StoneCo Ltd

Unless otherwise indicated or the context otherwise requires, all references in this annual report to “StoneCo” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to StoneCo Ltd., together with its consolidated subsidiaries, and Alpha-Logo Serviços de Informática S.A. (Tablet Cloud), Agilize Contabilidade Holdings Limited (“Agilize”), Dental Office S.A. (“Dental Office”), APP Sistemas S.A. (“APP”) and Delivery Much Tecnologia S.A. (“Delivery Much”) being entities on which we have a significant influence and minority interest in but do not consolidate.

The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. “Central Bank” refers to the Brazilian Central Bank (Banco Central do Brasil). References in the annual report to “real,” “reais” or “R$” refer to the Brazilian real, the official currency of Brazil and references to “U.S. dollar” “U.S. dollars” or “US$” refer to U.S. dollars, the official currency of the United States.

Financial Statements

We prepare our consolidated financial statements in accordance with the IFRS® Accounting Standards, as issued by the International Accounting Standards Board - IASB (“IFRS Accounting Standards”). We maintain our books and records in Brazilian reais. Unless otherwise noted, our financial information presented herein as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 is stated in reais, our functional and presentation currency. The financial information contained in this annual report includes our audited consolidated financial statements as of December 31, 2024 and 2023 and for each of the three years in the period ended December 31, 2024 together with the notes thereto. All references herein to “our financial statements” and “our audited consolidated financial statements” are to our consolidated financial statements.

The financial information should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and our audited consolidated financial statements.

Our fiscal year ends on December 31. References in this annual report to a fiscal year, such as “fiscal year 2024,” relate to our fiscal year ended on December 31 of that calendar year.

Financial Information in U.S. Dollars

Solely for the convenience of the reader, we have translated some of the real amounts included in this annual report from reais into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translated real amounts into U.S. dollars using a rate of R$6.1923 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2024 as reported by the Central Bank. See “—Selected financial data—Exchange Rates” for more detailed information regarding translation of reais into U.S. dollars and for historical exchange rates for the Brazilian real.

Selected financial data

You should read the following selected financial data together with “Item 5. Operating and Financial Review and Prospects” and our financial statements and the related notes appearing elsewhere in this annual report.

The summary statement of profit or loss data and statement of financial position data as of December 31, 2024 and 2023 and for each of the three years ended December 31, 2024, 2023 and 2022 have been derived from our audited consolidated financial statements prepared in accordance with IFRS Accounting Standards.

Exchange Rates

The Brazilian foreign exchange system allows the purchase and sale of foreign currency and the international transfer of reais by any person or legal entity, regardless of the amount, subject to certain regulatory procedures.

On December 31, 2020, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.1967, reflecting a depreciation of 22.4% in the real from December 31, 2019, being strongly affected by the COVID-19 pandemic. On December 31, 2021, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.5805, reflecting a depreciation of 6.9% in the real from December 31, 2020, which continued to be affected by the COVID-19 pandemic. On December 31, 2022, the real/U.S. dollar exchange rate reported by the Central Bank was R$5.2177, reflecting an appreciation of 7.0% in the real from December 31, 2021, mainly due to the high levels of interest rates in the country. On December 31, 2023, the real/U.S. dollar exchange rate reported by the Central Bank was R$4.8413, reflecting an appreciation of 7.8%, mainly due to the high levels of interest rates in the country. In 2024, the real experienced a significant devaluation against the U.S. dollar, influenced in part by the outcome of the U.S. presidential election which is expected to result in a stronger U.S. dollar relative to other currencies, as well as concerns surrounding the Brazilian economy and the federal government’s fiscal situation. On December 31, 2024, the real/U.S. dollar exchange rate reported by the Central Bank was R$6.1923, reflecting a depreciation of 21.8% in the real.

There can be no assurance that the real will not depreciate or appreciate further against the U.S. dollar. For further information regarding exchange rate variations, refer to “Item 3. Key Information— D. Risk Factors— Risks Relating to Our Financing Needs— We are exposed to fluctuations in foreign currency exchange rates.”

The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Brazilian reais per U.S. dollar. The average rate is calculated by using the average of reported exchange rates by the Central Bank on each business day during each annual or monthly period, as applicable. As of April 23, 2025, the exchange rate for the purchase of U.S. dollars as reported by the Central Bank was R$ 5.688 per US$1.00.

Business Segment Information

For the financial years ended December 31, 2024, 2023 and 2022, our reportable segments were comprised of: (i) financial services, (ii) software and (iii) Non-allocated.

Corporate Events

Investments in Software and other Companies

(a)Company merged into another entity of the Group.

(b)Closing date of the first step of the step acquisition.

Divestments in Software and other Companies

Since December, 2024, we no longer hold an equity stake in Neostore Desenvolvimento de Programas de Computador S.A. (“Neomode”). In January, 2022, Linx Sistemas acquired a 40.02% equity stake of Neomode. In April, 2024, we increased our equity stake in Neomode to 42.25% through the conversion of loans into shares. However, in December 2024, we sold our entire interest in Neomode, ceasing to be a shareholder in the company. Neomode offers a sales channel and white label commerce app platform with agnostic integrator to Enterprise Resource Planning (ERP), Point of Sale (POS), e-commerce and gateways with cloud-based solutions. The main objective is the development and supply of solutions that integrate online channels and physical stores in the omnichannel concept using its application and integrator.

Since February, 2024, we no longer hold an equity stake in PinPag. In January 2020, Linx Pay Meios de Pagamento Ltda. (“Linx Pay”) acquired 100% of the equity stake of Ametista Serviços Digitais Ltda. (“Ametista”), Diamante Serviços Digitais Ltda. (“Diamante”), Esmeralda Serviços Digitais Ltda. (“Esmeralda”) and Safira Serviços Digitais Ltda. (“Safira” and, jointly with Ametista, Diamante and Esmeralda, “PinPag”). In February, 2024, we sold all our interest in PinPag and ceased to be a shareholder in such company. PinPag is a company focused in financial solutions in electronic means of payment.

Since December 2023, we no longer hold an equity stake in Creditinfo Caribbean. In November 2020, we acquired a 53.05% interest in EveryData Group LTD. SEZC (formerly known as StoneCo CI Ltd), EveryData Jamaica Limited (formerly known as Creditinfo Jamaica Ltd), EveryData (Guyana) Inc (formerly known as Creditinfo Guyana Inc) and EveryData (Barbados) Limited (formerly known as Creditadvice Barbados Ltd) (all together described as “Creditinfo Caribbean”). In October 2022, we lost control of Creditinfo Caribbean after a capital contribution by a new investor (after such investment, our stake was diluted to 47.75% of the company). In December 2023, we sold all our remaining interest in Creditinfo Caribbean and ceased to be a shareholder in such company. Creditinfo Caribbean is a private credit bureaus company, having as main products credit reports, credit scores, monitoring, international business reports and a suite of value-added services, based in the Cayman Islands, Jamaica, Guyana and Barbados, respectively.

Since June 2023, we no longer hold an equity stake in Cappta S.A. (“Cappta”). Up to June 30, 2023, when we owned 69.58%, Cappta carried out the activities of (i) technology solutions for payments in installments, and (ii) technology solutions for electronic transfers. In June 2023, a reorganization of the businesses was carried by Cappta (“Cappta Reorganization”). As a result of the Cappta Reorganization, Cappta remained solely with the assets related to the activities of technology solutions for payments in installments, and Stef S.A. (a company incorporated under the Cappta Reorganization) remained with the assets related to the activities of technology solutions for electronic transfers. Subsequently to the Cappta Reorganization, we sold our stake in Cappta, and acquired 100% of Stef S.A.

Since February 2023, we no longer hold an equity stake in Banco Inter S.A. (“Banco Inter”). For additional information regarding our transaction with Banco Inter, please refer to “Item 5. Operating and Financial Review and Prospects — A. Operating Results — Transaction with Banco Inter”.

New financial services license

On January 5, 2024, we received from the Central Bank a license to operate a financial services company, Stone Sociedade de Crédito, Financiamento e Investimento S.A. (“Stone SCFI”). This license enables Stone SCFI to develop and offer a range of new products, such as time deposits to improve and diversify our funding sources.

Capital markets events

Equity Capital Market Events

September 2023

On September 21, 2023, our Board of Directors approved a program under which the Company could repurchase up to R$300,000 in outstanding Class A common shares. This program was implemented shortly after the board’s resolution. By November 9, 2023, the Company had utilized R$292,745 of the authorized amount for share repurchases.

November 2023

Following the completion of the September 2023 program, the Board of Directors approved an additional share repurchase program. This program authorized the repurchase of up to R$1 billion in Class A common shares. As of September 30, 2024, the Company had repurchased R$979,980 worth of shares under this program, nearly exhausting the authorized amount.

November 2024

In November 2024, our Board of Directors approved a new share repurchase program authorizing the repurchase of up to R$2 billion in outstanding Class A common shares. This program became effective immediately following the board’s resolution. As of March 31, 2025, the Company had repurchased R$1.4 billion under such program. See “Item 16E. Purchases of equity securities by the issuer and affiliated purchasers”.

Debt Capital Market Events

In July, 2024, the Company conducted a tender offer, repurchasing 58.9% of its outstanding notes due 2028. The notes were originally issued on June 11, 2021, raising US$500 million. The notes mature on June 16, 2028 and have an interest coupon of 3.95%, payable semiannually in December and June each year. We used the vast majority of the proceeds from this inaugural bonds to finance our investment in Banco Inter in 2021. See “Item 4. Information of the Company—B. Business Overview—Our Growth Strategies—Selectively Pursue Acquisitions” and “Item 5. Operating and Financial Review and Prospects—B. Liquidity and capital resources—Issuance of Inaugural Bonds”.

Following the authorization granted by the Central Bank to start Stone SCFI operations in 2024, we started issuing financial bills and time deposits in the ordinary course of business. Time deposits are the first instrument of interest bearing deposits issued, with the certificates being held by multiple counterparties and maturities up to 24 months. The principal and interest of both types of issuances are mainly paid at maturity indexed to CDI Rate. Time deposits distributed directly through our own platform can be immediately redeemed at any time by our clients.

On December 18, 2023, we announced a US$467.5 million revolving securitization facility with the United States International Development Finance Corporation (“DFC”), with a seven-year term. The facility aims to support us in offering receivables prepayment to micro, small and medium-sized businesses (MSMBs) and improving cash flow and financial flexibility. StoneCo holds 6.5% of subordinated quotas in ACR I Fundo de Investimento em Direitos Creditórios (“FIDC ACR I”), the Brazilian facility linked to this transaction. Using funds from DFC, FIDC ACR I issued quotas in exchange for a R$2,326.0 million contribution. FIDC ACR I has a seven-year maturity and pays a 12.75% fixed-rate semi-annual coupon in R$.

On November 8, 2023 our subsidiary MNLT S.A. (“MNLT”) concluded its first corporate issuance of debentures in the Brazilian capital markets, placing R$1 billion with a three year maturity at CDI + 1.75% payable annually. The debentures are guaranteed by both Stone Instituição de Pagamento S.A. (“Stone IP”) and by us.

New Incentive Plan Pool

In May 2022, our Board of Directors approved an amendment and restatement of our Long-Term Incentive Plan (“LTIP”) for the purpose of the adoption of a new equity-based incentive plan pool, comprised of 19.2 million shares to be granted in the form of restricted stock units (“RSUs”) and performance stock units (“PSUs”) under the LTIP. At the creation of the pool, a portion of it, 5.8 million shares, was approved for the grant of non-recurring long-term incentive plan awards, vesting of which is linked to the achievement of our annual goals and the performance of our stock price, of which 30% has a vesting period of 3 years and 70% of 5 years if our goals are met. Each vesting period has a stock price trigger at multiples of our stock price, which aligns the incentive with significant shareholder returns. Another portion of the pool, 1.7 million shares, was approved for the grant of regular annual equity incentive compensation. The remaining portion of the pool, 11.6 million shares, is being used at our discretion over time, either for recurring annual compensation or related to the non-recurring long-term incentive plan mentioned above. In section “Item 6. Directors, Senior Management and Employees—B. Compensation”, we will show details about the consumption of the pool.

In 2024, we made modifications to approximately 3.9 million PSU awards. The modification introduces alternative conditions as market performance for some PSU awards, and also adds an internal financial metric to all of them. This change increased the fair value of each award, as assessed by the Group at the modification date, resulting in incremental fair value. The modification also extended the vesting periods, adding an average of one year to the PSU awards’ vesting timeline. For more information, see note 20.4.1 to our Consolidated Financial Statements.

Board Changes

Throughout 2024, we made certain changes to the composition of our Board of Directors to support the next stage of our growth, as detailed below:

•In April 2024, André Street, Conrado Engel and Patricia Verderesi Schindler finished their respective terms as members of our Board of Directors and each elected not to seek reelection at our 2024 annual general meeting.

•Also in April 2024, at our annual general meeting, José Alexandre Scheinkman was elected to our Board of Directors. Following the annual general meeting, Mauricio Luchetti was appointed the new Chairperson of the Board of Directors and Gilberto Caldart became the Vice-Chairperson of our Board of Directors.

•In September 2024, Antonio Silveira joined our Board of Directors as an interim member.

With the exception of Mr. Thiago do Santos Piau, who informed us of his decision not to seek reelection, all members of our Board elected at the annual general meeting held on April 23, 2024 were reelected at the Company’s annual general meeting held on April 23, 2025 (“2025 AGM”). In addition, Mr. Antonio Silveira, who was appointed as an interim director in September 2024, and Mr. Luis Henrique Cals de Beauclair Guimarães, were elected at our 2025 AGM.

Organizational Changes on Management

In February 2025, the Board approved a reduction of the number officers of the Company to better align with our corporate governance. As a result, the following officers have resigned from their position as officers of StoneCo Ltd., but remained with the group in other positions, including as officers, employees, advisors and/or directors of the Company or the Company’s affiliated entities:

•Marcus Felipe Montenegro Carvalho da Fontoura resigned from the position of Chief Technology Officer.

•Maria Carolina Sanchez da Costa resigned from the position of Chief Impact and Sustainability Officer.

•Victor Vieira Lino resigned from the position of Chief Client Officer of Micro Merchants Business.

•Sandro de Oliveira Bassili resigned from the position of Chief Operating Officer of Software.

•Vinicius do Nascimento Carrasco resigned from the position of Chief Economist and Regulatory Affairs Officer.

Also in February 2025, the Board appointed Raúl Pierre Renteria as Chief Technology Officer of the Company and changed the title of the position held by Mateus Costa Biselli from “Chief Client Officer of Small and Medium Merchant Business” to “Chief Growth Officer”.

As a result of the changes mentioned above and considering the resignation in June 2024 of Mr. João Lourenço Vivan Bernartt from the position of Chief Product and Innovation Officer, the current officers of the Company are those indicated in section “Item 6. Directors, Senior Management and Employees — A. Directors and Senior Management — Executive Officers”.

Change of Control of the Company

In June 2022, following a series of governance enhancements, we submitted to the Central Bank a technical change of control request amid a corporate restructuring involving our founder shareholders. As part of this restructuring, Eduardo Pontes would leave HR Holdings, LLC (“HR Holdings”) and consequently convert his original super voting Class B common shares into Class A common shares. As a result, our two co-founders would collectively and individually have less than 50% of the voting power.

On November 29, 2022, the Central Bank approved the Company’s change of control through a corporate restructuring involving the conversion of Mr. Eduardo Pontes interests in Company’s Class B super-voting shares from HR Holdings (which were held indirectly through holding companies) into Class A common shares directly owned by his family controlled entities (“Corporate Restructuring”). Though one of our founders, André Street, remained a reference shareholder, the Corporate Restructuring resulted in a decrease in the concentration of votes held by our founding shareholders and, consequentially, in no single shareholder having more than 50% of our voting power.

As a result of the Corporate Restructuring, HR Holdings became the owner of approximately 34% of our voting power, as of December 31, 2024. HR Holdings and Cakubran Holdings Ltd.’s (“Cakubran”) parent company is VCK Investment Fund Limited SAC A (“VCK A”), whose primary investor is our co-founder, André Street.

On April 28, 2023, in connection with the Corporate Restructuring, our founding shareholders executed an irrevocable waiver to formally waive certain rights, provided under our amended and restated memorandum and articles of association adopted by special resolution passed on October 11, 2018 and the shareholders agreement among us and the founder shareholders dated as of October 29, 2018 (“Shareholders Agreement”), which they had already agreed and committed not to exercise since November 29, 2022. See “Item 7. Major Shareholders and Related Party Transaction - A. Major Shareholders - Shareholders Agreement” and “Item 10. Additional Information—B. Memorandum and articles of association” for information regarding our Articles of Association and the waiver mentioned above.

Special Note Regarding Non-IFRS Financial Measures

This annual report presents our adjusted net income (loss) for the convenience of investors. Adjusted net income (loss) is a non-IFRS financial measure. Generally, a non-IFRS financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS Accounting Standards. Adjusted net income (loss), however, should be considered in addition to, and not as a substitute for or superior to, profit (loss), or other measures of the financial performance prepared in accordance with IFRS Accounting Standards.

Adjusted net income (loss) is prepared and presented to eliminate the effect of items from profit (loss) that we do not consider indicative of our continuing business performance within the period presented. We define adjusted net income (loss) as profit (loss) for the period, adjusted for (1) amortization of fair value adjustments related to acquisitions, (2) impairment charges (and reversal of impairment charges), (3) unusual income and expenses, and (4) tax effects of the foregoing adjustments, as described in note (3) to “Presentation of Financial and Other Information—Selected financial data.” Note that as from the second quarter of 2022 and following the partial sale of our stake in Banco Inter, we have stopped adjusting the financial expenses related to our bond in our adjusted numbers. Also, starting in 2023, we decided to stop adjusting the expenses related to share-based expenses in our adjusted numbers. Therefore, in some of the tables of this document, we have made these adjustments retrospectively, as will be noted in the footnotes.

Adjusted net income (loss) is presented because our management believes that this non-IFRS financial measure can provide useful information to investors, securities analysts and the public in their review of our operating and financial performance, although it is not calculated in accordance with IFRS Accounting Standards or any other generally accepted accounting principles and should not be considered as a measure of performance in isolation. We believe adjusted net income (loss) is useful to evaluate our operating and financial performance for the following reasons:

•Adjusted net income (loss) is used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company and from period to period, depending on their accounting and tax methods, the book value of their assets and the method by which their assets were acquired.

•Impairment charges are adjusted to our results since it provides a clearer representation of our financial performance by excluding non-recurring and non-cash charges, ensuring a more accurate reflection of our operational profitability and underlying business trends.

•Amortization of the fair value adjustment relating to acquisitions can vary substantially from company to company and from period to period depending upon the applicable financing and accounting methods, the fair value and average expected life of the acquired intangible assets, the capital structure and the method by which the intangible assets were acquired and, as such, we do not believe that these adjustments are reflective of our core operating performance.

•Other one-time charges that are not reflective of our core operating performance, which include the fair value adjustment related to associates call option, earn-out and earn-out interests related to acquisitions and gains/losses in the divestment of assets.

We use adjusted net income (loss) as a key profitability measure to assess the performance of our business. We believe that adjusted net income (loss) should therefore be made available to investors, securities analysts and other interested parties to assist in their assessment of the performance of our business.

Adjusted net income (loss) is not a substitute for net income or loss for the period, which is the IFRS Accounting Standards measure of earnings. Additionally, our calculation of adjusted net income (loss) may be different from the calculation used by other companies, including our competitors in the payments processing industry, because other companies may not calculate these measures in the same manner as we do, and therefore, our measure may not be comparable to those of other companies. Additionally, this measure is not intended to be a measure of cash available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. For a reconciliation of our adjusted net income (loss), see “Presentation of Financial and Other Information—Selected financial data”. You are encouraged to evaluate our adjustments and the reasons we consider them appropriate.

Market Share and Other Information

This annual report contains data related to economic conditions in the market in which we operate. The information contained in this annual report concerning economic conditions is based on publicly available information from third-party sources that we believe to be reliable. Market data and certain industry forecast data used in this annual report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission (“SEC”) website) and industry publications. We obtained the information included in this annual report relating to the Brazilian internet, payment solutions and e-commerce markets, and more broadly, the industry in which we operate, as well as the estimates concerning market shares, through internal research, public information and publications on the industry prepared by official public sources, such as (1) the Brazilian Association of Credit Card and Service Companies (Associação Brasileira das Empresas de Cartões de Crédito e Serviços - ABECS), (2) the Central Bank, (3) the Brazilian Federation of Banks (Federação Brasileira de Bancos - FEBRABAN), (4) the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística - IBGE), (5) Reclame Aqui, among others.

Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as if they are reliable, neither we, the selling shareholders, the underwriters, nor their respective agents have independently verified it. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. Please note that from time to time, such sources can review numbers already reported, which can affect the comparability of this annual report to previous reports. In addition, the data that we compile internally and our estimates have not been verified by an independent source. Except as disclosed in this annual report, none of the publications, reports or other published industry sources referred to in this annual report were commissioned by us or prepared at our request. Except as disclosed in this annual report, we have not sought or obtained the consent of any of these sources to include such market data in this annual report.

Rounding

We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.