 thousand | 4.7% | 3.3% |
| Cash-Inother | R$97.0 billion | 19.1% | 23.3% |
| Cash-In per Active Banking Clientother | R$5.7 thousand | 20.2% | 26.7% |
| Credit Portfolioother | R$5.1 billion | 2.0% | 30.7% |
| Credit Portfolio, netother | R$4.6 billion | 1.6% | 29.2% |
| NPL 90+ | Total Credit Portfolioother | 3.4% | 0.4 p.p. | 0.9 p.p. |
| Expanded Portfolioother | R$52.4 billion | 2.6% | 9.0% |
| Prepayment to Merchantsother | R$47.3 billion | 2.7% | 7.0% |
| Total Depositsother | R$42.8 billion | 2.7% | 15.1% |
| On-Platform Depositsother | R$39.2 billion | 3.2% | 23.7% |
| Total Deposits APYother | 83.3% of CDI | (0.6) p.p. | (5.9) p.p. |
| Total Fundingother | R$47.2 billion | 0.8% | 10.1% |
| Expanded Loan-to-Funding Ratioother | 111% | 1.9 p.p. | (1.2) p.p. |
| BIS Ratioother | 22.5% | (1.7) p.p. | (7.1) p.p. |
| Total AssetsGAAP | R$75,697 million | 0.7% | 6.3% |
| Cash and cash equivalentsGAAP | R$624 million | -60.8% | -44.7% |
| EquityGAAP | R$15,016 million | 3.4% | 3.0% |
| Net Cash Provided by Operating ActivitiesGAAP | R$1,009 million | 8.5% | -53.9% |
| Net Cash Used in Investing ActivitiesGAAP | R$651 million | 15.5% | >100% |
| Net Cash Used in Financing ActivitiesGAAP | R$1,324 million | >100% | -24.8% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| PaymentsThe annual decline was mainly associated with product mix dynamics, while the sequential increase reflected the quarter-over-quarter recovery in TPV. | R$2,556 million | 1.6% | -4.7% |
| BankingGrowth was led by the 30.7% Credit Portfolio expansion, the 15.1% increase in Total Deposits, and higher transactionality across the Banking ecosystem. | R$824 million | 0.6% | 28.9% |
2026 commitments and 2029 ambition outlook
- NoteR$25 billion Credit Portfolio
- Notegross profit CAGR of approximately 10%
- NoteEPS CAGR above 16% between 2025 and 2029
- Note18% to 22% target range for managerial BIS ratio
- Noteplanned R$1.4 billion dividend distribution for the year
Capital returns
- In Q2 2026, the Company repurchased 1,870,755 outstanding Class A common shares under its current repurchase program.
- In the last twelve months, the Company repurchased over 19 million shares, or R$1 billion.
- The third share repurchase program was fully completed.
- In June 2026, the Company paid a special cash dividend of US$0.26 per common share.
- In Q2 2026, the Company distributed approximately R$363 million in dividends.
- During 2026, the Company has already distributed approximately R$600 million of the R$1.4 billion in dividends expected to be paid during 2026.
- An additional dividend of US$0.28 per common share was announced to be paid on September 30, 2026, with September 16, 2026 as the record date.
- The remaining amount, totaling approximately R$400 million, is expected to be paid in a subsequent installment this year.
- Over the last twelve months, the Company returned R$2.0 billion to shareholders through dividends and share buybacks.
What drove it
- Banking revenue increased 28.9% year-over-year and represented 24% of total revenue ex-ITC, up 5.1 p.p. year-over-year.
- TPV increased 3.0% year-over-year and 4.0% quarter-over-quarter to R$133.4 billion.
- Cash-In increased 23.3% year-over-year to R$97.0 billion, with Cash-In per Active Banking Client up 26.7% year-over-year.
- Credit Portfolio increased 30.7% year-over-year to R$5.1 billion, led by credit card receivables financing and working capital products.
- On-platform deposits increased 23.7% year-over-year to R$39.2 billion and represented 91.6% of Total Deposits.
- Financial Costs decreased 4.9% quarter-over-quarter, reflecting the 42 bps reduction in the weighted-average SELIC rate and four fewer business days than Q1 2026.
- Transaction Costs decreased 2.0% year-over-year, mainly due to lower Interchange and Card Scheme Fees from product-mix changes.
- Gross profit margin increased 2.5 p.p. quarter-over-quarter to 59.1%.
Concerns
- Total Revenue and Income increased 0.4% year-over-year, while payments revenue declined 4.7% year-over-year.
- Total Active Clients decreased 3.3% year-over-year and Active Banking Clients decreased 2.7% year-over-year, partly reflecting inactive-account lifecycle management.
- NPL 90+ | Total Credit Portfolio increased to 3.4% from 2.5%, while unsecured products rose to 24.3% of the Credit Portfolio from 13.1%.
- Credit Loss Allowance Expenses were R$70 million, compared with R$28 million in Q2 2025.
- Non-GAAP Operating Expenses increased 6.6% year-over-year, including an 8.3% increase in Marketing and Advertising associated with the World Cup broadcast sponsorship in Brazil.
- Managerial BIS ratio declined to 22.5% from 29.6% in Q2 2025 and 24.1% in Q1 2026.
- Net Cash Provided by Operating Activities declined 53.9% year-over-year to R$1,009 million.
What to watch
- The pace of TPV recovery and whether Payments revenue recovers following the 4.7% year-over-year decline.
- Banking revenue growth, credit product mix and the performance of working capital loans, which increased 203.6% year-over-year.
- Credit quality as unsecured products represent 24.3% of the Credit Portfolio and NPL 90+ was 3.4%.
- The persistence of lower funding costs, with Total Deposits APY at 83.3% of CDI.
- The effect of client lifecycle management on Active Banking Clients and Total Active Clients.
- Capital deployment after completion of the third share repurchase program and the planned R$1.4 billion dividend distribution for 2026.
- Management's progress toward its 2029 ambition of a R$25 billion Credit Portfolio, gross profit CAGR of approximately 10% and EPS CAGR above 16% between 2025 and 2029.
Balance sheet and cash flow
- Cash and cash equivalents were R$624 million, compared to R$1,128 million in Q2 2025 and R$1,590 million in Q1 2026.
- Total Assets were R$75,697 million.
- Equity was R$15,016 million.
- Total Funding was R$47.2 billion, up 10.1% year-over-year.
- Borrowings were R$1,498 million, down 56.6% year-over-year and 35.2% quarter-over-quarter.
- Net Cash Provided by Operating Activities was R$1,009 million, down 53.9% year-over-year.
- Purchases of Property and Equipment were R$228 million and Purchases and Development of Intangible Assets were R$290 million.
- Net Cash Used in Investing Activities was R$651 million.
- Net Cash Used in Financing Activities was R$1,324 million.
- Cash and Cash Equivalents at the End of the Period were R$624 million.
Analysis
PagSeguro reported modest top-line growth in Q2 2026, with Total Revenue and Income increasing 0.4% year-over-year to R$5,080.0 million and revenue ex-ITC increasing 1.7% to R$3,380 million. The mix shifted toward Banking, where revenue rose 28.9% to R$824 million and reached 24% of total revenue ex-ITC. Payments revenue declined 4.7% year-over-year to R$2,556 million, although it increased 1.6% sequentially as TPV rose 4.0% quarter-over-quarter to R$133.4 billion.
The Banking ecosystem remained the principal operating growth engine. Cash-In increased 23.3% year-over-year to R$97.0 billion, Credit Portfolio increased 30.7% to R$5.1 billion, and Total Deposits increased 15.1% to R$42.8 billion. On-platform deposits increased 23.7% to R$39.2 billion and represented 91.6% of Total Deposits. Credit expansion was concentrated in higher-growth categories, including working capital loans and other, which increased 203.6% year-over-year. The risk profile warrants attention: unsecured products increased to 24.3% of the portfolio and NPL 90+ increased to 3.4% from 2.5%.
Profitability improved despite the limited consolidated revenue growth. Gross Profit increased 2.8% year-over-year and 5.8% sequentially to R$1,999 million, while gross profit margin ex-ITC reached 59.1%, up 0.6 p.p. year-over-year and 2.5 p.p. quarter-over-quarter. Banking Gross Profit increased 26.2% to R$574 million. Financial Costs were broadly stable year-over-year and declined 4.9% sequentially, while Transaction Costs declined 2.0% year-over-year. These gains were partly offset by higher Credit Loss Allowance Expenses, which rose to R$70 million from R$28 million, and higher operating expenses tied in part to the World Cup broadcast sponsorship in Brazil.
GAAP Net Income increased 2.3% year-over-year to R$549 million and non-GAAP Net Income increased 1.9% to R$576 million. GAAP diluted EPS increased 10.1% to R$1.96 and non-GAAP diluted EPS increased 9.7% to R$2.06, supported by profitability and a lower weighted-average diluted share count. Non-GAAP ROAE was 15.6%, up 0.3 p.p. year-over-year but down 0.2 p.p. sequentially. Operating cash flow was R$1,009 million, down 53.9% year-over-year, while cash and cash equivalents declined to R$624 million.
Capital allocation remained active. The Company completed its third share repurchase program during the quarter, repurchasing 1,870,755 Class A common shares, and distributed approximately R$363 million in dividends during Q2 2026. The managerial BIS ratio was 22.5%, close to the upper end of the 18% to 22% target range, but down from 29.6% a year earlier after dividends, repurchases and balance sheet growth. The release did not provide quantified 2026 operating guidance, but reiterated the 2029 ambition of a R$25 billion Credit Portfolio, gross profit CAGR of approximately 10% and EPS CAGR above 16% between 2025 and 2029.
Not in the filing
stated, not guessed- Formal quantified 2026 revenue guidance
- Formal quantified 2026 gross margin guidance
- Formal quantified 2026 operating expense guidance
- Formal quantified 2026 tax rate guidance
- Prior-period outlook for comparison
- Free cash flow
- Cash dividends per share for Q2 2026 in Reais
- Net debt
- Management-provided segment operating income
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
PagSeguro filed a Form 6‑K with the SEC, providing its first public Q2 2026 financial results.
Ticker impact
Q2 2026 earnings release shows revenue and EPS growth, higher TPV and credit portfolio expansion, indicating improved profitability.
Potential short-term rally of 3-5% on the back of better-than-expected results.
Revenue up 0.4% YoY, non‑GAAP EPS up 9.7%, credit portfolio up 31%, and a solid ROAE of 15.6% signal operational strength.
Market effects
Strengthens the Brazilian fintech/payments sector outlook, may lift peers like StoneCo and Nubank.
Positive for Latin American digital banking stocks, could attract foreign capital flows.
Limited to emerging‑market fintech investors; minimal impact on broader global indices.
Counterpoint
Growth may be unsustainable if macro conditions worsen; credit expansion could raise future default risk.
Key entities
- CompanyPagSeguro Digital Ltd.
Brazilian fintech listed on NYSE under ticker PAGS.
- ExecutiveCarlos Mauad
CEO of PagSeguro who delivered the earnings commentary.
