Business Context and Reporting Period
Company: Inter & Co, Inc.
Filing Type: Form 6-K (Earnings Release)
Reporting Period: First Quarter ended March 31, 2025 (1Q25)
Business Overview: Inter operates a digital financial super app in Brazil, offering banking, spending, shopping, investments, insurance, and global services. The company reported record quarterly net income and continued expansion of its client ecosystem, reaching 37.7 million total clients and 21.6 million active clients.
Key Financial Metrics
| Metric | 1Q25 | 4Q24 | 1Q24 | YoY Change |
|---|---|---|---|---|
| Total Gross Revenue (R$ million) | 3,162 | 2,963 | 2,291 | +38.0% |
| Net Revenue (R$ million) | 1,838 | 1,844 | 1,401 | +31.2% |
| Net Income (Excl. Minority Interest) (R$ million) | 287 | 275 | 183 | +56.8% |
| ROE (Excl. Minority Interest) | 12.9% | 12.5% | 9.2% | +3.7 p.p. |
| Gross Loan Portfolio (R$ billion) | 42.6 | 41.2 | 32.1 | +32.5% |
| Funding (Deposits) (R$ billion) | 59.1 | 55.1 | 43.8 | +34.9% |
| Efficiency Ratio | 48.8% | 50.1% | 47.7% | +1.1 p.p. |
| Cost-to-Serve (CTS) (R$) | 13.1 | 14.0 | 12.4 | +6.2% |
| NPL > 90 Days | 4.1% | 4.2% | 4.8% | -0.8 p.p. |
| Basel Ratio | 14.7% | 15.2% | 20.3% | -5.6 p.p. |
Material Changes vs. Prior Period
- Profitability Surge: Net income excluding minority interest reached a record R$287 million, up 56.8% year-over-year (YoY), driven by a 30.6% increase in Earnings Before Tax (EBT).
- Revenue Growth: Total gross revenue grew 38% YoY to R$3.2 billion. Net interest income increased 37.3% YoY, while net fee revenue grew 16% YoY, impacted by seasonal trends and regulatory deferrals.
- Asset Quality Improvement: Non-Performing Loans (NPL) over 90 days decreased to 4.1% from 4.8% in 1Q24, attributed to enhanced underwriting and collection processes. Coverage ratio improved to 143%.
- Loan Portfolio Expansion: The gross loan portfolio grew 33% YoY, outpacing the Brazilian market. Notable growth occurred in FGTS (+43% YoY) and Home Equity (+45% YoY) segments.
- Client Base: Added 1 million net new active clients in the quarter, reaching 21.6 million active clients (+23.9% YoY). Total clients reached 37.7 million.
Guidance, Outlook, and Management Commentary
- Strategic Outlook: Management expressed confidence in robust growth prospects for 2025 despite a challenging macro scenario, aiming for a "landmark year" in their 60/30/30 journey.
- Efficiency Targets: The company remains focused on managing expenses to achieve a 30% efficiency ratio "north star," though the current ratio stands at 48.8%.
- Product Innovation: Continued rollout of AI tools (185 models at scale) to customize client experiences. New product launches include "Private Payroll" loans (reached R$197 million in 10 days) and expansion of the "Global Account" into Argentina via a partnership with Grupo Bind.
- Capital Management: The Basel ratio decreased to 14.7% due to credit portfolio growth. The company issued R$500 million in Subordinated Financial Bills in April 2025, expected to improve the Basel ratio by approximately 1 percentage point in 2Q25.
- Risks and Contingencies:
- Regulatory Impact: CMN Resolution No. 4966/2021 caused a deferral of credit-linked fee revenues, impacting Net ARPAC in 1Q25. Management expects this impact to dissipate in 2Q25.
- Macroeconomic Environment: Higher Selic rates increased the nominal cost of funding to 63.8% of CDI, though this remains industry-leading.
- Seasonality: Q1 is typically marked by lower liquidity and transaction volumes, affecting TPV and GMV metrics.
Investor Verification Checklist
- Regulatory Fee Deferral: Verify the timeline for the dissipation of the CMN Resolution No. 4966/2021 impact on fee revenues and Net ARPAC recovery in 2Q25.
- Capital Adequacy: Monitor the impact of the R$500 million subordinated debt issuance on the Basel ratio in the upcoming quarter to ensure it remains above regulatory minimums.
- Asset Quality Trends: Track the stability of NPL formation (currently 1.2%) and the convergence of Stage 3 formation metrics under new regulatory standards.
- Efficiency Ratio Trajectory: Assess the feasibility of reaching the 30% efficiency ratio target given the current 48.8% level and rising personnel/marketing expenses.
- International Expansion: Evaluate the execution and asset-light model of the new Argentina Global Account partnership with Grupo Bind.