Earnings Call Transcript - PAGS Q3 2022

Operator, Operator

Good evening. My name is Victoria, and I will be your conference operator today. Welcome to PagBank PagSeguro's webcast results for the Third Quarter 2022. At this time, all lines have been placed on mute to prevent any background noise. This event is also being broadcast live via webcast and may be accessed through PagBank PagSeguro's website at investors.pagseguro.com. Participants may view the slides in any order they wish. Today's conference is being recorded and will be available after the event is concluded. I would now like to turn the call over to your host, Eric Oliveira, Investor Relations and ESG Director. Please go ahead.

Eric Oliveira, Investor Relations and ESG Director

Hi everyone. Thanks for joining our third quarter 2022 earnings call. Today, we have with us Ricardo Dutra, CEO of UOL Group and Board Member of PagBank PagSeguro; Alexandre Magnani, our CEO; and Artur Schunck, CFO. After the speaker’s remarks, there will be a question-and-answer session. Before proceeding, let me mention that any forward statements included in the presentation or mentioned on this conference call are based on currently available information and PagBank PagSeguro's current assumptions, expectations, and projections about future events. While PagBank PagSeguro believes that the assumptions, expectations, and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those included in PagBank PagSeguro's presentation or discussed on this conference call for a variety of reasons, including those described in the forward-looking statements and Risk Factor sections of PagBank PagSeguro's most recent Annual Report on Form 20-F and other filings with the Securities and Exchange Commission, which are available on PagBank PagSeguro's Investor Relations website. Finally, I would like to remind you that during this conference call, the company may discuss some non-GAAP measures, including those disclosed in the presentation. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. The presentation of this non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered separately from or as a substitute for our financial information prepared and presented in accordance with IFRS as issued by the IASB. For more details, the foregoing non-GAAP measures and the reconciliation of these non-GAAP financial measures to the most directly comparable IFRS measures are presented in the last page of this webcast presentation and our earnings release. With that, let me turn the call over to Ricardo. Thank you.

Ricardo Dutra, CEO

Good evening from Sao Paulo and thank you, Eric. Going to slide three, I would like to begin our presentation with the main message for Q3 2022. We reported the highest EPS in company history for third quarters achieving BRL1.16, up 20% versus the same period of 2021. PagSeguro TPV reached BRL90.3 billion, growing 35% year-over-year and one more quarter outpacing the industry growth by far. Our successful repricing led to a net decrease of 24 basis points higher than Q1 2022. PagBank deposits reached BRL19.4 billion, 171% higher than the same period of 2021. PagBank gained 1.1 million new clients leading to almost 26 million clients, firmly positioning PagBank as the second largest digital bank in Brazil in terms of the number of clients. CapEx to revenue ratio was 12.4%, down 230 basis points when compared to the second quarter of 2022 and trending down moving forward. Moving to slide four, once again, our success with the strategy of democratizing access to financial services and payment solutions in Brazil resulted in record numbers across all main KPIs this quarter. In the payments platform, TPV was BRL90.3 billion and our revenues reached BRL3.7 billion, growing faster than TPV and reaching almost 50% growth year-over-year. Monthly TPV per merchant grew 39%, reaching BRL4.1 thousand, and our gross profit reached BRL1.3 billion. In financial services, PagBank TPV outpaced acquiring TPV for the first time, totaling BRL105 billion, with BRL339 million in revenues. Our gross profit was BRL76 billion, increasing BRL35 million compared to the last quarter, thanks to our cautious approach in credit underwriting given the macro uncertainties. In Q3 2022, 100% of credit underwriting was secured, helping the company balance asset quality while exploring safe entry points for consumers. Our deposits reached an impressive almost BRL20 billion, a 171% growth year-over-year. Overall, at the center of the slide, total revenue and income reached BRL4.04 billion, 45% higher than Q3 2021. Net income on a non-GAAP basis reached BRL411 million, while the GAAP net income reached BRL380 million, an 18% increase versus the same period of 2021 and the highest net income in PAGS history for third quarters. Now I'll pass the word to Alexandre to share some views about our business units. Thank you.

Alexandre Magnani, CEO

Hello, everyone, and thank you Ricardo for the initial remarks. Moving to slide five, we compare our performance relative to card TPV market, and I'm proud to say that we have been able to continue growing with profitability, which reinforces our successful repricing initiatives and unique value proposition for our clients. In the left chart, we are the TPV market share gain winner in this quarter, when compared to Q4 ’21, growing 92 basis points considering the Brazilian card association criteria for TPV market share. As we can see in the second chart, although every player has been increasing prices, our repricing initiatives have been the most successful. By focusing on creating a strong relationship with our clients and having a unique value proposition, we have been able to increase our net take rate much more than our peers over this year. Lastly, in the chart on the right, when we look at how much profit each company can extract in net income over TPV, we can see that PAGS is 3 to 5 times more profitable than its peers. Moving to slide six, I will start the segment highlights with PagSeguro's overview during the quarter. PagSeguro's total revenue and income grew 49% year-over-year, reaching BRL3.7 billion, which is faster than TPV, thanks to the successful repricing process throughout the year, which resulted in an increase of 24 basis points in PagSeguro's net take rate since Q1 ‘22. TPV grew 35% year-over-year, totaling BRL90.3 billion, negatively impacted by deflation during the quarter. Our market share in payments reached almost 11% from 8% in Q3 ‘20. On the next slide, we have been prioritizing recurrency and profitability versus merchant cross-addition. We have been more selective in our acquisition strategy during 2022, reducing subsidies and focusing on the best sales channels to improve new merchants' acquisition quality. As a result, we grew the new merchants average TPV by 36% through online channels and we also increased it by 39% overall average TPV per merchant on a year-over-year basis. Our number of active merchants, excluding Moip, reached 7.2 million in September 2022. This strategy results in a higher activation rate of POS devices, higher TPV per merchant, and higher upselling and cross-selling opportunities for PagBank. Consequently, the positive results to be expected are lower CapEx to revenue ratio, lower POS depreciation per sale, and a higher LTV over CAC ratio for the new merchant cohorts, which contribute to margins rebound and future cash flow generation. Moving to slide eight, I would like to update you all regarding our business diversification initiatives. HUBs accounted for 31% of PagSeguro TPV in the third quarter, maintaining strong growth as our operations cover approximately 90% of the Brazilian GDP. This accelerated growth is explained by our unique value proposition that combines banking and payments experienced through a single app, and customer care operation provides faster POS delivery, instant settlement, and a complete value-added service offering as presented on the right side of the slide. As we see significant growth opportunities in the online payment segment, we have been improving our operations and completing our set of solutions for our clients. We always focus on omnichannel sales, integrating different payment methods in the physical and online channels, also adding payment options beyond cards such as PIX. I would also like to update you that our cross-border operation previously called BoaCompra was rebranded during the third quarter and is now recognized as PagSeguro. This is an important step since the PagSeguro brand awareness is very strong and as a result, it should reinforce our cross-border payment business. On slide nine, I'll give you some updates about PagBank operation. PagBank reached 25.9 million clients, with almost 16 million active clients, around 58% of whom are consumer clients. Moving to the bottom of the chart, primary bank choice continues to increase for both consumers and merchants, reaching around 60% for consumers and 50% for merchants. PagBank cash-in totaled BRL41.9 billion in Q3 ’22, an increase of more than BRL10 billion compared to Q2 ’22, most of this cash-in was driven by PIX transactions. I am happy to share that our market share over PIX transactions is increasing and reached 9.5% during the quarter. Deposits totaled BRL19.4 billion, representing a 171% increase versus the same period of 2021 and almost BRL4 billion increase versus Q2. This increase is vital for our business since it helps us be more competitive by lowering funding costs. Moving to slide 10, I would like to do an update regarding our credit products. The total credit portfolio reached BRL2.7 billion, a 71% increase year-over-year, primarily driven by the increase of payroll loans and FGTS early prepayment, which are consumer-focused products, now representing 31% of the portfolio. Asset quality remains a priority for our company. Since last quarter, we decided to increase our exposure to secured products, balancing our portfolio mix. Doing so, secured products reached 35% of the credit portfolio, up from 5% in Q3 ‘21. Also, as Ricardo mentioned, we just launched our secured credit card package via PagBank balance account and have been vocal about advertising this product, as it addresses consumer and merchant needs. We expect to keep growing our portfolio gradually while making important investments to improve our models and the overall credit cycle pillars. These are top priorities and we have seen NPL trend down since July ‘22, and we expect to maintain this downtrend for the coming quarters. Additionally, we are making significant progress in our collection processes to decrease the delinquency rate. On slide 11, we see that PagBank's total revenue grew 31% year-over-year, ending the quarter at BRL339 million, stable versus Q2, mainly explained by our focus on secured loans. Total payment volume reached BRL105 billion, growing 79% year-over-year, reinforcing customer engagement with PagBank, resulting in strong deposit growth and the use of other features such as bill payments and marketplace. With that said, I pass the word to Artur, our CFO.

Artur Schunck, CFO

Thanks, Alexandre, for the segment highlight. Hello, everyone, and thank you for joining us tonight. I will continue the presentation in slide 12 with our Q3 ‘22 consolidated results. On the left side, total revenue and income reached a record of BRL4 billion, growing 45% year-over-year. The net take rate achieved 2.84% this quarter, increasing 9 basis points versus last quarter, as shown in the bottom right side of the slide. Important to note that this value excludes a one-time effect related to an adjustment in the amount of BRL53 million. On a GAAP basis, net take rates totaled 2.90%. Gross profit neutral of FX grew 7% year-over-year, impacted by financial expenses growth and the higher chargebacks mainly related to additional provisions for credit losses. The repricing in acquiring and credit products helped offset those impacts, leading to higher PagBank gross profit in Q3 ‘22 compared to Q2 ‘22. This quarter, again, our operating expenses grew less than total revenue and income growth showing the cost-driven approach of the company. Controlling costs and expenses is part of our future strategy, and the diligent way we work is a key component of our superior execution. Adjusted EBITDA closed at BRL770 million, up 4% in comparison to the same quarter of last year. Net income non-GAAP achieved BRL411 million, and net income GAAP increased 18% year-over-year, reaching the highest level for third quarters in our history, totaling BRL380 million. This represents earnings per share of BRL1.16 for the quarter, BRL0.19 or 20% better than Q3 ‘21, as shown in the top chart on the right side. PAGs continues to better balance growth and profitability, focusing on improving shareholders' return. Moving to slide 13. In the first chart on the left side, operating expenses reached BRL615 million in Q3 ’22, up 11% year-over-year. This amount represents 15% of PAGs revenue versus 20% in the same period of last year and stable, compared to last quarter. The improvement in efficiency has come from personnel and marketing expenses leverage, even with more investments to advertise PagBank’s new products, as well as the contribution of PagBank and HUBs revenue growth. This amount excludes POS write-off and one-time effects related to softer disposals, write-off of our investment in BoletoFlex and payment agreements with our POS supplier. In the right chart, financial expenses closed at BRL921 million compared to BRL210 million in Q3 '21. Around 90% of this increase is explained by the hike of SELIC and the remaining 10% was related to higher TPV volume, prepayment of receivables to merchants, and credit card mix. These effects were partially offset by repricing in acquiring, rising credit underwriting and lower cost of funding through deposits growth along with lower spreads negotiated with capital markets. We continue to focus on improving our funding process, diversifying sources, and extending terms to leverage our banking license and support company growth. Financial expenses were our biggest challenge in the past quarters. However, the Brazilian Central Bank has kept interest rates stable for a while. The last interest rate increase was in August this year; in September and November meetings, the country interest rates remained stable. In the next slide, the CapEx to revenue ratio reached 12.4% this quarter versus 16.8% in 2021 and 14.7% in Q2 ’22. This decrease is driven by lower CapEx related to a strategy of being more selective in merchant acquisition to leverage PagBank, along with the increase of HUB and PagBank's revenue. We expect to keep this ongoing downtrend in CapEx to revenue ratio over the coming quarters. In the following chart, adjusted EBITDA minus CapEx achieved a positive amount of BRL268 million, more than double that of Q4 ‘21 and slightly better compared to last quarter. It reflects PAGS' focus on maximizing LTV over CAC and improving cash earnings by reducing POS subsidies and adding more valuable merchants to our ecosystem. On slide 15, PAG's net cash balance ended the third quarter at BRL9 billion, improving BRL400 million quarter-over-quarter. This was mainly driven by TPV growth, higher share of credit card transactions, and larger penetration of same-day prepayment to merchants. At the same time, we have been improving our capital structure, ending this quarter with 74% of financing position provided by third-party capital. On top of that, PAGS is diversifying funding sources to support volume growth, lowering funding costs to consolidate a strong balance sheet. To conclude our presentation, I will turn back to Alexandre for the final remarks.

Alexandre Magnani, CEO

Thanks, Artur. I would like to review our guidance for Q3 ‘22 and establish a ballpark for the full-year 2022 results. Total revenue in Q3 ‘22 was BRL4.04 billion, higher than the guidance low end. For 2022, we expect to reach between BRL15.36 billion to BRL15.46 billion. Net income, non-GAAP was higher than the guidance high end, totaling BRL411 million. For 2022, we expect to deliver a net income non-GAAP between BRL1.57 billion to BRL1.6 billion. Net income GAAP reached BRL380 million. For 2022, we expect to reach between BRL1.45 billion to BRL1.48 billion, the highest in our history, mainly due to efficient capital allocation on marketing and personnel expenses in a year with high pressure over financial expenses due to the hike of Brazilian interest rates. Before we move to Q&A, I would like to share our priorities for the coming year. Our focus is to keep the consistent execution of our strategy, balancing growth and profitability to deliver EPS growth while we continue developing capabilities that will enable our banking and acquiring businesses to capture even more value in the future. The key components of this consistent execution are diligent cost and expense control to leverage OpEx and CapEx to revenue ratio, relevant chargeback and loss reduction, and consolidation of PagBank's business by growing deposits, card TPV, the secured credit portfolio, and increasing usage in the merchant base, growing faster than the market in payments profitably. Lastly, to reinforce our one-stop shop value proposition by merging banking and acquiring. Now we've concluded our presentation, and we will open for the Q&A session. Operator, please?

Operator, Operator

Thank you. We will now be conducting a question-and-answer session. Our first question comes from Mario Pierry with Bank of America. Please go ahead.

Mario Pierry, Analyst

Hi, everybody. Good evening. Congratulations on the results. Let me ask you two questions. One is how are you seeing the competitive environment in Brazil and your ability to continue to reprice your products? And then second is related to your guidance. We noticed you did not provide guidance for TPV growth, something that you normally do. And also, when we look at net income in the fourth quarter implied from your guidance, we're getting BRL385 million to BRL415 million, which would be down to flat versus the third quarter. So just wondering why would net income fall or remain flat in the fourth quarter. Thank you.

Ricardo Dutra, CEO

Hi, Mario, this is Ricardo. Thank you for the question. Good to hear from you. Regarding the competitive environment, sometimes we forget to point out the accomplishments we’ve been reaching at PagSeguro. This year is going to be the highest net income for the company overall. If we look at the first nine months of the year compared to other listed companies such as Stone Ciel and GetNet, we are 3 to 5 times more profitable than our peers. We have 3.2 times more clients than the second player. And even with that, we've been able to increase prices with no additional churn. Combined with that, we have also been the market share winner in the first two quarters, gaining 92 basis points. The competitive environment currently is not tougher than in the past. The ability to reprice our products depends on the macroeconomic dynamics next year. If necessary, we will keep increasing and raising our prices, as we believe we have a powerful combination of acquiring and banking with unique propositions. It's important to note that reaching the net income we had in Q3, we experienced an increase of more than BRL700 million in financial expenses compared to last year, and we still managed to reprice our base, outperforming in absolute terms. Regarding your guidance query, it's correct that in the implied net income for Q4, there is a range from BRL385 million to BRL415 million due to various moving factors. We have additional salary payments and seasonal spending in Q4, but the usage of this salary is uncertain. After the elections, a truck driver strike impacted economic activity. Additionally, the upcoming World Cup presents a one-off situation that could impact us between BRL3 billion to BRL4 billion. Thus, the guidance reflects these uncertainties.

Mario Pierry, Analyst

Okay. A follow-up then. The first one is on the take rate. So have we seen the full impact of all the repricing you have done? Is that already reflected in your numbers? Or did you implement any price hikes during the quarter that are not yet reflected? And the second, I understand you have less visibility on TPV, but this is a key metric that you normally provide guidance on. So I was just wondering, when you provided your bottom line estimates, what kind of growth are you expecting on TPV?

Ricardo Dutra, CEO

Mario, there is going to be growth against Q3. We are not disclosing the exact growth for TPV in Q4, but there will be growth. As I previously mentioned, there are moving parts regarding the impact of the World Cup and other events. We did increase prices in Q4 as well, so you may witness some decrease in net take rate. Nevertheless, when comparing net take rate minus financial expenses, the decrease between Q3 and Q4 is less than the net take rate before financial expenses because we increased our prices. Therefore, we found this to be effective. We still have 40 days left in the year, and while we have some visibility, we are uncertain of how the World Cup may impact our performance. However, we expect growth but are not disclosing the exact figures at this moment.

Bryan Keane, Analyst

Hi, guys. For the third quarter, I think you guided acquiring TPV to BRL91 billion to BRL92 billion, and it fell slightly below that. We've usually seen you beat these numbers. So is there anything specific you can call out in this quarter that resulted in this slight shortfall in acquiring TPV?

Ricardo Dutra, CEO

Bryan, I would say two main variables impacted Q3 TPV. One is the unexpected deflation. We had two months of deflation in Brazil during Q3. The second factor is that some bank issuers decreased the credit offers for consumers, leading to a more constrained credit environment. While we did see a slight decline in TPV, it's important to recognize that we're focusing on increasing revenues and net income irrespective of variations in TPV. Although we fell a bit short in TPV, we excelled in other important metrics concerning our profits.

Alexandre Magnani, CEO

It's essential to note that during Q3, the Brazilian cards industry shrank from Q2. Nonetheless, we normally grow our total TPV compared to the second quarter. While the industry increased by 20%, we grew 35% year-over-year.

Bryan Keane, Analyst

Got it. And then for Q4, you mentioned in your guidance that total revenue and income growth is expected to be between 23% and 26%, which is significantly lower than the run rate in prior quarters for this fiscal year. Given the World Cup and other economic factors, could you shed some light on this and how much of it is one-time, plus can we expect a reacceleration of that total revenue and income growth as we approach the first quarter of next year?

Ricardo Dutra, CEO

Bryan, in absolute terms, we anticipate that the World Cup could impact us between BRL3 billion and BRL4 billion. When discussing percentage growth, Q4 last year was difficult due to the economy reopening, leading to higher spending in that quarter. Although percentages may appear lower this year due to that tough comparison, the one-off World Cup represents a significant aspect affecting Q4. As for Q1, we certainly hope to see growth without the World Cup headwind and have a strategy to continue outpacing the industry as we have been performing over the past six years.

Bryan Keane, Analyst

Understood. Thanks, guys.

Domingos Falavina, Analyst

Hi, everyone on the call. Thanks for taking the question. I have two follow-up questions regarding pricing, which is more under your control in comparison to the industry TPV. When we look at the MDR revenues, we see low single-digit growth, similar to TPV quarter-on-quarter, which is reasonable. However, your net financial result shrank by 8% quarter-on-quarter, even with substantial growth in your deposit base. Could you explain why this shrinkage occurred and why you might be paying so much for deposits while experiencing such a large decrease in net financial results?

Ricardo Dutra, CEO

Domingos, thanks for your insightful question. I will answer regarding repricing and how we are managing our interest expenses. Firstly, the financial income minus expenses has indeed grown over the years, and while we didn't see growth at the same pace, the net financial income still reflects solid management. Looking at our net cash position and comparing it with industry averages, we are able to pay competitively for deposits while managing a robust income overall. As Artur detailed, we are steadily decreasing our costs concerning deposits each quarter, and the asset allocation will yield better results as we find our footing amid tech growth and consumer demand.

Artur Schunck, CFO

Yes, Domingos, thanks for your question. I want to emphasize that we had five extra working days in Q3 compared to Q2, which affects our expenses as our costs are based on working days. The TPV is calculated monthly, but financial expenses reflect daily impacts, leading to different growth rates. We are also committed to controlling our spending closely and strategically focusing on cost reductions.

Domingos Falavina, Analyst

Thanks for clarifying that. On OpEx, it's excellent to see that you managed to keep it down even as TPV grows. Should we expect this discipline on costs to continue going forward?

Ricardo Dutra, CEO

We anticipate our disciplined expense management to continue in the future. Notably, we have the ability to adjust our balance across operating expenses driven by our strategic approach in line with guiding our growth towards a more profitable future.

Neha Agarwala, Analyst

Hi, congratulations on the results, and thank you for taking my question. First, regarding the funding cost, how much are you paying on average for customer deposits? Should we expect a similar increase in customer deposits next quarter, which would lead to higher financial expenses?

Artur Schunck, CFO

The cost related to deposits is a few basis points lower than the CDI. We plan to sustain this growth, but there's always the real possibility of decreasing our remuneration to control funding costs. As of now, we are optimistic about our deposit growth and cash flow insights into 2023.

Neha Agarwala, Analyst

Thank you very much for that. Regarding the funding structure, could you elaborate on how you are funding the prepayment business?

Artur Schunck, CFO

We fund our prepayment operations through equity, factoring receivables with large banks, our deposit base, and issuing CDs in the market. Our balance is strategically leveraged to help grow net cash efficiently.

Neha Agarwala, Analyst

Great, thank you for that. Lastly, on taxes, the tax rate seemed low this quarter. Could you provide guidance on what to expect going forward?

Artur Schunck, CFO

The effective tax rate this quarter was 11%, significantly lower than last quarter's 17%. This was primarily due to R&D investment incentives we've had since our establishment, and revenue from abroad contributed as well. Moving forward, you can expect a tax rate between 10% and 15% for Q4 and below 20% in subsequent years.

Eric Oliveira, Investor Relations and ESG Director

Just to add, the positive effect of a lower tax rate is partially offset by higher tax collections impacting the top line. As the regulations have changed, we are collecting more taxes in financial income; thus, it's a net effect overall.

Tito Labarta, Analyst

Good evening. Thanks for the call and the opportunity for questions. I have a question about the margins we are expecting to see in the next year. Is it true that whenever interest rates decline, it also positively affects margins, considering that the SMB clients could affect this as well?

Ricardo Dutra, CEO

Regarding margins, we aim to focus on EPS growth rather than margin expansion alone. Historically, we have been consistently profitable and EPS has been our primary focus. The dynamics between SMBs and micro-merchant margins are certainly a consideration, but we want to ensure that even as proceeds shift, we maintain high profitability across sectors.

Eric Oliveira, Investor Relations and ESG Director

Indeed, we believe company profitability doesn't rely solely on interest rate fluctuations. Our expectation is revenue growth from PagBank and operational leverage, which will further contribute to stability in margins.

Jeff Cantwell, Analyst

Thank you for taking my questions today. On slide seven, I've noticed the active merchant base seems to be decreasing over the last three quarters. Can you clarify where this merchant base might go over time? Moreover, will we see it stabilize or rise again once the strategy changes?

Ricardo Dutra, CEO

We've intentionally decided not to focus on nano-merchants since it leads to lower profits. However, we are witnessing growth in our merchant base quality, which reflects in the improved TPV per cohort statistics. While the churn shows a decline in nano-merchants impacting overall numbers, the good news is our active merchant figures, based on a 90-day basis, are stable. We're committed to focusing on bringing in high-quality clients that will grow our metrics further. With the results we are seeing, we have a very robust pipeline of merchants arriving every week. Additionally, I anticipate we may soon be in a position to discuss stabilization in the first quarter of next year as we move past these adjustments.

Josh Siegler, Analyst

Thank you for the opportunity. I'd like to understand the market forces allowing you to achieve the highest take rate gains across the industry. How have you been able to successfully navigate repricing?

Ricardo Dutra, CEO

Thank you for the question, Josh. We leverage the combination of our acquiring and banking products, which resonate strongly with clients. We provide instant settlements facilitating cash flow management effectively for merchants. Our focused strategy on long-term client relationships also enables us to make strategic repricing gains—essentially rewarding value over price. Our unique approach has helped with both the repricing process and maintaining our competitive edge in gaining market share. While the World Cup creates one-time effects, we are confident that managed increases will benefit our product mix and overall financial strength moving forward.

Operator, Operator

Thank you. I would like to turn the floor over to Mr. Ricardo Dutra for his final remarks. Please, Mr. Dutra, you may proceed.

Ricardo Dutra, CEO

Hi, everyone. Thank you for investing your time to listen to us and for all the insightful questions. Happy holidays to all of you, and we look forward to speaking with you in the call at the beginning of next year regarding the full-year results for 2022. Thank you very much.

Operator, Operator

This concludes PagBank PagSeguro’s conference call. Thank you very much for your participation. You may now disconnect and have a great rest of your day.