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 November 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: November 3, 2021

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated November 3, 2021 – XP Inc. Reports 3Q21 Financial Results.
99.2	XP Inc. 3Q21 – Earnings Presentation.
99.3	XP Inc. 3Q21 – Unaudited Interim Condensed Consolidated Financial Statements.

Exhibit 99.1

XP Inc. Reports 3Q21 FinancialResults

São Paulo, Brazil, November 3, 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, reported today its financial results for the third quarter of 2021.

To our shareholders

"In adversity, some give up, while others exceed records." Ayrton Senna.

This phrase has been inspiring us throughout our history.

The ownership culture and our partnership, currently with more than 800 partners and 6,000 empowered executives acting as CEOs, coupled with our resilience and tenacity, were the factors that made us overcome various moments of uncertainty we have been through. It was like that in 2001, 2005, 2007, 2014 and 2019, and it will be no different today.

Whether or not we are in a crisis we cannot say, it shall become clearer over time, but the environment is certainly complex, and we like challenges.

In our opinion, the ability to connect dots in a chronological order of relevance is how an entrepreneurial journey is built. Crises force us to revisit this sequence and quickly rebuild this chain. Our greatest quality is precisely this pragmatism of thought and strong discipline of execution.

Our roadmap, as we've talked about since the IPO, is to continue expanding into new verticals, to provoke ourselves to go even further to better serve our clients and thus increasingly address the huge revenue pool of the financial industry and its adjacencies. Today we operate in a market of R$120bn of annual revenue, still small in the context of an industry pool of R$800bn.

Our efforts and investments in the allocation and addition of employees are divided into three strategic pillars: i) Foundations; ii) Protect and Expand the Core and iii) Build the Future.

Foundations represent the backbone that supports the company and allows it to grow exponentially and sustainably. It includes, among others, the Technology and Back Office infrastructures.

Protecting and Expanding theCore involves the continuous focus on innovating and reinforcing our competitive advantages in the universe of Investments and Capital Markets, never complacent with what we have built up to now. These pillars include, among others, the mission of promoting the availability and liquidity of high-quality products at the lowest possible cost, continuing to develop our distribution channels – both advisory and self-service – and advancing in the construction of a unique ecosystem of financial education, digital content and entrepreneurship. In the investment world, the concentration in the five big banks still exceeds 90%, and our share-of-wallet of existing clients is approximately 50%.

Building the Future, in turn, encompasses projects that are in their early stages and still generate little or no revenue, but which will allow XP to impact an increasing number of individuals and companies in Brazil over the next years. These projects include the frequently mentioned Banking, Credit, Insurance and Companies initiatives and other high potential fronts. We could not be more confident with the prospects of these businesses and with the return that investments made throughout 2021 and 2022 will bring to the company in the following years.

In the medium term, between 24-36 months, entering these verticals will expand our operations to a potential market of R$350bn to R$400bn of annual revenue.

In the third quarter we saw some of these lines begin to evolve and gain relevance, such as credit and credit cards. The growing representation of these products helped us to expand our revenue and strengthen our business.

Today we see the company more solid and capitalized than in any other challenging moment we have had to face in the past. Hence, we hope to maintain a consistent growth trajectory in the main KPIs, and we believe that the changes that the financial sector has been going through will allow us to grow even more intensely, benefiting consumers and literally transforming the financial environment in our country.

Additionally, the diversification of our business and the portfolio effect, especially in Retail, tend to preserve the company's revenue-generating capacity in different scenarios.

In the first days of October, we had the important conclusion of the spin-off process of Itaú Unibanco's stake in XP Inc. An event that brought us improvements in terms of corporate governance and strategic flexibility, as well as a broad base of institutional and individual investors, to which we would like to welcome in this letter.

We will continue to fight tirelessly against banking concentration in our country, bringing more extraordinary products and experiences to our customers, always focusing on the long term and strengthening our purpose: to improve people's lives.

We are sure that our story has just begun, that XP is our life project and that the next few years will be even more exponential.

Thiago Maffra, CEO

Highlights

3Q21 KPIs

Key Business Metrics

	3Q21	3Q20	YoY	2Q21	QoQ
Operating and Financial Metrics (unaudited)
Total AUC (in R$ bn)	789	563	40%	817	-3%
Active clients (in '000s)	3,296	2,645	25%	3,140	5%
Retail – gross total revenues (in R$ mn)	2,599	1,698	53%	2,452	6%
Institutional – gross total revenues (in R$ mn)	281	239	17%	375	-25%
Issuer Services – gross total revenues (in R$ mn)	284	169	68%	255	11%
Digital Content – gross total revenues (in R$ mn)	31	32	-2%	29	6%
Other – gross total revenues (in R$ mn)	172	107	61%	88	95%
Company Financial Metrics
Gross revenue (in R$ mn)	3,368	2,245	50%	3,200	5%
Net Revenue (in R$ mn)	3,171	2,101	51%	3,018	5%
Gross Profit (in R$ mn)	2,277	1,395	63%	2,127	7%
Gross Margin	71.8%	66.4%	541 bps	70.5%	133 bps
Adjusted EBITDA^1^ (in R$ mn)	1,170	728	61%	1,245	-6%
Adjusted EBITDA margin	36.9%	34.6%	225 bps	41.3%	-438 bps
Adjusted Net Income^1^ (in R$ mn)	1,039	570	82%	1,034	1%
Adjusted Net Margin	32.8%	27.1%	561 bps	34.2%	-149 bps
(1) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA

Operational Performance

Investments

Assets Under Custody (in R$ bn)

*Concentrated custodies are custodies greater than R$ 5 billion per client/economic group. These custodies are more volatile by nature.

Total AUC was R$789 billion as of September 30, up 40% year-over-year and down 3% quarter-over-quarter. Year-over-year growth was driven by R$219 billion of net inflows and R$7 billion of market appreciation. Relevant market depreciation over 3Q21 offset most of the appreciation seen in recent quarters.

Net Inflows¹ (in R$ bn)

¹Adjusted by concentrated inflows/outflows. Concentrated inflows/outflows are the ones greater than R$ 5 billion per client/economic group. These custodies are more volatile by nature.

Total net inflows were R$37 billion on 3Q21 vs R$75 billion on 2Q21. Adjusted by concentrated custodies, net inflows reached R$47 billion, R$16bn per month, up from R$45 billion on 2Q21 and reflecting the strong performance of both IFA and Direct channels at the XP brand.

Banking

Credit Portfolio^1^ (in R$ bn)

Our Credit portfolio reached R$8.6 billion as of September 30, 2021, increasing six times year over year. The duration of our credit book was 3.3 years, with a 90-day Non-Performing Loan (NPL) ratio of 0%.

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

Credit Card TPV (in R$ bn)

On 3Q21, XP Visa Infinite credit cards generated R$3.3 billion in TPV (Total Purchased Value), a growth of 55% quarter-over-quarter.

“Despite being at a very early stage in our banking initiatives, mainly collateralized credit and credit card, our data indicates a strong potential for cross selling in our platform. Our focus is to increase engagement within our client base, providing a complete and integrated experience, enhancing our long-term relationship with our clients” commented Thiago Maffra, XP Inc.’s CEO.

Active Clients (in ‘000s)

Active clients grew 25% and 5% in 3Q21 vs 3Q20 and 2Q21, respectively, reaching 3.3 million. Average monthly client additions grew 6% sequentially from 49,000 in 2Q21 to 52,000 in 3Q21.

“Despite the more challenging environment, with interest rates in an upward trend, we expect to continue to see a healthy growth pace in our mains KPIs, due to a diversified business model and a still highly concentrated financial industry in Brazil”, commented Bruno Constantino, XP Inc.’s CFO.

IFA Network Gross Adds

IFA Network gross additions totaled 1,188 in 3Q21, up 30% year-over-year and remaining stable quarter-over-quarter.

Retail DATs¹ (mn trades)

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

Retail DATs totaled 2.6 million in 3Q21, remaining relatively stable quarter-over-quarter and year-over-year.

Net Promoter Score (NPS)

Our NPS, a widely known survey methodology used to measure customer satisfaction, was 77 in September 2021, reflecting our ongoing efforts to provide superior customer service at a lower 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.

3Q21 Revenue Breakdown

Total Gross Revenue (in R$ mn)

Total Gross Revenue grew 50% from R$2.2 billion in 3Q20 to R$3.4 billion in 3Q21.The increase was mainly driven by the Retail business, which contributed with 80% of the growth year-over-year, while Issuer Services contributed with 10%. In addition to the growing contribution from Banking revenues, mainly net interest income and interchange fees, our resilient revenue growth also shows how our business has been able to adapt to distinct economic cycles. The reduction in DATs and the consequent impact on revenues from Equities and Futures seen since 1Q21 has been more than offset by the positive performance of interest rate linked lines such as Fixed Income, Floating and Interest on Gross Cash over the past two quarters. Our strong distribution channel coupled with a comprehensive product offering and focus on client experience are key factors that allow for such adaptability.

Retail

Retail Revenue (in R$ mn)

3Q20 vs 3Q21

Retail revenue grew 53% from R$1.7 billion in 3Q20 to R$2.6 billion in 3Q21, attributable mostly to (i) fixed income and structured products growth and (ii) floating revenues driven by higher interest rates. Revenue profile was on par with 2Q21, when there was an increase in the demand for fixed income products and stable trading volumes in equities and futures.

In 3Q21, Retail-related revenues represented 83% of consolidated Net Income from Financial Instruments, as per the Accounting Income Statement, and were composed of Derivatives, Fixed Income secondary transactions and Floating, among others.

LTM Take Rate (LTM Retail Revenue / AverageAUC)

The take rate for the last twelve months ended September 30, 2021 remained stable compared to the same period of 2020. Our ability to add new products and services to the platform – such as credit cards and credit – coupled with a diversified revenue profile, kept our take rate stable.

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$ mn)

3Q20 vs 3Q21

Institutional gross revenue totaled R$281 million in the 3Q21, up 17% from R$239 million in 3Q20. The result was largely driven by a strong fixed income activity – also benefiting from recent increases in interest rates in Brazil.

In 3Q21, Institutional revenue accounted for 6% 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$ mn)

3Q20 vs 3Q21

Issuer Services revenue expanded 68% year-over-year from R$169 million in 3Q20 to R$284 million in 3Q21. This increase was driven by (i) Equity Capital Markets (ECM), with 15 executed deals vs 14 in 3Q20, and (ii) our Debt Capital Markets (DCM) division, with participation in 48 deals vs 34 in 3Q20.

Our Issuer Services business is key to foster our product offering and contribute to the development of Capital Markets in Brazil. Although market conditions may affect our ECM results in the short-term, the DCM division is expected to benefit from the demand of corporate clients for alternative funding sources. Furthermore, we see our recent M&A initiative starting to flourish, reaping the benefits from being inserted in a complete ecosystem with several opportunities for deal origination.

Digital Content and Other

Digital Content Revenue

Gross revenue totaled R$31 million in 3Q21, down 2% from R$32 million in 3Q20. 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. 3Q21 trends remained pressured by the absence of in-person events and courses.

Other Revenue

3Q20 vs 3Q21

Other revenue increased 61% in 3Q21 vs 3Q20, from R$107 million to R$172 million. Interest on gross cash was higher due to both increases in interest rates and higher adjusted gross financial asset balance in the period, along with better results coming from asset and liability management.

In 3Q21, other revenue accounted for 10% 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$ mn) and Gross Margin

3Q20 vs 3Q21

COGS rose 27% from R$706 million in 3Q20 to R$894 million in 3Q21, following the expansion in overall Retail Revenues. There were two main drivers for this quarter’s margin expansion: (i) our continued investments in new product deployments – such as credit cards and credit – and (ii) rebalancing of our product mix towards products that tend to benefit from the current macroeconomic scenario, which has led to an increase in Gross Margin to 71.8% in the 3Q21, the highest since our IPO.

SG&A Expenses

SG&A Expenses (ex-Share-Based Compensation) (in R$ mn)

3Q20 vs 3Q21

SG&A expenses (excluding share-based compensation) totaled R$1,116 million in 3Q21, up 67% from R$669 million in 3Q20. Despite the fact that the marketplace is increasingly competitive concerning talent attraction and retention, especially for technology professionals, we have been able to hire people destined to carry out all the new initiatives and products, including the abovementioned pillars of (i) technology and operational foundations, (ii) core business and (iii) building the future. The increase in headcount was the main driver behind SG&A growth, as our headcount has increased by 64% in last twelve months, from 3,364 in 3Q20 to 5,527 in 3Q21. This led to a temporary increase in SG&A as a percentage of Net Revenue to higher levels, which should be transitory for the next 12 to 15 months, while the new initiatives and products are still in rollout phase.

Share-Based Compensation (in R$ mn)

Through 3Q21, 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 2Q21. 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$ mn) and Margin

3Q20 vs 3Q21

Adjusted EBITDA grew 61% year over year, from R$728 million to R$1,170 million. Adjusted EBITDA margin expanded 225 bps to 36.9%, driven by gross margin expansion, which was partially offset by higher SG&A expenses, mainly attributable to headcount growth. Excluding our considerable investments in technology and new initiatives, which we expect to continue for the next quarters and peak in 4Q22, we estimate that our Adjusted EBITDA Margin would be above 40%.

¹ See appendix for a reconciliation of Adjusted EBITDA.

Adjusted Net Income

Adjusted Net Income¹ (in R$ mn) and Margin

3Q20 vs 3Q21

Adjusted Net Income grew 82%, from R$570 million in 3Q20 to R$1,039 million in 3Q21, in connection with the factors explained in the Adjusted EBITDA and a lower normalized effective tax rate. The effective tax rate, normalized by withholding taxes that are recorded in our revenue was 13.8% in 3Q21, from 23.4% in 3Q20, mainly due to a more favorable revenue and expense mix across subsidiaries. Our Adjusted Net Margin expanded by 561 bps to 32.8% in 3Q21. Despite investments in technology and new businesses, our medium-term guidance range for Adjusted Net Margin remains unchanged.

¹ See appendix for a reconciliation of Adjusted Net Income.

Adjusted Cash Flow

(in R$ mn)

	3Q21	2Q21	3Q20
Cash Flow Data
Income before income tax	908	1,002	632
Adjustments to reconcile income before income tax	693	178	128
Income tax paid	(174)	(69)	(126)
Contingencies paid	(0)	(1)	(0)
Interest paid	(8)	(4)	(44)
Changes in working capital assets and liabilities	(797)	824	155
Adjusted net cash flow (used in) from operating activities	622	1,931	746
Net cash flow (used in) from securities, repos, derivatives and banking activities (i)	(3,393)	(2,189)	623
Net cash flows (used in) from operating activities	(2,771)	(258)	931
Adjusted Net cash flows from investing activities (ii)	(764)	(1,248)	(1,224)
Adjusted Net cash flows from financing activities (iii)	4,570	1,715	(916)

The management classifies (i) financial bills, foreign exchange, foreign exchange portfolio and credit card operations as net cash (used in) from banking activities. (ii) the commissions and incentives to our IFA network as adjusted net cash flow from investing activities. (iii) financing instruments payable as adjusted net cash flows from financing activities.

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 views as represents a more useful metric to track the intrinsic cash flow generation of the business) decreased to R$622 million in 3Q21 from R$1,931 million in 2Q21, and increased from R$746 million in 3Q20 to R$622 million in 3Q21 driven by:

·	Higher<br>balance 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, from Floating Balances and from private pension balances to<br>securities and other financial assets. These balances may fluctuate substantially from quarter-to-quarter and were the key drivers to<br>the net cash flow from operating activities figures;
---	---
·	Increases<br>in our banking activities from loans operations, market funding operations mainly derived from deposits (time deposits), structured operations<br>certificates (COEs) and other financial liabilities which include financial bills as a result of our expected growth in new financials<br>services verticals;
---	---
·	Our<br>income before tax combined with non-cash expenses consisting primarily of (i) Net foreign exchange differences of R$433 million in 3Q21<br>and R$1 million in 3Q20, (ii) share based plan of R$124 million in 3Q21 and R$38 million in 3Q20 and (iii) depreciation and amortization<br>of R$51 million in 3Q21 and R$36 million in 3Q20. The total amount of adjustments to reconcile income before income taxes was R$693 million<br>in 3Q21 and R$128 million in 3Q20.
---	---

Net Cash Flow Used in Investing Activities

Our net cash used in investing activities decreased from R$1,248 million in 2Q21 to R$764 million in 3Q21 and from R$1,224 million in 3Q20 to R$764 million, primarily affected by:

·	Investments<br>related our IFA Network, which decreased from R$1,102 million in 2Q21 to R$448 million in 3Q21 and from negative R$916 in 3Q20.

·	the<br>investment in intangible assets, mostly IT infrastructure and capitalization software development and property and equipment which decreased<br>from R$108 million in 2Q21 to R$68 million in 3Q21 and increased from R$42 million in 2Q20;
·	Our<br>investments in associates and joint ventures, mostly related to our asset management of R$246 million in 3Q21 and R$37 million in 2Q21.
---	---

Net Cash Provided by Financing Activities

Our net cash flows from financing activities increased from R$1,715 million in 2Q21 to R$4,570 million in 3Q21 and from use of R$916 million in 3Q20, primarily due to:

·	R$<br>4,334 million in 3Q21 related to issuance of our debt securities Bond.
·	R$<br>1,124 million in 2Q21 correspondent to the IPO of XPAC Acquisition Corp. The proceeds of IPO are restricted and only to use for the purpose<br>of XPAC transactions.
---	---
·	R$1,570<br>million in 2Q21 related to acquisitions of Borrowings mostly derived by our loan agreement with Banco Nacional do México.
---	---
·	R$500<br>million in 2Q21 related to issuance of non-convertible debentures with the objective of funding the Group’s working capital for<br>the construction of our new headquarters “Vila XP” at São Roque, State of São Paulo.
---	---

Floating Balance and Adjusted Gross

FinancialAssets (in R$ mn)

Floating Balance (=net uninvested clients' deposits)	3Q21	2Q21
Assets	(1,065)	(2,776)
(-) Securities trading and intermediation	(1,065)	(2,776)
Liabilities	19,635	20,814
(+) Securities trading and intermediation	19,635	20,814
(=) Floating Balance	18,570	18,038
Adjusted Gross Financial Assets	3Q21	2Q21
Assets	120,595	105,113
(+) Cash	2,823	1,237
(+) Securities - Fair value through profit or loss	53,432	45,360
(+) Securities - Fair value through other comprehensive income	28,566	23,701
(+) Securities - Evaluated at amortized cost	858	988
(+) Derivative financial instruments	15,471	15,485
(+) Securities purchased under agreements to resell	7,871	8,174
(+) Loans and credit card operations	10,535	7,964
(+) Foreign exchange portfolio	1,039	2,204
Liabilities	(85,459)	(73,704)
(-) Securities	(2,082)	(2,790)
(-) Derivative financial instruments	(14,506)	(16,373)
(-) Securities sold under repurchase agreements	(24,234)	(16,062)
(-) Private Pension Liabilities	(26,711)	(22,046)
(-) Deposits	(6,867)	(6,628)
(-) Structured Operations	(5,699)	(4,198)
(-) Financial Bills	(2,343)	(2,160)
(-) Foreign exchange portfolio	(1,150)	(2,324)
(-) Credit card operations	(1,867)	(1,124)
(-) Floating Balance	(18,570)	(18,038)
(=) Adjusted Gross Financial Assets	16,566	13,372

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 and Credit Card Operations and Foreign exchange portfolio (assets) 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), Financial Bills, Foreign exchange portfolio (liabilities), Credit cards operations 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 and investments in the IFA Network (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 3Q21 financial results on Wednesday, November 03, 2021, at 5:00 pm ET (6:00 pm BRT). To participate in the earnings webcast please subscribe at 3Q21 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

Marina Montemor

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 September 30, 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$ mn)

	3Q21	3Q20	YoY	2Q21	QoQ
Managerial Income Statement
Total Gross Revenue	3,368	2,245	50%	3,200	5%
Retail	2,599	1,698	53%	2,452	6%
Institutional	281	239	17%	375	-25%
Issuer Services	284	169	68%	255	11%
Digital Content	31	32	-2%	29	6%
Other	172	107	61%	88	95%
Net Revenue	3,171	2,101	51%	3,018	5%
COGS	(894)	(706)	27%	(891)	0%
As a % of Net Revenue	(28.2%)	(33.6%)	5.4 p.p	(29.5%)	1.3 p.p
Gross Profit	2,277	1,395	63%	2,127	7%
Gross Margin	71.8%	66.4%	5.4 p.p	70.5%	1.3 p.p
SG&A	(1,116)	(669)	67%	(900)	24%
Share Based Compensation^1^	(156)	(44)	252%	(147)	6%
EBITDA	1,005	681	48%	1,080	-7%
EBITDA Margin	31.7%	32.4%	-0.7 p.p	35.8%	-4.1 p.p
Adjusted EBITDA	1,170	728	61%	1,245	-6%
Adjusted EBITDA Margin	36.9%	34.6%	2.2 p.p	41.3%	-4.4 p.p
D&A	(51)	(36)	41%	(58)	-12%
EBIT	953	645	48%	1,022	-7%
Interest expense on debt	(49)	(12)	324%	(20)	146%
Share of profit or (loss) in joint ventures and associates	4	(1)	-763%	1	-1119%
Taxable equivalent adjustments^2^	179	74	142%	126	42%
Taxable equivalent EBT	1,087	706	54%	1,128	-4%
Normalized tax expense	(150)	(165)	-9%	(197)	-24%
Normalized effective tax rate^2^	(13.8%)	(23.4%)	9.5 p.p	(17.5%)	3.6 p.p
Net Income	936	541	73%	931	1%
Net Margin	29.5%	25.8%	3.8 p.p	30.9%	-1.3 p.p
Adjustments	102	29	255%	102	0%
Adjusted Net Income	1,039	570	82%	1,034	1%
Adjusted Net Margin	32.8%	27.1%	5.6 p.p	34.2%	-1.5 p.p

¹ A portion of total Share-Based Compensation is related to IFAs and allocated in COGS. ^2^Tax adjustments are related to tax withholding expenses that are recognized net in our gross revenue.

Accounting Income Statement

(in R$ mn)

	3Q21	3Q20	YoY	2Q21	QoQ
Accounting Income Statement
Net revenue from services rendered	1,589	1,278	24%	1,601	-1%
Brokerage commission	633	548	16%	650	-3%
Securities placement	442	388	14%	513	-14%
Management fees	415	274	51%	384	8%
Insurance brokerage fee	33	18	89%	35	-4%
Educational services	15	25	-43%	27	-46%
Banking Fees	57	33	73%	42	38%
Other services	154	122	26%	111	39%
Taxes and contributions on services	(160)	(131)	22%	(160)	0%
Net income from financial instruments at amortized cost and at fair value through other comprehensive income	(717)	190	-478%	(331)	117%
Net income from financial instruments at fair value through profit or loss	2,300	633	263%	1,748	32%
Total revenue and income	3,171	2,101	51%	3,018	5%
Operating costs	(889)	(696)	28%	(838)	6%
Selling expenses	(58)	(38)	50%	(62)	-7%
Administrative expenses	(1,267)	(810)	57%	(1,115)	14%
Other operating revenues (expenses), net	1	98	-99%	72	-99%
Expected credit losses	(5)	(10)	-45%	(54)	-90%
Interest expense on debt	(49)	(12)	324%	(20)	146%
Share of profit or (loss) in joint ventures and associates	4	(1)	-763%	1	-1119%
Income before income tax	908	632	44%	1,002	-9%
Income tax expense	28	(91)	-131%	(71)	-140%
Effective tax rate	3.1%	(14.4%)	17.5 p.p	(7.1%)	10.2 p.p
Net income for the period	936	541	73%	931	1%

Balance Sheet (in R$ mn)

	3Q21	2Q21
Assets
Cash	2,823	1,237
Financial assets	119,626	107,174
Fair value through profit or loss	68,904	60,845
Securities	53,432	45,360
Derivative financial instruments	15,471	15,485
Fair value through other comprehensive income	28,566	23,701
Securities	28,566	23,701
Evaluated at amortized cost	22,157	22,628
Securities	858	988
Securities purchased under agreements to resell	7,871	8,174
Securities trading and intermediation	1,065	2,776
Accounts receivable	356	396
Loan Operations	10,535	7,964
Other financial assets	1,473	2,330
Other assets	3,991	3,293
Recoverable taxes	127	118
Rights-of-use assets	260	194
Prepaid expenses	3,413	2,887
Other	191	94
Deferred tax assets	1,042	795
Investments in associates and joint ventures	1,185	772
Property and equipment	293	243
Goodwill & Intangible assets	775	807
Total Assets	129,735	114,321

	3Q21	2Q21
Liabilities
Financial liabilities	88,560	78,314
Fair value through profit or loss	16,588	19,163
Securities	2,082	2,790
Derivative financial instruments	14,506	16,373
Evaluated at amortized cost	71,972	59,151
Securities sold under repurchase agreements	24,234	16,062
Securities trading and intermediation	19,635	20,814
Financing instruments payable	19,213	13,154
Accounts payables	929	1,186
Borrowings	1,885	1,775
Other financial liabilities	6,076	6,161
Other liabilities	27,744	23,416
Social and statutory obligations	584	852
Taxes and social security obligations	412	481
Private pension liabilities	26,711	22,046
Provisions and contingent liabilities	28	26
Other	10	11
Deferred tax liabilities	-	-
Total Liabilities	116,304	101,730
Equity attributable to owners of the Parent company	13,427	12,588
Issued capital	0	0
Capital reserve	11,051	10,926
Other comprehensive income	(223)	(3)
Retained earnings	2,600	1,664
Non-controlling interest	3	3
Total equity	13,431	12,591
Total liabilities and equity	129,735	114,321

Adjusted EBITDA (in R$ mn)

	3Q21	3Q20	YoY	2Q21	QoQ
EBITDA	1,005	681	48%	1,080	-7%
(+) Share Based Compensation	165	45	269%	165	0%
(+) Offering expenses	-	2	-100%	-	n.a.
Adj. EBITDA	1,170	728	61%	1,245	-6%

Adjusted Net Income (in R$ mn)

	3Q21	3Q20	YoY	2Q21	QoQ
Net Income	936	541	73%	931	1%
(+) Share Based Compensation	165	45	269%	165	0%
(+) Offering expenses	-	2	-100%	-	n.a.
(+/-) Taxes	(62)	(18)	254%	(63)	-1%
Adj. Net Income	1,039	570	82%	1,034	1%

1 3Q21 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 .

3 Index Highlights 02 3Q21 KPIs and Financials 03 01 Opening Remarks Q&A 04

1 Opening Remarks

5 Main corporative pillars to successfully deliver our purpose Where are we investing in? 1 FOUNDATIONS 2 PROTECT THE CORE 3 CORE EXPANSION 4 BUILD THE FUTURE

2 Highlights

7 Highlights ▪ All time high quarterly Gross Revenue and Adjusted Net Income ▪ Highest gross margin since the IPO, of 71.8% ▪ Consistent Adj. Net Inflow +R$15bn monthly average 3Q21 Results Product Highlights ▪ Record Pension Funds Inflows ▪ Strong Credit Card TPV growth of +55% QoQ Improved Governance ▪ BDRs listed in B3 with ~500k new individual investors and improved liquidity ▪ XP Controle voting power increased to 68%

3 3Q21 KPIs and Financials

9 (1) This portfolio does not include Intercompany and Credit Card related loans and receivables (2) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA (3) NPS, is an independent widely known survey methodology that measures the willingness of customers to recommend a Company’s pr odu cts and services. The NPS calculation as of a given date reflects the average of the answers in the previous six months KPIs NPS 3 Sep - 21: 77 Total AuC R $ 789 Billion +40% YoY Credit Portfolio 1 R $ 8 . 6 Billion +122% YTD Gross Revenue R $ 3 . 4 Billion +50% YoY Active Clients 3 . 3 Million +25% YoY Credit Card TPV R $ 3 . 3 Billion Adjusted EBITDA 2 R $ 1 . 2 Billion +61% YoY Adjusted Net Inflows R $ 47 Billion NPL Ratio 0 % Adjusted Net Income 2 R $ 1 . 0 Billion +82% YoY Investments Banking Financials +22% YoY +55% QoQ

10 Revenue and Breakdown Total Gross Revenues (in R$ mn) Highlights ▪ Strong Retail and Issuer Services revenue, with growth contribution of 80 % and 10 % , respectively ; ▪ Growing contribution from banking revenues and record quarter for fixed income . 3Q20 3Q21 2,245 3,368 +50% RETAIL INSTITUTIONAL 77 % 8 % 8 % 1 % Other Revenue represented 5% of Total Gross Revenues of 3Q21 Total Gross Revenue ISSUER SERVICES DIGITAL CONTENT

11 Highlights ▪ Ability to add new products and services in the platform – such as credit cards and credit, and diversified revenue profile . Retail Revenue and Take Rate Resili ent monetization and product diversification LTM Take Rate (LTM Retail Revenue / Average AUC) Retail Revenue (in R$ mn ) 2Q20 1Q21 2Q21 1.3% 4Q19 1.3% 1Q20 1.3% 1.3% 3Q20 1.3% 3Q21 4Q20 1.3% 1.3% 1.3% 3Q20 3Q21 1,698 2,599 +53% Highlights ▪ Fixed income and structured products growth and floating revenues driven by higher interest rates ; ▪ On 3 Q 21 , Retail related revenues represented 83 % 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 IPO AUC LTM Take Rate Stable take rate since IPO

12 3Q20 3Q21 669 1,116 +67% 728 3Q20 3Q21 1,170 +61% Adjusted EBITDA and Margin Operational Leverage despite investments in technology, client experience and product offering Highlights ▪ Main drivers were ( 1 ) top line increase, mainly coming from Retail ; ( 2 ) higher gross margins, partially offset by investments in new initiatives . Adjusted EBITDA 2 (in R$ mn ) (1) Excluding Share Based Compensation (2) See appendix for a reconciliation of Adjusted EBITDA. 34.6% 36.9% % Adj EBITDA Margin Operating Expenses (in R$ mn ) % of Net Revenue Highlights ▪ A 64 % increase in headcount YoY was the main driver behind SG&A growth . Despite a competitive marketplace for talents, we have been able to hire people to carry out the new initiatives and products, especially in tech . 35.2% 31.9% SG&A 1 3Q21 3Q20 2Q21 3,364 4,489 5,527 +64% Headcount

13 Non - GAAP Financial Information Normalized Effective Tax Rate reconciliation 1Q21 2Q21 3Q21 Accounting ETR [A] EBT 784 1,002 908 [B] Income tax (50) (71) 28 A/B ETR -6.4% -7.1% 3.1% Normalized ETR [C] Tax witholding 105 126 179 [A+C] Tax equivalent EBT 889 1,128 1,087 [B-C] Normalized tax expense (155) (197) (150) Normalized ETR -17.4% -17.5% -13.8% PART OF OUR REVENUE IS RECOGNIZED NET OF TAXES. (in R$ mn )

14 3Q20 3Q21 570 1,039 +82% +104% +75% +61% +50% Adjusted EBITDA Gross Revenue Adjusted Net Income +82% 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 Income¹ (in R$ mn ) Note: See appendix for a reconciliation of Adjusted Net Income. YoY Growth Across 3Q21 P&L +225 bps Operating leverage Corporate Structure +561 bps Margin expansion YoY Highlights ▪ Adjusted Net Income grew 82 % vs . 3 Q 20 , explained by ( 1 ) strong growth in Retail Revenue, ( 2 ) operating leverage in SG&A and ( 3 ) a lower effective tax rate . 32.8% 27.1%

Q&A

16 Investor Relations ir@xpi.com.br https://investors.xpinc.com/

Appendix

18 Non - GAAP Financial Information Floating and Adjusted Gross Financial Assets 18 Adjusted Gross Financial Assets (in R $ mn ) Floating Balance (in R $ mn ) Floating Balance (=net uninvested clients' deposits) 3Q21 2Q21 Assets (1,065) (2,776) (-) Securities trading and intermediation (1,065) (2,776) Liabilities 19,635 20,814 (+) Securities trading and intermediation 19,635 20,814 (=) Floating Balance 18,570 18,038

19 Non - GAAP Financial Information Adjusted Assets (from the factors listed below) reflects our business more realistically 19 [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 129,735 26,711 103,024 19,635 83,389 39,706 43,683 Securities - Fair Value through P&L 53,432 26,711 26,721 - 26,721 6,368 20,354 Securities - Repos 7,871 - 7,871 - 7,871 7,871 - Securities - Fair Value through OCI 28,566 - 28,566 18,570 9,996 9,996 - Securities - Trading & Intermediation 1,065 - 1,065 1,065 - - - Other Financial Instruments 16,329 - 16,329 - 16,329 15,471 858 Other Assets 22,472 - 22,472 - 22,472 - 22,472 Liabilities + Equity [A] [B] Pension Funds [A-B] [C] Floating [A-B-C] [D] Client Liquidity & Sov. Bonds Arb. Adjusted Liabilities & Equity [A-B-C-D] Total 129,735 26,711 92,276 19,635 71,462 39,706 43,683 Securities - Repos 24,234 - 24,234 - 24,234 24,234 - Other Finan. Liab. 16,588 - 16,588 - 16,588 15,471 1,117 Pension Funds 26,711 26,711 - - - - - Securities - Trading & Intermediation 19,635 - 19,635 19,635 - - - Other Liabilities & Equity 42,567 - 42,567 - 42,567 - 42,567 Key factors inflating our balance sheet Simplified Balance Sheet (in R $ mn )

20 3Q21 3Q20 YoY 2Q21 QoQ EBITDA 1,005 681 48% 1,080 -7% (+) Share Based Compensation 165 45 269% 165 0% (+) Offering expenses - 2 -100% - n.a. Adj. EBITDA 1,170 728 61% 1,245 -6% Non - GAAP Financial Information Adjusted EBITDA and Adjusted Net Income 20 Adjusted Net Income (in R $ mn ) Adjusted EBITDA (in R $ mn ) 3Q21 3Q20 YoY 2Q21 QoQ Net Income 936 541 73% 931 1% (+) Share Based Compensation 165 45 269% 165 0% (+) Offering expenses - 2 -100% - n.a. (+/-) Taxes (62) (18) 254% (63) -1% Adj. Net Income 1,039 570 82% 1,034 1%

21 3Q21 3Q20 239 281 +17% Institutional and Issuer Services Institutional Revenue (in R$ mn ) Highlights ▪ The result was largely driven by a strong fixed income activity – also benefiting from recent increases in interest rates in Brazil . Issuer Services Revenue (in R$ mn ) 3Q20 3Q21 169 284 +68% Highlights ▪ Strong performance from both ECM and DCM divisions, with 15 and 48 deals executed in 3 Q 21 versus 14 and 34 in 3 Q 20 , respectively, and a growing contribution from M&A .

Exhibit 99.3

Reporton review of interim condensed consolidated financial statements

To the Board of Directors and Shareholders

XP Inc.

Introduction

We have reviewed the accompanying interim condensed consolidated balance sheets of XP Inc. and its subsidiaries (the "Company") as at September 30, 2021 and the related interim condensed consolidated statements of income and of comprehensive income for the three-month and nine-month periods then ended, and the interim condensed consolidated statements of changes in equity and cash flows for the nine-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 ofreview

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 does 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, november 3, 2021

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

PricewaterhouseCoopers,Av. Francisco Matarazzo 1400, 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><br><br> <br>As of September 30, 2021 and December31, 2020<br><br> <br>In thousands of Brazilian Reais
	Note	September 30,<br> <br>2021		December 31,<br><br> <br>2020
---	---	---	---	---	---
Cash			2,822,563		1,954,788
Financial assets			119,626,346		90,190,827
Fair value through profit or loss			68,903,724		57,149,446
Securities	4		53,432,287		49,590,013
Derivative financial instruments	5		15,471,437		7,559,433
Fair value through other comprehensive income			28,566,049		19,039,044
Securities	4		28,566,049		19,039,044
Evaluated at amortized cost			22,156,573		14,002,337
Securities	4		857,665		1,828,704
Securities purchased under agreements to resell	3		7,870,587		6,627,409
Securities trading and intermediation	9		1,064,775		1,051,566
Loan operations	7		10,535,402		3,918,328
Accounts receivable			355,607		506,359
Other financial assets	15		1,472,537		69,971
Other assets			3,990,936		1,760,999
Recoverable taxes			127,322		127,623
Rights-of-use assets	12		260,094		183,134
Prepaid expenses	8		3,412,774		1,393,537
Other			190,746		56,705
Deferred tax assets	17		1,041,750		505,046
Investments in associates and joint ventures	11		1,184,978		699,907
Property and equipment	12		293,029		204,032
Goodwill and Intangible assets	12		775,409		713,562
Total assets			129,735,011		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><br><br> <br>As of September 30, 2021 and December31, 2020<br><br> <br>In thousands of Brazilian Reais
	Note	September 30,<br> <br>2021			December 31,<br><br> <br>2020
---	---	---	---	---	---	---
Financial liabilities			88,559,863			70,600,989
Fair value through profit or loss			16,588,140			10,056,806
Securities	4		2,082,211			2,237,442
Derivative financial instruments	5		14,505,929			7,819,364
Evaluated at amortized cost			71,971,723			60,544,183
Securities sold under repurchase agreements	3		24,234,372			31,839,344
Securities trading and intermediation	9		19,634,754			20,303,121
Financing instruments payable	13		19,212,527			5,551,849
Accounts payables			928,892			859,550
Borrowings	14		1,885,165			284,087
Other financial liabilities	15		6,076,013			1,706,234
Other liabilities			27,744,423			14,522,206
Social and statutory obligations			583,657			667,448
Taxes and social security obligations			412,081			435,849
Private pension liabilities	16		26,711,015			13,387,913
Provisions and contingent liabilities	20		27,577			19,711
Other			10,093			11,285
Deferred tax liabilities	17		-			8,352
Total liabilities			116,304,286			85,131,547
Equity attributable to owners of the Parent company			13,427,265			10,894,609
Issued capital			23			23
Capital reserve			11,050,645			10,663,942
Other comprehensive income			(223,377	)		230,644
Retained earnings			2,599,974			-
Non-controlling interest			3,460			3,005
Total equity	18		13,430,725			10,897,614
Total liabilities and equity			129,735,011			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<br><br> <br>of income and of comprehensive income<br><br> <br>For the nine and three months period ended September 30, 2021and 2020<br><br> <br>In thousands of Brazilian Reais, except earnings per share
		Nine months period ended September 30,				Three months period ended September 30,
---	---	---	---	---	---	---	---	---	---
	Note	2021		2020		2021		2020
Net revenue from services rendered	21		4,644,551		3,493,231		1,588,880		1,277,745
Net income from financial instruments at amortized cost and at fair value through other comprehensive income	21	(1,016,823	)	298,585		(717,128	)	189,527
---	---	---	---	---	---	---	---	---	---
Net income from financial instruments at fair value through profit or loss	21	5,189,757		1,964,691		2,299,607		633,465
Total revenue and income		8,817,485		5,756,507		3,171,359		2,100,737
Operating costs	22	(2,564,074	)	(1,825,891	)	(889,015	)	(696,479	)
Selling expenses	23	(163,973	)	(94,367	)	(57,654	)	(38,322	)
Administrative expenses	23	(3,348,345	)	(2,077,587	)	(1,267,171	)	(809,596	)
Other operating income (expenses), net	24	90,982		84,986		1,086		97,801
Expected credit losses	10	(62,290	)	(38,171	)	(5,284	)	(9,541	)
Interest expense on debt		(78,600	)	(46,385	)	(49,112	)	(11,585	)
Share of profit (loss) in joint ventures and associates	11	3,394		(564	)	3,729		(564	)
Income before income tax		2,694,579		1,758,528		907,938		632,451
Income tax expense	17	(92,769	)	(279,427	)	28,449		(91,167	)
Net income for the period		2,601,810		1,479,101		936,387		541,284
Other comprehensive income
Items that can be subsequently reclassified to income
Foreign exchange variation of investees located abroad		13,036		76,575		(13,277	)	6,900
Gains (losses) on net investment hedge		(11,739	)	(80,370	)	9,004		(7,531	)
Changes in the fair value of financial assets at fair value through other comprehensive income		(458,772	)	(33,914	)	(236,173	)	(45,072	)
Other comprehensive income (loss) for the period, net of tax		(457,475	)	(37,709	)	(240,446	)	(45,703	)
Total comprehensive income for the period		2,144,335		1,441,392		695,941		495,581
Net income attributable to:
Owners of the Parent company		2,599,974		1,475,613		935,662		540,434
Non-controlling interest		1,836		3,488		725		850
Total comprehensive income attributable to:
Owners of the Parent company		2,142,499		1,437,904		695,216		494,731
Non-controlling interest		1,836		3,488		725		850
Earnings per share from total income attributable to the ordinary equity holders of the company
Basic earnings per share	26	4.6506		2.6742		1.6736		0.9794
Diluted earnings per share	26	4.5432		2.6534		1.6363		0.9710

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 changesin equity<br><br> <br>For the nine months period ended September 30, 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<br><br> <br>comprehensive<br><br> <br>income (loss)			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			-		-		-			-			1,475,613		1,475,613			3,488			1,479,101
Other comprehensive income, net			-		-		-			(37,709	)		-		(37,709	)		-			(37,709	)
Transactions with shareholders - contributions and distributions
Share based Plan	25		-		-		78,547			-			-		78,547			(10	)		78,537
Gain (loss) in changes in interest of subsidiaries, net			-		-		-			(377	)		-		(377	)		1,208			831
Allocations of the net income for the period
Dividends distributed			-		-		-			-			-		-			(6,136	)		(6,136	)
Balances at September 30, 2020			23		5,409,895		1,612,098			171,841			1,475,613		8,669,470			1,113			8,670,583
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			-		-		-			-			2,599,974		2,599,974			1,836			2,601,810
Other comprehensive income, net			-		-		-			(457,475	)		-		(457,475	)		-			(457,475	)
Transactions with shareholders - contributions and distributions
Share based Plan	25		-		-		390,496			-			-		390,496			2			390,498
Gain (loss) in changes in interest of subsidiaries, net			-		-		(3,793	)		3,454			-		(339	)		1,615			1,276
Allocations of the net income for the period
Dividends distributed			-		-		-			-			-		-			(2,998	)		(2,998	)
Balances at September 30, 2021			23		6,821,176		4,229,469			(223,377	)		2,599,974		13,427,265			3,460			13,430,725

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 cashflows<br><br> <br>For the nine months period ended September 30, 2021 and 2020<br><br><br><br> <br>In thousands of Brazilian Reais
		Nine months ended<br> <br>September 30,
---	---	---	---	---	---	---	---
	Note	2021			2020
Operating activities
Income before income tax			2,694,579			1,758,528
Adjustments to reconcile income before income taxes
Depreciation of property and equipment and right-of-use assets	12		46,465			52,972
Amortization of intangible assets	12		132,892			52,928
Loss on write-off of property, equipment and intangible assets and lease, net	12		14,663			61,888
Share of profit or (loss) in joint ventures and associates	11		(3,394	)		562
Expected credit losses on financial assets			62,290			38,171
(Reversal of) Provision for contingencies, net	20		4,434			(53	)
Net foreign exchange differences			358,229			2,981
Share based plan	25		390,498			78,537
Interest accrued			98,425			47,529
Changes in assets and liabilities
Securities (assets and liabilities)			(13,059,146	)		(23,926,297	)
Derivative financial instruments (assets and liabilities)			(1,243,803	)		314,825
Securities trading and intermediation (assets and liabilities)			(690,036	)		5,066,641
Securities purchased (sold) under resale (repurchase) agreements			(8,850,219	)		10,861,923
Accounts receivable			152,008			178,152
Loan operations			(6,622,032	)		(1,375,823	)
Prepaid expenses			(2,019,237	)		(1,001,314	)
Other assets and other financial assets			(1,578,971	)		(216,882	)
Financial instruments payable			9,199,037			2,695,808
Accounts payable			(34,840	)		387,120
Social and statutory obligations			(83,791	)		(113,027	)
Tax and social security obligations			129,004			(262,915	)
Private pension liabilities			13,323,102			5,890,232
Other liabilities and other financial liabilities			3,059,974			324,962
Cash from operations			(4,519,869	)		917,448
Income tax paid			(478,676	)		(48,097	)
Contingencies paid	20		(2,174	)		(592	)
Interest paid			(12,423	)		(62,015	)
Net cash flows (used in) from operating activities			(5,013,142	)		806,744
Investing activities
Acquisition of intangible assets	12		(206,612	)		(79,127	)
Acquisition of property and equipment	12		(107,577	)		(40,011	)
Acquisition of subsidiaries, net of cash acquired			(857	)		(55,741	)
Acquisition of associates and joint ventures			(307,863	)		(204,960	)
Net cash flows used in investing activities			(622,909	)		(379,839	)
Financing activities
Acquisitions of borrowings			1,570,639			-
Issuance of debt securities			4,334,562			-
Payments of borrowings and lease liabilities			(56,908	)		(130,798	)
Payment of debt securities in issued			(227,652	)		(400,000	)
Repurchase/payment of debentures			-			(64,717	)
Transactions with non-controlling interests			1,276			831
Dividends paid to non-controlling interests			(2,998	)		(6,136	)
Proceeds from SPAC issuance of shares			1,134,797			-
Net cash flows from (used in) financing activities			6,753,716			(600,820	)
Net increase in cash and cash equivalents			1,117,665			(173,915	)
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			(161,134	)		33,814
Cash and cash equivalents at the end of the period			3,616,919			747,695
Cash			2,822,563			642,491
Securities purchased under agreements to resell	3		548,380			-
Interbank certificate deposits	4		245,976			105,204

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

6
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---

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 68.25% 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 September 30, 2021 were approved by the Board of Directors on November 3, 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 on May 31, 2021 the US Federal Reserve Board’s (FED) and July 26, 2021 the Brazilian Central Bank (BACEN) approved the legal and accounting segregation of the Itau’s investments in XP Inc. to XPart.

On June 22, 2021, XP Inc. filed a registration statement on Form F-4 with the U.S. Securities and Exchange Commission, or the “SEC” as part of the Itau spin-off of its investment in XP Inc. The prospectus relates to the Class A common shares, or “XP Shares,” of XP Inc., including Class A common shares in the form of Brazilian Depositary Receipts of XP (each representing one XP Share), or the “XP BDRs.”

On October 1, 2021, XPart general sharehoders meeting approved the abovementione spin-off. As result, the corporate reorganization has taken place and XPart ceased to exist. On October 4, 2021, XP Inc. started trading its BDR (“Brazilian Depositary Receipts”) under symbol XPBR31, on brazilian stock exchange B3.

This transaction enhance XP Inc’s corporate governance structure and contributes to improve its capital structure and leverage capacity.The transaction had no material impacts on XP Inc. results of operations and financial condition..

7
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
a)	Basis of preparation
---	---

The unaudited interim condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, and the unaudited interim condensed consolidated statements of income and comprehensive income for nine and three months ended September 30, 2021, changes in equity, and cash flows for nine months period ended September 30, 2021 and 2020 (“the financial statements”) have been prepared in accordance with IAS 34 Interim Financial 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

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements 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) and (c).

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 accounting policies adopted by the Group
(i)	Financial assets at Fair Value Through Profit or Loss (“FVPL”)
---	---

Investments held in trust account

The Group has a certain class of securities derived from our subsidiary, which qualify as financial instruments, primarily due to their short-term nature. These securities are classified as FVPL. The group’s investments held in the trust account are comprised of money market funds, and are recognized at fair value,with the changes in fair value recognized in the consolidated statements of income. The estimated fair value of the investments held in the trust account is determined using available market information.

(ii)	Financial liabilities designated at FVPL

Classification and subsequent measurement

The Group applied the fair value option as an alternative measurement for selected financial liabilities. Financial liabilities can be irrevocably designated as measured at FVPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases, or a group of financial instruments is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. The amount of change in the fair value of the financial liabilities designated at FVPL that is attributable to changes in the credit risk of that liabilities shall be presented in other comprehensive income. See more information in Note 4 e).

8
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---

Derivative warrant liabilities

The Group evaluates if the warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants issued by XPAC Acquisition Corp. are derivatives or contain features that quailify as embedded derivatives in accordande with IFRS 9 – Financial Instruments. The Group’s derivatives instruments are recorded at Financial instruments measure at fair value trhough profit or loss. Accordingly, the Group recognizes the warrant as financial liabilities at fair value and remeasures the warrants to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Group’s consolidate statements of income. The fair value of the Public Warrants have been measured based on the listed market price of such warrants.

(iv)	Commitments subject to possible redemption

XPAC Acquisition Corp. redeemable shares

The Group accounts for the common stock subject to redemption in cash held by the noncontrolling interest holders of XPAC Acquisition Corp., a consolidated subsidiary, as a financial liability measured at amortized cost. The instrument is initally recognized at fair value, net of derivative warrant liabilities component and the corresponding elegible transaction costs. The warrant component issued to the noncontrolling interest holders of XPAC Acquisition Corp. are separately accounted as derivatives and measured at fair value with the change in fair value recorded in the statement of income.

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

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).

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.

d)	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:

			% of Group’s interest (i)
Entity name	Country of incorporation	Principal activities	September 30,2021	December 31,2020
Directly controlled
XPAC Sponsor LLC (ii)	Cayman	Special Purpose Acquisition (SPAC) Sponsor	100.00%	-
Indirectly controlled
XP Comercializadora de Energia Ltda. (ii)	Brazil	Energy trading	100.00%	-
Leadr Serviços Online Ltda. (iii)	Brazil	Social media	-	99.99%
XP Private (Europe) S.A. (iii)	Switzerland	Investment advisor	-	100.00%
XProject Participações S.A (ii)	Brazil	Holding	100.00%	-
Instituto XP (ii)	Brazil	Non-profit entity	100.00%	-
XPAC Acquisition Corp. (iv)	US	Special Purpose Acquisition (SPAC)	20.00%	-
Consolidated investments funds
XP Alesia Fund SP CL Shares - Brazil Internacional Fund SPC. (ii)	Cayman	Investment fund	100.00%	-
Newave Fundo de Investimento em Participações Multiestratégia. (ii)	Brazil	Investment fund	100.00%	-

9
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | (i) | The percentage of participation represents the Group’s interest in total capital and voting capital of its subsidiaries. | | --- | --- | | (ii) | New subsidiaries and investment funds commenced operations during the three months period ended of September 30, 2021. | | --- | --- | | (iii) | Subsidiaries closed in the three months period ended September 30, 2021. | | --- | --- | | (iv) | New subsidiaries which the Group holds operational control. The operational control refers to relevant rights the Company have over the subsidiary, that includes, among other topics, the right to nominate the directors and proporse the target entity for merger. | | --- | --- | | e) | Interests in associates and joint ventures | | --- | --- | | i. | Associates | | --- | --- |

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.

f)	Business development

Investments in XP Energia

On May 4, 2021 the Group entered into an agreement, to acquire 100% of total share capital of Solis Comercializadora de Energia Ltda. later denominated XP Comercializadora de Energia Ltda. The company's objective is to operate in the wholesale electricity trade, through brokerage, representation, intermediation, purchase, sale, import and export; provision of intermediation services between energy buyers and sellers, among other related services. This acquisition are not considered material for XP Inc. interim financial statements.The purchase prices were mostly allocated to goodwill, representing the value of expected synergies arising from the acquisition.

Investments in XProject

On August 23, 2021 the Group entered into an agreement, to acquire 100% of total share capital of UFUK Empreendimentos e Participações S.A. later referred to as XProject Participações S.A. The company is a holding which has an objective to acquire participation as a partner or a shareholder in other companies in Brazil and abroad. This acquisition is not considered material for XP Inc. interim financial statements.The purchase price is mostly allocated to goodwill, representing the value of expected synergies arising from the acquisition.

Minority stake acquisitions

XP Inc. entered in agreements through our proprietary funds to acquire a minority stake in (i) Giant Steps, a leader in systematic funds in Brazil; (ii) Capitânia Investimentos, an independent traditional asset manager in Brazil specializing in Corporate Credit, Real Estate and Infrastructure investment strategies and (iii) Jive Investments, the largest independent alternative investment manager in Brazil, offering credit recovery, real estate, and other distressed asset strategies. The completion of these transactions (“closing”) are subject to compliance with certain precedent conditions. The closing of Jive Investments occurred in October, 2021.

g)	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.

10
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- |

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 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 21), 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 21 (c) for a breakdown of total revenue and income and selected assets by geographic location.

h)	Estimates

The preparation of unaudited interim condensed consolidated financial statements of the Group requires 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 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
---	---
	September 30,<br> <br>2021			December 31,<br> <br>2020
---	---	---	---	---	---	---
Available portfolio		3,854,709			1,409,742
National Treasury Notes (NTNs) (i)		3,332,551			876,146
Financial Treasury Bills (LFTs) (i)		60,115			452,714
National Treasury Bills (LTNs) (i)		327,426			44,093
Debentures (ii)		124,193			36,789
Real Estate Receivable Certificates (CRI) (ii)		10,424			-
Collateral held		4,018,317			5,218,037
National Treasury Bills (LTNs) (i)		996,572			976,468
National Treasury Notes (NTNs) (i)		792,081			4,241,569
Financial Treasury Bills (LFTs)		498.498			-
Debentures (ii)		802,550			-
Real Estate Receivable Certificates (CRI) (ii)		928,616			-
Expected Credit Loss (iii)		(2,439	)		(370	)
Total		7,870,587			6,627,409

(i) 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 6.12% p.a. (1.91% p.a. as of December 31, 2020).

(ii) Refers to fixed-income securities issued by private companies.

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

As of September 30, 2021, R$ 548,380 (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.

11
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
	September 30,<br> <br>2021		December 31,<br> <br>2020
---	---	---	---	---
National Treasury Bills (LTNs)		3,226,372		18,318,498
National Treasury Notes (NTNs)		10,186,389		13,497,944
Financial Treasury Bills (LFTs)		7,616,361		-
Debentures		937,282		22,902
Real Estate Receivable Certificates (CRI)		1,883,820		-
Financial credit bills (LF)		384,148		-
Total		24,234,372		31,839,344

As of September, 2021, securities sold under repurchase agreements were agreed with average interest rates of 6.14% 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:
---	---
	September 30,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Fair<br> <br>value		Gross carrying amount		Fair<br> <br>value
Financial assets (i)
At fair value through profit or loss
Available portfolio		52,648,616		52,237,733		49,157,111		49,590,013
Brazilian government bonds		17,630,049		17,224,174		30,752,903		31,129,671
Investment funds		22,688,820		22,688,568		11,216,914		11,221,774
Stocks issued by public-held company		5,654,154		5,654,154		3,802,610		3,802,470
Debentures		1,953,882		1,901,922		1,111,595		1,114,967
Structured transaction certificate		239,621		266,800		485,012		515,960
Bank deposit certificates (ii)		402,123		404,568		371,455		372,329
Agribusiness receivables certificates		642,128		642,551		359,607		363,721
Certificate of real estate receivable		534,286		540,656		97,606		96,930
Financial credit bills		289,160		293,257		81,465		82,209
Others (iv)		2,614,393		2,621,083		877,944		899,982
Investmens held in trust accounts		1,194,554		1,194,554		-		-
US government bonds (iii)		1,194,554		1,194,554		-		-
Total		53,843,170		53,432,287		49,157,111		49,590,013
(i)	Financial assets include R$ 26,711,015 (December 31, 2020 – R$ 13,387,913) related to Specially<br>Constituted Investment Fund (“FIE”) as presented in Note 16, out of which R$ 25,518,086 (December 31, 2020 – R$ 10,625,520)<br>are Investments funds.
---	---
(ii)	Bank deposit certificates includes R$ 245,976 presented as cash equivalents in the statements of cash<br>flows.
---	---
(iii)	Related to investmets received through IPO transactions derived by XPAC Acquisition Corp. These funds<br>are restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares<br>as set forth in XPAC Acquisition Corp. trust agreement.
---	---
(iv)	Mainly related to bonds issued and traded overseas.
---	---
b)	Securities at fair value through other comprehensive income are presented in the following table:
---	---
	September 30,<br> <br>2021				December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Fair<br> <br>value (i)		Gross carrying amount		Fair<br> <br>value (i)
Financial assets
At fair value through other comprehensive income
Brazilian government bonds		28,335,676		27,630,060		19,011,499		19,039,044
Bonds		937,181		935,989		-		-
Total		29,272,857		28,566,049		19,011,499		19,039,044
(i)	Includes expected credit losses in the amount of R$ 13,206 (2020<br>– R$ 8,855). The reconciliation of gross carrying amount and the expected credit loss are presented in the Note 10.
---	---
c)	Securities evaluated at amortized cost are presented in the following table:
---	---

12
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---	---	---	---	---	---	---	---
	Gross carrying amount		Book<br> <br>value (i)		Gross carrying amount		Book<br> <br>value (i)
Financial assets
At amortized cost
Bonds		790,660		789,087		1,829,791		1,828,704
Rural Product Note		28,286		28,286		-		-
Debentures		40,292		40,292		-		-
Total		859,238		857,665		1,829,791		1,828,704
(i)	Includes expected credit losses in the amount of R$ 1,573<br>(2020 – R$ 1,087). The reconciliation of gross carrying amount and the expected credit loss are presented in the Note 10.
---	---
d)	Securities on the financial liabilities classified at fair value through profit or loss are presented<br>in the following table:
---	---
	September 30,<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		1,565,981		1,565,981		2,237,442		2,237,442
e)	Securities on the financial liabilities designated at fair value through profit or loss are presented<br>in the following table:
---	---

On May 6, 2021, XP Investimentos, issued non-convertible Debentures, in the aggregate amount of R$ 500,018, with the objective of funding the Group’s working capital for the construction of our new headquarters “Vila XP” at São Roque, State of São Paulo and designated this instrument as fair value through profit or loss in order to align it with the Group’s risk management and investment strategy. The principal amount is due on April 10, 2036. The accrued interest is payable every month from the issuance date and is calculated based on the IPCA (brazilian inflation index) plus 5%p.a.

	September 30,<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
Debentures		520,604		516,230		-		-

Unrealized gains/(losses) due to own credit risk for liabilities for which the fair value option has been elected are recorded in other comprehensive income. Gain/(losses) due to own credit risk were not material for the period ended of September 30, 2021.

Determination of own credit risk for itemsfor which the fair value option was elected

The debenture own credit risk is calculated as the difference between its yield and its benchmark rate for similar Brazilian federal securities.

e.1) Difference between aggregate fair value and aggregate remaining contractual principal balance outstanding

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of September 30, 2021 for instruments for which the fair value option has been elected.

13
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---	---	---	---	---	---	---
	Contractual principal outstanding		Fair value		Fair value/(under) contractual principal outstanding
Long-term debt
Debentures		520,604		516,230		(4,374	)
f)	Securities classified by maturity:
---	---
	Assets				Liabilities
---	---	---	---	---	---	---	---	---
	September 30,<br> <br>2021		December 31, 2020		September 30,<br> <br>2021		December 31, 2020
Financial assets
At fair value through PL and at OCI
Current		43,989,552		34,572,107		1,565,981		2,237,442
Non-stated maturity		31,477,684		15,246,105		1,565,981		2,237,442
Up to 3 months		1,967,844		794,025		-		-
From 3 to 12 months		10,544,024		18,531,977		-		-
Non-current		38,021,990		34,065,805		516,230		-
After one year		38,021,990		34,065,805		516,230		-
Evaluated at amortized cost
Current		790,659		1,829,791		-		-
Up to 3 months		625,485		1,623,487		-		-
From 3 to 12 months		165,174		206,304		-		-
Non-current		68,579		-		-		-
After one year		68,579		-		-		-
Total		82,870,780		70,467,703		2,082,211		2,237,442

The reconciliation of expected loss to financial assets at amortized cost – securities according with IFRS 9 are presented 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:

	September 30,<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		187,673,232		5,689,128		70	%		1,433,999		1,949,338		2,305,791
Swap contracts		26,791,031		1,233,690		10	%		64,316		26,130		1,143,244
Forward contracts		19,887,314		8,438,970		7	%		751,062		2,069,160		5,618,748
Future contracts		36,216,396		102,522		13	%		4,879		2,433		95,210
Others (i)		7,127		7,127		0	%		7,127		-		-
Total		270,575,100		15,471,437		100	%		2,261,383		4,047,061		9,162,993

14
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | Liabilities | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Options | 180,232,851 | 6,422,387 | 72 | % | 1,136,064 | 2,039,309 | 3,247,014 | | Swap contracts | 23,590,126 | 406,979 | 10 | % | 86,570 | 114,285 | 206,124 | | Forward contracts | 23,628,239 | 7,485,685 | 9 | % | 69,930 | 1,839,985 | 5,575,770 | | Future contracts | 21,452,001 | 144,064 | 9 | % | 11,223 | 7,278 | 125,563 | | Others (i) | 46,814 | 46,814 | 0 | % | 46,814 | - | - | | Total | 248,950,031 | 14,505,929 | 100 | % | 1,350,601 | 4,000,857 | 9,154,471 | | (i) | Related to Public Warrants and Private placement Warrants liabilities issued by XPAC Acquisition Corp. | | --- | --- | | | December 31, 2020 | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Notional | | Fair Value | | % | | | Up to 3 months | | From 3 to 12 months | | Above 12 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<br>subject to interest rate variations;
·	Currency: Risk of volatility in transactions<br>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 September 30, 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 items, 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.

15
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<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 amounts used to calculate hedge ineffectiveness | | | | September 30, 2021 | | | | | | | | | | | | | Foreign exchange risk | | | | | | | | | | | | | Hedge of net investment in foreign operations | | 294,481 | | - | | 11,913 | | 421,010 | | (11,739 | ) | | December 31, 2020 | | | | | | | | | | | | | Foreign exchange risk | | | | | | | | | | | | | Hedge of net investment in foreign operations | | 245,986 | | - | | 52,299 | | 349,218 | | (60,563 | ) | | b) | Fair value hedge | | --- | --- |

The Group’s fair value strategy consists of hedging the exposure to variation in fair value on the receipt, payment of interests and exchange variation on assets and liabilities.

The company applies fair value hedges as follows:

·	Hedging the exposure of Fixed-Income securities<br>carried out through structured operations certificates.The market risk hedge strategy involves avoiding temporary fluctuations in earnings<br>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,<br>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.

·	Hedging to protect the change in the fair value<br>of the exchange risk of the component of future cash flows arising from the XP Inc bond issued (financial liability) recognized in the<br>balance sheet of XP Inc on July by contracting derivatives (DI1 Futuro).

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
September, 2021
Interest rate risk
Hedge of pre-fixed operations		-		6,123,250		564,816			6,074,281		(561,594	)
December 31, 2020
Interest rate risk
Hedge of pre-fixed operations		-		2,178,459		(47,923	)		2,188,732		46,795

The hedge ineffectiveness recognized in statements of income are presented below:

16
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---	---	---	---	---	---	---	---	---	---	---
Hedge Instruments	Notional amount		Assets		Book value (i)<br> <br>Liabilities		Variation in fair value used to calculate hedge ineffectiveness			Hedge ineffectiveness recognized in income (ii)
Interest rate risk
Futures		6,074,281		-		6,123,250		(561,594	)		3,222
Foreign exchange risk
Futures		421,010		294,481		-		(11,739	)		-
	December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---	---	---	---
Hedge Instruments	Notional amount		Assets		Book value (i)<br> <br>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 financial instruments”. See Note<br>5.
---	---
(ii)	For the nine months period ended in September 30, 2021 the amount of hedge ineffectiveness was R$ 2,268.
---	---

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:


	Hedge instruments			Hedge item	Hedge instruments			Hedge item
Strategies	Notional amount	Fair value adjustments		Book value	Notional amount	Fair value adjustments		Book value
Hedge of Fair Value	6,074,281	(561,594	)	564,816	2,188,732	(47,923	)	46,795
Hedge of net investment in foreign operations	421,01	(11,739	)	11,913	349,218	(60,563	)	52,299
Total	6,495,291	(573,333	)	576,729	2,537,950	(108,486	)	99,094

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

	September 30,<br> <br>2021
Strategies	0-1 year		1-2 years		2-3 years		3-4 years		4-5 years		5-10 years		Total
Hedge of Fair Value		132,377		93,054		297,434		724,497		2,974,338		1,852,581		6,074,281
Hedge of net investment in foreign operations		366,616		-		-		54,394		-		-		421,010
Total		498,993		93,054		297,434		778,891		2,974,338		1,852,581		6,495,291
	December 31,<br> <br>2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Strategies	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

17
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---

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

Loans by type	September 30, 2021			December 31, 2020
Pledged asset loan
Retail		6,026,821			2,698,018
Credit card operations		1,898,391			51,270
Corporate		2,084,568			946,008
Non-pledged loan
Retail		308,716			116,978
Corportate		228,965			113,155
Total Loans operations		10,547,461			3,925,429
Expected Credit Loss (Note 10)		(12,059	)		(7,101	)
Total loans operations, net of Expected Credit Loss		10,535,402			3,918,328
By maturity	September 30,<br> <br>2021		December 31, 2020
---	---	---	---	---
Due in 3 months or less		2,026,264		160,918
Due after 3 months through 12 months		1,578,147		580,183
Due after 12 months		6,943,050		3,184,328
Total Loans operations		10,547,461		3,925,429

The loan products offered to its customers throught Banco XP 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 have 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$ 632,703 at September 30, 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. The Group monitors the value of the collaterals so that they are always sufficient, legally enforceable (effective) and viable. 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 are presented in Note 10.

8.	Prepaid expenses
	September 30,<br> <br>2021		December 31, 2020
---	---	---	---	---
Commissions and premiums paid in advance (i)		3,253,703		1,314,771
Marketing expenses		6,835		28,056
Services paid in advance		24,161		6,245
Other expenses paid in advance		128,075		44,465
Total		3,412,774		1,393,537
Current		155,694		283,183
Non-current		3,257,080		1,110,354

(i) 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.

18
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---

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


Cash and settlement records	338,078		18,128
Debtors pending settlement	790,642		1,088,923
(-) Expected losses on Securities trading and intermediation (i)	(63,945	)	(55,485	)
Total Assets	1,064,775		1,051,566
Cash and settlement records	227,215		59,712
Creditors pending settlement	19,407,539		20,243,409
Total Liabilities	19,634,754		20,303,121

(i) The reconciliation of gross carrying amount and the expected loss according with IFRS 9 are presented 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 September 30, 2021:

						September 30,<br> <br>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)		28,579,254		(13,205	)		28,566,049
Financial assets amortized cost
Low credit risk simplification
Securities (i)		859,238		(1,573	)		857,665
Securities purchased under agreements to resell (i)		7,873,026		(2,439	)		7,870,587
Three stage model
Loans and credit card operations (ii) (iii)		10,547,461		(11,413	)		10,536,048
Simplified approach
Securities trading and intermediation		1,128,720		(63,945	)		1,064,775
Accounts Receivable		360,770		(5,163	)		355,607
Other financial assets		1,519,254		(46,717	)		1,472,537
Total losses for on-balance exposures		50,867,723		(144,455	)		50,723,268
Off-balance exposures (iv)		681,403		(646	)		680,757
Total exposures		51,549,126		(145,101	)		51,404,025
(i)	Financial assets considered in Stage 1.
---	---
(ii)	As of September 30, 2021 are presented in Stage 1: Gross amount<br>of R$ 8,925,350 and ECL of R$ 5,989 Stage 2: Gross amount of R$ 1,621,016 and ECL of R$ 5,268 and Stage 3: Gross amount of R$ 1,095 and<br>ELC of R$ 156 respectively.
---	---
(iii)	As of September 30, 2021 there were transfers between from Stage<br>1 to Stage 2 of R$ 5,154 and from Stage 2 to Stage 3 of R$ 156. The were “cure” from Stage 2 to Stage 1 of R$ 320.
---	---
(iv)	Include credit cards limits and sureties.
---	---

19
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---	---	---	---	---	---	---
	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<br>of R$ 3,599,808 and ECL of R$ 5,648 and Stage 2: Gross amount of R$ 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 ventures of the Group as of September 30, 2021. The entities have share capital consisting solely of ordinary shares, which are held directly by the Group.

Entity	December 31, 2020		Equity		Equity in earnings			Other comprehensive income			Goodwill (i)		September 30, 2021
Associates (ii,a)		697,924		17,950		4,615			3,652			458,980		1,183,121
Joint ventures (ii,b)		1,983		1,225		(1,221	)		(130	)		-		1,857
Total		699,907		19,175		3,394			3,522			458,980		1,184,978
Entity	December 31, 2019		Equity		Equity in earnings			Other comprehensive income			Goodwill (i)		September 30, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Associates (ii.a)		-		75,093		(227	)		(120	)		621,248		695,994
Joint ventures (ii.b)		-		572		(337	)		-			408		643
Total		-		75,665		(564	)		(120	)		621,656		696,637
(i)	Related to the acquisitions of associates and joint ventures.<br>The premilinary goodwill recognized includes the value of expected synergies arising from the investments and includes an element of<br>contingent consideration.
---	---
(ii)	At September 30, 2021, include interest in total and voting<br>capital of the following companies: (a) Associates - Wealth High Governance Holding de Participações S.A. (49.9% total<br>and voting capital at September 30,2021 and December 31, 2020); O Primo Rico Mídia, Educacional e Participações<br>Ltda. (20% total and voting capital at September 30, 2021 and December 31, 2020); NK112 Empreendimentos e Participações<br>S.A. (49.9% total and voting capital at September 30, 2021); Capitânia Investments (20% total and voting capital at September 30,<br>2021) and ); Giant Steps Empreendimentos Ltda. (25% total and voting capital at September 30, 2021) (b) Joint ventures - Du Agro Holdings<br>S.A. (49% total and voting capital at September 30,2021 and December 31, 2020).
---	---

20
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
a)	Changes in the period
---	---
	Property and			Intangible
---	---	---	---	---	---	---
	equipment			assets
As of January 1, 2020		142,464			553,452
Additions		40,011			79,127
Business combination (i)		-			83,925
Write-offs		(61,967	)		(185	)
Transfers		(6,143	)		6,143
Depreciations / Amortization in the period		(19,609	)		(52,928	)
As of September 30, 2020		94,756			669,534
Cost		196,081			767,878
Accumulated depreciation / amortization		(101,325	)		(98,344	)
As of January 1, 2021		204,032			713,562
Additions		107,577			206,612
Write-offs		(1,925	)		(11,882	)
Transfers		5			(5	)
Foreign Exchange		(414	)		14
Depreciations / Amortization in the period		(16,246	)		(132,892	)
As of September 30, 2021		293,029			775,409
Cost		347,767			971,443
Accumulated depreciation / amortization		(54,738	)		(196,034	)
(i)	Related to acquired companies Fliper, DM10 and Antecipa concluded<br>in 2020.
---	---
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 unit (“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.

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 September, 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.


As of January 1, 2020	227,478		255,406
Additions (i)	45,377		45,129
Depreciation expense	(33,363	)	-
Write-offs	(78,321	)	(78,322	)
Interest expense	-		15,648
Revaluation	(9,115	)	(10,050	)
Impairment	264		-
Effects of exchange rate	29,694		32,675
Payment of lease liabilities	-		(45,903	)
As of September 30, 2020	182,014		214,583

21
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | | Right-of-use assets | | | Lease liabilities | | | | --- | --- | --- | --- | --- | --- | --- | | As of January 1, 2021 | | 183,134 | | | 208,448 | | | Additions (i) | | 79,146 | | | 79,146 | | | Depreciation expense | | (30,219 | ) | | - | | | Write-offs | | (856 | ) | | - | | | Interest expense | | - | | | 12,166 | | | Revaluation | | 25,036 | | | 24,260 | | | Effects of exchange rate | | 3,853 | | | 4,189 | | | Payment of lease liabilities | | - | | | (42,695 | ) | | As of September, 2021 | | 260,094 | | | 285,514 | | | Current | | - | | | 74,695 | | | Non-current | | 260,094 | | | 210,819 | | | (i) | Additions to right-of-use assets in the period include prepayments to lessors and accrued liabilities. | | --- | --- |

The Group recognized rent expense from short-term leases and low-value assets of R$ 1,014 for the nine months period ended September 30, 2021 (R$ 1,523 – September 30, 2020) and R$ 7 for three months period ended September 30, 2021 (R$ 430 – September 30, 2020) . The total rent expense for the nine month period ended September 30, 2021 is R$ 13,982 (R$ 7,853 – September 30, 2020) and for the three months period ended September 30, 2021 is R$ 2,279 (R$ 5,595 – September 30, 2020) and include other expenses related to leased offices such as condominium for the nine months period ended September 30, 2021.

Depreciation and amortization expense has been charged in the following line items of consolidated statement of income:

	Nine months period ended <br>September 30,				Three months period ended <br>September 30,
	2021		2020		2021		2020
Property and equipment
Depreciation in the period		16,246		19,609		5,825		6,616
Leases
Depreciation in the period		30,219		33,363		10,707		10,313
Intangible assets
Amortization in the period		132,892		52,928		34,946		19,451
		179,357		105,900		51,478		36,380
13.	Financing instruments payable
---	---
	September 30,<br> <br>2021		December 31,<br> <br>2020
---	---	---	---	---
Market funding operations (a)		14,908,388		5,216,599
Deposits		6,866,502		3,021,751
Demands deposits		187,975		44,536
Time deposits		6,672,394		2,977,215
Interbank deposits		6,133		-
Financial bills		2,342,940		16,389
Structured operations certificates		5,698,946		2,178,459
Debt securities in issued (b)		4,304,139		335,250
Promissory Note		80,419		-
Debentures		170,113		335,250
Bonds in issue		4,053,607		-
Total		19,212,527		5,551,849
Current		5,795,884		2,731,816
Non-Current		13,416,643		2,820,033

22
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
Maturity – As of September 30, 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		187,975		-		-		-		-		-		187,975
Time deposits		676,954		794,812		1,028,851		2,121,352		675,522		1,374,903		6,672,394
Interbank deposits		-		-		-		3,069		-		3,064		6,133
Financial bills		-		-		-		-		16,800		2,326,140		2,342,940
Structured operations certificates		-		248		354		10,762		28,653		5,658,929		5,698,946
Total		864,929		795,060		1,029,205		2,135,183		720,975		9,363,036		14,908,388
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		497,100		2,977,215
Financial bills		-		-		-		-		-		16,389		16,389
Structured operations certificates		-		-		-		945		1,489		2,176,025		2,178,459
Total		112,037		1,185		57,781		192,831		2,163,251		2,689,514		5,216,599
(b)	Debt securities in issued
---	---

As of September 30, 2021, the total balance is comprised of the following issuances:

		September 31,				December 30,
		2021				2020
		Up to 1 year		1-5 years		Up to 1 year		1-5 years
Bonds (i)	Fixed rate		-		4,053,607		-		-
Promissory Note (ii)	Fixed rate		80,419
Debentures (iii)	Fixed rate / Variable Rate		170,113		-		204,731		130,519
Total			250,532		4,053,607		204,731		130,519
Current					250,532				204,731
Non- Current					4,053,607				130,519
(i)	XP Inc Bonds
---	---

On July 1, 2021, XP Inc. concluded the issuance of a gross of US$750 million senior unsecured notes with a net proceeds of US$739 million (R$ 3,697 million) with maturity on July 1, 2026 and bear interest at the rate of 3.250% per year and will be guaranteed by XP Investimentos S.A.

(ii)	Promissory Note

On September 9, 2021, XP Energia, a group’s subsidiary, issued the first promissory note with the objective of funding the company’s working capital and treasury investments related to wholesale electricity trade business.The principal amount is due and paid on the maturity date of September 4, 2022, and the interest rate is CDI + 3.5% pre-fixed rate.

23
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---

The principal amount and accrued interest payables related to the second issuance are as follow: (i) for the principal amount, 50% is due and was paid on May 15, 2021 and the remaining balance on the maturity date of May 15, 2022, and (ii) the accrued interest is payable every 12 months from the issuance date. The annual rate is 107.5% CDI with a unit value at in the period ended of R$ 508.94.

Debentures are subject to financial covenants, which have certain performance conditions. The Group has complied with these covenants throughout the reporting period (Note 29 (ii)).

14.	Borrowings
	Interest rate %	Maturity	Sepetmber 30, 2021		December 31, 2020
---	---	---	---	---	---	---
Bank borrowings – domestic (i)	113% of CDI(*)	March 2021		-		10,523
Related parties				-		10,523
Financial institution (iii)	0.813%	May 2022		1,607,003		-
Financial institution (ii)	CDI (*)+ 0.774%	April 2023		278,162		273,564
Third parties				1,885,165		273,564
Total borrowings				1,885,165		284,087
Current				1,616,199		17,637
Non-current				268,966		266,450
(*)	Brazilian Interbank Offering Rate (CDI)
---	---
(i)	Loan agreement with Itaú Unibanco that was fully paid<br>on March 8, 2021.
---	---
(ii)	Loan agreement entered into on March 28, 2018 with the International<br>Finance Corporation (IFC). The principal amount is due on the maturity date and accrued interests payable at every six months.
---	---
(iii)	Loan agreement with Banco Nacional de México.
---	---

Some of obligations above contain financial covenants, which have certain performance conditions. The Group has complied with these covenants throughout the reporting period (Note 29 (ii)).

15.	Other financial assets and financial liabilities
a)	Other financial assets
---	---
	September 30,<br> 2021			December 31,<br> <br>2020
---	---	---	---	---	---	---
Foreign exchange portfolio		1,039,116			43,129
Receivables from IFAs		169,521			27,377
Others financial assets		310,617			2,777
(-) Expected losses on other financial assets (i)		(46,717	)		(3,312	)
Total		1,472,537			69,971
Current		1,039,116			43,129
Non-current		433,421			26,842
(i)	The reconciliation of gross carrying amount and the expected<br>loss according with IFRS 9 are presented in Note 10.
---	---

24
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
	September 30,<br> 2021		December 31,<br><br> <br>2020
---	---	---	---	---
Foreign exchange portfolio		1,149,536		70,208
Structured financing (i)		1,000,330		874,771
Credit cards operations		1,867,195		50,727
Contingent consideration (ii)		632,321		462,000
Commitments subject to possible redemption (iii)		1,087,982		-
Lease liabilities		285,514		208,448
Others		53,135		40,080
Total		6,076,013		1,706,234
Current		4,355,710		1,244,234
Non-current		1,720,303		462,000
(i)	Financing for maintenance of financial assets required to perform<br>financial transactions.
---	---
(ii)	Contractual contingent considerations mostly associated to the<br>investment acquisition.The maturity of the total contingent consideration payment is up to 6 years and the contractual maximum amount<br>payable is R$ 653,222 (the minimum amount is zero).
---	---
(iii)	Related to the IPO transaction of XPAC Acquisition Corp. that<br>occurred on August 3, 2021. The capital issued by XPAC Acquisition Corp. includes conditionally redeemable Class A ordinary shares that<br>feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain<br>events not solely within the Company’s control. The noncontrolling shareholders of XPAC Acquisition Corp. have the right to redeem<br>their shares in cash at the earliest of (i) upon the completion of XPAC Acquisition Corp’s initial business combination or (ii)<br>24 months from the closing of the IPO transaction.
---	---
16.	Private pension liabilities
---	---

As of September 30, 2021, active plans are principally accumulation of financial resources through brazilian private pension 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 derived from the operations by XP Vida e Previdência.

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)).

Changes in the period:

	Nine months period ended<br> <br>September 30,
	2021			2020
As of January 1		13,387,913			3,759,090
Contributions received		1,977,179			984,816
Transfer from third party plans		12,167,840			5,087,561
Withdraws		(929,182	)		(162,218	)
Gain (loss) from FIE		107,265			(19,927	)
As of September		26,711,015			9,649,322

25
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
a)	Deferred income tax
---	---

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

		Balance Sheet
	September 30,<br> <br>2021	December 31,<br> <br>2020
Share based compensation	325,804	115,976
Tax losses carryforwards	145,326	7,382
Provisions for IFAs’ commissions	94,449	94,544
Profit sharing plan	145,900	164,808
Net gain on hedge instruments	29,742	20,987
Expected credit losses (ii)	39,741	19,444
Revaluations of financial assets at fair value	108,699	(16,780	)
Goodwill on business combinations (i)	10,304	22,838
Other provisions	141,785	67,495
Total	1,041,750	496,694
Deferred tax assets	1,041,750	505,046
Deferred tax liabilities	-	(8,352	)
	Net change in the nine months<br><br> <br>period ended September 30,						Net change in the three months<br><br> <br>period ended September 30,
---	---	---	---	---	---	---	---	---	---	---	---	---
	2021			2020			2021			2020
Tax losses carryforwards		137,944			21,470			(4,118	)		24,769
Goodwill on business combinations (i)		(12,534	)		6,127			(9,996	)		(5,861	)
Provisions for IFAs’ commissions		(95	)		4,181			(9,422	)		1,718
Revaluations of financial assets at fair value		125,479			(35,252	)		87,768			3,513
Expected credit losses		20,297			14,912			18,107			4,248
Profit sharing plan		(18,908	)		(61,409	)		61,904			(97,272	)
Net gain (loss) on hedge instruments		8,755			69,311			(8,003	)		5,805
Share based plan		209,829			44,874			139,780			17,533
Other provisions		74,289			(5,963	)		107,577			(17,768	)
Total		545,056			58,251			383,597			(63,315	)
(i)	For tax purposes, goodwill is amortized over 5 years on a straight-line basis when the acquired entity<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:

	Nine months period ended<br> <br>September 30,
	2021		2020
As of January 1		496,694		279,401
Foreign exchange variations		9,269		22,721
Charges to statement of income		224,167		(28,561	)
Tax relating to components of other comprehensive income		311,620		64,091
As of September 30		1,041,750		337,652

26
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<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$ 27,432 (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 and Insurance Companies.

The text of the Provisional Measure proposes the increase in the CSLL rate between July and December 2021. On July 14, 2021 the Provisional Measure was converted into Federal Law No. 14,183 confirming the CSLL rate increase for the period between July 2021 and December, 2021.

As of the Provisional Measure approval the Deferred Tax Assets and Liabilities registered in the balance sheet of XP CCTVM, Banco XP and XP Vida e Previdencia were increased by 5% for certain temporary adjustments made for corporate income tax (CIT) purposes which would turn into permanent effect in the period between July and December, 2021.

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 period, calculated by applying the combined Brazilian statutory rates at 34% for the nine months period ended September 30:

	Ninemonths period<br> <br>ended September 30,						Threemonths period<br> <br>ended September 30 ,
	2021			2020			2021			2020
Income before taxes		2,694,579			1,758,528			907,938			632,451
Combined tax rate in Brazil (a)		34	%		34	%		34	%		34	%
Tax expense at the combined rate		916,157			597,900			308,699			215,034
Income (loss) from entities not subject to taxation		1,683			(11,358	)		133			(2,630	)
Effects from entities taxed at different rates		64,902			36,792			11,856			17,630
Effects from entities taxed at different taxation regimes (b)		(813,123	)		(285,529	)		(330,998	)		(111,061	)
Intercompany transactions with different taxation		(55,459	)		(46,775	)		(21,850	)		(19,645	)
Tax incentives and related donation programs		(4,467	)		(2,491	)		(1,196	)		(4,521	)
Non deductible expenses (non-taxable income), net		961			(12,693	)		2,005			(3,434	)
Effect from social contribution on net income rate (Law No. 14,183)		(25,396	)		-						-
Others		7,511			3,581			2,902			(206	)
Total		92,769			279,427			(28,449	)		91,167
Effective tax rate		3.44	%		15.89	%		(3.14	%)		14.41	%
Current		316,936			250,866			55,385			(6,732	)
Deferred		(224,167	)		28,561			(83,834	)		97,899
Total expense		92,769			279,427			(28,449	)		91,167
(a)	Considering that XP Inc. is domiciled in Cayman and there is<br>no income tax in that jurisdiction, the combined tax rate of 34% demonstrated above is the current rate applied to XP Investimentos S.A.<br>which is the holding company of all operating entities of XP Inc. in Brazil.
---	---
(b)	Certain eligible subsidiaries adopted the PPM tax regime and<br>the effect of the presumed profit of subsidiaries represents the difference between the taxation based on this method and the amount<br>that would be due based on the statutory rate applied to the taxable profit of the subsidiaries. Additionally, some entities and investment<br>funds adopt different taxation regimes according to the applicable rules in their jurisdictions.
---	---

Other comprehensive income

27
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- |

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

	Before tax
Foreign exchange variation of investees located abroad		76,575		-	76,575
Gains (losses) on net investment hedge		(121,772	)	41,402	(80,370	)
Changes in the fair value of financial assets at fair value		(56,603	)	22,689	(33,914	)
As of September 30, 2020		(101,800	)	64,091	(37,709	)
Foreign exchange variation of investees located abroad		13,036		-	13,036
Gains (losses) on net investment hedge		(18,364	)	6,625	(11,739	)
Changes in the fair value of financial assets at fair value		(763,766	)	304,994	(458,772	)
As of September 30, 2021		(769,094	)	311,619	(457,475	)
18.	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<br>common shares and issued; and
·	1,000,000,000 shares are designated as Class<br>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 September 30, 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,<br>in respect of such share, to 10 votes per share, whereas the holder of a Class A common share is entitled, in respect of such share, to<br>one vote per share.
·	Each holder of Class A common shares and Class<br>B common shares vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders,<br>except as provided below and as otherwise required by law.
---	---
·	Class consents from the holders of Class A common<br>shares and Class B common shares, as applicable, shall be required for any modifications to the rights attached to their respective class<br>of shares the rights conferred on holders of Class A common shares shall not be deemed to be varied by the creation or issue of further<br>Class B common shares and vice versa; and
---	---
·	the rights attaching to the Class A common shares<br>and the Class B common shares shall not be deemed to be varied by the creation or issue of shares with preferred or other rights, including,<br>without limitation, shares with enhanced or weighted 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 September 30, 2021, the outstanding number of company reserved under the plans were 9,856,177 restricted share units (“RSUs”) (December 31, 2020 – 11,079,736) and 2,819,912 performance restricted units (“PSUs”) (December 31, 2020 – 2,819,912) to be issued at the vesting date.

28
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- |

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 nine months period ended September 30, 2021, XP Inc. has not declared and paid dividends to the shareholders.

Non-controlling shareholders of some XP Inc’s subsidiaries received dividends in the nine months period ended of September 30, 2021 and 2020 in a total amount of R$ 2,998 and R$ 6,136, respectively.

(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 these financial assets are not realized. Also includes gains (losses) on net investment hedge and foreign exchange variation of investees located abroad.

19.	Related party transactions

The main transactions carried with related parties, conducted on an arm’s length basis, including interest rates, terms and guarantees, and period-end balances arising from such transactions are as follows:

	Assets/(Liabilities)						Revenue/(Expenses)
							Nine months period ended<br> <br>September 30,						Three months period ended September 30,
Relation and transaction	September<br> <br>30, 2021			December 31, 2020			2021			2020			2021			2020
Shareholders with significant influence (i)		(1,813,352	)		(5,667,588	)		(35,374	)		(36,541	)		(13,778	)		(13,509	)
Securities		177,481			112,127			1,415			9,154			787			1,895
Securities purchased under agreements to resell		-			-			2,556			3,557			1,726			650
Accounts receivable and Loans operations		9,166			11,238			399			233			102			(163	)
Securities sold under repurchase agreements		(1,999,999	)		(5,780,430	)		(39,723	)		(48,243	)		(16,393	)		(15,514	)
Borrowings		-			(10,523	)		(21	)		(1,242	)		-			(377	)
(i)	These transactions are mostly related to Itau Group’s companies until May, 2021. See Note 1.2.
---	---

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; (v) insurance and (vi) loan operations. The effects of these transactions have been eliminated and do not have effects on the consolidated financial statements.

20.	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, the Group evaluates the tax, civil and labor and risks 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.


Tax contingencies	10,262	10,097
Civil contingencies	10,828	4,281
Labor contingencies	6,487	5,333
Total provision	27,577	19,711
Judicial deposits (i)	10,388	10,199

29
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | (i) | There are circumstances in which the Group is questioning the legitimacy of certain litigations or claims filed against it. As a result, either because of a judicial order or based on the strategy adopted, the Group might be required to secure part or the whole amount in question by means of judicial deposits, without this being characterized as the settlement of the liability. These amounts are classified as “Other assets” on the consolidated balance sheets and referred above for information. | | --- | --- |

Changes in the provision during the period

	Nine months period ended<br> <br>September 30,						Three months period ended September 30,
	2021			2020			2021			2020
At the beginning of period		19,711			15,193			26,413			15,479
Monetary correction		5,606			1,472			675			499
Provision accrued		6,874			912			1,772			333
Provision reversed		(2,440	)		(965	)		(1,188	)		(78	)
Payments		(2,174	)		(592	)		(95	)		(213	)
At the end of period		27,577			16,020			27,577			16,020

Nature of claims

a)	Tax

As of September 30, 2021 the Group has claims classified as probable risk of loss in the amount of R$ 10,262 (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 September 30, 2021, there were 102 civil and administrative claims for which the likelihood of loss has been classified as probable, in the amount of R$ 10,828 (December 31, 2020 - R$ 4,281). An amount of R$ 99 was deposited in court as of September 30, 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 September 30, 2021, the Company and its subsidiaries are the defendants in approximately 16 cases involving labor matters for which the likelihood of loss has been classified as probable, in the amount of R$ 6,487 (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 is considered possible, and the contingencies amount to approximately R$ 307,430 (December 31, 2020 - R$ 217,426). This amount is not provisioned.

Below is summarized these possible claims by nature:


Tax (i)	72,095	71,027
Civil (ii)	206,869	136,228
Labor	28,466	10,171
Total	307,430	217,426

30
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | (i) | In December 2019, the Group was notified by tax authorities for a requirement of social security contributions due to employee profit sharing payments related to the calendar year 2015, allegedly in violation of Brazilian Law 10.101/00. Currently, the first appeal was denied by the first administrative level of the Revenue Service Office. The Group will provide the ordinary appeal to Administrative Council of Tax Appeals (“CARF”). There are other favorable CARF precedents on the subject and the Group obtained legal opinions that support the Group’s defense and current practice. | | --- | --- | | (ii) | The Group is defendant in 602 (December 31, 2020 – 586) civil and administrative claims by customers and investment agents, mainly related to portfolio management, risk rating, copyrights and contract termination. The total amount represents the collective maximum value to which the Group is exposed based on the claims’ amounts monetarily restated. | | --- | --- | | 21. | 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:

	Nine months period ended <br> September 30,						Three months period ended September 30,
	2021			2020			2021			2020
Major service lines
Brokerage commission		1,923,825			1,595,435			632,799			547,862
Securities placement		1,424,832			922,057			442,303			388,283
Management fees		1,108,997			809,024			414,775			274,353
Insurance brokerage fee		99,780			74,299			33,296			17,624
Educational services		60,446			95,627			14,575			25,474
Banking fees		115,779			71,060			57,146			32,955
Other services		366,746			263,411			154,256			122,109
Gross revenue from services rendered		5,100,405			3,830,913			1,749,150			1,408,660
(-) Sales taxes and contributions on services (i)		(455,854	)		(337,681	)		(160,270	)		(130,914	)
		4,644,551			3,493,231			1,588,880			1,277,745
(i)	Mostly related to taxes on services (ISS) and contributions<br>on revenue (PIS and COFINS).
---	---
b)	Net income from financial instruments
---	---
	Nine months period ended<br> <br>September 30,						Three months period ended<br> <br>September 30,
---	---	---	---	---	---	---	---	---	---	---	---	---
	2021			2020			2021			2020
Net income from financial instruments at fair value through profit or loss		5,266,644			2,007,466			2,335,500			647,076
Net income from financial instruments measured at amortized cost and at fair value through other comprehensive income		(1,015,419	)		303,388			(717,128	)		189,527
Total income from financial instruments		4,251,225			2,310,854			1,618,372			836,603
(-) Taxes and contributions on financial income		(78,291	)		(47,578	)		(35,893	)		(13,611	)
		4,172,934			2,263,276			1,582,479			822,992
c)	Disaggregation by geographic location
---	---

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

	Nine months period ended September 30,				Three months period ended September 30,
	2021		2020		2021		2020
Brazil		8,551,425		5,156,387		3,090,739		1,721,542
United States		247,082		570,738		79,082		368,524
Europe		18,978		29,382		1,538		10,671
Revenues		8,817,485		5,756,507		3,171,359		2,100,737

31
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | | September 30, 2021 | | December 31, 2020 | | | --- | --- | --- | --- | --- | | Brazil | | 6,137,704 | | 3,244,421 | | United States | | 104,303 | | 129,956 | | Europe | | 2,345 | | 4,123 | | Selected assets (i) | | 6,244,352 | | 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.

22.	Operating costs
	Nine months period ended<br><br> <br>September 30,				Three months period ended<br><br> <br>September 30,
---	---	---	---	---	---	---	---	---
	2021		2020		2021		2020
Commission and incentive costs		2,074,883		1,442,670		712,844		549,249
Operating losses		24,228		27,412		7,538		7,442
Other costs		464,963		355,809		168,633		139,788
Clearing house fees		288,603		240,806		104,964		104,922
Third parties’ services		69,304		42,880		13,684		9,102
Other (i)		107,056		72,123		49,985		25,764
Total		2,564,074		1,825,891		889,015		696,479
(i)	Other cost include operational errors and other costs.
---	---
23.	Operating expenses by nature
---	---
	Nine months period<br><br> <br>ended September 30,				Three months period<br><br> <br>ended September 30,
---	---	---	---	---	---	---	---	---
	2021		2020		2021		2020
Selling Expenses (i)		163,973		94,367		57,654		38,322
Administrative expenses		3,348,345		2,077,587		1,267,171		809,596
Personnel expenses		2,475,245		1,484,596		924,324		577,614
Compensation		1,011,969		565,640		419,962		203,419
Employee profit-sharing and bonus		981,948		566,353		294,304		240,763
Executives profit-sharing		77,899		156,988		39,025		52,662
Other personnel expenses (ii)		403,429		195,615		171,033		80,770
Other taxes expenses		26,840		26,193		9,684		9,907
Depreciation of property and equipment and right-of-use assets		46,465		52,972		16,532		16,928
Amortization of intangible assets		132,892		52,928		34,946		19,451
Data processing		326,317		212,074		122,754		89,018
Technical services		107,835		66,284		51,440		25,563
Third parties' services		154,782		116,086		76,470		43,663
Other administrative expenses (iii)		77,969		66,454		31,021		27,452
Total		3,512,318		2,171,954		1,324,825		847,918
(i)	Selling expenses refers to advertising and publicity.
---	---
(ii)	Other personnel expenses include benefits, social charges and<br>others.
---	---
(iii)	Other administrative expenses include rent, communication and<br>travel expenses, legal and judicial and other expenses.
---	---

32
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---
	Nine months period<br><br> <br>ended September 30,						Three months period<br><br> <br>ended September 30,
---	---	---	---	---	---	---	---	---	---	---	---	---
	2021			2020			2021			2020
Other operating income		144,705			273,809			24,057			196,445
Revenue from incentives from Tesouro Direto, B3 and Others		111,127			258,306			10,238			190,900
Other operating income (i)		33,578			15,503			13,819			5,545
Other operating expenses		(53,723	)		(188,823	)		(22,971	)		(98,644	)
Legal proceedings and agreement with customers		(2,844	)		(43,844	)		(810	)		(36,262	)
Losses on write-off and disposal of assets		(4,213	)		(59,216	)		(1,308	)		(29,809	)
Charity		(19,228	)		(40,512	)		(9,249	)		(13,668	)
Other operating expenses (ii)		(27,438	)		(45,251	)		(11,604	)		(18,905	)
Total		90,982			84,986			1,086			97,801
(i)	Other operating income include recovery of charges and expenses,<br>reversal of operating provisions, interest received on tax and others.
---	---
(ii)	Other operating expenses include fines and penalties, association<br>and regulatory fees and other expenses.
---	---
25.	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.

Set out below are summaries of XP Inc's RSU and PSU activity for the nine months period ended September 30, 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
Granted		74,694			-		74,694
Forfeited		(1,298,253	)		-		(1,298,253	)
Outstanding, September 30		9,856,177			2,819,912		12,676,089

For the nine and three months period ended September 30, 2021 and 2020, total compensation expense of both plans were R$ 505,228(R$ 113,464) and R$ 165,340 (R$ 44,352), including R$ 114,732 (R$ 34,917) and R$ 39,765 (R$ 12,578) of tax provisions and does not include any tax benefits on total share-based compensation expense once, 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. The average grant date fair value in the period was US$ 39.69.

26.	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.

33
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<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 the nine and three months period ended of September 30:

				Three months period<br><br> <br>ended September 30,
		2020		2021		2020
Net Income attributable to owners of the Parent	2,599,974		1,475,613		935,662		540,434
Basic weighted average number of outstanding shares (i) (iii)	559,059		551,800		559,059		551,800
Basic earnings per share - R	4,6506		2,6742		1,6736		0,9794
Effect of dilution
Shared-based plan (ii) (iii)	13,214		4,323		12,767		4,774
Diluted weighted average numer of outstanding shares (iii)	572,273		556,574		571,826		556,574
Diluted earnings per share - R	4,5432		2,6534		1,6363		0,9710

All values are in US Dollars.

(i)	See on Note 18, the number of XP Inc.’s outstanding common shares during the period.
(ii)	See on Note 25, the number of shares granted and forfeited during the period regarding XP Inc.’s Share-based plan.
---	---
(iii)	Thousands of shares.
---	---
27.	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<br>fair value of securities is determined by reference to their closing prices on the date of presentation of the consolidated financial<br>statements. If there is no market price, fair value is estimated based on the present value of future cash flows discounted using the<br>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.
---	---
•	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.
---	---
•	Others: Derivatives – the warrant liabilities issued by XPAC Corporation Corp. contain features<br>that qualify as embedded derivatives. The fair value of Public Warrants issued in connection with the Initial Public Offering have been<br>measured based on the listed market price of such warrants.
---	---
•	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<br>rates and market rates on the date the financial statements are presented.
---	---

34
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- | | • | Contingent consideration: Fair value of the contingent consideration liability related to acquisitions is estimated by applying the income approach and discounting the expected future payments to selling shareholders under the terms of the 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:

	September , 30, 2021
	Level 1		Level 2		Level 3		Fair Value		Book Value
Financial Assets
Financial assets at Fair value through profit or loss
Securities		25,038,764		28,393,523		-		53,432,287		53,432,287
Derivative financial instruments		102,522		15,368,915		-		15,471,437		15,471,437
Fair value through other comprehensive income
Securities		28,566,049		-		-		28,566,049		28,566,049
Evaluated at amortized cost
Securities		812,054		58,989		-		871,043		857,665
Securities purchased under agreements to resell		-		7,892,977		-		7,892,977		7,870,587
Securities trading and intermediation		-		1,064,775		-		1,064,775		1,064,775
Loan operations		-		10,547,461		-		10,547,461		10,535,402
Accounts receivable		-		355,607		-		355,607		355,607
Other financial assets		-		1,472,537		-		1,472,537		1,472,537
Financial liabilities
Fair value through profit or loss
Securities		1,565,981		516,230		-		2,082,211		2,082,211
Derivative financial instruments		144,064		14,361,865		-		14,505,929		14,505,929
Evaluated at amortized cost
Securities sold under repurchase agreements		-		24,116,866		-		24,116,866		24,234,372
Securities trading and intermediation		-		19,634,754		-		19,634,754		19,634,754
Financing instruments payable		-		18,831,529		-		18,831,529		19,212,527
Borrowings		-		1,889,966		-		1,889,966		1,885,165
Accounts payables		-		928,892		-		928,892		928,892
Other financial liabilities		-		5,443,692		632,321		6,076,013		6,076,013
	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
Financing instruments payable		-		5,162,455		-		5,162,455		5,551,849
Borrowings		-		283,993		-		283,993		284,087
Accounts payables		-		859,550		-		859,550		859,550
Other financial liabilities		-		1,244,231		462,000		1,706,231		1,706,231

35
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- |

As of September 30, 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 10.08% p.a. Change in the discount rate by 100 bps would increase/decrease the fair value by R$15,849. The change in the fair value of 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 September 30, 2021 the Group had no transfers between Level 2 and Level 3.

28.	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.

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.

	September 30,<br><br><br><br>2021
Trading portfolio	Exposures	Scenarios
Risk factors	Risk of variation in:	I	II	III
Pre-fixed	Pre-fixed interest rate in Reais	(68)	(47,157)	(71,759)
Exchange coupons	Foreign currencies coupon rate	(221)	(4,067)	(8,128)
Foreign currencies	Exchange rates	(3,898)	435,820	1,077,145
Price indexes	Inflation coupon rates	(359)	(13,667)	(27,125)
Shares	Shares prices	(1,380)	101,767	519,089
Seed Money (i)	Seed Money	(9,867)	(246,673)	(493,346)
		(15,793)	226,023	995,876

36
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

---
---	---	---	---	---
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 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.

29.	Capital Management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it 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.

The net debt and corresponding gearing ratios as of September 30, 2021 and December 31, 2020 were as follows:

	September 30,<br> <br>2021
Company debt (Notes 30) (i)		6,991,048		827,785
Structured financing (Note 15 (b))		1,000,330		874,771
Total debt		7,991,378		1,702,556
Cash		(2,822,563	)	(1,954,788	)
Securities purchased under agreements to resell (Note 3 (a))		(548,380	)	(593,673	)
Certificate deposits (Securities) (Note 4 (a))		(245,976	)	(111,933	)
Net debt		4,374,459		(957,838	)
Total equity		13,339,635		10,894,609
Total capital		17,714,094		9,936,771
Gearing ratio %		24.69	%	(9.64	)%
(i)	Includes Debentures and Bonds designated as fair value through<br>profit or loss. See Note 4(e) and 13, respectively.
---	---
(i)	Minimum capital requirements
---	---

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

37
| **XP Inc. and its subsidiaries**<br><br><br><br>**Notes to unaudited interim condensed consolidated financial statements**<br><br><br><br>**As of September 30, 2021**<br><br>***In thousands of Brazilian Reais, unless otherwise stated*** |

| --- |

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 September 30, 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 “Debentures” (Notes 13 and 14), the Group is required to comply with certain performance conditions, such as profitability and efficiency indexes.

At September 30, 2021, the amount of contracts under financial covenants is R$ 448,275 (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.

30.	Cash flow information
a.	Debt reconciliation
---	---
	Borrowings			Lease liabilities			Debt securities in issued (i)			Total
---	---	---	---	---	---	---	---	---	---	---	---	---
Total debt as of January 1, 2020		382,078			255,406			835,230			1,472,714
Acquisitions / Issuance		-			45,129			-			45,129
Write-off		-			(78,322	)		-			(78,322	)
Payments		(84,895	)		(45,903	)		(400,000	)		(530,798	)
Repurchase		-			-			(64,717	)		(64,717	)
Revaluation		-			(10,050	)		-			(10,050	)
Net foreign exchange differences		-			32,675			-			32,675
Interest accrued		10,281			15,648			20,128			46,057
Interest paid		(10,067	)		-			(51,948	)		(62,015	)
Total debt as of September 30, 2020		297,397			214,583			338,693			850,673
Total debt as of January 1, 2021		284,087			208,448			335,250			827,785
Acquisitions / Issuance		1,570,639			79,146			4,334,562			5,984,347
Payments		(14,213	)		(42,695	)		(227,652	)		(284,560	)
Revaluation		-			24,260			-			24,260
Net foreign exchange diferences		32,068			4,189			325,425			361,682
Interest accrued		12,621			12,166			68,032			92,819
Interest paid		(37	)		-			(12,386	)		(12,423	)
Total debt as of September 30, 2021		1,885,165			285,514			4,823,231			6,993,910
(i)	Debt securities in issue includes Debentures mensured at FVPL<br>presented in Note 4 (e), and does not include fair value adjustments of (i) Debentures - R$ 4,374 and (ii) Bonds - R$ 1,512 of bonds<br>(December 31, 2020: nill).
---	---
b.	Non-cash investing and financing activities
---	---

Non-cash investing and financing activities disclosed in other notes are related to (i) Acquisition of investment in associates through contingent consideration – R$ 110,554 and (ii) lease liabilities issuance – R$ 79,146.