StoneCo Ltd (NASDAQ:STNE) stock plunges 30.80% (As on Nov 17, 10:44:34 AM UTC-4, Source: Google Finance) after the company posted mixed results for the third quarter of FY 21. Total annualized revenue in the quarter was R$5.9 billion, of which financial services represent approximately 72%14 while software solutions represent approximately 21%. In financial services, net addition of clients was 293,800 in the quarter, reaching a total of nearly 1.4 million active payment clients, led by a strong performance in our Micro+SMB (“MSMB”) business, which grew TPV by 81.3% year over year. The consolidated TPV reached R$75.0 billion, or R$73.9 billion excluding Coronavoucher, a 53.6% year over year growth, with record TPV addition (ex- Coronavoucher), both on a year over year and quarter over quarter basis. Consolidated software revenue increased from R$18.8 million in the third quarter of 2020 to R$314.8 million in the third quarter of 2021, mainly driven by the consolidation of Linx and a 182% growth in consolidated revenue from our existing software portfolio (excluding Linx). On a proforma basis for Linx acquisition, consolidated revenue grew 27.5% year over year. The number of clients using a software solution reached over 200,000 in the quarter. Linx’s consolidation, has added 262 million reais in revenue, and the growth of the existing business contributed positively to this growth and the lack of revenue from the credit product contributed negatively. The company’s business, excluding Linx and the credit product, grew revenue by over 55% year over year. The credit product, on the other hand, which contributed with 156 million reais revenue in the third quarter last year, didn’t contribute to the revenue this quarter because the company had temporarily paused new disbursements.
Moreover, net cash inflow from the legacy credit products in the third quarter was 483 million reais, which reduced the credit portfolio to approximately 1.6 billion reais from 2 billion reais in the previous quarter. The coverage ratio remained above 100%, and the legacy credit portfolio is performing as expected.
STNE in the third quarter of FY 21 has reported the adjusted loss per share of 78 cents, missing the analysts’ estimates for the adjusted earnings per share of 12 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $281.2 million in the third quarter of FY 21, beating the analysts’ estimates for revenue by 46.79%.
The company plans to initiate a testing phase in small scale with short-term loans between the fourth quarter of ’21 and the first quarter of ’22, with focus driven toward getting feedback from engineering and improvements of the operation.