PicS N.V. (PICS) Earnings

Management highlights

### Leadership Transition • Andre Cazotto succeeded Rodrigo Couto as CFO as part of a planned succession process. Cazotto has 20+ years of experience in payments and financial services, and led PicPay's Nasdaq listing capital markets work stream. Rodrigo Couto will remain as a special advisor through year-end 2026. ### Core Operating & Financial Performance • PicPay beat guidance on nearly all major metrics: credit portfolio at 31.9 billion reais (3% above the high end of guidance), total revenues at 3.7 billion reais (3.6% above guidance, managerial revenues excluding derivatives/hedge accounting), adjusted net income at 283 million reais (15.5% above guidance). • Key operating metrics: 70.4 million total accounts (+10% YoY, +3% QoQ), 45.4 million quarterly active clients, 167.6 billion reais consolidated TPV (+27% YoY, +7% QoQ), 35.8 billion reais in deposits (+45% YoY, +10% QoQ). • Profitability and operating leverage: Gross profit reached 1.25 billion reais (+48% YoY, +14% QoQ), adjusted net income reached 283 million reais (+135% YoY, +67% QoQ), adjusted ROE reached 20.2% (+1 percentage point YoY). Revenue per client grew 67% YoY while cost to serve grew only 13% YoY, generating strong operating leverage; the adjusted efficiency ratio improved 210 basis points sequentially to 44.8%. ### Consumer Banking Updates • New investment and brokerage services launched; the Epic credit card segment reached 23% penetration of the eligible customer base, accounting for 14% of total card TPV, with 80% of users actively utilizing included benefits. • AI is a core strategic pillar: second-generation AI customer agents for WhatsApp and in-app use support over 70 multi-step transactional tasks; the company is the first Brazilian bank with official plugins in major cloud and OpenAI ecosystems. New AI-powered marketing agents for SMBs launched, with 10,000 SMB opt-ins in the first week. Internally, AI has cut token costs by 70% since the start of 2026, 90% of employees use the platform daily, and product deployments have doubled year-to-date. Headcount has remained flat since October 2025, eliminating the previously projected 10% 2026 headcount increase. ### Credit Portfolio and Risk Management • Total credit portfolio grew 99% YoY and 14% sequentially to 31.9 billion reais, 93% consumer and 7% SMB. 86% of Q2 portfolio growth came from lower-risk loans and mature credit cards. • Early NPL (15-90 days past due) fell to 7.5% in Q2 from 8.4% in Q1, driven by seasonal effects and improving recent vintage performance. 90+ day NPL rose to 9.8% and Stage 3 (credit-impaired exposures) rose to 12.9%, a dynamic driven entirely by portfolio aging (natural seasoning of earlier vintages) and intentional risk-taking in growing private payroll loans, not underlying portfolio deterioration. All increased credit risk is already recognized and provisioned, with 74.1% coverage for Stage 3 exposures. The Desenrola renegotiation program reduced NPL and Stage 3 formation, with 520 million reais gross exposure renegotiated. ### Funding and Capital • Funding base grew 10% QoQ to 35.8 billion reais, with ongoing diversification across deposits and capital market instruments. Recent transactions strengthened the balance sheet to support continued credit portfolio growth. Total capital ratio stood at 17.6% and CET1 at 15.6% in Q2, providing ample headroom above regulatory requirements.

Guidance

• Q3 2026 standalone guidance (excluding the newly acquired Kev (Cover)): total credit portfolio expected to reach ~34.7 billion reais; cost of risk expected to remain in the 3.9% to 4.1% range; managerial revenues expected at ~4 billion reais; net interest income expected at ~2.1 billion reais; gross profit guided at ~1.3 billion reais. • Q3 profitability guidance: IFRS EBT expected at ~360 million reais (+34% QoQ); adjusted EBT expected at ~378 million reais (+30% QoQ); IFRS net income expected at ~255 million reais (-5% QoQ), and adjusted net income expected at ~265 million reais (-6% QoQ). The sequential net income decline reflects normalization of the effective tax rate after a large one-off tax benefit concentrated in Q2 2026, not operational deterioration. • Full year 2026 capital guidance: after a projected 150 basis point capital consumption from the Kev acquisition in Q3 2026, the full year total capital ratio is expected to be ~14%, with CET1 in the 12% to 12.5% range, remaining comfortably above regulatory requirements. • Kev (Cover) 2026 contribution guidance: 80 million to 100 million reais in net income contribution from August to December 2026, following the completed acquisition. • Long-term efficiency guidance: the adjusted efficiency ratio is expected to reach the low 40% to high 30% range by the end of 2026, supported by AI-driven productivity gains. • Funding cost guidance: funding cost is expected to stabilize around 94-95% of CDI in coming quarters, down slightly from 96.2% in Q2 2026. • NPL trajectory guidance: 90+ day NPL and Stage 3 metrics are expected to continue rising modestly through the end of 2026 due to ongoing portfolio aging, then gradually converge to a stable level. The increase is mechanical and expected, not a sign of credit deterioration.

Segment performance

1. Unsecured Credit: Generated 1.2 billion reais in revenue, 40% year-over-year growth and 11% sequential growth, contributing 29% of total Q2 2026 revenue. 2. Secured and Partially Secured Products: Generated 1 billion reais in revenue, 158% year-over-year growth and 23% sequential growth, contributing 24% of total revenue. This segment is led by scaling private payroll loans, which reached a 7.2 billion reais total portfolio with over 3.6 million contracts. 3. Non-credit (Fees, Commissions, Float, Hedge Accounting, Insurance, Acquiring): Generated 1.9 billion reais in revenue, 57% year-over-year growth and 19% sequential growth, contributing 47% of total revenue (24% from fees/commissions, 23% from float/hedge accounting). 4. Small and Medium Businesses (SMB): Average 85,000 new SMB accounts per month in H1 2026, a 3x increase from H1 2025. Supply chain finance origination hit 1.05 billion reais in Q2, up from 693 million reais in Q1 2026 and 40 million reais in Q4 2025. 5. Audiences and Ecosystem: The iGaming vertical reached 2.7 million clients in one year of operation; active insurance policies reached 11.1 million, up 63% year-over-year and 9% sequentially, with the acquisition of Cover (rebranded to Kev) completed in August 2026 to accelerate insurance growth. Overall total revenue: 4.1 billion reais, up 67% year-over-year and 17% sequentially. 71% of total revenue now comes from no or lower-risk revenue streams, up from 63% one year prior.

Risks & headwinds

• Intentional risk-taking in private payroll loans: the company is deliberately expanding into slightly higher-risk profiles within private payroll to accelerate growth, which will naturally lead to higher NPL and cost of risk metrics as the portfolio seasons, though this remains within the company's approved risk appetite and targeted risk-adjusted returns. • Macro unemployment risk: higher-than-expected unemployment could pressure the performance of longer-duration private payroll loans. The company maintains a dynamic approach to origination, using model gains to stabilize rather than accelerate origination to offset this risk. • Portfolio aging mechanical impact: as a rapidly growing new lender in private payroll loans, natural seasoning of older vintages will continue to push 90+ day NPL and Stage 3 metrics higher in coming quarters, even without underlying credit quality deterioration. • Higher-than-expected funding costs: deposit growth has lagged loan growth recently, requiring increased use of more expensive capital market funding, though the company expects this to remain manageable. • Residual operational risk in private payroll loans: while operational issues from earlier product rollout have been largely resolved, full automation of guarantee and payroll deduction processes is not yet complete, so some residual uncertainty remains.

Analyst Q&A

• Q: What additional benefits can we expect from the Desenrola renegotiation program in Q3 2026, and what is the outlook for deposit growth and funding costs going forward? /

  A: The Desenrola program generated a 59 million reais positive impact on Q2 cost of risk and cut 90+ day NPL by 117 basis points, via 520 million reais gross renegotiated exposure with a 50% average balance reduction. A smaller positive impact is expected in Q3, with most of the benefit already realized in Q2. On funding, management is comfortable with deposit growth: transactional cash balances continue growing 20% year over year, and the small Q2 increase in funding cost was driven only by a new FGTS-backed securitization issuance, not underlying weakness in deposit franchise. Funding costs are expected to stabilize around 95% of CDI in coming quarters.

• Q: Can you expand on PicPay's AI strategy and tangible impacts from AI initiatives? /

  A: AI strategy has two core pillars: customer-facing products and internal operational efficiency. Customer-facing AI agents support 70+ sequential transactional tasks across the app and WhatsApp, and the company is the first Brazilian bank with official OpenAI/cloud plugins. A new SMB AI marketing tool that targets local customers launched, with 10,000 SMB opt-ins in its first week. Internally, a proprietary AI platform has cut token costs by 70% year-to-date, 90% of employees use the platform daily, and product deployments have doubled year-to-date. This productivity gain has kept headcount flat since October 2025, eliminating the previously planned 10% 2026 headcount increase.

• Q: How do you balance risk and reward for private payroll loans, given rising delinquency in industry-wide central bank data, and what is the NPL trajectory going forward? /

  A: The industry-wide delinquency increase reflects the product expanding beyond its historical customer base of only large company employees to smaller employers, matching PicPay's intentional strategy of expanding into slightly higher-risk profiles to scale. PicPay has not seen deterioration in credit quality within the same risk buckets, and all expanded risk-taking remains within approved risk appetite and targeted risk-adjusted returns. Operational issues from the early rollout have been largely resolved. 90+ day NPL is expected to continue rising gradually through end of 2026 as the portfolio matures, eventually converging to a stable level around the current Stage 3 percentage of the total portfolio, with no underlying deterioration in credit quality.

• Q: What is the expected contribution to 2026 net income from the newly acquired Kev (Cover)? /

  A: Kev (formerly Cover) was consolidated starting August 3, 2026. Management expects 80-100 million reais in net contribution from Kev over the remaining five months of 2026. A corresponding revenue breakdown was not available during the call and will be shared later with investors.