Good morning, everyone. I'm Rafaela de Vitoria, Inter's IR Officer, and I would like to welcome all to Inter's Second Quarter 2025 Earnings Conference Call. The conference is being recorded. A replay will be available at the company's IR website. With me on today's call are Joao Vitor Menin, Inter's Global CEO; Alexandre Riccio, Brazil's CEO; and Santiago Stel, Senior Vice President and CFO. Throughout this conference call, we'll be presenting non-IFRS financial information. These are important financial measures for the company but are not financial measures as defined by the IFRS. Reconciliations to the company's non-IFRS to the IFRS financial information are available in our earnings release and earnings presentation appendix. I would also like to remind everyone that today's discussion might include forward-looking statements which are not guarantees of future performance. Please refer to the forward-looking statements disclosure in the company's earnings release and earnings presentation. Today, Joao will discuss the interest strategy and business overview. After that, Alexandre and Santiago will take you through our financial and operating results in more detail. We'll then open the call for questions. I will now turn the call over to Joao. Joao, please go ahead.

Thank you, Raf. Good morning, everyone. Today, I'm happy to share that we had another quarter of solid results. I'm also excited about our progress as we keep innovating and making the client experience better every day. Inter was designed with a clear focus. From the beginning, we chose to offer sustainable credit options, for us and for our clients. We also worked hard to diversify our source of fees and to build a strong funding franchise. Because of this choice, our profitability has compounded quarter after quarter. For the last 10 quarters, we have grown our profits in a consistent way. This compounding effect gives us a solid foundation for the future, and we plan to keep building on it. What gets me really excited is in addition to delivering increasing profits, we are building long-term value for our stakeholders. This quarter, we delivered two features that exemplify this value creation. One on the asset side and another one on the funding side. Let's start with My Credit. This is a new journey inside our app to help clients build a healthy credit relationship with Inter. Our goal is to expand credit access in a safe and responsible way. With My Credit, clients can now track their scores with us directly in the app. This is much more transparent than what you usually see in Brazilian banks, where your score is often hidden. Through My Credit, clients can take steps to improve their scores and unlock higher limits in clear states. This feature is not just for those who are behind on payments and want to rebuild their credit. It is also for clients who want to improve their scores and plan their finances better. We believe My Credit is a strong tool for financial education, and it will help us grow credit penetration in a sustainable and healthy way. Now moving on to the funding side. We have launched My Piggy Bank By Savings Goals. With this new feature, clients can organize their savings for a specific purpose. Like buying a new car, planning a vacation, or getting a new smartphone. It is a simple way for people to take control of their future. The response has been excellent. In less than one month over 425,000 clients have used this feature, creating more than 529,000 savings goals. This shows how engaged our users are and the strength of our platform. For example, if a client is saving for a new smartphone, we can offer a special promotion from Inter Shop and send tailored communications. If someone is saving for a new home, we can present our mortgage solutions. By understanding our clients' goals, we can offer the right products at the right time. This is a powerful tool for monetization as it drives cross-sell across our verticals. Features like My Piggy Bank By Savings Goals and My Credit show how we listen to our clients and bring useful solutions for their everyday lives. By doing that, we were able to continuously grow our client base. Just a few days ago, we reached 40 million clients. This is a clear sign of the trust people place in our platform. We know this trust will keep growing as we deliver real value to our clients. That's why user experience is always at the center of what we do. Every interaction must be simple, intuitive, and enjoyable. This approach has helped us build a strong brand. We are proud that Inter was named the 7 most powerful brand in Brazil, and the #1 banking brand for Gen Z. These achievements tell us that we are on the right path. We want to create lasting and meaningful relationships with our clients. We're very grateful for their trust. Now Xandre and Santi will walk you through the quarterly results. Xandre, please go ahead.

Thank you, Joao. It's incredibly exciting to see 40 million clients embracing our platform and joining us on this journey. The strength of our brand is rooted in the close relationship we build with our customers. Our Net Promoter Score remains firmly in the excellence zone at 85 points. We also continue to receive outstanding feedback with ratings of 4.9 in the Apple Store and 4.8 in the Play Store. These numbers aren't just statistics. They reflect the trust and engagement of real users who interact with our platform every day. In June, we saw nearly 19 million daily logins, and we now process over 780 million financial transactions each month. All these achievements highlight the high level of engagement our clients have with our ecosystem, as well as the value and synergy we create across our 7 verticals. Moving to the next slide. Let me start by highlighting our ongoing robust client growth. We've consistently added 1 million to 1.1 million active clients each quarter, showing how attractive and relevant our platform is to millions of people. Our activation rate has reached 57.7% with a clear upward trend towards 60%, driven by continuous improvements in marketing, onboarding, and personalized experiences. Our private payroll loan is helping us reactivate former clients and attract new active users from day one. On the business side, our client base grew 19% year-over-year to 2.4 million accounts, with strong engagement and rising ARPAC levels. These achievements demonstrate the power of our platform and our commitment to deliver innovation and value. Moving to the next page. When we look at banking performance, we see strong momentum. Total payment value grew by 33% year-over-year and reached BRL 374 billion, a new record high. PIX was a major driver, accounting for BRL 346 billion and achieving an 8.2% market share. On the chart on the right, we can see that TPV levels keep rising across all cohorts, with the darker lines representing our newest clients. These cohorts are transacting even more intensely and at a faster pace, showing higher engagement levels from the beginning. These results highlight the growing engagement of our users and the power of our platform to drive sustainable, high-quality transactional growth. Moving to the next page, we see that we had a strong quarter in credit across both secured and unsecured products. Credit penetration among active clients continues to climb, now reaching 33.8%. This healthy and sustainable growth is underpinned by initiatives such as the My Credit journey that Joao presented, as well as our monthly credit reassessments to make sure we're supporting our clients. A standout highlight this quarter is our private payroll loan portfolio which soared to BRL 728 million, and now serves 153,000 clients. This success demonstrates the strength of our digital distribution and how seamlessly this product fits into our strategy, truly Inter by design. Real estate lending also continues to perform exceptionally well. Despite a high interest rate environment, our portfolio grew 37% year-over-year, reaching BRL 13.3 billion, including mortgages and home equity loans. In the last quarter, I shared our focus on reshaping our credit card portfolio. We're continuing to increase the share of installment products that help clients organize their financial lives. Santi will provide more details on our strong and balanced loan book performance in the next session. Altogether, these results reinforce the effectiveness of our credit strategy and our commitment to delivering sustainable, high-quality growth across all of our lending products. Moving to the next page. Let's now look at the strong performance of our other verticals. Investments continue to deliver impressive results, reaching 7.9 million active clients, a growth of 38% year-over-year. This was fueled by the success of My Piggy Bank with its new savings goals feature driving high engagement. As a result, assets under custody grew by 47% year-over-year. Insurance adoption continues to rise, reaching 10 million active contracts, up 272% year-over-year. This reflects the success of our fully integrated offering across other verticals, including e-commerce and banking. In shopping, our in-app e-commerce platform, we saw our net take rate increase to 7.6%, while GMV grew 9%. Additionally, 9.3% of our total GMV was converted into Buy Now Pay Later, highlighting our ecosystem's strong selling power. Finally, in loyalty, our client base grew 64% year-over-year to 13.6 million. Members of our loyalty program are highly engaged, transacting 3x more than non-members and using more products across our platform. These results show how each vertical not only grows individually, but also drives greater engagement and value through integration within our ecosystem. Our global front, in the next page, continues to accelerate with a remarkable result this quarter. The number of global account clients grew 34% year-over-year, reaching 4.4 million. We also had a record performance in deposits, which surpassed $294 million this quarter, up 90% year-over-year, marking our best-ever quarterly growth. This vertical is becoming increasingly relevant for our clients. Whether they're traveling, diversifying their investments internationally, or doing business abroad. This significant deposit growth is a clear sign of the scale and importance we have achieved with our global account offering. These results confirm that our global platform is not only gaining traction, but also building real materiality for Inter and our clients around the world. To wrap up on the next slide, I want to highlight our continued and impressive market share gains across some of our key markets we participate in. Quarter after quarter, we see tangible progress in both our credit and fee-based businesses. This momentum is a result of giving our clients real access through a complete range of solutions, which increases our share of wallet and compounds the positive impact on engagement. Our strong performance in market share demonstrates not only our capacity to attract new clients but also deepen relationships with existing ones, showing the strength and relevance of our platform. I'm confident that we will continue strengthening our position and capturing even more opportunities ahead. With that, I'll hand it over to Santi, who will share more about our financial performance.

Thank you, Xandre. We had another excellent quarter in loans. Our total portfolio grew by 8% from the previous quarter, reflecting a growth rate slightly above 30% and a small acceleration compared to earlier quarters. The quality of our portfolio remains robust, with nearly 70% being collateralized, which provides resilience against asset quality fluctuations while ensuring strong profitability as we shift towards higher ROE products. We have outperformed the market growth in most portfolios. FGTS and home equity grew by about 40% year-on-year, increasing our market share. Mortgages also performed well, with a 27% year-on-year growth, benefiting from an environment where competitors are struggling with earmarked loans. Payroll and personal loans accelerated to 27%, primarily driven by digital private payroll as we capitalize on opportunities aligned with our Inter by design model. Our credit cards grew almost 1.5 times faster than the market, achieving a 24% year-on-year growth, all while reshaping our portfolio to enhance profitability. For SMEs, we prioritize profitability over loan growth by focusing on secured working capital options. Regarding asset quality metrics, we improved the 15- to 90-day non-performing loans (NPLs) by 20 basis points, while the 90-day past due rate remained stable. Our credit card NPLs continue to perform strongly across cohorts, confirming our advancements in underwriting and collection processes. NPL formation and Stage 3 formation were at 1.6% and 1.5%, respectively, consistent with historical trends. Our cost of risk reached 5.0% this quarter. It’s important to note that our goal is not just to minimize this metric but to sustainably enhance our risk-adjusted net interest margin for both us and our clients. This cost level contributed to a coverage ratio of 143%, approximately 10 percentage points higher than in previous quarters. We also observed robust funding growth, up 30% year-on-year, exceeding BRL 62 billion. This was largely driven by time deposits, fueled by the Selic increase and the success of My Piggy Bank, our fixed income investment product. On average, our active clients held nearly BRL 2,000 in deposits, marking our second highest level on record. The healthy growth and mix of funding allowed us to achieve an industry-leading cost of funding at 64.8% of the CDI. Notably, despite fluctuations in interest rates, this funding cost has remained advantageous for our performance. In terms of revenues, we recorded BRL 3.6 billion in total gross revenues and BRL 2.0 billion in net revenue, representing a year-on-year increase of 48% and 35%, respectively. Quarterly growth was robust at 13% for gross revenue and 9% for net revenue. This quarter, fee income outperformed net interest income, driven by growth in interchange and shopping investments. The increasing client engagement has led to improved monetization across different customer segments. On a matured basis, we reached BRL 128 and BRL 89 in gross and net terms, respectively, while the average figures for active clients were BRL 54 and BRL 32. These favorable metrics, alongside a cost-to-serve of BRL 13, allowed us to achieve our second-best quarter for gross margin per active client at BRL 19. We're excited about our customer monetization progress and believe that our success with products like private payroll will drive continued performance in upcoming quarters. Now, let's discuss our net interest margins. Both our NIM 1.0 and NIM 2.0, which excludes non-interest receivables from credit cards, are showing consistent quarter-after-quarter growth and reaching record levels. This improvement is due to our successful blend of product offerings driven by an ROE-oriented credit origination model, which optimizes our capital allocation. When factoring in risk-adjusted NIM, which deducts the cost of risk from the NIM, we also see strong performance. It’s encouraging that despite notable shifts in macroeconomic variables such as inflation and CDI, our NIM trend has remained stable and positive, demonstrating the effectiveness of our asset liability management strategy. On the expense front, we experienced a 5% increase this quarter, reaching BRL 873 million. We continue to strategically invest in marketing to enhance brand awareness, resulting in a record addition of 1.1 million new active clients this quarter. Additionally, we are working on seniorizing our team, exemplified by bringing Marlos Araujo on board as our Chief Risk Officer after his successful 20-year career at Bradesco. We are also investing in technology to automate processes and enhance the client experience. As we grow our business rapidly, we're focused on consolidating contracts with major vendors to reduce transaction costs and improve efficiency. Our emphasis on operational leverage remains a core pillar of our digital banking model, contributing to a 100 basis point improvement in our efficiency ratio, from 48.8% to 47.8%. We also introduced a version of the efficiency ratio that excludes tax expenses related to interest on capital, yielding a more precise view of our operational leverage, which hit a record low of 47.1%. We have included this metric in our historical data available on our Investor Relations website. Lastly, I want to emphasize our commitment to increasing profitability. We achieved a record return on equity of 13.9%, resulting in a record net income of BRL 315 million. Our quarterly performance reflects remarkable consistency, which we take pride in, and we have done this while maintaining a strong balance sheet and continuing to invest in our long-term strategy. With that, I’ll turn it back over to Joao for his final comments. Thank you.

Thank you, Xandre and Santi. After sharing the quarter highlights, I want to share why I'm so excited about Inter's future. Back in 2015, when we started this journey, our focus was on building the platform. Over the last 2 years, we have added consistent profitability to our story. Today, growth and profitability work through symbiosis. Each one is strengthening the other, and this is the engine behind our network effect. As our client base grows, we gain scale and efficiency. This greater efficiency feeds our profitability. With higher profitability, we are able to reinvest more in our platform, improve our products and bring even more clients. This restarts the cycle stronger and larger each time. Thank you to our clients, partners, and the Inter team for making all of this possible. Let's keep building the future together.

Before we move to the Q&A, I'd like to remind our investors about the current subsidy period for converting BDRs to Class A shares. We've been highly successful in our journey to migrate our share liquidity to the U.S. market since 2022, and it's now surpassed 50% of combined volume on most trading days. I want to emphasize that the subsidy period ends at the close of this month on August 30. If you have any questions, please don't hesitate to reach out to us. On our IR website, we've made available all the conversion rules and comprehensive guides to help you through the operational process. We want to reinforce that this movement benefits everyone, both shareholders and the company, as having shares traded in a single market creates value for all parties involved. Now let's open for questions.

Can you hear me now?

Yes.

Congrats on the numbers and on the execution. My question, I think it's on the private payroll product. It would be great to hear an update from you on your expectations for the product and how we can, I think, Inter's great UX and hyper-personalization offering can help boost the product's success with clients?

Rosman, this is Xandre speaking. Thank you for your question. So first, I'd like to say that we're very constructive with the product. So we've said before that it was almost a product that's made for Inter by design that we've been talking about. So we were very happy with the launch. The early days were great and the first quarter was even better. So we should pass the $1 billion portfolio soon here in the next days. We've been increasing in-app sales. So it's around getting close to 40% already. The other part comes from the government app. And it is a digital-only product for us, which also fits all the digital strategy that Inter has. And the potential pain point with the product that is delinquency is coming better than our expectations. So as we have discussed before, we started the product pricing it conservatively with the expectation that delinquency could be in the range of 15%, but the early signs that we see as the collection progresses is that it's going to be in the single-digit side. So much better than what we forecasted in the beginning. But again, this is a story to be written. We've been saying that, let's say, the first 12 months is going to be at least what we need to stabilize and have a good view. But the first readings are very good. The base scenario given what we see in terms of delinquency is that the product will run with an ROE beyond 30%. Finally, as we go to the UX and hyper-personalization, the first goal that we have is to keep bringing underwriting volume to the app. So having Inter's app as the primary channel for underwriting is an important goal for us. We're working on it. And how do we do this? You touched on hyper-personalization and it's a good point there. It's about feeding the product not only for people that push like the credit button that are looking for credit, but also finding situations where we can solve the customer's problem with the credit, and that's where we're going. So finding the right journeys to offer the product and solve the clients' problems. We'll see a lot of that in the upcoming months.

No, great, Xandre, just a follow-up here. Given that the product is digital first, and everyone is kind of starting from the same kind of lane, let's say, starting point. It's fair to say that you expect to have a substantially higher market share in this product than you have, for instance, on the public sector payroll?

Yes. We anticipate achieving a significant market share in the new products, similar to what we experienced with PIX, where we initially held a strong market position. Even with FGTS, which started with a 4% market share as a new product, we are seeing similar trends in the private payroll sector. Therefore, we expect our market share to exceed 5%, especially since we are launching this product simultaneously and have a strong demand for it as an additional offering. Joao will provide further insights.

So Rosman, Joao speaking. Thank you for your questions and comments. One thing to highlight is that we have the portability rate in place, allowing incumbent banks to migrate their former contracts to the new one. Excluding that, we are already operating at a market share of between 15% and 20%. This is very encouraging. We believe we have all the necessary tools to capture a significant share of this product. Additionally, we are excited about the private payroll, which has been a recurring topic in our conference calls. It’s an ideal product for Inter, as it combines several factors. It is 100% digital and has strong capital allocation, as Xandre noted, with a 30% ROE. There is considerable pent-up demand in Brazil, potentially in the hundreds of billions of BRL across all three factors. We also have a mutually beneficial relationship with clients, which is crucial for us. It benefits the client, supports good debt services, enhances our confidence, and strengthens our balance sheet. This fosters long-lasting client relationships. With that in mind, we are very pleased with the product. We also anticipate that other similar private payroll products will emerge, and we aim to adopt a digital approach and achieve a significant market share there as well. We are quite happy, and thank you for the question.

Our next question comes from Tito Labarta.

Can you hear me now?

Yes.

Okay, great. Congratulations on the strong results. I guess my question, asset quality seems to be holding up fairly well. Your provisions kind of did go up a bit, cost of risk a bit higher as you're growing, I guess, in riskier products, particularly maybe with the growth in the private payroll as well. So just how do you think about those two lines in terms of the outlook for credit quality for the rest of the year, given you kind of had to factor in a higher Selic and maybe the economy slowing a little bit? And then your outlook for provisioning levels as well as you continue to grow at a very healthy pace, and you're growing in somewhat higher risk segments. Just help us how you're thinking about those two lines?

Tito, this is Santiago. I'll address that question. From the start of Inter by design, we aimed to navigate asset quality cycles with a diversified loan portfolio focused on securitized products, paired with sustainable borrowing costs for our clients. We believe this approach fosters a healthy long-term relationship. As we mentioned, our goal is to increase risk-adjusted net interest margin, rather than just boosting NIM or minimizing the cost of risk; it's about optimizing both. We reported the lowest 90-day non-performing loan rate since 2022, a testament to the excellent efforts of our credit underwriting, collections, and risk teams, showing consistent improvement quarter after quarter. As you noted, we are accepting some marginal risks in specific areas, like private payroll, where we're pleased with our risk-adjusted NIM and return on equity, which, as Xandre pointed out, exceeds 30%. We're also reshaping our credit card portfolio and leveraging Buy Now Pay Later in the success of the Inter Shop platform. All these efforts contribute to an increase in credit penetration among our active clients, a priority for us as we aim to further monetize our clients. The ARPAC is highly sensitive to this credit penetration. To address your question directly, Tito, the 5% to 5.25% figure we've mentioned in previous quarters remains our expectation. We have been pleasantly surprised with several quarters outperforming that expectation. While we hope for further positive surprises, our base case continues to project a cost of risk in the 5% to 5.25% range.

Great. That's helpful, Santiago. So I guess at a high level, maybe because of the growth that you're having, growing in higher risk segments, the cost of risk could be a little bit higher, or just maybe getting closer to that 5.25%, I'm not sure the exact number, but compensated with better margins overall. But in general, maybe cost of risk can still trend up a little bit more from here given the risk and the growth that you have?

The 5% to 5.25% already contemplates the mix at which we are originating today. So we are continuing to do a lot of FGTS as well. Mortgages are accelerating. As Xandre mentioned that in his part, we're seizing the attractive opportunity. Home equity continues to be a product with a lot of success. So we're also growing on the other lines, right? So when we put all of it together, and we add the improvements that we're doing in the Credit and Collections fronts as well. We see the 5% to 5.25% continue to be the base case with some potential to be surprised as we have in the prior quarters.

Okay. And on the asset quality front, it sounds like you feel fairly comfortable with asset quality given the NPLs that you're delivering?

We are. We have been, as I mentioned, seeing that improvement. It's the lowest level we had since 2022. And as we continue to navigate these new products, private payroll, Alexandre mentioned, we see that trending towards the single digit. We need more time to see where it actually ends up. But again, the goal is to continue to improve the risk-adjusted NIM. And that's what we're trying to aim for. And we see that on Page 27, moving consistently in the right direction.

Our next question comes from Yuri Fernandez.

Congrats, Joao, Santiago, Alexandre, for a good quarter. I would like to ask you about margins on your NIM expansion, especially on a by-product when we try to look after the hedges. We see a pretty good improvement on personal loans and real estate. I think like the personal loan yields, they moved to 23%, from 19.5% in the first quarter. So if you can explain a little bit what drove this improvement? If this is seasonal? If it is sustainable? If it is driven by, I don't know, your peak finance product? Is it mix? So just to understand. And in addition to the yield, if you can comment a little bit on the margins. It has been a pretty good run. Markets continue to go up even with a small increase in the funding cost that is still very low, right? But if you can also comment a little bit on your new trajectory, I think that's interesting.

We're pleased with the progress in interest rates at the product level. The all-in loans rate increased from 20.3% to 22.5%, showing significant growth compared to previous quarters. The main contributor to this change was in personal lines, particularly in digital private payroll, where the loan balance has exceeded BRL 130 million, driving up the interest rate for that product. In the mortgage sector, we've been accelerating loan growth, supported by a favorable competitive environment. Newer loans are coming in at better interest rates, which benefits our net interest margin significantly more than existing loans, indicating that repricing is progressing well. Regarding SMEs, we are focusing on performance rather than just growth in size, as size is simply a result of our approach. We want to nurture lines that exhibit strong profitability. Overall, we've observed improvements in other products like FGTS, which has a rate of 1.8%, and home equity loans, which are tied to inflation plus a margin of 10% or 15%. This strategy is effectively enhancing our net interest margin. Our ROE-driven underwriting framework is showing positive results across the organization, compounding success as we capitalize on new opportunities. For example, we added private payroll, which wasn't initially included in our 2025 budget but was implemented at the end of the previous year, allowing us to offer this product immediately as it became available.

No, super clear. So basically, repricing and mix, right, those two things combined. If I may, just a follow-up, Santiago. You mentioned like about the change in the nature of the credit card offering. If you can simplify a little bit more what are those changes if this is loyalty, new product, financing, whatever? Just trying to understand what you mean by that. And congrats on cards TPV. I think like the growth on volumes were strong. So I just want to understand what is different on the credit card product here for you?

Yuri, this is Xandre speaking. There is a lot happening with our credit card product, and we are focused on expanding that portfolio. One of our main goals is to reshape it, which means increasing the portion that earns interest. We plan to achieve this in two main ways: first, by boosting fixed financing, and we are actively working on increasing this volume. Second, we aim to assist customers facing delinquency by offering them additional installment products. In the second quarter, we observed positive results from this reshaping effort, as our transactor percentage improved from 78.5% to 78%. We also launched a new product in May that allows for full balance installment renegotiation. This led us to temporarily hold back on fixed financing for 45 days toward the end of the quarter, but overall we saw growth in the installment segment, as indicated by the BRL 1.2 billion portfolio shown on Page 14. Moving forward, we will continue to foster growth in the installment and interest-earning parts of the portfolio. Additionally, I want to highlight the Inter Card that we discussed in the last quarter call. It's a credit card limit specifically designed for PIX financing and is always interest-earning. We already have a few clients using this feature, and we will monitor its development in the coming months. Thank you.

Our next question comes from Gustavo Schroden.

Can you hear me?

Yes, we can.

Congrats on the results. Strong evolution indeed. So my question is regarding the 6-30-30 plan, right? So we are doing some math here, taking into consideration the current run rate you have presented. And in a simple math here, we estimate an ROE by the end of this year, around 16% to 17%. Efficiency ratio around 45% and the number of customers around 40 million, 42 million customers by the end of this year. And for the next year, assuming the same run rate we would be around 22%, 23%. And efficiency ratio around 40% and 50 million clients by the end of 2026. I know that you don't give official guidance, but my point here is that would you be able to elaborate on these numbers that I just mentioned? If those numbers make sense? And how do you see the evolution of these KPIs, let's say, to achieve this 6-30-30 plan by the end of 2027?

Schroden, thank you for your question. Joao speaking here. First of all, I mean we're very proud of the 6-30-30 plan, which was unveiled 2.5 years ago. As we just mentioned, it's not guidance, but we're really focused on delivering the 3 KPIs of it. Number of clients, efficiency, and also ROE. In a 5-year period, a lot of things change. We have some headwinds, some tailwinds. For instance, we didn't expect that the macro will be like that today. But also we didn't expect that we would have the private payroll kicking in. We didn't expect that, for instance, we might have other changes starting next year as the Central Bank is advocating for. So it's a lot of uncertainties, of course, for a 5-year plan. But the good news is, as I told in my closing remarks, we see that the network effect of our platform is starting to kick in. So we have more profitability, invest more, grow more, more clients, more dilution of expenses. So I'm really not only committed, but I'm really excited, and I really think that we can achieve that. Okay, you might go a few months, a few quarters ahead. It doesn't matter. At the end of the day, we are not running the company only to get to these metrics. So we're running the company to have the best capital allocation ever, the best customer-centric approach ever. And the good news is we have the tools, we have the clients, we have the portfolio, we have the data, we have all the regulation behind us to get there. So excited. I believe it's feasible that you get there. And I think that our numbers are pretty much in line with what we have in-house, okay. Thank you for the question.

Our next question comes from Pedro Leduc.

Congratulations on the journey here. First question, just a quick follow-up on PIX financing. You mentioned that it is a driver for the non-transactor portfolio gaining share. Can you elaborate a bit more so we can understand how many of your clients already utilize it and how significant it is within the non-transactor card portfolio? Additionally, regarding general credit appetite, we see macro indicators worsening, yet you have shown excellent credit results. How do you balance these factors when considering growth plans for the second half and what insights can you provide about next year, particularly in comparison to the start of this year? How is your outlook on credit appetite moving forward?

Thank you for your question, Leduc. This is Xandre. I'll address the first part. Our approach to PIX finance involves not expecting clients to fully utilize their credit card limit with this option. It's a product that complements their usual spending. Clients will make regular purchases and then apply a portion of their limit to PIX financing. This behavior typically sees about 2 to 3 users each month. Delinquency rates are remaining relatively stable, slightly higher than for clients not using PIX credit, but still within acceptable limits. Overall, we are seeing good trends that match our projections for non-performing loans. We do encourage usage of PIX credit and will continue to promote it, as it serves to assist clients who may not have available cash to pay with a debit card. That's all I have for now. Santi?

Our credit appetite is at its highest point ever. This quarter, we experienced one of our largest loan growth figures. We aim to actively utilize our balance sheet, leveraging our strong funding capabilities to enhance credit penetration with our clients. We're witnessing encouraging indicators of this increased credit engagement as we continue to add approximately 1.1 million new active clients each quarter. Our diversified portfolio, which includes collateral-backed products, allows us to maintain a consistent outlook regardless of economic fluctuations. The same strategy applies as we aggressively pursue expanding our market share in the PIX sector, which currently stands at 8%. We've successfully increased our home equity share and are steadily growing our FGTS segment quarter after quarter. We anticipate achieving similar progress across various products. Our risk appetite remains robust, presenting us with an opportunity to accelerate our credit business strategy, which we are actively pursuing with the resources we have.

Our next question comes from Daniel Vaz.

Congrats on the results. I wanted to touch base on your renegotiated portfolio. Just to understand how do you classify in the stages, right? So do you classify it as normally as a Stage 2? Or is it Stage 3? Because we have been seeing a rising trend on the renegotiated portfolios. And when we listen to incumbents, and I don't want to trade you as an incumbent here, but they are being more restrictive in terms of renegotiating clients and now they're accelerating some write-offs. So I want to hear you about your renegotiation strategy? And how do you classify between the stages here? Just to understand how it can evolve for the next 12 months?

Yes, Santiago here, taking that one again. So it depends on the case of the renegotiations. We have some that are in Stage 1, in Stage 2, and Stage 3. The ones that grew this quarter were within Stage 1, which were real estate contracts that were reputated this quarter, which means that the client was performing, but the contract was amended for certain conditions. That was the delta of this particular quarter. In those cases, those who are still within Stage 1, and then the others depend on the case of the loan. Some are in Stage 2, Stage 3, and others in Stage 1.

So basically, these clients are not defaulting on credit card lines. You're pretty much focusing on adjusting some conditions on the mortgage portfolio. Is that correct?

Yes, that's correct. It's commercial renegotiations. Most of them are on the real estate front, by the way, which are the ones where we have collateral, and it's a longer-term agreement and they are within Stage 1.

Our next question comes from Mario Pierry.

Congratulations on the results. I wanted to go back on the private payroll product. Xandre, you talked about running this product having a 30% ROE and you're very excited about it, which we agree, right? We see this as a tremendous opportunity. However, talking to the other banks, they have been quite reluctant so far to really grow into this product, citing that they don't feel like the guarantees are good enough, or they're still seeing a lot of operational risks. And we even heard some news outlets in Brazil talking about the NPL or the product being around 10%. So can you discuss why are you more positive right now at the beginning than the other players? And you show that you already have 10% market share. But at a time when the other players are quite cautious as they come back to the market, do you think you're going to be able to retain this 10% market share? What do you think this could put some pressure on the prices that you're offering right now? So basically, I'm just trying to get a little bit more why are you so comfortable with the products and the other players are not at the beginning? And then I have another question on efficiency.

Thank you for your question. I've been in the industry for a long time, starting in 2002 at Inter. I noticed a similar pattern when payroll services began; back then, many viewed it as a risky product. Over time, we learned that companies with consumer finance portfolios hesitated to adopt it due to concerns about cannibalizing their earnings. Although there were challenges early on, the government and relevant institutions subsequently addressed them, leading to what is now a solid market offering, with a credit portfolio exceeding BRL 700 million and providing valuable services for the population in Brazil as well as for banks. I see the same trend now; we recognize some existing issues that are being resolved. The large incumbent banks are cautious about entering this new product, fearing it may affect their current revenues and fees. We disagree with that outlook. We are optimistic, and we’re not alone in this; many other players are also entering the market. I believe we will witness a repeat of what occurred with private payroll from 2005 to 2010, where major banks acquired those successfully managing payroll portfolios. Xandre will provide more details on this.

Mario, just a few points to finish this answer. So one, Joao talked about it, which is why are we so engaged and excited and why are others sometimes not? Cannibalization risks. So we don't have a portfolio to be cannibalized, whether it's personal loans or private payroll loans, we don't have a portfolio to be cannibalized and that is the situation with many players in the industry. That's the first point. The second one is about delinquency and operational risks. They exist. We're aware of them. But we price for them. Taking a little bit of what Santi mentioned in the, I think, the last question. We're very disciplined in pricing and being detailed about all the risks that we assess. And in this particular product being conservative, and so we're comfortable that our pricing is right, and we will deliver the ROEs that we are modeling given this pricing. And finally, to your point on price reduction. We do believe that this will happen because delinquency levels are going to be better than originally forecasted. But this is good news, right? We're talking about a portfolio that can be much bigger than originally planned. We've been talking about BRL 200 billion to BRL 250 billion. Where can this go, is a product that's going to be priced at, say, 2.5 on average rather than what we're seeing today, which is close to 3.7. So again, exciting times to come, and we will be vigilant and work hard here to have the lowest delinquency levels possible and the highest origination volumes possible also.

That's very clear, Xandre. And on these originations that you're making, are these like new originations? Or do you think there are people replacing their existing private payroll loan with your private payroll loan?

The absolute majority, new originations.

New originations. And then my follow-up question also on efficiency. Joao, you've made significant progress since announcing your 6-30-30 plan. The efficiency ratio has improved quite a bit, but it has stagnated over the last year. This is primarily due to increased expenses rather than revenues. The acquisition impacted this as well. However, we expected to see more operational leverage in the business. How do you foresee the efficiency ratio evolving? I think Schroden asked that question and provided some numbers. Do you believe that efficiency gains are now being driven more by revenue generation or by a heightened focus on controlling nominal expense growth?

Mario, I will take this one. It's an important point. We aim to achieve compounding results, and we have observed that trend. We don’t control every variable at the same time, and life isn’t linear as we often say. However, we have seen a general trend of improvement in various metrics, and the efficiency ratio is one of them. This quarter, we introduced a new methodology for calculating the efficiency ratio, which is cleaner as it excludes the IOF or JCP tax. This has resulted in a clear evolution, now reaching a record level of 47.1%. Structurally, we are transitioning our contracts with major vendors from a variable to a fixed dynamic. Many of these contracts are linked to client volumes, limiting our operational leverage. By shifting to less variable contracts, we expect revenue growth to outpace expense growth. Expenses will undoubtedly rise, but we anticipate revenues will grow significantly faster. This quarter illustrates that well, with 5% expense growth and 8% revenue growth, reflecting the dynamic we expect to continue. Predicting the future trajectory of the efficiency ratio is challenging, but we hope to see gradual improvements each quarter. The Inter Pag transaction last year has made that analysis somewhat complicated, as it raised the efficiency ratio due to the acquisition of a company with a 100% ratio. Now, as we work towards achieving the efficiencies we planned there, especially on the expense side, we are seeing improvements compared to the levels prior to the Inter Pag deal. In summary, we expect continuous improvement in the coming quarters as we address the more structural contracts with clients, which have a greater long-term impact than those we can control in the short term. We have increased our employee numbers since the end of last year, along with fixed expenses like rent. Our focus is on the major vendor contracts, where we are making significant changes compared to the past few years.

Santi, that's clear. But what percentage of your costs today are fixed versus variable? And some of these contracts that you're trying to renegotiate, are these like technology that you could develop yourself rather than relying on third parties?

So on the expense breakdown, we have around 1/3, which is personal and 2/3 which is administrative. In those 2/3 which are administrative, we have around 75% that are with this technology provider. So it's a big part on the administrative. Within those, we are working to make them less variable and more sticky and therefore, to have more operational leverage. These contracts are multiyear contracts, so it doesn't happen overnight, but we have been seeing an increasing level of success. And it's not only on the top 3 or 4 names that you may imagine, but also in the longer. We're working on the 100 top providers who are using the tariff control McKinsey approach to revise them thoroughly every single week. And we see that will continue to play out. But again, the revenues will grow. This is a high-growth company. And by doing that, the difference of the revenue growth versus the expense growth is the one that will result in the operational leverage continuing to play out.

Our last question comes from Neha.

Congratulations on the results. Just two quick questions. Again, on the private payroll side, I think one of the questions that the industry has is how effective will the collateral be? Do we have any more color on collateral in case of delinquencies, which will arise in the future, it's too soon to say? And my second question is on expected loan growth for the year. You mentioned that the private payroll, which has been doing so well was not budgeted initially. What kind of loan growth should we expect for this year and for next year, in view of this new product and also in view of the macro, which is ever evolving.

Neha, this is Xandre speaking. I'll start with the collateral for the private payroll. We believe it will serve as a strong collateral to be utilized. Currently, it indicates a low long-term delinquency rate in the single digits. This is because companies are becoming more engaged with the payment process, and the third round of payments has shown significant improvement over the first. We anticipate ongoing improvements moving forward. Additionally, part of the FGTS balance from these clients will be used for debt repayment, which has not yet commenced but will enhance the private payroll process. Moreover, if a company fails to collect or pay as it should, the client remains accountable. We're observing positive behavior from clients as we initiate the collection process. This represents solid collateral. Furthermore, as clients change jobs, the liability or collateral tends to transfer with them, akin to a lifetime commitment. The government is currently fine-tuning automatic collection, but it seems likely that the collateral will be automatically reinstated as clients transition jobs. This is promising, and while we need to continue learning and working on it, the outlook appears positive. Regarding loan growth, we had a strong quarter with 8% growth quarter-on-quarter and a 31% year-over-year increase in our core portfolio. With new products like private payroll, we expect to be at the higher end of our previously mentioned growth range of 25% to 30%. Our confidence stems from having effective products that drive this growth, even in a macro environment with a 15% Selic rate. Private payroll loans are a new opportunity for growth, along with strong performance in mortgages, which we have managed to price well. We will also focus on home equity and FGTS, given our client base and the potential for growth in unsecured lending and fixed financing to reach our target of 30% overall growth. Thank you, Neha.

And this concludes our Q&A session. I'll pass the word to Joao for his final thoughts.

Thank you, Rafa. Thank you, everyone, for being with us today. It's been a long journey so far. As I told you in my final remarks, I believe you were on our early days for the business, for the network effect that it's kicking in. We have an amazing team committed to deliver the best we can for our clients, for our shareholders, for the regulators, for the country, for the industry. So I'm really happy with this earnings call with these earnings results. Not only because of the numbers, but what we have been able to accomplish in a short period of time. And as I told you, I see a bright future for this company and bright future for this project, I'm really proud to be a part of it. Again, thank you, shareholders, employees for helping us to make this dream come true. Thank you very much. See you on our next earnings call. Have a good day.