6-K - STNE - Equibles

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 6-K

REPORT OF FOREIGNPRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2025

Commission File Number: 001-38714

STONECO LTD.****(Exact name of registrant as specified in its charter)

4th Floor, Harbour Place103 South Church Street, P.O. Box 10240Grand Cayman, KY1-1002, Cayman Islands+55 (11) 3004-9680(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F	X	Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

StoneCo Ltd.
By:	/s/ Mateus Scherer Schwening
	Name:	Mateus Scherer Schwening
	Title:	Chief Financial Officer and Investor Relations Officer

Date: March 18, 2025

EXHIBIT INDEX

Exhibit No.	Description
99.1	StoneCo Ltd. – Audited Consolidated Financial Statements For The Three Years Ended December 31, 2024, 2023 and 2022.

Exhibit 99.1

Consolidated Financial Statements

December 31, 2024 and 2023 and the threeyears ended December 31, 2024, 2023 and 2022with report of Independent Registered Public Accounting Firm

Index to Consolidated FinancialStatements

Audited Annual Consolidated Financial Statements	Page
Report of Independent Registered Public Accounting Firm	3
Consolidated Statement of Financial Position as of December 31, 2024 and 2023	5
Consolidated Statement of Profit or<br> Loss for the years ended December 31, 2024, 2023 and 2022	7
Consolidated Statement of Other<br> Comprehensive Income (loss) for the years ended December 31, 2024, 2023 and 2022	8
Consolidated Statement of Changes in<br> Equity for the years ended December 31, 2024, 2023 and 2022	9
Consolidated Statement of Cash Flows<br> for the years ended December 31, 2024, 2023 and 2022	10
Notes to Consolidated Financial Statements	12
Auditor Data Elements	Years ended<br><br> <br><br><br> <br>December 31, 2024, December 31, 2023, and December 31, 2022.
---	---
Auditor Name	Ernst & Young Auditores Independentes S/S Ltda.
Auditor Location	São Paulo, Brazil
Auditor Firm ID	1448

Report of Independent RegisteredPublic Accounting Firm

To the Shareholders and the Board of Directors of

StoneCo Ltd.

Opinion on the FinancialStatements

We have audited the accompanying consolidated statement of financial position of StoneCo Ltd. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of profit or loss, other comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Impairment of Goodwill

Software cash generating unit

Description of theMatter ****

As discussed in note 11.4 to the consolidated financial statements, the Company recorded an impairment loss on goodwill related to the Software cash generating unit. Goodwill is tested for impairment annually and when events or changes in circumstances indicate that the carrying value of a reporting unit exceeds its value in use. If the carrying value of the reporting unit exceeds its value in use, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Management concluded that, the value in use of the Software cash generating unit was lower than its carrying amount resulting in an impairment loss of R$ 3,558,049 thousand.

Auditingthe Company’s Software cash generating unit impairment test was complex and subjective due to the estimation required in determiningthe value in use of the Software cash generating unit utilizing a discounted cash flows model. The discounted cash flow model uses certainkey assumptions in determining the value in use of a cash generating unit, including the pre-tax discount rate, the free cash flow toequity, the average annual growth rate and the perpetuity growth rate. The average annual growth rate was particularly sensitive to theimpairment test calculation.How We Addressedthe matter in Our AuditWeobtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairmenttesting process for the Software cash generating unit. These procedures included, among others, controls over management’s reviewof the key assumptions used in the discounted cash flow model, including the review of the average annual growth rate, as well as thecontrols over the completeness and accuracy of the data used in the value in use determination.Totest management’s estimated value in use of the Software cash generating unit, we performed audit procedures that included, amongothers, involving our valuation specialists to assist in the assessment of the valuation methodology used by the Company, as well asto support the evaluation and testing of the key assumptions, including the average annual growth rate, the free cash flow to equity,perpetuity growth rate, pre-tax discount rate, and to support the testing of the completeness and accuracy of the underlying data usedby the Company in its goodwill impairment test. With the support of valuation specialists, we also evaluated management’s assumptionsto determine the average annual growth rate by comparing the current and past performance of the Software cash generating unit and theconsistency with external market and industry (peer) data.We also assessed the adequacy of the Company’s related disclosures in note 11.4 to the consolidated financial statements with respectto the Software cash generating unit impairment test of goodwill./s/Ernst & Young Auditores Independentes S/S Ltda.We have served as theCompany’s auditor since 2016.São Paulo, BrazilMarch 17, 2025 4 ConsolidatedStatement of Financial Position as of December 31, 2024 and 2023| Consolidated Statement of Financial Position As of December 31, 2024 and 2023 (In thousands of Brazilian Reais) || --- || | Notes | December 31, 2024 | December 31, 2023 || --- | --- | --- | --- || Assets | | | || Current assets | | | || Cash and cash equivalents | 5.2 | 5,227,654 | 2,176,416 || Short-term investments | 6.3 | 517,874 | 3,481,496 || Financial assets from banking solutions | 6.7 | 8,805,882 | 6,397,898 || Accounts receivable from card issuers | 6.4.1 | 29,231,820 | 23,895,512 || Trade accounts receivable | 6.5.1 | 390,575 | 459,947 || Credit portfolio | 6.6 | 891,718 | 209,957 || Recoverable taxes | 8 | 372,432 | 146,339 || Derivative financial instruments | 6.9 | 156,814 | 4,182 || Other assets | 7 | 370,255 | 380,854 || | | 45,965,024 | 37,152,601 || Non-current assets | | | || Long-term investments | 6.3 | 32,629 | 45,702 || Accounts receivable from card issuers | 6.4.1 | 116,245 | 81,597 || Trade accounts receivable | 6.5.1 | 25,528 | 28,533 || Credit portfolio | 6.6 | 171,401 | 40,790 || Receivables from related parties | 13.1 | 613 | 2,512 || Deferred tax assets | 9.4 | 871,640 | 664,492 || Derivative financial instruments | 6.9 | 103,374 | — || Other assets | 7 | 159,159 | 137,508 || Investment in associates | | 75,751 | 83,010 || Property and equipment | 10.3 | 1,833,997 | 1,661,897 || Intangible assets | 11.3 | 5,458,102 | 8,794,919 || | | 8,848,439 | 11,540,960 || Total assets | | 54,813,463 | 48,693,561 || Liabilities and equity | | | || Current liabilities | | | || Retail deposits | 6.8.1 | 8,704,809 | 6,119,455 || Accounts payable to clients | 6.1.2.3.2 | 17,756,720 | 19,163,672 || Trade accounts payable | | 672,184 | 513,877 || Institutional deposits and marketable debt securities | 6.8.2 | 3,065,999 | 475,319 || Other debt instruments | 6.8.3 | 1,903,840 | 1,404,678 || Labor and social security liabilities | 20.5 | 578,345 | 515,749 || Taxes payable | 12 | 560,250 | 514,299 || Derivative financial instruments | 6.9 | 10,593 | 4,558 || Other liabilities | | 281,073 | 119,526 || | | 33,533,813 | 28,831,133 || Non-current liabilities | | | || Accounts payable to clients | 6.1.2.3.2 | 50,674 | 35,455 || Institutional deposits and marketable debt securities | 6.8.2 | 5,429,963 | 3,495,759 || Other debt instruments | 6.8.3 | 2,496,139 | 143,456 || Derivative financial instruments | 6.9 | 281,177 | 311,613 || Deferred tax liabilities | 9.4 | 680,672 | 546,514 || Provision for contingencies | 14.3 | 237,406 | 208,866 || Labor and social security liabilities | 20.5 | 39,515 | 34,301 || Other liabilities | | 236,822 | 410,504 || | | 9,452,368 | 5,186,468 || Total liabilities | | 42,986,181 | 34,017,601 |The accompanying notes are an integral part of these consolidatedfinancial statements. F-5 | Consolidated Statement of Financial Position As of December 31, 2024 and 2023 (In thousands of Brazilian Reais) || --- || | Notes | December 31, 2024 | | December 31, 2023 | || --- | --- | --- | --- | --- | --- || Equity | 15 | | | | || Issued capital | 15.1 | 76 | | 76 | || Capital reserve | 15.2 | 14,215,212 | | 14,056,484 | || Treasury shares | 15.3 | (1,805,896 | ) | (282,709 | ) || Other comprehensive income | 15.5 | (287,048 | ) | (320,449 | ) || Retained earnings (accumulated losses) | | (346,360 | ) | 1,168,862 | || Equity attributable to controlling shareholders | | 11,775,984 | | 14,622,264 | || Non-controlling interests | | 51,298 | | 53,696 | || Total equity | | 11,827,282 | | 14,675,960 | || Total liabilities and equity | | 54,813,463 | | 48,693,561 | || | | | | (concluded) | |The accompanying notes are an integralpart of these consolidated financial statements. F-6 ConsolidatedStatement as of Profit or Loss for the years ended as of December 31, 2024, 2023 and 2022| Consolidated Statement of Profit or Loss For the years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | Notes | | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Net revenue from transaction activities and other services | | 17.3 | | 3,216,018 | | | 3,309,765 | | | 2,617,407 | || Net revenue from subscription services and equipment rental | | 17.3 | | 1,846,931 | | | 1,824,956 | | | 1,760,915 | || Financial income | | 17.3 | | 7,676,204 | | | 6,229,303 | | | 4,638,022 | || Other financial income | | 17.3 | | 518,301 | | | 690,979 | | | 572,601 | || Total revenue and income | | | | 13,257,454 | | | 12,055,003 | | | 9,588,945 | || Cost of services | | 18 | | (3,389,127 | ) | | (2,982,758 | ) | | (2,669,752 | ) || Administrative expenses | | 18 | | (1,130,499 | ) | | (1,188,869 | ) | | (1,121,357 | ) || Selling expenses | | 18 | | (2,105,475 | ) | | (1,698,275 | ) | | (1,511,241 | ) || Financial expenses, net | | 19 | | (3,693,606 | ) | | (3,999,465 | ) | | (3,514,739 | ) || Mark-to-market on equity securities designated at FVPL | | | | — | | | 30,574 | | | (853,056 | ) || Software business goodwill impairment loss | | 11.4 | | (3,558,049 | ) | | — | | | — | || Other income (expenses), net | | 18 | | (398,726 | ) | | (241,213 | ) | | (302,501 | ) || Total expenses | | | | (14,275,482 | ) | | (10,080,006 | ) | | (9,972,646 | ) || Gain (loss) on investment in associates | | | | 399 | | | (4,179 | ) | | (3,589 | ) || Profit (loss) before income taxes | | | | (1,017,629 | ) | | 1,970,818 | | | (387,290 | ) || Current income tax and social contribution | | 9.3 | | (527,919 | ) | | (345,813 | ) | | (292,172 | ) || Deferred income tax and social contribution | | 9.3 | | 38,498 | | | (24,585 | ) | | 153,066 | || Net income (loss) for the year | | | | (1,507,050 | ) | | 1,600,420 | | | (526,396 | ) || Net income (loss) attributable to: | | | | | | | | | | | || Controlling shareholders | | | | (1,515,222 | ) | | 1,592,065 | | | (519,417 | ) || Non-controlling interests | | | | 8,172 | | | 8,355 | | | (6,979 | ) || | | | | (1,507,050 | ) | | 1,600,420 | | | (526,396 | ) || Earnings (loss) per share | | | | | | | | | | | || Basic earnings (loss) per share for the year attributable to controlling shareholders (in Brazilian Reais) | | 16 | | (5.02 | ) | | 5.09 | | | (1.67 | ) || Diluted earnings (loss) per share for the year attributable to controlling shareholders (in Brazilian Reais) | | 16 | | (5.02 | ) | | 4.74 | | | (1.67 | ) |The accompanying notes are an integralpart of these consolidated financial statements. F-7 Consolidated Statement as of Other Comprehensive Income(loss) for the years ended as of December 31, 2024, 2023 and 2022| Consolidated Statement of Other Comprehensive Income (Loss) For the years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais) || --- || | Notes | | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Net income (loss) for the year | | | | (1,507,050 | ) | | 1,600,420 | | | (526,396 | ) || Other comprehensive income (“OCI”) | | | | | | | | | | | || Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods: | | | | | | | | | | | || Changes in the fair value of accounts receivable from card issuers | | 22.1.1 | | (117,097 | ) | | 98,283 | | | (253,181 | ) || Tax on changes in the fair value of accounts receivable from card issuers at fair value | | | | 39,873 | | | (33,414 | ) | | 86,081 | || Exchange differences on translation of foreign operations | | | | 1,749 | | | (24,073 | ) | | (30,544 | ) || Changes in the fair value of cash flow hedge | | | | 71,657 | | | 64,146 | | | (207,222 | ) || Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods: | | | | | | | | | | | || Net monetary position in hyperinflationary economies | | | | (657 | ) | | 4,316 | | | 5,384 | || Gain on sale of equity instruments designated at fair value through other comprehensive income | | 6.3(b) | | 35,647 | | | — | | | — | || Changes in the fair value of equity instruments designated at fair value | | 6.3 (b) / 22.1.1 | | 1,623 | | | 1,912 | | | (6,971 | ) || Other comprehensive income (loss) that were reclassified to profit or loss in subsequent periods: | | | | | | | | | | | || Accumulated exchange differences on disposal of foreign operation | | | | — | | | 257 | | | 5,383 | || Other comprehensive income (loss) for the year, net of tax | | | | 32,795 | | | 111,427 | | | (401,070 | ) || Total comprehensive income (loss) for the year, net of tax | | | | (1,474,255 | ) | | 1,711,847 | | | (927,466 | ) || Total comprehensive income (loss) attributable to: | | | | | | | | | | | || Controlling shareholders | | | | (1,481,821 | ) | | 1,704,317 | | | (916,326 | ) || Non-controlling interests | | | | 7,566 | | | 7,530 | | | (11,140 | ) || Total comprehensive income (loss) for the year, net of tax | | | | (1,474,255 | ) | | 1,711,847 | | | (927,466 | ) |The accompanying notes are an integralpart of these consolidated financial statements. F-8 Consolidated Statement of Changes in Equity for the yearsended as of December 31, 2024, 2023 and 2022tement as of Other Comprehensive Income(loss) for the years ended as of December 31, 2024, 2023 and 2022| Consolidated Statement of Changes in Equity For the years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais) || --- || | | Attributable to controlling shareholders | | | | | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || | | | Capital reserve | | | | | | | | | | || | Notes | Issued capital | Additional paid-in capital | Transactions among shareholders | Special reserve | Other reserves | Total | Treasury shares | Other comprehensive income | Retained earnings (accumulate d losses) | Total | Non-controlling interest | Total || Balance as of December 31, 2021 | | 76 | 13,825,325 | 299,701 | 61,127 | 354,979 | 14,541,132 | (1,065,184) | (35,792) | 96,214 | 13,536,446 | 90,774 | 13,627,220 || Loss for the year | | — | — | — | — | — | — | — | — | (519,417) | (519,417) | (6,979) | (526,396) || Other comprehensive income (loss) for the year | | — | — | — | — | — | — | — | (396,909) | — | (396,909) | (4,161) | (401,070) || Total comprehensive income | | — | — | — | — | — | — | — | (396,909) | (519,417) | (916,326) | (11,140) | (927,466) || Transaction costs from subsidiaries | | — | — | — | — | — | — | — | — | — | — | (60) | (60) || Equity transaction related to put options over non-controlling interest | | — | — | — | — | (78,289) | (78,289) | — | — | — | (78,289) | 3,849 | (74,440) || Share-based payments | | — | — | — | — | 189,003 | 189,003 | — | — | — | 189,003 | 47 | 189,050 || Shares delivered under share-based payment arrangements | | — | — | (34,315) | — | (88,264) | (122,579) | 122,579 | — | — | — | — | — || Treasury shares - Delivered on business combination and sold | | — | — | (703,656) | — | — | (703,656) | 873,520 | — | — | 169,864 | — | 169,864 || Equity transaction with non-controlling interests | | — | — | (6,792) | — | — | (6,792) | — | — | — | (6,792) | (23,757) | (30,549) || Dividends paid | | — | — | — | — | — | — | — | — | — | — | (3,601) | (3,601) || Others | | — | — | — | — | — | — | — | — | — | — | 6 | 6 || Balance as of December 31, 2022 | | 76 | 13,825,325 | (445,062) | 61,127 | 377,429 | 13,818,819 | (69,085) | (432,701) | (423,203) | 12,893,906 | 56,118 | 12,950,024 || Net income for the year | | — | — | — | — | — | — | — | — | 1,592,065 | 1,592,065 | 8,355 | 1,600,420 || Other comprehensive income (loss) for the year | | — | — | — | — | — | — | — | 112,252 | — | 112,252 | (825) | 111,427 || Total comprehensive income | | — | — | — | — | — | — | — | 112,252 | 1,592,065 | 1,704,317 | 7,530 | 1,711,847 || Equity transaction related to put options over non-controlling interest | | — | — | — | — | 89,475 | 89,475 | — | — | — | 89,475 | (3,904) | 85,571 || Repurchase of shares | 15.3 | — | — | — | — | — | — | (292,745) | — | — | (292,745) | — | (292,745) || Share-based payments | | — | — | (25,851) | — | 226,713 | 200,862 | 25,851 | — | — | 226,713 | (114) | 226,599 || Shares delivered under share-based payment arrangements | | — | — | (47,591) | — | (4,873) | (52,464) | 53,270 | — | — | 806 | — | 806 || Equity transaction with non-controlling interests | | — | — | — | — | — | — | — | — | — | — | 49 | 49 || Dividends paid | | — | — | — | — | — | — | — | — | — | — | (5,983) | (5,983) || Others | | — | — | — | — | (208) | (208) | — | — | — | (208) | — | (208) || Balance as of December 31, 2023 | | 76 | 13,825,325 | (518,504) | 61,127 | 688,536 | 14,056,484 | (282,709) | (320,449) | 1,168,862 | 14,622,264 | 53,696 | 14,675,960 || Loss for the year | | — | — | — | — | — | — | — | — | (1,515,222) | (1,515,222) | 8,172 | (1,507,050) || Other comprehensive income (loss) for the year | | — | — | — | — | — | — | | 33,401 | — | 33,401 | (606) | 32,795 || Total comprehensive income | | — | — | — | — | — | — | — | 33,401 | (1,515,222) | (1,481,821) | 7,566 | (1,474,255) || Repurchase of shares | 15.3 | — | — | — | — | — | — | (1,587,332) | — | — | (1,587,332) | — | (1,587,332) || Equity transaction related to put options over non-controlling interest | | — | — | — | — | 26,911 | 26,911 | — | — | — | 26,911 | 1,028 | 27,939 || Share-based payments | | — | — | — | — | 194,729 | 194,729 | — | — | — | 194,729 | — | 194,729 || Shares delivered under share-based payment arrangements | | — | — | (62,912) | — | — | (62,912) | 64,145 | — | — | 1,233 | — | 1,233 || Dividends paid | | — | — | — | — | — | — | — | — | — | — | (10,454) | (10,454) || Others | | — | — | — | — | — | — | — | — | — | — | (538) | (538) || Balance as of December 31, 2024 | | 76 | 13,825,325 | (581,416) | 61,127 | 910,176 | 14,215,212 | (1,805,896) | (287,048) | (346,360) | 11,775,984 | 51,298 | 11,827,282 |The accompanying notes are an integralpart of these consolidated financial statements. F-9 Consolidated Statement of Cash Flows for the years endedas of December 31, 2024, 2023 and 2022| Consolidated Statement of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais) || --- || | Notes | | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Operating activities | | | | | | | | | | | || Net income (loss) for the year | | | | (1,507,050 | ) | | 1,600,420 | | | (526,396 | ) || Adjustments to reconcile net income (loss) for the year to net cash flows: | | | | | | | | | | | || Depreciation and amortization | | 10.4 | | 949,394 | | | 878,181 | | | 800,326 | || Deferred income tax and social contribution | | 9.3 | | (38,498 | ) | | 24,585 | | | (153,066 | ) || Loss on investment in associates | | | | (399 | ) | | 4,179 | | | 3,589 | || Accrued interest, monetary and exchange variations, net | | | | 174,079 | | | (195,419 | ) | | (382,707 | ) || Provision for contingencies | | 14.3 | | 61,226 | | | 5,825 | | | 18,849 | || Share-based payments expense | | 20.3 | | 232,672 | | | 251,239 | | | 213,076 | || Allowance for expected credit losses | | 6.4.2/ 6.5.2/6.6.4 | | 143,451 | | | 160,195 | | | 88,572 | || Loss on disposal of property, equipment and intangible assets | | 22.2.5 | | 29,365 | | | 66,200 | | | 25,347 | || Software business goodwill impairment loss | | 11.4 | | 3,558,049 | | | — | | | — | || Effect of applying hyperinflation accounting | | | | (184 | ) | | 3,652 | | | 3,852 | || Loss on sale of subsidiary | | | | 58,244 | | | 10,926 | | | 20,308 | || Fair value adjustment in financial instruments at FVPL | | 22.2.1 | | (441,478 | ) | | 96,563 | | | 1,179,547 | || Fair value adjustment in derivatives | | | | 485,977 | | | 20,320 | | | 90,821 | || Remeasurement of previously held interest on business combination | | 23.3.3.1 | | (7,406 | ) | | — | | | — | || Others | | | | — | | | 1,168 | | | — | || Working capital adjustments: | | | | | | | | | | | || Accounts receivable from card issuers | | | | (2,981,844 | ) | | 32,304 | | | 740,190 | || Receivables from related parties | | | | 27,974 | | | 20,343 | | | 12,912 | || Recoverable taxes | | | | (244 | ) | | 138,987 | | | 261,867 | || Prepaid expenses | | | | 54,498 | | | 41,310 | | | 152,966 | || Trade accounts receivable, banking solutions and other assets | | | | 810,748 | | | 205,105 | | | 707,521 | || Credit portfolio | | | | (670,780 | ) | | (312,808 | ) | | — | || Accounts payable to clients | | | | (8,507,343 | ) | | (3,382,075 | ) | | (3,633,937 | ) || Taxes payable | | | | (6,259 | ) | | 169,827 | | | 137,825 | || Labor and social security liabilities | | | | 29,991 | | | 19,284 | | | 171,293 | || Payment of contingencies | | 14.3 | | (58,939 | ) | | (34,012 | ) | | (9,799 | ) || Trade accounts payable and other liabilities | | | | 361,680 | | | (80,024 | ) | | 323,619 | || Interest paid | | | | (782,437 | ) | | (749,366 | ) | | (430,398 | ) || Interest income received, net of costs | | 22.2.2 | | 4,578,276 | | | 2,766,933 | | | 2,058,650 | || Income tax paid | | | | (174,145 | ) | | (116,134 | ) | | (191,142 | ) || Net cash provided by (used in) operating activities | | | | (3,621,382 | ) | | 1,647,708 | | | 1,683,685 | || Investing activities | | | | | | | | | | | || Purchases and construction of property and equipment | | 22.2.3 | | (764,482 | ) | | (736,244 | ) | | (417,733 | ) || Purchases and development of intangible assets | | 22.2.4 | | (507,278 | ) | | (474,053 | ) | | (305,512 | ) || Acquisition of subsidiary, net of cash acquired | | | | (9,054 | ) | | — | | | (69,837 | ) || Sale of subsidiary, net of cash disposed | | | | (4,204 | ) | | — | | | (4,325 | ) || Proceeds from (acquisition of) short-term investments, net | | | | 2,994,587 | | | 181,611 | | | (1,222,364 | ) || Acquisition of equity securities | | | | — | | | — | | | (15,000 | ) || Proceeds from disposal of long-term investments – equity securities | | | | 57,540 | | | 220,520 | | | 183,518 | || Proceeds from the disposal of non-current assets | | 22.2.5 | | 1,746 | | | 536 | | | 27,008 | || Payment for interest in subsidiaries acquired | | | | (181,365 | ) | | (37,806 | ) | | (46,897 | ) || Net cash provided by (used in) investing activities | | | | 1,587,490 | | | (845,436 | ) | | (1,871,142 | ) |The accompanying notes are an integral part of these consolidatedfinancial statements F-10 | Consolidated Statement of Cash Flows For the years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais) || --- || Notes | 2024 | 2023 | 2022 || --- | --- | --- | --- || Financing activities | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- || Proceeds from institutional deposits and marketable debt securities | 6.8.3 | 6,585,937 | | 1,608,162 | | — | || Payment of institutional deposits and marketable debt securities | 6.8.3 | (2,713,574 | ) | (75,004 | ) | (404,317 | ) || Proceeds from other debt instruments, except lease | 6.8.3 | 5,997,721 | | 4,138,209 | | 3,499,986 | || Payment to other debt instruments, except lease | | (3,049,824 | ) | (5,447,180 | ) | (5,855,452 | ) || Payment of principal portion of leases liabilities | 6.8.3 | (68,971 | ) | (72,815 | ) | (99,829 | ) || Payment of derivative financial instruments designated for hedge accounting | | (112,771 | ) | — | | — | || Repurchase of own shares | 15.3 | (1,587,332 | ) | (292,745 | ) | — | || Sale of own shares | | — | | — | | 53,406 | || Acquisition of non-controlling interests | | (146 | ) | (1,440 | ) | (325 | ) || Dividends paid to non-controlling interests | | (10,454 | ) | (5,983 | ) | (3,601 | ) || Net cash provided by (used in) financing activities | | 5,040,586 | | (148,796 | ) | (2,810,132 | ) || Effect of foreign exchange on cash and cash equivalents | | 44,544 | | 10,336 | | 14,548 | || Change in cash and cash equivalents | | 3,051,238 | | 663,812 | | (2,983,041 | ) || Cash and cash equivalents at beginning of year | 5.2 | 2,176,416 | | 1,512,604 | | 4,495,645 | || Cash and cash equivalents at end of year | 5.2 | 5,227,654 | | 2,176,416 | | 1,512,604 | || Change in cash and cash equivalents | | 3,051,238 | | 663,812 | | (2,983,041 | ) || | | | | | | (concluded) | |The accompanying notes are an integralpart of these consolidated financial statements. F-11 Notes to Consolidated Financial Statements| Notes to Consolidated Financial Statements Years ended December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 1. | Operations || --- | --- |StoneCo Ltd. (“StoneCo”or the “Company”), is a Cayman Islands exempted company with limited liability, incorporated on March 11, 2014. The registeredoffice of the Company is located at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman E9, KY1-1002.HR Holdings LLC owns 34.12% ofthe Company's voting shares. HR Holding LLC's ultimate parent is the VCK Investment Fund Limited SAC A, an investment fund owned by theco-founder of the Company, Mr. Andre Street.The Company’s shares arepublicly traded on Nasdaq under the ticker symbol STNE and its Brazilian Depositary Receipts (“BDRs”) representing the underlyingCompany’s shares are traded on the Brazilian stock exchange (B3) under the ticker symbol STOC31. In December 2024, the Company decidedto discontinue the sponsored BDR program and initiated the procedures to cancel such program. The BDRs under the Sponsored BDR programceased to be traded on the Brazilian stock exchange on March 14, 2025.The Company and its subsidiaries(collectively, the “Group”) provide financial services and software solutions to clients across in-store, mobile and onlinedevice platforms helping them to better manage their businesses by increasing the productivity of their sales initiatives.The consolidated financial statementsof the Group were approved for issue by the Audit Committee on March 17, 2025.1.1. Reclassificationof items included on financial liabilitiesConsidering that the Group is diversifyingits sources of funding in the different markets (retail, banking, capital markets, institutional and other) in these financial statementsa revised classification of deposits and debt instruments has been adopted. The comparative balances as of December 31, 2023 have beenretroactively reclassified following the new criteria.The table below presents the effectsof reclassified items on Statement of financial position as of December 31, 2023:| Previous items | December 31, 2023 (before reclassification) | Reclassification | | Current items | December 31, 2023 (after reclassification) || --- | --- | --- | --- | --- | --- || Liabilities | | | | | || Current liabilities | | | | | || Borrowing and financing | 1,374,766 | (899,447 | ) | Institutional deposits and marketable debts securities | 475,319 || Obligations to FIDC quotas holders | 505,231 | 899,447 | | Other debt instruments | 1,404,678 || Total current liabilities | 1,879,997 | — | | | 1,879,997 || Non-current liabilities | | | | | || Borrowing and financing | 3,639,215 | (143,456) | | Institutional deposits and marketable debts securities | 3,495,759 || Obligations to FIDC quotas holders | - | 143,456 | | Other debt instruments | 143,456 || Total non-current liabilities | 3,639,215 | — | | | 3,639,215 |The tables below presents the effectsof reclassified items on Statement of cash flows in 2023 and 2022: F-12 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Previous items | 2023 (before reclassification) | | | Reclassification | | | Current items | 2023 (after reclassification) | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Financing activities | | | | | | | | | | || Proceeds from borrowings | | 5,181,619 | | | (3,573,457 | ) | Proceeds from institutional deposits and marketable debt securities | | 1,608,162 | || Payment of borrowings | | (4,489,681 | ) | | 4,414,677 | | Payment of institutional deposits and marketable debt securities | | (75,004 | ) || Proceeds from FIDC quota holders | | 564,752 | | | 3,573,457 | | Proceeds from other debt instruments, except lease | | 4,138,209 | || Payment to FIDC quota holders | | (1,032,503 | ) | | (4,414,677 | ) | Payment to other debt instruments, except lease | | (5,447,180 | ) || | | 224,187 | | | — | | | | 224,187 | || Previous items | 2022 (before reclassification) | | | Reclassification | | | Current items | 2022 (after reclassification) | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Financing activities | | | | | | | | | | || Proceeds from borrowings | | 3,499,986 | | | (3,499,986 | ) | Proceeds from institutional deposits and marketable debt securities | | — | || Payment of borrowings | | (5,009,769 | ) | | 4,605,452 | | Payment of institutional deposits and marketable debt securities | | (404,317 | ) || Proceeds from FIDC quota holders | | — | | | 3,499,986 | | Proceeds from other debt instruments, except lease | | 3,499,986 | || Payment to FIDC quota holders | | (1,250,000 | ) | | (4,605,452 | ) | Payment to other debt instruments, except lease | | (5,855,452 | ) || | | (2,759,783 | ) | | — | | | | (2,759,783 | ) || 2. | General accounting policies || --- | --- |The accounting policies are presentedin the corresponding notes throughout the financial statements. The general accounting policies, unrelated to specific notes, are presentedas follows.2.1. Basis of preparationThe consolidated financial statementsof the Group have been prepared in accordance with IFRS^®^ Accounting Standards as issued by the International AccountingStandards Board (“IASB”).The consolidated financial statementshave been prepared on a historical cost basis, other than some Short and Long-term investments, Accounts receivable from card issuers,Derivative financial instruments, Other liabilities related to contingent consideration and, upon initial recognition, Provision for contingenciesof entities acquired on business combinations. The consolidated financial statements are presented in Brazilian Real/Reais (“R$”),and all values are rounded to the nearest thousand (R$ 000), except when otherwise indicated. F-13 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |2.2. Foreign currency translation2.2.1. Financial statements in foreign currenciesThe Group’s consolidatedfinancial statements are presented in Brazilian Reais, which is the Company’s functional currency.The Group determines the functionalcurrency for each entity within the Group. The Company’s subsidiaries functional currency is the Brazilian Real, except for theNapse Group for which the functional currency of the different entities are U.S. Dollar, Argentinian Peso, Chilean Peso, Mexican Peso,Nuevo Sol and Uruguayan Peso.For those entities that use a functionalcurrency other than the Brazilian Real, their financial statements are translated into Brazilian Reais using (i) the exchange rates atthe reporting date for assets and liabilities, (ii) average monthly exchange rates for profit or loss, and (iii) the exchange rate atthe transaction date for equity transactions. For these entities, exchange gains and losses arising from the translation process are recordedin Other comprehensive income (loss) ("OCI") in “Exchange differences on translation of foreign operations”.2.2.2. Transactions in foreign currenciesTransactions in foreign currenciesare initially recorded by the Group’s entities in their functional currency at the spot exchange rate at the date the transactionfirst qualifies for recognition.Monetary assets and liabilitiesdenominated in foreign currencies are translated into each functional currency using the exchange rates prevailing at the reporting date.Exchange gains and losses arising from the settlement of transactions and from the translation of monetary assets and liabilities denominatedin foreign currency are recognized in the statement of profit or loss. These mostly arise from transactions carried out by clients withcredit and debit cards issued by foreign card issuers, from the translation of the Group’s financial instruments denominated inforeign currencies and, to a lesser extent, from purchase of products and services denominated in foreign currencies.2.3. LeasesThe determination of whether anarrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. In the event that fulfillmentof the arrangement is dependent on the use of specific assets or the arrangement transfers a right to use the asset, such arrangementsare defined as leases.2.3.1. The Group as a lesseeThe Group applies a single recognitionand measurement approach for all leases, except for short-term leases and leases of low-value assets for which the Group opts for recognitionexemption. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlyingassets.2.3.1.1. Right-of-use assetsThe Group recognizes right-of-useassets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measuredat cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost ofright-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at orbefore the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over theshorter of the lease term and the estimated useful lives of the assets. The estimated useful lives for the right-of-use assets are asfollows: F-14 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | Estimated useful lives (years) || --- | --- || Offices | 1-10 || Vehicles | 1-3 || Equipment | 1-10 || Software | 1-3 |If ownership of the leased assetis transferred to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculatedusing the estimated useful life of the asset. The right-of-use assets are also subject to impairment.2.3.1.2. Lease liabilitiesAt the commencement date of thelease, the Group recognizes under “Other debt instruments” lease liabilities measured at the present value of lease paymentsto be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentivesreceivable and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchaseoption reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects theGroup exercising the option to terminate. The variable lease payments are recognized as an expense in the same period the event or conditionthat triggered the payment occurred.In calculating the present valueof lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the leaseis not readily determinable. After the commencement date, the lease liability balance is increased to reflect the accretion of interestand reduced when lease payments are made. The carrying amount of lease liabilities is remeasured if there is a modification, a changein the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.2.3.1.3. Short-term leases and leases oflow-value assetsThe Group applies the short-termlease recognition exemption to its short-term leases of offices, software, vehicles and other equipment (being contracts with a leaseterm of 12 months or less from the commencement date which do not contain a purchase option). It also applies the low-value assets recognitionexemption to leases of office equipment that are considered of low value (below five thousand of U.S. Dollar). Lease payments of short-termleases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.2.3.2. The Group as a lessorLeases in which the Group doesnot transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Initial directcosts incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized overthe lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.The Group has cancellable month-to-monthlease contracts of Pin Pads & Point of Sale (“POS”) to third parties (clients). The leased assets are included in “Propertyand equipment” in the consolidated statement of financial position and are depreciated over their expected useful lives on a straight-linebasis. Income from operating leases (net of any incentives given to the lessee) is recognized on a straight-line basis over the leaseterm in “Net revenue from subscription services and equipment rental” in the consolidated statement of profit or loss.2.4. Current and non-current classificationThe Group presents assets and liabilitiesin the statement of financial position based on a current / non-current classification. F-15 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |An asset is current when it is:| • | expected to be realized or intended to be sold or consumed in the normal operating cycle; || --- | --- || • | held primarily for the purpose of trading; || --- | --- || • | expected to be realized within twelve months after the reporting period; or || --- | --- || • | cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. || --- | --- |All other assets are classifiedas non-current.A liability is current when itis:| • | expected to be settled in the normal operating cycle; || --- | --- || • | held primarily for the purpose of trading; || --- | --- || • | due to be settled within twelve months after the reporting period; or || --- | --- || • | there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. || --- | --- |All other liabilities are classifiedas non-current.Deferred tax assets and liabilitiesare classified as non-current assets and liabilities.2.5. Financial reporting in hyperinflationaryeconomiesAs the accumulated inflation ratein Argentina had exceeded 100% over the past three years, the Group adopted IAS 29- Financial Reporting in Hyperinflationary Economiesfor the Argentine subsidiary Napse S.R.L.Non-monetary assets and liabilities,shareholders’ equity and amounts in the statement of profit or loss of entities that operate in hyperinflationary economies areadjusted by the change in the general purchasing power of the currency, based on a general price index.The financial statements of anentity whose functional currency is the currency of a hyperinflationary economy, whether based on the historical or current cost approach,should be expressed in terms of the current measurement unit at the statement of financial position date.2.6. Climate related mattersThe Group acknowledges the presenceand importance of climate risk and seeks to integrate it as part of the other managed risks. By the nature of its activities, the Groupis mainly affected by physical and transition risks indirectly, as a result of the effects of those risks on its customers. Within thiscontext, the Group has the objective of developing its capabilities for identifying, assessing, measuring, monitoring, reporting, andmitigating the potential effects resulting from social, environmental, and climate risks associated with its prioritized products, services,activities, and processes, based on the principles of relevance and proportionality.The Group's current view is thatits business model and its main products are not likely to have a significant impact from the transition to a low-carbon economy. Climate-relatedmatters however may increase the uncertainty in selected estimates and assumptions underpinning some items in the financial statements.Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevantchanges and developments, such as new climate-related legislation. F-16 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Financial assets may be indirectlyimpacted by climate-related matters, principally the credit portfolio. Cash flows from customers whose businesses are affected by transitionrisks and extreme weather events and other physical climate risks may be impacted. However, this risk is mitigated by the diverse andbroad base of customers operating in across numerous industries and in different geographical regions in Brazil, and the relative short-termduration of the loans. Extreme weather events might more significantly affect specific cities or geographical areas.2.7. New standards and amendments to standardsand interpretations adoptedThe following amendments and interpretationswere applicable as from January 1, 2024:| • | Amendments to IAS 1 - Presentation of Financial Statements: The amendments to IAS 1 were made to clarify when to consider contractual conditions (covenants) that may affect the unconditional right to defer the settlement of the liabilities for at least 12 months after the reporting period and includes disclosure requirements for liabilities with covenants classified as non-current. || --- | --- || • | IAS 7 - Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: The amendments clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. || --- | --- || • | Amendments to IFRS 16 - Leases: The amendments in IFRS 16 specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. || --- | --- |These amendments had no significantimpact on the consolidated financial statements of the Group.2.8. New standards and amendments to standardsand interpretations not yet adoptedThe new and amended standards andinterpretations that are issued, but not yet effective as of December 31, 2024 are presented below. The Group intends to adopt these newand amended standards and interpretations, if applicable, when they become effective.2.8.1. Amendments to IAS 21: Lack of exchangeabilityOn August 15, 2023, the IASB issuedLack of Exchangeability which amended IAS 21 - The Effects of Changes in Foreign Exchange Rates (“the amendments”). The amendmentsintroduce requirements to assess when a currency is exchangeable into another currency and when it is not. The amendments require theentity to estimate the spot exchange rate when it concludes that a currency is not exchangeable into another currency.The amendments are effective forannual reporting periods beginning on or after January 1, 2025. The Group is assessing if the amendments will affect the Group’sconsolidated financial statements.2.8.2. IFRS 18 - Presentation and Disclosurein Financial StatementsIn April 2024, the IASB issuedIFRS 18, which replaces IAS 1 - Presentation of Financial Statements. IFRS 18 introduces new requirements on presentation within the statementof profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses withinthe statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations,whereof the first three are new.It also requires disclosure ofnewly defined management-defined performance measures (“MPMs”), certain profit or loss performance measure, and includes newrequirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financialstatements (“PFS”) and the notes. F-17 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |In addition, narrow-scope amendmentshave been made to IAS 7 - Statement of Cash Flows, which include changing the starting point for determining cash flows from operationsunder the indirect method, from ‘profit or loss’ to ‘operating profit or loss’ and removing the options aroundclassification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards.IFRS 18, and the amendments tothe other standards, are effective for reporting periods beginning on or after 1 January 2027, but earlier application is permitted andmust be disclosed. IFRS 18 will apply retrospectively.The Group is currently reviewingthe standard to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements.2.8.3. IFRS 19 - Subsidiaries without PublicAccountability: DisclosuresIn May 2024, the IASB issued IFRS19, which allows eligible entities to elect to apply its reduced disclosure requirements while still applying the recognition, measurementand presentation requirements in other IFRS Accounting Standards. To be eligible, at the end of the reporting period, an entity must bea subsidiary as defined in IFRS 10, cannot have public accountability and must have a parent (ultimate or intermediate) that preparesconsolidated financial statements, available for public use, which comply with IFRS Accounting Standards.IFRS 19 will become effective forreporting periods beginning on or after 1 January 2027, with early application permitted.The Group is not eligible to applyIFRS 19 as it has public accountability.2.8.4. IFRS 9 - Financial instrumentsOn 30 May 2024, the InternationalAccounting Standards Board (the IASB or the Board) issued Amendments to the Classification and Measurement of Financial Instruments whichamended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (the Amendments). The Amendments provide additionalguidance and clarity on the following specific matters: date of recognition and write-off of financial instruments and significant characteristicsin the assessment of the cash flows of financial instruments for classification and measurement. In addition, disclosures relating toequity instruments designated at fair value are enhanced through other comprehensive income and financial instruments linked to contingentevents.These amendments are effectivefor years starting on January 1st, 2026, early adoption being permitted, with retrospective application. The Group is assessing if theamendments will affect the Group’s consolidated financial statements.2.9. Pillar 2 in BrazilIn October 2024, Provisional Measure(“MP”) n° 1,262/2024 was published as part of the Brazilian government proposal for a partial adoption of the Pillar 2rules. It imposes a corporate tax surcharge (Additional CSLL) intended to function as Brazil’s QDMTT (Qualified Domestic MinimumTop-up Tax) starting January 1, 2025.Under the rule, multinational companieswith a minimum annual revenue of €750 million must apply a minimum effective tax rate of 15% on adjusted income measured followingPillar 2 rules. Based on the analysis of Group’s consolidated financial statements for the last three years, the Group understandthat it meets such revenue threshold.Additional CSLL will be appliedto excess profits computed following Brazilian accounting rules and adjustments consistent with the Pillar 2 global rules. Only profitof the Brazilian entities will be considered to determine QDMTT, therefore does not affect entities of the Group in other jurisdictions.The Group does not expect any additional tax from this partial adoption of the Pillar 2 rules. F-18 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The text of the MP was included in law bill that wassubsequently approved by Congress and sanctioned by the President into Law 15,079/2024 adapting Brazilian tax legislation to the GlobalAnti-Base Erosion Rules ("GloBE Rules") of the Organization for Economic Cooperation and Development (“OECD”).| 3. | Significant judgments, estimates and assumptions || --- | --- |The preparation of the financialstatements of the Company and its subsidiaries requires management to make judgments and estimates and to adopt assumptions that affectthe amounts presented referring to revenues, expenses, assets and liabilities at the financial statement date. Actual results may differfrom these estimates.The judgements, estimates and assumptionsare frequently revised, and any effects are recognized in the revision period and in any future affected periods. The objective of theserevisions is to mitigate the risk of material differences between estimated and actual results in the future.Significant assumptions about sourcesof uncertainty in future estimates and other significant sources at the reporting date are presented in each of the notes along the financialstatements.| 4. | Group information || --- | --- |4.1. Subsidiaries4.1.1. Accounting policy4.1.1.1. Basis of consolidationThe consolidated financial statementscomprise the financial statements of the Company and its subsidiaries. Control is achieved when the Group:| • | has power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); || --- | --- || • | is exposed, or has rights, to variable returns from its involvement with the investee; and || --- | --- || • | has the ability to use its power to affect its returns. || --- | --- |Generally, there is a presumptionthat a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the votingor similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee,including:| • | the contractual arrangement(s) with the other vote holders of the investee; || --- | --- || • | rights arising from other contractual arrangements; and || --- | --- || • | the Group’s voting rights and potential voting rights. || --- | --- |The Group re-assesses whether itcontrols an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidationof a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets,liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statementsfrom the date the Group obtains control until the date the Group ceases to control the subsidiary. F-19 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Profit or loss and each componentof OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in thenon-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries tobring their accounting policies into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income,expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.A change in the ownership interestof a subsidiary, without a loss of control, is accounted for as an equity transaction, in “Transactions among shareholders”in equity.4.1.1.2. Consolidationof structured entitiesUsually, the control of an investeeis determined by voting or similar rights of the investor. In some cases, voting or similar rights is not the decisive factor to characterizecontrol. An entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entityis denominated as a structured entity. Frequently, the relevant activities of structured entities are directed by means of contractualarrangements. In such cases, an investor’s consideration of the purpose and design of the investee shall also include considerationof the risks to which the investee was designed to be exposed, the risks it was designed to pass on to the parties involved with the investeeand whether the investor is exposed to some or all of those risks.Based on the contractual terms,the Group identified that certain investments meet the definition of a structured entity under IFRS 12 – Disclosure of Interestsin Other Entities.The Group considers the entitieslisted below to be structured entities that are controlled by the Group. The participation of the Group in each of them is stated as follows:| | Outstanding quotas as of December 31, 2024 | Outstanding quotas as of December 31, 2023 || --- | --- | --- || ACR FAST Fundo de Investimento em Direitos Creditórios ("FIDC ACR FAST") | 100% of subordinated quotas representing approximately 4% of total (subordinated and senior) quotas | 100% of subordinated quotas representing approximately 3% of total (subordinated and senior) quotas || ACR I Fundo de Investimento em Direitos Creditórios ("FIDC ACR I") | 100% of subordinated quotas representing approximately 7% of total (subordinated and senior) quotas | 100% of subordinated quotas representing all outstanding quotas || SOMA III Fundo de Investimentos em Direitos Creditórios Não Padronizados ("FIDC SOMA III") | 100% of subordinated quotas and 100% of mezzanine quotas representing all outstanding quotas | 100% of subordinated quotas representing all outstanding quotas || Stone Fundo de Investimento Multimercado Crédito Privado ("STONE FIM CP") | 100% of subordinated quotas representing all outstanding quotas | — || StoneCo Exclusivo Fundo de Investimento em Cotas de Fundo de Investimento Multimercado Crédito Privado ("FIC FIM STONECO") | 100% of subordinated quotas representing all outstanding quotas | || Tapso Fundo de Investimento em Direitos Creditórios ("FIDC TAPSO") | 100% of subordinated quotas and 100% of mezzanine quotas representing all outstanding quotas | 100% of subordinated quotas and 100% of mezzanine quotas representing approximately 99% of total (subordinated, mezzanine and senior) quotas || Tapso II Fundo de Investimento em Direitos Creditórios ("FIDC TAPSO II") ^(a)^ | — | 100% of subordinated quotas representing all outstanding quotas || SOMA I Fundo de Investimentos em Direitos Creditórios Não Padronizados ("FIDC SOMA") ^(a)^ | — | 100% of subordinated quotas representing all outstanding quotas || ACR III Fundo de Investimento em Direitos Creditórios ("FIDC ACR III") ^(a)^ | — | 100% of subordinated quotas representing all outstanding quotas || ACR V Fundo de Investimento em Direitos Creditórios ("FIDC ACR V") ^(a)^ | — | 100% of subordinated quotas representing all outstanding quotas || ACR VI Fundo de Investimento em Direitos Creditórios ("FIDC ACR VI") ^(a)^ | — | 100% of subordinated quotas representing all outstanding quotas || (a) | During 2024, these structured entities were closed. || --- | --- | F-20 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The bylaws of these structuredentities were established at their inception to grant significant decision-making authority over these entities. As sole holders of thesubordinated quotas, the Group is entitled to the full residual value of the entities, if any, and thus the Group has the rights to theirvariable returns.In accordance with IFRS 10, theGroup concluded it controls all structured entities listed above, therefore, they are consolidated in the Group’s financial statements.FIDCs senior and mezzanine quotas held by third parties, when applicable, are accounted for as a financial liability under “Otherdebt instruments and Institutional deposits and marketable debt securities” and the remuneration paid to senior and mezzanine quotaholders is recorded as an interest expense (Note 6.8).4.1.2. Subsidiaries of the GroupThe consolidated financial statementsof the Group include the following subsidiaries and structured entities:| | | % of Group's equity interest | || --- | --- | --- | --- || Entity name | Main activities | December 31, 2024 | December 31, 2023 || Stone Instituição de Pagamento S.A. (“Stone IP”) | Merchant acquiring | 100.00 | 100.00 || MNLT S.A. (“MNLT”) | Merchant acquiring | 100.00 | 100.00 || Pagar.me Instituição de Pagamento S.A. (“Pagar.me”) | Merchant acquiring | 100.00 | 100.00 || Linx Pay Meios de Pagamento Ltda. (“Linx Pay”) | Merchant acquiring | 100.00 | 100.00 || Stone Cartões Instituição de Pagamento S.A. (“Stone Cartões”) | Financial services | 100.00 | 100.00 || Stone Sociedade de Crédito, Financiamento e Investimento S.A. ("Stone SCFI") ^(a)^ | Financial services | 100.00 | — || Stone Sociedade de Crédito Direto S.A. (“Stone SCD”) | Financial services | 100.00 | 100.00 || TAG Tecnologia para o Sistema Financeiro S.A. ("TAG") | Financial assets register | 100.00 | 100.00 || MLabs Software S.A. (“MLabs”) | Technology services | 51.50 | 51.50 || Questor Sistemas S.A. (“Questor”) | Technology services | 50.00 | 50.00 || Sponte Educação Ltda. ("Sponte Educação") ^(a)^ | Technology services | 100.00 | — || SimplesVet Tecnologia S.A. (“SimplesVet”) | Technology services | 50.00 | 50.00 || VHSYS Sistema de Gestão S.A. (“VHSYS”) | Technology services | 50.00 | 50.00 || Trinks Serviços de Internet S.A. (“Trinks”) ^(b)^ | Technology services | 100.00 | 19.90 || Linx S.A. (“Linx”) | Technology services | 100.00 | 100.00 || Linx Sistemas e Consultoria Ltda. (“Linx Sistemas”) | Technology services | 100.00 | 100.00 || Linx Telecomunicações Ltda. ("Linx Telecom") | Technology services | 100.00 | 100.00 || Linx Automotivo Ltda. ("Linx Auto") ^(a)^ | Technology services | 100.00 | — || Linx Impulse Ltda. ("Linx Impulse") ^(a)^ | Technology services | 100.00 | — || Linx Saúde Ltda. ("Linx Saúde") ^(a)^ | Technology services | 100.00 | — || Linx Commerce Ltda. ("Linx Commerce") ^(a)^ | Technology services | 100.00 | — || Linx People Ltda. ("Linx People") ^(a)^ | Technology services | 100.00 | — || Linx Enterprise Ltda. ("Linx Enterprise") ^(a)^ | Technology services | 100.00 | — || Napse S.R.L. (“Napse Group”) | Technology services | 100.00 | 100.00 || Napse Uruguay SAS (“Napse Group”) | Technology services | 100.00 | 100.00 || Sociedad Ingenería de Sistemas Napse I.T. de Chile Limitada (“Napse Group”) | Technology services | 100.00 | 100.00 || Napse IT Peru S.R.L. (“Napse Group”) | Technology services | 100.00 | 100.00 || Synthesis Holding LLC (“Napse Group”) | Technology services | 100.00 | 100.00 || Synthesis US LLC (“Napse Group”) | Technology services | 100.00 | 100.00 || Retail Americas Sociedad de Responsabilidad Limitada de Capital Variable (“Napse Group”) | Technology services | 100.00 | 100.00 | F-21 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | | % of Group's equity interest | || --- | --- | --- | --- || Entity name | Main activities | December 31, 2024 | December 31, 2023 || Synthesis IT de México Sociedad de Responsabilidad Limitada de Capital Variable (“Napse Group”) | Technology services | 100.00 | 100.00 || --- | --- | --- | --- || Hiper Software S.A. ("Hiper") | Technology services | 100.00 | 100.00 || Reclame Aqui LLC (“Reclame Aqui Group”) | Technology services | 50.00 | 50.00 || Obvio Brasil Software e Serviços S.A. (“Reclame Aqui Group”) | Technology services | 50.00 | 50.00 || O Mediador Tecnologia da Informação S/S Ltda. (“Reclame Aqui Group”) | Technology services | 50.00 | 50.00 || Reclame Aqui Marcas e Serviços Ltda. (“Reclame Aqui Group”) | Technology services | 50.00 | 50.00 || STEF S.A ("Stef") | Technology services | 100.00 | 100.00 || Hubcount Tecnologia S.A. (“Hubcount”) ^(c)^ | Technology services | 75.60 | 75.60 || Buy4 Processamento de Pagamentos S.A. (“Buy4”) | Processing card transactions | 100.00 | 100.00 || Buy4 Sub LLC ("Buy4 LLC") | Cloud store card transactions | 100.00 | 100.00 || Vitta Corretora de Seguros Ltda. (“Vitta Group”) | Insurance services | 100.00 | 100.00 || Vitta Tecnologia em Saúde S.A. (“Vitta Group”) | Health services | 100.00 | 100.00 || Vitta Serviços em Saúde Ltda. (“Vitta Group”) | Health services | 100.00 | 100.00 || Vitta Saúde Administradora de Benefícios Ltda. (“Vitta Group”) | Health services | 100.00 | 100.00 || StoneCo Pagamentos UK Ltd. ("StoneCo UK") ^(d)^ | Service provider | — | 100.00 || Stone Logística Ltda. ("Stone Log") | Logistic services | 100.00 | 100.00 || Stone Franchising Ltda. ("Franchising") | Franchising management | 100.00 | 100.00 || Ametista Serviços Digitais Ltda. (“PinPag”) ^(e)^ | Electronic fund transfer | — | 100.00 || Esmeralda Serviços Digitais Ltda. (“PinPag”) ^(e)^ | Electronic fund transfer | — | 100.00 || Diamante Serviços Digitais Ltda. (“PinPag”) ^(e)^ | Electronic fund transfer | — | 100.00 || Safira Serviços Digitais Ltda. (“PinPag”) ^(e)^ | Electronic fund transfer | — | 100.00 || FIDC TAPSO | Investment fund | 100.00 | 100.00 || FIDC TAPSO II ^(f)^ | Investment fund | — | 100.00 || FIDC SOMA ^(g)^ | Investment fund | — | 100.00 || FIDC SOMA III | Investment fund | 100.00 | 100.00 || FIDC ACR I | Investment fund | 100.00 | 100.00 || FIDC ACR III ^(f)^ | Investment fund | — | 100.00 || FIDC ACR V ^(f)^ | Investment fund | — | 100.00 || FIDC ACR VI ^(g)^ | Investment fund | — | 100.00 || STONE FIM CP ^(h)^ | Investment fund | 100.00 | — || FIC FIM STONECO | Investment fund | 100.00 | 100.00 || FIDC ACR FAST | Investment fund | 100.00 | 100.00 || MPB Capital LLC ("MPB") | Investment company | 100.00 | 100.00 || DLP Capital LLC ("DLP Cap") | Holding company | 100.00 | 100.00 || DLPPar Participações S.A. (“DLPPar”) | Holding company | 100.00 | 100.00 || Reclame Aqui Holding Ltd ("Reclame Aqui Group") | Holding company | 50.00 | 50.00 || STNE Participações S.A. ("STNE Par") | Holding company | 100.00 | 100.00 || STNE Participações em Tecnologia S.A. ("STNE ParTec") | Holding company | 100.00 | 100.00 || VittaPar LLC (“Vitta Group”) | Holding company | 100.00 | 100.00 || Stone Holding Instituições S.A. ("Stone Holding") | Holding company | 100.00 | 100.00 || STNE Investimentos S.A. ("STNE Invest") | Holding company | 100.00 | 100.00 || Equals Software S.A. ("Equals Software") | Holding company | 100.00 | 100.00 || Stone Seguros S.A. (“Stone Seguros”) | Holding company | 100.00 | 100.00 || (a) | In the first quarter of 2024, the Group incorporated the companies Stone SCFI, Sponte Educação, Linx Auto and Linx Impulse, all of which are wholly owned by the Group. In the second quarter of 2024, the Group incorporated the companies Linx Saúde, Linx Commerce, Linx People and Linx Enterprise all of which are wholly owned by the Group. || --- | --- || (b) | In May 2024, Trinks became a wholly owned subsidiary of STNE Par. || --- | --- | F-22 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (c) | STNE Par has a 50% equity interest in Questor and, on August 31, 2022, Questor acquired a 75.60% equity interest in Hubcount. || --- | --- || (d) | Dissolved on July 9, 2024. || --- | --- || (e) | On February 7, 2024, the equity interest of Ametista Serviços Digitais Ltda., Esmeralda Serviços Digitais Ltda., Diamante Serviços Digitais Ltda., and Safira Serviços Digitais Ltda. (collectively the “Pinpag") was sold, thus, the Group ceased to hold equity interest in these entities. || --- | --- || (f) | Closed on April 2024. || --- | --- || (g) | Closed on May, 2024. || --- | --- || (h) | The Group owns 100% of the subordinated quotas in connection with the incorporation of the funds. || --- | --- |The Group holds call options toacquire additional interests in some of its subsidiaries (Notes 6.1.5 and 6.9) and issued put options to non-controlling investors (Note6.13.1 (g)).4.2. Associates4.2.1. Accounting policyAn associate is an entity overwhich the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisionsof the investee, but does not have control, or joint control over those policies.The considerations made in determiningsignificant influence are similar to those necessary to determine control over subsidiaries. The Group’s investments in associatesare accounted for using the equity method.Under the equity method, the investmentin an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’sshare of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amountof the investment and is not tested for impairment separately.The Statement of profit or lossreflects the Group’s share of the results of operations of the associate. Any change in OCI of those investees is presented as partof the Group’s OCI. In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizesits share of any changes, when applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactionsbetween the Group and associates are eliminated to the extent of the interest in the associate.The aggregate of the Group’sshare of profit or loss of an associate is shown on the face of the Statement of profit or loss outside operating profit and representsprofit or loss after tax and non-controlling interests in the subsidiaries of the associate.The financial statements of theassociate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policiesin line with those of the Group.After application of the equitymethod, the Group determines whether it is necessary to recognize an impairment loss on its investment in its associate. At each reportingdate, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence,the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value,and then recognizes the loss within share of profit of an associate in the statement of profit or loss.In the event of a loss of significantinfluence over the associate, the Group measures and recognizes any retained investment at its fair value. Any difference between thecarrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposalis recognized in profit or loss.None of the investments in associatespresented significant restrictions on transferring resources in the form of cash dividends or repayment of obligations, during the periodsreported. F-23 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |4.2.2. Associates held by the Group| | | % Group's equity interest | || --- | --- | --- | --- || Entity name | Principal activities | December 31, 2024 | December 31, 2023 || Alpha-Logo Serviços de Informática S.A. (“Tablet Cloud”) | Technology services | 25.00 | 25.00 || Agilize Tecnologia S.A. ("Agilize") ^(a)^ | Technology services | — | 33.33 || Neostore Desenvolvimento de Programas de Computador S.A. (“Neomode”) ^(b)^ | Technology services | — | 40.02 || Dental Office S.A. (“RH Software”) | Technology services | 20.00 | 20.00 || APP Sistemas S.A. (“APP”) ^(c)^ | Technology services | 19.80 | 19.90 || Delivery Much Tecnologia S.A. (“Delivery Much”) | Food delivery marketplace | 29.49 | 29.49 || Agilize Contabilidade Holding Limited ("Agilize Cayman") ^(a)^ | Holding company | 28.70 | — || (a) | On August 1, 2023, the Group acquired a 33.33% equity interest in Agilize, a private company based in the State of Bahia, Brazil, for R$ 8,523 through the conversion of a credit arising from a convertible loan agreement. Agilize develops technology that provides online accounting services. In November 2024, as part of a corporate reorganization, Agilize established an offshore structure, leading to the direct ownership of all shareholders in Agilize Cayman and contributions of capital from new investors in which StoneCo had no participation. Subsequently, STNE Invest, which previously held a stake in Agilize, fully transferred its equity interest to StoneCo and reduced its equity interest from 33.33% to 28.70%. || --- | --- || (b) | Linx Sistemas has sold all of its shares in Neomode. || --- | --- || (c) | In March 2024, the share capital of APP was increased through the subscription and payment of new shares, resulting in the proportional dilution of STNE Par ownership interest. || --- | --- |The Group holds call options toacquire additional interests in some of its associates (Notes 6.1.5 and 6.9).| 5. | Cash and cash equivalents || --- | --- |5.1. Accounting policyCash and cash equivalents in thestatement of financial position comprise cash at banks and short-term deposits with a maturity of three months or less from the date ofacquisition, which are subject to an insignificant risk of changes in value, and readily convertible into cash.5.2. Currency denomination| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Denominated in R$ | 5,157,035 | 2,128,425 || Denominated in US$ | 70,619 | 47,991 || | 5,227,654 | 2,176,416 || 6. | Financial instruments || --- | --- |6.1. Accounting policy6.1.1. Financial assets6.1.1.1. Descriptionof the different financial assetsThe Group holds financial assetsfor all its businesses due to the nature of its activities. In order to facilitate the understanding of the financial statements and theunderlying businesses, the financial asset line items presented in the statement of financial position are shown by business activitythat generated the assets, how these are measured, and where in the statement of profit or loss the results generated by such assets areclassified. F-24 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Line item presented in the statement of financial position | Description of the related business activity | Basis of measurement | Line item of the statement of profit (loss) or statement of other comprehensive income (loss) where results generated are presented || --- | --- | --- | --- || Cash and cash equivalents and Short-term investments | Managing of liquidity of the business | Cash and cash equivalents – Amortized cost Short-term investiment – FVPL ^(a)^ | Interest income - Other financial income Fair value gain or losses - Other financial income Foreign exchange gain or losses - Financial expenses, net || Financial assets from banking solutions | Corresponds to regulatorily required amounts to be maintained in certain specified assets as reserve requirements for deposits of banking customers | Deposits at Brazilian Central Bank ("BACEN") – Amortized cost Government securities – FVPL | Interest income - Financial income Fair value gain or losses - Financial income || Accounts receivable from card issuers | Corresponds to amounts receivable from card issuers for transactions that acquiring business processes. The balances do not bear interest. Receivables are regularly sold before their maturity as part of the funding strategy | FVOCI ^(b)^ | Fair value gain or losses - Other comprehensive income Cost of funding on sale of receivables - Financial expenses, net Foreign exchange gain or losses on balances of transactions in foreign currency - Financial expenses, net || Trade accounts receivable | Corresponds to amounts due by customers of the acquiring business for subscription services and equipment rental and of the software business for services provided. | Amortized cost | Allowance for expected credit losses - Cost of services Interest and penalties for late payment - Other financial income || Credit portfolio | Corresponds to credit (merchant portfolio loans and balances due by credit card) granted to customers | Amortized cost | Interest income - Financial income Allowance for expected credit losses - Cost of services Foreign exchange gains or losses on balance of credit card in foreign currency – Financial expenses, net || Derivative financial instruments assets | Corresponds to derivatives entered into to manage the financial risks (mainly interest rate and foreign exchange) inherent to acquiring businesses and related to the funding structure | FVPL | Fair value gain or losses - Financial expenses, net, except for those designated in a cash flow hedge relationship: Ineffective portion of change in fair value - Financial expenses, net Effective portion of change in fair value once reclassified from OCI - Financial expenses, net || Long-term investments | Corresponds to investments in equity interests with no significant influence. | FVPL or FVOCI | FVPL - Other financial income / Mark-to-market on equity securities designated at FVPL FVOCI - Other comprehensive income || (a) | Fair Value through Profit or Loss (“FVPL”). || --- | --- || (b) | Fair Value through Other Comprehensive Income (“FVOCI”). || --- | --- |6.1.1.2. Initialrecognition and measurementFinancial assets are initiallyrecognized at fair value plus costs (except assets at FVPL) on the trading date, and subsequently measured at amortized cost, FVOCI, orFVPL . F-25 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The classification of financialassets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s businessmodel for managing them according to IFRS 9. The Group’s business model for managing financial assets refers to how it manages itsfinancial assets in order to generate cash flows. The business model is based on whether cash flows will result from collecting contractualcash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within this businessmodel with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measuredat FVOCI are held within a business model with the objective of holding to collect contractual cash flows and selling.Trade receivables that do not containa significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determinedunder IFRS 15 – Revenue from Contracts with Customers.To be classified and measured atamortized cost or FVOCI, a financial asset needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”)on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financialassets with cash flows that are not SPPI are classified and measured at FVPL, irrespective of the business model.Financial assets at FVPL includefinancial assets held for trading, financial assets designated upon initial recognition at FVPL, or financial assets mandatorily requiredto be measured at fair value. Financial assets are considered as held for trading if they are acquired for the purpose of selling or repurchasingin the near term. Derivatives, including separated derivatives, are also considered as held for trading unless they are designated ashedge accounting instrument. Notwithstanding the criteria for financial assets to be classified at amortized cost or at FVOCI, as describedabove, financial instruments may be designated at FVPL on initial recognition if doing so eliminates, or significantly reduces, an accountingmismatch.Purchases or sales of financialassets that require delivery of assets within a time frame set by regulation or market practice (regular way trades) are recognized onthe trade date, i.e., the date that the Group commits to purchase or sell the asset.6.1.1.3. Subsequent measurementFor purposes of subsequent measurement,financial assets are classified in four categories, as described as follows:6.1.1.3.1. Financial assets at amortized cost(debt instruments)Financial assets at amortized costare subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Gains and lossesare recognized in profit or loss when the asset is derecognized, modified or impaired.The Group’s financial assetsat amortized cost include Trade accounts receivable, Credit portfolio originated from March 1, 2023, Receivables from related partiesand Other assets, since they are held to collect payments of principal and interest and meet the SPPI test.6.1.1.3.2. Financial assets at FVOCI with recyclingof cumulative gains and losses (debt instruments)For debt instruments at FVOCI,interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the statement of profit or loss similarlyto financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulativefair value change recognized in OCI is recycled to profit or loss. This category is the most relevant to the Group and it correspondssolely to Accounts receivable from card issuers. F-26 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.1.1.3.3. Financial assetsat FVOCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)Upon initial recognition, the Groupcan irrevocably elect to designate its equity investments as FVOCI when they meet the definition of equity under IAS 32 – FinancialInstruments: Presentation, and are not held for trading. The classification is determined on an instrument-by-instrument basis.Gains and losses on these financialassets are never recycled to profit or loss, even if the asset is sold or impaired. Dividends are recognized as other financial incomein the statement of profit or loss when the right to payment has been established, except when the Group benefits from such proceeds asa recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated atFVOCI are not subject to impairment assessment.The Group elected to irrevocablyclassify some of the equity investments under this category, included in Long-term investments.6.1.1.3.4. Financial assets at FVPLFinancial assets at FVPL are carriedin the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss.This category includes financialassets which the contractual cash flows do not meet the SPPI condition, such as (i) bonds and investment funds under short-term investment(ii) financial assets from banking solutions, (iii) some equity investments and (iv) derivative financial instruments.6.1.1.4. DerecognitionA financial asset (or, where applicable,a part of a financial asset or part of a group of similar financial assets) is derecognized of the consolidated statement of financialposition when:| • | The contractual rights to receive cash flows from the asset have expired; or || --- | --- || • | The Group has transferred its contractual rights to receive cash flows from the asset or has assumed a contractual obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Group has transferred substantially all the risks and rewards of the asset, or (ii) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset where ‘control’ is evaluated by looking to whether the transferee has the practical ability to transfer the asset. || --- | --- |When the Group has transferredits contractual rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to whatextent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks andrewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of itscontinuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liabilityare measured on a basis that reflects the rights and obligations that the Group has retained.Continuing involvement that takesthe form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximumamount of consideration that the Group could be required to repay. F-27 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The derecognition of a financialasset by the Group occurs mainly in the definitive assignment of Accounts receivable from card issuers to third parties without substantialretention of risks and benefits of the assigned financial asset and without continuing involvement. The difference between the considerationreceived by the Group for the financial asset and its carrying amount is recognized under Financial expenses, net.6.1.1.5. Impairmentof financial assetsThe Group recognizes an allowancefor expected credit losses (“ECLs”) for all financial instruments measured at amortized cost or FVOCI. ECLs are based on thedifference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive,discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held orother credit enhancements that are integral to the contractual terms.For the credit portfolio, the Groupapplies general approach in calculating ECLs, considering delinquency information, internal risk classification and risk parameters (“PD”– probability of default, “LGD” – loss given default and “EAD” – exposure at default), resultingin three-stage levels.For all other financial assetssubject to ECL, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk,but instead recognizes a loss allowance based on lifetime ECLs, provision matrix and days past due at each reporting date.See details about ECL estimationprocedures in Note 6.2.1.6.1.2. Financial liabilities6.1.2.1. Descriptionof the funding strategy including different financial liabilities of the Financial services segmentThe Group’s different businessesrequire funding, in particular the financial services acquiring business, to be able to provide liquidity to customers mainly throughthe prepayment of the transactions processed by the Group (accounts payable to clients) and other credit facilities. Different forms offunding are sought, some of which comprise indebtedness presented as financial liabilities in the statement of financial position. TheGroup also fund its activities by selling accounts receivables on a fully non-recourse basis and passing to the counterparts all the risksand benefits of such assets (Note 6.2.1.2 - Accounts receivable from card issuers). In order to facilitate an understanding of the financialstatements and how they relate to the underlying business the financial liabilities line items presented in the statement of financialposition are summarized by the business activity that generates such liabilities, showing how they are measured and where their resultsare classified in the statement of profit or loss.| Line item presented in the statement of financial position | Description of the related business activity | Basis of measurement | Line item of the statement of profit (loss) or statement of other comprehensive income (loss) where results generated are presented || --- | --- | --- | --- || Retail deposits | Amounts held by banking customers on their payment accounts and time deposits to retail clients. The amounts held by banking customers generally do not result in the recognition of gain or losses. | Amortized cost | Interest expense - Financial expenses, net | F-28 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Line item presented in the statement of financial position | Description of the related business activity | Basis of measurement | Line item of the statement of profit (loss) or statement of other comprehensive income (loss) where results generated are presented || --- | --- | --- | --- || Accounts payable to clients | Amounts payable to merchants for transactions for acquiring business processes. The balances do not carry interest. Amounts may be early redeemed of the contractual due date at a discount | Amortized cost | Gain from the prepayment of payables at a discount - Financial income || --- | --- | --- | --- || Trade accounts payable | Corresponds to payments for payment scheme networks and suppliers. | Amortized cost | Cost of services Administrative expenses Selling expenses || Institutional deposits and marketable debt securities | Financing obtained, time deposits and debt securities, including FIDC shares, when consolidated entities. | Amortized cost | Interest expense - Financial expenses, net Foreign exchange gain or losses - Financial expenses, net || Other debt instruments | Financing obtained from third parties, leasing and other debt instruments. | Amortized cost | Interest expense - Financial expenses, net Foreign exchange gain or losses - Financial expenses, net || Derivative financial instruments liabilities | Corresponds to derivative entered into to manage the financial risks (mainly interest rate and foreign exchange) inherent to the acquiring business and related to the funding structure | FVPL | Fair value gain or losses - Financial expenses, net, except for those designated as hedge accounting Ineffective portion of change in fair value - Financial expenses, net Effective portion of change in fair value once reclassified from OCI - Financial expenses, net || Other liabilities - contingent consideration | Corresponds to contingent payments from business combinations | FVPL | Interest expenses - Financial expenses, net Fair value gain or losses - Other income (expenses), net |6.1.2.2. Initialrecognition and measurementFinancial liabilities are initiallyrecognized at fair value plus costs (except liability at fair value through profit or loss) on the trading date and classified as amortizedcost or FVPL.6.1.2.3. SubsequentmeasurementThe measurement of financial liabilitiesdepends on their classification, as described as follows.6.1.2.3.1. Financial liabilities at FVPLFinancial liabilities at FVPL includefinancial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. F-29 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Financial liabilities are consideredas held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financialinstruments entered by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9 – FinancialInstruments. Separated embedded derivatives are also classified as FVPL unless they are designated and qualify as hedge accounting.Gains or losses on liabilitiesheld for trading are recognized in the statement of profit or loss.Financial liabilities designatedupon initial recognition at FVPL only if the criteria in IFRS 9 are satisfied.This category includes derivativefinancial instruments and contingent consideration included in other liabilities.6.1.2.3.2. Financial liabilities at amortized costFinancial liabilities at amortizedcost are subsequently measured using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognizedas well as through the EIR amortization process.Amortized cost is calculated byconsidering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is classifiedas Financial expenses, net in the statement of profit or loss.This category includes Accountspayable to clients and all other financial liabilities, except derivative financial instruments and contingent consideration includedin other liabilities. This category is the most significant to the Group.Accounts payable to clients representamounts due to accredited clients related to credit and debit card transactions, net of interchange fees retained by card issuers andassessment fees disbursed to payment scheme networks as well as the Group’s net merchant discount rate fees which are collectedby the Group as an agent.6.1.2.4. DerecognitionA financial liability is derecognizedwhen the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by anotherfrom the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchangeor modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in therespective carrying amounts is recognized in the statement of profit or loss.6.1.3. Fair value of financial instrumentsThe Group measures financial instrumentsat fair value at each statement of financial position date.Fair value is the price that wouldbe received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurementdate. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes placeeither:| • | In the principal market for the asset or liability; or || --- | --- || • | In the absence of a principal market, in the most advantageous market for the asset or liability. || --- | --- |The principal or the most advantageousmarket must be accessible by the Group.The fair value of an asset or aliability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that marketparticipants act in their economic best interest.The Group uses valuation techniquesthat are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevantobservable inputs and minimizing the use of unobservable inputs. F-30 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |All assets and liabilities forwhich fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows,based on the lowest level input that is significant to the fair value measurement as a whole:The Group uses the following hierarchyto determine and disclose the fair value of financial instruments through measurement technique:| • | Level I: quoted prices in active markets for identical assets or liabilities; || --- | --- || • | Level II: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; and || --- | --- || • | Level III: techniques using inputs that have a significant effect on the recorded fair value that are not based on observable market data. || --- | --- |For assets and liabilities thatare recognized in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred betweenlevels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurementas a whole) at the end of each reporting period.6.1.4. Offsetting of financial instrumentsFinancial assets and financialliabilities are offset, and the net amount is reported in the consolidated statement of financial position, only if there is a currentlyenforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets andsettle the liabilities simultaneously.As of December 31, 2024, and 2023,the Group has no financial instruments that meet the conditions for recognition on a net basis.6.1.5. Derivative financial instrumentsFrom time to time, the Group usesderivative financial instruments as part of its risk management strategy, as defined in the Market Risk Management Policy. It aims tohedge against exposure to fluctuations in exchange rates, interest rates, and other risk factors that may impact its financial operations.These instruments mitigate the effects of adverse market fluctuations and preserve the Group’s financial stability. The derivativesare continuously monitored to ensure compliance with the Group’s internal risk policies and applicable regulatory requirements.Dependingon the instrument and the risk being hedged, derivative strategies may be accounted for as economic hedges or designated for hedge accountingunder the categories of fair value hedge accounting or cash flow hedge accounting.Derivative financial instrumentsare initially recognized at fair value on the date on which a derivative contract is entered and are subsequently remeasured at FVPL.Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.Certain agreementsentered into by the Group for the acquisition of subsidiaries and associates include call options to acquire additional interests inthe investees, which are classified as embedded derivatives. Each of the options is measured at FVPL in accordance with pre-determinedformulas and recorded in the consolidated statement of financial position as an asset under Derivative financial instruments (Note 6.9).6.1.5.1. Cash flow hedgeThe Group uses hedge accountingto protect against future cash flow fluctuations arising from exposure to specific risks, such as changes in foreign exchange rates orinterest rates. F-31 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Cash flow hedge accounting is appliedwhen the hedging relationship meets the required criteria under hedge accounting standards, including proper documentation at the timethe hedge is entered into, and provided that the hedge is considered highly effective over time in mitigating the risk of cash flow fluctuations.The Group regularly reviews hedgeeffectiveness to ensure that gains or losses on the hedging instruments are appropriately accounted for. Any hedge ineffectiveness identifiedis immediately recognized in profit or loss for the year.Depending on the instrument andthe risk being hedged, some of the Group’s derivative financial instruments are used as cash flow hedge accounting instruments.The effective portion of gains or losses arising from changes in the fair value of these derivatives are usually recognized in equity,in “Other comprehensive income.” The ineffective portion is recognized in the statement of profit or loss, in “Financialexpenses, net.” For the hedged item classified as a financial instrument measured at amortized cost using the EIR method, the amountaccumulated in the cash flow hedge reserve is reclassified to profit or loss when the hedged cash flows impact the statement of profitor loss. The method applied by the Group to reclassify the amounts is as follows: (i) the accrual interest portion of the derivative isalso measured by the EIR method and recognized in the statement of profit or loss, in “Financial expenses, net”, followingthe hedged item accrual; and (ii) the remaining amounts related to fair value of hedging instrument is a temporal effect recognized inOCI at each reporting date, ultimately being recognized in profit or loss upon the liquidation of the hedging instrument (Note 6.9.1).6.1.5.2. Fair value hedgeThe Group applies fair value hedgeaccounting to protect against changes in the fair value of assets or liabilities arising from exposure to specific risks, such as changesin foreign exchange rates or interest rates. In accordance with IFRS, changes in the fair value of both the hedging instrument and thehedged item are recognized directly in profit or loss for the period. This allows gains or losses on the hedging instrument to offset,in whole or in part, the losses or gains on the hedged item.For a fair value hedge to be accountedfor in this manner, the hedging relationship must meet specific criteria, such as formal documentation of the hedging objective and evidencethat the hedge is highly effective in offsetting changes in the hedged item's fair value over time.The Group conducts regular effectivenesstests to ensure the hedging relationship remains effective. Any hedge ineffectiveness is immediately recognized in profit or loss forthe year.6.1.5.3. Economic hedgeThe Group also uses derivativefinancial instruments as an economic hedge. These instruments are measured at FVPL and recorded as an asset or liability under Derivativefinancial instruments (Note 6.9.2).6.2. Significant judgments, estimates and assumptions6.2.1. Measurement of loss allowance for expectedcredit losses6.2.1.1 Credit portfolioThe Group calculates an expectedcredit loss (“ECL") allowance for its loans based on statistical models that consider both internal and external historicaldata, negative credit information and guarantees, among other information addressing the behavior of each debtor. The Group calculatesits credit portfolio in three stages: F-32 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (i) | Stage 1: corresponds to loans that do not present significant increase in credit risk since origination and ECL are determined considering probability of default events within 12 months window; || --- | --- || (ii) | Stage 2: corresponds to loans that presented significant increase in credit risk subsequent to origination and ECL are estimated considering probability of default events within the life of the financial instrument; || --- | --- |The Group determinesStage 2 based on following criteria:| (a) | absolute criteria: financial asset overdue more than 30 days, or; || --- | --- || (b) | relative criteria: in addition to the absolute criteria, the Group analyzes the evolution of the risk of each financial instrument on a monthly basis, comparing the current behavior score attributed to each client with that attributed at the time of recognition of the financial asset. Behavioral scoring considers credit behavior variables, such as default on other products and market data about the customer. When the credit risk increases significatively since origination, the Stage 1 operations is moved to Stage 2. || --- | --- |For Stage 2, a curecriterion is applied when the financial asset no longer meets the criteria for a significant increase in credit risk, as mentioned above,and the loan is moved to Stage 1.| (iii) | Stage 3: corresponds to impaired loans. || --- | --- |The Group determineStage 3 based on following criteria:| (a) | absolute criteria: financial asset overdue more than 90 days, or; || --- | --- || (b) | relative criteria: indicators that the financial asset will not be paid in full without activating a guarantee or financial guarantee. || --- | --- |The indication thatan obligation will not be paid in full includes the tolerance of financial instruments that imply the granting of advantages to the counterpartyfollowing the deterioration of the counterparty's credit quality.The Group also assumesa cure criterion for Stage 3, with respect to the counterparty's repayment capacity, such as the percentage of total debt paid or thetime limit to liquidate current debt obligations.Management regularly seeks forwardlooking perspectives for future market developments including macroeconomic scenarios as well as its portfolio risk profile. Managementmay adjust the ECL resulting from the models above in order to better reflect this forward looking perspective.The information about the ECLson the Group’s Credit portfolio to clients are disclosed in Note 6.6.6.2.1.2. Accountsreceivable from card issuersThe macroeconomic environment whereGroup operates is volatile and card issuers might be negatively impacted. Continuous monitoring this environment is crucial for the decisionson the provision and how the Group estimates its ECLs. The Group estimates ECLs based on available external and internal information thatconsider the expected nature and level of risk associated with receivables and the information about the different issuers (includingwhen available, ratings from major agencies). The Group monitors credit risk of issuers.The information about the ECLsamount on the Group’s Accounts receivable from card issuers are disclosed in Note 6.4.2.6.2.1.3. Tradeaccounts receivableThe provision rates are based ondays past due for groupings of various client segments that have similar loss patterns (e.g., by product type, customer type and rating).The provision is initially basedon the Group’s historical observed default rates. The Group calibrates to adjust the historical credit loss experience with forward-lookinginformation every year.The information about the ECLson the Group’s Trade accounts receivable are disclosed in Note 6.5.2. F-33 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.2.2. Fair value measurement of financial instrumentsWhen the fair values of financialassets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets,their fair value is measured using valuation techniques including the discounted cash flow (“DCF”) model. The inputs to thesemodels are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishingfair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relatingto these factors could affect the reported fair value of financial instruments.6.3. Shortand Long-term investments| | Short-term | Long-term | December 31, 2024 || --- | --- | --- | --- || Bonds ^(a)^ | | | || Brazilian sovereign bonds | 46,426 | — | 46,426 || Structured notes linked to Brazilian sovereign bonds | 418,120 | — | 418,120 || Time deposits | 51,711 | — | 51,711 || Equity securities ^(b)^ | — | 32,629 | 32,629 || Investment funds ^(c)^ | 1,617 | — | 1,617 || | 517,874 | 32,629 | 550,503 || | Short-term | Long-term | December 31, 2023 || Bonds ^(a)^ | | | || Brazilian sovereign bonds | 2,954,236 | — | 2,954,236 || Structured notes linked to Brazilian sovereign bonds | 473,259 | — | 473,259 || Time deposits | 51,933 | — | 51,933 || Equity securities ^(b)^ | — | 45,702 | 45,702 || Investment funds ^(c)^ | 2,068 | — | 2,068 || | 3,481,496 | 45,702 | 3,527,198 || (a) | As of December 31, 2024, bonds are mainly linked to the CDI and SELIC benchmark interest rates. || --- | --- || (b) | Comprised of common shares of unlisted entities that are not traded in an active market. As of December 31, 2024, all assets are recognized at FVPL, while on December 31, 2023, some assets were recognized at FVOCI. The fair value of unlisted equity instruments was determined based on negotiations of the securities. The change in the fair value of equity securities at FVPL was a gain of R$ 4,131 on December 31, 2024 (2023 - gain of R$ 30,574), which was recognized in the statement of profit or loss. The change in fair value of equity securities at FVOCI was a gain of R$ 37,270 on December 31, 2024 (2023 - gain of R$ 1,912), which was recognized in the statement of other comprehensive income (loss). || --- | --- || (c) | Comprised of foreign investment fund shares. || --- | --- |Short-term investments are denominatedin Brazilian Reais and U.S. Dollars.6.4. Accounts receivable from card issuers6.4.1. Composition of accounts receivable fromcard issuersAccounts receivable are amountsdue from card issuers and acquirers for the transactions of clients with card holders, performed in the ordinary course of business.| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Accounts receivable from card issuers ^(a)^ | 28,833,909 | 23,364,806 | F-34 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Accounts receivable from other acquirers ^(b)^ | 575,044 | 667,922 || --- | --- | --- || Allowance for expected credit losses | (60,888) | (55,619) || | 29,348,065 | 23,977,109 || Current | 29,231,820 | 23,895,512 || --- | --- | --- || Non-current | 116,245 | 81,597 || (a) | Accounts receivable from card issuers, net of interchange fees, as a result of processing transactions with clients. || --- | --- || (b) | Accounts receivable from other acquirers related to PSP (Payment Service Provider) transactions. || --- | --- |Part of the Group’s cashrequirement is to make prepayments to acquiring customers. The Group finances those requirements through different sources of fundingincluding the sale of receivables to third parties. When such sales of receivables are carried out to entities in which the Group hassubordinated shares or quotas, the receivables sold remain in the statement of financial position, as these entities are consolidatedin the financial statements. As of December 31, 2024 a total of R$ 419,099 (December 31, 2023 - R$ 467,622) were consolidated throughFIDC ACR FAST and R$ 2,561,139 (December 31, 2023 - R$ null) through FIDC ACR I, of which the Group has subordinated shares. When thesale of receivables is carried out to non-controlled entities and for transactions where continuous involvement is not present, the amountstransferred are derecognized from the accounts receivable from card issuers. As of and for the year ended December 31, 2024, the saleof receivables that were derecognized from accounts receivables from card issuers in the statement of financial position represented themain form of funding used for the prepayment business.Accounts receivable held by FIDCsguarantee the Institutional deposits and marketable securities and Other Debt Instruments.6.4.2. Allowance for expected credit lossesof accounts receivable from card issuers| | 2024 | 2023 || --- | --- | --- || At January 1 | 55,619 | 22,763 || Addition | 60,830 | 53,090 || Reversal | (55,561) | (20,234) || At December 31 | 60,888 | 55,619 |6.5. Trade accounts receivable6.5.1. Composition of trade accounts receivable| | December 31, 2024 | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- || Accounts receivable from subscription services | | 248,322 | | | 293,304 | || Accounts receivable from equipment rental | | 111,535 | | | 114,252 | || Chargeback | | 93,829 | | | 72,401 | || Services rendered | | 46,991 | | | 51,456 | || Cash in transit | | 12,620 | | | 24,172 | || Receivables from registry operation | | 13,643 | | | 22,347 | || Allowance for expected credit losses | | (131,260 | ) | | (117,553 | ) || Others | | 20,423 | | | 28,101 | || | | 416,103 | | | 488,480 | || Current | | 390,575 | | | 459,947 | || Non-current | | 25,528 | | | 28,533 | | F-35 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.5.2. Allowance for expected credit lossesof trade accounts receivable| | 2024 | | | 2023 | | || --- | --- | --- | --- | --- | --- | --- || At January 1 | | 117,553 | | | 108,434 | || Addition | | 89,882 | | | 82,946 | || Reversal | | (34,151 | ) | | (17,668 | ) || Write-off | | (42,024 | ) | | (56,159 | ) || At December 31 | | 131,260 | | | 117,553 | |6.6. Credit portfolioPortfolio balances by product andmaturity:| | December 31, 2024 | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | | 1,093,475 | | | 309,677 | || Credit card | | 114,156 | | | 3,131 | || Credit portfolio, gross | | 1,207,631 | | | 312,808 | || Allowance for expected credit losses | | (144,512 | ) | | (62,061 | ) || Credit portfolio, net of allowance for expected credit losses | | 1,063,119 | | | 250,747 | || Current | | 891,718 | | | 209,957 | || Non-current | | 171,401 | | | 40,790 | |6.6.1. Non-performing loans ("NPL")Total outstanding of the contractwhenever the clients default on an installment:| | December 31, 2024 | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- || | Merchant portfolio | Credit card | Total | Merchant portfolio | Credit card | Total || Balances not overdue | 1,006,335 | 108,930 | 1,115,265 | 298,460 | 3,130 | 301,590 || Balances overdue by | | | | | | || ≤ 15 days | 17,462 | 1,390 | 18,852 | 4,350 | 1 | 4,351 || 15 < 30 days | 7,054 | 676 | 7,730 | 1,389 | — | 1,389 || 31 < 60 days | 13,521 | 865 | 14,386 | 2,045 | — | 2,045 || 61 < 90 days | 7,121 | 647 | 7,768 | 2,582 | — | 2,582 || 91 < 180 days | 17,637 | 1,078 | 18,715 | 824 | — | 824 || 181 < 360 days | 24,345 | 570 | 24,915 | 27 | — | 27 || | 87,140 | 5,226 | 92,366 | 11,217 | 1 | 11,218 || Credit portfolio, gross | 1,093,475 | 114,156 | 1,207,631 | 309,677 | 3,131 | 312,808 | F-36 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.6.2. Aging by maturity| | December 31, 2024 | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- || | Merchant portfolio | Credit card | Total | Merchant portfolio | Credit card | Total || Installments not overdue | | | | | | || ≤ 15 days | 23,083 | 30,638 | 53,721 | 1,666 | 615 | 2,281 || 15 < 30 days | 36,917 | 20,075 | 56,992 | 11,244 | 851 | 12,095 || 31 < 60 days | 99,015 | 19,492 | 118,507 | 30,213 | 457 | 30,670 || 61 < 90 days | 107,068 | 12,334 | 119,402 | 27,696 | 321 | 28,017 || 91 < 180 days | 268,770 | 19,019 | 287,789 | 82,415 | 525 | 82,940 || 181 < 360 days | 354,807 | 10,043 | 364,850 | 113,005 | 318 | 113,323 || 361 < 720 days | 148,084 | 6 | 148,090 | 41,572 | 1 | 41,573 || > 720 days | 25,237 | — | 25,237 | 61 | — | 61 || | 1,062,981 | 111,607 | 1,174,588 | 307,872 | 3,088 | 310,960 || Installments overdue by | | | | | | || ≤ 15 days | 2,561 | 514 | 3,075 | 247 | 2 | 249 || 15 < 30 days | 4,170 | 211 | 4,381 | 657 | 41 | 698 || 31 < 60 days | 4,614 | 512 | 5,126 | 799 | — | 799 || 61 < 90 days | 3,865 | 344 | 4,209 | 99 | — | 99 || 91 < 180 days | 9,091 | 706 | 9,797 | 3 | — | 3 || 181 < 360 days | 6,193 | 262 | 6,455 | — | — | — || | 30,494 | 2,549 | 33,043 | 1,805 | 43 | 1,848 || Credit portfolio, gross | 1,093,475 | 114,156 | 1,207,631 | 309,677 | 3,131 | 312,808 |6.6.3. Movement between stages - Gross carryingamountReconciliation of gross portfolioof loans operations, segregated by stages:| Stage 1 | December 31, 2023 | Acquisition / (Settlement) | Transfer to stage 2 | Transfer to stage 3 | Cure from stage 2 | Cure from stage 3 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | 296,282 | 791,295 | (125,424) | (7,276) | 37,116 | 1,726 | — | 993,719 || Credit card | 3,131 | 110,119 | (11,679) | (472) | 1,960 | 242 | — | 103,301 || | 299,413 | 901,414 | (137,103) | (7,748) | 39,076 | 1,968 | — | 1,097,020 || Stage 2 | December 31, 2023 | Acquisition / (Settlement) | Cure to stage 1 | Transfer to stage 3 | Transfer from stage 1 | Cure from stage 3 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | 12,195 | 940 | (37,116) | (59,832) | 125,424 | 860 | — | 42,471 || Credit card | — | 703 | (1,960) | (1,768) | 11,679 | 55 | — | 8,709 || | 12,195 | 1,643 | (39,076) | (61,600) | 137,103 | 915 | — | 51,180 || Stage 3 | December 31, 2023 | Acquisition / (Settlement) | Cure to stage 1 | Cure to stage 2 | Transfer from stage 1 | Transfer from stage 2 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | 1,200 | (1,111) | (1,726) | (860) | 7,276 | 59,832 | (7,326) | 57,285 || Credit card | — | 203 | (242) | (55) | 472 | 1,768 | — | 2,146 || | 1,200 | (908) | (1,968) | (915) | 7,748 | 61,600 | (7,326) | 59,431 | F-37 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Consolidated 3 stages | December 31, 2023 | Write-off | Acquisition / (Settlement) | December 31, 2024 || --- | --- | --- | --- | --- || Merchant portfolio | 309,677 | (7,326) | 791,124 | 1,093,475 || Credit card | 3,131 | — | 111,025 | 114,156 || | 312,808 | (7,326) | 902,149 | 1,207,631 |6.6.4. Movement between stages - Allowance forexpected credit losses of loans operations| Stage 1 | December 31, 2023 | (Acquisition) / Settlement | Transfer to stage 2 | Transfer to stage 3 | Cure from stage 2 | Cure from stage 3 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | (57,576) | (55,539) | 43,623 | 5,097 | (4,389) | (165) | — | (68,949) || Credit card | (200) | (12,765) | 5,156 | 403 | (372) | (27) | — | (7,805) || | (57,776) | (68,304) | 48,779 | 5,500 | (4,761) | (192) | — | (76,754) || Stage 2 | December 31, 2023 | (Acquisition) / Settlement | Cure to stage 1 | Transfer to stage 3 | Transfer from stage 1 | Cure from stage 3 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | (3,445) | (18,465) | 4,389 | 41,884 | (43,623) | (327) | — | (19,587) || Credit card | — | (372) | 372 | 1,311 | (5,156) | (25) | — | (3,870) || | (3,445) | (18,837) | 4,761 | 43,195 | (48,779) | (352) | — | (23,457) || Stage 3 | December 31, 2023 | (Acquisition) / Settlement | | Cure to stage 1 | Cure to stage 2 | Transfer from stage 1 | Transfer from stage 2 | Write-off | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Merchant portfolio | (840) | (2,714) | 0 | 165 | 327 | (5,097) | (41,884) | 7,326 | (42,717) || Credit card | — | 78 | | 27 | 25 | (403) | (1,311) | — | (1,584) || | (840) | (2,636) | | 192 | 352 | (5,500) | (43,195) | 7,326 | (44,301) || Consolidated 3 stages | December 31, 2023 | (Acquisition) / Settlement | Write-off | December 31, 2024 || --- | --- | --- | --- | --- || Merchant portfolio | (61,861) | (76,718) | 7,326 | (131,253) || Credit card | (200) | (13,059) | — | (13,259) || | (62,061) | (89,777) | 7,326 | (144,512) |6.7. Financial assets from banking solutionsAs required by Brazilian CentralBank (“BACEN”) regulation, client’s proceeds deposited in payment accounts (“Deposits from retail clients”- Note 6.8.1) must be fully collateralized by government securities, and/or deposits at BACEN (“CCME”).As of December 31, 2024, the amountof financial assets from banking solutions was R$ 8,805,882 (December 31, 2023 - R$ 6,397,898), fully collateralized by CCME.6.8. Financial liabilities6.8.1. Retail deposits| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Deposits from retail clients | 8,274,868 | 6,119,455 || Time deposits from retail clients ^(a)^ | 429,941 | — || | 8,704,809 | 6,119,455 | F-38 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (a) | Deposit interest rates yield up to 100% of the CDI and are applied every 30 days from the deposit date, following a FIFO (First In, First Out) logic. || --- | --- |6.8.2. Composition of financial liabilitiesThe table below presents the compositionof financial liabilities other than Retail deposits:| | Average annual interest rate % | Original date of issuance | Original maturity | Current portion | Non-current portion | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- || Bonds (6.8.4.1) | 3.95% USD | Jun/21 | Jun/28 | 2,299 | 1,255,963 | 1,258,262 || Debentures (6.8.4.2) | CDI ^(a)^ + 1.75% | Nov/23 | Oct/26 | 23,657 | 999,538 | 1,023,195 || Financial bills (6.8.4.3) | CDI + 0.68% to CDI + 0.90% | Jun/24 | Jun/26 up to Nov/28 | — | 2,954,374 | 2,954,374 || Receivables backed securities (6.8.4.4) | CDI +1.30% | Sep/23 | Sep/26 | 2,250 | 99,447 | 101,697 || Total debentures, financial bills and commercial papers | | | | 25,907 | 4,053,359 | 4,079,266 || Obligations to open-end FIDC quota holders (6.8.4.5) | CDI + 0.40% | Jul/23 | Not applicable | 418,324 | — | 418,324 || Time deposits (6.8.4.6) | CDI + 0.25% to 110% of CDI | May/24 | Jan/25 up to Jun/26 | 2,619,469 | 120,641 | 2,740,110 || Total institutional deposits and marketable debt securities | | | | 3,065,999 | 5,429,963 | 8,495,962 || Obligations to closed-end FIDC quota holders (6.8.4.8) | 12.75% | Jan/24 | Jan/31 | — | 1,988,645 | 1,988,645 || Bank borrowings and working capital facilities (6.8.4.9) | CDI + 0.75% to CDI + 1.74% | Jan/24 | Jan/25 up to Dec/27 | 1,853,944 | 310,386 | 2,164,330 || Leases (6.8.4.10) | 105.1% to 151.8% of CDI | Not applicable | Jan/25 up to Jun/29 | 49,896 | 197,108 | 247,004 || Total other debt instruments | | | | 1,903,840 | 2,496,139 | 4,399,979 || | Average annual interest rate % | Original date of issuance | Original maturity | Current portion | Non-current portion | December 31, 2023 || --- | --- | --- | --- | --- | --- | --- || Bonds (6.8.4.1) | 3.95% USD | Jun/21 | Jun/28 | 2,922 | 2,399,776 | 2,402,698 || Debentures (6.8.4.2) | CDI ^(a)^ + 1.75% | Nov/23 | Oct/26 | 16,953 | 997,281 | 1,014,234 || Receivables backed securities (6.8.4.3) | CDI + 1.30% | Sep/23 | Sep/26 | 3,316 | 98,702 | 102,018 || Total debentures, financial bills and commercial papers | | | | 20,269 | 1,095,983 | 1,116,252 || Obligations to open-end FIDC quota holders (6.8.4.5) | CDI + 1.12% | Jul/23 | Not applicable | 452,128 | — | 452,128 || Total institutional deposits and marketable debt securities | | | | 475,319 | 3,495,759 | 3,971,078 || Obligations to FIDC TAPSO quota holders (6.8.4.7) | CDI + 1.85% | Jul/23 | Jul/24 | 53,103 | — | 53,103 || Bank borrowings and working capital facilities (6.8.4.9) | CDI + 1.30% to CDI + 1.94% | (Several) | Up to six months | 1,321,348 | — | 1,321,348 || Leases (6.8.4.10) | 105.1% to 151.8% of CDI | Not applicable | Jan/23 to Jun/29 | 30,227 | 143,456 | 173,683 || Total other debt instruments | | | | 1,404,678 | 143,456 | 1,548,134 || (a) | “CDI” Rate (Brazilian Certificado de Depósito Interbancário), which is an average of interbank overnight rates in Brazil. The average rate of December 31, 2024 was 10.83% (2023 – 13.04%). || --- | --- | F-39 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.8.3. Changes in financial liabilitiesThe table below presents the movementof financial liabilities other than Retail deposits:| | December 31, 2023 | Additions | Disposals | Payment of principal | Payment of interest | Changes in exchange rates | Fair value adjustment | Interest | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Bonds | 2,402,698 | — | — | (1,610,349) | (141,298) | 520,419 | — | 86,792 | 1,258,262 || Debentures, financial bills and commercial papers ^(a)^ | 1,116,252 | 2,884,768 | — | — | (172,598) | — | — | 250,844 | 4,079,266 || Time deposits ^(b)^ | — | 3,564,387 | — | (889,077) | (22,876) | — | — | 87,676 | 2,740,110 || Obligations to open-end FIDC quota holders | 452,128 | 136,782 | — | (214,148) | (12,229) | — | — | 55,791 | 418,324 || Institutional deposits and marketable debt securities | 3,971,078 | 6,585,937 | — | (2,713,574) | (349,001) | 520,419 | — | 481,103 | 8,495,962 || Current | 475,319 | | | | | | | | 3,065,999 || Non-current | 3,495,759 | | | | | | | | 5,429,963 || Obligations to closed-end FIDC quota holders | 53,103 | 2,325,984 | — | (50,000) | (149,468) | — | (437,347) | 246,373 | 1,988,645 || Bank borrowings and working capital facilities | 1,321,348 | 3,671,737 | — | (2,999,824) | (124,490) | 157,832 | — | 137,727 | 2,164,330 || Leases | 173,683 | 140,784 | (4,623) | (68,971) | (14,292) | 6,132 | — | 14,291 | 247,004 || Other debt instruments | 1,548,134 | 6,138,505 | (4,623) | (3,118,795) | (288,250) | 163,964 | (437,347) | 398,391 | 4,399,979 || Current | 1,404,678 | | | | | | | | 1,903,840 || Non-current | 143,456 | | | | | | | | 2,496,139 || (a) | The subsidiary Stone SCFI issues financial bills in the ordinary course of the business. The principal and interest of all issuances are mainly paid at the maturity indexed to CDI rate. || --- | --- || (b) | Following the authorization granted by the Brazilian central bank (“BACEN”) to start operations earlier this year, the Group issues time deposits in the ordinary course of the business. Time deposits were the first interest bearing deposits issued by the Group. The certificates are held by multiple counterparties and maturities up to 24 months. The principal and interest of this type of issuance are mainly paid at the maturity indexed to CDI rate. || --- | --- || | December 31, 2022 | Additions | Disposals | Payment of principal | | Payment of interest | | Changes in exchange rates | | Fair value adjustment | Interest | December 31, 2023 || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Bonds | 2,587,303 | — | — | — | | (96,157 | ) | (188,440 | ) | — | 99,992 | 2,402,698 || Debentures, financial bills and commercial papers | — | 1,093,410 | — | — | | — | | — | | — | 22,842 | 1,116,252 || Obligations to open-end FIDC quota holders | — | 514,752 | — | (75,004 | ) | (2,413 | ) | — | | — | 14,793 | 452,128 || Institutional deposits and marketable debt securities | 2,587,303 | 1,608,162 | — | (75,004 | ) | (98,570 | ) | (188,440 | ) | — | 137,627 | 3,971,078 || Current | — | | | | | | | | | | | 475,319 || Non-current | 2,587,303 | | | | | | | | | | | 3,495,759 || Obligations to closed-end FIDC quota holders | 975,248 | 50,000 | — | (957,499 | ) | (70,996 | ) | — | | — | 56,350 | 53,103 || Bank borrowings and working capital facilities | 1,788,426 | 4,088,209 | — | (4,489,681 | ) | (246,738 | ) | (4,326 | ) | — | 185,458 | 1,321,348 || Leases | 200,148 | 67,416 | (21,225) | (72,815 | ) | (13,764 | ) | 156 | | — | 13,767 | 173,683 || Other debt instruments | 2,963,822 | 4,205,625 | (21,225) | (5,519,995 | ) | (331,498) | | (4,170 | ) | — | 255,575 | 1,548,134 || Current | 2,822,655 | | | | | | | | | | | 1,404,678 || Non-current | 141,167 | | | | | | | | | | | 143,456 | F-40 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.8.4. Description of financial liabilitiesIn the ordinary course of the business,the Group funds its operations through a mix of own cash, debt and sale of receivables to third parties.6.8.4.1. BondsThe Company issued bonds in 2021,raising USD 500 million in seven-year notes with a final yield of 3.95%. The total issuance was R$ 2,510,350 (R$ 2,477,408 net ofthe offering transaction costs, which will be amortized over the tenure of the debt). The Group has entered into a hedge to protect itscurrency risk (Note 6.9.1).During 2024, a tender offer wasexecuted, repurchasing approximately 60% of the outstanding bonds.6.8.4.2. DebenturesOn November 8, 2023 the subsidiaryMNLT concluded its first issuance of debentures placing R$ 1,000,000 with a three- year maturity at CDI + 1.75% p.a. The debentures areguaranteed by both Stone IP and by the Company being the first corporate issuance by the Group in the Brazilian capital markets.6.8.4.3. FinancialbillsThe Group issued financial billsthrough public offerings and private placements, with multiple counterparties and maturities. The principal and the interest are mainlypaid at the date of maturity.6.8.4.4. Receivables backed securitiesOn September 6, 2023, a Certificateof Real Estate Receivables ("CRI") was issued by Opea Securitizadora S.A., raising R$ 100,000 in a three-year note bearing interestat CDI + 1.30% p.a. The CRI security is backed by commercial notes issued by Stone IP as well as STNE Par. This was the first fundingstructure of the Group to access retail and with institutional investors.6.8.4.5. Obligations to open-end FIDC quota holdersThe FIDC ACR FAST was issued withthe Group as a sponsor as well as a quota holder. This was the first open-end fund with third parties, in which the Group holds subordinatedquotas, resulting in the consolidation of the whole structure. The main goal of this structure is to access the money market funds sector.Being an open-end fund, redemptions are settled 30 days after requested by quota holders.6.8.4.6. Time depositsThe Group issues time depositsto fund its operations. The issuances have occurred with multiple counterparties and also through third-party brokers and/or platforms.The principal and the interest are mainly paid at the date of maturity.Time deposits distributed directlythrough own platform can have automatic redemption at any time for the Group’s clients and are recognized under Retail deposits.6.8.4.7. Obligations to FIDC TAPSO quota holdersIn February 2022, the Group negotiatedan amendment of the contract to postpone the payment date of the principal to March 2023. The mezzanine quotas were settled on March 2,2023. Upon maturity of the mezzanine quotas, in July 2023 the Group negotiated new issuance of FIDC TAPSO senior shares.In July 2024, there was a fullredemption of FIDC TAPSO senior quotas. F-41 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.8.4.8. Obligations to closed-end FIDC quota holdersFIDC ACR I issued quotas in exchangefor a contribution of R$ 2,325,984. The contribution was made by a special purpose vehicle funded by a revolving facility in which UnitedStates International Development Finance Corporation (“DFC”) has invested US$ 467.5 million, funding the Groups’s prepaymentbusiness through this FIDC. The special purpose vehicle entered into foreign currency derivatives with financial institutions to convertthe receivable denominated in R$ it holds from FIDC ACR I into US$. StoneCo has to provide guarantees to the vehicles in the event ofcertain defined default events on the derivatives by such financial institutions. Considering the current risk rating of the institutions,the fair value of the guarantee is estimated to be immaterial.FIDC ACR I has a final maturityof seven years and pays a semi-annual coupon at a fixed rate of 12.75% in R$.6.8.4.9. Bank borrowingsThe Group issues bilateral unsecuredterm loans, with multiple counterparties and maturities. The principal and the interest of this type of loan are mainly paid at the dateof maturity. The proceeds of these loans were used mainly for prepayments to acquiring customers.6.8.4.10. LeasesThe Group has lease contracts forvarious items of offices, vehicles and software in its operations. The Group’s obligations under its leases are secured by the lessor’stitle to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets.6.9. Derivative financial instrumentsThe Group executes exchange-tradedand Over-the-counter (“OTC”) instruments to hedge its foreign currency and interest rate exposure. All counterparties arepreviously approved for OTC transactions following a counterparty policy, and internal committees monitor and control the counterpartyrisk associated with those transactions.| | December 31, 2024 | | | || --- | --- | --- | --- | --- || | Notional amount | Asset (fair value) | Liabilities (fair value) | Net || Cash flow hedge | | | | || Foreign exchange rate swap | 3,994,559 | 214,169 | — | 214,169 || Fair value hedge | | | | || Interest rate swap | 2,837,758 | 5,373 | (281,177) | (275,804) || Economic hedge | | | | || NDF | 15,359 | 1,784 | (9,578) | (7,794) || Interest rate swap | 8,008,992 | 36,249 | (1,015) | 35,234 || M&A derivatives | | | | || Call options | n/a | 2,613 | — | 2,613 || Total | 14,856,668 | 260,188 | (291,770) | (31,582) | F-42 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | December 31, 2023 | | | || --- | --- | --- | --- | --- || | Notional amount | Asset (fair value) | Liabilities (fair value) | Net || Cash flow hedge | | | | || Foreign exchange rate swap | 2,526,603 | — | (311,445) | (311,445) || Economic hedge | | | | || NDF | 7,030 | 629 | (302) | 327 || Interest rate swap | 6,079,500 | | (4,424) | (4,424) || M&A derivatives | | | | || Call options | n/a | 3,553 | — | 3,553 || Total | 8,613,133 | 4,182 | (316,171) | (311,989) |6.9.1. Hedge accounting6.9.1.1. Breakdownby maturityThe table below shows the breakdownby maturity of the notional amounts and fair values of derivative financial instruments used for hedging purposes:| | December 31, 2024 | | | || --- | --- | --- | --- | --- || | Less than 3 months | 3 to 12 months | More than 12 months | Total || Notional | | | | || Foreign exchange rate swap | — | 1,510,788 | 2,483,771 | 3,994,559 || Interest rate swap | 2,129,636 | 6,127,456 | 2,589,658 | 10,846,750 || NDF | 15,359 | — | — | 15,359 || Total | 2,144,995 | 7,638,244 | 5,073,429 | 14,856,668 || Asset (fair value) | | | | || Foreign exchange rate swap | — | 115,368 | 98,801 | 214,169 || Interest rate swap | 8,037 | 29,012 | 4,573 | 41,622 || NDF | 1,784 | — | — | 1,784 || Liability (fair value) | | | | || Interest rate swap | — | (1,015) | (281,177) | (282,192) || NDF | (9,578) | — | — | (9,578) || Net | 243 | 143,365 | (177,803) | (34,195) | F-43 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | December 31, 2023 | | | || --- | --- | --- | --- | --- || | Less than 3 months | 3 to 12 months | More than 12 months | Total || Notional | | | | || Foreign exchange rate swap | — | — | 2,526,603 | 2,526,603 || NDF | 7,030 | — | — | 7,030 || Interest rate swap | 2,692,500 | 3,354,400 | 32,600 | 6,079,500 || Total | 2,699,530 | 3,354,400 | 2,559,203 | 8,613,133 || Asset (fair value) | | | | || NDF | 629 | — | — | 629 || Liability (fair value) | | | | || Foreign exchange rate swap | — | — | (311,445) | (311,445) || Interest rate swap | (2,076) | (2,180) | (168) | (4,424) || NDF | (302) | — | — | (302) || Net | (1,749) | (2,180) | (311,613) | (315,542) |6.9.2. Economic hedgeThe Group engages in certain hedgingtransactions to mitigate specific financial risks, such as fluctuations in foreign currencies and interest rates. Some of these transactionsare not formally designated for hedge accounting.Although these derivatives areused to manage economic risks, changes in their fair value are recognized directly in profit or loss for the period without the applicationof the specific accounting treatments of hedge accounting. This means that the gains and losses generated by these instruments are fullyaccounted for in profit or loss as they occur, reflecting changes in the fair value of the derivatives.The decision not to apply hedgeaccounting to these transactions may be due to considerations such as the administrative cost of the formal documentation required byhedge accounting standards, the nature of the instruments, or the desired operational flexibility. Nevertheless, the Group continues monitoringthese instruments to ensure their use aligns with the overall risk management strategy.6.10. Financial risk managementThe Group’s activities exposeit to market, liquidity and credit risks.The Risk Management Area carriesthe Group’s financial risk management.The Board of Directors has approvedpolicies, and limits for its financial risk management. The Group uses financial derivatives only to mitigate market risk exposures. TheGroup’s policy is not to engage in derivatives for speculative purposes. Different levels of managerial approval are required forentering into financial instruments depending on their nature and the type of risk associated. F-44 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.10.1. Credit riskCredit risk is defined as the riskthat a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. TheGroup’s counterparties include those in financial contracts (cash and cash equivalents, derivative financial instruments, creditportfolio, and deposits with banks and other financial institutions) and in operating activities (accounts receivable from card issuers,including outstanding receivables and commitments, advances to suppliers, and financial guarantees granted to third parties).6.10.1.1. Financial instruments and cash depositsCredit risk from balances withbanks and financial institutions is managed in accordance with the Group’s internal policies. Investments of surplus funds and theuse of derivative instruments are only conducted with carefully selected financial institutions.6.10.1.2. Accounts receivable from card issuersCard issuers, once accepted bythe networks, issue cards that when transacted are processed by acquirers. Card issuers have different risk profiles.The Group, with frequency associatedwith the availability of new information or new financial indicators of card issuers, carries out assessments of these companies, aimingto identify potential risks. Payment scheme networks have credit risk mitigation mechanisms that vary by network that are available toacquirers like the Group. To date, the Group has not incurred any significant loss from card issuer receivables.6.10.1.3 Credit portfolioMerchant portfolio and credit cardsare available solely to individuals and businesses that are existing customers of the Group through acquiring or banking.Merchant portfolio loans rely onthe main repayment source and collateral future receivables of customers while credit card line limits may be unsecured; the line is generallya portion of the total credit line available to a particular customer based on credit appetite and risk rating.6.10.2. Market riskMarket risk is the risk of financialloss resulting from changes in the fair value or future cash flows of financial instruments due to changes in market conditions.In the ordinary course of business,the Group executes financial transactions that are subject to market variables and, therefore, exposed to market risk.Market risk comprises mainly: foreignexchange risk, interest rate risk and equity price risk.6.10.2.1. Interest rate riskThe Group’s interest raterisk arises from mismatches among certain assets (mainly cash and equivalents, short-term investments, accounts receivables, credit portfolio)and liabilities (institutional deposits and marketable debt securities, and other debt instruments) with different benchmarks (fixed orlinked to CDI) and maturity dates. The Group may mitigate its exposure by executing derivative transactions to match those benchmarksand duration gaps. F-45 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |6.10.2.2. Foreign currency riskThe Group has assets and liabilitiesin foreign currencies. The foreign currency risk is generated by fluctuations in exchange rates among Brazilian reais and other currencies.Operations include cash and short-term investments in multiple countries and total payment volume (“TPV”) processed in foreignexchange. Significant capital expenditures (Pin Pads & POS, and data center equipment) and regular expenses (cloud and software fees)are incurred in US Dollars and Euros. The total foreign currency results on the year ended December 31, 2024 was loss of R$ 19,811 (2023- loss of R$ 13,580).The Group uses derivatives electedfor cash flow or fair value hedge accounting, to hedge the risk of foreign exchange fluctuation of debt in foreign currencies. All criticalterms of the hedged item are matched with the hedging instrument.The residual Group’s exposureto foreign currency changes for all other currencies considering the hedge instruments entered into is not material.6.10.2.3. Risk Assessment: Value-at-Risk andScenario AnalysisMarket risk is managed and monitored,by risk factor, using the value-at-risk (“VaR”) methodology.The Group conducts a study on howmarket variables would impact the Group’s financial statements based on Historical Value at Risk models.| Risk Factor | Asset/ Liability | VaR 1 day (thousands) | VaR 10 days (thousands) | VaR 60 days (thousands) || --- | --- | --- | --- | --- || Interest rates | Accounts receivables from card issuers, Credit portfolio, Accounts payables to clients and interest rate swaps | 811 | 2,564 | 6,280 || Foreign currency exchange | USD denominated asset/liabilities/derivatives | 233 | 737 | 1,805 |6.10.2.4 Equity price riskEquity price risk is the risk thatthe fair values of equities decrease as the result of changes in the level of equity and individual stocks. The Group is exposed to equityprice risk as it holds, as of December 31, 2024, R$ 32,629 (2023 - R$ 45,702) in equity securities (Note 6.3).6.10.3. Liquidity riskCash flow forecasting is performedfor the operating entities of the Group and then aggregated. Rolling forecasts of liquidity requirements are monitored to ensure the Grouphas sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities so that the Groupdoes not breach borrowing limits on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debtfinancing plans, compliance with internal target liquidity and leverage ratios targets and, if applicable, external regulatory or legalrequirements. The Group’s main liquidity risk is its potential inability to raise financing to continue its prepayment and creditbusiness. Although the prepayment and credit activities is not an obligation for the Group it is a significant component of its revenues.Surplus cash held by the operatingentities is invested in interest-earning bank accounts, time deposits, money market deposits and marketable securities, choosing instrumentswith appropriate maturities or sufficient liquidity to provide adequate margin as determined by the above-mentioned forecasts. As of December31, 2024, the Group held short-term investments of R$ 517,874 (2023 - R$ 3,481,496) that are expected to be readily convertible into cashfor managing liquidity. F-46 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The table below analyzes the Group’snon-derivative financial liabilities to maturity. Derivative financial liabilities are not included in the analysis as their contractualmaturities are not essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractualundiscounted cash flows.| | Less than one year | Between 1 and 2 years | Between 2 and 5 years | Over 5 years || --- | --- | --- | --- | --- || December 31, 2024 | | | | || Retail deposits | 8,704,809 | — | — | — || Accounts payable to clients | 17,756,720 | 50,674 | — | — || Trade accounts payable | 672,184 | — | — | — || Institutional deposits and marketable debt securities | 3,068,186 | 4,680,530 | 1,366,089 | — || Other debt instruments | 1,939,982 | 626,789 | 954,211 | 2,774,095 || Other liabilities | 281,073 | 236,822 | — | — || | 32,422,954 | 5,594,815 | 2,320,300 | 2,774,095 || December 31, 2023 | | | | || Retail deposits | 6,119,455 | — | — | — || Accounts payable to clients | 19,163,672 | 35,455 | — | — || Trade accounts payable | 513,877 | — | — | — || Institutional deposits and marketable debt securities | 472,397 | 1,344,545 | 4,905,779 | — || Other debt instruments | 1,404,679 | — | 143,456 | — || Other liabilities | 119,526 | 160,079 | 250,425 | — || | 27,793,606 | 1,540,079 | 5,299,660 | — |6.11. Fraud riskThe Group’s exposure to fraudrisk is the risk that misuse, or wrongful or criminal deception will lead to financial loss for one of the parties involved on acquiringand banking transactions that the Group is required to cover. These fraud transactions include unauthorized use of lost or stolen cards,fraudulent applications, fraudulent cash-outs, counterfeit or altered cards, and the fraudulent use of a cardholder’s card numberfor card-not-present transactions.While the costs of most fraud involvingcards remain with either the issuing financial institution or the client, the Group is occasionally required to cover fraudulent transactionsin the following situations:| • | Where clients also contract anti-fraud services rendered by the Group entities; or || --- | --- || • | Through the chargeback process if the Group does not follow the minimum procedures, including the timely communication to all involved parties about the occurrence of a fraudulent transaction. || --- | --- |The Group is also exposed to potentialliability if fraudulent agents use false identities to access credit and banking products, which could increase credit risk exposure aswell as the liability towards clients and third parties in case of any damages. Criminals are using increasingly sophisticated methodsto engage in illegal activities. Failure to effectively manage risk and prevent fraud would increase credit liabilities and default ratesof credit solutions, and subject the Group to potential fines by regulators.6.12. Financial instruments by category6.12.1. Financial assets by category F-47 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | Amortized cost | FVPL | FVOCI | Total || --- | --- | --- | --- | --- || December 31, 2024 | | | | || Short and Long-term investments | — | 550,503 | — | 550,503 || Financial assets from banking solutions | 8,805,882 | — | — | 8,805,882 || --- | --- | --- | --- | --- || Accounts receivable from card issuers | 9,492 | — | 29,338,573 | 29,348,065 || Trade accounts receivable | 416,103 | — | — | 416,103 || Credit portfolio | 1,063,119 | — | — | 1,063,119 || Derivative financial instruments^(a)^ | — | 260,188 | — | 260,188 || Receivables from related parties | 613 | — | — | 613 || Other assets | 529,414 | — | — | 529,414 || | 10,824,623 | 810,691 | 29,338,573 | 40,973,887 || December 31, 2023 | | | | || Short and Long-term investments | — | 3,481,496 | 45,702 | 3,527,198 || Financial assets from banking solutions | 5,250,496 | 1,147,402 | — | 6,397,898 || Accounts receivable from card issuers | 5,877 | — | 23,971,232 | 23,977,109 || Trade accounts receivable | 488,480 | — | — | 488,480 || Credit portfolio | 250,747 | — | — | 250,747 || Derivative financial instruments^(a)^ | — | 4,182 | — | 4,182 || Receivables from related parties | 2,512 | — | — | 2,512 || Other assets | 518,362 | — | — | 518,362 || | 6,516,474 | 4,633,080 | 24,016,934 | 35,166,488 || (a) | Derivative financial instruments as of December 31, 2024 of R$ 214,169 (2023 – R$ 311,445) were designated as cash flow hedge accounting. Therefore, the effective portion of the hedge is accounted in OCI. || --- | --- |6.12.2. Financial liabilities by category| | Amortized cost | FVPL | Total || --- | --- | --- | --- || December 31, 2024 | | | || Retail deposits | 8,704,809 | — | 8,704,809 || Accounts payable to clients | 17,807,394 | — | 17,807,394 || Trade accounts payable | 672,184 | — | 672,184 || Institutional deposits and marketable debt securities | 8,495,962 | — | 8,495,962 || Other debt instruments^(a)^ | 2,411,334 | 1,988,645 | 4,399,979 || Derivative financial instruments | — | 291,770 | 291,770 || Other liabilities | 316,700 | 201,195 | 517,895 || | 38,408,383 | 2,481,610 | 40,889,993 || December 31, 2023 | | | || Retail deposits | 6,119,455 | — | 6,119,455 || Accounts payable to clients | 19,199,127 | — | 19,199,127 || Trade accounts payable | 513,877 | — | 513,877 || Institutional deposits and marketable debt securities | 3,971,078 | — | 3,971,078 || Other debt instruments | 1,548,134 | — | 1,548,134 || Derivative financial instruments | — | 316,171 | 316,171 || Other liabilities | 119,526 | 410,504 | 530,030 || | 31,471,197 | 726,675 | 32,197,872 | F-48 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (a) | Debt designated for hedge accounting as the hedged item in a fair value hedge is adjusted for changes on its fair value only attributable to the specifically designated risks being hedged. || --- | --- |6.13. Fair value measurement6.13.1. Assets and liabilities by fair valuehierarchyThe following table presents ananalysis of financial instruments measured at fair value by fair value hierarchy level:| | December 31, 2024 | | December 31, 2023 | || --- | --- | --- | --- | --- || | Fair value | Hierarchy level | Fair value | Hierarchy level || Assets measured at fair value | | | | || Short and Long-term investments ^(a) (b)^ | 550,503 | I /II | 3,527,198 | I /II || Financial assets from banking solutions ^(b)^ | — | I | 1,147,402 | I || Accounts receivable from card issuers ^(c)^ | 29,338,573 | II | 23,971,232 | II || Derivative financial instruments ^(d)^ | 260,188 | II | 4,182 | II || | 30,149,264 | | 28,650,014 | || Liabilities measured at fair value | | | | || Other debt instruments ^(e)^ | 1,988,645 | II | — | II || Derivative financial instruments ^(d)^ | 291,770 | II | 316,171 | II || Other liabilities ^(f) (g)^ | 201,195 | III | 410,504 | III || | 2,481,610 | | 726,675 | || (a) | Listed securities are classified as Level I and unlisted securities classified as Level II, determining fair value using valuation techniques, which employ the use of market observable inputs. || --- | --- || (b) | Sovereign bonds are priced using quotations from Anbima public pricing method. || --- | --- || (c) | For Accounts receivable from card issuers measured at FVOCI, fair value is estimated by discounting future cash flows using market rates for similar items. || --- | --- || (d) | The Group enters into derivative financial instruments with financial institutions with investment grade credit ratings. Derivative financial instruments are valued using valuation techniques, which employ the use of observable market inputs. || --- | --- || (e) | For Other debt instruments, fair value is estimated by discounting future cash flows using contract rates for funding items, and using market value of senior quotas liabilities. || --- | --- || (f) | These are contingent considerations included in Other liabilities arising on business combinations that are measured at FVPL. Fair values are estimated in accordance with pre-determined formula explicit in the contracts with selling shareholders. The significant unobservable inputs used in the fair value measurement of contingent consideration categorized as Level III of the fair value hierarchy are based on projections of revenue, net debt, number of clients, net margin and the discount rates used to evaluate the liability. || --- | --- || (g) | The Group issued put options for Reclame Aqui’s non-controlling interests, in the 2022 business combination. For the non-controlling shareholder amounts the Group has elected as an accounting policy that the put options derecognize the non-controlling interests at each reporting date as if it was acquired at that date and recognize a financial liability at the present value of the amount payable on exercise of the non-controlling interests put option. The difference between the financial liability and the non-controlling interests derecognized at each period is recognized as an equity transaction. The amount of R$ 151,606 was recorded in the consolidated statement of financial position as of December 31, 2024 as a financial liability under Other liabilities (2023 - R$ 178,721). || --- | --- |As of December 31, 2024 and 2023,there were no transfers between the fair value measurements of Level I and Level II and between the fair value measurements of Level IIand Level III.6.13.2. Fair value of financial instrumentsnot measured at fair valueThe table below presents a comparisonof the book value and fair value of the financial instruments of the Group, other than those with carrying amounts that reasonably approximatefair values: F-49 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | December 31, 2024 | | December 31, 2023 | || --- | --- | --- | --- | --- || | Book value | Fair value | Book value | Fair value || Financial assets | | | | || Credit portfolio | 1,063,119 | 962,465 | 250,747 | 250,877 || | 1,063,119 | 962,465 | 250,747 | 250,877 || Financial liabilities | | | | || Accounts payable to clients | 17,807,394 | 16,857,591 | 19,199,127 | 18,685,622 || Institutional deposits and marketable securities | 8,495,962 | 8,380,224 | 3,971,078 | 4,692,866 || | 26,303,356 | 25,237,815 | 23,170,205 | 23,378,488 |6.14. Capital managementThe Group’s objectives whenmanaging capital are to safeguard its ability to continue as a going concern to provide returns for shareholders and benefits for otherstakeholders, to maintain an optimal capital structure to reduce the cost of capital, and to have resources available for new opportunities.In order to manage the capitalstructure of the Group, a framework is used to compare the Group’s existing capital with quantitative and qualitative indicators,including liquidity, credit ratings, regulatory requirements, and business cash and capital projections. Considering such framework,management can make, or may propose to the Board or shareholders when their approval is required, adjustments to the capital structurethrough several mechanisms such as repurchase of shares, returning capital to shareholders, distributing dividends, issuing new sharesor selling assets to reduce leverage, among others.The adjusted net cash as of December31, 2024 and 2023 was as follows:| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Cash and cash equivalents | 5,227,654 | 2,176,416 || Short-term investments | 517,874 | 3,481,496 || Financial assets from banking solutions | 8,805,882 | 6,397,898 || Accounts receivable from card issuers | 29,348,065 | 23,977,109 || Derivative financial instruments ^(a)^ | 257,575 | 629 || Adjusted cash | 44,157,050 | 36,033,548 || Retail deposits | (8,704,809) | (6,119,455) || Accounts payable to clients | (17,807,394) | (19,199,127) || Institutional deposits and marketable debt securities | (8,495,962) | (3,971,078) || Other debt instruments ^(b)^ | (4,152,975) | (1,374,452) || Derivative financial instruments | (291,770) | (316,171) || Adjusted debt | (39,452,910) | (30,980,283) || Adjusted net cash | 4,704,140 | 5,053,265 || (a) | Refers to economic hedge of cash and cash equivalents and short-term investments denominated in U.S. dollars, and excludes the effects of call options. || --- | --- || (b) | Borrowings and financing exclude the effects of leases liabilities recognized under IFRS 16. || --- | --- |Although capital is managed consideringthe consolidated position, some subsidiaries in Brazil are subject to minimum regulatory capital requirements established by BACEN. F-50 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The Group has a dedicated, centralizedregulatory capital management team, which reports directly to the Chief Risk Officer (“CRO”), who is ultimate responsiblefor capital adequacy. The structure has the objective of ensuring compliance with the current regulation and capital management processesregulatorily required. Additionally, the area has procedures and routines to plan capital adequacy requirement considering current andpotential risks.| 7. | Other assets || --- | --- || | December 31, 2024 | December 31, 2023 || --- | --- | --- || Customer deferred acquisition costs | 227,799 | 190,239 || Prepaid expenses ^(a)^ | 134,210 | 189,371 || Receivables from the sale of associates and subsidiaries ^(b)^ | 55,469 | 18,676 || Suppliers advances | 27,167 | 35,835 || Security deposits | 14,032 | 14,230 || Judicial deposits | 13,317 | 22,507 || Salary advances | 12,073 | 10,837 || Convertible loans | 12,048 | 11,267 || Other | 33,299 | 25,400 || | 529,414 | 518,362 || Current | 370,255 | 380,854 || Non-current | 159,159 | 137,508 || (a) | These expenditures include, but are not limited to, prepaid software licenses, certain consulting services, insurance premiums and prepaid marketing expenses. The amount recognized as asset in the statement of financial position is charged to the statement of profit or loss once the prepaid services are consumed by the Group. As of December 31, 2024, the balance includes prepaid software subscriptions and licenses in amount of R$110,116 (2023 - R$ 32,639) and prepaid media in the amount of R$1,524 (2023 - R$114,260). || --- | --- || (b) | Refers to balances receivable from buyers for the sale of the equity interest of Pinpag and Everydata Group Ltd. (“StoneCo CI”) and its subsidiaries (namely, the Creditinfo Caribbean companies). || --- | --- || 8. | Recoverable taxes || --- | --- || | December 31, 2024 | December 31, 2023 || --- | --- | --- || Withholding income tax on finance income ^(a)^ | 335,762 | 101,579 || Income tax and social contribution ^(b)^ | 19,430 | 9,584 || Others withholding income tax | 4,138 | 19,710 || Contributions over revenue | 2,936 | 544 || Other taxes | 10,166 | 14,922 || | 372,432 | 146,339 || (a) | Refers to income taxes withheld on financial income which will be offset against future income tax payable. || --- | --- || (b) | Refers to income taxes, social contributions, and withholding tax prepayments that have been offset against income tax payable. || --- | --- | F-51 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 9. | Income taxes || --- | --- |9.1. Accounting policy9.1.1. Current income and social contributiontaxesCurrent tax assets and liabilitiesare measured at the amount expected to be recovered or paid to the tax authorities. The tax regulations applied are those in force onthe statement of financial position date in the countries where the Group operates and generates taxable income.The Company is domiciled in theCayman Islands which is an income tax free jurisdiction. Income of StoneCo from some investments outside the Cayman Islands is subjectto withholding taxes in the countries where the investments are based. The withholding tax rate is generally 15%, which is treated asan income tax expense when no recovery of the tax withheld is expected.The combined statutory rate appliedto most entities in Brazil is 34%, comprising the Corporate Income Tax (“IRPJ”) and the Social Contribution on Net Income(“CSLL”) on the taxable income of each Brazilian legal entity individually (no consolidated tax returns).The Group's Brazilian entitiesrecognize IRPJ and CSLL on an accrual basis. According to Brazilian tax regulations, the historical nominal amount of tax losses determinedin prior years can be offset against results of subsequent years at any time (i.e., do not prescribe), provided that such offsetting doesnot exceed 30% of the annual taxable income of the fiscal period in which tax losses are utilized.Payments are made monthly, in anticipationof the amount which will be due by the year-end.9.1.2. Deferred income and social contributiontaxesDeferred tax assets or liabilitiesare measured based on the differences between the tax bases of assets and liabilities and the amounts reported in the statement of financialposition. Deferred tax assets may be recognized for unused tax loss carryforwards.Deferred tax assets are recognizedonly to the extent that it is probable that the Group's Brazilian entities will generate sufficient future taxable profits that will allowfor their recovery. The expected realization of deferred tax assets is based on technical studies prepared by the Group that demonstrateexpectation of future taxable profits according to management projections.The income tax and social contributionexpense is recognized in the consolidated statement of profit or loss under Income tax and social contribution, except when it refersto items recognized in OCI, in which case the related deferred tax assets or liabilities are also recognized against OCI. In this case,the Group presents these items in the consolidated statement of other comprehensive income net of related tax effect.Management periodically evaluatespositions taken in tax returns with respect to situations where applicable tax regulations are subject to interpretation and recognizesprovisions, if appropriate.Deferred tax assets and liabilitiesare presented net in the consolidated statement of financial position when there is a legally enforceable right and the intention to offsetthem upon the calculation of current taxes, generally when related to the same legal entity and the same jurisdiction. Accordingly, deferredtax assets and liabilities in different entities or in different tax jurisdictions are generally presented separately, and not on a netbasis. F-52 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |9.2. Significant judgments, estimates and assumptionsDeferred tax assets are recognizedfor all unused tax losses to the extent that sufficient taxable profit will likely be available to allow the use of such losses. Significantjudgment is required of management to determine the amount of deferred tax assets that can be recognized, based on the likely timing andlevel of future taxable profits, together with future tax planning strategies.9.3. Reconciliation of income tax expense| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Profit (loss) before income taxes | (1,017,629) | 1,970,818 | (387,290) || Brazilian statutory rate | 34% | 34% | 34% || Tax income (expense) at the statutory rate | 345,994 | (670,078) | 131,679 || Tax effect of income (expense) that are not taxable (deductible) for tax purposes: | | | || Profit from entities subject to different tax rates | 317,023 | 228,953 | 48,594 || Profit (loss) from entities subject to different tax rates - Mark to market on equity securities designated at FVPL | — | 10,395 | (290,039) || Research and development tax benefits ("Lei do Bem") | 50,443 | 59,155 | 10,275 || Interest payments on net equity ^(a)^ | 25,294 | — | 560 || Software business goodwill impairment loss ^(b)^ | (1,209,737) | — | — || Recognition of deferred income tax unrecognized in previous periods | 20,533 | 24,156 | 1,292 || Unrecognized deferred income tax in the period | (34,467) | (15,966) | (33,465) || Equity pickup on associates | 136 | (1,421) | (1,220) || Other tax incentives | 13,746 | 8,123 | 3,827 || Other permanent differences | (18,386) | (13,715) | (10,609) || Total tax expense | (489,421) | (370,398) | (139,106) || Effective tax rate | (48%) | 19% | (36%) || Current income tax and social contribution | (527,919) | (345,813) | (292,172) || Deferred income tax and social contribution | 38,498 | (24,585) | 153,066 || Total tax expense | (489,421) | (370,398) | (139,106) || (a) | Interest payments on net equity is a distribution to shareholders of Brazilian entities following a formula based on the capital of the entity and an annual rate determined by regulation which is tax deductible. Interest on net equity is carried out between the Group’s companies. || --- | --- || (b) | As described in Note 11.4, the Group recognized an impairment loss on software business goodwill in the amount of R$ 3,558,049 on December 31, 2024. According to IAS 12 – Income Taxes, the recognition of a deferred tax liability on initial recognition of goodwill, as well on subsequent effects related with such initial recognition, is not permitted. Consequently, no deferred tax effect has been recognized on goodwill impairment. || --- | --- |9.4. Deferred income taxes by nature| | December 31, 2023 | Recognized against other comprehensive income | Recognized against profit or loss | Recognized against goodwill | December 31, 2024 || --- | --- | --- | --- | --- | --- || Assets at FVOCI | 179,944 | 39,873 | — | — | 219,817 || Losses available for offsetting against future taxable income | 343,313 | — | (40,392) | — | 302,921 || Other temporary differences | 302,551 | — | 82,390 | — | 384,941 || Tax deductible goodwill | 42,625 | — | (37,615) | — | 5,010 | F-53 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Share-based compensation | 123,211 | — | 37,037 | — | 160,248 || --- | --- | --- | --- | --- | --- || Contingencies arising from business combinations | 36,320 | — | 3,872 | — | 40,192 || Technological innovation benefit | (9,038) | — | 4,910 | — | (4,128) || Temporary differences under FIDC | (224,733) | — | (54,572) | — | (279,305) || Intangible assets and property and equipment arising from business combinations | (676,215) | — | 42,868 | (5,381) | (638,728) || Deferred tax, net | 117,978 | 39,873 | 38,498 | (5,381) | 190,968 || | December 31, 2022 | Recognized against other comprehensive income | Recognized against profit or loss | Recognized against goodwill | December 31, 2023 || --- | --- | --- | --- | --- | --- || Assets at FVOCI | 215,730 | (35,786) | — | — | 179,944 || Losses available for offsetting against future taxable income | 385,634 | — | (42,321) | — | 343,313 || Other temporary differences | 273,625 | — | 28,926 | — | 302,551 || Tax deductible goodwill | 69,017 | — | (26,392) | — | 42,625 || Share-based compensation | 58,815 | — | 64,396 | — | 123,211 || Contingencies arising from business combinations | 51,313 | — | (14,993) | — | 36,320 || Assets at FVPL | (993) | — | 993 | — | — || Technological innovation benefit | (31,557) | — | 22,519 | — | (9,038) || Temporary differences under FIDC | (147,924) | — | (76,809) | — | (224,733) || Intangible assets and property and equipment arising from business combinations | (693,936) | — | 19,096 | (1,375) | (676,215) || Deferred tax, net | 179,724 | (35,786) | (24,585) | (1,375) | 117,978 |9.5. Unrecognized deferred taxesThe Group has accumulated tax losscarryforwards and other temporary differences in some subsidiaries in the amount of R$147,735 as of December 31, 2024 (2023 – R$133,710)for which a deferred tax asset was not recognized and are available indefinitely for offsetting against future taxable profits of thecompanies in which the losses arose. Deferred tax assets have not been recognized with respect of these losses as they cannot be usedto offset taxable profits between subsidiaries of the Group, and there is no other evidence of probable recoverability in the near future.| 10. | Property and equipment || --- | --- |10.1. Accounting policyAll property and equipment arestated at historical cost less accumulated depreciation and impairment losses, if any (Note 10.5). Historical cost includes expendituresthat are directly attributable to the acquisition of the items and, if applicable, net of tax credits. Subsequent costs are included inthe asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Group and the cost of the item is material and can be measured reliably. All other repairs andmaintenance expenditures are charged to profit or loss during the period in which they are incurred. Depreciation is calculated on a straight-linebasis over the estimated useful lives of the assets.Assets’ residual values,useful lives and methods of depreciation are reviewed at each reporting date and adjusted prospectively, if appropriate. Gains and losseson disposals or derecognition are determined by comparing the disposal proceeds (if any) with the carrying amount and are recognizedin profit or loss. The Group also derecognizes Pin Pads & POS held by customers that have not been used in the past 180 or 360 days,depending on the category of customer. F-54 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |10.2. Significant judgments, estimates and assumptionsProperty and equipment assets includethe preparation of estimates to determine the useful life for depreciation purposes. Useful life determination requires estimates in relationto the expected technological advances and alternative uses of assets. There is a significant element of judgment involved in making technologicaldevelopment assumptions, since the timing and nature of future technological advances are difficult to predict.The Group evaluated the usefullife of Property and equipment assets and concluded that no change on the estimates of useful life and residual value of this assets wasnecessary for the year ended December 31, 2024.The estimated useful lives forthe Property and equipment are substantially as follows:| | Estimated useful lives (years) || --- | --- || Pin Pads & POS | 5 || IT equipment | 3 – 10 || Facilities | 5 – 10 || Furniture and fixtures | 10 || Machinery and equipment | 5 – 10 || Vehicles and airplanes | 2 – 10 || --- | --- |10.3. Changes in Property and equipment| | December 31, 2023 | | | Additions | | | Disposals ^(a)^ | | | Transfers | | | Effects of changes in foreign exchange rates | | | Business combination ^(b)^ | | December 31, 2024 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Cost | | | | | | | | | | | | | | | | | | | | || Pin Pads & POS | | 2,359,314 | | | 682,308 | | | (107,770 | ) | | — | | | — | | | — | | 2,933,852 | || IT equipment | | 295,330 | | | 34,252 | | | (32,050 | ) | | 2,782 | | | 49 | | | 423 | | 300,786 | || Facilities | | 77,594 | | | 6,583 | | | (559 | ) | | 19,609 | | | — | | | — | | 103,227 | || Machinery and equipment | | 23,950 | | | 3,863 | | | (4,935 | ) | | 575 | | | (1 | ) | | — | | 23,452 | || Furniture and fixtures | | 22,684 | | | 930 | | | (268 | ) | | 3,006 | | | 11 | | | 15 | | 26,378 | || Vehicles and airplane | | 27,175 | | | 346 | | | (47 | ) | | — | | | 5 | | | — | | 27,479 | || Construction in progress | | 30,962 | | | 28,265 | | | (3,568 | ) | | (25,972 | ) | | — | | | — | | 29,687 | || Right-of-use assets - Equipment | | 4,880 | | | — | | | (197 | ) | | — | | | — | | | — | | 4,683 | || Right-of-use assets - Vehicles | | 31,976 | | | 18,368 | | | (29,271 | ) | | — | | | — | | | — | | 21,073 | || Right-of-use assets - Offices | | 179,154 | | | 89,022 | | | (24,870 | ) | | — | | | 117 | | | — | | 243,423 | || | | 3,053,019 | | | 863,937 | | | (203,535 | ) | | — | | | 181 | | | 438 | | 3,714,040 | || Accumulated depreciation | | | | | | | | | | | | | | | | | | | | || Pin Pads & POS | | (1,065,406 | ) | | (535,996 | ) | | 91,370 | | | — | | | — | | | — | | (1,510,032 | ) || IT equipment | | (172,517 | ) | | (55,960 | ) | | 29,150 | | | — | | | (204 | ) | | — | | (199,531 | ) || Facilities | | (30,507 | ) | | (14,313 | ) | | 544 | | | — | | | 638 | | | — | | (43,638 | ) || Machinery and equipment | | (20,039 | ) | | (6,890 | ) | | 4,814 | | | — | | | 1,413 | | | — | | (20,702 | ) || Furniture and fixtures | | (6,798 | ) | | (2,390 | ) | | 51 | | | — | | | (34 | ) | | — | | (9,171 | ) || Vehicles and airplane | | (5,468 | ) | | (3,092 | ) | | 35 | | | — | | | (15 | ) | | — | | (8,540 | ) || Right-of-use assets - Equipment | | (1,150 | ) | | (53 | ) | | 197 | | | — | | | — | | | — | | (1,006 | ) || Right-of-use assets - Vehicles | | (23,302 | ) | | (14,839 | ) | | 28,384 | | | — | | | — | | | — | | (9,757 | ) || Right-of-use assets - Offices | | (65,935 | ) | | (34,879 | ) | | 23,117 | | | — | | | 31 | | | — | | (77,666 | ) || | | (1,391,122 | ) | | (668,412 | ) | | 177,662 | | | — | | | 1,829 | | | — | | (1,880,043 | ) || Property and equipment, net | | 1,661,897 | | | 195,525 | | | (25,873 | ) | | — | | | 2,010 | | | 438 | | 1,833,997 | || (a) | Includes Pin Pad & POS derecognized for not being used by customers after a period of time. Includes also impairment losses of PinPads & POS in the amount of R$ 4.679 for cost and R$ 2.403 for accumulated depreciation. || --- | --- | F-55 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (b) | More details in Note 23.3. || --- | --- || | December 31, 2022 | | | Additions | | | Disposals | | | Transfers | | | Effects of hyperinflation | | | Effects of changes in foreign exchange rates | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Cost | | | | | | | | | | | | | | | | | | | | | || Pin Pads & POS | | 1,948,382 | | | 563,884 | | | (152,952 | ) | | — | | | — | | | — | | | 2,359,314 | || IT equipment | | 262,405 | | | 51,743 | | | (27,612 | ) | | 8,754 | | | 165 | | | (125 | ) | | 295,330 | || Facilities | | 91,820 | | | 2,488 | | | (20,846 | ) | | 4,669 | | | (68 | ) | | (469 | ) | | 77,594 | || Machinery and equipment | | 23,521 | | | 4,241 | | | (2,702 | ) | | — | | | (93 | ) | | (1,017 | ) | | 23,950 | || Furniture and fixtures | | 24,150 | | | 1,025 | | | (3,413 | ) | | 960 | | | (16 | ) | | (22 | ) | | 22,684 | || Vehicles and airplane | | 27,296 | | | 49 | | | (14 | ) | | — | | | (5 | ) | | (151 | ) | | 27,175 | || Construction in progress | | 50,320 | | | 192 | | | (5,167 | ) | | (14,383 | ) | | — | | | — | | | 30,962 | || Right-of-use assets - Equipment | | 4,823 | | | 64 | | | (7 | ) | | — | | | — | | | — | | | 4,880 | || Right-of-use assets - Vehicles | | 43,794 | | | 3,785 | | | (15,603 | ) | | — | | | — | | | — | | | 31,976 | || Right-of-use assets - Offices | | 205,450 | | | 29,405 | | | (56,255 | ) | | — | | | — | | | 554 | | | 179,154 | || | | 2,681,961 | | | 656,876 | | | (284,571 | ) | | — | | | (17 | ) | | (1,230 | ) | | 3,053,019 | || Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | || Pin Pads & POS | | (740,468 | ) | | (455,632 | ) | | 130,694 | | | — | | | — | | | — | | | (1,065,406 | ) || IT equipment | | (145,406 | ) | | (53,143 | ) | | 26,027 | | | — | | | — | | | 5 | | | (172,517 | ) || Facilities | | (37,739 | ) | | (13,671 | ) | | 20,618 | | | — | | | — | | | 285 | | | (30,507 | ) || Machinery and equipment | | (18,571 | ) | | (4,463 | ) | | 2,495 | | | — | | | — | | | 500 | | | (20,039 | ) || Furniture and fixtures | | (7,054 | ) | | (2,316 | ) | | 2,560 | | | — | | | — | | | 12 | | | (6,798 | ) || Vehicles and airplane | | (2,437 | ) | | (3,123 | ) | | 51 | | | — | | | — | | | 41 | | | (5,468 | ) || Right-of-use assets - Equipment | | (1,031 | ) | | (129 | ) | | 10 | | | — | | | — | | | — | | | (1,150 | ) || Right-of-use assets - Vehicles | | (21,663 | ) | | (15,988 | ) | | 14,349 | | | — | | | — | | | — | | | (23,302 | ) || Right-of-use assets - Offices | | (66,414 | ) | | (36,846 | ) | | 36,858 | | | — | | | — | | | 467 | | | (65,935 | ) || | | (1,040,783 | ) | | (585,311 | ) | | 233,662 | | | — | | | — | | | 1,310 | | | (1,391,122 | ) || Property and equipment, net | | 1,641,178 | | | 71,565 | | | (50,909 | ) | | — | | | (17 | ) | | 80 | | | 1,661,897 | |10.4. Depreciation and amortization chargesDepreciation and amortization expensehas been charged to the consolidated statement of profit or loss as follows:| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Cost of services | 688,491 | 606,639 | 529,793 || General and administrative expenses | 222,169 | 229,394 | 226,353 || Selling expenses | 38,734 | 42,148 | 43,879 || Other income (expenses), net | — | — | 301 || Depreciation and Amortization charges | 949,394 | 878,181 | 800,326 || Depreciation charge | 668,412 | 585,311 | 513,413 || Amortization charge (Note 11.3) | 280,982 | 292,870 | 286,913 || Depreciation and Amortization charges | 949,394 | 878,181 | 800,326 |10.5. Impairment testAs of December 31, 2024, 2023 and2022, there were no indicators of impairment of property and equipment. Property and equipment were tested for impairment at the CashGenerating Units (“CGUs”) level in connection with intangible assets and investments in associates (Note 11.4). F-56 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 11. | Intangible assets || --- | --- |11.1. Accounting policy11.1.1. Initial recognitionCertain direct development costsassociated with internally developed software and software enhancements of the Group’s technology platform are capitalized. Capitalizedcosts, which occur post determination by Management of technical feasibility, include external services and internal payroll costs. Thesecosts are recorded as intangible assets over the development phase. Research and pre-feasibility development costs, as well as maintenanceand training costs, are charged to profit or loss when incurred.Separately acquired intangibleassets are measured at cost on initial recognition. The cost of intangible assets acquired in a business combination corresponds to theirfair value at the acquisition date.11.1.2. Subsequent recognitionThe useful lives of intangibleassets are assessed as finite or indefinite. As of December 31, 2024 and 2023 the Group holds trademarks, patents and goodwill as indefinitelife intangible assets. Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-linebasis. Intangible assets with indefinite lives are not amortized. In both cases the intangible asset is tested for impairment wheneverthere is an indication that their carrying amount may not be recovered. For intangible assets with indefinite live, the impairment testis annually mandatory.The carrying amount of an intangibleasset comprises of its cost net of accumulated amortization and any impairment losses recognized.The useful life and the methodof amortization for intangible assets with finite lives are reviewed at least at the end of each year or when a change in the use patternof the asset is identified. Changes in estimated useful lives or expected consumption of future economic benefits embodied in the assetsare considered to modify the amortization period or method, as appropriate, and treated as changes in accounting estimates, with prospectiveeffects.The amortization of intangibleassets with definite lives is recognized in profit or loss as an expense consistent with the use of intangible assets.Gains and losses resulting fromthe disposal or derecognition of intangible assets are measured as the difference between the net disposal proceeds (if any) and theircarrying amount and are recognized in profit or loss.11.1.3. Impairment testThe Group performs the impairmenttest of the assets in the scope of IAS 36 - Impairment of assets when (i) it observes an indication that an asset may be impaired or (ii)annually, whenever the entity has non-ready-to-use assets or goodwill. Assets of the Group subject to IAS 36 are intangible assets (includinggoodwill), property and equipment and investments in associates.Assets are tested individually,whenever possible, or allocated to CGU or group of CGUs. For the purpose of goodwill impairment testing, goodwill is allocated to theCGU or group of CGUs, which are expected to benefit from the synergies of the business combination, irrespective of whether other assetsor liabilities of the acquiree are assigned to those CGU or groups of CGUs. F-57 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The impairment test consists ofa comparison between (i) the carrying amount of the asset, CGU, or group of CGUs and (ii) its recoverable amount. The recoverable amountof an asset, CGU or group of CGUs is the higher of (i) its fair value less costs of disposal and (ii) its value in use. If the carryingamount exceeds the recoverable amount an impairment loss is recognized.In determining fair value lesscosts of disposal, recent market transactions are considered. If no such transactions can be identified, an appropriate valuation modelis used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other availablefair value indicators. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risks specific to the asset.Impairment losses of continuingoperations are recognized in the statement of profit or loss as expenses consistent with the function of the impaired asset. Impairmentlosses can be reversed in future periods, except for impairment losses of goodwill.See Note 11.4 for details in themodel and key assumptions adopted in the annual goodwill impairment test.11.2. Significant judgments, estimates and assumptions11.2.1. Estimated useful livesAccounting for intangible assetsrequires to estimate the useful life of those assets for amortization purposes. Useful life determination requires estimates in relationto the expected technological advances and alternative uses of assets. There is a significant element of judgment involved in making technologicaldevelopment assumptions, since the timing and nature of future technological advances are difficult to predict.The Group evaluated the usefullife of its intangible assets and concluded that no change of estimate of useful life and residual value of these assets was necessaryfor the year ended December 31, 2024.The useful lives for the intangibleassets with definite lives are presented below:| | Estimated useful lives (years) || --- | --- || Software | 3 – 10 || Customer relationship | 2 – 34.5 || Trademarks and patents | 7 – 30.9 || Non-compete agreement | 5 |11.2.2. Value in use calculation in the impairmenttestThe value in use calculation isbased on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities thatthe Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested.The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growthrate used for extrapolation purposes. These estimates are the most relevant for the impairment test of goodwill recognized by the Group. F-58 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |11.3. Changes in Intangible assets| | December 31, 2023 | Additions | Disposals ^(a)^ | Software business goodwill impairment loss ^(b)^ | Transfers | Effects of hyperinflation | Effects of changes in foreign exchange rates | Business combination ^(c)^ | December 31, 2024 || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Cost | | | | | | | | | || Goodwill - acquisition of subsidiaries | 5,634,903 | — | (44,536) | (3,558,049) | — | — | 10 | 45,787 | 2,078,115 || Customer relationship | 1,793,696 | 4,290 | (8,054) | — | — | — | — | 5,324 | 1,795,256 || Trademarks and patents | 550,999 | 2,067 | (11,829) | — | — | — | — | — | 541,237 || Software | 1,334,698 | 165,040 | (172,031) | — | 79,483 | — | 2,070 | 10,502 | 1,419,762 || Non-compete agreement | 26,024 | — | — | — | — | — | — | — | 26,024 || Operating license | 5,674 | — | (5,674) | — | — | — | — | — | — || Software in progress | 274,608 | 326,779 | (17,230) | — | (79,143) | — | — | — | 505,014 || Right-of-use assets - Software | 50,558 | 33,394 | (1,121) | — | — | — | (2) | — | 82,829 || | 9,671,160 | 531,570 | (260,475) | (3,558,049) | 340 | — | 2,078 | 61,613 | 6,448,237 || Accumulated amortization | | | | | | | | | || Customer relationship | (343,981) | (60,333) | 990 | — | — | — | — | — | (403,324) || Trademarks and patents | (20,219) | (9,401) | 3,350 | — | — | — | — | — | (26,270) || Software | (474,163) | (190,718) | 154,787 | — | (340) | (413) | (89) | — | (510,936) || Non-compete agreement | (12,834) | (4,872) | — | — | — | — | — | — | (17,706) || Operating license | (5,673) | — | 5,673 | — | — | — | — | — | — || Right-of-use assets - Software | (19,371) | (15,658) | 3,130 | — | — | — | — | — | (31,899) || | (876,241) | (280,982) | 167,930 | — | (340) | (413) | (89) | — | (990,135) || Intangible assets net | 8,794,919 | 250,588 | (92,545) | (3,558,049) | — | (413) | 1,989 | 61,613 | 5,458,102 || (a) | Includes impairment losses of Software and Software in progress in the amount of R$ 138,337 for cost and R$ 136,433 for accumulated amortization. || --- | --- || (b) | More details in Note 11.4. || --- | --- || (c) | More details in Note 23.3. || --- | --- | F-59 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | December 31, 2022 | | | Additions | | | Disposals | | | Transfers | | | Effects of hyperinflation | | Effects of changes in foreign exchange rates | | | Business combination | | | December 31, 2023 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Cost | | | | | | | | | | | | | | | | | | | | | | | || Goodwill - acquisition of subsidiaries | | 5,647,421 | | | — | | | — | | | — | | | — | | (10,358 | ) | | (2,160 | ) | | 5,634,903 | || Customer relationship | | 1,793,405 | | | 6,285 | | | (7,934 | ) | | — | | | — | | — | | | 1,940 | | | 1,793,696 | || Trademarks and patents | | 551,000 | | | 1 | | | (2 | ) | | — | | | — | | — | | | — | | | 550,999 | || Software | | 1,162,311 | | | 220,627 | | | (62,862 | ) | | 23,160 | | | 681 | | (11,323 | ) | | 2,104 | | | 1,334,698 | || Non-compete agreement | | 26,024 | | | — | | | — | | | — | | | — | | — | | | — | | | 26,024 | || Operating license | | 5,674 | | | — | | | — | | | — | | | — | | — | | | — | | | 5,674 | || Software in progress | | 66,820 | | | 254,664 | | | (23,716 | ) | | (23,160 | ) | | — | | — | | | — | | | 274,608 | || Right-of-use assets - Software | | 88,254 | | | 34,163 | | | (71,859 | ) | | — | | | — | | — | | | — | | | 50,558 | || | | 9,340,909 | | | 515,740 | | | (166,373 | ) | | — | | | 681 | | (21,681 | ) | | 1,884 | | | 9,671,160 | || Accumulated amortization | | | | | | | | | | | | | | | | | | | | | | | || Customer relationship | | (278,032 | ) | | (70,690 | ) | | 4,741 | | | — | | | — | | — | | | — | | | (343,981 | ) || Trademarks and patents | | (10,816 | ) | | (9,404 | ) | | 1 | | | — | | | — | | — | | | — | | | (20,219 | ) || Software | | (337,935 | ) | | (184,397 | ) | | 43,581 | | | — | | | — | | 4,588 | | | — | | | (474,163 | ) || Non-compete agreement | | (7,751 | ) | | (5,083 | ) | | — | | | — | | | — | | — | | | — | | | (12,834 | ) || Operating license | | (6,108 | ) | | (16 | ) | | 451 | | | — | | | — | | — | | | — | | | (5,673 | ) || Right-of-use assets - Software | | (67,935 | ) | | (23,280 | ) | | 71,844 | | | — | | | — | | — | | | — | | | (19,371 | ) || | | (708,577 | ) | | (292,870 | ) | | 120,618 | | | — | | | — | | 4,588 | | | — | | | (876,241 | ) || Intangible assets, net | | 8,632,332 | | | 222,870 | | | (45,755 | ) | | — | | | 681 | | (17,093 | ) | | 1,884 | | | 8,794,919 | |11.4. Impairment testThe Group performs its impairmenttest annually or more frequently if it observes an indication that a potential impairment exists by testing the impairment of the CGUs(or groups of CGUs) that contain goodwill and / or indefinite useful-life intangible assets. In 2024, the Group defined three CGUs, forwhich goodwill had been allocated to two of them, as follows:| | | October 31, 2024 | | October 31, 2023 | || --- | --- | --- | --- | --- | --- || CGU | Description | Goodwill allocated | Indefinite useful-life intangible assets allocated | Goodwill allocated | Indefinite useful-life intangible assets allocated || CGU 1 – Financial services | Companies related to financial solutions are included in this CGU. The Group considers these companies as a CGU due to the integrated financial solutions provided by them. | 443,764 | 14,516 | 444,140 | 14,497 || CGU 2 – Software ^(a)^ | This CGU includes technological solutions offered to the Group's customers. | 1,630,501 | 245,171 | 5,147,296 | 248,422 || CGU 3 –TAG ^(b)^ | Due to the specific service related to financial assets registration provided by this enterprise and its independence of the other Group’s CGUs, the Group considers TAG as a separate CGU. | — | — | — | — || (a) | After recognition of impairment loss. || --- | --- || (b) | As of December 31, 2023 UGC TAG, was presented together with UGC Pinpag, which was divested on 2024. || --- | --- | F-60 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |As from 2023, the Group changedthe date of the mandatory annual impairment test for goodwill and indefinite useful-life intangible assets to October 31 in order to betteralign the date with the timing of its financial budgeting and forecasting cycle. The recoverable amount of the Group’s CGUs as ofOctober 31, 2024 and as of October 31, 2023 has been determined based on a value in use calculation using cash flow projections from financialbudgets approved by Board of Officers, covering a period of five years in 2024 and 2023.The key assumptions consideredin value in use calculation for all of the Group’s CGUs are as follows:| • | Free cash flow to equity for the five years forecasted period. || --- | --- || • | Average annual growth rate of the free cash flows over the five-year forecast period, based on past performance and management’s expectations of market development and on current industry trends and including long-term inflation forecasts. || --- | --- || • | Considered a pre-tax discount rate applied to discount future cash flows of between 11.12% and 11.83% (2023 – between 11.73% and 13.75%), based on long-term interest rate, country risk premium, industry adjusted beta and other variables. || --- | --- || • | Considered a perpetuity growth rate of 5.00% (2023 – 6.00%), based on long-term local inflation and real growth. || --- | --- |As a result of the Group’sannual impairment test as of October 31, 2024, an impairment loss of R$ 3,558,049 was recognized for CGU 2 – Software, since theestimated recoverable amount of this cash generating unit was lower than the net book value. As of October 31, 2023, there were no indicatorsof impairment of finite-life intangible assets.The impairment was charged to goodwillof CGU 2 – Software against profit and loss (Software business goodwill impairment loss). The recoverable amount of CGU 2 on October31, 2024 was estimated at R$ 4,402,426. After 3 years of the acquisition of Linx, the main asset of CGU 2, and as part of a strategicreview performed during the fourth quarter of 2024, the Group revisited the strategy for the Software segment, as well as the achievablepotential synergies of that segment with the Financial Services segment. As result of the strategic review, the Group reduced the estimatesof both expected revenue growth and of synergies of CGU 2 which resulted in an impairment loss.For CGU 1 and CGU 3, managementdid not identify an impairment. The Group carried out a sensitivity analysis of the impairment test considering four independent scenariosof key assumptions deterioration, as follows: (i) a decrease of 1,000 basis points in the average annual growth of the free cash flowover the five-year forecasted period; (ii) an increase of 100 basis points in the pre-tax discount rate; and (iii) a decrease of 50 basispoints in the perpetuity rate applied after the last year of projected free cash flow. The sensitivity analysis did not indicate an impairmentloss on the CGUs 1 and 3 carrying amounts.| 12. | Taxes payable || --- | --- || | December 31, 2024 | December 31, 2023 || --- | --- | --- || Income tax (IRPJ and CSLL) ^(a)^ | 385,819 | 366,366 || Contributions over revenue (PIS and COFINS) ^(b)^ | 95,026 | 76,719 || Withholding income tax | 45,896 | 43,238 || Taxes on services (ISS) ^(b)^ | 14,802 | 13,367 || Withholding taxes from services taken ^(c)^ | 5,230 | 5,392 || Social security levied on gross revenue (INSS) | 3,927 | 1,239 || Other taxes and contributions | 9,550 | 7,978 || | 560,250 | 514,299 | F-61 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (a) | Some income from investment funds is only taxed when redemption occurs. Accordingly, on December 31, 2024, the amount of R$ R$ 365,629 (R$ 356,599 on December 31, 2023) was recorded as income tax on an accrual basis. The expense for current income tax is recognized in the statement of profit or loss under "Income tax and social contribution" against taxes payable. An advance payment of income tax when due is recognized during the tax year as Recoverable taxes (Note 8). || --- | --- || (b) | PIS/COFINS and ISS are measured based on the revenues of the Brazilian entities of the Group and are recognized as a deduction to gross revenue. || --- | --- || (c) | Amount relative to PIS, COFINS, IRPJ and CSLL, withheld from suppliers and paid by the Group on their behalf. These amounts are recognized as a tax liability, with no impact to the statement of profit or loss. || --- | --- || 13. | Transactions with related parties || --- | --- |Related parties comprise the Group’sparent companies, key management personnel and any businesses which are controlled, directly or indirectly by the founders, officers anddirectors or over which they exercise significant management influence. Related party transactions are entered in the normal course ofbusiness at prices and terms approved by the Group’s management.The following transactions werecarried out with related parties:| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Sales of services | | | || Associates (legal and administrative services) ^(a)^ | 11 | 153 | 86 || Entity controlled by management personnel ^(b)^ | — | 6 | 3 || | 11 | 159 | 89 || Purchases of goods and services | | | || Associates (transaction services) ^(b)^ | (2,642) | (3,207) | (1,800) || | (2,642) | (3,207) | (1,800) || (a) | Related to services provided to Trinks, APP, and Tablet Cloud in 2023 and 2024, as well as Banco Inter S.A. (“Banco Inter”), Zurich Brasil Companhia de Seguros (“Zurich”), and Genova Corretora de Seguros ltda. (“Genova”) in 2023. || --- | --- || (b) | Related mainly to expenses paid to Trinks, RH Software, APP, Agilize, Tablet Cloud, and Neomode in 2023 and 2024, as well as Banco Inter in 2023 for consulting services, marketing expenses, sales commissions, and software licenses for new customer acquisition. || --- | --- |Services provided to related partiesinclude legal and administrative services provided under normal trade terms and reimbursement of other expenses incurred in their respect.As of December 31, 2024, some officersand directors had subscribed to the Group’s banking solutions. The total amount recognized in Retail deposits is R$ 108 (2023 –R$ 253).13.1. Year-end balancesThe following balances are outstandingat the end of the reporting period in relation to transactions with related parties:| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Loans to associate | 613 | 2,512 || Receivables from related parties | 613 | 2,512 |As of December 31, 2024, thereis no allowance for expected credit losses on related parties receivables. No guarantees were provided or received in relation to anyaccounts receivable or payable involving related parties. F-62 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |13.2. Key management personnel compensationManagement includes executive officersand members of Board of Directors of the Group and compensation consists of fixed compensation, profit sharing and benefits plus any correspondingsocial or labor charges and or provisions for such charges. Compensation expenses are recognized in profit or loss of the Group. For theyears ended December 31, 2024, 2023 and 2022, compensation expense was as follows:| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Short-term benefits | 70,790 | 64,904 | 45,169 || Share-based payments (Note 20.4) | 66,523 | 86,215 | 64,038 || | 137,313 | 151,119 | 109,207 || 14. | Provision for contingencies || --- | --- |14.1. Accounting policySome entities of the Group areparty to labor, civil and tax litigation in progress, which are being addressed at the administrative and judicial levels.Provisions for legal claims (labor,civil and tax) are recognized when (i) there is a present obligation (legal or constructive) as a result of a past event; (ii) it is probablethat an outflow of resources will be required to settle such obligation; and (iii) a reliable estimate can be made of the amount of theobligation.If there are a number of similarobligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as awhole, even if the likelihood of an outflow for a specific claim included in the same class of obligations may be small. A provisionis recognized even if the likelihood of an outflow with respect to any item included in the same class of obligations may be small.Provisions are measured by thebest estimate of the expenditure required to settle the present obligation at the end of the reporting period. Provisions are recognizedat the present value using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific tothe obligation whenever the effect of the time value of money is material. The increase in the provision due to the passage of time isrecognized as Financial expenses, net.Where the Group expects some orall of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, butonly when the reimbursement is virtually certain.The expense relating to a provisionis presented in the statement of profit or loss net of any reimbursement, if applicable.14.2. Significant judgments, estimates and assumptionsPossible losses are based on theactual historical costs in the respective judicial courts for similar cases. In general, upon final determination, actual losses are afraction of the total amounts claimed.For probable losses, individuallynon-significant lawsuits of a similar nature such as a portfolio, are measured, grouped and provided to cover the losses based on themost recent 12-month average loss for these types of lawsuits. For individually significant losses or those of a non-repetitive nature,the Group continues to assess the probability and the amount of the losses considered probable on a case-by-case basis. F-63 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |14.3. Probable losses, provided for in the statementof financial positionThe Group’s companies areparty to labor, civil and tax litigation in progress, which are being addressed at the administrative and judicial levels, as well recognizerisks of their activities that may require the recording of provisions. The amount, nature and the changes of the liabilities during 2024and 2023 are summarized as follows:| | Civil | Labor | Tax | Total || --- | --- | --- | --- | --- || Balance as of December 31, 2022 | 25,324 | 24,460 | 160,592 | 210,376 || Additions | 46,723 | 38,533 | 23,607 | 108,863 || Reversals | (22,598) | (24,624) | (55,816) | (103,038) || Interest | 3,846 | 3,218 | 19,613 | 26,677 || Payments | (17,433) | (1,882) | (14,697) | (34,012) || Balance as of December 31, 2023 | 35,862 | 39,705 | 133,299 | 208,866 || Additions | 58,954 | 72,982 | 2 | 131,938 || Reversals | (23,939) | (31,106) | (15,667) | (70,712) || Interest | 4,770 | 7,656 | 13,827 | 26,253 || Payments | (31,185) | (17,745) | (10,009) | (58,939) || Balance as of December 31, 2024 | 44,462 | 71,492 | 121,452 | 237,406 |14.3.1. Civil lawsuitsIn general, provisions and contingenciesarise from claims related to lawsuits of a similar nature, with individual amounts that are not considered individually significant.The nature of the civil litigations is categorized according to the primary business of the Group. Substantial provisions are summarizedin two business domains, namely (i) acquiring, totaling R$ 24,486 as of December 31, 2024 (2023 - R$ 18,556) and (ii) banking, totalingR$ 16,027 as of December 31, 2024 (2023 - R$ 12,559).14.3.2. Labor claimsIn the context of Labor Courts,the Group encounters recurrent lawsuits, primarily falling in two categories: (i) labor claims by former employees and (ii) labor claimsbrought forth by former employees of outsourced companies contracted by the Group. These claims commonly center around issues such asthe claimant’s placement in a different trade union and payment of overtime. The initial value of these lawsuits is asserted bythe former employees at the commencement of the legal proceeding and the provision recognized represents the best estimate of the expenditurerequired to settle the obligation.14.4. Possible losses, not provided for in thestatement of financial positionThe Group has the following civil,labor and tax litigation involving risks of loss assessed by management as possible, based on the advice of the legal counsel, for whichno provision was recognized:| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Civil | 64,104 | 50,762 || Labor | 2,227 | 2,179 || Tax | 95,882 | 181,163 || Total | 162,213 | 234,104 | F-64 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |14.4.1. Civil lawsuitsThe Group is a party to severallegal actions whose subjects are connected to its ordinary operations. In this regard, civil lawsuits have been categorized accordingto the Group’s primary business fronts, mainly: (i) acquiring, amounting to R$ 22,099 as of December 31, 2024 (2023 - R$ 19,945);and (ii) software, amounting to R$ 29,076 as of December 31, 2024 (2023 - R$ 28,412). For the software product line, there is significantindemnity lawsuit filed by an indirect supplier, for the utilization of a specific software provided by the partner, amounting to R$ 26,835as of December 31, 2024 (2023 - R$ 25,596).The Group is also involved in asecurities class action related to its credit product. However, due to the early stages of litigation and the lack of economic expertanalysis or the benefit of discovery, we do not believe potential damages can be reasonably quantified or estimated.14.4.2. LaborclaimsThe Group frequently receiveslawsuits through the labor courts, primarily for two categories: (i) labor claims by former employees and (ii) labor claims by formeremployees of outsourced companies contracted by the Group (as a secondary obligor). These claims typically revolve around matters suchas the claimant’s placement in a different trade union and payment of overtime. An initial value of these lawsuits is claimed bythe former employees at the beginning of the proceeding. The actual amounts of possible contingencies when disbursed correspond to afraction of the amount initially requested by the claimants – this lower fraction is calculated based on the Group’s trackrecord of losses, considering similar cases. As the lawsuits progress, the reported risk amount may change, particularly following newcourt decisions.14.4.3. Tax litigationsThe nature of the tax litigationsis summarized as follows:An action for annulment of taxdebts regarding the tax assessment issued by the State tax authorities alleging that the Group would have leased equipment and data centerspaces from January 2014 to December 2015, on the grounds that the operations are analogous to telecommunications services and thereforewould be subject to State tax at the rate of 25% plus a fine equivalent to 50% of the updated tax amount for failure to issue ancillarytax obligations. As of December 31, 2024, the updated amount recorded as a probable loss is R$ 30,962 (2023 - R$ 27,937), and the amountof R$ 30,658 (2023 - R$ 29,727) is considered as a possible loss (contingency arising from the acquisition of Linx).During 2023 and 2024, the Groupreceived tax assessments issued by a municipal tax authority relating to the allegedly insufficient payment of tax on services rendered.Considering a win and the consequent reduction of the amounts being claimed, as of December 31, 2024, the updated amount of the claimsis R$ 41,579 (2023 - R$ 129,141).14.5. Judicial depositsFor certain contingencies, theGroup has made judicial escrow deposits, which are legal reserves required by the Brazilian courts as security for any damages or settlementsthe Group may be required to pay as a result of litigation.The amount of the judicial depositsas of December 31, 2024 is R$ 13,317 (2023 - R$ 22,507), which are included in Other assets in the non-current assets. F-65 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 15. | Equity || --- | --- |15.1. Authorized capitalOn December 31, 2024 and 2023,the Company’s issued capital totaled R$ 76. The Company has an authorized share capital of US Dollar 50 thousand, correspondingto 630,000,000 authorized shares with a par value of US Dollar 0.000079365 each. The Company is authorized to increase capital up to thislimit, subject to approval of the Board of Directors. The liability of each member is limited to the amount from time to time unpaid onsuch member’s shares.15.2. Subscribed and paid-in capital and capitalreserveThe Articles of Association providethat at any time when there are Class A common shares issued, Class B common shares may only be issued pursuant to: (a) a share split,subdivision or similar transaction or as contemplated in the Articles of Association; or (b) a business combination involving the issuanceof Class B common shares as full or partial consideration. A business combination, as defined in the Articles of Association, would include,amongst other things, a statutory amalgamation, merger, consolidation, arrangement or other reorganization.The additional paid-in capitalrefers to the difference between the purchase price that the shareholders pay for the shares and their par value. Under Cayman IslandsLaw, the balance in this account may be applied by the Company to pay distributions or dividends to members, pay up unissued shares tobe issued as fully paid, for redemptions and repurchases of own shares, for writing off preliminary expenses, recognized expenses, commissionsor for other reasons. All distributions are subject to the Cayman Islands Solvency Test which addresses the Company’s ability topay debts as they fall due in the natural course of business.The changes in the number of sharesduring 2024 and 2023 are summarized below:| | Number of shares | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- || | Class A | | Class B | | | Total | || At December 31, 2022 | | 294,124,829 | | 18,748,770 | | | 312,873,599 || Vested awards ^(a)^ | | 1,373,921 | | — | | | 1,373,921 || At December 31, 2023 | | 295,498,750 | | 18,748,770 | | | 314,247,520 || Conversions | | 1,823,680 | | (1,823,680 | ) | | — || At December 31, 2024 | | 297,322,430 | | 16,925,090 | | | 314,247,520 || (a) | In 2023, the Company delivered 1,373,921.00 shares, due to vesting of RSUs. || --- | --- |15.3. Treasury sharesOwn equity instruments that arereacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase,sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration,if reissued, is recognized in equity.During the years presented, theBoard of Directors approved programs to repurchase outstanding Class A common shares as detailed in the table below: F-66 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || Date of programs approved by the Board of Directors | Maximum amount of repurchase approved | Amounts actually repurchased under the program | Status of programs as of December 31, 2024 || --- | --- | --- | --- || September-23 | 300,000 | 292,745 | Program completed || November-23 | 1,000,000 | 981,345 | Program completed || November-24 | 2,000,000 | 608,339 | Program in progress |The main transactions involvingtreasury shares during the calendar year ended on December 31, 2023 were: (i) sale of 16,641 Class A common shares to Pagar.me, whichwere used for payment of contingent consideration related to acquisition of Trampolin Pagamentos S.A., which originally occurred in August2021; (ii) delivery of 824 shares in the context of the transaction completed with Vitta Group in May 2020; (iii) delivery of 132,607shares to Linx founders shareholders, in accordance with the non-compete agreement signed; (iv) delivery of 375,531 shares due to vestingof RSUs awards (Note 20.4.1); (v) transfer of 130,488 treasury shares due to the anti-dilutive mechanism of the IPO pool signed withthe founders of the Company; and (vi) repurchase of 5,733,740 Class A shares for the amount of R$ 292,745.During the year ended December31, 2024, the changes in treasury shares correspond to (i) repurchase of 24,090,491 Class A shares in the amount of R$ 1,587,332; (ii)delivery of 1,017,725 shares due to the vesting of RSUs awards; (iii) delivery of 132,606 shares to Linx founding shareholders, by thenon-compete agreement signed; (iv) delivery of 16,639 shares to the founders of Trampolin Pagamentos S.A. (incorporated by Pagar.me) asa form of payment.As of December 31, 2024 the Companyholds 28,234,941 Class A common shares in treasury (December 31, 2023 - 5,311,421).15.4. Incentive sharesIn 2017, certain key employeeshave been granted incentive shares, or the Co-Investment Shares, which entitle participants to receive a cash bonus which they, at theiroption, may use to purchase a specified number of shares.Incentive Shares are subject toa 10-year lock-up period; after that the shares are free and clear for transfer. If a participant ceases employment for any reason beforethe end of the 10-year lock-up period, the Company has the right (but not the obligation) to acquire the shares for the price originallypaid by the participant less an applicable discount.The incentives shares granted wereclassified and recognized as equity settled transaction. During 2024 and 2023, there were no repurchases of Class A common shares. Theparticipants of the plan were granted 5,321,769 Incentive Shares. In December 31, 2024, there were still 162,152 shares subjectedto the lock-up period (2023 - 325,407).15.5. Other comprehensive incomeOther comprehensive income representsthe profit or loss not reported in the statement of profit and loss being separately presented in the financial statements. This includesGroup transactions and operations that are not considered realized gains or losses. The table presents the accumulated balance of eachcategory of OCI as of December 31, 2024 and 2023: F-67 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | December 31, 2024 | December 31, 2023 || --- | --- | --- || Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods (net of tax): | | || Exchange differences on translation of foreign operations | (38,910) | (41,266) || Accounts receivable from card issuers at fair value | (425,753) | (348,529) || Unrealized loss on cash flow hedge | (125,532) | (197,188) || Other comprehensive income (loss) that will not be reclassified to profit or loss in subsequent periods (net of tax): | | || Fair value of equity instruments designated at fair value | 291,623 | 254,353 || Effects of hyperinflationary accounting | 11,524 | 12,181 || Total | (287,048) | (320,449) || 16. | Earnings (loss) per share || --- | --- |16.1. Accounting policyBasic earnings (loss) per shareis calculated by dividing net income (loss) for the year attributed to the controlling shareholders by the weighted average number ofcommon shares outstanding during the year.Diluted earnings (loss) per shareconsiders the number of shares outstanding for the purposes of Basic earnings (loss) plus (when dilutive) the number of potentially issuableshares computed following the treasury stock method, as required by IAS 33 - Earnings per share. All numbers of shares for the purposeof earnings per share are the weighted average during each period presented.For share-based transactions, acalculation is done to determine the number of shares issuable, based on the number of shares granted adjusted by the difference between(i) the weighted average quoted market price during the period, and (ii) the proceeds to be obtained (if any) upon issuance of the shares.As per IAS 33, proceeds for share-based compensation instruments must include, as deemed proceeds, the amount to be recognized as compensationexpense in profit and loss in future periods for such instruments.16.2. Numerator of earnings (loss) per shareIn determining the numerator ofbasic EPS, earnings attributable to the Group is allocated as follows:| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Net income (loss) attributable to controlling shareholders | (1,515,222) | 1,592,065 | (519,417) || Numerator of basic EPS | (1,515,222) | 1,592,065 | (519,417) |In determining the numerator ofdiluted EPS, earnings attributable to the Group is allocated as follows:| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Numerator of basic EPS | (1,515,222) | 1,592,065 | (519,417) || Adjustments for expenses (revenues) related to potential common shares included in the net income attributable to controlling shareholders ^(a)^ | — | (79,062) | — || Numerator of diluted EPS | (1,515,222) | 1,513,003 | (519,417) | F-68 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || (a) | Diluted earnings per share are calculated by adjusting the numerator of basic EPS, considering adjustments of potentially convertible instruments related to contingent consideration of acquisitions. However, due to the loss for the year ended December 31, 2022, these instruments have a non-diluting effect, therefore, they were not considered in the total numerator of diluted loss per share. As of December 31, 2024 the Company has no convertible instruments related to contingent consideration. || --- | --- |16.3. Basic and Diluted earnings (loss) pershareThe following table contains theearnings (loss) per share of the Group for the years ended December 31, 2024, 2023 and 2022 (in thousands except share and per shareamounts):| | | | 2023 | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- || Numerator of basic EPS | (1,515,222 | ) | | 1,592,065 | | (519,417 | ) || Weighted average number of outstanding shares | 301,514,333 | | | 312,574,647 | | 308,905,398 | || Weighted average number of contingently issuable shares with conditions satisfied | 180,846 | | | 12,941 | | — | || Denominator of basic EPS | 301,695,179 | | | 312,587,588 | | 311,880,008 | || Basic earnings (loss) per share - R | (5.02 | ) | | 5.09 | | (1.67 | ) || Numerator of diluted EPS | (1,515,222 | ) | | 1,513,003 | | (519,417 | ) || Denominator of basic EPS | 301,695,179 | | | 312,587,588 | | 311,880,008 | || Share-based instruments (a) (Note 16.3.1) | — | | | 6,679,569 | | — | || Denominator of diluted EPS | 301,695,179 | | | 319,267,157 | | 311,880,008 | || Diluted earnings (loss) per share - R | (5.02 | ) | | 4.74 | | (1.67 | ) |All values are in US Dollars.| (a) | Including share-based compensation, contingent consideration and non-compete agreement with founders of Linx. Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding, considering potentially convertible instruments. However, due to the loss for the years ended December 31, 2022 and 2024, these instruments issued have a non-diluting effect, therefore, they were not considered in the total number of outstanding shares to determine the diluted loss per share. || --- | --- |16.3.1. Detail of potentially issuable commonshares for purposes of Diluted EPSFor the year ended December 31,2023, the potentially issuable common shares consider the difference between the issuable shares under share-based instruments and thenumber of shares that potentially be purchased at the weighted average market price of the shares during the period with the amount offuture compensation expense of those share-based instruments, as presented as follows:| | 2023 || --- | --- || Shares issuable under share-based payment plans for which performance conditions have already been met | 13,578,978 || Total weighted average shares that could have been purchased: compensation expense to be recognized in future periods divided by the weighted average market price of Company’s shares | (8,944,168) || Other total weighted average shares potentially issuable for no additional consideration | 2,044,759 || Share-based instruments | 6,679,569 | F-69 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 17. | Revenue and income || --- | --- |17.1. Accounting policy17.1.1. Revenue from contracts with clientsRevenue is recognized when theGroup has transferred control of the services to the clients, in an amount that reflects the consideration the Group expects to collectin exchange for those services. The Group applies the following five steps:| • | Identification of the contract with a client; || --- | --- || • | Identification of the performance obligations in the contract; || --- | --- || • | Determination of the transaction price; || --- | --- || • | Allocation of the transaction price to the performance obligations in the contract; and || --- | --- || • | Recognition of revenue when or as the entity satisfies a performance obligation. || --- | --- |Revenue is recognized net of taxescollected from clients, which are subsequently remitted to governmental authorities.The revenue from contracts withclients of the Group is presented as follows.17.1.1.1. Transaction activities and other servicesFor financial solution, the Group’score performance obligations are to provide electronic payment processing services including the capture, transmission, processing andsettlement of transactions carried out using credit, debit and voucher cards, as well as fees for other services. The Group’s promiseto its clients is to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the clients’use (e.g., number of payment transactions processed). Therefore, the total consideration received for services provided to the clientis variable despite the price for each transaction being specified by contract. The Group recognizes the transaction fee at a point intime considering the contractual right to bill its clients for each processed transaction.Revenue from transaction activitiesis recognized net of interchange fees retained by card issuers and assessment fees paid to payment scheme networks. The Group does notbear the significant risks and rewards, being an agent in those services as follows:| • | The Group facilitates the acquisition of payment information and management of the client relationship, it is not primarily responsible for the authorization, processing and settlement services performed by payment schemes networks and card issuers; || --- | --- || • | The Group has no latitude to establish the assessment and interchange fees applied to card issuers and payment scheme networks. The Group generally has the right to increase its merchant discount rate to protect its net commission when interchange and assessment fees are increased by payment schemes networks; || --- | --- || • | The Group does not collect the interchange fee that is retained by the card issuer and effectively acts as a clearing house in collecting and remitting assessment fees and payment settlements on behalf of payment scheme networks and clients; and || --- | --- || • | The Group does not bear the credit risk of the cardholder (i.e., the client’s customer). It does bear credit risk from the card issuer for the payment settlement and assessment fees. Card issuers are qualified by the payment scheme networks. Receivables can be considered to be collateralized by the cardholder’s invoice settlement proceeds. As such, the Group’s exposure to credit risk is generally low. || --- | --- |Other services mainly comprises: F-70 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || • | Membership fee from customers is one-time charge for specific products for which there is not a recurring fee for the use of Pin Pads & POS. Revenue up to December 31, 2023 was recognized at agreement inception when all risks and benefits of the transaction are transferred to the customer and the Group obtains the contractual rights related to fee. From January 1, 2024 onwards, the Group recognizes revenues from membership fees deferred through the expected lifetime of the client. The new criteria has been adopted and the Group has applied prospectively because the effect of the change from the old criteria was not material to the consolidated financial statements both for the current and past periods. For further details see Note 17.3. || --- | --- || • | Fees charged to customers for services related to banking money-in volumes (transfers received under TED, Pix and “boleto” products and interchange as fees from transactions on other networks using credit and debit card issued by the Group), and money-out volumes (transfers made under products as Pix Out, wire transfers, bill payments, boletos paid, withdrawals, recharge and other transactions). The revenue is recognized at each transactions date. || --- | --- |17.1.1.2. Subscription services and equipment rentalFor software solutions and equipmentrental the Group’s core performance obligations are to provide: (a) recurring subscription services, such as reconciliation, businessautomatization solutions, services to provide the client with the right of use of software in a cloud-based, where the client has no rightto end the contract and become the owner of the software, and revenues related to technological support, help desk, equipment rental andsoftware hosting services; (b) non-recurring services, such as implementation services, personalization, training, and other services;and (c) operating leases of electronic capture equipment to clients.The Group has concluded that itis the principal for purposes of its revenue arrangements, because it controls the services before transferring them to the client.The Group’s subscriptionservices generally consist of services sold as part of a new or existing agreement or sold as a separate service. The Group’s subscriptionservices may or may not be considered distinct based on the nature of the services being provided. Subscription service fees are chargedas a fixed monthly fee, and the related revenue is recognized over time, either as the subscription services are performed or as the servicesfrom a combined performance obligation are transferred to the client (over the term of the related transaction and processing agreement).The Group accounts for equipmentrental as a separate performance obligation and recognizes the revenue at its standalone selling price, considering that rental is chargedas a fixed monthly fee. Revenue is recognized on a straight-line basis over the contractual lease term, beginning when the client obtainscontrol of the equipment lease. The Group does not manufacture equipment, but purchases equipment from third-party vendors.17.1.1.3. Contracts with multiple performance obligationsThe Group’s contracts withits clients can consist of multiple performance obligations and the Group accounts for individual performance obligations separately ifthey are distinct (e.g., setup services and subscription fees in the same contract). When equipment or services are bundled in an agreementwith a client, the components are separated using the relative stand-alone selling price of the components which is based on the Group’scustomary pricing for each element in separate transactions. F-71 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |17.1.1.4. Costs to obtain and fulfill a contractThe Group incurs certain coststo obtain and fulfill a contract that are capitalized at the inception of the transaction for new customer contracts, for recurring customersthese costs are not capitalized. The cost comprises mainly commissions to sellers in order to obtain a contract and logistic costs tofulfill a contract. The asset recognized is amortized on a straight-line basis over the expected life of merchants. As of December 31,2024, the Group had a carrying amount of R$ 227,799 (2023 – R$ 190,239) recognized under Other assets and R$ 95,627 (2023 –R$ 110,035 and 2022 – R$ 97,982) as amortization recognized in the statement of profit or loss.17.1.2. Financial incomeComprised mainly of:| • | discount fees charged for the prepayment to clients of their installment receivables. The discount is measured by the difference between the original amount payable to the client, net of commissions and fees charged, and the prepaid amount. Revenue is recognized in full when the amount is prepaid to the client; || --- | --- || • | interest income over floating account balances; and || --- | --- || • | interest income on loans. || --- | --- |A loan is considered in defaultif there is any indication that it will not be fully honored even if the loan is not in arrears.Loans classified as Stage 1 or2 have interest income recognized by applying the EIR to the gross carrying amount of the asset. Once loans are classified as Stage 3,differently from Stage 1 or 2, interest income is recognized by applying the EIR to the amortized cost balance (net of the correspondingallowance for expected credit losses) rather than to the gross carrying amount. If a loan impaired is subsequently cured, it is transferredfrom Stage 3, back to Stage 2 or Stage 1, or to stage 1, previously unrecognized interest is recognized in profit or loss.17.1.3. Other financial incomeComprises interest income and fairvalue gains (losses) of cash and cash equivalents and short-term investments.17.1.4. Deferred revenueThe Group records deferred revenuerelated to hours contracted by clients for rendering of services. Revenue is recognized after provision of service. If billed amountsexceed services rendered plus recognized revenue, the difference is recorded in the statement of financial position as deferred revenueand presented in the statement of financial position as deferred revenue under “Other liabilities.”The Group records deferred revenuefor services paid by the clients but which have not yet been completed under the contract which are recognized in the statement of financialposition as deferred revenue under “Other liabilities”.The amount recognized as deferredrevenue in the statement of financial position is recycled to the statement of profit or loss once the promised services are executed.17.1.5. Sales taxesRevenues, expenses and assets arerecognized net of sales tax, except;| • | When the sales taxes incurred on the purchase of goods or services are not recoverable from tax authorities, they are recognized as part of the cost of acquiring the asset or expense item, as applicable; || --- | --- || • | When the amounts receivable or payable are stated with the amount of sales taxes included. || --- | --- | F-72 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |The net amount of sales taxes,recoverable or payable to the tax authority, is included as part of receivables or payables in the statement of financial position, andnet of corresponding revenue or cost / expense, in the statement of profit or loss.Sales revenues in Brazil are subjectto taxes and contributions, at the following statutory rates:| | Rate | | || --- | --- | --- | --- || | Transaction activities and other services | Subscription services and equipment rental | Financial income || Contribution on gross revenue for social integration program (“PIS”) ^(a)^ | 0.65% - 1.65% | 0.65% - 1.65% | 0.65% || Contribution on gross revenue for social security financing (“COFINS”) ^(a)^ | 3.00% - 7.60% | 3.00% - 7.60% | 4.00% || Taxes on service (“ISS”) ^(b)^ | 2.00% - 5.00% | 2.00% - 5.00% | — || Social security levied on gross revenue (“INSS”) ^(c)^ | 4.50% | — | — || (a) | PIS and COFINS are contributions levied by the Brazilian Federal government on gross revenues. These amounts are invoiced to and collected from the Group’s customers and recognized as deductions to gross revenue (Note 17.3) against tax liabilities. PIS and COFINS paid on certain purchases may be claimed back as tax credits to offset PIS and COFINS payable. These amounts are recognized as Recoverable taxes (Note 8) and are offset on a monthly basis against Taxes payable (Note 12) and presented net, as the amounts are due to the same tax authority. || --- | --- || (b) | ISS is a tax levied by municipalities on revenues from the provision of services. ISS tax is added to amounts invoiced to the Group’s customers for the services the Group renders. These are recognized as deductions to gross revenue (Note 17.3) against tax liabilities. The ISS stated in the table is applicable to the city of São Paulo and refers to the rate most commonly levied on the Group’s operations. || --- | --- || (c) | INSS is a social security charge usually levied on employees' wages. Companies in some economic sectors can calculate INSS based on their revenues. The subsidiaries Linx Sistemas, Equals, Hiper, Buy4, Vitta Tecnologia em Saúde S.A. and Questor have this option to pay INSS at a rate of 4.50% on gross revenue when this is a more favorable basis compared to social security tax on payroll regime. || --- | --- |17.2. Significant judgments, estimates and assumptions17.2.1. Expected life of merchantsThe Group estimates the expectedlife of two different classes of merchants in order to recognize equipment rental revenue on a straight-line basis and as a fixed monthlyfee, as well as recognize the amortization of the costs of obtaining and fulfilling contracts with these merchants.The estimate is revised annually,and is related to the average time expected for the merchants to process transactions with the Group, over the customers' life cycles.17.3. Timing of revenue recognitionNet revenue from transaction activitiesand other services and discount fees charged for the prepayment of accounts payable to client are recognized at a point in time, exceptfor membership fees which are recognized over time as mentioned in Note 17.1.1.1. All other revenue and income are recognized over time.The Group has recognized revenueto those membership fees in the amount of R$124,811 as of December 31, 2024 (2023 - R$ 315,919). As of December 31, 2024 theGroup billed R$ 286,266 in membership fees (2023 - R$ 315,919).Net revenue from transaction activitiesand other services includes membership fee mentioned above and R$ 54,106 of registry business fee in December 31, 2024 (2023 - R$ 113,897and 2022 - R$ 164,280) F-73 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || 18. | Expenses by nature || --- | --- || | 2024 | | 2023 | | 2022 | || --- | --- | --- | --- | --- | --- | --- || Software business goodwill impairment loss (Note 11.4) | | 3,558,049 | | — | | — || Personnel expenses (Note 20.3) | | 2,972,591 | | 2,731,089 | | 2,508,567 || Transaction and client services costs ^(a)^ | | 1,483,115 | | 1,279,366 | | 1,069,082 || Marketing expenses and sales commissions ^(b)^ | | 993,014 | | 772,910 | | 632,137 || Depreciation and amortization (Note 10.4) | | 949,394 | | 878,181 | | 800,326 || Third party services | | 289,330 | | 261,281 | | 332,081 || Other | | 336,383 | | 188,288 | | 262,658 || Total | | 10,581,876 | | 6,111,115 | | 5,604,851 || (a) | Transaction and client services costs include card transaction capturing services, card transaction and settlement processing services, logistics costs, payment scheme fees, cloud services and other costs. || --- | --- || (b) | Refers to marketing and advertising expenses as well as commissions paid to sales related partnerships. || --- | --- || 19. | Financial expenses, net || --- | --- || | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Finance cost of sale of receivables (Note 22.2.5) | | 2,544,359 | | | 3,195,130 | | | 2,463,298 | || Interest on bonds | | 263,691 | | | 402,231 | | | 385,681 | || Other interest on borrowings and financing (Note 6.8.3) | | 792,702 | | | 293,210 | | | 548,009 | || Foreign exchange gains | | (19,811 | ) | | (13,580 | ) | | (3,958 | ) || Other | | 112,665 | | | 122,474 | | | 121,709 | || Total | | 3,693,606 | | | 3,999,465 | | | 3,514,739 | || 20. | Employee benefits || --- | --- |The Group offers a combinationof fixed and variable compensation, each part of the mix defined based on the nature, scope and seniority of the different job positions,aligned to market practices.Fixed compensation is payable incash while variable compensation is paid in cash and/or by granting share-based instruments (as described below). Whereas the variablecompensation for sales and operations teams is paid monthly or quarterly in cash, other teams are paid on an annual basis, which consistsof a combination of cash payments (“cash bonus”) and share-based instruments with a four-year vesting schedule (“equitybonus”). The Group may also grant incentives as part of a hiring package to attract specific talent to the senior management team.The Group has occasionally grantedshare-based instruments on an individual or collective basis to reward extraordinary performance (Special Recognition Equity Awards).Such special recognition equity awards are not part of the goals-based variable compensation but rather are granted unilaterally by theGroup and have a vesting schedule and /or performance conditions defined on an ad-hoc basis.The annual “equity bonus”,hiring bonus and special recognition equity awards are part of the Long-Term Incentive Plan (¨LTIP¨) that enables the grant ofshare-based instruments to employees and other service providers with respect to the Class A common shares. F-74 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |20.1. Accounting policy20.1.1. Short-term obligationsLiabilities in connection withshort-term employee benefits are measured on a non-discounted basis and are expensed as the related service is provided.The liability is recognized forthe expected amount to be paid under the plans of cash bonus or short-term profit sharing if the Group has a legal or constructive obligationof paying this amount due to past service provided by employees and the obligation may be reliably estimated.20.1.2. Share-based paymentThe Group has equity settled share-basedpayment instruments, under which management grants shares to employees and non-employees depending on the strategy described above.The cost of equity-settled transactionswith employees is measured using their fair value at the date they are granted. The cost is expensed together with a corresponding increasein equity over the service period when the performance conditions are fulfilled (the vesting period). The cumulative expense recognizedfor equity-settled transactions at each reporting date up to the vesting date reflects the extent to which the vesting period has elapsedand the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statementof profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.Service and non-market performanceconditions are not taken into account when determining the grant date fair value of the instruments, but the likelihood of the conditionsbeing met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Marketperformance conditions are reflected within the grant date fair value. Any other conditions attached to an instrument, but without anassociated service requirement, are considered to be non-vesting conditions.The dilutive effect of outstandingshare-based instruments is reflected as additional share dilution in the computation of diluted earnings per share (Note 16).20.1.3. Profit-sharing and bonus plansThe Group recognizes a liabilityand an expense for bonuses and profit-sharing. Bonus and profit-sharing payable in cash for each individual is determined based on thefollowing factors: corporate goals, department goals and individual performance assessment. The Group recognizes a provision where contractuallyobliged or where there is a past practice that has created a constructive obligation.20.2. Significant judgments, estimates and assumptions20.2.1. Share-based paymentEstimating fair value for share-basedinstruments requires determination of the most appropriate valuation model and underlying assumptions, which depends on the terms andconditions of the grant and the information available at the grant date.The Group uses the following methodologiesto estimate fair value:| • | estimation of fair value based on equity transactions with third parties close to the grant date; and || --- | --- || • | other valuation techniques including option pricing models such as Black-Scholes; || --- | --- | F-75 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |These estimates also require determinationof the most appropriate inputs to the valuation models including assumptions regarding the expected life of a share option or appreciationright, expected volatility of the price of the Group’s shares and expected dividend yield.20.3. Employee benefits expenses| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Wages and salaries | 2,107,677 | 1,923,480 | 1,727,760 || Social security costs | 460,311 | 335,081 | 353,789 || Profit-sharing and annual cash bonus | 171,931 | 221,289 | 213,942 || Share-based payments | 232,672 | 251,239 | 213,076 || | 2,972,591 | 2,731,089 | 2,508,567 |20.4. Share-based payment plansAs detailed further below the Grouphas primarily two types of share-based instruments: Restricted Share Units (¨RSU¨) and Performance Share Units (¨PSU¨).The Group goal-based annual equitybonus is granted entirely through RSUs for approximately 1,600 employees (10.6% of total employees). The special recognition equity awardsare usually granted through a combination of RSUs and PSUs and about 200 employees (1.3% of total employees) currently have instrumentsoutstanding.While the majority of RSUs vestingis conditional only to a time condition, a small part vests also depending on certain Group level performance goals. Whereas all PSUsvesting are conditional to market conditions, namely Total Shareholder Return measured based on the quoted market price of the sharesof StoneCo at the vesting date.On December 31, 2024, 24,686 vestedRSUs were pending settlement by issuance of shares (December 31, 2023 - R$ null).The table below outlines the differenttype of instruments outstanding and changes for the years ended as of December 31, 2024, 2023 and 2022.| | Equity | | | | | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || | RSU | | | PSU | | | Options | | | Total | | || Number of shares | | | | | | | | | | | | || Balance as of December 31, 2022 | | 11,507,221 | | | 7,320,367 | | | 45,159 | | | 18,872,747 | || Granted | | 5,293,655 | | | 1,141,273 | | | — | | | 6,434,928 | || Vested | | (2,149,169 | ) | | — | | | — | | | (2,149,169 | ) || Cancelled | | (2,222,150 | ) | | (156,592 | ) | | — | | | (2,378,742 | ) || Balance as of December 31, 2023 | | 12,429,557 | | | 8,305,048 | | | 45,159 | | | 20,779,764 | || Granted | | 3,649,962 | | | 1,329,735 | | | — | | | 4,979,697 | || Vested ^(a)^ | | (1,340,877 | ) | | — | | | — | | | (1,340,877 | ) || Cancelled | | (2,034,864 | ) | | (3,743,400 | ) | | (1,386 | ) | | (5,779,650 | ) || Balance as of December 31, 2024 | | 12,703,778 | | | 5,891,383 | | | 43,773 | | | 18,638,934 | || (a) | The Group delivered 1,017,725 treasury shares for the plan beneficiaries after withholding taxes. || --- | --- | F-76 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |20.4.1. Restricted share units ("RSU")RSUs have been granted to certainkey employees under the LTIP to incentivize and reward such individuals. These awards are equity-classified for accounting purposes andmay be granted as part of the annual equity bonus and also as special recognition equity awards (Note 20.4), with a remaining weightedaverage vesting period of 2 years, subject to and conditioned upon the achievement of certain targets which are generally solely serviceconditions. Assuming these conditions are met, awards are settled through Class A common shares. If the applicable conditions are notachieved, the awards are forfeited for no consideration.Information on the restricted sharesis summarized below (amounts in R$):| | RSU | | | || --- | --- | --- | --- | --- || Granted year | Vesting period | Weighted average fair value ^(a)^ | Weighted average remaining expected life (years) | Number of Outstanding Awards || 2018 ^(b)^ | From 4 to 10 years of service | R$ 88.80 | 1.54 | 1,043,339 || 2019 | From 5 to 10 years of service | R$ 136.08 | 1.67 | 5,114 || 2020 | From 5 to 10 years of service | R$ 163.18 | 3.12 | 170,257 || 2021 | From 1 to 10 years of service | R$ 348.49 | 3.68 | 451,626 || 2022 | From 1 to 10 years of service | R$ 49.56 | 1.57 | 4,457,979 || 2023 | From 1 to 9 years of service | R$ 52.22 | 1.99 | 3,347,500 || 2024 | From 1 to 8 years of service | R$ 76.50 | 2.27 | 3,227,963 || | | | | 12,703,778 || (a) | Determined based on the fair value of the equity instruments granted and the exchange rate, both at the grant date. || --- | --- || (b) | All performance conditions related with this grant were already satisfied. || --- | --- |20.4.2. Performanceshare units ("PSU")PSUs are equity classified foraccounting purposes and the vast majority have been granted as part of special recognition equity awards (Note 20.4), with a remainingweighted average vesting period of 3.3 years. PSU grants beneficiaries the right to receive shares if the Group reaches minimum levelsof total shareholder return (“TSR”) for a specific period. As detailed in Note 20.4.2.1, during 2024 some awards were modifiedto include an internal financial metric. If the minimum performance condition is not met the PSUs will not be delivered.The fair value of the instrumentsis estimated at the grant date using the Black-Scholes-Merton pricing model, considering the terms and conditions on which the PSUs weregranted, and the related expense is recognized over the vesting period. The performance condition is considered for estimating the grant-datefair value and of the number of PSUs expected to be issued, based on historical data and current expectations and is not necessarily indicativeof performance patterns that may occur.The expected volatility reflectsthe assumption that the historical volatility over a period similar to the life of the PSUs is indicative of future trends, which maynot necessarily be the actual outcome. The main two inputs to the model were: Risk–free interest rate and annual volatility, basedon the historical stock price of the Company and relevant peers. To estimate the number of awards that are considered vested for accountingpurposes the calculation considers exclusively whether the service condition is met but TSR target attainment is ignored. If TSR targetsare ultimately not achieved the expense will be recognized and not reversed for those PSUs for which the service condition was met. F-77 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Information on the performanceshares is as follows (amounts in R$);| | PSU | | | | | || --- | --- | --- | --- | --- | --- | --- || Granted year | Vesting conditions | Weighted average fair value | Volatility | Risk-free rate | Weighted average remaining expected life (years) | Number of Outstanding Awards || 2022 | From 1 to 5 years of service and achievement of a specified TSR | R$ 2.71 | 76.5% to 83.3% | 2.18%to 4.34% | 3.17 | 3,719,167 || 2023 | From 1.4 to 5.3 years of service and achievement of a specified TSR | R$ 4.06 | 73.8% to 83.4% | 3.95% to 5.60% | 3.22 | 842,481 || 2024 | From 1 to 5 years of service and achievement of a specified TSR | R$ 11.64 | 42.7% to 77.9% | 3.72% to 5.32% | 3.7 | 1,329,735 || | | | | | | 5,891,383 |20.4.2.1 Modification of Performance share units("PSU")In 2024, the Group made modificationsto 3,880,096 PSU awards. The modification introduces alternative conditions as market performance for some PSU awards, and also considersan internal financial metric (adjusted by any potential capital distributions) to all of them. This change results in a higher fair valuefor each award, as measured by the Group through the assessment of both original and modified award fair values at the modification date,leading to an incremental fair value. This modification was also accompanied by an extension of the vesting periods, leading to a weightedaverage increase of one year in the vesting timeline for the PSU awards.The fair value of the instrumentswas estimated on the modified date based on: i) the fair value of equity instruments and the exchange rate, both as of the modified date,and ii) the Black-Scholes-Merton pricing model, which had two inputs: risk–free interest rate and annual volatility, based on Company’shistorical stock price.The average incremental fair valueof the modified awards is R$ 13.74, resulting in an impact of R$ 22,267 in 2024.20.4.3. OptionsThe Group has granted awards asstock options with an exercise date between three and ten years and a fair value estimated at the grant date based on the Black-Scholes-Mertonpricing model.Information on the stock optionsis summarized as follows (amounts in R$ and in USD):| | Options | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- || Granted year | Vesting period | Weighted average fair value | Volatility | Remaining expected life (years) | Exercisable at year end | Exercise price | Number of Outstanding Awards || 2018 | From 5 to 10 years of service | R$ 59.59 | 50.00 % | 0.5 to 5.5 | 12,657 | USD 24.00 | 38,613 || 2019 | From 3 to 5 years of service | R$ 81.71 | 69.80 % | 1.5 | 1,935 | USD 30.00 | 5,160 || | | | | | | | 43,773 |20.4.4. Share-based payment expensesThe total expense, including taxesand social charges, recognized as Other income (expenses), net for the programs was R$232,672 (2023 - R$ 251,239 and 2022 - R$ 213,076). F-78 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |20.5. Labor and social security liabilities| | December 31, 2024 | December 31, 2023 || --- | --- | --- || Accrued annual payments and related social charges | 494,706 | 435,915 || Labor liabilities and related social charges | 123,154 | 114,135 || Total labor and social security liabilities | 617,860 | 550,050 || Current | 578,345 | 515,749 || Non-current | 39,515 | 34,301 || 21. | Transactions with non-controlling interests || --- | --- |The main transactions of non-controllinginterests with the controlling shareholders were:| | Changes in non-controlling interest | | | | | || --- | --- | --- | --- | --- | --- | --- || | Capital contributions (deductions) by non-controlling interests | | Transfers to (from) non-controlling interests | | Changes in equity attributable to controlling shareholders | Consideration paid or payable to non-controlling interests || Transactions between subsidiaries and shareholders: | | | | | | || Transaction costs from subsidiaries | (60 | ) | — | | — | — || Equity transaction with non-controlling interests ^(a)^ | — | | (20,928 | ) | — | 2,829 || Non-controlling interests arising on a business combination ^(b)^ | — | | 3,849 | | — | — || For the year ended December 31, 2022 | (60 | ) | (17,079 | ) | — | 2,829 || Transactions between subsidiaries and shareholders: | | | | | | || Equity transaction with non-controlling interests | — | | 49 | | — | — || Equity transaction related to put options over non-controlling interest | — | | (3,904 | ) | — | — || For the year ended December 31, 2023 | — | | (3,855 | ) | — | — || Transactions between subsidiaries and shareholders: | | | | | | || Equity transaction related to put options over non-controlling interest | — | | 1,028 | | — | — || For the year ended December 31, 2024 | — | | 1,028 | | — | — || (a) | On October 18, 2022, the Group lost control of its subsidiary StoneCo CI following a capital contribution by a new investor. The remaining interest of 47.75% held by the Group on StoneCo CI is classified as an investment in an associate according to IAS 28. As result of the loss of control, in accordance with IFRS 10, the Group derecognized the assets and liabilities of StoneCo CI. The amount of R$20,928 refers to shares held by non-controlling shareholders. On September 20, 2022, STNE Par fully acquired the non-controlling interest held by Sponte. The amount of R$2,829 refers to shares held by non-controlling shareholders. || --- | --- || (b) | Arising from the business combination between Reclame Aqui and Hubcount. || --- | --- || 22. | Other disclosures on cash flows || --- | --- |22.1. Non-cash transactions22.1.1. Operating activities| | 2024 | | | 2023 | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- || Changes in the fair value of accounts receivable from card issuers at FVOCI | | (117,097 | ) | | 98,283 | | (253,181 | ) || Fair value adjustment on equity instruments/listed securities designated at FVOCI | | 1,623 | | | 1,912 | | (6,971 | ) | F-79 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |22.1.2. Investing activities| | 2024 | | 2023 | | 2022 | || --- | --- | --- | --- | --- | --- | --- || Property and equipment and intangible assets acquired through lease (Note 10.3 and 11.3) | | 140,784 | | 67,417 | | 63,910 |22.1.3. Financing activities| | 2024 | | 2023 | | 2022 | || --- | --- | --- | --- | --- | --- | --- || Unpaid consideration for acquisition of non-controlling shares | | 579 | | 725 | | 1,498 || Shares of the Company delivered at Reclame Aqui acquisition | | — | | — | | 169,864 |22.2. Items breakdown22.2.1. Fair value adjustment in financial instrumentsdesignated at FVPL| | 2024 | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- || Fair value adjustment on loans designated at FVPL | | — | | (127,137 | ) | | (326,491 | ) || Adjustment on FIDC obligations designated for fair value hedge | | 437,347 | | — | | | — | || Fair value adjustment on equity securities designated at FVPL | | 4,131 | | 30,574 | | | (853,056 | ) || Fair value adjustment in financial instruments designated at FVPL | | 441,478 | | (96,563 | ) | | (1,179,547 | ) |22.2.2. Interest income received, net of costs| | 2024 | 2023 | 2022 || --- | --- | --- | --- || Interest income received on accounts payable to clients | 7,122,635 | 5,962,063 | 4,521,948 || Finance cost of sale of receivables on accounts receivable from card issuers (Note 19) | (2,544,359) | (3,195,130) | (2,463,298) || Interest income received, net of costs | 4,578,276 | 2,766,933 | 2,058,650 |22.2.3. Purchases of property and equipment| | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Additions of property and equipment (Note 10.3) | | (863,937 | ) | | (656,876 | ) | | (692,206 | ) || Additions of right of use (IFRS 16) (Note 10.3) | | 107,390 | | | 33,254 | | | 47,182 | || Payments from previous year | | (65,348 | ) | | (176,835 | ) | | (51,614 | ) || Purchases unpaid at year end | | 57,413 | | | 65,348 | | | 176,835 | || Prepaid purchases of POS | | — | | | (1,135 | ) | | 102,070 | || Purchases of property and equipment | | (764,482 | ) | | (736,244 | ) | | (417,733 | ) | F-80 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |22.2.4. Purchases and development of intangibleassets| | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Additions of intangible assets (Note 11.3) | | (531,570 | ) | | (515,740 | ) | | (288,004 | ) || Additions of right of use (IFRS 16) (Note 11.3) | | 33,394 | | | 34,163 | | | 16,728 | || Payments from previous year | | (14,117 | ) | | (6,593 | ) | | (41,898 | ) || Purchases unpaid at year end | | 5,015 | | | 14,117 | | | 6,593 | || Capitalization of borrowing costs | | — | | | — | | | 1,069 | || Purchases and development of intangible assets | | (507,278 | ) | | (474,053 | ) | | (305,512 | ) |22.2.5 Proceeds from the disposal of non-currentassets| | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Net book value of disposed assets (Notes 10.3 and 11.3) | | 118,414 | | | 96,664 | | | 202,519 | || Net book value of disposed Leases | | (4,623 | ) | | (21,225 | ) | | (52,164 | ) || Loss on disposal of property and equipment and intangible assets | | (29,365 | ) | | (66,200 | ) | | (25,347 | ) || Disposal of Creditinfo property, equipment and intangible assets, including goodwill | | — | | | — | | | (61,316 | ) || Disposal of Pinpag property, equipment and intangible assets, including goodwill | | (59,176 | ) | | — | | | — | || Disposal of Cappta property, equipment and intangible assets | | — | | | 1,767 | | | — | || Outstanding balance | | (23,504 | ) | | (10,470 | ) | | (36,684 | ) || Proceeds from the disposal of non-current assets | | 1,746 | | | 536 | | | 27,008 | || 23. | Business combinations || --- | --- |23.1. Accounting policyBusiness combinations are accountedfor using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, includingassets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange, which is measured at acquisitiondate fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whetherto measure non-controlling interests in the acquiree at fair value or on the basis of its proportionate share in the identifiable netassets of the acquiree. Costs directly attributable to the acquisition are expensed as incurred.The assets acquired and liabilitiesassumed are measured at fair value, classified, and allocated according to the contractual terms, economic circumstances, and relevantconditions as at the acquisition date. The Group identifies and measures the assets acquired and liabilities assumed by the value obtainedin preliminary assessments at the acquisition date. The Group has up to 12 months after each of the acquisitions to conclude the assessmentand frequently values the assets acquired and liabilities assumed with the assistance of independent specialists. When the valuation isfinalized, the Group recognizes the difference between the preliminary amounts and the final amounts related to the acquisition on itsstatement of financial position and statement of profit or loss, as appropriate.Subsequently to the initial recognitionof property and equipment and intangible assets identified, the Group records the depreciation and amortization over the useful livesdefined at the initial recognition based on the preliminary assessments until the final assessments are available.Contingent liabilities recognizedas of acquisition date are measured at fair value. Subsequently, until the liability is settled, cancelled or expires, they are recognizedat the higher of the amount initially recognized or the amount that would be recognized under IAS 37. F-81 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |Any contingent consideration tobe transferred by the acquirer is recognized as a liability at fair value on acquisition date. Subsequent changes in the fair value ofthis liability is recognized in profit or loss. In order to evaluate the contingent consideration, the Group considers different probabilitiesof scenarios and discounted future contractual cash flows at the interest rates available in the market for similar financial instruments.Goodwill is measured as the excessof the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest heldover the fair value of net assets acquired. If the fair value of net assets acquired is in excess of the aggregate consideration transferred,the Group re-assesses whether it has correctly identified all assets acquired and all liabilities assumed and reviews the procedures usedto measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of netassets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition,goodwill is measured at cost less any accumulated impairment losses. Goodwill and indefinite useful life intangible assets recognizedunder business combination are tested for impairment at least annually or whenever there is an indication that it may be impaired (Note11.4).23.2. Significant judgments, estimates and assumptionsThe process of accounting a businesscombination includes the use of (i) valuation techniques to determine the amounts of intangible assets identified, (ii) estimates to determineits useful life, and (iii) valuation techniques to estimate the contingent consideration included in the total consideration paid to acquirethe companies.23.3. Trinks acquisitionOn May 2, 2024, the Group obtainedthe control of Trinks with a 100% equity interest buying shares from selling shareholders. Trinks was previously an associate and accountedfor under the equity method. The Group previously held an equity interest of 19.9% in Trinks which was acquired on November 25, 2019.Trinks is an unlisted enterprise based in the State of Rio de Janeiro, Brazil, that develops an integrated solution of management, focusedmainly on the beauty service segment.23.3.1. Financialposition of the businesses acquiredThe allocation of assets acquiredand liabilities assumed in the business combinations mentioned above are presented below. F-82 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |23.3.1.1. Trinks| Fair value | Trinks (as of May 2, 2024) ^(a)^ || --- | --- || Cash and cash equivalents | 991 || Short-term-investments | 1,788 || Trade accounts receivable | 1,379 || Recoverable taxes | 158 || Property and equipment | 438 || Intangible assets - Customer relationship | 5,324 || Intangible assets - Software | 10,502 || Other assets | 243 || Total assets | 20,823 || Trade accounts payable | 187 || Labor and social security liabilities | 1,840 || Taxes payable | 252 || Deferred tax liabilities | 5,381 || Total liabilities | 7,660 || Net assets and liabilities | 13,163 || Consideration paid (Note 23.3.3) | 58,950 || Goodwill | 45,787 || (a) | Identification and measurement of assets acquired, liabilities assumed, consideration transferred, and goodwill are final. In the assessment, the Group identified customer relationship, and software as intangible assets. Details on the methods and assumptions adopted to evaluate these assets are described on Note 23.3.2. || --- | --- |23.3.2. Intangibleassets recognized from business combinationsThe assumptions used in the measurementof fair value of intangible assets identified in the business combination are as below.23.3.2.1. Customer relationship| | Trinks || --- | --- || Amount | 5,324 || Method of evaluation | MEEM ^(a)^ || Estimated useful life ^(b)^ | 4 years, 5 months || Discount rate ^(c)^ | 17.1% || Source of information | Acquirer’s management internal projections || (a) | Multi-Period Excess Earnings Method (“MEEM”). || --- | --- || (b) | Useful lives were estimated based on internal benchmarks. || --- | --- || (c) | Discount rate used was equivalent to the weighted average cost of capital combined with the sector’s risk. || --- | --- | F-83 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |23.3.2.2. Software| | Trinks || --- | --- || Amount | 10,502 || Method of evaluation | Relief from royalties || Estimated useful life ^(a)^ | 5 years || Discount rate ^(b)^ | 17.1% || Source of information | Acquirer’s management internal projections || (a) | Useful lives were estimated based on internal benchmarks. || --- | --- || (b) | Discount rate used was equivalent to the weighted average cost of capital combined with the sector’s risk. || --- | --- |23.3.3. Consideration paidThe consideration paid on businesscombination comprises the following values, if any: (i) consideration transferred, (ii) non-controlling interest in the acquiree and (iii)fair value of the acquirer’s previously held equity interest in the acquiree. The consideration paid in the final assessments ispresented as follows.23.3.3.1. Trinks| | Trinks || --- | --- || Cash consideration paid to the selling shareholders | 10,045 || Cash consideration to be paid to the selling shareholders | 29,890 || Previously held equity interest in the acquire, at fair value ^(a)^ | 11,728 || Contingent consideration^(b)^ | 7,287 || Total | 58,950 || (a) | Refers to the interest in Trinks' shares previously held by the Group. As a result of the step acquisition, the Group recognized a gain of R$ 7,406 for the remeasurement of the previously held 19.9% interest in Trinks to fair value, of R$ 11,728, compared to its carrying amount, of R$ 4,322. || --- | --- || (b) | Refers to contingent consideration that may be paid in 2025 and 2027. The amount is based on predetermined formulas which consider mainly internal metrics and the expected net revenue of Trinks at the end of 2024 and 2026. || --- | --- || 24. | Segment information || --- | --- |24.1. Accounting policyIn line with the strategy and organizationalstructure of the Group, two reportable segments, “Financial Services” and “Software” and certain non-allocatedactivities, are presented:| • | Financial services: Comprised of the financial services solutions which includes mainly payments solutions, digital banking, credit, insurance solutions as well as the registry business. || --- | --- || • | Software: The Software segment includes the following solutions: POS/ERP, TEF and QR Code gateways, reconciliation, CRM, OMS, e-commerce platform, engagement tool, ads solution, and marketplace hub. || --- | --- || • | Non allocated activities: Comprised of non-strategic businesses, including results on disposal / discontinuation of non-core businesses. || --- | --- |The Group used and continues touse Adjusted net income (loss) as the measure reported to the Chief Operating Decision Maker (“CODM”), which comprises theChief Executive Officer (“CEO”) and the Board of Directors, about the performance of each segment. F-84 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- |24.2. Segmented statement of profit or loss| | 2024 | | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || | Financial services | | | Software | | | Non allocated | | || Total revenue and income | | 11,689,278 | | | 1,562,682 | | | 5,494 | || Cost of services | | (2,721,356 | ) | | (667,755 | ) | | (16 | ) || Administrative expenses | | (710,917 | ) | | (280,598 | ) | | (2,561 | ) || Selling expenses | | (1,763,161 | ) | | (341,160 | ) | | (1,154 | ) || Financial expenses, net | | (3,640,533 | ) | | (35,300 | ) | | (74 | ) || Other income (expenses), net | | (340,863 | ) | | (21,301 | ) | | — | || Total adjusted expenses | | (9,176,830 | ) | | (1,346,114 | ) | | (3,805 | ) || Loss on investment in associates | | — | | | (80 | ) | | 479 | || Adjusted profit before income taxes | | 2,512,448 | | | 216,488 | | | 2,168 | || Income taxes and social contributions | | (492,474 | ) | | (38,154 | ) | | (428 | ) || Adjusted net income for the year | | 2,019,974 | | | 178,334 | | | 1,740 | || | 2023 | | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || | Financial Services | | | Software | | | Non allocated | | || Total revenue and income | | 10,495,422 | | | 1,492,206 | | | 67,375 | || Cost of services | | (2,309,021 | ) | | (670,878 | ) | | (2,859 | ) || Administrative expenses | | (729,204 | ) | | (290,494 | ) | | (32,676 | ) || Selling expenses | | (1,373,202 | ) | | (304,448 | ) | | (20,626 | ) || Financial expenses, net | | (3,902,800 | ) | | (50,383 | ) | | (930 | ) || Other income (expenses), net | | (383,150 | ) | | (25,652 | ) | | (481 | ) || Total adjusted expenses | | (8,697,377 | ) | | (1,341,855 | ) | | (57,572 | ) || Loss on investment in associates | | (4,608 | ) | | 446 | | | (17 | ) || Adjusted profit before income taxes | | 1,793,437 | | | 150,797 | | | 9,786 | || Income taxes and social contributions | | (356,803 | ) | | (36,953 | ) | | (2,768 | ) || Adjusted net income for the year | | 1,436,634 | | | 113,844 | | | 7,018 | | F-85 | Notes to Consolidated Financial Statements December 31, 2024, 2023 and 2022 (In thousands of Brazilian Reais, unless otherwise stated) || --- || | 2022 | | | | | | | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || | Financial services | | | Software | | | Non allocated | | || Total revenue and income | | 8,083,548 | | | 1,419,841 | | | 85,555 | || Cost of services | | (1,987,522 | ) | | (670,154 | ) | | (12,076 | ) || Administrative expenses | | (640,772 | ) | | (314,267 | ) | | (39,666 | ) || Selling expenses | | (1,245,266 | ) | | (245,071 | ) | | (20,903 | ) || Financial expenses, net | | (3,426,148 | ) | | (56,176 | ) | | (1,067 | ) || Other income (expenses), net | | (296,785 | ) | | (18,267 | ) | | (24,659 | ) || Total adjusted expenses | | (7,596,493 | ) | | (1,303,935 | ) | | (98,371 | ) || Loss on investment in associates | | (409 | ) | | (1,355 | ) | | (1,825 | ) || Adjusted profit (loss) before income taxes | | 486,646 | | | 114,551 | | | (14,641 | ) || Income taxes and social contributions | | (124,857 | ) | | (49,811 | ) | | (1,352 | ) || Adjusted net income (loss) for the year | | 361,789 | | | 64,740 | | | (15,993 | ) |24.3. Reconciliation of segment adjusted netincome (loss) for the year with net income (loss) in the consolidated financial statements| | 2024 | | | 2023 | | | 2022 | | || --- | --- | --- | --- | --- | --- | --- | --- | --- | --- || Adjusted net income – Financial services | | 2,019,974 | | | 1,436,634 | | | 361,789 | || Adjusted net income (loss) – Software | | 178,334 | | | 113,844 | | | 64,740 | || Adjusted net income (loss) – Non allocated | | 1,740 | | | 7,018 | | | (15,993 | ) || Segment adjusted net income | | 2,200,048 | | | 1,557,496 | | | 410,536 | || Adjustments from adjusted net income to consolidated net income (loss): | | | | | | | | | || Mark-to-market from the investment in Banco Inter | | — | | | 30,574 | | | (853,056 | ) || Amortization of fair value adjustment ^(a)^ | | (122,798 | ) | | (92,399 | ) | | (138,601 | ) || Software business goodwill impairment loss (Note 11.4) | | (3,558,049 | ) | | — | | | — | || Other expenses ^(b)^ | | (67,887 | ) | | 78,623 | | | 17,810 | || Tax effect on adjustments | | 41,636 | | | 26,126 | | | 36,915 | || Consolidated net income (loss) | | (1,507,050 | ) | | 1,600,420 | | | (526,396 | ) || (a) | Related to acquisitions. Consists of expenses resulting from the changes in the fair value adjustments as a result of the application of the acquisition method. || --- | --- || (b) | Consists of the fair value adjustment related to associates call option, earn-out and earn-out interests related to acquisitions, reversal of litigation of Linx and divestment of assets. || --- | --- |**** F-86