XP Inc. - Class A (NASDAQ:XP) Reports Mixed Q2 2025 Earnings Amid Revenue Miss and Strong Net Income Growth

XP Inc. - Class A (NASDAQ:XP) reported its second-quarter 2025 financial results, delivering mixed performance relative to analyst expectations. The Brazilian financial services platform posted revenue of R$4.27 billion, falling short of the consensus estimate of R$4.67 billion. Earnings per share (EPS) came in at R$2.34, slightly below the projected R$2.42.

Market Reaction

Following the earnings release, XP's stock saw a modest decline in after-hours trading, dropping 0.57%, reflecting investor caution amid the revenue miss. Over the past month, shares have risen 3.18%, suggesting some optimism ahead of the report, but the muted post-earnings movement indicates a wait-and-see approach as investors digest the results.

Key Financial Highlights

• Net Income Growth: Net income reached R$1.32 billion, up 18% year-over-year (YoY) and 7% quarter-over-quarter (QoQ).
• Gross Revenue: Increased 4% YoY to R$4.67 billion, driven by retail segment growth (+9% YoY).
• Client Assets: Total client assets grew 14% YoY to R$1.37 trillion, supported by net inflows and market appreciation.
• Credit Portfolio Expansion: Credit portfolio surged 24% YoY to R$23.9 billion, with 72% collateralized by investments.
• Insurance Growth: Gross written premiums jumped 45% YoY, reflecting strong demand for insurance products.

Segment Performance

• Retail Revenue: Increased 9% YoY to R$3.58 billion, led by fixed income (+20%) and other retail services (+31%).
• Institutional & Corporate Services: Institutional revenue was flat YoY, while corporate & issuer services declined 13% YoY, partly due to lower issuance activity.

Efficiency & Profitability

• EBT Margin: Declined to 29.6% (from 32.8% in Q2 2024), impacted by higher operating expenses.
• Return on Tangible Equity (ROTE): Improved to 30.1%, up 283 basis points YoY, demonstrating strong capital efficiency.

Outlook & Analyst Expectations

While XP did not provide explicit forward guidance, analysts expect Q3 2025 revenue of R$2.48 billion and full-year revenue of R$9.70 billion. The company’s ability to sustain growth in retail and credit segments will be key to meeting these targets.

Conclusion

XP’s Q2 results reflect solid underlying growth in client assets and profitability, though revenue fell short of expectations. The market’s tepid reaction suggests investors are weighing near-term execution against long-term potential in Brazil’s expanding financial services market.

For more detailed earnings estimates and historical performance, visit XP’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.