StoneCo's Pix Deposits Cut Funding Costs, Aiding Profitability Amid Persistent Challenges

What happened

StoneCo is leveraging Pix-driven deposit growth to shift cash sweeps to time deposits, lowering funding costs as noted in a recent Zacks article. The DeepValue report highlights Pix adoption as a tailwind for digitization but warns it pressures take rates due to its low-cost A2A model, creating a mixed impact. This deposit surge directly enhances net interest margins, supporting improved profitability in line with 1H25 positive earnings trends. However, the report cautions that macro sensitivity, software impairment overhangs, and intense competition from rivals like Mercado Pago remain significant offsets. Overall, this operational efficiency is a positive step, yet it must be sustained against ongoing pricing and regulatory headwinds.

Implication

Lower funding costs from Pix deposits improve net interest margins, providing a buffer against the take-rate compression that has weighed on profitability. This supports the report's emphasis on active capital allocation, such as buybacks, by potentially enhancing cash generation. Investors should verify if this deposit growth is durable and translates into consistent free cash flow, given historical volatility from impairments and macro factors. The premium valuation versus peers like PagSeguro demands continued success in cross-selling to Linx clients and software monetization. Ultimately, while this development aids operational momentum, it doesn't eliminate the need for vigilant oversight of competitive and regulatory pressures.

Thesis delta

The news confirms Pix's role in reducing funding costs, reinforcing the bullish aspect of digitization and supporting the report's constructive bias on near-term profitability. However, it doesn't address core risks like take-rate compression or software impairment, so the thesis shifts only slightly towards improved operational efficiency. The overall stance remains cautiously optimistic, with profitability gains contingent on sustained execution against persistent headwinds.