3Q23

Results

PagSeguro Digital Ltd.

Unaudited Condensed Consolidated

Interim Financial Statements

As of September 30, 2023 and for the three and nine-month periods ended September 30, 2023 and 2022.

1

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim financial statements

As of September 30, 2023 and for the three and nine-month periods ended September 30, 2023 and 2022

Contents

Unaudited condensed consolidated interim financial statements

Unaudited condensed consolidated interim balance sheet………………………………………………… 3

Unaudited condensed consolidated interim statements of income………………………………………...5

Unaudited condensed consolidated interim statements of comprehensive income……………………...6

Unaudited condensed consolidated interim statement of changes in equity……………………………...7

Unaudited condensed consolidated interim statement of cash flows……………………………………... 8

Notes to the unaudited consolidated interim financial statements………………………………………….9

2

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim balance sheet As of September 30, 2023 and 2022

(All amounts in thousands of reais)

Note

September 30, 2023

December 31, 2022

Assets

Current assets

Cash and cash equivalents

5

1,974,618

1,829,097

Financial investments

6

1,078,319

1,103,299

Accounts receivable

7

37,521,292

36,248,589

Receivables from related parties

9

4,399

-

Inventories

26,195

13,281

Tax Receivable

8

379,141

410,801

Other receivables

162,896

162,011

Total current assets

41,146,860

39,767,078

Non-current assets

Accounts receivable

7

1,000,115

745,546

Receivables from related parties

9

28,024

-

Judicial deposits

49,634

44,855

Deferred income tax and social contribution

19

101,541

99,411

Other receivables

38,770

18,509

Investment

-

1,651

Property and equipment

11

2,478,114

2,493,499

Intangible assets

12

2,483,927

2,158,773

Total non-current assets

6,180,125

5,562,244

Total assets

47,326,985

45,329,322

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

3

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim balance sheet As of September 30, 2023 and 2022

(All amounts in thousands of reais)

Note

September 30, 2023

December 31, 2022

Liabilities and equity

Current Liabilities

Payables to third parties

13

18,706,627

17,988,139

Deposits

14

8,577,445

10,100,599

Borrowings

18

192,778

-

Derivative financial instruments

26

28,091

22,289

Trade payables

439,359

449,102

Payables to related parties

9

78,359

593,906

Salaries and social security charges

15

333,847

292,778

Taxes and contributions

16

82,922

89,779

Provision for contingencies

17

70,163

46,233

Deferred revenue

125,801

126,042

Other liabilities

30,027

31,484

Total current liabilities

28,665,419

29,740,351

Non-current liabilities

Payables to third parties

13

159,438

84,759

Deposits

14

3,337,023

1,894,689

Payables to related parties

9

284,082

-

Deferred income tax and social contribution

19

1,755,429

1,564,228

Provision for contingencies

17

6,314

14,370

Deferred revenue

18,074

17,486

Other liabilities

232,999

171,313

Total non-current liabilities

5,793,359

3,746,845

Total liabilities

34,458,778

33,487,196

Equity

Share capital

20

26

26

Treasury shares

20

(609,824)

(475,354)

Capital reserve

20

6,097,391

6,102,573

Retained earnings

20

7,403,056

6,237,392

Equity valuation adjustments

20

(22,372)

(22,372)

Other comprehensive income

20

(70)

(139)

Total equity

12,868,207

11,842,126

Total liabilities and equity

47,326,985

45,329,322

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

4

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim statements of income

For the three and nine-month periods ended September 30, 2023 and 2022 (All amounts in thousands of reais unless otherwise stated)

Three-month period

Nine-month period

September 30,

September 30,

September 30,

September 30,

Note

2023

2022

2023

2022

Revenue from transaction activities and other

22

services

2,269,288

2,292,079

6,586,313

6,602,349

Financial income

22

1,691,273

1,697,222

4,820,449

4,638,118

Other financial income

22

65,585

46,126

195,028

132,469

Total revenue and income

4,026,146

4,035,427

11,601,790

11,372,936

Cost of sales and services

23

(2,033,309)

(1,862,164)

(5,888,679)

(5,501,843)

Selling expenses

23

(378,241)

(530,840)

(1,017,591)

(1,510,591)

Administrative expenses

23

(206,333)

(185,343)

(581,078)

(554,611)

Financial expenses

23

(819,937)

(920,656)

(2,428,535)

(2,296,843)

Other expenses, net

23

(76,262)

(111,123)

(252,542)

(224,564)

Profit before income taxes

512,064

425,301

1,433,365

1,284,484

Current income tax and social contribution

19

(16,827)

1,603

(77,122)

(26,518)

Deferred income tax and social contribution

19

(84,512)

(46,617)

(190,579)

(160,835)

Income tax and social contribution

(101,339)

(45,014)

(267,701)

(187,353)

Net income for the period

410,725

380,287

1,165,664

1,097,131

Basic earnings per common share - R$

21

1.2762

1.1639

3.6049

3.3501

Diluted earnings per common share - R$

21

1.2686

1.1562

3.5801

3.3285

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

5

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim statements of comprehensive income For the three and nine-month periods ended September 30, 2023 and 2022

(All amounts in thousands of reais)

Three-month period

Nine-month period

September 30,

September 30,

September 30,

September 30,

2023

2022

2023

2022

Net income for the period

410,725

380,287

1,165,664

1,097,131

Other comprehensive income that may be reclassified to the

statement of income in subsequent periods

Currency translation adjustment

40

1

(33)

(717)

Loss on financial investments designated at fair value through OCI

(84)

662

267

249

Derivative Financial Instruments through OCI

2,114

3,969

419

(13,084)

Income tax and social contribution

(690)

(1,574)

(233)

4,364

Other comprehensive income for the period

412,105

383,346

1,166,084

1,087,943

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

6

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim statement of changes in equity For the nine-month periods ended September 30, 2023 and 2022

(All amounts in thousands of reais)

Capital reserve

Profit reserve

Share

Treasury

Capital

Share-basedlong-term

Retained

Note

capital

shares

reserve

incentive plan (LTIP)

earnings

Equity valuation

adjustments

Other comprehensive

Total

income

equity

At December 31, 2021

26

(285,011)

5,828,754

247,532

4,732,624

(22,372)

645

10,502,198

Net income for the period

-

-

-

-

1,097,131

-

-

1,097,131

Currency translation adjustment

-

-

-

-

-

-

(717)

(717)

Gain on financial assets through OCI

-

-

-

-

-

-

164

164

Derivative Financial Instruments through OCI

-

-

-

-

-

-

(8,636)

(8,636)

Share based long term incentive plan (LTIP)

-

-

-

113,307

-

-

-

113,307

Acquisition of treasury shares

-

(191,819)

-

-

-

-

-

(191,819)

(LTIP) of treasury shares

-

100,233

-

(100,233)

-

-

-

-

At September 30, 2022

26

(376,599)

5,828,754

260,606

5,829,755

(22,372)

(8,543)

11,511,628

Net income for the period

-

-

-

-

407,637

-

-

407,637

Currency translation adjustment

-

-

-

-

-

-

41

41

Loss on financial assets through OCI

-

-

-

-

-

-

(271)

(271)

Derivative Financial Instruments through OCI

-

-

-

-

-

-

8,636

8,636

Share based long term incentive plan (LTIP)

-

-

-

14,082

-

-

-

14,082

Acquisition of treasury shares

-

(99,625)

-

-

-

-

-

(99,625)

(LTIP) of treasury shares

-

869

-

(869)

-

-

-

-

At December 31, 2022

26

(475,354)

5,828,754

273,819

6,237,392

(22,372)

(138)

11,842,127

Net income for the period

20

-

-

-

-

1,165,664

-

-

1,165,664

Currency translation adjustment

20

-

-

-

-

-

-

(33)

(33)

Loss on financial assets through OCI

20

-

-

-

-

-

-

(176)

(176)

Derivative Financial Instruments through OCI

20

-

-

-

-

-

-

277

277

Share based long term incentive plan (LTIP)

20

-

-

-

109,172

-

-

-

109,172

Acquisition of treasury shares

20

-

(248,824)

-

-

-

-

-

(248,824)

(LTIP) of treasury shares

20

-

114,354

-

(114,354)

-

-

-

-

At September 30, 2023

26

(609,824)

5,828,754

268,637

7,403,056

(22,372)

(70)

12,868,207

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

7

PagSeguro Digital Ltd.

Unaudited condensed consolidated interim statement of cash flows For the nine-month periods ended September 30, 2023 and 2022 (All amounts in thousands of reais)

Nine-month period

Note

September 30, 2023

September 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before income taxes

Expenses (revenues) not affecting cash:

Depreciation and amortization

23

Total Losses

23

Accrual of provision for contingencies Share based long term incentive plan (LTIP)

Loss on disposal of property, equipment, intangible and investment assets Derivative Financial Instruments, net

Interest accrued

Other (income) cost, net

Changes in operating assets and liabilities

Accounts receivable

Financial investments (mandatory guarantee)

Inventories

Taxes recoverable

Other receivables

Deferred revenue

Other liabilities

Payables to third parties

Trade payables

Payables to related parties, net

Deposits

Salaries and social charges

Taxes and contributions

Provision for contingencies

Income tax and social contribution paid

Interest income received (paid)

NET CASH PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

Amount paid on acquisitions, net of cash acquired

10

Purchases of property and equipment

11

Purchases and development of intangible assets

Redemption (Acquisition) of financial investments

NET CASH USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings

18

Payment of borrowings

18

Payment of borrowings interest

18

Acquisition of treasury shares

20

Payment of leases

11

NET CASH USED IN FINANCING ACTIVITIES

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at the beginning of the period

5

Cash and cash equivalents at the end of the period

5

1,433,365

1,284,484

989,477

824,004

413,463

792,950

23,385

27,969

109,172

113,307

207,992

189,308

(2,488)

-

393,056

1,063,441

(598)

14,925

(4,944,398)

(14,955,359)

229,461

(209,556)

(12,915)

(2,525)

105,616

102,909

(8,115)

38,187

(187)

(28,872)

2,724

(35,478)

768,298

1,124,710

(12,212)

(219,710)

(296,777)

(118,883)

759,676

9,096,672

40,057

41,035

(24,083)

23,615

(11,357)

(17,139)

162,612

(850,006)

(78,553)

(86,560)

1,750,587

2,525,849

1,834,646

1,589,283

(31,313)

-

(692,232)

(1,027,025)

(774,518)

(731,361)

(120,019)

393

(1,618,082)

(1,757,993)

300,000

250,000

(100,000)

(250,000)

(9,613)

(15,337)

(248,824)

(191,819)

(12,606)

(13,977)

(71,043)

(221,133)

145,521

(389,842)

1,829,097

1,794,362

1,974,618

1,404,519

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

8

PagSeguro Digital Ltd.

Notes to the unaudited condensed consolidated interim financial statements

As of September 30, 2023 and for the nine-month periods ended September 30, 2023 and 2022 (All amounts in thousands of reais unless otherwise stated)

1. General information

PagSeguro Digital Ltd., ("PagSeguro Digital" or the "Company"), is a holding company with its principal executive offices located in Cayman Islands, subsidiary of Universo Online S.A. ("UOL"), referred to, together with its subsidiaries, as the "PagSeguro Group", and was incorporated on July 19, 2017. A total of 99,99% of the shares of PagSeguro Internet Instituição de Pagamento S.A. ("PagSeguro Brazil") were contributed to PagSeguro Digital on January 4, 2018 and PagSeguro Digital maintains control of PagSeguro Brazil.

PagSeguro Brazil is a privately held corporation established on December 20, 2006, and engages in providing financial technology solutions and services and corresponding related activities, focused principally on micro-merchants and small and medium-sized businesses ("SMEs").

In June 2022, Boa Compra Tecnologia Ltda., changed its name to PagSeguro Tecnologia Ltda. ("PagSeguro Tecnologia") as part of a marketing strategy to bring the entity closer to PagSeguro's brand.

In January 2023, Pagseguro Biva Serviços Financeiros Ltda. incorporated Pagseguro Biva Correspondente Bancário Ltda and, in July 2023, PagSeguro Instituição de Pagamento S.A. incorporated Registra Seguro S.A.

The subsidiaries of PagSeguro Digital are PagSeguro Brazil, PagSeg Participações Ltda. ("PagSeg"), BS Holding Financeira Ltda. ("BS Holding") and PagSeguro Holding Ltd. ("PSHC"). The PagSeguro Group subsidiaries are as follows:

  • PagSeguro Brazil subsidiaries are PagSeguro Biva Securitizadora de Créditos Financeiras S.A.
    ("Biva Sec"), Fundo de Investimento em Direitos Creditórios - PagSeguro ("FIDC"), Wirecard Brazil Instituição de Pagamento S.A. ("MOIP), Concil Inteligência em Conciliação S.A. ("Concil") and Netpos Serviços de Informática S.A. ("Netpos").
  • PagSeg subsidiaries are Net+Phone Telecomunicações Ltda. ("Net+Phone"), Pagseguro Tecnologia, BCPS Online Services Lda. ("BCPS"), CDS Serviços Financeiros Ltda. ("CDS"), Pagseguro Biva Serviços Financeiros Ltda. ("Biva Serviços") and PagBank Participações Ltda. ("Pag Participações").
  • Pag Participações subsidiaries are Tilix Digital Ltda. ("TILIX"), Yamí Software & Inovação Ltda.
    ("YAMÍ") and Zygo Serviços de Tecnologia S.A. ("ZYGO").
  • PSHC subsidiaries are Pagseguro Chile SPA ("Pagseguro Chile), Pagseguro Colombia S.A.S ("Pagseguro Colombia), PSGP México S.A de C.V. ("PSGP Mexico") and Pagseguro Peru S.A.C. ("Pagseguro Peru").
  • BS Holding subsidiaries are BancoSeguro S.A. ("Bancoseguro") and Paginvest CTVM Ltda. ("Paginvest").

These consolidated interim financial statements include Pagseguro Brazil, PagSeg, PSHC, BS Holding and corresponding subsidiaries.

9

PagSeguro Digital Ltd.

Notes to the unaudited condensed consolidated interim financial statements

As of September 30, 2023 and for the nine-month periods ended September 30, 2023 and 2022 (All amounts in thousands of reais unless otherwise stated)

2. Presentation and preparation of the unaudited condensed consolidated interim financial statements and significant accounting policies

2.1. Basis of preparation of the condensed consolidated interim financial information

These unaudited condensed consolidated interim financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and disclose all (and only) the applicable significant information related to the financial statements, which is consistent with the information utilized by management in the performance of its duties. The consolidated interim financial statements are presented in thousands of Brazilian reais, unless otherwise indicated, which is the functional currency of PagSeguro Group.

These unaudited condensed consolidated interim financial statements for three and nine-month periods ended September 30, 2023 were authorized for issuance by the PagSeguro Digital's Board of Directors on November 13, 2023.

These unaudited condensed consolidated interim financial statements for the three and nine-month periods ended September 30, 2023 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as issued by the IASB and disclose all (and only) the applicable significant information related to the financial statements.

These unaudited condensed consolidated interim financial statements do not include all the notes of the type normally included in an annual consolidated financial statement. Accordingly, this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2022 (the "Annual Financial Statements").

.

The accounting policies and critical accounting estimates and judgments adopted are consistent with those of the previous financial year and corresponding interim reporting period.

2.2. New accounting standards adopted in 2023

The accounting policies adopted in the preparation of the consolidated interim financial statements for the period ended September 30, 2023 are consistent with those adopted for the year ended December 31, 2022, except for the changes required by the pronouncements, interpretations and standards which became effective on January 1, 2023, as described below.

  • IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current measurement model where estimates are remeasured in each reporting period, Contracts are measured using the building blocks of discounted probability-weighted cash flows, an explicit risk adjustment and a contractual service margin (CSM) representing the unearned profit of the contract which is recognized as revenue over the coverage period.

10

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PagSeguro Digital Ltd. published this content on 16 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 November 2023 21:22:59 UTC.