UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
6-K/A
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE
13a-16
OR
15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 2018
Commission File Number:
001-38353
PagSeguro Digital Ltd.
(Name of Registrant)
Av.
Brigadeiro Faria Lima, 1384, 4º andar, parte A
São Paulo, SP,
01451-001,
Brazil
+55 11 3038 8127
(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.
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):
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):
EXPLANATORY NOTE
This Form
6-K/A
replaces the previous Form
6-K
furnished to the Securities and
Exchange Commission (the
SEC
) on May 30, 2018 under Accession Number
0001193125-18-177112.
The principal change is to align the presentation of
non-GAAP
financial measures with the presentation included in PagSeguro Digital Ltd.s Registration Statement on Form
F-1
originally filed with the SEC on June 18,
2018 under File Number
333-225697.
PagSeguro Reports First Quarter
Results
Net Income
reached
R$148.5
million,
up
144.9%
compared to 1Q17, or up
251.3%
after
Non-GAAP
adjustments to 1Q18.
1Q18
Non-GAAP
Net Income
reached
R$212.9
million.
São Paulo, July 20, 2018
PagSeguro
Digital Ltd. (PagSeguro or we) announced on May 29, 2018 its first quarter results for the period ended March
31, 2018. Our consolidated financial statements are presented in Reais
(R$) in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
First Quarter 2018 Financial & Operational Highlights:
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R$
14.4
billion in total payment volume (TPV), up
138.7
% compared with 1Q17;
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Active merchants in the last 12 months at close of period of
3.1
million, up
83.3
% compared with 1Q17, with growth of
1.4
million net new merchants;
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R$
928.0
million in total net revenue*, up
106.9
% compared with 1Q17, or
86.9%
after
Non-GAAP
adjustments to 1Q18;
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R$
838.2
million in
Non-GAAP
total net revenue* in 1Q18;
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R$
148.5
million in net income, up
144.9
% compared with 1Q17, or
251.3%
after
Non-GAAP
adjustments to 1Q18;
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R$
212.9
million in
Non-GAAP
net income in 1Q18;
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Net Margin of
16.0
%, up
2.5
percentage points compared with 1Q17, or up
11.9
percentage points after
Non-GAAP
adjustments to 1Q18;
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Non-GAAP
Net Margin of
25.4
% in 1Q18.
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At and for the three
months ended
March 31,
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Main Operational and Financial Indicators (R$ millions),
except per share amounts
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2018
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2017
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Var.%
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TPV
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14,378.1
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6,022.7
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138.7%
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Active Merchants at close of period last 12 months
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3.1
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1.7
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83.3%
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Total Net Revenue*
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928.0
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448.5
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106.9%
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Net Income
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148.5
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60.6
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144.9%
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Net Margin (%)
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16.0%
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13.5%
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2.5 pp
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Basic earnings per common share (EPS)**
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0.4988
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0.2311
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Diluted earnings per common share (EPS)
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0.4969
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0.2311
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Non-GAAP
Main
Operational and Financial Indicators (R$ millions), except per share amounts
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2018
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Non-GAAP
Total Net Revenue*
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838.2
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Non-GAAP
Net Income
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212.9
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Non-GAAP
Net Margin (%)
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25.4%
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Non-GAAP
Basic earnings per common share (EPS)**
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0.7153
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Non-GAAP
Diluted earnings per common share (EPS)
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0.7126
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For a
reconciliation of these
non-GAAP
financial measures to the most directly comparable GAAP financial measures, see the last page of this earnings release.
*
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Total revenue and income.
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**
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Weighted average number of common shares of 262 million during 1Q17 and 297 million during 1Q18.
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Financial Discussion:
IStatement of Income
Non-GAAP
disclosure
This press release includes certain
non-GAAP
measures.
We present
non-GAAP
measures when we believe that the additional information is useful and meaningful to investors. These
non-GAAP
measures are provided to enhance
investors overall understanding of our current financial performance and its prospects for the future. Specifically, we believe the
non-GAAP
measures provide useful information to both management and
investors by excluding certain expenses, gains and losses, as the case may be, that may not be indicative of our core operating results and business outlook.
These measures may be different from
non-GAAP
financial measures used by other companies. The presentation of this
non-GAAP
financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered separately from, or as a substitute for, our financial
information prepared and presented in accordance with IFRS as issued by the IASB.
Non-GAAP
measures have limitations in that they do not reflect all of the amounts associated with our results of operations as
determined in accordance with IFRS. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.
Our
Non-GAAP
results consist of our GAAP results as adjusted to exclude the following items:
Stock-based compensation expenses and related employer payroll taxes
: This consists of expenses for equity awards under our long-term
incentive plan (LTIP). We exclude stock-based compensation expenses from our
non-GAAP
measures primarily because they are
non-cash
expenses. The related employer payroll
taxes depend on our stock price and the timing and size of exercises and vesting of equity awards, over which management has limited to no control, and as such management does not believe these expenses correlate to the operation of our business.
The largest portion of this expense amount was recognized upon closing of our initial public offering (
IPO
) with the issuance of 1.8 million shares under LTIP awards that vested on or before the IPO date.
Foreign exchange gain on IPO primary share proceeds
: This consists of financial income related to the impact of exchange rate variation
on the conversion from U.S. dollars into Brazilian
reais
of the proceeds from our sale of new shares in the IPO. We exclude this foreign exchange variation from our
non-GAAP
measures primarily because
it is an unusual gain.
Tax related to remittance of IPO primary share proceeds (IOF tax)
: This relates to the impact of Brazilian
IOF tax (currency remittance tax) payable when we remitted the proceeds from our sale of new shares in the IPO from the Cayman Islands to Brazil. We exclude this IOF tax on the remittance of IPO primary share proceeds from our
non-GAAP
measures primarily because it is an unusual expense.
Income tax and social contribution on
non-GAAP
adjustments
: This represents the income tax effect related to the
non-GAAP
adjustments mentioned above, except the Foreign exchange gain on IPO primary share
proceeds.
For a reconciliation of these
non-GAAP
financial measures to the most directly
comparable GAAP measures, see Reconciliation of Revenue and Income to
Non-GAAP
Revenue and Income, Reconciliation of Expenses to
Non-GAAP
Expenses, Reconciliation of Income Tax and Social Contribution to
Non-GAAP
Income Tax and Social Contribution, Reconciliation of Net Income to
Non-GAAP
Net Income, Reconciliation of Basic and diluted EPS to
Non-GAAP
Basic and diluted EPS, and Reconciliation of GAAP Measures to
Non-GAAP
Measures.
Total revenue and income
Our Total revenue and income amounted to R$
928.0
million in the three months ended March 31, 2018, an increase of
106.9%,
or
86.9%
after
Non-GAAP
adjustments to 1Q18, from R$
448.5
million in the three months ended March 31, 2017.
Our non-GAAP Total
revenue and income amounted to R$
838.2
million in the three months ended
March 31, 2018.
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Reconciliation of Revenue and Income to
Non-GAAP
Revenue and Income:
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At and for the
three months
ended March
31, 2018
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Revenue and Income
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928.0
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Less: Foreign exchange gain on IPO primary share proceeds
[1]
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(89.8
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)
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Non-GAAP
Revenue and Income
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838.2
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[1]
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Foreign exchange gain on IPO primary share proceeds: financial income in the amount of R$
89.8
million related to the impact of exchange rate variation on the conversion from U.S. dollars into
Brazilian
reais
of the proceeds from our sale of new shares in the IPO. We exclude this foreign exchange variation from our
non-GAAP
measures primarily because it is unusual income.
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Net revenue from transaction activities and other services
Our Gross revenue from transaction activities and other services in the three months ended March 31, 2018 amounted to R$
514.1
million, an
increase of R$
296.8
million, or
136.6%
, from R$
217.3
million in the three months ended March 31, 2017. This increase was principally due to a continued increase in our active merchant base and TPV.
Our Gross revenue from transaction activities and other services during the three months ended March 31, 2018 increased by a lesser percentage than our
TPV, which increased to R$
14.4
billion from R$
6.0
billion in the three months ended March 31, 2017. This difference in the growth rate was due to the mix of debit and credit card payments processed.
Our Deductions from gross revenue from transaction activities and other services, which consist principally of sales taxes, amounted to
R$
71.2
million in the three months ended March 31, 2018, or
13.8%
of our Gross revenue from transaction activities and other services for the quarter. In the three months ended March 31, 2017, Deductions from gross
revenue from transaction activities and other services totaled R$
26.8
million, or
12.3%
of our Gross revenue from transaction activities and other services for the quarter. The increase in these Deductions as a percentage of our
Gross revenues from transaction activities and other services is due to the repeal of the law that charges ISS based on the municipality where the POS device is used. Since the repeal of this law is being contested, we are currently judicially
depositing the full tax rate regarding sales made within the São Paulo municipality and recognizing a provision for the difference charged by other municipalities.
As a result, our Net revenue from transaction activities and other services in the three months ended March 31, 2018 amounted to
R$
442.8
million, an increase of R$
252.4
million, or
132.6%
, from R$
190.4
million in the three months ended March 31, 2017.
Net revenue from sales
Our Gross revenue from
sales in the three months ended March 31, 2018 amounted to R$
129.7
million, a decrease of R$
36.5
million, or
22.0
%, from R$
166.2
million in the three months ended March 31, 2017. This decrease was
due to a different hardware sales mix in the three months ended March 31, 2018 when compared to the three months ended March 31, 2017, with the launch of the Minizinha at the end of the first quarter of 2017. In terms of number of
terminals sold, we observed an increase in the three months ended March 31, 2018 compared to the three months ended March 31, 2017.
Our Deductions from gross revenue from sales in the
three months ended March 31, 2018 amounted to R$
35.7
million, or
27.5%
of our Gross revenues from sales for the period. In the three months ended March 31, 2017, these Deductions totaled R$
47.8
million, or
28.8%
of Gross revenues from sales for the period. The small decrease in these Deductions as a percentage of our Gross revenues from sales is due to a change in the mix of Brazilian states in which we sold POS devices, since ICMS is levied by
each state at a different rate.
As a result, our Net revenue from sales in the three months ended March 31, 2018 amounted to
R$
94.0
million, a decrease of R$
24.4
million, or
20.6
%, from R$
118.4
million in the three months ended March 31, 2017.
Financial income
Our Financial income, which
represents the volume of the discount fees we withhold from TPV in the early payment of receivables feature that we offer merchants, amounted to R$
274.8
million in the three months ended March 31, 2018, an increase of
R$
136.0
million, or
98.0%
from R$
138.8
million in the three months ended March 31, 2017. The growth in this activity compared to the three months ended March 31, 2017 was driven by growth in our TPV,
partially offset by an increase in the adjustment of note receivables at present value of R$
16.8
million in the three months ended March 31, 2018 from R$
3.4
million in the three months ended March 31, 2017.
Other financial income
Our Other financial income
amounted to R$
116.4
million in the three months ended March 31, 2018, an increase of R$
115.6
million from R$
0.8
million in the three months ended March 31, 2017.
This increase was due to
the unusual impact of changes in exchange rates on the conversion from U.S. dollars into Brazilian
reais
of the proceeds from our sale of new shares in our IPO, which impact amounted to R$
89.9
million in the three months
ended March 31, 2018.
Our non-GAAP Other
financial income, which excludes the foreign exchange
gain of R$
89.8
million, amounted to R$
26.6
million in the three months ended March 31, 2018. For a reconciliation of our
non-GAAP
Other financial income to our Other financial
income, see the last page of this earnings release.
Expenses
Our total expenses amounted to R$
765.0
million in the three months ended March 31, 2018, an increase of R$
398.7
million, or
108.8%
, or an increase of
47.8%
after
Non-GAAP
adjustments to 1Q18, from R$
366.
3
million in the three months ended March 31, 2017.
As a percentage of our Total revenue and income, our total expenses in the three months ended March 31, 2018 increased by
0.7
percentage points,
to
82.4%
in the three months ended March 31, 2018 from
81.7%
in the three months ended March 31, 2017.
Our non-GAAP total
expenses amounted to R$
541.3
million in the three months ended March 31, 2018 due to the exclusion of the LTIP expenses in the amount of R$
210.6
million and
IOF tax of R$
13.1
million. As a percentage of
our non-GAAP Total
revenue and income,
our non-GAAP total
expenses in the three months
ended March 31, 2018 was
64.6%
as we continue to leverage our costs and expenses.
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Reconciliation of Expenses to
Non-GAAP
Expenses:
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At and for the
three months
ended March
31, 2018
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Expenses
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(765.0
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)
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Less: share-based long-term incentive plan (LTIP)
[1]
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210.6
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Less: Tax related to remittance of IPO primary share proceeds (IOF tax)
[2]
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13.1
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Total
non-GAAP
expenses adjustments
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223.7
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Non-GAAP
Expenses
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(541.3
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)
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[1]
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Share-based long-term incentive plan (LTIP): Stock-based compensation expenses and related employer payroll taxes in the total amount of R$
210.6
million. This amount consists of expenses for equity awards
under our long-term incentive plan (LTIP). We exclude stock-based compensation expenses from our
non-GAAP
measures primarily because they are
non-cash
expenses. The
related employer payroll taxes depend on our stock price and the timing and size of exercises and vesting of equity awards, over which management has limited to no control, and as such management does not believe these expenses correlate to the
operation of our business. The largest portion of this expense amount was recognized upon closing our IPO with the issuance of
1.8
million shares under LTIP awards that vested on or before the IPO date.
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[2]
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Tax related to remittance of IPO primary share proceeds (IOF tax): R$
13.1
million related to Brazilian IOF tax (currency remittance tax) payable when we remitted the proceeds from our sale of new
shares in the IPO from the Cayman Islands to Brazil. We exclude this IOF tax on the remittance of IPO primary share proceeds from our
non-GAAP
measures primarily because it is an unusual expense.
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Cost of sales and services
Our
Cost of sales and services amounted to R$
444.8
million in the three months ended March 31, 2018, an increase of R$
201.9
million, or
83.1%
, from R$
242.9
million in the three months ended March 31,
2017. As a percentage of the total of our Net revenue from transaction activities and other services and our Net revenue from sales, our Cost of sales and services posted an increase of
4.2
percentage points, to
82.8%
in the three
months ended March 31, 2018 from
78.6%
in the three months ended March 31, 2017.
Within our Cost of sales and services line item, our
Cost of services, expressed as a percentage of our Net revenue from transaction activities and other services, increased to
74.2%
in the three months ended March 31, 2018 from
65.7%
in the three months ended March 31, 2017,
principally due to R$
38.2
million in Share-based long-term incentive plan (LTIP) expenses. Our Cost of sales, expressed as a percentage of our Net revenue from sales, increased to
123.4%
in the three months ended March 31,
2018 from
99.5%
in the three months ended March 31, 2017, due to the change in our device product mix, with the launch of the Minizinha at the end of the first quarter of 2017.
For the three months ended March 31, 2018, our
non-GAAP
Cost of sales and services amounted to
R$
406.5
million, reflecting the exclusion of the LTIP adjustment of R$
38.2
million. For a reconciliation of our
non-GAAP
Cost of sales and services to our Cost of sales and services,
see the last page of this earnings release.
Selling expenses
Our Selling expenses amounted to R$
83.6
million in the three months ended March 31, 2018, an increase of R$
12.5
million, or
17.6%
, from R$
71.1
million in the three months ended March 31, 2017. As a percentage of our Total revenue and income, our Selling expenses decreased by
6.9
percentage points, to
9.0%
in the three months ended
March 31, 2018 from
15.9%
in the three months ended March 31, 2017. This reduction in our Selling expenses as a percentage of our Total revenue and income reflected the increase in leverage of our selling expenses base as our TPV
has increased.
Administrative expenses
Our Administrative expenses amounted to R$
219.0
million in the three months ended March 31, 2018, an increase of R$
186.5
million,
or
573.5%
, from R$
32.5
million in the three months ended March 31, 2017. This increase in the three months ended March 31, 2018 was mainly due to the Share based long-term incentive plan (LTIP) expense related to our
IPO, which amounted to R$
172.4
million. As a percentage of our Total revenue and income, our Administrative expenses increased by
16.3
percentage points, to
23.6%
in the three months ended March 31, 2018 from
7.3%
in the three months ended March 31, 2017.
For the three months ended March 31, 2018 our
non-GAAP
Administrative expenses amounted to R$
46.7
million, which excludes the LTIP adjustment of R$
172.4
million. Our
non-GAAP
Administrative
expenses represented
5.6
% of the total of our
non-GAAP
Net revenue and income for the three months ended March 31, 2018. For a reconciliation of our
non-GAAP
Administrative expenses to our Administrative expenses, see the last page of this earnings release.
Financial expenses
Our Financial expenses
amounted to R$
16.5
million in the three months ended March 31, 2018, a decrease of R$
2.7
million, or
14.0%
, from expenses of R$
19.2
million in the three months ended March 31, 2017. Expressed as a
percentage of our Financial income, our Financial expenses represented
6.0%
in the three months ended March 31, 2018 and
13.8%
in the three months ended March 31, 2017.
The interest we paid on early payment of receivables that we obtained from issuing banks decreased by R$
14.9
million in the three months ended
March 31, 2018, when compared with the three months ended March 31, 2017, due to our use of a portion of the proceeds from our IPO in late January 2018 to fund the early payment of receivables feature that we offer merchants, as well as
our repayment of R$
2.7
million in borrowings during the three months ended March 31, 2017. These effects were partially offset by a R$
13.1
million increase related to the impact of the IOF tax on the remittance of our
sale of new shares in the IPO from the Cayman Islands to Brazil.
Our non-GAAP Financial
expenses, which
excludes the IOF tax amount of R$
13.1
million, amounted to R$
3.4
million in the three months ended March 31, 2018. For a reconciliation of our
non-GAAP
Financial expenses to
our Financial expenses, see the last page of this earnings release.
Other (expenses) income, net
Our Other expenses, net, recorded R$
1.1
million in the three months ended March 31, 2018 and R$
0.6
million in the three months
ended March 31, 2017. These net amounts principally reflect expenses related to civil litigation proceedings during both periods.
Profit
before income taxes
Our Profit before income taxes amounted to R$
163.0
million in the three months ended March 31, 2018, an
increase of R$
80.8
million, or
98.4%
, or an increase of
261.2%
after
Non-GAAP
adjustments to 1Q18, from R$
82.2
million in the three months ended March 31, 2017.
Our non-GAAP Profit
before income taxes amounted to R$
296.9
million in the three months ended
March 31, 2018. This increase was due to significant growth in our Total revenue and income, driven by growth in active merchants and TPV. For a reconciliation of our
non-GAAP
Profit before income taxes
to our Profit before income taxes, see the last page of this earnings release.
Income tax and social contribution
Income tax and social contribution amounted to expenses of R$
14.5
million in the three months ended March 31, 2018, a decrease of
R$
7.1
million from expenses of R$
21.6
million in the three months ended March 31, 2017. This variance principally reflects the tax benefit under the
Lei do Bem
, which applies to investments made in innovation
and technology by PagSeguro Brazil, our Brazilian operating subsidiary.
Our Current income tax and social contribution expense in the three months ended
March 31, 2018 amounted to R$
20.9
million, an increase of R$
1.8
million from R$
19.1
million in the three months ended March 31, 2017. This increase is mainly due to growth in our Profit before income
taxes, partially offset by the tax benefit under the
Lei do Bem
and the
non-taxable
income generated by PagSeguro Digital.
Our Deferred income tax and social contribution in the three months ended March 31, 2018 amounted to a tax benefit of R$
6.4
million, an
increase of R$
8.9
million compared with an expense of R$
2.5
million in the three months ended March 31, 2017.
The amount of
Deferred income tax and social contribution recorded in the three months ended March 31, 2018 reflected the tax benefit on our significant new capital investments in software and technology during the period, less the depreciation and
amortization expenses that we recorded against those assets during the period. This tax benefit was partially offset by the amounts we recorded during the period for provisions for employee corporate results-sharing, share-based long-term incentive
plan (LTIP) expenses and tax contingencies.
The amount of Deferred income tax and social contribution recorded in the three months ended March 31,
2017 reflected the tax benefit on our capital investments in software and technology during the period, less the depreciation and amortization expenses that we recorded against those assets during the period. This tax benefit was partially offset by
the amounts we recorded during the period for provisions for employee corporate results-sharing.
Our non-GAAP Deferred
income tax and social contribution expense for the three months ended March 31,
2018 amounted to R$
69.5
million.
|
|
|
|
|
Reconciliation of Income Tax and Social Contribution to
Non-GAAP
Income Tax and Social Contribution:
|
|
At and for the
three months
ended March
31, 2018
|
|
Income tax and social contribution
|
|
|
(14.5
|
)
|
|
|
|
|
|
Less: Income tax and social contribution on Non-GAAP adjustments
[1]
|
|
|
(69.5
|
)
|
|
|
|
|
|
Non-GAAP
Income tax and social
contribution
|
|
|
(84.0
|
)
|
|
|
|
|
|
[1]
|
Income tax and social contribution on
Non-GAAP
adjustments: the amount of R$
69.5
million consists of income tax at the rate of 34% calculated on the
Non-GAAP
adjustments, other than the foreign exchange gain on IPO primary share proceeds of R$
89.8
million, which is not taxable, and the tax benefits related to other
Non-GAAP
adjustments.
|
Net income for the period
Our Net income for the period in the three months ended March 31, 2018 amounted to R$
148.5
million, an increase of R$
87.9
million,
or
144.9%
, or an increase of
251.3%
after
Non-GAAP
adjustments to 1Q18, from R$
60.6
million in the three months ended March 31, 2017.
As a percentage of our Total revenue and income, our Net income for the period increased by
2.5
percentage points, to
16.0%
in the three months
ended March 31, 2018 compared with
13.5%
in the three months ended March 31, 2017. This increase was driven by growth in active merchants and TPV, resulting in greater leverage of our operating expenses.
Our non-GAAP Net
income for the three months ended March 31, 2018 amounted to
R$
212.9
million, reflecting the sum of the
non-GAAP
adjustments described above.
|
|
|
|
|
Reconciliation of Net Income to
Non-GAAP
Net Income:
|
|
At and for the
three months
ended March
31, 2018
|
|
Net Income
|
|
|
148.5
|
|
|
|
|
|
|
Foreign exchange gain on IPO primary share proceeds
[1]
|
|
|
(89.8
|
)
|
Share-based long-term incentive plan (LTIP)
[2]
|
|
|
210.6
|
|
Tax related to remittance of IPO primary share proceeds (IOF tax)
[3]
|
|
|
13.1
|
|
Income tax on
non-GAAP
adjustments
[4]
|
|
|
(69.5
|
)
|
|
|
|
|
|
Total
non-GAAP
net income adjustments
|
|
|
64.4
|
|
|
|
|
|
|
Non-GAAP
Net Income
|
|
|
212.9
|
|
|
|
|
|
|
[1]
|
Foreign exchange gain on IPO primary share proceeds: financial income in the amount of R$
89.8
million related to the impact of exchange rate variation on the conversion from U.S. dollars into
Brazilian
reais
of the proceeds from our sale of new shares in the IPO. We exclude this foreign exchange variation from our
non-GAAP
measures primarily because it is unusual income.
|
[2]
|
Share-based long-term incentive plan (LTIP): Stock-based compensation expenses and related employer payroll taxes in the total amount of R$
210.6
million. This amount consists of expenses for equity awards
under our long-term incentive plan (LTIP). We exclude stock-based compensation expenses from our
non-GAAP
measures primarily because they are
non-cash
expenses. The
related employer payroll taxes depend on our stock price and the timing and size of exercises and vesting of equity awards, over which management has limited to no control, and as such management does not believe these expenses correlate to the
operation of our business. The largest portion of this expense amount was recognized upon closing our IPO with the issuance of
1.8
million shares under LTIP awards that vested on or before the IPO date.
|
[3]
|
Tax related to remittance of IPO primary share proceeds (IOF tax): R$
13.1
million related to Brazilian IOF tax (currency remittance tax) payable when we remitted the proceeds from our sale of new
shares in the IPO from the Cayman Islands to Brazil. We exclude this IOF tax on the remittance of IPO primary share proceeds from our
non-GAAP
measures primarily because it is an unusual expense.
|
[4]
|
Income tax and social contribution on
Non-GAAP
adjustments: the amount of R$
69.5
million consists of income tax at the rate of 34% calculated on the
Non-GAAP
adjustments, other than the foreign exchange gain on IPO primary share proceeds of R$
89.8
million, which is not taxable, and the tax benefits related to other
Non-GAAP
adjustments.
|
IICash Flow
Our cash and cash equivalents at the beginning of the three months ended March 31, 2018 amounted to R$
66.8
million.
Our Profit before income taxes in the three months ended March 31, 2018, as discussed above, was R$
163.0
million.
The adjustments for revenue, income and expenses recorded in our statement of income in the three months ended March 31, 2018 but which did not affect
our cash flows totaled the positive amount of R$
162.0
million, principally reflecting R$
130.3
million of Share-based long-term incentive plan (LTIP) expenses, R$
14.4
million in Chargebacks and
R$
18.0
million of Depreciation and amortization recorded in our statement of income. Share based long-term incentive plan (LTIP) relates to expenses for equity awards under our LTIP. Chargebacks relate to amounts that we initially
recorded as revenues but for which we did not receive the related cash payment due to fraud.
The adjustments for changes in our operating assets and
liabilities in the three months ended March 31, 2018 amounted to negative cash flows of R$
1,378.1
million:
|
|
Our Note receivables item, which is presented net of transaction costs and financial expenses we incur when we elect to receive early payment of the note receivables owed to us by card issuers, consists of the
difference between the opening and closing balances of the Note receivables item of Current Assets on our balance sheet (R$
4,883.3
million at March 31, 2018 versus R$
3,522.3
million
at year-end 2017)
excluding interest income received in cash and chargebacks, which are presented separately in the statement of cash flows. Note receivables represented a negative cash flow of
R$
1,449.2
million in the three months ended March 31, 2018, which represents an increase in Note receivables because we no longer obtain early payment of note receivables from issuing banks since the IPO date. Prior to the IPO, one
of our sources of cash was the early payment of note receivables, which we obtained from issuing banks at
pre-agreed
interest rates. After our IPO, we ceased obtaining early payment of note receivables from
issuing banks and started to use a portion of the proceeds of our IPO to fund our early payment of receivables feature for merchants and also repaid issuing banks for note receivables already received. The cash amount that we receive under the note
receivables consists of the original note receivable amount, less the respective interchange fee charged by the financial institution, and less the finance charge withheld by the card issuer for the early payment.
|
|
|
Our Payables to third parties item, which is presented net of revenue from transaction activities and financial income we receive when merchants elect to receive early payments, consists of the difference between the
opening and closing balances of the Payables to third parties item of Current Liabilities on our balance sheet (R$
2,975.3
million at March 31, 2018 versus R$
3,080.6
million
at year-end 2017).
Payables to third parties represented negative cash flow of R$
105.3
million in the three months ended March 31, 2018.
|
|
|
Our Receivables from (payables to) related parties item consists of the difference between the opening and closing balances of the Receivables from related parties item (i.e., UOL) of Current Assets on our balance sheet
(R$
0.9
million at March 31, 2018 versus R$
124.7
million
at year-end 2017)
offset by the difference between the opening and closing balances of the Payables to
related parties item (i.e., UOL) of Current Liabilities on our balance sheet (R$
45.0
million at March 31, 2018 versus R$
39.1
million
at year-end 2017),
which represented
movements in our treasury cash position with UOL prior to the completion of our IPO. Receivables from (payables to) related parties represented positive cash flow of R$
129.6
million in the three months ended March 31, 2018. Our cash
management has been separate from UOLs cash management starting from the date of completion of our IPO. Any remaining balances that relate to prior cash management activities began accruing interest on arms length terms from the date of
completion of our IPO, and all such balances were repaid by UOL.
|
|
|
Our Inventories item represents changes in the carrying value of the Inventories item of Current Assets on our balance sheet. This item represented positive cash flow of R$
1.7
million in the three months
ended March 31, 2018.
|
|
|
Our Salaries and social charges item represents amounts that were recorded on our statement of income, but which remained unpaid at the end of the period, principally because they related to the final month of the
period. This item represented negative cash flow of R$
8.1
million in the three months ended March 31, 2018.
|
|
|
Our Taxes and contributions item represents sales taxes (ISS, ICMS, PIS and COFINS). This item represented positive cash flow of R$
19.4
million in the three months ended March 31, 2018.
|
Since our statement of cash flows begins with our Profit before income taxes, it also adjusts for cash amounts paid in respect of our
income tax and social contribution, which totaled R$
34.8
million in the three months ended March 31, 2018. Our statement of cash flows also adjusts for interest income received in cash, which represented a positive cash flow of
R$
73.8
million in the three months ended March 31, 2018. Our cash flows in the three months ended March 31, 2018 show no amount adjusted for interest paid.
As a result of the above, our Net Cash used in operating activities in the three months ended March 31, 2018 totaled R$
1,014.1
million.
Our Cash flows provided by investing activities in the three months ended March 31, 2018 totaled R$
180.4
million. This amount consisted of
R$
211.1
million in redemptions of financial investments, representing total cash that we withdrew during the period. We also invested R$
29.7
million in purchases and development of intangible assets, which represent purchases
of third party software and the salaries and other amounts that we paid to develop internally our software and technology, which we capitalize as intangible assets.
Our Cash flows provided by financing activities in the three months ended March 31, 2018 totaled R$
3,312.3
million, consisting of
R$
3,444.9
million representing our IPO primary share proceeds, less R$
148.0
million representing transaction costs, both of which related to our IPO.
After accounting for the total increase in Cash and cash equivalents of R$
2,478.6
million
discussed above, our Cash and cash
equivalents at March 31, 2018 amounted to R$
2,545.4
million.
Products launched in 1Q18
At the end of February, we launched a new functionality for Moderninha Pro and Wifi devices, enabling several merchants to share a single
point-of-sale
device (each terminal can serve up to six digital accounts, handling sales transactions for each account separately). The campaign launch was broadcast
nationally, with a new commercial starring Alessandra Negrini, a recognized Brazilian actress.
At the close of the first quarter in March, we
launched the Minizinha Chip, a handy and affordable POS that comes with chip-recognition and
wi-fi
connection. This release was headlined by Wesley Safadão, a popular Brazilian singer.
Earnings webcast
PagSeguro (NYSE: PAGS) hosted a conference call and earnings webcast on Wednesday, May 30, at 10:00 am ET. The conference
dial-in
in the US and International was
1-800-492-3904
or +1 646
828-8246.
The
dial-in
for connections in Brazil was +55 11 3193-1001 or +55 11 2820-4001. The Conference ID was PagSeguro.
The live webcast was accessable on PagSeguros IR website at
investors.pagseguro.com
. A replay is available on the same website.
About PagSeguro:
PagSeguro Digital is a
disruptive provider of financial technology solutions focused primarily on micro-merchants, small companies and
medium-sized
companies in Brazil. PagSeguro Digitals business model covers all of the
following five pillars:
|
|
Multiple digital payment solutions;
|
|
|
In-person
payments via point of sale (POS) devices that PagSeguro Digital sell to merchants;
|
|
|
Issuer of prepaid cards to clients for spending or withdrawing account balances; and
|
|
|
Operating as an acquirer.
|
PagSeguro Digital is an UOL Group Company that provides an easy, safe and
hassle-free way of accepting payments, where its clients can transact and manage their cash, without the need to open a bank account. PagSeguro Digitals
end-to-end
digital ecosystem enables its customers to accept a wide range of online and
in-person
payment methods, including credit cards, debit cards, meal voucher cards, boletos, bank transfers, bank debits and cash
deposits.
PagSeguro Digitals mission is to disrupt and democratize financial services in Brazil, a concentrated, underpenetrated and high interest
rate market, by providing an
end-to-end
digital ecosystem that is safe, affordable, simple and mobile-first for both merchants and consumers. For more information visit
http://investors.pagseguro.com
Contacts:
Investor Relations:
PagSeguro Digital Ltd.
André Cazotto, +55 (11) 3914-9403
ir@pagseguro.com
investors.pagseguro.com
UNAUDITED CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
Three months ended
March 31, 2017
|
|
|
%
|
|
|
|
(In R$ thousands)
|
|
|
|
|
Net revenue from transaction activities and other services
|
|
|
442,848
|
|
|
|
190,425
|
|
|
|
132.6%
|
|
Net revenue from sales
|
|
|
93,986
|
|
|
|
118,438
|
|
|
|
-20.6%
|
|
Financial income
|
|
|
274,838
|
|
|
|
138,808
|
|
|
|
98.0%
|
|
Other financial income
|
|
|
116,360
|
|
|
|
836
|
|
|
|
13,818.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue and income
|
|
|
928,032
|
|
|
|
448,508
|
|
|
|
106.9%
|
|
Cost of sales and services
|
|
|
(444,762
|
)
|
|
|
(242,893
|
)
|
|
|
83.1%
|
|
Selling expenses
|
|
|
(83,614
|
)
|
|
|
(71,106
|
)
|
|
|
17.6%
|
|
Administrative expenses
|
|
|
(219,024
|
)
|
|
|
(32,520
|
)
|
|
|
573.5%
|
|
Financial expenses
|
|
|
(16,524
|
)
|
|
|
(19,218
|
)
|
|
|
-14.0%
|
|
Other expenses, net
|
|
|
(1,109
|
)
|
|
|
(594
|
)
|
|
|
86.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE INCOME TAXES
|
|
|
163,000
|
|
|
|
82,177
|
|
|
|
98.4%
|
|
Current income tax and social contribution
|
|
|
(20,935
|
)
|
|
|
(19,085
|
)
|
|
|
9.7%
|
|
Deferred income tax and social contribution
|
|
|
6,391
|
|
|
|
(2,468
|
)
|
|
|
-359.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX AND SOCIAL CONTRIBUTION
|
|
|
(14,544
|
)
|
|
|
(21,553
|
)
|
|
|
-32.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME FOR THE PERIOD
|
|
|
148,456
|
|
|
|
60,624
|
|
|
|
144.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Basic and diluted EPS to
Non-GAAP
Basic and
diluted EPS
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
Three months ended
March 31, 2017
|
|
|
|
(In R$ thousands, except per share amounts)
|
|
Net income attributable to:
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
148,378
|
|
|
|
60,624
|
|
Non-controlling
interests
|
|
|
78
|
|
|
|
(1
|
)
|
Weighted average number of outstanding common shares
|
|
|
297,454,853
|
|
|
|
262,288,607
|
|
Weighted average number of common shares
|
|
|
298,584,130
|
|
|
|
262,288,607
|
|
Basic earnings per common share - R$
|
|
|
0.4988
|
|
|
|
0.2311
|
|
Diluted earnings per common share - R$
|
|
|
0.4969
|
|
|
|
0.2311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
Non-GAAP
|
|
|
223,923
|
|
|
|
62,991
|
|
Weighted average number of outstanding common shares
|
|
|
297,454,853
|
|
|
|
262,288,607
|
|
Weighted average number of common shares diluted
|
|
|
298,584,130
|
|
|
|
262,288,607
|
|
Non-GAAP
Basic earnings per common share - R$
|
|
|
0.7525
|
|
|
|
0.2402
|
|
Non-GAAP
Diluted earnings per common share - R$
|
|
|
0.7497
|
|
|
|
0.2402
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED
INTERIM OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
Three months ended
March 31, 2017
|
|
|
|
(In thousands R$)
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Profit before income taxes
|
|
|
163,000
|
|
|
|
82,177
|
|
Expenses (revenues) not affecting cash:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
18,007
|
|
|
|
10,762
|
|
Chargebacks
|
|
|
14,438
|
|
|
|
17,434
|
|
Accrual of provision for contingencies
|
|
|
725
|
|
|
|
272
|
|
Share based long term incentive plan (LTIP)
|
|
|
130,303
|
|
|
|
|
|
Provision of obsolescence loss
|
|
|
(1,686
|
)
|
|
|
|
|
Other financial cost, net
|
|
|
274
|
|
|
|
3,446
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Note receivables
|
|
|
(1,449,214
|
)
|
|
|
(229,126
|
)
|
Changes in receivables subject to early payment
|
|
|
(1,137,210
|
)
|
|
|
150,113
|
|
Changes in receivables not subject to early payment
|
|
|
(312,004
|
)
|
|
|
(379,239
|
)
|
Inventories
|
|
|
1,693
|
|
|
|
(13,365
|
)
|
Taxes recoverable
|
|
|
(2,700
|
)
|
|
|
(15,942
|
)
|
Other receivables
|
|
|
3,948
|
|
|
|
(351
|
)
|
Other payables
|
|
|
7,193
|
|
|
|
3,015
|
|
Payables to third parties
|
|
|
(105,272
|
)
|
|
|
138,716
|
|
Trade payables
|
|
|
25,633
|
|
|
|
31,011
|
|
Receivables from (payables to) related parties
|
|
|
129,643
|
|
|
|
(47,440
|
)
|
Salaries and social charges
|
|
|
(8,077
|
)
|
|
|
(3,710
|
)
|
Taxes and contributions
|
|
|
19,350
|
|
|
|
23,982
|
|
Provision for contingencies
|
|
|
(331
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,053,073
|
)
|
|
|
880
|
|
|
|
|
|
|
|
|
|
|
Income tax and social contribution paid
|
|
|
(34,806
|
)
|
|
|
(156
|
)
|
Interest income received
|
|
|
73,804
|
|
|
|
56,111
|
|
Interest paid
|
|
|
|
|
|
|
(9,174
|
)
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
|
|
(1,014,075
|
)
|
|
|
47,662
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(976
|
)
|
|
|
(52
|
)
|
Purchases and development of intangible assets
|
|
|
(29,695
|
)
|
|
|
(21,266
|
)
|
Redemption of financial investments
|
|
|
211,116
|
|
|
|
113,742
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY INVESTING ACTIVITIES
|
|
|
180,445
|
|
|
|
92,424
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Payment of borrowings
|
|
|
|
|
|
|
(199,480
|
)
|
Payment of derivative financial instruments
|
|
|
|
|
|
|
(5,831
|
)
|
Proceeds from offering of shares
|
|
|
3,444,875
|
|
|
|
|
|
Transactional costs
|
|
|
(147,972
|
)
|
|
|
|
|
Transaction with
non-controlling
interest
|
|
|
(4,650
|
)
|
|
|
|
|
Capital increase by
non-controlling
shareholders
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
|
3,312,253
|
|
|
|
(205,311
|
)
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
2,478,622
|
|
|
|
(65,225
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
66,767
|
|
|
|
79,969
|
|
Cash and cash equivalents at the end of the period
|
|
|
2,545,389
|
|
|
|
14,744
|
|
UNAUDITED CONDENSED CONSOLIDATED
INTERIM BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
|
December 31, 2017
|
|
|
|
(In thousands R$)
|
|
Cash and cash equivalentes
|
|
|
2,545,389
|
|
|
|
66,767
|
|
Financial investments
|
|
|
|
|
|
|
210,103
|
|
Note receivables
|
|
|
4,883,321
|
|
|
|
3,522,349
|
|
Receivables from related parties
|
|
|
909
|
|
|
|
124,723
|
|
Inventories
|
|
|
61,602
|
|
|
|
61,609
|
|
Taxes recoverable
|
|
|
18,008
|
|
|
|
14,446
|
|
Other receivables
|
|
|
18,834
|
|
|
|
27,956
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
7,528,063
|
|
|
|
4,027,953
|
|
|
|
|
|
|
|
|
|
|
Judicial deposits
|
|
|
1,198
|
|
|
|
872
|
|
Prepaid expenses
|
|
|
506
|
|
|
|
160
|
|
Deferred income tax and social contribution
|
|
|
63,822
|
|
|
|
37,015
|
|
Property and equipment
|
|
|
11,065
|
|
|
|
10,889
|
|
Intangible assets
|
|
|
190,638
|
|
|
|
158,868
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
assets
|
|
|
267,229
|
|
|
|
207,804
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
7,795,292
|
|
|
|
4,235,757
|
|
|
|
|
|
|
|
|
|
|
Payables to third parties
|
|
|
2,975,297
|
|
|
|
3,080,569
|
|
Trade payables
|
|
|
119,155
|
|
|
|
92,444
|
|
Payables to related parties
|
|
|
44,973
|
|
|
|
39,101
|
|
Salaries and social charges
|
|
|
26,192
|
|
|
|
34,269
|
|
Taxes and contributions
|
|
|
57,862
|
|
|
|
52,064
|
|
Provision for contingencies
|
|
|
5,213
|
|
|
|
4,648
|
|
Other payables
|
|
|
23,028
|
|
|
|
15,872
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,251,720
|
|
|
|
3,318,967
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax and social contribution
|
|
|
63,226
|
|
|
|
42,809
|
|
Other payables
|
|
|
3,624
|
|
|
|
3,590
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
liabilities
|
|
|
66,850
|
|
|
|
46,399
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
25
|
|
|
|
524,577
|
|
Legal reserve
|
|
|
|
|
|
|
30,216
|
|
Capital reserve
|
|
|
4,311,782
|
|
|
|
|
|
Equity valuation adjustments
|
|
|
(6,701
|
)
|
|
|
55
|
|
Profit retention reserve
|
|
|
148,378
|
|
|
|
312,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,453,484
|
|
|
|
866,895
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
23,238
|
|
|
|
3,496
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
4,476,722
|
|
|
|
870,391
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
7,795,292
|
|
|
|
4,235,757
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP MEASURES TO
NON-GAAP
MEASURES
|
|
|
|
|
|
|
Three Months Ended
March 31, 2018
|
|
|
|
(in millions of
reais
, except
amounts per share)
|
|
Total revenue and income
|
|
|
928.0
|
|
Less: Foreign exchange gain on IPO primary share proceeds
|
|
|
(89.8
|
)
|
|
|
|
|
|
Non-GAAP
total revenue and income (1)
|
|
|
838.2
|
|
|
|
|
|
|
Total expenses
|
|
|
(765.0
|
)
|
Less: Share-based long-term incentive plan (LTIP)
|
|
|
210.6
|
|
Less: Tax related to remittance of IPO primary share proceeds (IOF tax)
|
|
|
13.1
|
|
|
|
|
|
|
Non-GAAP
total expenses (2)
|
|
|
(541.3
|
)
|
|
|
|
|
|
Profit before taxes
|
|
|
163.0
|
|
Plus: Total
Non-GAAP
adjustments
|
|
|
133.9
|
|
|
|
|
|
|
Non-GAAP
profit before taxes (3)
|
|
|
296.9
|
|
|
|
|
|
|
Income tax and social contribution
|
|
|
(14.5
|
)
|
Less: Income tax and social contribution on
non-GAAP
adjustments
|
|
|
(69.5
|
)
|
|
|
|
|
|
Non-GAAP
deferred income tax (4)
|
|
|
(84.0
|
)
|
Net income
|
|
|
148.5
|
|
Plus: Total
Non-GAAP
adjustments
|
|
|
64.4
|
|
|
|
|
|
|
Non-GAAP
net income (5)
|
|
|
212.9
|
|
|
|
|
|
|
Basic earnings per common shareR$
|
|
|
0.4988
|
|
Diluted earnings per common shareR$
|
|
|
0.4969
|
|
|
|
|
|
|
Non-GAAP
basic earnings per common shareR$
(6)
|
|
|
0.7153
|
|
Non-GAAP
diluted earnings per common shareR$
(6)
|
|
|
0.7126
|
|
|
|
|
|
|
(1)
|
Non-GAAP
total revenue and income excludes a foreign exchange gain on our IPO primary proceeds in the amount of R$89.8 million in the three months ended March 31, 2018,
which relates to the impact of exchange rate variation on the conversion from U.S. dollars into Brazilian
reais
of the proceeds from our sale of new shares in the IPO. We exclude this foreign exchange variation from our
non-GAAP
measures primarily because it is unusual income. The foreign exchange gain on our IPO primary proceeds is included within Other financial income. Other financial income in the amount of R$116.4 million
is therefore adjusted by excluding the foreign exchange gain on our IPO primary proceeds, resulting in
Non-GAAP
Other financial income in the amount of R$26.6 million.
|
(2)
|
Non-GAAP
total expenses excludes:
|
|
(a)
|
stock-based compensation expenses in the total amount of R$210.6 million, consisting of expenses for equity awards under our LTIP. We exclude stock-based compensation expenses from our
non-GAAP
measures primarily because they are
non-cash
expenses, and the related employer payroll taxes depend on our stock price and the timing and size of exercises and
vesting of equity awards, over which management has limited to no control, and as such management does not believe these expenses correlate to the operation of our business. The largest portion of this expense amount was recognized upon the closing
of our IPO with the issuance of 1.8 million shares under our LTIP awards that vested on the IPO date. The total of stock-based compensation expenses is allocated between Cost of sales and services and Administrative expenses. Excluding the
stock-based compensation expenses, Cost of sales and services in the amount of R$444.8 million is adjusted by R$38.2 million resulting in a
Non-GAAP
Cost of sales and services of
R$406.5 million; and Administrative Expenses in the amount of R$219.0 million is adjusted by R$172.4 million resulting in
Non-GAAP
Administrative expenses of R$46.7 million.
|
|
(b)
|
tax related to remittance of IPO primary share proceeds (IOF tax) in the amount of R$13.1 million in the three months ended March 31, 2018, which represents the impact of Brazilian IOF tax (currency remittance
tax) payable when we remitted the proceeds from our sale of new shares in the IPO from the Cayman Islands to Brazil. We exclude this IOF tax on the remittance of IPO primary share proceeds from our
Non-GAAP
measures primarily because it is an unusual expense. The IOF tax is fully allocated to Financial expenses. Financial expenses in the amount of R$16.5 million is therefore adjusted by excluding the IOF tax, resulting in
Non-GAAP
Financial expenses in the amount of R$3.4 million.
|
(3)
|
Non-GAAP
profit before taxes is equal to the sum of the adjustments described in footnotes (1) and (2) above.
|
(4)
|
Non-GAAP
income tax and social contribution consists of income tax at the rate of 34% calculated on the
Non-GAAP
adjustments described in
footnotes (1) and (2) above, other than the foreign exchange gain on IPO primary share proceeds of R$89.8 million, which is not taxable, and the tax benefits related to other
Non-GAAP
adjustments.
|
(5)
|
Non-GAAP
net income is equal to the sum of the adjustments described in footnotes (1), (2) and (4) above.
|
(6)
|
Non-GAAP
basic earnings per common share and
Non-GAAP
diluted earnings per common share reflect the adjustments to
Non-GAAP
net income, which is allocated in full to Owners of the Company.
|
SIGNATURES
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.
Date: July 20, 2018
|
|
|
PagSeguro Digital Ltd.
|
|
|
By:
|
|
/s/ Eduardo Alcaro
|
Name:
|
|
Eduardo Alcaro
|
Title:
|
|
Chief Financial and Investor Relations Officer,
Chief Accounting Officer and Director
|
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