4Q19 / FY19 RESULTS February 2020
DISCLAIMER Non-GAAP Financial Measures This presentation, prepared by PagSeguro Digital Ltd (the “Company”), is This presentation includes the following financial measures defined as "non- GAAP financial measures" by the SEC: non-GAAP net income, non-GAAP solely for informational purposes. The information in this presentation does not total net revenue, non-GAAP net take rate, non-GAAP total costs and constitute or form part of, and should not be construed as, an offer or invitation expenses, non-GAAP administrative expenses and non-GAAP net margin. We to subscribe for, underwrite or otherwise acquire, any securities of the present non-GAAP measures when we believe that the additional information company or any subsidiary or affiliate of the company, nor should it or any part is useful and meaningful to investors. These non-GAAP measures are of it form the basis of, or be relied on in connection with any contract to provided to enhance investors' overall understanding of our current financial purchase or subscribe for any securities of the company or any of its performance and its prospects for the future. Specifically, we believe the non- subsidiaries or affiliates nor shall it or any part of it form the basis of or be GAAP measures provide useful information to both management and relied on in connection with any contract or commitment whatsoever. 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 This presentation may contain forward-looking statements relating to matters outlook. such as continued growth prospects for the company, industry trends and product and technology initiatives. For an explanation of the foregoing non-GAAP measures, please see “Supplemental Information" included in this presentation. These measures These statements are based on currently available information and our current may be different from non-GAAP financial measures used by other assumptions, expectations and projections about future events. While we companies. The presentation of this non-GAAP financial information, which is believe that our assumptions, expectations and projections are reasonable in not prepared under any comprehensive set of accounting rules or principles, is view of currently available information, you are cautioned not to place undue not intended to be considered in isolation of, or as a substitute for, the reliance on these forward-looking statements. Our actual results may differ financial information prepared and presented in accordance with International materially from those included in this presentation, for a variety of reasons, (“IFRS”) as issued Financial Reporting Standards by the International including those described in the forward-looking statements and risk factor Accounting Standards Board (“IASB”) . Non-GAAP measures have limitations sections of our Annual Report on Form 20F (File No. 001-38353) and other filings with the Securities and Exchange Commission (the “SEC”), which are 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 available on our investor relations website (http://investors.pagseguro.com) and on the SEC’s website (https://www.sec.gov). only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. All of the information included in this presentation is updated as of December 31, 2019 . Except as may be required by applicable law, we For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, see “Supplemental Information." assume no obligation to publicly update or revise our statements. 2
4Q19 RESULTS HIGHLIGHTS Adjusted Net Net Net Net Revenues 1 Take Rate 2 Income 3 Margin 4 SOLID R$ billion x NON-GAAP | R$ million NON-GAAP 1.6 2.97% 412 26 % RESULTS +27% YoY +38% YoY Total Payment Absolute Active Net Additions Volume TPV Growth Merchants 5 OPERATING R$ billion R$ billion Dec-2019 Merchants | 2019 4.9 34.3 5.3 1.1 FIGURES +39% YoY +11% YoY million million PagBank PagBank Users Bill Active Cash Active users 6 Net Additions Payments Cards growth Dec-19 4Q19 # of transactions QoQ PAGBANK 2.7 232% 868 56% QoQ million thousand 1) Adjusted Net Revenue = Net Revenue from Transaction Activities and Other Services + Financial Income. We exclude revenues and costs originated in the 4Q19 by membership fee booked in Net Transaction Activities and Other Services (4Q19: -R$9.0M ); 2) Net Take Rate = (Net Revenue from Transactional Activities and Other Services + Financial Income - Transaction Costs) / Total Payment Volume. Excluding revenues and costs originated in the 4Q19 by membership fee booked in Net Transaction Activities and Other Services (4Q19: -R$9.0M; 3Q19: R$16.9M) in Transaction Costs (4Q19: -R$8.3M), we would reach a net take rate of 3.02%. However, we also began to defer the membership revenues instead of an upfront recognition in our Income Statement. Therefore, equalizing this adjusted effect in Net Transaction Activities and Other Services Revenue of -R$0,8M in 3Q19 and -R$7,2M in 4Q19, we have reached a comparable take rate of 2.97%; 3) Non-GAAP Net Income is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure; 4) Net Margin is calculated by dividing Net Income by Total Revenue and Income. Non-GAAP Net Income Margin is calculated by dividing non-GAAP Net Income by non-GAAP Total Revenue and Income. Non-GAAP Net Income Margin is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure; 5) Active Merchants: At least one transaction in the last twelve months; 6) Total Active Users of PagBank are active merchants using one additional digital account feature/service beyond acquiring and consumers with balance in the digital account in the last day of the month. 3
2019 RESULTS HIGHLIGHTS Total Payment Volume Active Merchants Absolute TPV growth R$ billion thousand R$ million R$38.7B 1,133 11% 51% 27% Historical record 4,887 115 4,386 5,269 net new TPV growth 4,135 76 2,791 38 1,411 14 4Q18 4Q19 2016 2017 2018 2019 2016 2017 2018 2019 PagBank Active Users 1 Total Revenue and Income NON-GAAP Net Income 2 thousand R$ million R$ million R$1.5M R$0.4M 1,614 36% 38% 5,707 1,470 2,737 4,203 1,068 1,869 2,523 1,397 1,123 479 1,138 128 1Q19 2Q19 3Q19 4Q19 2016 2017 2018 2019 2016 2017 2018 2019 1) Total Active Users of PagBank are active merchants using one additional digital account feature/service beyond acquiring and consumers with balance in the digital account in the last day of the month; 2) Non-GAAP Net Income is a non-GAAP financial measure. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. 4
2019 GUIDANCE ACCOMPLISHED CONTINUED STRONG EXECUTION Net Income NON-GAAP Guidance Reported R$ million R$ million 1,322 - 1,500 1,470 Net Additions Merchants Guidance Reported thousand thousand 1,000 1,133 5
REVENUES AND COSTS STRONG TOP LINE GROWTH AND COST CONTROL ADJUSTED NET REVENUES 1 | R$ mn ADJUSTED NET REVENUES BREAKDOWN 1 | R$ mn 2018 2019 47% 11% 5,399 38% 3,682 38.5% 37.6% 61.5% 62.4% 1,559 1,400 1,130 4Q18 3Q19 4Q19 2018 2019 Net Transaction Activities and Other Services Financial Income TOTAL COSTS AND EXPENSES 2 | (%) of TPV ADMINISTRATIVE EXPENSES 3 | (%) of TPV 0.8% 4.1% 3.4% 3.5% 3.3% 3.0% 3.3% 0.4% 0.4% 3.2% 3.0% 0.3% 0.3% 0.3% 0.2% 0.2% 2018 2019 2018 2019 4Q18 4Q19 4Q18 4Q19 GAAP non-GAAP GAAP non-GAAP GAAP non-GAAP GAAP non-GAAP 1) Adjusted Net Revenue = Net Revenue from Transaction Activities and Other Services + Financial Income. We exclude revenues and costs related to the membership fee booked in Net Transaction Activities and Other Services (3Q19: R$16.9M , 4Q19: -R$9.0M ) to calculate the adjusted number; 2) Non-GAAP Total Costs and Expenses is a non-GAAP financial measure. Excludes stock-based compensation expenses (4Q19: R$29.8M, 4Q18: R$31.0M ). Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure; 3) Non-GAAP Administrative Expenses is a non-GAAP financial measure. Excludes administrative stock-based compensation expenses (4Q19: R$29.8M, 4Q18: R$31.0M ) to make results comparable. Please see the Supplemental Information for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. 6
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