Stone reported a Net Income of R$197.1 million in Q3 2022, ending the four-quarter-long period of losses. A year ago, in Q3 2021, the company reported a Net Loss of R$1.26 billion due to mounting losses in its lending business and markdowns on its investment in Banco Inter. Nevertheless, Stone’s flourishing “MSMB” segment (micro, small, and medium-sized businesses) allowed the company to get back on its feet and leave this difficult period behind.
What is your point of TPV outpaced inflation by saying-"Inflation in Brazil stood at 10.07% in July, 8.73% in August, and 7.17% in September; thus, Stone’s TPV growth confidently outpaced inflation in the country."
Hi, Dipak! If you look at Q3 2022 results of several US payment companies, then the growth came primarily from inflation. This was definitely not the case for Stone.
So this beating of inflation helps merchants who adjusted product prices and sure TPV increase and hence with even same take rate Stone brings more money as commission.
However I feel,
The merchants are either early wakers or late wakers. Some merchants will anticipate inflation ahead and keep fat margin while others will wake when they realize oh we are losing money because we are not selling at margin we should be selling ( coz at the cost they bought goods and stored was increased which is not same as a month back cost)
Some also don't like to keep pushing prices ( thinking they don't want to loss customer for now but will let go some margin in exchange of customer retention)
So this % is good comparison but should not be given big focus.
My take is a bit simpler: inflation means (some) merchants already increased prices (otherwise there would be no inflation), and if the acquirer is big enough (Stone has 10% market share in Brazil) then the overall inflation level increases TPV.
What is your point of TPV outpaced inflation by saying-"Inflation in Brazil stood at 10.07% in July, 8.73% in August, and 7.17% in September; thus, Stone’s TPV growth confidently outpaced inflation in the country."
Hi, Dipak! If you look at Q3 2022 results of several US payment companies, then the growth came primarily from inflation. This was definitely not the case for Stone.
So this beating of inflation helps merchants who adjusted product prices and sure TPV increase and hence with even same take rate Stone brings more money as commission.
However I feel,
The merchants are either early wakers or late wakers. Some merchants will anticipate inflation ahead and keep fat margin while others will wake when they realize oh we are losing money because we are not selling at margin we should be selling ( coz at the cost they bought goods and stored was increased which is not same as a month back cost)
Some also don't like to keep pushing prices ( thinking they don't want to loss customer for now but will let go some margin in exchange of customer retention)
So this % is good comparison but should not be given big focus.
What do you think?
My take is a bit simpler: inflation means (some) merchants already increased prices (otherwise there would be no inflation), and if the acquirer is big enough (Stone has 10% market share in Brazil) then the overall inflation level increases TPV.