6-K - XP - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, 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 May 2021

Commission File Number: 001-39155

XP Inc.

(Exact name of registrant as specified in itscharter)

Av. Chedid Jafet, 75, Torre Sul, 30th floor,

Vila Olímpia – São Paulo

Brazil 04551-065

+55 (11) 3075-0429

(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):

Yes	No	X

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):

Yes	No	X

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.

XP Inc.
By:	/s/ Bruno Constantino Alexandre dos Santos
	Name:	Bruno Constantino Alexandre dos Santos
	Title:	Chief Financial Officer

Date: May 4, 2021

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Release dated May 4, 2021 – XP Inc. Reports 1Q21 Financial Results
99.2	XP Inc. – Unaudited interim condensed consolidated financial statements for the three months period ended March 31, 2021
99.3	1Q21 Earnings Presentation

Exhibit 99.1

XP Inc. Reports 1Q21 FinancialResults

São Paulo, Brazil, May 4, 2021 – XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading tech-enabled platform and a trusted pioneer in providing low-fee financial products and services in Brazil, today reported its financial results for the first quarter of 2021.

To our shareholders and employees

I remember it as if it were today when I moved to Porto Alegre, at the age of 24, fleeing my hometown, ashamed of my dismissal and in search of a fresh start.

How quickly these past 20 years have passed!

I confess that at first, I didn't think it would work. The company's capital was practically non-existent, I didn’t have much experience, and everything seemingly conspired against my project. It was by making many mistakes that I ended up finding the niche of financial education and, from this moment on, everything began to happen.

Looking back, I believe that three main pillars have marked my journey:

• Partnership: sharing my dream with people who complemented my background and aligning them with me for the long term;

• Resilience: the ability to not give up regardless of difficulties or obstacles;

• Humility: recognize errors quickly and learn from them.

In the business world, the distance between two points is not always a straight line, but rather a zigzag. Each scenario shift demanded changes, many of them severe, to adjust and adapt XP's business model. The challenge has always been, and will continue to be, to connect the dots in a chronological sequence while maintaining a long-term vision.

We became known as the “XP boys”. In a traditional market, where labels meant more than purpose, that was the way to underestimate us.

We played an important role in strengthening the Brazilian capital market, and we were pioneers in the development of the independent investment industry. After all, until recently, almost everything was done within the five largest banks in Brazil.

The Brazilian population has always been, and continues to be, hostage to a concentrated system, controlled by few participants who have no genuine concern for the quality of services or products delivered to customers.

Some clear examples of this are always worth repeating: R$1 trillion currently sitting in Poupança (Savings Accounts), and interest charged on credit cards and loans often exceeding 10% per month.

For these reasons and many others, the opportunity we have in Brazil is probably one of the largest in the world in terms of disruption of the traditional financial sector.

Our challenge in the coming years will continue to be promoting transformation in this industry ethically and respectfully, seeking what is best for the client.

In 2021, we evolved our business model. Before, we were an investment company focused on “helping Brazilians to invest better”. Today, we are a company that aims to “transform the financial market to improve people's lives”. For many, the difference may be subtle, but for us it is massive.

Our Big Dream is moving towards fully addressing Brazilians’ financial journey, complementing the investment offering, our core and origin, with a universe of credit and banking services. In this sense, in 2021, we are expanding our platform with new products such as more affordable loans, digital accounts, credit cards and

insurance. We will make sure that our current and new customers will be able to have a more holistic relationship with XP Inc.

Another relevant short-term deliverable is the offering of banking services, through a customized experience, for businesses, encompassing small, mid-sized and corporate segments.

Additionally, we will continue to focus on strengthening our insurance company, fund administrator, our offshore operations (XP Investments), new investment fund lines and our active participation in debt, REITs and equity offerings.

The Brazilian financial system is expected to generate approximately R$770 billion in revenue in 2021, and in 2020 we accounted for just over 1% of the total. The avenue of opportunities for us to transform this ecosystem is wide, and we will not rest until this happens.

Finally, I want to take this opportunity to ratify the letter recently sent about my new role as Executive Chairman of the Board of Directors of XP Inc. and the appointment of Thiago Maffra as CEO.

As CTO, Maffra led an unprecedented and highly successful digital transformation in our company.

The whole executive board was unanimous in appointing him as the most prepared professional to lead XP’s daily challenges and manage the company through its ever-changing evolution cycle. We are confident that he is one of the brightest and most passionate professionals, ready to take the company to a new level of scale and impact on the Brazilian financial industry.

It’s time to accelerate changes and evolve from a model in which “technology serves the business” to one where “technology empowers clients, while working for the business”. This type of transformation requires a new mindset, a highly collaborative approach that integrates every facet of XP – from product, design, operations and technology, curating our clients’ experience from end-to-end.

Over the past 20 years, I genuinely have not felt as confident in the long-term success of XP and in the opportunities we have in our hands as I do now. After all, this transition process says a lot about our culture and values, placing the right people in the correct positions so that they can maximize their contributions and make our company stronger.

Predicting the future is impossible, however, as someone who has always believed in making impossible dreams possible, I think that XP will be increasingly admired, sustainable, innovative, technological and profitable.

Finally, once again I would like to thank you for the trust and all the interactions we had during my time as CEO. I will continue to be here, 100% present, but with other ambitions and focused on our long-term since it never hurts to remember: we are just getting started!

Guilherme Benchimol

Highlights

1Q21 KPIs

Key Business Metrics

	1Q21	1Q20	YoY	4Q20	QoQ
Operating and Financial Metrics (unaudited)
AUC (in R$ bn)	715	366	96%	660	8%
Active clients (in '000s)	2,993	2,039	47%	2,777	8%
Retail – gross total revenues (in R$ mn)	2,088	1,254	67%	1,844	13%
Institutional – gross total revenues (in R$ mn)	294	331	-11%	307	-4%
Issuer Services – gross total revenues (in R$ mn)	234	132	77%	323	-28%
Digital Content – gross total revenues (in R$ mn)	23	27	-16%	25	-11%
Other – gross total revenues (in R$ mn)	145	113	29%	71	106%
Company Financial Metrics
Gross revenue (in R$ mn)	2,784	1,856	50%	2,570	8%
Net Revenue (in R$ mn)	2,628	1,735	51%	2,395	10%
Gross Profit (in R$ mn)	1,787	1,156	55%	1,559	15%
Gross Margin	68.0%	66.6%	137 bps	65.1%	293 bps
Adjusted EBITDA^1^ (in R$ mn)	1,043	595	75%	891	17%
Adjusted EBITDA margin	39.7%	34.3%	535 bps	37.2%	247 bps
Adjusted Net Income^1^ (in R$ mn)	846	415	104%	721	17%
Adjusted Net Margin	32.2%	23.9%	827 bps	30.1%	209 bps
(1) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA

Operational Performance

Assets Under Custody (in R$ billions)

Total AUC reached R$715 billion at March 31, up 96% year-over-year and 8% quarter-over-quarter. Year-over-year growth was driven by R$252 billion of net inflows and R$97 billion of market appreciation. Through a very challenging twelve-month period since the outbreak of the COVID-19 pandemic, XP’s business model and strategy proved its resilience and reinforced the efficacy of innovation and adaptation while strengthening relationships with employees, clients and partners.

Consistent AUC growth throughout the past several years and in various macroeconomic environments, including recession and other unfavorable trends, was achieved by the combination of the high concentration on the Brazilian financial industry and XP’s disruptive client-centric and digital driven approach. We are confident that expressive performance and secular changes should persist for many years to come as we maintain our focus and culture and expand to new markets and verticals going forward.

Net Inflows (in R$ billions)

Average monthly Net Inflows, adjusted for extraordinary equity inflows/outflows, was R$14.2 billion in 1Q21, up 15% from R$12.3 billion in 4Q20. For 1Q21, flows were strong across all channels and brands, led by the IFA network, reflecting investments in the business in the second half of 2020.

Active Clients (in 000’s)

Active clients grew 47% and 8% in 1Q21 vs 1Q20 and 4Q20, respectively. Average monthly net client additions increased to 72,000 in 1Q21 from 44,000 in 4Q20, reflecting seasonality, the reduction of brokerage fees for online stock trading at Rico and XP in 3Q20 and our ongoing client acquisition and brand awareness efforts.

IFA Network

IFA Network gross additions totaled 917 in 1Q21, consistent with strong growth trends in 2H20. Our total IFA headcount stood at nearly 9,000 as of March 31, 2021. Ongoing IFA growth was driven by both industry growth as well as XP’s network investments.

Retail Equity DARTs¹ (million trades)

¹Daily Average Revenue Trades, including Stocks, REITs, Options and Futures

Retail DARTs increased 23% in 1Q21 to 3.2 million from an already robust level of 2.6 million in 4Q20. The remarkable figures reinforce the benefits of the platform investments and pricing strategy across XP’s three Retail brands. On a year-over-year basis, DARTs grew 91% from 1.7 million in 1Q20, reflecting the ongoing increase in the participation and relevance of individual investors on the Brazilian Stock Exchange.

Credit Portfolio^1^ (in R$ millions)

Our Credit portfolio reached R$4.7 billion as of March 31, 2021, representing 0.7% of our total AUC. The average duration of our credit book was 3.1 years, with a 90-day Non-Performing Loan (NPL) ratio of 0.0%. Furthermore, we highlight the capital-light nature of our loan book, which currently represents R$916 million of Risk Weighted Assets and requires minimum regulatory capital of R$73 million. The fact that a relevant portion of loans is collateralized reduces capital needs for growth. Our book is mainly funded by the issuance of Structured Notes (COEs) and Deposits, which are distributed to clients via XP’s platform.

¹This portfolio does not include Credit Card related loans and receivables

Net Promoter Score (NPS)

Our NPS, a widely known survey methodology used to measure customer satisfaction, increased to 74 in March 2021, reflecting our ongoing efforts to provide superior customer service at the lowest possible cost. Maintaining a high NPS score remains a priority for XP since our business model is built around client experience. The NPS calculation as of a given date reflects the average scores in the prior six months.

1Q21 Revenue Breakdown

Total Gross Revenue (in R$ millions)

Total Gross Revenue reached an all-time high, increasing 50% from R$1.9 billion in 1Q20 to R$2.8 billion in 1Q21, despite a lower contribution from performance fees. The increase was mainly driven by strong growth in the Retail business, which contributed 90% of the growth year-over-year.

Retail

Retail Revenue (in R$ millions)

1Q20 vs 1Q21

Retail revenue grew 67% from R$1.3 billion in 1Q20 to R$2.1 billion in 1Q21. Revenue generation was strong across all products and channels within Retail, as resilient secondary trading volumes in securities, solid primary market activity, increases in structured operations distribution and growing management fees more than offset the reduced fees for online stock trading put into place in September 2020.

In 1Q21, Retail-related revenues represented 79% of consolidated Net Income from Financial Instruments, as per the Accounting Income Statement, and were composed of Derivatives with Retail Clients, Fixed Income secondary transactions, and Floating, among others.

LTM Take Rate (LTM Retail Revenue / AverageAUC)

1Q21 take rate (for the last twelve months) remained stable compared to 1Q20. Despite the strong growth in AUC during the period and pricing changes in online brokerage, Retail monetization remained stable due to higher client activity and our diversified revenue profile. The resilience in the take rate reinforces the power of the ecosystem and ongoing product development, positioning XP as the main beneficiary of financial deepening in Brazil.

Note: LTM Take Rate (LTM Retail Revenue / Average AUC). Average AUC = (Sum of AUC from the beginning of period and each quarter-end in a given year, being 5 data points in one year)/5

Institutional

Institutional Revenue (in R$ millions)

1Q20 vs 1Q21

Institutional gross revenue was R$294 million in the 1Q21, down 11% from R$331 million in 1Q20. Despite the growth in core institutional trading desks in 1Q21, 1Q20 benefited from strong client activity in the fixed income business related to the pandemic.

In 1Q21, Institutional revenue accounted for 8% of consolidated Net Income from Financial Instruments, as per the Accounting Income Statement, and was composed mostly of Fixed Income secondary transactions and Derivatives, among others.

Issuer Services

Issuer Services Revenue (in R$ millions)

1Q20 vs 1Q21

Issuer Services revenue expanded 77% year-over-year from R$132 million in 1Q20 to R$234 million in 1Q21. This increase was driven by (1) Equity Capital Markets (ECM), with 12 executed deals vs 5 in 1Q20, and (2) our Debt Capital Markets (DCM) division, with participation in 43 deals vs 36 in 1Q20. In 2021, XP remains committed to further developing Capital Markets in Brazil. In 1Q21, XP ranked #1 in REITs distribution, and CRA (agribusiness certificate of receivable). To reinforce our Capital Markets ecosystem and complete the suite of products and services we offer to our corporate clients, we recently hired one of the most seasoned and respected teams in M&A. We expect that the combination of M&A expertise and XP’s differentiated network will drive accelerating growth looking ahead.

Digital Content and Other

Digital Content Revenue

Gross revenue totaled R$23 million in 1Q21, down 16% from R$27 million in 1Q20. Our digital content plays an important role in educating Brazilians and making them more proficient in financial products and services. It also enhances client’s relationships and attracts new clients that grow our retail platform. 1Q21 trends were still impacted by the absence of in-person events and courses.

Other Revenue

1Q20 vs 1Q21

Other revenue increased 29% in 1Q21 vs. 1Q20, from R$113 million to R$145 million. In 1Q21, other revenue accounted for 13% of consolidated Net Income from Financial Instruments, as per the Accounting Income Statement, composed mostly of interest on adjusted gross cash and results related to our asset and liability management.

COGS

COGS (in R$ millions) and Gross Margin

1Q20 vs 1Q21

COGS rose 45% from R$579 million in 1Q20 to R$841 million in 1Q21, following the expansion in overall Retail Revenues. The gross margin expanded 137 bps, from 66.6% to 68.0%, despite the impact of long-term incentives with the IFA network, as costs were abnormally high in the same period of last year due to the beginning of the pandemic.

SG&A Expenses

SG&A Expense (ex-Share-Based Compensation)(in R$ millions)

1Q20 vs 1Q21

SG&A expenses (excluding share-based compensation) totaled R$765 million in 1Q21, up 36% from R$561 million in 1Q20. Despite growing our headcount by 64% year-over-year, continuously investing in technology and new verticals, and deploying new products, we increased efficiency, reducing expenses as a percentage of net revenue by 321 bps.

Share-Based Compensation (in R$ millions)

Through 1Q21, we have granted approximately half of the current approved program authorizing dilution of up to 5%. Expenses related to the program remained steady compared to 4Q20, the first quarter fully impacted by the larger grants in 2020. We expect to use the approved dilution as originally planned: within five years from the IPO. A portion of Share-Based Compensation is related to IFAs and allocated in COGS.

Adjusted EBITDA

Adjusted EBITDA¹ (in R$ millions) and Margin

¹ See appendix for a reconciliation of Adjusted EBITDA.

1Q20 vs 1Q21

Adjusted EBITDA grew 75%, from R$595 million to R$1,043 million and margins expanded from 34.3% to 39.7%. The growth was driven by (1) increases in the top line, mainly coming from Retail; (2) better COGS as a percentage of Net Revenues, and consequently higher gross margins and (3) operating leverage in SG&A. Despite investments in technology, product development, and new hires -- headcount increased by 64% during the last 12 months - the margin expansion was attributable to our highly scalable business model.

Adjusted Net Income

Adjusted Net Income¹ (in R$ millions) andMargin

1Q21 vs 1Q20

Adjusted Net Income grew 104%, from R$415 million in 1Q20 to R$846 million in 1Q21. Year-over-year growth was driven by (1) strong performance for the Retail business; (2) cost efficiencies and operating leverage and (3) a lower effective tax rate. Our effective tax rate decreased from 23.0% in the 1Q20 to 6.4% in 1Q21, mainly due to our post-IPO corporate structure. Our Adjusted Net Margin expanded by 827 bps to 32.2% in 1Q21.

¹ See appendix for a reconciliation of Adjusted Net Income.

Cash flow

(in R$ millions)

	1Q21	4Q20	1Q20
Cash Flow Data
Income before income tax	784	663	517
Adjustments to reconcile income before income tax	233	229	80
Income tax paid	(236)	(97)	(197)
Contingencies paid	(1)	(1)	(0)
Interest paid	(0)	(9)	(1)
Changes in working capital assets and liabilities	629	830	(69)
Adjusted net cash flow (used in) from operating activities	1,409	1,615	330
Net cash flow (used in) from securities, repos, derivatives and banking activities	(1,048)	(959)	(469)
Net cash flows from operating activities	361	656	(139)
Net cash flows from investing activities	(162)	(202)	(41)
Net cash flows from financing activities	(26)	1,390	(28)

Net Cash Flow Used in Operating Activities

Our net cash flow used in Operating activities represented by Adjusted net cash flow (used in) from operating activities (which in management’s view is a more useful metric to track the intrinsic cash flow generation of the business) decreased to R$1,409 million for 1Q21 from R$1,615 million 4Q20, and increased from R$330 million in 1Q20driven by:

·	Higher<br>balances of securities and derivatives that we hold in the ordinary course of our business as a Retail investment distribution platform<br>and as an Institutional broker-dealer (with respect to the sale of fixed income securities and structured notes);
·	Our<br>strategy to allocate excess cash and cash equivalents from treasury funds, Floating Balances and private pension balances to securities<br>and other financial assets. These balances may fluctuate substantially from quarter to quarter and were key drivers to net cash flow<br>from operating activities figures;
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·	Increases<br>in our banking activities from loans operations, deposits mainly derived from time deposits, structured operations certificates (COEs)<br>and other financial liabilities which include financial bills as a result of our expected growth in new financial services verticals.
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·	Growth<br>of our omni-channel distribution network through our network of IFA partners;
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·	Our<br>income before tax of R$1,017 million in 1Q21 and R$892 million in 4Q20 combined with non-cash expenses consisting primarily of (i) share-based<br>plan expenses of R$140 million in 1Q21 and R$154 million in 4Q20 and (ii) depreciation and amortization of R$69 million in 1Q21 and R$37<br>million in 4Q20. The total amount of adjustments to reconcile income before income taxes of R$233 million in 1Q21 and in 4Q20 was R$229<br>million.
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Net Cash Flow Used in Investing Activities

Our net cash used in investing activities decreased from R$202 million in 4Q20 to R$162 million in 1Q21 and increased from R$41 million in 1Q20, primarily affected by:

·	the<br>investment in intangible assets, mostly IT infrastructure and capitalization software development which increased from from R$20 million<br>in 1Q20 and R$67 million in 4Q20 to R$114 million in 1Q21.
·	the<br>investment in the expansion of our office spaces due to accelerated growth in employee headcount to support the growth in our business<br>and operations, including the construction of our new headquarters at Villa XP which decreased from R$105 million in 4Q20 to R$24 million<br>in 1Q21 and increased from R$21 million in 1Q20. The construction of Villa XP may result in additional capital expenditures, but we do<br>not expect these to have a material impact on our liquidity position or cash flows.
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·	Our<br>investments in FinTechs, associates and joint ventures of R$24 million in 1Q21 and R$30 million in 4Q20;
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Net Cash Provided by Financing Activities

Our net cash flows from financing activities decreased from R$28 million in 1Q20 and R$1,390 million in 4Q20 to R$26 million in 1Q21, primarily due to:

·	R$24<br>million in 1Q21, R$22 million in 4Q20 and R$26 million in 1Q20 related to Payments of borrowings and lease liabilities;

Floating Balance and AdjustedGross Financial Assets (in R$ millions)

Floating Balance (=net univested clients' deposits)	1Q21	4Q20
Assets	(3,184)	(1,052)
(-) Securities trading and intermediation	(3,184)	(1,052)
Liabilities	20,399	20,303
(+) Securities trading and intermediation	20,399	20,303
(=) Floating Balance	17,214	19,252
Adjusted Gross Financial Assets	1Q21	4Q20
Assets	113,327	90,518
(+) Cash	1,557	1,955
(+) Securities - Fair value through profit or loss	62,855	49,590
(+) Securities - Fair value through other comprehensive income	21,629	19,039
(+) Securities - Evaluated at amortized cost	1,916	1,829
(+) Derivative financial instruments	13,587	7,559
(+) Securities purchased under agreements to resell	6,741	6,627
(+) Loans	5,041	3,918
Liabilities	(84,493)	(60,484)
(-) Securities loaned	(2,706)	(2,237)
(-) Derivative financial instruments	(13,564)	(7,819)
(-) Securities sold under repurchase agreements	(44,483)	(31,839)
(-) Private Pension Liabilities	(16,897)	(13,388)
(-) Deposits	(4,003)	(3,022)
(-) Structured Operations	(2,841)	(2,178)
(-) Floating Balance	(17,214)	(19,252)
(=) Adjusted Gross Financial Assets	11,619	10,782

We present Adjusted Gross Financial Assets because we believe this metric captures the liquidity that is, in fact, available to us, net of the portion of liquidity that is related to our Floating Balance (and therefore attributable to clients). We calculate Adjusted Gross Financial Assets as the sum of (1) Cash and Financial Assets (comprised of Cash plus Securities – Fair value through profit or loss, plus Securities – Fair value through other comprehensive income, plus Securities – Evaluated at amortized cost, plus Derivative financial instruments, plus Securities (purchased under agreements to resell), plus Loans, less (2) Financial Liabilities (comprised of the sum of Securities loaned, Derivative financial instruments, Securities sold under repurchase agreements and Private pension liabilities), Deposits, Structured Operation Certificates (COE) and (3) less Floating Balance.

It is a measure that we track internally daily, and it more intuitively reflects the effect of the operational profits we generate and the variations between working capital assets and liabilities (cash flows from operating activities), investments in fixed and intangible assets (cash flows from investing activities) and inflows and outflows related to equity and debt securities in our capital structure (cash flows from financing activities).

Our management treats all securities and financial instrument assets, net of financial instrument liabilities, as balances that compose our total liquidity, with subline items (such as, for example, “securities at fair value

through profit and loss” and “securities at fair value through other comprehensive income”) expected to fluctuate substantially from quarter to quarter as our treasury manages and allocates our total liquidity to the most suitable financial instruments.

Other Information

Web Meeting

The Company will host a webcast to discuss its 1Q21 financial results on Tuesday, May 04, 2021, at 5:00 pm ET (7:00 pm BRT). To participate in the earnings webcast please subscribe at 1Q21 Earnings Web Meeting. The replay will be available on XP’s investor relations website at https://investors.xpinc.com/

Investor Relations Team

André Martins

Antonio Guimarães

ir@xpi.com.br

Important Disclosure

IN REVIEWING THE INFORMATION CONTAINED IN THIS RELEASE, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER. THIS INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT.

This release is prepared by XP Inc. (the “Company,” “we” or “our”), is solely for informational purposes. This release does not constitute a prospectus and does not constitute an offer to sell or the solicitation of an offer to buy any securities. In addition, this document and any materials distributed in connection with this release are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

This release was prepared by the Company. Neither the Company nor any of its affiliates, officers, employees or agents, make any representation or warranty, express or implied, in relation to the fairness, reasonableness, adequacy, accuracy or completeness of the information, statements or opinions, whichever their source, contained in this release or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. The information and opinions contained in this release are provided as at the date of this release, are subject to change without notice and do not purport to contain all information that may be required to evaluate the Company. The information in this release is in draft form and has not been independently verified. The Company and its affiliates, officers, employees and agents expressly disclaim any and all liability which may be based on this release and any errors therein or omissions therefrom. Neither the Company nor any of its affiliates, officers, employees or agents makes any representation or warranty, express or implied, as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any.

The information contained in this release does not purport to be comprehensive and has not been subject to any independent audit or review. Certain of the financial information as of and for the periods ended of March 31, 2021 and December 31, 2020, 2019, 2018 and 2017 has been derived from audited financial statements and all other financial information has been derived from unaudited interim financial statements. A significant portion of the information contained in this release is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. The Company’s internal estimates have not been verified by an external expert, and the Company cannot guarantee that a third party using different methods to assemble, analyze or compute market information and data would obtain or generate the same results.

Statements in the release, including those regarding the possible or assumed future or other performance of the Company or its industry or other trend projections, constitute forward-looking statements. These statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. By their nature, forward-looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements and there can be no assurance that such forward-looking statements will prove to be correct. These risks and uncertainties include factors relating to: (1) general economic, financial, political, demographic and business conditions in Brazil, as well as any other countries we may serve in the future and their impact on our business; (2) fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve in the future; (3) competition in the financial services industry; (4) our ability to implement our business strategy; (5) our ability to adapt to the rapid pace of technological changes in the financial services industry; (6) the reliability, performance, functionality and quality of our products and services and the investment performance of investment funds managed by third parties or by our asset managers; (7) the availability of government authorizations on terms and conditions and within periods acceptable to us; (8) our ability to continue attracting and retaining new appropriately-skilled employees; (9) our capitalization and level of indebtedness; (10) the interests of our controlling shareholders; (11) changes in government regulations applicable to the financial services industry in Brazil and elsewhere; (12) our ability to compete and conduct our business in the future; (13) the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors; (14) changes in consumer demands regarding financial products, customer experience related to investments and technological advances, and our ability to innovate to respond to such changes; (15) changes in labor, distribution and other operating costs; (16) our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us; (17) other factors that may affect our financial condition, liquidity and results of operations. Accordingly, you should not place undue reliance on forward-looking statements. The forward-looking statements included herein speak only as at the date of this release and the Company does not undertake any obligation to update these forward-looking statements. Past performance

does not guarantee or predict future performance. Moreover, the Company and its affiliates, officers, employees and agents do not undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of the release. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented and we do not intend to update any of these forward-looking statements.

Market data and industry information used throughout this release are based on management’s knowledge of the industry and the good faith estimates of management. The Company also relied, to the extent available, upon management’s review of industry surveys and publications and other publicly available information prepared by a number of third-party sources. All of the market data and industry information used in this release involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although the Company believes that these sources are reliable, there can be no assurance as to the accuracy or completeness of this information, and the Company has not independently verified this information.

The contents hereof should not be construed as investment, legal, tax or other advice and you should consult your own advisers as to legal, business, tax and other related matters concerning an investment in the Company. The Company is not acting on your behalf and does not regard you as a customer or a client. It will not be responsible to you for providing protections afforded to clients or for advising you on the relevant transaction.

This release includes our Floating Balance, Adjusted Gross Financial Assets, Adjusted EBITDA and Adjustments to Reported Net Income, which are non-GAAP financial information. We believe that such information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. We also believe that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s business that, when viewed with our International Financial Reporting Standards (“IFRS”) results, as issued by the International Accounting Standards Board, provide a more complete understanding of factors and trends affecting the Company’s business. Further, investors regularly rely on non-GAAP financial measures to assess operating performance and such measures may highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with IFRS. We also believe that certain non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in the Company’s industry, many of which present these measures when reporting their results. The non-GAAP financial information is presented for informational purposes and to enhance understanding of the IFRS financial statements. The non-GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for, or superior to, IFRS results. As other companies may determine or calculate this non-GAAP financial information differently, the usefulness of these measures for comparative purposes is limited. A reconciliation of such non-GAAP financial measures to the nearest GAAP measure is included in this release.

For purposes of this release:

“Active Clients” means the total number of retail clients served through our XP Investimentos, Rico, Clear, XP Investments and XP Private (Europe) brands, with an AUC above R$100.00 or that have transacted at least once in the last thirty days. For purposes of calculating this metric, if a client holds an account in more than one of the aforementioned entities, such client will be counted as one “active client” for each such account. For example, if a client holds an account in each of XP Investimentos and Rico, such client will count as two “active clients” for purposes of this metric.

“Assets Under Custody (AUC)” means the market value of all client assets invested through XP’s platform and that is related to reported Retail Revenue, including equities, fixed income securities, mutual funds (including those managed by XP Gestão de Recursos Ltda., XP Advisory Gestão de Recursos Ltda. and XP Vista Asset Management Ltda., as well as by third-party asset managers), pension funds (including those from XP Vida e Previdência S.A., as well as by third-party insurance companies), exchange traded funds, COEs (Structured Notes), REITs, and uninvested cash balances (Floating Balances), among others. Although AUC includes custody from Corporate Clients that generate Retail Revenue, it does not include custody from institutional clients (asset managers, pension funds and insurance companies).

Rounding

We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Unaudited Managerial Income Statement (in R$ millions)

	1Q21	1Q20	YoY	4Q20	QoQ
Managerial Income Statement
Total Gross Revenue	2,784	1,856	50%	2,570	8%
Retail	2,088	1,254	67%	1,844	13%
Institutional	294	331	-11%	307	-4%
Issuer Services	234	132	77%	323	-28%
Digital Content	23	27	-16%	25	-11%
Other	145	113	29%	71	106%
Net Revenue	2,628	1,735	51%	2,395	10%
COGS	(841)	(579)	45%	(836)	1%
As a % of Net Revenue	(32.0%)	(33.4%)	1.4 p.p	(34.9%)	2.9 p.p
Gross Profit	1,787	1,156	55%	1,559	15%
Gross Margin	68.0%	66.6%	1.4 p.p	65.1%	2.9 p.p
SG&A	(765)	(561)	36%	(717)	7%
Share Based Compensation^1^	(158)	(28)	456%	(136)	16%
EBITDA	864	567	52%	705	23%
EBITDA Margin	32.9%	32.7%	0.2 p.p	29.4%	3.4 p.p
Adjusted EBITDA	1,043	595	75%	891	17%
Adjusted EBITDA Margin	39.7%	34.3%	5.3 p.p	37.2%	2.5 p.p
D&A	(70)	(32)	120%	(37)	86%
EBIT	795	536	48%	668	19%
Interest expense on debt	(10)	(19)	-50%	(6)	51%
Share of profit or (loss) in joint ventures and associates	(1)	-	n.a.	1	n.a.
EBT	784	517	52%	663	18%
Income tax expense	(50)	(119)	-58%	(60)	-17%
Effective Tax Rate	(6.4%)	(23.0%)	16.7 p.p	(9.1%)	2.8 p.p
Net Income	734	398	85%	602	22%
Net Margin	27.9%	22.9%	5.0 p.p	25.2%	2.8 p.p
Non Recurring Items	111	17	549%	118	-6%
Adjusted Net Income	846	415	104%	721	17%
Adjusted Net Margin	32.2%	23.9%	8.3 p.p	30.1%	2.09 p.p

¹ A portion of total Share-Based Compensation is related to IFAs and allocated in COGS

Accounting Income Statement

(in R$ millions)

	1Q21	1Q20	YoY	4Q20	QoQ
Accounting Income Statement
Net revenue from services rendered	1,455	1,152	26%	1,523	-5%
Brokerage commission	641	505	27%	545	18%
Securities placement	469	348	35%	508	-8%
Management fees	310	255	22%	415	-25%
Insurance brokerage fee	32	29	9%	39	-17%
Educational services	19	26	-27%	23	-17%
Other services	119	94	26%	143	-17%
Taxes and contributions on services	(136)	(105)	29%	(148)	-9%
Net income from financial instruments at amortized cost and at fair value through other comprehensive income	31	202	-85%	(115)	-127%
Net income from financial instruments at fair value through profit or loss	1,143	380	200%	987	16%
Total revenue and income	2,628	1,735	51%	2,395	10%
Operating costs	(837)	(557)	50%	(819)	2%
Selling expenses	(44)	(28)	56%	(41)	10%
Administrative expenses	(966)	(578)	67%	(936)	3%
Other operating revenues (expenses), net	18	(14)	-232%	86	-79%
Expected credit losses	(3)	(22)	-84%	(17)	-80%
Interest expense on debt	(10)	(19)	-50%	(6)	51%
Share of profit or (loss) in joint ventures and associates	(1)	-	n.a.	1	n.a.
Income before income tax	784	517	52%	663	18%
Income tax expense	(50)	(119)	-58%	(60)	-17%
Effective tax rate	(6.4%)	(23.0%)	16.6 p.p	(9.1%)	2.7 p.p
Net income for the period	734	398	85%	602	22%

Balance Sheet (in R$ millions)

	1Q21	4Q20
Assets
Cash	1,557	1,955
Financial assets	115,611	90,191
Fair value through profit or loss	76,442	57,149
Securities	62,855	49,590
Derivative financial instruments	13,587	7,559
Fair value through other comprehensive income	21,629	19,039
Securities	21,629	19,039
Evaluated at amortized cost	17,540	14,002
Securities	1,916	1,829
Securities purchased under agreements to resell	6,741	6,627
Securities trading and intermediation	3,184	1,052
Accounts receivable	367	506
Loan Operations	5,041	3,918
Other financial assets	290	70
Other assets	2,175	1,761
Recoverable taxes	129	128
Rights-of-use assets	204	183
Prepaid expenses	1,785	1,394
Other	57	57
Deferred tax assets	653	505
Investments in associates and joint ventures	734	700
Property and equipment	223	204
Goodwill & Intangible assets	798	714
Total Assets	121,750	96,029

	1Q21	4Q20
Liabilities
Financial liabilities	92,617	70,601
Fair value through profit or loss	16,269	10,057
Securities	2,706	2,237
Derivative financial instruments	13,564	7,819
Evaluated at amortized cost	76,348	60,544
Securities sold under repurchase agreements	44,483	31,839
Securities trading and intermediation	20,399	20,303
Deposits	4,003	3,022
Structured operations certificates	2,841	2,178
Accounts payables	803	860
Borrowings and lease liabilities	507	493
Debentures	337	335
Other financial liabilities	2,975	1,514
Other liabilities	17,580	14,522
Social and statutory obligations	400	667
Taxes and social security obligations	250	436
Private pension liabilities	16,897	13,388
Provisions and contingent liabilities	26	20
Other	8	11
Deferred tax liabilities	-	8
Total Liabilities	110,198	85,132
Equity attributable to owners of the Parent company	11,550	10,895
Issued capital	0	0
Capital reserve	10,803	10,664
Other comprehensive income	14	231
Retained earnings	734	-
Non-controlling interest	3	3
Total equity	11,553	10,898
Total liabilities and equity	121,750	96,029

Adjusted EBITDA (in R$ millions)

	1Q21	1Q20	YoY	4Q20	QoQ
EBITDA	864	567	52%	705	23%
(+) Share Based Compensation	178	28	528%	180	-1%
(+) Offering expenses	-	-	n.a.	6	-100%
Adj. EBITDA	1,043	595	75%	891	17%

Adjusted Net Income (in R$ millions)

	1Q21	1Q20	YoY	4Q20	QoQ
Net Income	734	398	85%	602	22%
(+) Share Based Compensation	178	28	n.a.	180	-1%
(+) Offering expenses	-	-	n.a.	6	-100%
(+/-) Taxes	(67)	(11)	n.a.	(68)	-1%
Adj. Net Income	846	415	104%	721	17%

Exhibit 99.2

Report on review of interim condensed consolidatedfinancial statements

To the Board of Directors and Shareholders XP Inc.

Introduction

We have reviewed the accompanying interim condensed consolidated balance sheets of XP Inc. as at March 31, 2021 and the related interim condensed consolidated statements of income and of comprehensive income, of changes in equity and cash flows for the three-month period then ended, and a summary of significant accounting policies and other explanatory notes.

Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 - "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", and ISRE 2410 - "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently did not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements referred to above are not prepared, in all material respects, in accordance with IAS 34.

São Paulo, May 4, 2021

PricewaterhouseCoopers	Tatiana Fernandes Kagohara Gueorguiev
Auditores Independentes	Contadora CRC 1SP245281/O-6 CRC 2SP000160/O-5

PricewaterhouseCoopers, Av. Francisco Matarazzo1400, Torre Torino, São Paulo, SP, Brasil, 05001-903, Caixa Postal 60054, T: +55 (11) 3674 2000, www.pwc.com.br

XP Inc. and its subsidiaries<br><br> <br><br><br> <br>Unaudited interim condensed consolidated balance sheets<br><br> <br>As of March 31, 2021 and December 31, 2020<br><br> <br><br><br> <br>In thousands of Brazilian Reais
	Note		March 31,<br> <br>2021		December 31, 2020
---	---	---	---	---	---	---
Cash				1,556,782		1,954,788
Financial assets				115,611,055		90,190,827
Fair value through profit or loss				76,441,946		57,149,446
Securities		4		62,855,038		49,590,013
Derivative financial instruments		5		13,586,908		7,559,433
Fair value through other comprehensive income				21,629,266		19,039,044
Securities		4		21,629,266		19,039,044
Evaluated at amortized cost				17,539,843		14,002,337
Securities		4		1,915,816		1,828,704
Securities purchased under agreements to resell		3		6,741,459		6,627,409
Securities trading and intermediation		9		3,184,130		1,051,566
Accounts receivable				367,459		506,359
Loan operations		7		5,041,413		3,918,328
Other financial assets				289,566		69,971
Other assets				2,174,885		1,760,999
Recoverable taxes				128,769		127,623
Rights-of-use assets		12		204,430		183,134
Prepaid expenses		8		1,784,698		1,393,537
Other				56,988		56,705
Deferred tax assets		19		652,632		505,046
Investments in associates and joint ventures		11		733,861		699,907
Property and equipment		12		223,141		204,032
Goodwill and Intangible assets		12		798,001		713,562
Total assets				121,750,357		96,029,161

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

XP Inc. and its subsidiaries<br><br> <br><br><br> <br>Unaudited interim condensed consolidated balance sheets<br><br> <br>As of March 31, 2021 and December 31, 2020<br><br> <br><br><br> <br>In thousands of Brazilian Reais
	Note		March 31,<br> <br>2021		December 31, 2020
---	---	---	---	---	---	---
Financial liabilities				92,617,251		70,600,989
Fair value through profit or loss				16,269,472		10,056,806
Securities loaned		4		2,705,869		2,237,442
Derivative financial instruments		5		13,563,603		7,819,364
Evaluated at amortized cost				76,347,779		60,544,183
Securities sold under repurchase agreements		3		44,483,097		31,839,344
Securities trading and intermediation		9		20,398,530		20,303,121
Deposits		13		4,003,129		3,021,750
Structured operations certificates		14		2,841,116		2,178,459
Accounts payables				803,443		859,550
Borrowings and lease liabilities		15		506,531		492,535
Debentures		16		336,987		335,250
Other financial liabilities		17		2,974,946		1,514,174
Other liabilities				17,580,356		14,522,206
Social and statutory obligations				399,957		667,448
Taxes and social security obligations				249,950		435,849
Private pension liabilities		18		16,896,508		13,387,913
Provisions and contingent liabilities		22		26,024		19,711
Other				7,917		11,285
Deferred tax liabilities		19		-		8,352
Total liabilities				110,197,607		85,131,547
Equity attributable to owners of the Parent company				11,549,981		10,894,609
Issued capital				23		23
Capital reserve				10,802,675		10,663,942
Other comprehensive income				13,615		230,644
Retained earnings				733,668		-
Non-controlling interest				2,769		3,005
Total equity		20		11,552,750		10,897,614
Total liabilities and equity				121,750,357		96,029,161

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

XP Inc. and its subsidiaries<br><br> <br><br><br> <br>Unaudited interim condensed consolidated statements of income and of comprehensive income<br><br> <br>For the three months ended March 31, 2021 and 2020<br><br> <br>In thousands of Brazilian Reais, except earnings per share
			Three months period ended March 31,
---	---	---	---	---	---	---	---	---
	Note		2021			2020
Net revenue from services rendered		23		1,454,656			1,151,946
Net income from financial instruments at amortized cost and at fair value through other comprehensive income		23		30,884			202,497
Net income from financial instruments at fair value through profit or loss		23		1,142,501			380,398
Total revenue and income				2,628,041			1,734,841
Operating costs		24		(837,435	)		(556,854	)
Selling expenses		25		(44,418	)		(28,476	)
Administrative expenses		25		(966,278	)		(578,116	)
Other operating income (expenses), net		26		18,361			(13,883	)
Expected credit losses		10		(3,455	)		(21,962	)
Interest expense on debt				(9,516	)		(19,019	)
Share of profit or (loss) in joint ventures and associates		11		(1,084	)		-
Income before income tax				784,216			516,531
Income tax expense		19		(50,068	)		(118,977	)
Net income for the period				734,148			397,554
Other comprehensive income
Items that can be subsequently reclassified to income
Foreign exchange variation of investees located abroad				26,312			56,560
Gains (losses) on net investment hedge				(20,744	)		(56,496	)
Changes in the fair value of financial assets at fair value through other comprehensive income				(222,597	)		31,490
Other comprehensive income (loss) for the period, net of tax				(217,029	)		31,554
Total comprehensive income for the period				517,119			429,108
Net income attributable to:
Owners of the Parent company				733,668			396,860
Non-controlling interest				480			694
Total comprehensive income attributable to:
Owners of the Parent company				516,639			428,414
Non-controlling interest				480			694
Earnings per share from total income attributable to the ordinary equity holders of the company
Basic earnings per share		28		1.3123			0.7192
Diluted earnings per share		28		1.2810			0.7139

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

XP Inc. and its subsidiaries<br><br> <br>Unaudited interim condensed consolidated statements of changes in equity<br><br> <br>For the three months ended March 31, 2021 and 2020<br><br> <br>In thousands of Brazilian Reais
			Atributable to owners of the Parent
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
					Capital reserve
	Notes		Issued Capital		Additional paid-in capital		Other Reserves			Other comprehensive income			Retained Earnings		Total			Non-Controlling interest			Total Equity
Balances at December 31, 2019				23		5,409,895		1,533,551			209,927			-		7,153,396			2,563			7,155,959
Comprehensive income for the period
Net income for the period				-		-		-			-			396,860		396,860			694			397,554
Other comprehensive income, net				-		-		-			31,554			-		31,554			-			31,554
Transactions with shareholders - contributions and distributions
Share based plan		27		-		-		23,221			-			-		23,221			(7	)		23,214
Gain (loss) in changes in interest of subsidiaries, net				-		-		-			(83	)		-		(83	)		1,933			1,850
Allocations of the net income for the period
Dividends distributed				-		-		-			-			-		-			(3,432	)		(3,432	)
Balances at March 31, 2020				23		5,409,895		1,556,772			241,398			396,860		7,604,948			1,751			7,606,699
Balances at December 31, 2020				23		6,821,176		3,842,766			230,644			-		10,894,609			3,005			10,897,614
Comprehensive income for the period
Net income for the period				-		-		-			-			733,668		733,668			480			734,148
Other comprehensive income, net				-		-		-			(217,029	)		-		(217,029	)		-			(217,029	)
Transactions with shareholders - contributions and distributions
Share based Plan		27		-		-		140,549			-			-		140,549			2			140,551
Gain (loss) in changes in interest of subsidiaries, net				-		-		(1,816	)		-			-		(1,816	)		61			(1,755	)
Allocations of the net income for the period
Dividends distributed				-		-		-			-			-		-			(779	)		(779	)
Balances at March 31, 2021				23		6,821,176		3,981,499			13,615			733,668		11,549,981			2,769			11,552,750

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

XP Inc. and its subsidiaries<br><br> <br>Unaudited interim condensed consolidated statements of cash flows<br><br> <br><br><br> <br>For the three months ended March 31, 2021 and 2020<br><br><br>In thousands of Brazilian Reais
			Three months ended<br> <br>March 31,
---	---	---	---	---	---	---	---	---
	Note		2021			2020
Operating activities
Income before income tax				784,216			516,531
Adjustments to reconcile income before income taxes
Depreciation of property and equipment and right-of-use assets		12		15,145			15,878
Amortization of intangible assets		12		54,362			15,648
Loss on write-off of property, equipment and intangible assets and lease, net		12		3,028			3,452
Share of profit or (loss) in joint ventures and associates		11		1,084			-
Expected credit losses on financial assets				3,455			21,962
(Reversal of) Provision for contingencies, net		22		3,295			(387	)
Net foreign exchange differences				(56	)		(19,510	)
Share based plan		27		140,551			23,221
Interest accrued				12,019			20,087
Changes in assets and liabilities
Securities (assets and liabilities)				(15,255,321	)		(6,676,164	)
Derivative financial instruments (assets and liabilities)				(314,666	)		988,979
Securities trading and intermediation (assets and liabilities)				(2,037,783	)		3,708,191
Securities purchased (sold) under resale (repurchase) agreements				12,528,762			46,190
Accounts receivable				138,006			6,197
Loan operations				(1,121,807	)		(63,520	)
Prepaid expenses				(391,161	)		(15,811	)
Other assets and other financial assets				(220,817	)		52,295
Structured operations certificates				662,657			130,987
Accounts payable				(56,375	)		(1,616	)
Deposits				981,379			4
Social and statutory obligations				(267,491	)		(217,971	)
Tax and social security obligations				7,257			(33,554	)
Private pension liabilities				3,508,595			1,395,998
Other liabilities and other financial liabilities				1,419,510			141,008
Cash from operations				597,844			58,095
Income tax paid				(235,785	)		(196,585	)
Contingencies paid		22		(1,480	)		(234	)
Interest paid				(38	)		(572	)
Net cash flows (used in) from operating activities				360,541			(139,296	)
Investing activities
Acquisition of property and equipment		12(a)		(23,698	)		(20,746	)
Acquisition of intangible assets		12(a)		(114,298	)		(19,914	)
Acquisition of subsidiaries, net of cash acquired		2(e)		(854	)		-
Acquisition of associates and joint ventures				(23,231	)		-
Net cash flows (used in) investing activities				(162,081	)		(40,660	)
Financing activities
Payments of borrowings and lease liabilities		32		(23,758	)		(26,058	)
Transactions with non-controlling interests				(1,755	)		1,844
Dividends paid to non-controlling interests				(779	)		(3,432	)
Net cash flows from (used in) financing activities				(26,292	)		(27,646	)
Net increase (decreased) in cash and cash equivalents				172,168			(207,602	)
Cash and cash equivalents at the beginning of the period				2,660,388			887,796
Effects of exchange rate changes on cash and cash equivalents				7,636			31,009
Cash and cash equivalents at the end of the period				2,840,192			711,203
Cash				1,556,782			249,950
Securities purchased under agreements to resell		3		1,191,577			309,053
Interbank certificate deposits		4		91,833			152,200

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
1.	Operations
---	---

XP Inc. (the “Company”) is a Cayman Island exempted company with limited liability, incorporated on August 29, 2019. The registered office of the Company is Ugland House, 121 South Church Street in George Town, Grand Cayman. The Company’s principal executive office is located in the city of São Paulo, Brazil.

XP Inc. is a holding company controlled by XP Controle Participações S.A., which holds 55.40% of voting rights and whose is ultimately controlled by a group of individuals. On December 13, 2019, the Company completed its Initial Public Offering (“IPO”) and the common shares began trading on the Nasdaq Global Select Market (“NASDAQ-GS”) under the symbol “XP”.

XP Inc. and its subsidiaries (collectively, the “Company”, “Group” or “XP Group”) is a leading, technology-driven financial services platform and a trusted provider of low-fee financial products and services in Brazil. XP Group are principally engaged in providing its customers, represented by individuals and legal entities in Brazil and abroad, various financial products, services, digital content and financial advisory services, mainly acting as broker-dealer, including securities brokerage, private pension plans, commercial and investment banking products such as loans operations, transactions in the foreign exchange markets and deposits, through our brands that reach clients directly and through network of Independent Financial Advisers (“IFAs”).

These unaudited interim condensed consolidated financial statements as of March 31, 2021 were approved by the Board of Directors on May 4, 2021.

1.1	Follow-on public offering

On July 1, 2020, XP Inc. concluded an underwritten public offering of 22,465,733 Class A common shares offered by General Atlantic (XP) Bermuda, L.P. and XP Controle Participações S.A. (“selling shareholders”) at a public offering price of US$42.50 per share, including the full exercise of the underwriters’ option to purchase an additional 2,930,313 Class A common shares from the selling shareholders. The Company did not receive any proceeds from the sale of Class A common shares by the selling shareholders and there were no changes in the Company’s control structure as a result of such transaction.

On December 7, 2020, XP Inc closed of its underwritten secondary public offering of 31,654,894 Class A common shares, 7,130,435 of which were issued and sold by the Company and 24,524,459 of which were sold by ITB Holding Brasil Participações Ltda.. The offering was made pursuant to a registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission (“SEC”).

The offering price per Class A common share was US$ 39.00, resulting in gross proceeds of US$283,087 thousand (or R$1,444,530) to XP Inc, deducting R$31,599 thousand as underwriting discounts and commissions. Additionally, the Company incurred in R$7,271 thousand regarding other offering expenses, of which R$5,622 thousand was recognized directly in income statements and an amount of R$1,649 in equity as transaction costs.

1.2	Spin-off of Itaú’s investment in XP Inc.

In January 2021, XP Inc. reached an agreement with Itaú Unibanco in connection with Itaú’s spin-off of its investment in XP Inc., and has entered into two agreements regarding to the corporate reorganization announced by Itaú Unibanco Holding S.A. on December 31, 2020 (Itaú Agreements).

The Itaú Agreements establish certain steps to be taken as a result of the corporate reorganization approved and announced by its shareholders, which are subject to the US Federal Reserve Board’s (FED) approval.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The proposed transaction is being proposed by XPart and XP to streamline and simplify the corporate structure at shareholders’ level at XP, specifically by giving XPart’s shareholders more accessible ways to trade XP shares as they will directly own an interest in XP.

It is not expected that such transaction will have any impact on XP Inc.’s results of operations and financial condition.

1.3	COVID-19

Covid-19 has significantly impacted the world economy. Many countries have imposed travel bans on millions of people and, additionally, people in many locations are subject to quarantine measures. Businesses are dealing with lost revenue and disrupted supply chains. Countries have imposed lockdowns in response to the pandemic and, as a result of the disruption to businesses, millions of workers have lost their jobs. The Covid-19 pandemic has also resulted in significant volatility in the financial and commodities markets worldwide. Numerous governments have announced measures to provide both financial and non-financial assistance to the affected entities. During the pandemic, the Group maintained trading platforms and other services available to clients without interruption. XP has played a valuable role on keeping our clients connected to the market and reinforce our mission to our clients.

Based on thorough assessments about the well-being and performance of our workforce, management announced on September 11, 2020, the permanent and company-wide adoption of the home-office model.

The Group has reviewed its exposure to economic-related and market volatility, which could negatively impact the value of a certain class of financial instruments however has not identified relevant impact to the financial performance or position of the group as March 31, 2021. The Company has sufficient headroom to enable it to comply with its covenants on its existing borrowings and sufficient working capital and undrawn financing facilities to service its operating activities and ongoing investments.

2.	Basis of preparation and changes to the Group’s accounting policies
a)	Basis of preparation
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The unaudited interim condensed consolidated financial statements as of March 31, 2021 and for three months ended March, 2021 and 2020 have been prepared in accordance with IAS 34 InterimFinancial Reporting as issued by the International Accounting Standards Board (“IASB”).

The unaudited interim condensed consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value.

The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as of December 31, 2020. The list of notes that were not presented in this unaudited interim condensed is described below:

Note to financial statements of December 31, 2020	Description
3.	Summary of significant accounting policies
4.	Significant estimated and judgements
5.	Group structure
11.	Accounts receivable
12.	Recoverable taxes
24.	Social and Statutory obligations
25.	Tax and social security obligations
29. (a)	Key-person management compensation
38. (b) to (f)	Management of financial risks and financial instruments

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the new accounting policies adopted for the current interim reporting period, see Note 2 (b).

The unaudited interim condensed consolidated financial statements are presented in Brazilian reais (“R$”), which is the Group’s presentation currency and all amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand currency units unless otherwise stated.

b)	New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2020, except for the adoption of new standards effective as of 1 January 2021. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Interest Rate Benchmark Reform – Phase2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank

offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).

The amendments include the following practical expedients:

·	A practical expedient to require contractual changes, or changes to cash flows that are directly required<br>by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
·	Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without<br>the hedging relationship being discontinued
---	---
·	Provide temporary relief to entities from having to meet the separately identifiable requirement when<br>an RFR instrument is designated as a hedge of a risk component
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These amendments had no impact on the unaudited interim condensed consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.

c)	Basis of consolidation

There were no changes since December 31, 2020 in the accounting practices adopted for consolidation of the Company’s direct and indirect interests in its subsidiaries for the purposes of these unaudited interim condensed consolidated financial statements, except for the following items:

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
			% of Group’s interest (i)
---	---	---	---	---
Entity name	Country of incorporation	Principal activities	March 31,2021	December 31,2020
Directly controlled
XPAC Sponsor LLC (ii)	Cayman	Special Purpose Acquisition	100.00%	-
Indirectly controlled
Leadr Serviços Online Ltda. (iii)	Brazil	Social media	-	99.99%
(i)	The percentage of participation represents the Group’s<br>interest in total capital and voting capital of its subsidiaries.
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(ii)	New subsidiaries incorporated in the period.
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(iii)	Subsidiaries closed in the period.
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d)	Interests in associates and joint ventures
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i.	Associates
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Associates are companies in which the investor has a significant influence but does not hold control. Investments in these companies are initially recognized at cost of acquisition and subsequently accounted for using the equity method. Investments in associates and joint ventures include the goodwill identified upon acquisition, net of any cumulative impairment loss.

ii.	Joint ventures

The Group has joint venture whereby the parties that have joint control of the arrangement have rights to the net assets.

iii.	Equity method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

If its interest in the associates and joint ventures decreases, but the Group retains significant influence or joint control, only the proportional amount of the previously recognized amounts in Other comprehensive income is reclassified in Income, when appropriate.

e)	Business combinations

During 2020 the Group acquired certain companies as part of our growth strategy and the fair value of the identifiable assets acquired and liabilities assumed as of each acquisition date were:

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
	Fliper			Antecipa			DM10			Total
---	---	---	---	---	---	---	---	---	---	---	---	---
Assets
Cash		617			1,917			275			2,809
Other assets		-			95			411			506
Intangible assets		2,869			10,037			2,950			15,856
		3,486			12,049			3,636			19,171
Liabilities
Other liabilities		(6,159	)		(198	)		(1,522	)		(7,879	)
Total identifiable net assets at fair value		(2,673	)		11,851			2,114			11,292
Goodwill arising on acquisition (*)		39,832			20,732			14,886			75,450
Contingent consideration (**)		30,300			8,732			-			39,032
Purchase consideration transferred (*)		67,459			41,315			17,000			125,774
Analysis of cash flows on acquisition
Net cash acquired with the subsidiary		(617	)		(1,917	)		(275	)		(2,809	)
Payable in installments		-			(14,636	)		(6,000	)		(20,636	)
Contingent consideration		(30,300	)		(8,732	)		-			(39,032	)
Net of cash flow on acquisition (investing activities)		36,542			16,030			10,725			63,297

From R$ 63,297 of net cash flow on aquisition, R$ 62,443 was settled during 2020, and R$ 854 was settled in 2021.

*During the measurement period, the purchase consideration transferred for the acquisitions was adjusted to R$ 125,774 (R$ 100,923 previously disclosed) as a result of purchase price adjustments. Accordingly, goodwill was updated to R$2,233.

** During the measurement period, the preliminary contingent consideration for the acquisitions was adjusted to R$39,032 (R$14,183 previously disclosed) as a result of a fair value adjustment of R$24,849.

For the purchase price allocation, the following intangible assets were identified. The valuation techniques used for measuring the fair value of separately identified intangible assets acquired were as follows:

Assets	Amount	Method	Expected amortization period
Customer list	2,181	Multi-period excess earning method	5.5 years
Trademark	3,799	Relief from royalty	5 years
Technology	9,876	Relief from royalty	5 years

For the concluded acquisitions, the total consideration paid is R$125,773, being: i) R$62,443 paid in cash, ii) R$21,487 payable in three consecutives annual installments from 2020 to 2022 adjusted by the Interbank Certificates of Deposit (“CDI”) rate and iii) R$ 39,032 as a fair value of the contingent consideration.

The goodwill recognized includes the value of expected synergies arising from the acquisition, which is not separately recognized. The goodwill recognized is not expected to be deductible for income taxes purposes.

In addition, the Company incurred direct costs for the business combinations which were expensed as incurred.

The results of operations of the businesses acquired for periods prior to acquisitions, individually and in the aggregate, were not material to the Company´s consolidated statements of income and, accordingly, pro forma information has not been presented.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Acquisition of Carteira Online Controle de InvestimentosLtda.-ME (“Fliper”)

On June 5, 2020, the Group entered into an agreement, to acquire 100% of total share capital of Carteira Online Controle de Investimentos Ltda.-ME (“Fliper”). Fliper is an automated investment consolidation platform that offers its users connectivity and tools to perform intuitive and intelligent financial self-management. The transaction allows the Group to offer its customers additional resources to manage their investments, as the open banking trend continues to accelerate in Brazil. On July 13, 2020, the acquisition was consummated, through approval of Central Bank (BACEN).

Acquisition of DM10 Corretora de Seguros e AssessoriaLtda. (“DM10”)

On June 9, 2020, the Group entered into an agreement, to acquire 100% of total share capital of DM10 Corretora de Seguros e Assessoria Ltda. (“DM10”). DM10 is an marketplace that connects hundreds of independent distributors with Life Insurance and Pension Plan products, adding value through technology and education. With the transaction, the Group enhances its distribution network in the insurance division. On September 24, 2020, the acquisition was consummated, through approval of Central Bank (BACEN).

Acquisition of Antecipa S.A. (“Antecipa”)

On June 29, 2020, the Group entered into an agreement, to 100% of total share capital of Antecipa S.A. (“Antecipa”). Antecipa is a digital platform focused on financing of receivables and offering an efficient alternative for companies to optimize its cash flow management. For the Group, the acquisition represents an opportunity to further expand its product range and reinforce the company’s presence in the Small to Medium Enterprise (SME) and corporate segments in Brazil, similar to XP’s transformational initiatives across the Retail, High-Income and Private Market channels. On September 1, 2020, acquisition was consummated, through approval of Central Bank (BACEN).

Acquisition of Riza Capital Consultoria de InvestimentosS.A (“Riza”)

On December 23, 2020 the Group entered into an agreement, to acquire 100% of total share capital of Riza an independent financial advisory company. Riza has one of the most seasoned and respected teams in the segment, with experience in important financial institutions and active participation in some of the most relevant M&A transactions over the last decades. The transaction is aligned with XP Inc.’s strategy to reinforce its Capital Markets ecosystem.

As at March 31, 2021, the acquisition of Riza has not been completed. The Company expects to conclude the transaction during 2021, subject to certain contractual precedent conditions. After the closing of the acquisition XP will proceed with the purchase price allocation of net assets acquired as well as the consolidation of entities purchased.

f)	Segment reporting

In reviewing the operational performance of the Group and allocating resources, the chief operating decision maker of the Group (“CODM”), who is the Group’s Chief Executive Officer (“CEO”) and the Board of Directors (“BoD”), represented by statutory directors holders of ordinary shares of the immediate parent of the Company, reviews selected items of the statement of income and of comprehensive income.

The CODM considers the whole Group as a single operating and reportable segment, monitoring operations, making decisions on fund allocation and evaluating performance based on a single operating segment. The

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

CODM reviews relevant financial data on a combined basis for all subsidiaries and joint ventures. Disaggregated information is only reviewed at the revenue level (Note 23), with no corresponding detail at any margin or profitability levels.

The Group’s revenue, results and assets for this one reportable segment can be determined by reference to the unaudited interim condensed consolidated statements of income and of comprehensive income and unaudited interim condensed consolidated balance sheet.

See Note 23 (c) for a breakdown of total revenue and income and selected assets by geographic location.

g)	Estimates

The preparation of unaudited interim condensed consolidated financial statements of the Group requires management to make judgments and estimates and to adopt assumptions that affect the amounts presented referring to revenues, expenses, assets and liabilities at the reporting date. Actual results may differ from these estimates.

In preparing these unaudited interim condensed consolidated financial statements, the significant judgements and estimates made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that are set the consolidated financial statements for the year ended December 31, 2020.

3.	Securities purchased (sold) under resale (repurchase) agreements
a)	Securities purchased under agreements to resell
---	---
	March 31,<br> <br>2021			December 31, 2020
---	---	---	---	---	---	---
Available portfolio		2,959,713			1,409,742
National Treasury Notes (NTNs) (a)		1,322,501			876,146
Financial Treasury Bills (LFTs) (a)		650,613			452,714
National Treasury Bills (LTNs) (a)		873,138			44,093
Debentures (b)		113,461			36,789
Collateral held		3,783,057			5,218,037
National Treasury Bills (LTNs) (a)		977,999			976,468
National Treasury Notes (NTNs) (a)		2,360,239			4,241,569
Financial Treasury Bills (LFTs) (a)		241,195			-
Debentures (b)		203,624			-
Expected Credit Loss (c)		(1,311	)		(370	)
Total		6,741,459			6,627,409

(a) Investments in purchase and sale commitments collateral-backed by sovereign debt securities refer to transactions involving the purchase of sovereign debt securities with a commitment to sale originated in the subsidiary XP CCTVM and in exclusive funds and were carried out at an average fixed rate of 2.58% p.a. (1.91% p.a. as of December 31, 2020).

(b) Refers to fixed-rate fixed-income and low-risk investments issued by financial institutions, collateral-backed by debentures.

(c) The reconciliation of gross carrying amount and the expected credit loss segregated by stages are presented in the Note 10.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

As of March 31, 2021, R$1,191,577 (December 31, 2020 - R$593,673) from the total amount of available portfolio is being presented as cash equivalents in the statements of cash flows.

b)	Securities sold under repurchase agreements
	March 31,<br> <br>2021		December 31,<br> <br>2020
---	---	---	---	---
National Treasury Bills (LTNs)		17,018,906		18,318,498
National Treasury Notes (NTNs)		22,008,552		13,497,944
Financial Treasury Bills (LFTs)		5,215,499		-
Debentures		240,140		22,902
Total		44,483,097		31,839,344

As of March 31, 2021, securities sold under repurchase agreements were agreed with average interest rates of 2.64% p.a. (December 31, 2020 – 1.89% p.a.), with assets pledged as collateral.

4.	Securities
a)	Securities classified at fair value through profit and loss:
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	March 31,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Fair<br> <br>value		Gross carrying amount		Fair<br> <br>value
Financial assets (ii)
At fair value through profit or loss		63,160,733		62,855,038		49,157,111		49,590,013
Brazilian government bonds		40,895,440		40,563,575		30,752,903		31,129,671
Investment funds (ii)		14,989,732		14,994,872		11,216,914		11,221,774
Stocks issued by public-held company		4,558,222		4,557,967		3,802,610		3,802,470
Debentures		1,184,649		1,188,995		1,111,595		1,114,967
Structured transaction certificate		382,230		401,185		485,012		515,960
Bank deposit certificates (i)		287,617		289,022		371,455		372,329
Agribusiness receivables certificates		152,999		151,756		359,607		363,721
Certificate of real estate receivable		84,919		83,055		97,606		96,930
Financial credit bills		65,449		65,758		81,465		82,209
Uniated States government bonds		19,968		20,004		590,710		602,214
Real estate credit bill		2,085		2,121		474		477
Others (iii)		537,423		536,728		286,760		287,291
(i)	Bank deposit certificates includes R$ 91,833 presented as cash equivalents in the statements of cash flows.
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(ii)	Financial assets include R$ 16,896,508 (December 31, 2020 – R$ 13,387,913) related to Specially<br>Constituted Investment Fund (“FIE”) as presented in Note 18, out of which R$14,181,289 (December 31, 2020 – R$ 10,625,520)<br>are Investments funds.
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(iii)	Mainly related to bonds issued and traded overseas.
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XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
b)	Securities at fair value through other comprehensive income are presented in the following table:
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	March 31,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Fair<br> <br>value		Gross carrying amount		Fair<br> <br>value
Financial assets
At fair value through other comprehensive income
Brazilian government bonds (i)		21,977,757		21,629,266		19,011,499		19,039,044
(i)	Includes expected credit losses in the amount of R$ 10,238 (2020<br>– R$ 8,855). The reconciliation of gross carrying amount and the expected credit loss are presented in the Note 10.
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c)	Securities evaluated at amortized cost are presented in the following table:
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	March 31,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Book<br> <br>value		Gross carrying amount		Book<br> <br>value
Financial assets
At fair value through other comprehensive income
Bonds (i)		1,916,962		1,915,816		1,829,791		1,828,704
(i)	Includes expected credit losses in the amount of R$ 1,146 (2020<br>– R$ 1,087). The reconciliation of gross carrying amount and the expected credit loss are presented in the Note 10.
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d)	Securities on the financial liabilities classified at fair value through profit or loss are presented<br>in the following table:
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	March 31,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Fair<br> <br>value		Gross carrying amount		Fair<br> <br>value
Financial liabilities
At fair value through profit or loss
Securities loaned		2,705,869		2,705,869		2,237,442		2,237,442
e)	Securities classified by maturity:
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	Assets				Liabilities
---	---	---	---	---	---	---	---	---
	March 31,<br> <br>2021		December 31, 2020		March 31,<br> <br>2021		December 31, 2020
Financial assets
At fair value through PL and at OCI
Current		38,300,712		34,572,107		2,705,869		2,237,442
Non-stated maturity		19,903,106		15,246,105		2,705,869		2,237,442
Up to 3 months		11,831,738		794,025		-		-
From 3 to 12 months		6,565,868		18,531,977		-		-
Non-current		46,193,830		34,065,805		-		-
After one year		46,193,830		34,065,805		-		-
Evaluated at amortized cost
Current		1,916,962		1,829,791		-		-
Up to 3 months		1,715,080		1,623,487		-		-
From 3 to 12 months		201,882		206,304		-		-
Total		86,411,504		70,467,703		2,705,869		2,237,442

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The reconciliation of expected loss to financial assets at amortized cost – securities according with IFRS 9 is demonstrated in Note 10.

5.	Derivative financial instruments

The Group trades derivative financial instruments with various counterparties to manage its overall exposures (interest rate, foreign currency and fair value of financial instruments) and to assist its customers in managing their own exposures.

Below is the composition of the derivative financial instruments portfolio (assets and liabilities) by type of instrument, stated fair value and by maturity:

	March 31,<br> <br>2021
	Notional		Fair Value		%			Up to 3<br> <br>months		From 3 to<br> <br>12 months		Above<br> <br>12 months
Assets
Options		509,856,294		6,967,818		95	%		3,059,069		2,467,835		1,440,914
Swap contracts		8,009,244		919,856		1	%		210,430		79,270		630,156
Forward contracts		10,565,131		5,488,700		2	%		4,770,720		679,012		38,968
Future contracts		9,565,259		210,534		2	%		141,705		50,885		17,944
Total		537,995,928		13,586,908		100	%		8,181,924		3,277,002		2,127,982
Liabilities
Options		428,490,648		7,717,168		95	%		3,535,508		2,377,603		1,804,057
Swap contracts		7,333,816		1,247,598		2	%		200,494		496,051		551,053
Forward contracts		10,581,320		4,598,604		2	%		4,564,545		21,952		12,107
Future contracts		1,564,977		233		1	%		-		11		222
Total		447,970,761		13,563,603		100	%		8,300,547		2,895,617		2,367,439

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
	December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Notional		Fair Value		%			Up to 3<br> <br>months		From 3 to<br> <br>12 months		Above 12<br> <br>months
Assets
Options		681,464,674		6,298,358		83	%		2,327,062		2,351,285		1,620,011
Swap contracts		5,578,227		777,816		10	%		35,241		206,921		535,654
Forward contracts		2,905,411		456,724		6	%		230,862		201,324		24,538
Future contracts		43,100,609		26,535		1	%		26,535		-		-
Total		733,048,921		7,559,433		100	%		2,619,700		2,759,530		2,180,203
Liabilities
Options		614,741,256		6,735,478		87	%		2,152,890		2,378,689		2,203,899
Swap contracts		6,143,671		870,393		11	%		99,249		213,532		557,612
Forward contracts		3,035,011		200,272		3	%		133,679		49,102		17,491
Future contracts		44,981,642		13,221		1	%		542		1,742		10,937
Total		668,901,580		7,819,364		100	%		2,386,360		2,643,065		2,789,939
6.	Hedge accounting
---	---

The Group has two types of hedge relationships: hedge of net investment in foreign operations and fair value hedge. For hedge accounting purposes, the risk factors measured by the Group are:

·	Interest Rate: Risk of volatility in transactions subject to interest rate variations;
·	Currency: Risk of volatility in transactions subject to foreign exchange variation.
---	---

The structure of risk limits is extended to the risk factor level, where specific limits aim at improving the monitoring and understanding processes, as well as avoiding concentration of these risks.

The structures designed for interest rate and exchange rate categories take into account total risk when there are compatible hedging instruments. In certain cases, management may decide to hedge a risk for the risk factor term and limit of the hedging instrument.

a)	Hedge of net investment in foreign operations

In the period ended March 31, 2021, the objective for the Group was to hedge the risk generated by the US$ variation from investments in our subsidiaries in the United States, XP Holdings International and XP Advisors Inc.

The Group has entered into forward contracts to protect against changes in future cash flows and exchange rate variation of net investments in foreign operations known as Non Deliverable Forward (“NDF”) contracts.

The Group undertakes risk management through the economic relationship between hedge instruments and hedged item, in which it is expected that these instruments will move in opposite directions, in the same proportions, with the aim of neutralizing the risk factors.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
	Hedged item						Hedge instrument
---	---	---	---	---	---	---	---	---	---	---	---
	Book Value
Strategies	Assets		Liabilities		Variation in value recognized in Other comprehensive income		Notional value		Variation in the<br> amounts used to<br> calculate hedge<br> ineffectiveness
March 31, 2021
Foreign exchange risk
Hedge of net investment in foreign operations		282,760		-		24,103		427,297		(20,744	)
Total		282,760		-		24,103		427,297		(20,744	)
December 31, 2020
Foreign exchange risk
Hedge of net investment in foreign operations		245,986		-		52,299		349,218		(60,563	)
Total		245,986		-		52,299		349,218		(60,563	)
b)	Fair value hedge
---	---

The fair value hedging strategy of the Group consists of hedging the exposure of Fixed-Income securities carried out through structured operations certificates.

The market risk hedge strategy involves avoiding temporary fluctuations in earnings arising from changes in the interest rate market in Reais. Once this risk is offset, the Group seeks to index the portfolio to the CDI, through the use of derivatives (DI1 Futuro).

The hedge is contracted in order to neutralize the total exposure to the market risk of the fixed-income funding portfolio, excluding the portion of the fixed-income compensation represented by the credit spread of Banco XP S.A, seeking to obtain the closest match deadlines and volumes as possible.

The effects of hedge accounting on the financial position and performance of the Group are presented below:

	Hedged item							Hedge instrument
	Book Value
Strategies	Assets		Liabilities		Variation in value recognized in income			Nominal value		Variation in the amounts used to calculate hedge ineffectiveness
March 31, 2021
Interest rate risk
Hedge of pre-fixed operations		-		2,841,116		228,878			2,838,377		(228,524	)
Total		-		2,841,116		228,878			2,838,377		(228,524	)
December 31, 2020
Interest rate risk
Hedge of pre-fixed operations		-		2,178,459		(47,923	)		2,188,732		46,795
Total		-		2,178,459		(47,923	)		2,188,732		46,795

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
	March 31, 2021
---	---	---	---	---	---	---	---	---	---	---	---
			Book value (i)
Hedge Instruments	Notional amount		Assets		Liabilities		Variation in fair value used to calculate hedge ineffectiveness			Hedge ineffectiveness recognized in income
Interest rate risk
Futures		2,838,377		-		2,841,116		(228,524	)		354
	December31, 2020
---	---	---	---	---	---	---	---	---	---	---	---
			Book value (i)
Hedge Instruments	Notional amount		Assets		Liabilities		Variation in fair value used to calculate hedge ineffectiveness		Hedge ineffectiveness recognized in income
Interest rate risk
Futures		2,188,732		-		2,178,459		46,795		(1,128	)
(i)	Amounts recorded within financial statement line “Derivative<br>financial instruments”. See Note 5.
---	---

The table below presents, for each strategy, the notional amount and the fair value adjustments of hedge instruments and the book value of the hedged item:

	March 31, 2021							December 31, 2020
Strategies	Hedge instruments					Hedge item		Hedge instruments					Hedge item
	Notional amount		Fair value adjustments			Book value		Notional amount		Fair value adjustments			Book value
Hedge of Fair Value		2,838,377		(228,524	)		228,878		2,188,732		(47,923	)		46,795
Hedge of net investment in foreign operations		427,297		(20,744	)		24,103		349,218		(60,563	)		52,299
Total		3,265,674		(249,268	)		252,981		2,537,950		(108,486	)		99,094

The table below shows the breakdown notional value by maturity of the hedging strategies:

	March31, 2021
	0-1 year		1-2 years		2-3 years		3-4 years		4-5 years		5-10 years		Total
Hedge of Fair Value		18,367		19,307		166,022		103,503		1,049,761		1,481,417		2,838,377
Hedge of net investment in foreign operations		42,730		-		162,373		222,194		-		-		427,297
Total		61,097		19,307		328,395		325,697		1,049,761		1,481,417		3,265,674
	December 31, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	0-1 year		1-2 years		2-3 years		3-4 years		4-5 years		5-10 years		Total
Hedge of Fair Value		1,977		13,375		94,099		44,843		672,978		1,361,460		2,188,732
Hedge of net investment in foreign operations		-		-		146,547		202,671		-		-		349,218
Total		1,977		13,375		240,646		247,514		672,978		1,361,460		2,537,950

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
7.	Loan operations
---	---

Following are the breakdown of the carrying amount of loan operations by class, sector of debtor and maturity:

Loans by type	March<br> <br>31,2021			December 31, 2020
Retail
Pledged asset loan		3,472,794			2,698,018
Non-pledged loan		121,739			116,978
Credit card		317,266			51,270
Corporate
Pledged asset loan		1,104,551			946,008
Non-pledged loan		31,046			113,155
Total Loans operations		5,047,396			3,925,429
Expected Credit Loss (Note 10)		(5,983	)		(7,101	)
Total loans operations, net of Expected Loss		5,041,413			3,918,328
By maturity	March 31,<br> <br>2021		December 31,<br> <br>2020
---	---	---	---	---
Due in 3 months or less		249,274		160,918
Due after 3 months through 12 months		800,923		580,183
Due after 12 months		3,997,199		3,184,328
Total Loans operations		5,047,396		3,925,429

The Group offers loan products through Banco XP to its customers. The loan products offered to its customers are fully collaterized by customers’ investments on XP platform and credit product strictly related to investments in structured notes, in which the borrower is able to operate leveraged, retaining the structured note itself as guarantee for the loan.

Certain loans operations originated by the collateralized credit has insignificant risk of loss, which results in no loss allowance being recognised in accordance with the Group's expected credit loss model. The carrying amount of such financial assets is R$349,890 at March 31, 2021 (December 31, 2020 – R$297,443).

The Group uses client’s investments as collaterals to reduce potential losses and protect against credit risk exposure by managing these collaterals so that they are always sufficient, legally enforceable (effective) and viable, the Group monitors the value of the collaterals. The Credit Risk Management provides subsidies to define strategies as risk appetite, to establish limits, including exposure analysis and trends as well as the effectiveness of the credit policy.

The reconciliation of loans operations according with IFRS 9 is demonstrated in Note 10.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
8.	Prepaid expenses
---	---
	March 31,<br> <br>2021		December 31, 2020
---	---	---	---	---
Commissions and premiums paid in advance (a)		1,702,308		1,314,771
Marketing expenses		21,984		28,056
Services paid in advance		8,248		6,245
Other expenses paid in advance		52,158		44,465
Total		1,784,698		1,393,537
Current		114,754		283,183
Non-current		1,669,944		1,110,354

(a) Mostly comprised by long term investment programs implemented by XP CCTVM through its network of IFAs. These commissions and premiums paid are recognized at the signing date of each contract and are amortized in the statement of income of the Company, linearly, according to the investment term period.

9.	Securities trading and intermediation (receivable and payable)

Represented by operations at B3 on behalf of and on account of third parties, with liquidation operating cycle between D+1 and D+3.

	March 31, 2021
Cash and settlement records		1,279,944		18,128
Debtors pending settlement		1,705,048		847,620
Other		255,251		241,303
(-) Expected losses on Securities trading and intermediation (a)		(56,113	)	(55,485	)
Total Assets		3,184,130		1,051,566
Cash and settlement records		905,410		59,712
Creditors pending settlement		19,493,120		20,243,409
Total Liabilities		20,398,530		20,303,121
(a)	The reconciliation of gross carrying amount and the expected<br>loss according with IFRS 9 were demonstrated in Note 10.
---	---
10.	Expected Credit Losses on Financial Assets and Reconciliation of carrying amount
---	---

It is presented below the reconciliation of gross carrying amount of Financial assets through other comprehensive income and Financial assets measured at amortized cost – that have their ECLs (Expected Credit Losses) measured using the three stage model, the low credit risk simplification and the simplified approach and the ECLS as of March 31, 2021:

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
						March 31, 2021
---	---	---	---	---	---	---	---
	Gross carrying amount		Expected Credit Losses			Carrying amount, net
Financial assets at fair value through other comprehensive income
Low credit risk simplification
Securities (i)		21,639,504		(10,238	)		21,629,266
Financial assets amortized cost
Low credit risk simplification
Securities (i)		1,916,962		(1,146	)		1,915,816
Securities purchased under agreements to resell (i)		6,742,770		(1,311	)		6,741,459
Three stage model
Loans and credit card operations (ii) (iii)		5,047,204		(5,791	)		5,041,413
Simplified approach
Securities trading and intermediation		3,240,243		(56,113	)		3,184,130
Accounts Receivable		374,771		(7,312	)		367,459
Other financial assets		293,729		(4,163	)		289,566
Total losses for on-balance exposures		39,255,183		(86,074	)		39,169,109
Off-balance exposures (iv)		562,017		(192	)		561,825
Total exposures		39,817,200		(86,266	)		39,730,934
(i)	Financial assets considered in Stage 1.
---	---
(ii)	As of March 31, 2021 are presented in Stage 1: Gross amount<br>of R$ 4,243,736 and ECL of R$ 3,284 and Stage 2: Gross amount of R$ 803,468 and ECL of R$ 2,507 respectively.
---	---
(iii)	As of March 31, 2021 there were transfers between Stage 1 to<br>Stage of R$2,156.
---	---
(iv)	Include credit cards limits and sureties.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
						December 31, 2020
---	---	---	---	---	---	---	---
	Gross carrying amount		Expected Credit Losses			Carrying amount, net
Financial assets at fair value through other comprehensive income
Low credit risk simplification
Securities (i)		19,047,899		(8,855	)		19,039,044
Financial assets amortized cost
Low credit risk simplification
Securities (i)		1,829,791		(1,087	)		1,828,704
Securities purchased under agreements to resell (i)		6,627,779		(370	)		6,627,409
Three stage model
Loans and credit card operations (ii) (iii)		3,925,429		(7,101	)		3,918,328
Simplified approach
Securities trading and intermediation		1,107,051		(55,485	)		1,051,566
Accounts Receivable		512,777		(6,418	)		506,359
Other financial assets		73,466		(3,495	)		69,971
Total losses for on-balance exposures		33,124,192		(82,811	)		33,041,381
Off-balance exposures (credit card limits)		35,810		-			35,810
Total exposures		33,160,002		(82,811	)		33,077,191
(i)	Financial assets considered in Stage 1.
---	---
(ii)	As of December 31, 2020 are presented in Stage 1: Gross amount of R$ 3,599,808 and ECL of R$ 5,648 and Stage 2: Gross amount of R$<br>325,621 and ECL of R$ 1,453 respectively.
---	---
(iii)	As of December 31, 2020, there were no transfers between stages.
---	---
11.	Investments in associates and joint ventures
---	---

Set out below are the associates and joint venture of the Group as of March 31, 2021. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.

Name of entity			Nature of relationship	Measurement method
Du Agro Holdings S.A.	49	%	Joint Venture (1)	Equity method	2,543	1,246
Wealth High Governance Holding de Participações S.A.	49,9	%	Associate (2)	Equity method	144,559	72,135
O Primo Rico Mídia, Educacional e Participações Ltda.	20	%	Associate (3)	Equity method	19,481	3,896
Total equity-accounted investments					166,583	77,277

(1) On June 23, 2020, the Company acquired a 49% interest in DuAgro Holdings S.A. (“DuAgro”), a joint venture involved in the agribusiness. DuAgro is an integrated platform that utilizes technology to finance the purchase of agricultural inputs. The focus is on small- and medium-sized producers.

(2) On September 8, 2020, the Company entered into an agreement to hold a 49.9% minority stake of the total share capital of Wealth High Governance Holding de Participações S.A. (“WHG”) formely denominated VPL Gestão Patrimonial e Participações S.A. With this transaction XP Inc. is complementing the existing offering to ultra-high-net-worth individual in the Wealth Management segment.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

(3) O Primo Rico is a company focused on digital content services, including developing and selling financial education courses and online events.

Entity
Du Agro Holdings S.A.	1,983	(329	)	-	-	1,654
Wealth High Governance Holding de Participações S.A. (ii)	695,859	(2,475	)	-	34,927	728,311
O Primo Rico	2,065	1,720		111	-	3,896
Total	699,907	(1,084	)	111	34,927	733,861

(i) Related to the acquisitions of associates and joint ventures. As of December 31, 2020 the goodwill recognized is includes the value of expected synergies arising from the investments.

(ii) The Goodwill includes an element of contingent consideration. The fair value of the contingent consideration is presented in Note 17. During the measurement period, the preliminary fair value of contingent consideration for the acquisitions was adjusted to R$482,744 (R$447,817 previously disclosed).

12.	Property, equipment, goodwill, intangible assets and lease
a)	Changes in the period
---	---
	Property and<br> <br>equipment			Intangible<br> <br>assets
---	---	---	---	---	---	---
As of January 1, 2020		142,464			553,452
Additions		20,746			19,914
Write-offs		(324	)		-
Transfers		(2,083	)		2,083
Depreciation / amortization in the period		(6,255	)		(15,648	)
As of March 31, 2020		154,548			559,801
Cost		211,839			672,045
Accumulated depreciation / amortization		(57,291	)		(112,244	)
As of January 1, 2021		204,032			713,563
Additions		23,698			114,298
Business combination		-			27,048
Write-offs		(452	)		(2,576	)
Transfers		5			(5	)
Foreign exchange		1,091			35
Depreciation / amortization in the period		(5,233	)		(54,362	)
As of March 31, 2021		223,141			798,001
Cost		269,430			952,536
Accumulated depreciation / amortization		(46,289	)		(154,535	)
b)	Impairment test for goodwill
---	---

Given the interdependency of cash flows and the merger of business practices, all Group’s entities are considered a single cash generating units (“CGU”) and, therefore, goodwill impairment test is performed at the single operating level. Therefore, the carrying amount considered for the impairment test represents the Company’s equity.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The Group performs its annual impairment test in December and when circumstances indicates that the carrying value may be impaired. The Group’s impairment tests are based on value-in-use calculations. The key assumptions used to determine the recoverable amount for the cash generating unit were disclosed in the annual consolidated financial statements for the year ended December 31, 2020. As of March 31, 2021, there were no indicators of a potential impairment of goodwill.

c)	Leases

Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and the movements during the period.

	Right-of-use<br> <br>assets
As of January 1, 2020		227,478		255,406
Additions (i)		19,273		19,361
Depreciation expense		(9,623	)	-
Interest expense		-		6,145
Revaluation		(19,968	)	(19,968	)
Impairment		(3,040	)	-
Effects of exchange rate		22,016		23,561
Payment of lease liabilities		-		(15,558	)
As of March 31, 2020		236,136		268,947
As of January 1, 2021		183,134		208,448
Additions (i)		1,528		1,528
Depreciation expense		(9,912	)	-
Interest expense		-		3,965
Revaluation		21,543		21,275
Effects of exchange rate		8,137		9,206
Payment of lease liabilities		-		(13,258	)
As of March 31, 2021		204,430		231,164
Current		-		53,817
Non-current		204,430		177,347
(i)	Additions to right-of-use assets in the period include prepayments<br>to lessors and accrued liabilities.
---	---

The Group recognized rent expense from short-term leases and low-value assets of R$902 for the period ended March 31, 2021. The total rent expense of R$ 6,070 include other expenses related to leased offices such as condominium.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
13.	Deposits
---	---
	March 31,<br> <br>2021		December 31, <br> 2020
---	---	---	---	---
Demands deposits		148,745		44,536
Time deposits		3,854,384		2,977,214
Total		4,003,129		3,021,750
Current		3,545,327		2,524,651
Non-Current		457,802		497,099
Maturity – As of March 31, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Class	Within 30 days		From 31 to 60 days		From 61 to 90 days		From 91 to 180 days		From 181 to 360 days		After 360 days		Total
Demand deposits		148,745		-		-		-		-		-		148,745
Time deposits		21,533		46,170		145,499		1,549,421		1,633,959		457,802		3,854,384
Total		170,278		46,170		145,499		1,549,421		1,633,959		457,802		4,003,129
Maturity – As of December 31, 2020
Class		Within 30 days		From 31 to 60 days		From 61 to 90 days		From 91 to 180 days		From 181 to 360 days		After 360 days		Total
Demand deposits		44,536		-		-		-		-		-		44,536
Time deposits		67,501		1,185		57,781		191,886		2,161,762		497,099		2,977,214
Total		112,037		1,185		57,781		191,886		2,161,762		497,099		3,021,750
14.	Structured operations certificates
---	---

Structured Operations Certificates (COE) are financial instruments combining fixed and variable income elements, with returns linked to assets indices such as exchange, inflation, shares and international assets. All the financial instruments its originate by Banco XP S.A.


Maturity
From 91 to 180 days	1,889	945
From 180 to 360 days	25,345	1,489
After 360 days	2,813,882	2,176,025
Total	2,841,116	2,178,459
Current	27,234	2,434
Non-Current	2,813,882	2,176,025

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
15.	Borrowings and lease liabilities
---	---
	Interest rate %	Maturity		March 31, 2021		December 31, 2020
---	---	---	---	---	---	---	---
Bank borrowings – domestic (i)	113% of CDI(*)		March 2021		-		10,523
Related parties					-		10,523
Financial institution (ii)	CDI (*)+ 0.774%		April 2023		275,367		273,564
Third parties					275,367		273,564
Total borrowings					275,367		284,087
Lease liabilities					231,164		208,448
Total borrowings and lease liabilities					506,531		492,535
Current					62,164		51,656
Non-current					444,367		440,879

(*) Brazilian Interbank Offering Rate (CDI)

(i) Loan agreement with Itaú Unibanco that was fully paid on March 8, 2021.

(ii) Loan agreement entered into on March 28, 2018 with the International Finance Corporation (IFC). The principal amount is due on the maturity date and accrued interests payable at every six months.

All the obligations above contain financial covenants, which comply with certain performance conditions. The Group has complied with these covenants throughout the reporting period (Note 31 (ii)).

16.	Debentures

On May 15, 2019, the Company issued Debentures, non-convertible into shares, in the amount of R$ 400,000, with the objective of funding the Group’s working capital and treasury investments.

As of March 31, 2021, the total balance is comprised of the following issuances:

Issuance	Quantity Issued (units)		Annual<br> <br>rate	Issuance date	Maturity date	Unit value at issuance		Unit value at period-end
2nd		400,000	107.5% CDI	5/15/2019	5/15/2022	R$	1,000.00	R$	1,007.76	336,987
Total		400,000								336,987
	March 31,<br> <br>2021			December 31, 2020
---	---	---	---	---	---	---
Principal		400,000			400,000
Interest		26,828			25,091
Payments		(25,124	)		(25,124	)
Repurchase		(64,717	)		(64,717	)
Total		336,987			335,250
Current		205,664			204,731
Non-current		131,323			130,519

The principal amount and accrued interest payables related to the second issuance are as follow: (i) for the principal amount, 50% is due on May 15, 2021 and the remaining balance on the maturity date, and (ii) the accrued interest is payable every 12 months from the issuance date.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Debentures are subject to financial covenants, which comply with certain performance conditions. The Group has complied with these covenants throughout the reporting period (Note 31(ii)).

17.	Other financial liabilities
	March 31,<br> <br>2021		December 31, 2020
---	---	---	---	---
Structured financing (i)		1,725,220		874,771
Contingent consideration (ii)		521,776		462,000
Foreign exchange portfolio		322,227		70,208
Credit cards operations (iii)		306,720		50,727
Financial bills (iii)		83,009		16,389
Others		15,994		40,079
Total		2,974,946		1,514,174
Current		2,370,161		1,035,785
Non-current		604,785		478,389
(i)	Financing for maintenance of financial assets required to perform<br>financial transactions.
---	---
(ii)	Contractual contingent considerations mostly associated to the<br>investment acquisition of WHG, as described in Note 11. The contingent consideration arrangement requires that the Company pay the selling<br>shareholders an amount principally associated to the performance (net income without dividends). The maturity of the total contingent<br>consideration payment is up to 6 years and the contractual maximum amount payable is R$653,222 (the minimum amount is zero).
---	---
(iii)	Related to operations of Banco XP S.A.
---	---
18.	Private pension liabilities
---	---

As of March 31, 2021, active plans are principally accumulation of financial resources through products PGBL and VGBL structured in the form of variable contribution, for the purpose of granting participants with returns based on the accumulated capital in the form of monthly withdraws for a certain term or temporary monthly withdraws.

In this respect, such financial products represent investment contracts that have the legal form of private pension plans, but which do not transfer insurance risk to the Group. Therefore, contributions received from participants are accounted for as liabilities and balance consists of the balance of the participant in the linked Specially Constituted Investment Fund (“FIE”) at the reporting date (Note 4 (a)).

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Changes in the period:

	Three months period ended March 31,
	2021			2020
As of January 1		13,387,913			3,759,090
Contributions received		619,361			278,357
Transfer with third party plans		3,123,046			1,636,370
Withdraws		(211,872	)		(46,585	)
Gain (loss) from FIE		(21,940	)		(472,144	)
As of March 31		16,896,508			5,155,088
19.	Income tax
---	---
a)	Deferred income tax
---	---

Deferred tax assets (DTA) and deferred tax liabilities (DTL) are comprised of the main following components:

	Balance Sheet					Net change in the three months period ended
	March 31, 2021		December 31, 2020			March 31, 2021			March 31,<br> <br>2020
Share based compensation		186,025		115,976			70,049			11,237
Tax losses carryforwards		143,923		7,382			136,541			22,152
Provisions for IFAs’ commissions		103,871		94,544			9,327			(3,372	)
Profit sharing plan		83,996		164,808			(80,812	)		(69,828	)
Net gain on hedge instruments		37,745		20,987			16,758			59,091
Expected credit losses (ii)		21,634		19,444			2,190			8,029
Revaluations of financial assets at fair value		20,931		(16,780	)		37,711			(51,629	)
Goodwill on business combinations (i)		20,300		22,838			(2,538	)		(7,589	)
Other provisions		34,207		67,495			(33,288	)		14,019
Total		652,632		496,694			155,938			(17,890	)
Deferred tax assets		652,632		505,046
Deferred tax liabilities		-		(8,352	)
(i)	For tax purposes, goodwill is amortized over 5 years on a straight-line basis when the entity acquired<br>is sold or merged into another entity.
---	---
(ii)	Include expected credit loss on accounts receivable, loan operations and other financial assets.
---	---

The changes in the net deferred tax were recognized as follows:

	Three months period ended March 31,
	2021			2020
As of January 1		496,694			279,401
Foreign exchange variations		987			21,055
Charges to statement of income		(9,571	)		(47,072	)
Tax relating to components of other comprehensive income		164,522			8,128
As of March 31		652,632			261,512

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Unrecognized deferred taxes

Deferred tax assets are recognized for tax losses to the extent that the realization of the related tax benefit against future taxable profits is probable. The Group did not recognize deferred tax assets of R$40,169 (December 31, 2020 - R$ 37,309) mainly in respect of losses from subsidiaries overseas and that can be carried forward and used against future taxable income.

Changes in Social Contribution on Net Income(CSLL)

On March 1, 2021, Provisional Measure No. 1,034 was published increasing the Social Contribution on Net Income (CSLL) rate by 5%, to 25% for Banks and 20% for Broker dealers.

The text of the Provisional Measure proposes the validity of the increase in the CSLL rate between July and December 2021. The deadline for converting the Provisional Measure into Law is 60 days, extendable for an additional 60 days from the date of publication of the said rule.

The Group is monitoring the impacts on its business, which are still uncertain and will depend on the approval and conversion of the provisional measure into Law and does not expect significant impacts on the Company's results or financial position.

b)	Income tax expense reconciliation

The tax on the Group's pre-tax profit differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities. The following is a reconciliation of income tax expense to profit (loss) for the year, calculated by applying the combined Brazilian statutory rates at 34% for the period ended March 31:

	Three months period<br> <br>ended March 31,
	2021			2020
Income before taxes		784,216			516,531
Combined tax rate in Brazil (a)		34	%		34	%
Tax expense at the combined rate		266,634			175,620
Income (loss) from entities not subject to taxation		2,176			(9,246	)
Effects from entities taxed at different rates		14,068			14,287
Effects from entities taxed at different taxation regimes (b)		(215,804	)		(64,678	)
Intercompany transactions with different taxation		(13,394	)		(9,156	)
Tax incentives		(543	)		605
Non deductible expenses (non-taxable income), net		(5,231	)		6,586
Others		2,162			4,959
Total		50,068			118,977
Effective tax rate		6.38	%		23.03	%
Current		40,498			71,905
Deferred		9,570			47,072
Total expense		50,068			118,977
(a)	Considering that XP Inc. is domiciled in Cayman and there is no income tax in that jurisdiction, the combined<br>tax rate of 34% demonstrated above is the current rate applied to XP Investimentos S.A. which is the holding company of all operating<br>entities of XP Inc. in Brazil.
---	---

XP Inc. and its subsidiaries Notes to unaudited interim condensed consolidated financial statements As of March 31, 2021 In thousands of Brazilian Reais, unless otherwise stated

(b)

Certain eligible subsidiaries adopted the PPM tax regime and the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. Additionally, some entities and investment funds adopt different taxation regimes according to the applicable rules in their jurisdictions

---

Other comprehensive income

The tax (charge)/credit relating to components of other comprehensive income is as follows:

	Before tax
Foreign exchange variation of investees located abroad		56,560		-		56,560
Gains (losses) on net investment hedge		(85,600	)	29,104		(56,496	)
Changes in the fair value of financial assets at fair value		52,467		(20,977	)	31,490
As of March 31, 2020		23,427		8,127		31,554
Foreign exchange variation of investees located abroad		26,312		-		26,312
Gains (losses) on net investment hedge		(31,430	)	10,686		(20,744	)
Changes in the fair value of financial assets at fair value		(376,434	)	153,837		(222,597	)
As of March 31, 2021		(381,552	)	164,523		(217,029	)
20.	Equity
---	---
(a)	Issued capital
---	---

The Company has an authorized share capital of US$ 35 thousand, corresponding to 3,500,000,000 authorized shares with a par value of US$ 0,00001 each of which:

·	2,000,000,000 shares are designated as Class A common shares and issued; and
·	1,000,000,000 shares are designated as Class B common shares and issued.
---	---

The remaining 500,000,000 authorized but unissued shares are presently undesignated and may be issued by our board of directors as common shares of any class or as shares with preferred, deferred or other special rights or restrictions. Therefore, the Company is authorized to increase capital up to this limit, subject to approval of the Board of Directors.

As of March 31, 2021, the Company have R$23 thousand of issued capital which were represented by 377,764,985 Class A common shares and 181,293,980 Class B common shares.

(b)	Additional paid-in capital and capital reserve

Class A and Class B common shares, have the following rights:

·	Each holder of a Class B common share is entitled, in respect of such share, to 10 votes per share, whereas<br>the holder of a Class A common share is entitled, in respect of such share, to one vote per share.
·	Each holder of Class A common shares and Class B common shares vote together as a single class on all<br>matters (including the election of directors) submitted to a vote of shareholders, except as provided below and as otherwise required<br>by law.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
·	Class consents from the holders of Class A common shares and Class B common shares, as applicable, shall<br>be required for any modifications to the rights attached to their respective class of shares the rights conferred on holders of Class<br>A common shares shall not be deemed to be varied by the creation or issue of further Class B common shares and vice versa; and
---	---
·	the rights attaching to the Class A common shares and the Class B common shares shall not be deemed to<br>be varied by the creation or issue of shares with preferred or other rights, including, without limitation, shares with enhanced or weighted<br>voting rights.
---	---

The Articles of Association provide that at any time when there are Class A common shares in issue, Class B common shares may only be issued pursuant to: (a) a share split, subdivision of shares or similar transaction or where a dividend or other distribution is paid by the issue of shares or rights to acquire shares or following capitalization of profits; (b) a merger, consolidation, or other business combination involving the issuance of Class B common shares as full or partial consideration; or (c) an issuance of Class A common shares, whereby holders of the Class B common shares are entitled to purchase a number of Class B common shares that would allow them to maintain their proportional ownership and voting interests in XP Inc.

In December 2020, as a result of the completion of the secondary public offering describe in Note 1.1 a number of 7,258,639 Class A common shares were offered by the controlling shareholder of XP Inc.

The Board of Directors approved on December 2019 a share based long-term incentive plan, which the maximum number of shares should not exceed 5% of the issued and outstanding shares. As of March 31, 2021, the outstanding number of company reserved under the plans were 10,593,118 restricted share units (“RSUs”) (December 31, 2020 – 11,079,736) and 2,819,912 performance restricted units (“PSUs”) (December 31, 2020 – 2,819,812) to be issued at the vesting date.

The additional paid-in capital refers to the difference between the purchase price that the shareholders pay for the shares and their par value. Under Cayman Law, the amount in this type of account may be applied by the Company to pay distributions or dividends to members, pay up unissued shares to be issued as fully paid, for redemptions and repurchases of own shares, for writing off preliminary expenses, recognized expenses, commissions or for other reasons. All distributions are subject to the Cayman Solvency Test which addresses the Company’s ability to pay debts as they fall due in the natural course of business

(c)	Dividends distribution

The Group has not adopted a dividend policy with respect to future distributions of dividends. The amount of any distributions will depend on many factors such as the Company's results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by XP Inc. board of directors and, where applicable, the shareholders.

For the three months period ended March 31, 2021, XP Inc. has not declared and paid dividends to the shareholders.

Non-controlling shareholders of some XP Inc’s subsidiaries has received dividends in the period ended of March 31, 2021.

(d)	Other comprehensive income

Other comprehensive income is comprised of changes in the fair value of financial assets at fair value through other comprehensive income, while this financial assets are not realized. Also includes gains (losses) on net investment hedge and foreign exchange variation of investeeds located abroad.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
21.	Related party transactions
---	---

The main transactions carried with related parties, under commutative conditions, including interest rates, terms and guarantees, and period-end balances arising from such transactions are as follows:

	Assets/(Liabilities)						Revenue/(Expenses)
							Three months period ended March 31,
Relation and transaction	March 31, 2021			December 31, 2020			2021			2020
Shareholders with significant influence (i)		(3,732,842	)		(5,667,588	)		(21,596	)		(26,039	)
Securities		91,833			112,127			628			3,780
Securities purchased under agreements to resell		174,999			-			830			(30,087	)
Accounts receivable		326			11,238			297			797
Securities sold under repurchase agreements		(4,000,000	)		(5,780,430	)		(23,330	)		-
Borrowings		-			(10,523	)		(21	)		(529	)
(i)	These transactions are related to Itaú Unibanco who became<br>shareholder of the Company in 2018 and since then a related party.
---	---

Transactions with related parties also includes transactions among the Company and its subsidiaries in the course of normal operations include services rendered such as: (i) education, consulting and business advisory; (ii) financial advisory and financial consulting in general; (iii) management of resources and portfolio management; (iv) information technology and data processing; and (v) insurance. The effects of these transactions have been eliminated and do not have effects on the consolidated financial statements.

22.	Provisions and contingent liabilities

The Company and its subsidiaries are party to judicial and administrative litigations before various courts and government bodies, arising from the ordinary course of operations, involving tax, civil and labor matters and other issues. Periodically, Management evaluates the tax, civil and labor and risks, based on legal, economic and tax supporting data, in order to classify the risks as probable, possible or remote, in accordance with the chances of them occurring and being settled, taking into consideration, case by case, the analyses prepared by external and internal legal advisors.

	March 31,<br> <br>2021
Tax contingencies		10,129	10,097
Civil contingencies		10,267	4,281
Labor contingencies		5,628	5,333
Total provision		26,024	19,711
Judicial deposits (i)		10,219	10,199
(i)	There are circumstances in which the Group is questioning the<br>legitimacy of certain litigations or claims filed against it. As a result, either because of a judicial order or based on the strategy<br>adopted by management, the Group might be required to secure part or the whole amount in question by means of judicial deposits, without<br>this being characterized as the settlement of the liability. These amounts are classified as “Other assets” on the consolidated<br>balance sheets and referred above for information.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Changes in the provision during the period

	Three months period ended March 31,
	2021			2020
As of January 1		19,711			15,193
Monetary correction		4,498			325
Provisions accrued		3,308			159
Provisions reversed		(13	)		(546	)
Payments		(1,480	)		(234	)
As of March 31		26,024			14,897

Nature of claims

a)	Tax

As of March 31, the Group has claims classified as probable risk of loss in the amount of R$ 10,129 (December 31, 2020 - R$ 10,097), regarding questioning the definition of the basis for calculating revenues to be paid correctly. This case was pending the specialized technical report after the decision of the court of second instance to grant the right to provide evidence and send the case back to the court of first instance. These processes are supported by judicial deposits in their entirety.

b)	Civil

The majority of the civil and administratives claims involve matters that are normal and specific to the business, and refer to demands for indemnity primarily due to: (i) financial losses in the stock market; (ii) portfolio management; and (iii) alleged losses generated from the liquidation of costumers assets in portfolio due to margin cause and/or negative balance. As of March 31, 2021, there were 102 civil and administrative claims for which the likelihood of loss has been classified as probable, in the amount of R$ 10,267 (December 31, 2020 - R$ 4,281). An amount of R$100 was deposited in court as of March 31, 2021 (December 31, 2020 – R$ 100).

c)	Labor

Labor claims to which the Group is party primarily concern: (i) the existence (or otherwise) of a working relationship between the Group and IFAs; and (ii) severance payment of former employees. As of March 31, 2021, the Company and its subsidiaries are the defendants in approximately 12 cases involving labor matters for which the likelihood of loss has been classified as probable, in the amount of R$ 5,628 (December 31, 2020 - R$ 5,333).

Contingent liabilities - probability of lossclassified as possible

In addition to the provisions constituted, the Company and its subsidiaries have several labor, civil and tax contingencies in progress, in which they are the defendants, and the likelihood of loss, based on the opinions of the internal and external legal advisors, is considered possible, and the contingencies amount to approximately R$ 220,759 (December 31, 2020 - R$ 217,426).

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Below is summarized these possible claims by nature:

	March 31,<br> <br>2021
Tax (i)		71,172	71,027
Civil (ii)		130,778	136,228
Labor		18,809	10,171
Total		220,759	217,426
(i)	In December 2019, the Group was<br>notified by tax authorities for a requirement of social security contributions due to employee profit sharing payments related to the<br>calendar year 2015, allegedly in violation of Brazilian Law 10.101/00. Currently, the first appeal was denied by the first administrative<br>level of the Revenue Service Office. The Group will provide the ordinary appeal to Administrative Council of Tax Appeals (“CARF”).<br>There are other favorable CARF precedents on the subject and the Group obtained legal opinions that support the Group’s defense<br>and current practice.
---	---
(ii)	The Group is defendant in 477 (December 31, 2020 – 586)<br>civil and administrative claims by customers and investment agents, mainly related to portfolio management, risk rating, copyrights and<br>contract termination. The total amount represents the collective maximum value to which the Group is exposed based on the claims’<br>amounts monetarily restated.
---	---
23.	Total revenue and income
---	---
a)	Net revenue from services rendered
---	---

Revenue from contracts with customers derives mostly from services rendered and fees charged at daily transactions from customers, therefore mostly recognized at a point in time. Disaggregation of revenue by major service lines are as follows:

	Three months period ended<br> <br>March 31,
	2021			2020
Major service lines
Brokerage commission		641,324			504,644
Securities placement		469,323			348,174
Management fees		309,897			255,049
Insurance brokerage fee		31,962			29,226
Educational services		18,866			25,700
Other services		118,920			94,085
		1,590,292			1,256,878
(-) Sales taxes and contributions on revenue (i)		(135,636	)		(104,932	)
		1,454,656			1,151,946
(i)	Mostly related to taxes on services (ISS) and contributions<br>on revenue (PIS and COFINS).
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
b)	Net income from financial instruments
---	---
	Three months period<br> <br>ended March 31,
---	---	---	---	---	---	---
	2021			2020
Net Income of financial instruments at fair value through profit or loss		1,161,364			391,689
Net Income of financial instruments measured at amortized cost and at fair value through other comprehensive income		32,288			207,299
(-) Taxes and contributions on financial income		(20,267	)		(16,093	)
		1,173,385			582,895
c)	Disaggregation by geographic location
---	---

Breakdown of total net revenue and income and selected assets by geographic location:

	Three months period<br> <br>ended March 31,
	2021		2020
Brazil		2,533,157		1,634,093
United Stated of America		84,915		91,890
Europe		9,969		8,858
Total revenue and income		2,628,041		1,734,841
		March 31,<br> <br>2021		December 31, 2020
Brazil		3,802,978		3,244,421
United Stated of America		122,829		129,956
Europe		4,081		4,123
Selected assets (i)		3,929,888		3,378,500

(i) Selected assets are total assets of the Group, less: cash, financial assets and deferred tax assets and are presented by geographic location.

None of the clients represented more than 10% of our revenues for the periods presented.

24.	Operating costs
	Three months period ended<br> <br>March 31,
---	---	---	---	---
	2021		2020
Commission costs		676,505		441,951
Operating losses and provisions		7,411		16,341
Other costs		153,519		98,562
Clearing house fees		99,035		63,504
Third parties’ services		30,829		18,148
Other (a)		23,655		16,910
Total		837,435		556,854
(a)	Other cost include operational errors and other costs.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
25.	Operating expenses by nature
---	---
	Three months period ended March 31,
---	---	---	---	---
	2021		2020
Selling Expenses (a)		44,418		28,476
Administrative expenses		966,278		578,116
Personnel expenses		693,738		400,980
Compensation		294,620		177,119
Employee profit-sharing and bonus		287,478		103,020
Executives profit-sharing		6,654		72,677
Other personnel expenses (b)		104,986		48,164
Other taxes expenses		11,558		6,843
Depreciation of property and equipment and right-of-use assets		15,146		15,878
Amortization of intangible assets		54,362		15,648
Data processing		98,730		55,947
Technical services		25,271		20,768
Third parties' services		36,343		40,193
Other administrative expenses (c)		31,130		21,859
Total		1,010,696		606,592
(a)	Selling expenses refers to advertising and publicity.
---	---
(b)	Other personnel expenses include benefits, social charges and<br>others.
---	---
(c)	Other administrative expenses include rent, communication and<br>travel expenses, legal and judicial and other expenses.
---	---
26.	Other operating income (expenses), net
---	---
	Three months period ended March 31,
---	---	---	---	---	---	---
	2021			2020
Other operating income		28,399			27,666
Revenue from incentives from Tesouro Direto, B3 and Others		18,476			21,672
Other operating income (a)		9,923			5,994
Other operating expenses		(10,038	)		(41,549	)
Legal, administrative proceedings and agreement with customers		(826	)		(10,246	)
Losses on write-off and disposal of assets		(1,673	)		(59	)
Charity		(3,028	)		(16,596	)
Other operating expenses (b)		(4,511	)		(14,648	)
Total		18,361			(13,883	)
(a)	Other operating income include recovery of charges and expenses,<br>reversal of operating provisions, interest received on tax and others.
---	---
(b)	Other operating expenses include fines and penalties, association<br>and regulatory fees and other expenses.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
27.	Share-based plan
---	---

Outstanding shares granted and valuation inputs

The maximum number of shares available for issuance under the share-based plan shall not exceed 5% of the issued and outstanding shares.

As of March 31, 2021, the outstanding number of Company reserved under the plans were 13,413,030 (December 31, 2020 – 13,899,648) including 10,593,118 RSUs (December 31, 2020 – 11,079,736) and 2,819,912 PSUs (December 31, 2020 – 2,819,912).

Set out below are summaries of XP Inc's RSU and PSU activity for March 31, 2021.

	RSUs			PSUs		Total
(In thousands, except weighted-average data, and where otherwise stated)	Number of units			Number of units		Number of units
Outstanding, January 1		11,079,736			2,819,912		13,899,648
Forfeited		(486,618	)		-		(486,618	)
Outstanding, March 31		10,593,118			2,819,912		13,413,030

No options were granted, expired or vested during the periods covered by the above table.

For the three months periods ended March 31, 2021 and 2020, total compensation expense of both plans were R$178,246 (2020 – R$ 28,408), including R$37,697 (2020 – R$ 5,187) of tax provisions and does not include any tax benefits on total share-based compensation expense once, as this expense is not deductible for tax purposes. The tax benefits will be perceived when the shares are converted into common shares.

The original weighted-average grant-date fair value of RSU and PSU shares was US$27 and US$ 34.56 respectively. In May 2020, the Company decided to update the measurement condition of its PSU shares, replacing the TSR measurement from US Dollars (US$) to Brazilian Reais (R$), being therefore subject to exchange variation. The weighted-average grant-date fair value of PSU shares for the updated plan was US$52.41. The incremental fair value will be recognised as an expense over the period from the modification date to the end of the vesting period. All other conditions of the PSU shares plan has not been modified.

28.	Earnings per share (basic and diluted)

Basic earnings per share is calculated by dividing net income for the period attributed to the owners of the parent by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated by dividing net income attributable to owners of XP Inc by the weighted average number of shares outstanding during the year plus the weighted average number of shares that would be issued on conversion of all dilutive potential shares into shares. The shares in the share based plan are the only shares with potential dilutive effect.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The following table presents the calculation of net income applicable to the owners of the parent and basic and diluted EPS for period ended of March 31:


		2020
Net Income attributable to owners of the Parent	733,668		396,860
Basic weighted average number of outstanding shares (i) (iii)	559,059		551,800
Basic earnings per share - R	1.3123		0.7192
Effect of dilution
Shared-based plan (ii) (iii)	13,676		4,096
Diluted weighted average numer of outstanding shares (iii)	572,735		555,896
Diluted earnings per share - R	1.2810		0.7139

All values are in US Dollars.

(i)	See on Note 20, the number of XP Inc.’s outstanding common<br>shares during the period.
(ii)	See on Note 27, the number of shares granted and forfeited during<br>the period regarding XP Inc.’s Share-based plan.
---	---
(iii)	Thousands of shares.
---	---
29.	Determination of fair value
---	---

The Group measures financial instruments such as certain financial investments and derivatives at fair value at each balance sheet date.

Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The financial instruments included in the level 1 consist mainly in public financial instruments and financial instruments negotiated on active markets (i.e. Stock Exchanges).

Level 2: The fair value of financial instruments that are not traded in active markets is determined using valuation techniques, which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value as instrument are directly or indirectly observable, the instrument is included in level 2. The financial instruments classified as level 2 are composed mainly from private financial instruments and financial instruments negotiated in a secondary market.

Level 3: If one or more of the significant inputs is unobservable, the instrument is included in level 3. This is the case for unlisted equity securities.

Specific valuation techniques used to value financial instruments include:

·	Financial assets (other than derivatives) - The fair value of securities is determined by reference to<br>their closing prices on the date of presentation of the consolidated financial statements. If there is no market price, fair value is<br>estimated based on the present value of future cash flows discounted using the observable rates and market rates on the date of presentation.
•	Swap – These operations swap cash flow based on the comparison of profitability between two indexers.<br>Thus, the agent assumes both positions – put in one indexer and call on another.
---	---
•	Forward - at the market quotation value, and the installments receivable or payable are prefixed to a<br>future date, adjusted to present value, based on market rates published at B3.
---	---

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
•	Futures – Foreign exchange rates, prices of shares and commodities are commitments to buy or sell<br>a financial instrument at a future date, at a contracted price or yield and may be settled in cash or through delivery. Daily cash settlements<br>of price movements are made for all instruments.
---	---
•	Options - option contracts give the purchaser the right to buy the instrument at a fixed price negotiated<br>at a future date. Those who acquire the right must pay a premium to the seller. This premium is not the price of the instrument, but only<br>an amount paid to have the option (possibility) to buy or sell the instrument at a future date for a previously agreed price.
---	---
•	Other financial assets and liabilities - Fair value, which is determined for disclosure purposes, is calculated<br>based on the present value of the principal and future cash flows, discounted using the observable rates and market rates on the date<br>the financial statements are presented.
---	---

• Loans operations – Fair value is determined through the present value of expected future cash flows discounted using the observable rates and market rates on the date the financial statements are presented.

•	Contingent consideration: Fair value of the contingent consideration liability related to acquisitions<br>is estimated by applying the income approach and discounting the expected future payments to selling shareholders under the terms of the<br>purchase and sale agreements.

Below are the Group financial assets and liabilities by level within the fair value hierarchy. The Group assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels:

	March , 31 2021
	Level 1		Level 2		Level 3		Fair Value		Book Value
Financial Assets
Financial assets at Fair value through profit or loss
Securities		60,208,275		2,646,763		-		62,855,038		62,855,038
Derivative financial instruments		210,534		13,376,374		-		13,586,908		13,586,908
Fair value through other comprehensive income
Securities		21,629,266		-		-		21,629,266		21,629,266
Evaluated at amortized cost
Securities		1,916,817		-		-		1,916,817		1,915,816
Securities purchased under agreements to resell		-		6,736,411		-		6,736,411		6,741,459
Securities trading and intermediation		-		3,184,130		-		3,184,130		3,184,130
Accounts receivable		-		367,459		-		367,459		367,459
Loan operations		-		5,041,413		-		5,041,413		5,041,413
Other financial assets		-		289,566		-		289,566		289,566
Financial liabilities
Fair value through profit or loss
Securities loaned		2,705,869		-		-		2,705,869		2,705,869
Derivative financial instruments		233		13,563,370		-		13,563,603		13,563,603
Evaluated at amortized cost
Securities sold under repurchase agreements		-		44,317,354		-		44,317,354		44,483,097
Securities trading and intermediation		-		20,398,530		-		20,398,530		20,398,530
Deposits		-		3,707,630		-		3,707,630		4,003,129
Structured operations certificates		-		2,841,116		-		2,841,116		2,841,116
Borrowings and lease liabilities		-		506,453		-		506,453		506,531
Debentures		-		334,795		-		334,795		336,987
Accounts payables		-		803,443		-		803,443		803,443
Other financial liabilities		-		2,453,170		521,776		2,974,946		2,974,946

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
	December 31, 2020
---	---	---	---	---	---	---	---	---	---	---
	Level 1		Level 2		Level 3		Fair Value		Book Value
Financial Assets
Financial assets at Fair value through profit or loss
Securities		35,549,047		14,040,966		-		49,590,013		49,590,013
Derivative financial instruments		26,535		7,532,898		-		7,559,433		7,559,433
Fair value through other comprehensive income
Securities		19,039,044		-		-		19,039,044		19,039,044
Evaluated at amortized cost
Securities		1,830,031		-		-		1,830,031		1,828,704
Securities purchased under agreements to resell		-		6,627,044		-		6,627,044		6,627,409
Securities trading and intermediation		-		1,051,566		-		1,051,566		1,051,566
Accounts receivable		-		506,359		-		506,359		506,359
Loan operations		-		4,037,954		-		4,037,954		3,918,328
Other financial assets		-		69,971		-		69,971		69,971
Financial liabilities
Fair value through profit or loss
Securities loaned		2,237,442		-		-		2,237,442		2,237,442
Derivative financial instruments		13,221		7,806,143		-		7,819,364		7,819,364
Evaluated at amortized cost
Securities sold under repurchase agreements		-		31,810,893		-		31,810,893		31,839,344
Securities trading and intermediation		-		20,303,121		-		20,303,121		20,303,121
Deposits		-		2,636,085		-		2,636,085		3,021,750
Structured operations certificates		-		2,178,459		-		2,178,459		2,178,459
Borrowings and lease liabilities		-		492,441		-		492,441		492,535
Debentures		-		331,520		-		331,520		335,250
Accounts payables		-		859,550		-		859,550		859,550
Other financial liabilities		-		1,052,174		462,000		1,514,174		1,514,174

As of March 31, 2021 the total contingent consideration liability is reported at fair value and is dependent on the profitability of the acquired associate (WHG) and businesses (Fliper and Antecipa).The total contingent consideration is classified within Level 3 of the fair value hierarchy. The contigent consideration liability represents the maximum amount payable under the purchase and sale agreements discounted using a weighted average rate of 5.19% p.a. Change in the discount rate by 100 bps would increase/decrease the fair value by R$13,933. The change in the fair value in the contingent consideration between the acquisition date and December 31, 2020 was not material.

Transfers into and out of fair value hierarchy levels are analysed at the end of each consolidated financial statements. As of March 31, 2021 the Group had no transfers between Level 2 and Level 3.

30.	Management of financial risks and financial instruments

The Group’s activities are exposed to a variety of financial risks: credit risk, liquidity risk, market risk (including currency risk, interest rate risk and price risk), and operational risk. The Group’s overall risk management structure focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to mitigate certain risk exposures. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

Management has overall responsibility for establishing and supervising the risk management structure of the Group. Risk Management is under a separated structure from business areas, reporting directly to senior management, to ensure exemption of conflict of interest, and segregation of functions appropriate to good corporate governance and market practices.

The risk management policies of the Group are established to identify and analyze the risks faced, to set appropriate risk limits and controls, and to monitor risks and adherence to the limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and in the activities of the Group. The Group, through its training and management standards and procedures, developed a disciplined and constructive control environment within which all its employees are aware of their duties and obligations.

Regarding one specific subsidiary XP CCTVM, the organizational structure is based on the recommendations proposed by the Basel Accord, in which procedures, policies and methodology are formalized consistent with risk tolerance and with the business strategy and the various risks inherent to the operations and/or processes, including market, liquidity, credit and operating risks. The Group seek to follow the same risk management practices as those applying to all companies.

Such risk management processes are also related to going concern management procedures, mainly in terms of formulating impact analyses, business continuity plans, contingency plans, backup plans and crisis management.

The unaudited interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group’s annual financial statements as of December 31, 2020. There have been no changes in the risk management department or in any risk management policies since the year-end.

Sensitivity analysis

According to the market information, the Group performed the sensitivity analysis by market risk factors considered relevant. The largest losses, by risk factor, in each of the scenarios were presented with an impact on the profit or loss, providing a view of the exposure by risk factor of the Group in exceptional scenarios. The following sensitivity analyzes do not consider the functioning dynamics of risk and treasury areas, since once these losses are detected, risk mitigation measures are quickly triggered, minimizing the possibility of significant losses.

								March 31,<br> <br>2021
Trading portfolio	Exposures	Scenarios
Risk factors	Risk of variation in:	I			II			III
Pre-fixed	Pre-fixed interest rate in Reais		(4,985	)		(54,441	)		(92,397	)
Exchange coupons	Foreign currencies coupon rate		(174	)		(6,874	)		(13,572	)
Foreign currencies	Exchange rates		(1,407	)		93,369			281,357
Price indexes	Inflation coupon rates		(163	)		(7,496	)		(12,359	)
Shares	Shares prices		(489	)		125,400			428,900
Seed Money (i)	Seed Money		(3,796	)		(94,890	)		(189,779	)
			(11,014	)		55,068			402,150

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
								December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---	---	---
Trading portfolio	Exposures	Scenarios
Risk factors	Risk of variation in:	I			II			III
Pre-fixed	Pre-fixed interest rate in Reais		(191	)		(9,056	)		(33,402	)
Exchange coupons	Foreign currencies coupon rate		(379	)		(5,508	)		(11,184	)
Foreign currencies	Exchange rates		(1,997	)		(169,318	)		(373,807	)
Price indexes	Inflation coupon rates		(311	)		(14,384	)		(28,434	)
Shares	Shares prices		(4,957	)		(107,704	)		(167,737	)
			(7,835	)		(305,970	)		(614,564	)
(i)	Related to seed money strategy, which includes several risk<br>factors that are dicloused in aggregate.
---	---

Scenario I: Increase of 1 basis point in the rates in the fixed interest rate yield, exchange coupons, inflation and 1 percentage point in the prices of shares, commodities and currencies;

Scenario II: Project a variation of 25 percent in the rates of the fixed interest yield, exchange coupons, inflation, price of shares, commodities and currencies, both rise and fall, being considered the largest losses resulting by risk factor; and

Scenario III: Project a variation of 50 percent in the rates of the fixed interest yield, exchange coupons, inflation, prices of shares, commodities and currencies, both rise and fall, being considered the largest losses resulting by risk factor.

31.	Capital Management

The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital, In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group also monitors capital on the basis of the net debt and the gearing ratio. Net debt is calculated as total debt (including borrowings, lease liabilities, Structured financing and debentures as shown in the consolidated balance sheet) less cash and cash equivalent (including cash, Securities purchased under agreements to resell and certificate deposits as shown in the consolidated statement of cash flows). The gearing ratio corresponds to the net debt expressed as a percentage of total capital.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated

The net debt and corresponding gearing ratios as of March 31, 2021 and December 31, 2020 were as follows:

	March 31,<br> <br>2021
Borrowings and lease liabilities		506,531		492,535
Debentures		336,987		335,250
Structured financing (Note 17 (i))		1,725,220		874,771
Total debt		2,568,738		1,702,556
Cash		(1,556,782	)	(1,954,788	)
Securities purchased under agreements to resell		(1,191,577	)	(593,673	)
Certificate deposits (Securities)		(91,833	)	(111,933	)
Net debt		(271,454	)	(957,838	)
Total equity		11,549,981		10,894,609
Total capital		11,278,527		9,936,771
Gearing ratio %		(2.41	)%	(9.64	)%
(i)	Minimum capital requirements
---	---

Although capital is managed considering the consolidated position, certain subsidiaries are subject to minimum capital requirement from local regulators.

The subsidiary XP CCTVM, leader of the Prudential Conglomerate (which includes Banco XP), under BACEN regulation regime, is required to maintain a minimum capital and follow aspects from the Basel Accord.

The subsidiary XP Vida e Previdência operates in Private Pension Business and is oversight by the SUSEP, being required to present Adjusted Shareholders' Equity (PLA) equal to or greater than the Minimum Required Capital (“CMR”), CMR is equivalent to the highest value between base capital and Venture Capital Liquidity (“CR”).

At March 31, 2021 the subsidiaries XP CCTVM and XP Vida e Previdência were in compliance with all capital requirements.

There is no requirement for compliance with a minimum capital for the other Group companies.

(ii)	Financial covenants

In relation to the long-term debt contracts, including multilateral instruments, recorded within “Borrowing and lease liabilities” and “Debentures” (Notes 15 and 16), the Group is required to comply with certain performance conditions, such as profitability and efficiency indexes.

At March 31, 2021, the amount of contracts under financial covenants is R$ 612,354 (December 31, 2020 – R$619,337). The Group has complied with these covenants throughout the reporting period.

Eventual failure of the Group to comply with such covenants may be considered as breach of contract and, as a result, considered for early settlement of related obligations.

XP Inc. and its subsidiaries<br><br><br><br>Notes to unaudited interim condensed consolidated financial statements<br><br>As of March 31, 2021<br><br><br><br>In thousands of Brazilian Reais, unless otherwise stated
32.	Cash flow information
---	---
(i)	Debt reconciliation
---	---
	Borrowings			Lease liabilities			Debentures		Total
---	---	---	---	---	---	---	---	---	---	---	---
Total debt as of January 1, 2020		382,078			255,406			835,230		1,472,714
Acquisitions / Issuance		-			19,361			-		19,361
Payments		(10,500	)		(15,558	)		-		(26,058	)
Revaluation		-			(19,968	)		-		(19,968	)
Net foreign exchange diferences		-			23,561			-		23,561
Interest accrued		4,486			6,145			9,131		19,762
Interest paid		(572	)		-			-		(572	)
Total debt as of March 31, 2020		375,492			268,947			844,361		1,488,800
Total debt as of January 1, 2021		284,087			208,448			335,250		827,785
Acquisitions / Issuance		-			1,528			-		1,528
Payments		(10,500	)		(13,258	)		-		(23,758	)
Revaluation		-			21,275			-		21,275
Net foreign exchange diferences		-			9,206			-		9,206
Interest accrued		1,818			3,965			1,737		7,520
Interest paid		(38	)		-			-		(38	)
Total debt as of March 31, 2021		275,367			231,164			336,987		843,518
(ii)	Non-cash investing and financing activities
---	---

Non-cash investing and financing activities disclosed in other notes are: (i) related to business acquisitions through accounts payables and contingent consideration – see Note 2(e) – R$39,032, and (ii) related to Acquisition of investment in associates through accounts payables and contingent consideration – see note 11 – R$482,744.

Exhibit 99.3

1 1Q21 Earnings Presentation

2 Important Disclosure IN REVIEWING THE INFORMATION CONTAINED IN THIS PRESENTATION, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER . THIS INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT . This presentation is prepared by XP Inc . (the “Company,” “we” or “our”), is solely for informational purposes . This presentation does not constitute a prospectus and does not constitute an offer to sell or the solicitation of an offer to buy any securities . In addition, this document and any materials distributed in connection with this presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction . This presentation was prepared by the Company . Neither the Company nor any of its affiliates, officers, employees or agents, make any representation or warranty, express or implied, in relation to the fairness, reasonableness, adequacy, accuracy or completeness of the information, statements or opinions, whichever their source, contained in this presentation or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information . The information and opinions contained in this presentation are provided as at the date of this presentation, are subject to change without notice and do not purport to contain all information that may be required to evaluate the Company . The information in this presentation is in draft form and has not been independently verified . The Company and its affiliates, officers, employees and agents expressly disclaim any and all liability which may be based on this presentation and any errors therein or omissions therefrom . Neither the Company nor any of its affiliates, officers, employees or agents makes any representation or warranty, express or implied, as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any . The information contained in this presentation does not purport to be comprehensive and has not been subject to any independent audit or review . Certain of the financial information as of and for the periods ended December 31 , 2019 , 2018 and 2017 has been derived from audited financial statements and all other financial information has been derived from unaudited interim financial statements . A significant portion of the information contained in this presentation is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate . The Company’s internal estimates have not been verified by an external expert, and the Company cannot guarantee that a third party using different methods to assemble, analyze or compute market information and data would obtain or generate the same results . Statements in the presentation, including those regarding the possible or assumed future or other performance of the Company or its industry or other trend projections, constitute forward - looking statements . These statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others . By their nature, forward - looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company . Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward - looking statements and there can be no assurance that such forward - looking statements will prove to be correct . These risks and uncertainties include factors relating to : ( 1 ) general economic, financial, political, demographic and business conditions in Brazil, as well as any other countries we may serve in the future and their impact on our business ; ( 2 ) fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve in the future ; ( 3 ) competition in the financial services industry ; ( 4 ) our ability to implement our business strategy ; ( 5 ) our ability to adapt to the rapid pace of technological changes in the financial services industry ; ( 6 ) the reliability, performance, functionality and quality of our products and services and the investment performance of investment funds managed by third parties or by our asset managers ; ( 7 ) the availability of government authorizations on terms and conditions and within periods acceptable to us ; ( 8 ) our ability to continue attracting and retaining new appropriately - skilled employees ; ( 9 ) our capitalization and level of indebtedness ; ( 10 ) the interests of our controlling shareholders ; ( 11 ) changes in government regulations applicable to the financial services industry in Brazil and elsewhere ; ( 12 ) our ability to compete and conduct our business in the future ; ( 13 ) the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors ; ( 14 ) changes in consumer demands regarding financial products, customer experience related to investments and technological advances, and our ability to innovate to respond to such changes ; ( 15 ) changes in labor, distribution and other operating costs ; ( 16 ) our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us ; ( 17 ) the negative impacts of the COVID - 19 pandemic on global, regional and national economies and the related market volatility and protracted economic downturn ; and ( 18 ) other factors that may affect our financial condition, liquidity and results of operations . Accordingly, you should not place undue reliance on forward - looking statements . The forward - looking statements included herein speak only as at the date of this presentation and the Company does not undertake any obligation to update these forward - looking statements . Past performance does not guarantee or predict future performance . Moreover, the Company and its affiliates, officers, employees and agents do not undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward - looking statements to reflect events that occur or circumstances that arise in relation to the content of the presentation . You are cautioned not to unduly rely on such forward - looking statements when evaluating the information presented and we do not intend to update any of these forward - looking statements . Market data and industry information used throughout this presentation are based on management’s knowledge of the industry and the good faith estimates of management . The Company also relied, to the extent available, upon management’s review of industry surveys and publications and other publicly available information prepared by a number of third party sources . All of the market data and industry information used in this presentation involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates . Although the Company believes that these sources are reliable, there can be no assurance as to the accuracy or completeness of this information, and the Company has not independently verified this information . The contents hereof should not be construed as investment, legal, tax or other advice and you should consult your own advisers as to legal, business, tax and other related matters concerning an investment in the Company . The Company is not acting on your behalf and does not regard you as a customer or a client . It will not be responsible to you for providing protections afforded to clients or for advising you on the relevant transaction . This presentation also includes certain non - GAAP financial information . We believe that such information is meaningful and useful in understanding the activities and business metrics of the Company’s operations . We also believe that these non - GAAP financial measures reflect an additional way of viewing aspects of the Company’s business that, when viewed with our International Financial Reporting Standards (“IFRS”) results, as issued by the International Accounting Standards Board, provide a more complete understanding of factors and trends affecting the Company’s business . Further, investors regularly rely on non - GAAP financial measures to assess operating performance and such measures may highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with IFRS . We also believe that certain non - GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in the Company’s industry, many of which present these measures when reporting their results . The non - GAAP financial information is presented for informational purposes and to enhance understanding of the IFRS financial statements . The non - GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for, or superior to, IFRS results . As other companies may determine or calculate this non - GAAP financial information differently, the usefulness of these measures for comparative purposes is limited . A reconciliation of such non - GAAP financial measures to the nearest GAAP measure is included in this presentation . For purposes of this presentation : “Active Clients” means the total number of retail clients served through our XP Investimentos, Rico, Clear, XP Investments and XP Private (Europe) brands, with an AUC above R $ 100 . 00 or that have transacted at least once in the last thirty days . For purposes of calculating this metric, if a client holds an account in more than one of the aforementioned entities, such client will be counted as one “active client” for each such account . For example, if a client holds an account in each of XP Investimentos and Rico, such client will count as two “active clients” for purposes of this metric . “Assets Under Custody (AUC)” means the market value of all client assets invested through XP’s platform, including equities, fixed income securities, mutual funds (including those managed by XP Gestão de Recursos Ltda . , XP Advisory Gestão Recursos Ltda . and XP Vista Asset Management Ltda . , as well as by third - party asset managers), pension funds (including those from XP Vida e Previdência S . A . , as well as by third - party insurance companies), exchange traded funds, COEs (Structured Notes), REITs, and uninvested cash balances (Floating Balances), among others . 2

3 Index 01 Banking Update 02 1Q21 KPIs and Financials 03 Q&A 04 Opening Remarks

1 Opening Remarks

5 Highlights ▪ Strongest Quarter Ever: Records in all KPIs and Financials ▪ Cost discipline and efficiency as a competitive advantage ▪ Operating leverage enabling reinvestments in the platform 1Q21 Results Governance ▪ Elimination of Material Weaknesses within the first year as listed company Banking ▪ XP VISA INFINITY card officially launched ▪ Loan portfolio growth of +22% QoQ Investments ▪ International Funds has reached R$20bn in AUC (six times higher YoY), with 120 funds available, including new exclusive partners, such as Systematica , Nordea (ESG Global Fund) and Goldman Sachs ▪ Pension Funds with 88% of market transfers in March, yet with a small AUC (1.6% share) 1 (1) Source: Fenaprevi

2 Banking Update

7 Banking: Recent Developments Solid deliveries over the last twelve months COLLATERALIZED CREDIT CREDIT CARD MARGIN LOANS ▪ R $ 5 . 0 billion book (Individuals and Companies) ▪ Conservative approach to risk aiming zero NPL ▪ Lower capital vs traditional credit lines ▪ XP VISA INFINITY card officially launched ▪ Higher than expected card activation to date ▪ Marketplace delivered in two months ▪ Credit line currently in pilot phase ▪ Relevant tool to enhance trading experience ▪ Collateralization mitigates default risk

8 Banking: What’s Next Connecting the dots to execute an ambitious business plan and grow our revenue SAM (serviceable available market) with expanded product offering INDIVIDUALS (MASS AFFLUENT AND PRIVATE) • Scale existing products: Investments, FX, Collateralized Credit, Derivatives • Scale Energy Trading Desk Short - Term (2021 - 2022) Mid - Term (2022 - 2023) Business Plan Optionalities COMPANIES (SMB, MIDDLE AND CORPORATE) • Full Digital Account • Debit Card and PIX • Expanded credit offering • Taylor - Made Insurance products • Cash Management • Enter the Acquiring / Payments market • Enhance Data Analytics • Cross - sell and explore Corporate Pension • Open Banking opportunities • Attract and monetize Retail clients through cross - sell and non - investment products • Open Banking opportunities • Expanded credit offering • New Insurance products

3 1Q21 KPIs and Financials

10 Total AuC R $ 715 Billion +96% YoY Collateralized Credit Portfolio R $ 4 . 7 Billion +74x YoY Gross Revenue R $ 2 . 8 Billion +50% YoY Active Clients 3 . 0 Million +47% YoY Credit Card TPV R $ 505 Million Adjusted EBITDA 2 R $ 1 . 0 Billion +75% YoY DARTS 3 . 2 Million NPL Ratio 1 0 % Adjusted Net Income 2 R $ 846 Million +104% YoY Investments Banking Financials +91% YoY (1) Rounded number (2) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA (3) Note: NPS, is an independent widely known survey methodology that measures the willingness of customers to recommend a Compan y’s products and services. The NPS calculation as of a given date reflects the average of the answers in the previous six months KPIs NPS 3 Mar - 21: 74

11 KPIs AUC, Active Clients and Net Inflows Assets Under Custody (AUC) (in R$ bn) Net Inflow (in R$ bn) 2,993 1Q20 1Q21 2,039 +47% Active Clients (‘000) Net Inflow Adj. by Extraordinary Inflows (in R$ bn) 366 715 252 Market Appreciatio n 1Q20 97 Net Inflow 1Q21 +96% 29 117 37 69 3Q20 2Q20 4Q20 1Q21 29 39 37 43 2Q20 3Q20 4Q20 1Q21

12 Revenue and Breakdown Total Gross Revenues (in R$ mn) Highlights ▪ Strong growth leading to a new record, driven mainly by the Retail business, with 90 % of growth contribution . RETAIL INSTITUTIONAL ISSUER SERVICES DIGITAL CONTENT 75 % 11 % 8 % 1 % Other Revenue represented 5% of Total Gross Revenues of 1Q21 Total Gross Revenue 1Q20 1Q21 1,856 2,784 +50%

13 Retail Revenue and Take Rate Resili ent monetization and strong trading volumes, following client net adds and net inflows LTM Take Rate (LTM Retail Revenue / Average AUC) Retail Revenue (in R$ mn) 3Q18 1.5% 1.4% 4Q18 1.4% 2Q19 1.3% 1.3% 1Q19 1.3% 3Q19 1.3% 2Q20 4Q19 1.3% 1Q20 1.3% 1.3% 3Q20 4Q20 1.3% 1Q21 1Q20 1Q21 2,088 1,254 +67% Highlights ▪ Deepening client relationship and strong flow volumes driving continued monetization of retail revenues Highlights ▪ Retail revenue was strong across all products . Key growth drivers were : ( 1 ) Financial Products ; ( 2 ) Equity and futures ; and ( 3 ) Fixed Income ; ▪ On 1 Q 21 , Retail related revenues represented 79 % of consolidated Net Income from Financial Instruments . Note: Average AUC = (Sum of AUC from the beginning of period and each - quarter end in a given year, being 5 data points in one ye ar)/5) Zero brokerage Clear New Online Pricing XP and Rico AUC LTM Take Rate Pandemic Outbreak Banking License

14 1,043 1Q20 1Q21 595 +75% Highlights ▪ Adjusted EBITDA grew 75 % , from R $ 595 million to R $ 1 , 043 million . The growth was driven by ( 1 ) increases in the top line, mainly coming from Retail ; ( 2 ) better COGS as a percentage of Net Revenues, and consequently higher gross margins and ( 3 ) operating leverage in SG&A . Adjusted EBITDA and Margin Operational Leverage despite investments in technology, client experience and product offering Adjusted EBITDA (in R$ mn) Adjusted EBITDA Margin Note: See appendix for a reconciliation of Adjusted EBITDA. 1Q21 34.3% 1Q20 39.7% Highlights ▪ Despite investments in technology, product development, and new hires -- headcount increased by 64 % during the last 12 months - the margin expansion was attributable to our highly scalable business model .

15 1Q20 1Q21 415 846 +104% +104% +75% Adj. Net Income +104% Adj. EBITDA Gross Revenue +75% Adjusted Net Margin Adjusted Net Income and Margin Net margin expansion driven by strong growth in Retail, operating leverage and a lower tax rate Adjusted Net Income (in R$ mn) Note: See appendix for a reconciliation of Adjusted Net Income. YoY Growth Across 1Q21 P&L +535 bps Operating leverage Efficient Corporate Structure +827 bps Margin expansion YoY Highlights ▪ Adjusted Net Income grew 104 % vs . 1 Q 20 , explained by ( 1 ) strong growth in Retail Revenue, ( 2 ) operating leverage in SG&A and ( 3 ) a lower effective tax rate . +50% 32.2% 23.9%

Q&A

17 Investors Relations ir@xpi.com.br https://investors.xpinc.com/

Appendix

19 579 841 1Q21 1Q20 +45% 29.1% 32.3% % of Net Revenue 561 765 1Q20 1Q21 +36% COGS and SG&A Gross margin expansion and efficiency gains despite investments in the platform COGS (in R$ mn) Operating Expenses (in R$ mn) Highlights ▪ Year - over - year gross margin expansion, despite the impact of long - term incentives with the IFA network, as costs were abnormally high in the same period of last year due to the beginning of the pandemic . 68.0% 66.6% Gross Margin % of Net Revenue Highlights ▪ Despite growing our headcount by 64 % year - over - year, continuously investing in technology and new verticals, and deploying new products, we increased efficiency, reducing expenses as a percentage of net revenue by 321 bps . Excluding Share - Based Compensation

20 Institutional and Issuer Services Institutional benefited from volumes and Issuer Services from market window Issuer Services Revenue (in R$ mn) Institutional Revenue (in R$ mn) 331 294 1Q21 1Q20 - 11% 1Q20 1Q21 132 234 +77% Highlights ▪ Despite the growth in core trading desks in 1 Q 21 , the same period of last year benefited from a strong client activity in the fixed income business, due to the pandemics . Highlights ▪ This increase was driven by ( 1 ) Equity Capital Markets (ECM), with 12 executed deals vs 5 in 1 Q 20 , and ( 2 ) our Debt Capital Markets (DCM) division, with participation in 43 deals vs 36 in 1 Q 20

21 KPIs Average Trades and Market Share Retail Equity DARTs (million) 1Q21 1Q20 1.7 3.2 91% XP Inc. Retail Equity Market Share Mar - 21 33% Custody Traded Volume 56%

22 Non - GAAP Financial Information A low ETR driven by ( i ) corporate structure and (ii) share based compensation expenses 22 (1) Share - Based Compensation and Offering expenses effects on EBT and Income Tax (2) A portion of Total Revenue and Income generated is recognized already net of income tax (3) Illustrative ETR incorporating both item (1) and (2) Normalized ETR from Accouting ETR (in R $ mn ) 1Q20 2Q20 3Q20 4Q20 1Q21 [A] Accounting ETR ETR 21.8% 10.7% 13.5% 7.6% 6.4% EBT 545 650 677 799 784 Income Tax 119 69 91 60 50 [A+B] ETR ex-Adjustments 1 ETR 22.7% 12.4% 15.0% 13.0% 12.1% [B] EBT 573 690 723 985 963 +178 Income Tax 130 85 109 128 117 +67 [A+C] ETR ex-Corporate Structure accounting effects 2 ETR 27.5% 17.8% 22.0% 23.2% 17.4% [C] EBT 587 707 751 962 889 +105 Income Tax 161 126 165 224 155 +105 [A+B+C] Normalized ETR 3 ETR 28.0% 19.0% 22.9% 25.4% 20.8% [B+C] EBT 616 747 797 1,148 1,068 +283 Income Tax 173 142 183 291 222 +172 222 784 105 178 105 Normalized Corporat e Structure 1,068 Share - Based Compensatio n 50 67 Accounting EBT Income Tax 20.8% 1 Q 21 Normalized Effective Tax Rate (in R $ mn ) ETR% 6.4%

23 Non - GAAP Financial Information Adjusted Assets (from the factors listed below) reflects our business more realistically 23 [B] Pension Funds ▪ AUM from XP Vida & Previdência is accounted in both assets and liabilities [C] Floating ▪ Uninvested cash from clients allocated in sovereign bonds [D] Client Liquidity & Sovereign Bonds arbitrage ▪ Providing liquidity to clients with derivatives ▪ Money market funding (repos mostly) allocated into sovereign bonds targeting arbitrage opportunities Assets [A] [B] Pension Funds [A-B] [C] Floating [A-B-C] [D] Client Liquidity & Sov. Bonds Arb. Adjusted Assets [A-B-C-D] Total 121,750 16,897 104,854 20,399 84,455 58,047 26,409 Securities - Fair Value through P&L 62,855 16,897 45,959 - 45,959 33,327 12,632 Securities - Repos 6,741 - 6,741 - 6,741 6,741 - Securities - Fair Value through OCI 21,629 - 21,629 17,214 4,415 4,415 - Securities - Trading & Intermediation 3,184 - 3,184 3,184 - - - Other Financial Instruments 15,503 - 15,503 - 15,503 13,564 1,939 Other Assets 11,838 - 11,838 - 11,838 - 11,838 Liabilities + Equity [A] [B] Pension Funds [A-B] [C] Floating [A-B-C] [D] Client Liquidity & Sov. Bonds Arb. Adjusted Assets [A-B-C-D] Total 121,750 16,897 104,854 20,399 84,455 58,047 26,409 Securities - Repos 44,483 - 44,483 - 44,483 44,483 - Other Finan. Liab. 16,269 - 16,269 - 16,269 13,564 2,706 Pension Funds 16,897 16,897 - - - - - Securities - Trading & Intermediation 20,399 - 20,399 20,399 - - - Other Liabilities & Equity 23,703 - 23,703 - 23,703 - 23,703 Key factors inflating our balance sheet Simplified Balance Sheet (in R $ mn )

24 Floating Balance (=net univested clients' deposits) 1Q21 4Q20 Assets (3,184) (1,052) (-) Securities trading and intermediation (3,184) (1,052) Liabilities 20,399 20,303 (+) Securities trading and intermediation 20,399 20,303 (=) Floating Balance 17,214 19,252 Non - GAAP Financial Information Floating and Adjusted Gross Financial Assets 24 Adjusted Gross Financial Assets (in R $ mn ) Floating Balance (in R $ mn )

25 1Q21 1Q20 YoY 4Q20 QoQ EBITDA 864 567 52% 705 23% (+) Share Based Compensation 178 28 528% 180 -1% (+) Offering expenses - - n.a. 6 -100% Adj. EBITDA 1,043 595 75% 891 17% Non - GAAP Financial Information Adjusted Net Income and Adjusted Gross Financial Assets 25 Adjusted Net Income (in R $ mn ) Adjusted EBITDA (in R $ mn ) 1Q21 1Q20 YoY 4Q20 QoQ Net Income 734 398 85% 602 22% (+) Share Based Compensation 178 28 n.a. 180 -1% (+) Offering expenses - - n.a. 6 -100% (+/-) Taxes (67) (11) n.a. (68) -1% Adj. Net Income 846 415 104% 721 17%