4Q18 and Full Year Presentation February 21, 2019 F e b r u a r y 2 0 1 9
Important disclosure This presentation, prepared by PagSeguro Digital Ltd (the “company”), is solely for informational purposes. The information i n this presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of the company or any subsidiary or affiliate of the company, nor should it or any part of it form the basis of, or be relied on in connection with any contract to purchase or subscribe for any securities of the company or any of its subsidiaries or affiliates nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation may contain forward-looking statements relating to matters such as continued growth prospects for the company, industry trends and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those included in this presentation, for a variety of reasons, including those described in the forward-looking statements and risk factor sections of our Registration Statement on Form F-1 (File No. 333-225697) and other filings with the Securities a nd Exchange Commission (the “SEC”), which are available on our investor relations website (http://investors.pagseguro.com ) and on the SEC’s website (https://www.sec.gov). All of the information included in this presentation is updated as of December 31, 2018. Except as may be required by applicable law, we assume no obligation to publicly update or revise our statements. Non-GAAP financial measures This presentation includes the following financial measures defined as "non-GAAP financial measures" by the SEC: non-GAAP net income, non-GAAP total net revenue, non- GAAP net take rate, non-GAAP total costs and expenses, non-GAAP administrative expenses and non-GAAP net margin. We present non-GAAP measures when we believe that the additional information is useful and meaningful to investors. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and its prospects for the future. Specifically, we believe the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, as the case may be, that may not be indicative of our core operating results and business outlook. For an explanation of the foregoing non- GAAP measures, please see “Supplemental Information" included in this presentation. Thes e measures may be different from non-GAAP financial measures used by other companies. The presentation of this non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Non -GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with IFRS. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. For a reconciliation of these non- GAAP financial measures to the most directly comparable GAAP measures, see “Supplemental Infor mation." 2
Summary of 2018 full year figures Exceeded projections shared with sell side research analysts during the IPO process 2018 IPO Metric Reported Growth % Projections 3 Non-GAAP Net Income (R$) 1 R$ 910M R$ 1,068M 17% Non-GAAP Net Revenue (R$) 2 R$ 3.6B R$ 4.2B 17% TPV R$ 63.9B R$ 76B 19% ¹ Non-GAAP Net Income is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure 2 Non-GAAP Net Revenue is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure 3 Projections shared with sell side research analysts in September 2017, before the IPO 3
Full Year Highlights • Net Income of R$910.4M, up 90% year over year, or R$1,068M , up 123% year over year, after non-GAAP adjustments • Net Revenue of R$4.3B, up 72% year over year, or R$4.2B , up 67% year over year, after non-GAAP adjustments • TPV of R$76B , growing R$38B or up 98% year over year , the largest growth among listed Brazilian payments companies • 4.1M active merchants , adding +1.3M new merchants year over year • Net Margin of 21%, an increase of 2p.p. year over year, or non-Gaap Net Margin of 25.4% , an increase of 6.4p.p. year over year • In December, more than 20% of our active merchant base adopted additional products like bill payment, prepaid cards and mobile top up • Highly rated app (4.8 stars) on Google and Apple stores, with over 339k reviews, reinforcing our commitment in delivering top class User Experience • Strongest brand in Brazilian payments industry, with 7.5x more searches than second peer according to Google Trends (Financials Category) • 130 app updates, 15 new main products launched and 3 new POS devices launched (Minizinha Chip, Moderninha Plus and Smart POS) • Net Cash Used in Operating Activities ended at R$25.7M, close to break even, after adding back the repayment of R$1.7bn in early payment receivables • Average spending per merchant grew by 19% year over year, ending Q418 at R$6.2k 4
Operating Metrics Total Payment Volume (R$ billion) Net Take Rate¹ (%) Change QoQ YoY 76.1 80,00 3.36% 3.27% +81% 3.25% 3.00% YoY -25 bps 30,0000 70,00 24.6 +98% 1.91% 1.97% 1.91% QoQ -21 bps 1.70% 25,0000 60,00 20.3 +22% 50,00 20,0000 38.5 13.6 40,00 3.08% 3.06% 2.96% 2.88% -8 bps 15,0000 30,00 10,0000 20,00 +2 bps -1.67% -1.61% -1.59% -1.72% 5,0000 10,00 1Q18 2Q18 3Q18 4Q18 ,0000 ,00 4Q17 3Q18 4Q18 2017 2018 ¹ Net revenue from transactional activities and other services + financial income - Transactions Cost / Total TPV Active Merchants² (# thousand) Average Spending per Merchant³ (R$) YoY 6,192 YoY +19% +1,344 4,135 5,528 QoQ 5,205 3,827 5,113 4,892 +12% QoQ +308 2,791 4Q17 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 ²At least one transaction in the last twelve months. ³TPV / Average quarterly Active Merchants 5
Unmatched Growth Among Listed Brazilian Payments Companies 2018 x 2017 TPV Growth (%) 2018 x 2017 TPV Growth (R$ billion) 37.8 34.9 98% 72% 0.9 0% PagSeguro Player A Player B PagSeguro Player A Player B 6
Summary Of Metrics Delivered Net Income above the top of the guidance range Q4 2018 Guidance Reported R$ 280 – 290M GAAP Net Income (R$) R$ 302.8M 49 – 54% Net income growth year over year 61% R$ 305 – 315M Non-GAAP Net Income (R$)¹ R$ 323.4M 62 – 67% Non-GAAP Net income growth year over year¹ 72% Full Year 2018 Guidance Reported R$ 888 – 898M GAAP Net Income (R$) R$ 910.4M 85 – 88% Net income growth year over year 90% R$ 1,050 – 1,060M Non-GAAP Net Income (R$)¹ R$ 1,067.7M 119 – 121% Non-GAAP Net income growth year over year¹ 123% ¹ Non-GAAP Net Income is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. 7
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