PicS N.V. Class A ((PICS)) has held its Q2 earnings call. Read on for the main highlights of the call.

PicS N.V. Class A delivered a broadly upbeat earnings call, underscoring strong revenue growth, expanding profitability and clear progress in diversifying away from higher‑risk credit revenues. Management acknowledged some pressure from aging loan vintages and deliberate risk‑taking in private payroll loans, but stressed solid provisioning, capital headroom and continuing earnings momentum.

Revenue growth meaningfully beats expectations

Total revenues reached BRL 4.1 billion, jumping 67% year‑over‑year and 17% quarter‑over‑quarter, with managerial revenues at BRL 3.7 billion, up 59% year‑over‑year. The top line came in roughly 3.6% above guidance, signaling strong demand across PicS’s platforms and better‑than‑planned monetization of its client base.

Profitability accelerates across key metrics

Adjusted net income rose to BRL 283 million, climbing 135% year‑over‑year and 67% sequentially, while adjusted earnings before tax hit BRL 291 million, up 174% year‑over‑year. Gross profit reached BRL 1.25 billion, rising 48% year‑over‑year and 14% quarter‑over‑quarter, and adjusted return on equity improved to 20.2% from 15.5% in the previous quarter.

Operating leverage supports margin expansion

Adjusted operating expenses increased far less than revenues, with the efficiency ratio improving to 44.8%, down 210 basis points quarter‑over‑quarter. Adjusted operating expenses totaled BRL 955 million, and with headcount flat since October 2025, management highlighted AI‑driven productivity as a key driver of operating leverage.

Monetization per active client strengthens

Average revenue per active client (ARPAC) reached BRL 92, up 52% year‑over‑year and 14% quarter‑over‑quarter, or BRL 83.3 excluding hedge accounting effects. These gains reflect improved cross‑selling and deeper engagement across PicS’s ecosystem, supporting a more profitable customer base.

Scale and client engagement continue to grow

Total accounts rose to 70.4 million, up 10% year‑over‑year and 3% quarter‑over‑quarter, with 45.4 million quarterly active clients. Consolidated TPV hit BRL 167.6 billion, increasing 27% year‑over‑year, while wallet and banking TPV reached BRL 142.6 billion and cash‑in flows totaled BRL 136.4 billion, both posting solid double‑digit growth.

Revenue mix shifts toward lower‑risk streams

About 71% of revenues now come from no or lower credit‑risk sources such as float, hedge accounting, fees, commissions and secured credit, up from 63% a year ago. Noncredit revenues climbed to BRL 1.9 billion, increasing 57% year‑over‑year and 19% sequentially, reducing the business’s dependence on riskier unsecured lending.

Credit portfolio scales with secured focus

Secured credit revenues surged to BRL 1.0 billion, up 158% year‑over‑year and 23% quarter‑over‑quarter, while unsecured credit revenues reached BRL 1.2 billion, rising 40% year‑over‑year. Consumer loan originations were BRL 4.8 billion, up 78% year‑over‑year, helping lift the total credit portfolio to BRL 31.9 billion, nearly doubling versus a year ago.

Deposits and funding base expand

Deposits rose to BRL 35.8 billion, up 45% year‑over‑year and 10% quarter‑over‑quarter, supporting the enlarged credit book. The funding base reached the same level, aided by a new FIDC and capital markets issuance, which management said further diversified funding and strengthened the balance sheet.

Insurance, SMB and new products gain traction

Active insurance policies climbed to 11.1 million, increasing 63% year‑over‑year and 9% quarter‑over‑quarter, while the Kovr acquisition, now rebranded KEV, closed in early August and is expected to add material earnings in the coming months. Small‑business momentum is also strong, with new SMB accounts running at 85,000 per month in the first half of 2026 versus 27,000 a year ago and supply chain finance originations reaching BRL 1.05 billion.

AI drives productivity and product rollout

PicS reported that its AI platform cut token costs by about 70% and is now used by roughly 90% of employees, supporting efficiency gains. The company doubled product deployments since the start of the year and rolled out consumer and SMB AI agents, with the marketing agent alone generating 10,000 opt‑ins, 1,500 campaigns and reaching 1.7 million individuals in its first week.

Late‑stage delinquencies move higher

Non‑performing loans over 90 days rose to 9.8% and Stage 3 exposures increased to 12.9%, levels that remain elevated versus earlier vintages. Management tied this mainly to portfolio aging and deliberate incremental risk in private payroll loans, while emphasizing that these trends are being closely monitored.

Cost of risk and provisions edge up

Quarterly cost of risk ticked up to 3.9% from 3.7%, with credit loss allowance expenses rising to BRL 1.2 billion from BRL 974 million. Overall portfolio coverage stayed broadly stable at 13.9%, but the higher absolute provisions underscore management’s cautious stance as the enlarged book seasons.

Stage 3 coverage declines on mix effects

Stage 3 coverage slipped to 74.1% from 77% quarter‑over‑quarter, a move management attributed mainly to the mix of renegotiations under the Desenrola program with FGO guarantees, which lower expected losses. Executives stressed that provisioning standards are unchanged and that the coverage drop is largely mechanical rather than a sign of weaker reserves.

Intentional risk‑taking in private payroll loans

Management confirmed it has intentionally expanded into slightly higher‑risk clusters in private payroll lending, using progressive limits across growth cohorts. This strategy has contributed to higher late‑stage delinquencies and will weigh on some credit metrics while newer cohorts season, though it is framed as a calculated trade‑off for growth.

Funding costs rise modestly

The cost of funding increased from about 94% to 96.2% of CDI, mainly due to the new FIDC issuance, adding some pressure this quarter. Management expects funding costs to ease back toward roughly 94%–95% of CDI over time, helped by the more diversified funding base.

IFRS net income set to normalize in Q3

PicS guided IFRS net income for the third quarter to around BRL 255 million and adjusted net income to approximately BRL 265 million, both down mid‑single digits sequentially. The decline largely reflects the one‑off concentration of a tax benefit in the second quarter rather than any deterioration in the underlying operations.

Early NPL trends and vintage dynamics

Early NPL between 15 and 90 days improved to 7.5% from 8.4%, giving some comfort on more recent origination quality. Even so, management expects overall NPL metrics to remain affected by portfolio aging and slower dilution from new loans, with NPL over 90 days potentially converging toward the low‑teens by year‑end.

Renegotiation programs shape credit ratios

The Desenrola renegotiation program significantly reduced Stage 3 formation this quarter and delivered roughly BRL 59 million in benefits to the cost of credit, about 5% of total cost of credit. Management cautioned that some of this impact is one‑off in nature and that future quarters may see smaller tailwinds from renegotiations.

Guidance points to ongoing earnings strength

Looking ahead, PicS expects its stand‑alone total credit portfolio to reach about BRL 34.7 billion in the third quarter, with managerial revenues around BRL 4.0 billion and net interest income near BRL 2.1 billion. Gross profit is guided to roughly BRL 1.3 billion and IFRS earnings before tax to around BRL 360 million, up about a third sequentially, while capital ratios are projected to stay healthy.

PicS’s latest earnings call paints a picture of a fast‑growing, increasingly diversified financial platform balancing aggressive expansion with tighter risk controls. Revenue and profitability momentum, AI‑driven efficiency and lower‑risk revenue streams stand against rising late‑stage delinquencies and a planned normalization in net income, leaving investors focused on execution as the enlarged credit book matures.