SÃO PAULO, Brazil, April 01, 2019 (GLOBE NEWSWIRE) -- StoneCo Ltd. (Nasdaq: STNE) (“Stone” or the “Company”), a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels and help them grow their businesses over time through technology, today announced preliminary results for the first quarter of 2019.
“In the first quarter of 2019 we continued to deliver strong results and made key advancements in our strategic roadmap,” said Thiago Piau, chief executive officer of Stone. “Our preliminary results and key operational highlights for 1Q19 demonstrate strong continued execution and performance across the Company and have encouraged us to make some additional investments to implement our strategy and accelerate our plans. For example, we are very pleased with the continued evolution and performance of our Stone Hub strategy and have decided to invest further in our Stone Hub operations, ahead of our original plans for the year. We have also been encouraged by the progress and positive feedback from our clients related to our new solutions in software, banking and credit, which we believe will continue to differentiate and strengthen our ecosystem of offerings, enable us to serve our clients better and empower small and medium sized merchants to manage and grow their businesses. As a result, we are very happy to announce two new investments in Point-of-Sale and ERP software solutions and welcome a new installed base of approximately 18,000 integrated merchants to our client community. In addition to these business updates, we are happy to see the continued commitment and strengthening of our team who remain 100% focused on delighting our customers and are very excited about the many opportunities ahead of us.”
Preliminary Results for the First Quarter of 2019
Key Recent Operational Highlights
Important developments of our strategy roadmap
Software
By integrating our payment offerings with software solutions, we believe we will improve the lifetime value of our clients and be able to leverage strategic data that will allow us to be more proactive in providing financial solutions such as working capital and credit. Currently, approximately 14,000 clients use at least one type of software product we provide. We also aim to invest in new software opportunities to help merchants become more productive, including opportunities to develop and deploy ERP software in other industry verticals. A few highlights on our current software offerings are:
New investments in software
In March of 2019, we signed two binding memoranda of understanding to invest in two new software companies, VHSYS and Tablet Cloud. “We believe these two new investments will strengthen our ability to continue to provide superior value proposition to our clients, assist us in our continued efforts to help clients better manage their operations, and drive omni-channel growth, giving brick-and-mortar establishments the tools they need to successfully sell both online and offline,” says Thiago Piau, CEO.
The two new investments are:
Together, VHSYS and Tablet Cloud will add approximately 18,000 new software clients, in addition to the 14,000 clients that used our software in 1Q19.
Credit solutions:
In February of 2019, we launched the pilot of our credit solution to SMBs, with a third-party credit provider. We believe this solution will support our clients when they need funding to grow their business, by allowing them to effortlessly contract, monitor and payback loans, by fully integrating our credit solution within our payments platform. We are in the initial stages of our credit offering and as of 1Q19 we had more than 143 clients.
We believe the main benefits of our SMB Credit Solution will be the following:
Digital banking solutions:
We are developing a suite of digital banking solutions designed to enable our clients to conduct financial transactions, receive and remit funds, issue boletos, pay bills, and integrate their enterprise financial data in a more efficient, streamlined, and cost-effective manner than traditional bank accounts. Our technology platform is proprietary and directly integrated to the Brazilian Central Bank’s system. As of February 2019, our pilot had more than 2,500 open accounts.
Digital and IP strategy
Adjusted Net Income Reconciliation
Net Income Bridge (R$mn) | 1Q19 | 1Q18 | Δ | ||
Net income (loss) for the period | 170.8 - 174.8 | 24.7 | 146.1 - 150.1 | ||
Share-based compensation expenses (a) | 10.1 | 0.0 | 10.1 | ||
Amortization of fair value adjustment (b) | 3.8 | 2.7 | 1.1 | ||
Tax effect on adjustments | (4.7) | (0.9) | (3.8) | ||
Adjusted net income (loss) | 180.0 - 184.0 | 26.5 | 153.5 - 157.5 | ||
(a) Consists of non-cash expenses related to the vesting of share-based compensation, as well as fair value (mark-to-market) adjustments for share-based compensation expense classified as a liability in our consolidated financial statements. | |||||
(b) On intangibles related to acquisitions. Consists of expenses resulting from the amortization of the fair value adjustment on intangible assets and property and equipment as a result of the application of the acquisition method, a significant portion of which relate to the EdB acquisition. | |||||
Cautionary Statement Regarding Preliminary Results
The results for the three months ended March 31, 2019 are preliminary, unaudited and subject to completion, reflect our management’s current views and may change as a result of our management’s review of our results and other factors, including economic and competitive risks and uncertainties. Such preliminary results for the three months ended March 31, 2019 are subject to the finalization and closing of our accounting books and records (which have yet to be performed),and should not be viewed as a substitute for full quarterly financial statements prepared in accordance with IFRS. We caution you that these preliminary results for the three months ended March 31, 2019 are not guarantees of future performance or outcomes and that actual results may differ materially from those described above. These preliminary results have been prepared by and are the sole responsibility of our management.
Free Writing Prospectus Legend
The Company has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Company, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it from Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: 1-866-803-9204; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014; or Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by phone at 1-800-831-9146. You may also access the Company’s most recent preliminary prospectus dated April 1, 2019 included in the Company’s registration statement on Form F-1 dated as the today through the following link: https://www.sec.gov/Archives/edgar/data/1745431/000119312519093494/d727522df1.htm
This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About Stone
Stone is a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels and help them grow their business over time through technology.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. These statements identify prospective information and may include words such as “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “forecast,” “plan,” “predict,” “project,” “potential,” “aspiration,” “objectives,” “should,” “purpose,” “belief,” and similar, or variations of, or the negative of such words and expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Stone’s control.
Stone’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: more intense competition than expected, lower addition of new clients, regulatory measures, more investments in our business than expected, among other factors.
Contact
ICR, Inc.
+1 646-277-1200
StoneIR@icrinc.com
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