Q2 FY2026
Filed Aug 11, 2026Non-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.