StoneCo Ltd (NASDAQ:STNE) stock fell 10.14% (As on May 10, 11:25:47 AM UTC-4, Source: Google Finance) after the company posted lower than expected result for the first quarter of FY 24. Adjusted EBITDA in 1Q24 was R$1,512.0 million, an increase of 20.8% year over year and a decrease of 6.6% quarter over quarter. Adjusted EBITDA Margin decreased sequentially from 49.8% to 49.0%, mainly due to lower seasonal revenues and to the change in our internal accounting methodology related to membership fees, combined with higher selling expenses as percentage of revenues. These effects were partially compensated by lower other operating expenses and administrative expenses as percentage of revenues. djusted EBT in 1Q24 was R$567.6 million, up 75.2% year over year, with adjusted EBT margin increasing 6.5 percentage points, to 18.4%. Quarter over quarter, Adjusted EBT was down 11.1% with adjusted EBT margin decreasing 1.2 percentage points. The sequential margin decrease is attributed to the same factors abovementioned for Adjusted EBITDA margin. Adjusted Net Income in 1Q24 was R$450.4 million, 90.4% higher year over year, with adjusted net margin of 14.6%. This compares with R$563.8 million and a margin of 17.4% in 4Q23. The quarter over quarter margin decrease was driven by the same factors that impacted Adjusted EBT margin combined with a more normalized effective tax rate. Adjusted Net Cash position was R$5,139.8 million in 1Q24, increasing 28.9% year over year or 1.7% quarter over quarter. The sequential increase of R$86.5 million was mainly driven by cash generation from the operations with the main outflows being from capex and loans.

Moreover, Consolidated TPV including PIX P2M transactions grew 17.9% year over year to R$114.3 billion in 1Q24, mostly attributed to growth in the MSMB segment’s TPV, with an 18.4% year over year growth in TPV and a 147.7% increase in PIX P2M volumes. These effects were partially offset by a 15.5% decrease in Key Accounts’ TPV. Total Payments Active Client base surpassed 3.7 million, representing a total quarterly net addition of 198,500 active clients.

STNE in the first quarter of FY 24 has reported the adjusted earnings per share of $1.42, missing the analysts’ estimates for the adjusted earnings per share of $1.44. The company had reported the adjusted revenue growth of 13.8 percent to $3.08 billion in the first quarter of FY 24, missing the analysts’ estimates for revenue of $3.1 billion. This was primarily driven by a 16.0% increase in financial services revenues, mainly as a result of active client base growth and higher monetization from clients in the MSMB segment.