On May 26th, PagSeguro Digital Ltd. (NYSE: PAGS) witnessed a sharp decline of nearly 14% in its share value following the release of its first-quarter earnings report. Although the company delivered better-than-expected profits, the revenue figures fell short of Wall Street’s projections.
The financial technology firm revealed a 6% increase in its net profit for the first quarter, reporting earnings of 370 million reais ($73.95 million). This exceeded analysts’ expectations of 344 million reais, thanks to robust payment processing revenue.
CEO Alexandre Magnani conveyed his satisfaction with the overall performance of the company, specifically highlighting the robust growth observed in payment processing revenues. This growth was primarily attributed to PagSeguro’s success in capturing a larger market share in key segments. He further emphasized the positive impact resulting from the repricing of payment processing services carried out in the previous year and the interest income derived from the company’s financial services.
However, despite the impressive profit figures, PagSeguro’s net revenue for the first quarter reached 3.75 billion reais, which fell slightly short of analysts’ estimated target of 3.84 billion reais. The reported revenue represented a 9% increase compared to the same period last year. The company acknowledged the need to enhance its revenue growth strategies to meet market expectations.
In terms of payment volume, PagSeguro’s total payment volume (TPV) for its payments arm reached 88.1 billion reais, marking a 10% increase compared to the first quarter of the previous year. This growth in TPV further reinforces the company’s ability to capture a larger share of the payment processing market.
On Friday, PAGS stock opened at $11.22, and after fluctuating within a range of $10.03 and $11.22, finally closed at $10.44. The traders have exchanged hands with a total of 12,819,482 shares, which is significantly higher compared to its average volume of 4.13M over the past 3 months. The market cap of PAGS stands at $3.93B.