XP (XP) Earnings Date & Reports

Key Takeaways

• Profit beat: XP Inc. reported adjusted net income of R$1.384 billion for the second quarter of 2026, up 5% year over year and modestly above the R$1.365 billion LSEG-compiled consensus.
• Revenue growth: Gross revenue rose 8% year over year to R$5.056 billion, while adjusted earnings before taxes (EBT) climbed 15% to R$1.565 billion, lifting the EBT margin to 32.0%.
• Inflows accelerated: Net new money (NNM) reached R$28 billion, nearly triple the year-ago level, with R$20 billion coming from retail clients.
• Assets scaled up: Total client assets, including assets under custody, management, and administration (AuC, AuM, and AuA), reached R$2.2 trillion, up 17% year over year.
• Wholesale momentum: Wholesale banking revenue rose 32% year over year to R$1.175 billion, led by a 117% increase in corporate revenue.
• Subdued stock reaction: Despite the modest beat, XP shares slipped 0.76% to $15.70 in regular trading and moved lower after hours, reflecting caution on fixed income and mark-to-market pressures.

Earnings Context and Why It Matters

XP has been expanding from an investment-focused brokerage into a broader financial ecosystem spanning banking, credit, insurance, and business services. The second-quarter 2026 report was a key test of that strategy: investors wanted evidence that diversified revenue and steady client inflows can offset softer fixed income economics, mark-to-market swings, and intense competition in Brazilian wealth management. The results also marked the first earnings print under Gustavo Alejo, who took over as chief financial officer (CFO) on August 3. With the stock trading near the lower end of its 52-week range ahead of the release, the quarter carried outsized weight for sentiment.

Reported Results

For the second quarter of 2026 (2Q26), XP Inc. posted gross revenue of R$5.056 billion, an 8% increase from R$4.669 billion a year earlier. Net revenue rose 9% to R$4.884 billion, slightly above the consensus estimate of approximately R$4.85 billion. Adjusted diluted earnings per share (EPS) came in at R$2.67, while adjusted net income of R$1.384 billion topped the LSEG-compiled consensus of R$1.365 billion.

Profitability strengthened on an operational basis. Adjusted EBT reached R$1.565 billion, up 15% year over year, and the EBT margin expanded to 32.0% from 30.3% in 2Q25 and 30.0% in the first quarter. Gross margin was 68.6%, roughly stable year over year and up from 67.2% sequentially. Return on average equity (ROE) came in at 22.5%.

Retail revenue rose 8% to R$3.881 billion. Within retail, equities revenue increased 11% and funds platform revenue grew 23%, but fixed income revenue fell 16% to R$833 million, pressured by mark-to-market effects and a mix shift toward lower-yield daily liquidity products. Wholesale banking revenue climbed 32% to R$1.175 billion, with corporate revenue more than doubling to R$606 million.

Total client assets reached R$2.2 trillion, up 17% year over year, supported by R$28 billion in net new money. Active clients rose 1% to about 4.77 million. XP completed a R$1 billion buyback, launched another R$1 billion program, and paid roughly R$500 million in dividends. Its BIS ratio (a bank capital adequacy measure) was 20.3%, above the 16%–19% guidance range. Management reiterated confidence in double-digit revenue growth for full-year 2026.

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Market Reaction and Investor Sentiment

The initial market response was cautious. XP shares closed regular trading down 0.76% at $15.70 and slipped further in after-hours trading to around $15.47, even though results were modestly ahead of consensus. The reaction suggests investors were more focused on the composition of growth than the headline beat, particularly the 16% decline in fixed income revenue and ongoing mark-to-market impacts. Heading into the report, options markets had priced in a move of about 5.8% in either direction, and sell-side sentiment remained broadly constructive, with most analysts covering the stock maintaining buy ratings.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors should monitor whether the acceleration in net new money continues. Retail inflows of R$20 billion matched the pace management has described as a soft target, but sustaining that pace will depend on client confidence and Brazil's interest rate environment. The fixed income business also bears watching: management said roughly 70% of fixed income sales are now concentrated in lower-yield daily liquidity products, a mix shift that compresses take rates and creates a high bar for revenue growth.

On the growth side, XP plans to launch a small and medium-sized enterprise (SME) platform on September 1 and continues to roll out acquiring, corporate card, credit, insurance, and AI-powered advisory capabilities. Wholesale banking is expected to remain solid in the third quarter, with a gradual recovery in primary debt capital markets activity, according to management.

Finally, capital allocation remains a focal point. With the BIS ratio above the company's 16%–19% guidance, XP has signaled it can keep returning capital through buybacks and dividends, targeting a payout above 50% of net income in 2026. Macroeconomic volatility, Brazilian elections, and the path of the Selic benchmark interest rate are also key variables that could influence trading activity, client inflows, and mark-to-market results in the quarters ahead.

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