PICS (NASDAQ:PICS) reported first-quarter 2026 results that came in above management’s guidance across its key operating and profitability metrics, with executives emphasizing growth in credit, improving revenue diversification and continued discipline around asset quality.
Andre Cazotto, PicPay’s Strategy, M&A, and Investor Relations Officer, said the company’s total credit portfolio reached BRL 28 billion, 5.8% above guidance of BRL 26.5 billion. Managerial revenues, which exclude derivative revenues and hedge accounting effects, were BRL 3.2 billion, while net interest income reached BRL 1.7 billion. IFRS net income came in at BRL 152 million, 8.4% above the company’s BRL 140 million guidance, and adjusted net income was BRL 169 million, 9.3% above guidance.
Revenue Mix Shifts Toward Lower-Risk Streams
PicPay’s net revenues reached BRL 3.5 billion, up 17% year over year and 17% sequentially. Excluding derivatives and hedge accounting, managerial revenues rose 60% year over year and 9% from the fourth quarter. Average revenue per active client increased 55% year over year to BRL 80.7.
Chedid highlighted the company’s changing revenue composition, saying only 31% of revenue is now driven by unsecured credit. Secured credit represented 23% of net revenues, fees and commissions contributed 25%, and float plus hedge accounting accounted for 21%. He said 69% of revenues are now derived from “no or low credit risk streams,” up from 63% a year earlier.
Secured credit revenues were BRL 820 million, up 272% from the prior year and 41% sequentially, driven by payroll loans. Unsecured credit revenues reached BRL 1.1 billion, up 44% year over year and 10% from the fourth quarter. Non-credit revenues were BRL 1.6 billion, up 47% year over year and 11% sequentially.
Credit Portfolio Expands as Payroll Loans Gain Traction
The total credit portfolio grew 116% year over year and 17% sequentially to BRL 28 billion. Chedid said consumer loans origination reached BRL 4.5 billion, more than doubling from a year earlier, while PicPay Card TPV rose 41% year over year to BRL 17.4 billion.
Danilo Caffaro, Vice President of Consumer Banking, said PicPay continued gaining market share across several credit products. He said the company reached 4.93% market share in private payroll loans, up from 0.2%, and 2.76% share in personal loans, up from 2%. Credit card TPV market share reached 1.53%, while credit card portfolio share was 1.08%.
Caffaro said the consumer portfolio reached BRL 26.1 billion in the quarter, representing BRL 3.6 billion of growth from the fourth quarter after a one-off public payroll portfolio sale. He said 91% of portfolio growth came from lower-risk products and more mature cohorts.
On private payroll loans, Caffaro said first payment defaults have improved from early cohorts and are stable at around 9% across recent cohorts. He said the company continues to see “very healthy unit economics” in private payroll loans, including lifetime net interest margins around 30% and lifetime ROEs consistently above 100%.
Management Addresses Asset Quality Questions
Chief Financial Officer Rodrigo Couto said PicPay’s cost of risk remained stable at 3.7%, while total portfolio coverage increased to 13.9%. For the second quarter, the company expects cost of risk between 3.7% and 3.9%.
During the question-and-answer session, analysts focused on rising 90-day nonperforming loans. Couto said NPL ratios are based on days past due and are highly sensitive to write-off policies, making comparisons difficult. He said PicPay’s write-off policy is 360 days for both cards and loans.
Couto said management expects NPL ratios to continue rising as the portfolio matures and eventually settle in the low teens for the total portfolio. He said PicPay manages credit performance through cost of risk, loss absorption, stage formation and coverage, rather than relying solely on NPL ratios.
Chedid said the company is not focused on “simply minimizing NPLs at any cost,” but instead on risk-adjusted profitability. He said PicPay’s framework for riskier products involves higher spreads, shorter duration and lower leverage relative to income. He also said the company expects any broader market deterioration in credit quality to be gradual rather than systemic.
AI, Funding and Strategic Initiatives
Couto said operating leverage improved during the quarter, with the company’s efficiency ratio improving by three percentage points compared with the fourth quarter. He said artificial intelligence is already affecting the business, noting that headcount has been flat since October 2025 and that a projected 10% increase during 2026 will not materialize.
Caffaro said PicPay has been using AI and large language models since early 2023, initially in customer service, and now across customer service, credit, engineering and marketing. Chedid said the company avoided hiring an additional 3,000 customer service representatives over the past two years because of productivity improvements.
Management also highlighted several strategic developments:
- PicPay launched “Skip Purchases,” allowing cardholders to pause a monthly payment without penalties.
- New small and medium business account openings increased to 80,000 per month in the first quarter from 60,000 per month in the fourth quarter.
- A supply chain finance product generated BRL 693 million in origination in its first quarter.
- The company announced a two-way distribution partnership with TIM, under which PicPay will offer TIM telecom plans in its app and TIM will offer PicPay accounts and credit products.
- Brazil’s antitrust agency CADE approved PicPay’s acquisition of Cover without restrictions; the company is awaiting final approvals from SUSEP and the central bank.
On funding, Couto said PicPay’s funding base grew 8% quarter over quarter, while cost of funding remained largely flat at about 94% of CDI. The company also raised BRL 1.25 billion through its second FGTS structure. After incorporating approximately BRL 2 billion in IPO proceeds, PicPay’s Common Equity Tier 1 ratio reached 16.7%.
Second-Quarter Guidance Calls for Sequential Growth
For the second quarter of 2026, excluding any contribution from Cover, PicPay expects its total credit portfolio to reach approximately BRL 31 billion, representing 11% sequential growth. Managerial revenues are expected to reach about BRL 3.6 billion, up 13% from the first quarter, and net interest income is expected to reach approximately BRL 1.9 billion.
The company guided for gross profit of about BRL 1.15 billion, IFRS earnings before taxes of approximately BRL 265 million and adjusted earnings before taxes of about BRL 285 million. IFRS net income is expected to reach approximately BRL 235 million, while adjusted net income is expected to reach about BRL 245 million.
Chedid closed the call by saying the company has “high conviction” in its ability to deliver full-year results, while maintaining its strategy of expanding credit within its risk-adjusted return framework.
