##Company Overview

XP Inc. is a leading tech-enabled financial services platform in Brazil, offering a comprehensive suite of investment, banking, and wealth management services to retail and institutional clients. Founded in 2001 and headquartered in Grand Cayman, Cayman Islands, XP has grown into one of Brazil's most prominent financial services companies. It operates through technological platforms for investments, financial services, and education, alongside media and content platforms such as XP, Rico, Clear, Infomoney, XPeed, and IM+. As a Brazilian investment management company, XP provides access to a wide array of products including fixed income, equities, investment funds, private pension plans, wealth management, and other financial services. The firm's offerings cater to retail clients, high-net-worth individuals, international clients, and corporate/institutional clients, providing access to over 800 investment products through its open financial product platform.

Business Model and Services

XP Inc. operates a dual-pronged approach:

Core Platform Operations

The company's primary engine is the XP Platform, an open product ecosystem that grants clients access to a vast selection of market investment products. This includes:

- Securities: Brokerage services for equities and other securities.

- Fixed Income: A broad range of fixed-income instruments.

- Investment Funds: Mutual funds, hedge funds, and private equity funds.

- Derivatives & Synthetics: Access to complex financial instruments.

- Credit Products: Credit cards, loan operations, and collateralized credit products.

- Pension & Insurance: Private pension plans, social security funds, and life/travel insurance.

- Other Investments: Real estate funds, equity and debt capital markets solutions.

- Wealth Management: Comprehensive services tailored for high-net-worth clients.

Service Portfolio

XP Inc. provides a diversified range of services designed for different client segments:

- Retail Services: Securities brokerage services catering to individual investors.

- Institutional Services: Brokerage and issuer services for institutional and corporate clients.

- Asset Management: Management of mutual funds (focusing on stocks and macro strategies) distributed to both retail and institutional clients, as well as bespoke funds and managed portfolios for high-net-worth retail clients.

- Educational Services: Development and distribution of financial education courses and events, available both online and in person, primarily for retail clients.

Financial Performance

Q2 2025 Results

XP Inc. demonstrated strong financial performance in the second quarter of 2025, showcasing significant growth and profitability.

Key Financial Metrics (Q2 2025):

• Net Income: Reached a record high of R$1.3 billion, an 18% year-over-year increase.

• Earnings Per Share (EPS): R$2.46, exceeding consensus estimates of R$2.35 per share.

• Gross Revenue: BRL 4.7 billion, reflecting 4% growth year-over-year.

• Return on Equity (ROE): 24.4%, an increase of 230 basis points year-over-year.

• Net Income Margin: Achieved a record net income margin of 29.7%, a 320-basis-point expansion year-over-year.

Market Capitalization and Valuation

As of September 2025, XP Inc. holds a market capitalization of $9.31 billion USD. This valuation places XP Inc. within the large capitalization category, typically defined for companies with market capitalizations ranging between $10 billion and $200 billion USD.

Client Assets and Growth Metrics

Client Assets under XP's purview totaled R$1.4 trillion in Q2 2025, marking a substantial 14% increase year-over-year and a 3% rise quarter-over-quarter. This growth was primarily fueled by R$96 billion in net inflows and R$72 billion from market appreciation. The combined total of client assets, assets under management (AuM), and assets under custody reached an impressive R$1.9 trillion, representing a healthy 17% year-over-year growth.

Strategic Initiatives and Business Transformation

XP Inc. is actively engaged in strategic initiatives to enhance its market position and diversify its revenue streams.

Distribution Model Evolution

XP has successfully evolved its distribution model, shifting from a predominantly Independent Financial Adviser (IFA)-centric approach to a more diversified strategy incorporating Registered Investment Advisers (RIAs) and internal advisers. In Q2 2025, over 50% of new asset inflows originated from these newer channels, a significant transformation compared to its 2021 reliance primarily on IFAs.

Fee-Based Services Expansion

The strategic adoption of the RIA model aligns with the global trend towards fee-based services. Currently, fee-based services account for 5% of XP's total client assets. Management projects this figure to grow to 7%-8% in the coming years, promising a more predictable, recurring revenue stream and an increased wallet share per client.

Product Diversification

XP continues to enrich its ecosystem by introducing new verticals and expanding its product offerings. Recent additions, such as global accounts and consortiums, have significantly contributed to new product revenues, which experienced a remarkable 146% year-over-year growth.

Capital Management and Returns

XP Inc. maintains a robust capital management strategy focused on shareholder returns and regulatory compliance.

Share Buyback Program

In the first half of 2025, XP actively executed its share repurchase program, totaling R$915 million. The company's R$1 billion share buyback program remains ongoing as part of its capital distribution plan. This initiative is designed to align with its guidance target for the BIS Ratio, aiming to operate the business between 16% and 19% in 2026.

Capital Ratios

XP maintains strong capital ratios, crucial for its operations and future growth. The company's Common Equity Tier 1 (CET1) ratio stands at a comfortable 18.5%, which is well above the Brazilian banking sector average of 12%. This provides substantial flexibility for expansion and shareholder returns. The BIS Ratio was 20.1% in Q2 2025, an increase of 115 basis points quarter-over-quarter and a decrease of 38 basis points year-over-year.

XP Inc. stands as Brazil's leading technology-driven financial services platform, expertly combining innovative digital solutions with comprehensive investment offerings. The company's strong financial performance, diversified business model, and strategic focus on expanding fee-based services position it as a key and evolving player in Brazil's dynamic financial services landscape.

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