CSU Digital S.A. (CSUD3) Earnings Call Transcript & Summary

Good morning, ladies and gentleman. At this time we would like to welcome you to the CSU Digital videoconference to discuss the results for the second quarter 2023. This video conference is being recorded, and the replay can be accessed at the company's site ri.csu.com.br. The presentation is also available for download. We would like to inform you that participants cannot only watch the speakers, but also follow the slides during the presentation. Ensuing this, we will go on to the question-and-answer session when further instructions will be provided. The presentation will be in Portuguese with simultaneous translation into English. For those who wish to follow the audio of this presentation in English, please choose the language through the interpretation icon at the bottom right of the platform. Now before we proceed, we would like to state that the forward-looking statements are based on the beliefs and assumptions of the CSU Digital management and the information currently available to the company. These forward-looking statements could involve risks and uncertainties as they relate to future events, and therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists should keep in mind that events relating to the macroeconomic environment, to the segment and other factors could lead the results to differ materially from those expressed in these forward-looking statements. Today, in this video conference, we have Mr. Pedro Alvarenga, the CFO and IRO; Mr. Fabiano Droguetti, the CTO; and the IR team. Thus, I would like to give the floor to Mr. Pedro Alvarenga, who will begin the presentation. You may proceed, sir.

A good morning to all of you. It's a pleasure to be once again with investors and other market participants to speak more broadly about the company and, of course, speak about the figures of our results at the beginning of '23. Before we speak about the results, I would like to explain what we do, how we do what we do. And it's natural that a company that in the last 3 or 4 years has significantly changed the way that it acts still leads to doubts in the market. Recently, we came closer to analysts, investors, individual people who continue to follow up on our journey. I will try to be very brief in this recap of the company so that we can ensure that this presentation for you today is useful. We begin here in this first slide. Basically, this is one of the first and main companies in infras tech for the financial industries of Brazil. We're working with B2B2C. Our technology and our platforms allow other companies to offer financial solutions to their own customers, a great deal of speed, expeditiousness without considerable investments, and we're responsible for the development and dedicated management of the platforms. These platforms, of course, have been considered for several different realities in the market, industries. So they're created in a modular way. And of course, each company decides how to use this in the day-to-day of their work. They can access the full platform or only select some modules that will be connected to their own modules through APIs. Now all of this allied to broad technical and operational knowledge, a broad know-how of how each of these systems operates. And this agenda is very important when you choose who's going to be your main supplier, especially if you imagine a highly regulated environment when it comes to data, the central bank. So you need to orchestrate all of these arrangements, have very clear parameters for the rules. And this, of course, is of the utmost importance and we're highly responsible in guaranteeing technical and operational support and to ensure the security of the platforms. This is our main DNA in each of our activities. And at the end of the day, the question that we listen to constantly: Why do customers hire CSU? Well, the choice goes through the back that new revenue lines do not always operate within the financial ecosystem. And of course, this becomes possible. There's opportunities to work with upselling and cross-selling with the current customer base, generating ever more monetization based on a customer that usually contracted a single product. And the brand, the quality and the value perceived ends up creating a process of loyalty and engagement. CSU has more than 30 years in the market. We have more than 5 million accounts that we have in the platform. We have 160 million processes and more than BRL 250 million managed within the -- I'm sorry, BRL 290 billion process within the CSU platforms. And of course, this is very relevant to the market in which we act. On this slide -- well, this slide is very important. The market can see how our portfolio becomes ever more complete day after day. Without a shadow of a doubt, I can say that CSU is the broadest and most complete portfolio in the entire sector. And we are agnostic, which is very important. We don't work with banners or means of payment. The company, in fact, has a highly differentiated positioning in the segment. I'm not going to go through each of these verticals individually. We have been reiterating this [ constantly ]. To speak about the first, the means of payment. This is the original DNA of the company, this is how we came about. Initially, with a monoproduct, we went on 2 cards. We now have the most complete platform and process all types of payment regardless of the currencies and the type of transactions that are taking place or the type of transaction agreement that you have. Now the cards can guarantee the system. We also work with Pix or Pix in installments. All of these go through the platform. This is one of the first evolutions that the company delivered. We now have an operational center, and, of course, this will benefit our performance in the coming quarters. The second product that we offer is on the part of loyalty and incentives. Basically, we guarantee the infrastructure management and loyalty. We guarantee the engagement of that customer base of users that we had previously. And this becomes ever more relevant because of the recent launch that we did of banking-as-a-service. It's worthwhile recalling that in the last 3 or 4 years the company has invested significantly so that other companies can offer digital accounts and everything relating to this. And we are an integral part of this because we have a marketplace for purchases and much more. Now we have this block that we call CSU Pays as being the main block of the company. And we'll speak about the individual performance of this segment further ahead. This is a segment that becomes more and more relevant in our revenues and results. And presently, we have new products, new service, modalities, and by far, it is the most productive service in its portfolio. To the right of this slide, you have CSU DX, the part of operations, in-house operations that are the ones that sustain and anchor the better performance constantly. They have their own customers. But generally, this came about with the concept of supporting and anchoring everything that we're doing. And this is part of our main DNA once again. Traditionally, the company has been working for years in the part of customer experience. It used to be traditional. Nowadays, this is a highly digital operation. But we do guarantee service and support to final users based on their day-to-day demands when they need to relay to the companies they're working, with normally financial institutions. And more recently, we have entered HAS, it's the brand of a product that we use. Basically, these are hyperautomation platforms. When you think of a financial service offline in after-sales, you require some operations, fraud prevention and much more. And generally, these are very manual processes in the companies. Now people intend to digitize everything to have a seamless process to enhance the value perception of financial services for the companies that hire us. And this image, I think, summarizes how we do everything that was on the previous slide, that chain of action that is fully interconnected, the processing of payment through the more traditional means going through the CSU wallet developed by the company and wallets developed by the market. And the processing is independent of the currencies. We can work with the real, the digital real, regulated, non-regulated currencies. All of these are part of our process. And what is important is that the platform is fully integrated. And we're now creating new components in this world of payments, for example, bank-as-a-payment, extending our portfolio to payments to any and all types of financial services. And this allows the customers to constantly come back and use our platforms. A massive use of artificial intelligence to enhance the customer journey. That entire part of fraud protection, all of that is deeply protected. And for some time we have important solutions for the acquiring market. Now luckily today, we have the participation of our CTO, Droguetti. He is our special guest today, who will speak about the customer journey. We'll speak further about platforms and how we imagine the evolution of our model going forward.

Well, thank you, Pedro, and good day to all of you. It's a pleasure to be here with you. We're going to show you the day-to-day of a user of any large city, all of us basically, and the interactions. We have several technologies at the disposal of customers now. How does this impact the consumption experience? We based ourselves on a very simple journey to mirror this to see if we can service this entire journey in a fully integrated fashion. Since the moment when you wake up, you go into an electronic store to replenish your stock through an app or through an assistant. And after this, you watch the news, you need a repair, you need replenishment, so you send out a request. And we have a system that has now become more streamlined. At lunch, you'll pay the lunch with your digital wallet, of course. And further along in the day when you have to take a cab or transportation through an app, once again, you will use a specific wallet to carry out the payment. And at the end of the day, you are sharing your expenses with your roommate. These are electric energy expenses and others, and, once again, you're going to be using this wallet. So we see several technologies, different ecologies to facilitate the journey of the customer. We see debit, credit, the wallet, all of this in a very integrated, seamless way so that the customer doesn't need to think if they're using solution A or B to carry out a payment. This is the intention here, the integration of all of the platforms. Now if we look at the technology more specifically, how do we make that journey more feasible? How can we add different services, platforms with different technologies, connections and integrations with a diversity of arrangements and communication channels with the customer? They can use an app. We have more recent arrangement, which is the case of Pix. And of course, we can advance to any other solution that could be launched in the market. We ended up creating an architecture that facilitates the integration of these solutions and others that may appear as part of the service rendering. Well, we are representing here the different modules of systems that we either developed or we brought the best that there was in the market for each areas, and we have carried out an integration so that the processes can be as fluid, as seamless as possible. Of course, we're always thinking about financial services, and we're extremely careful with security and fraud. This is an area that we pay special attention to. And we have infrastructure that goes from the mainframe to the cloud, adjusting the solution to the need of each customer regardless of the volume, the complexity and regardless of the peculiarities of each customer. And we carried out a very important work in terms of data. We believe that evermore we will have this data at our disposal to make more assertive decisions not only in the operation per se, but also for monitoring, for follow-up for the customer and to have a more customized segmentation so that the customer can make the most of this -- all of this without frontiers. There are no restrictions here regarding new products, currencies, banners, arrangements, anything that may be fostered in Brazil. More recently, we are focusing on the geographic expansion of our operation and we're going to begin to explore this further. So based on this architectural design, we are seeking an evermore digital experience, which is what the customer wants. This is what we see evermore in our consumption relationship. But we have the benefit of having a completely agnostic platform that will select the very best components in the market wherever they may be. We have products from different sources. And with our experience, we are able to add integration and things that are more specific to the Brazilian market. And in each market that we work, we will continue on with this. Now what is more important not only with technology, but how do we execute these services? It's not only the technology that guarantees it. It's also people with excellent training and the right mindset to be able to guarantee the master execution of all of these processes. We're speaking of high volumes, critical processes that could have a significant impact. Now the result of all of this is that we have one of the greatest availabilities in the market. And this, of course, is critical. There are no longer operations that are not 24 x 7. We have to have everything available Saturday, Sunday, early in the morning and late at night, not being able to do a transaction is no longer part of our operations or services. Of course, all of this framework is of the utmost importance in our operations. But we have also seen that there is a more significant demand for quality and efficiency. And this is a result of cost as well. And this demand arises not only in the day-to-day operations, but also in the after-sales part in the more operational day-to-day. We see interactions and processes that are manual where the error for -- the margin of error tends to be quite high. And so we have built a series of components that could make the difference in that area. Well, we have hyperautomation solutions. This is an integrated platform based on artificial intelligence with a practical use to bring benefits to carry out market analysis to carry out enhancements and processes so that we can execute repetitive processes in a highly efficient way, expeditiously and with a very limited margin of error. Well, we're tricking some of our own remedy here, we have implemented this in our own operation, and we're now beginning to expand this to other processes with the potential customers of this platform. If we can continue on -- and of course, this leads to some possibilities for growth. We have called them the 6 avenues for growth. These are where we focus the work of our development and products, especially in the field of digital payments, interactions with accounts based on the digital experience, be it through an app, a digital wallet. Now to use our artificial intelligence for different modalities and possibilities to benefit the processes in the acquiring market. Well, they are the competitors that are quite consolidated in the market, but there is still room for significant improvement. BaaS, Banking-as-a-Service, can bring in services for those who previously did not have them available prevention to fraud, as mentioned previously, is of the utmost importance. And Brazil, of course, when it comes to financial services is one of the most creative when it comes to frauds. We have impressive stories day after day, and we truly focus on this area. And all of this complemented with more work in terms of the customer loyalty. It is not simple to sell a financial product. It's more complex to maintain the customer and the loyalty strategy ends up being very important in this journey. We have translated all of this facility and integration into a communication layer with the customers, with the acquirers, with our retailers, which is called the CSU switcher. Basically, this is a data platform where we can send the traffic of data in the different platforms, integrating this with a customer platform if it is CRM or an app, a relationship app with the final customer. The CSU switcher has a fundamental role therefore, of making the experience of implementation and maintenance of services ever more seamless so that changes for new products that have to be launched will be limited. This is the general idea behind this. Pedro, I would like to return the floor to you.

Well, thank you very much, Droguetti. For the explanation, it will be very helpful to understand our case better. We're going to continue on. Now all of this robustness is operational robustness, the solidity of the platform that we have been presenting ends up in enhancement of results, and we will now speak more specifically of how our performance was in the second quarter and in the first half of the year. We can begin speaking from the commercial viewpoint, all of this new range of products, the implementation, the robustness in the day-to-day of management of the platform has allowed us to attract a growing number of customers. And I draw your attention to the diversity of the segments that we have attracted to our base companies that work with us day after day. We have an enormous diversification of segments with which we operate. We go from banks with whom we began -- of course, a very relevant role in the financial services role, retail and consumption and, of course, other industries and services. And here in the chart, you can see a sprinkling of some of the companies that work with us. We have a much larger portfolio from different segments, working with us. Thanks to the strides we have made in terms of the traditional services, the platform and the range of products with which we work. This quarter, we were able to obtain 2 new customers, humanitarian besides a tool that we had already obtained at the beginning of the year to continue on with our commercial evolution that we will reinforce in coming quarters. Before we speak specifically about consolidated results, it's important to understand the dynamic and performance of each of our verticals. So we have divided this in 2. We're going to speak first about CSU Pays and then we're going to speak about CSU DX. Now CSU Pays is our vertical gear to the entire range of financial service products. And it has repeatedly presented a record in results year after year, quarter after quarter. We ended this quarter with almost BRL 36 million of units registered in our platform, 19 and some million are available for invoicing. Now this figure has been evolving recurrently in this basis of cards and accounts. We have a growth, this year of 8% vis-a-vis last year. And this is a base that has become very active. We see a growth in the volume of transactions and we ended the second quarter with more than 260 million of managed transactions on our platforms. And in the last 11 months, we're speaking of almost 1 billion transactions that have gone through our system. We're speaking of a TPV in these last months of more than BRL 290 million. These, of course, are very expressive relevant figures, and they explain everything that is happening below them. When you analyze our performance in terms of revenue growth, transactions grew more than 20% year-on-year. This means that our operation will continue to generate an expansion. We'll continue to offer more results because our customers are managing greater volumes, more customers, and we're bringing in more customers to our base. For comparison, we ended this quarter with more than BRL 83 million in revenue, an expansion of approximately 6% in this line item. And for half of the year, this represents a 10% growth. So repeatedly, we have had a 2-digit growth every year in this vertical. And we have more than 60% accrued growth since the second quarter of 2019. And there are 2 messages about the importance of this topic and the consolidation of revenues. We have sound relationships with our customers, and we have also had this constant growth in this vertical. This year, we prioritized the renewal of contracts with most of our customers for longer terms. I'm referring to contracts that will vary from 3 to 5 years. The average duration is higher than 4 years. And this is one of the most important results of this quarter. Why is it important? It guarantees a base that will sustain our new expansion cycle. We are a company that operates like an infrastructure for financial services. Our revenues have that carryover effect. The more customers we have in the base, the more transactions we add, the revenues increased gradually. If we have a relevant base of customers to guarantee this longevity. This is very important. Each of those new movements or new products that we launch will have a great deal of momentum and they will continue to contribute to the expansion of this vertical. And this is very important news that we would like to convey to you and our revenue grew 10% year-on-year in this specific vertical. These are very important factors, not only for our current results but also for our future results. Another key point and that refers to what was mentioned by Droguetti, the company made huge efforts to automate products and processes and to allow for new automation in our day-to-day machine learning and much more in the use of processes. Initially, we did this in-house for ourselves, and we're now going to begin offering this possibility to our customers. Now because we did this because we began with ourselves, you can see the results here when you look at the gross margin of the company, it is a company that has also been growing very relevantly and recurrently by 2 digits and it's proportional to the growth of revenue. And because of this, our operating margin has also had an important expansion in this 5-year cycle. So we get to this first semester of 2023 with a 51% margin with BRL 85 million generated as gross results only for this vertical. So this vertical grows recurrently. It has new avenues for expansion. We're always launching new products and of course, the results speak for themselves. Now to speak about CSU DX, it's very important to understand how this business is being transformed in the company. The company has adopted several tools to manage the interactions we have with each and every final user Nowadays, we no longer speak about which channel we're going to act and we have to be present in all of them and the automation of this service through artificial intelligence and other tools has to be part of the way we work. And basically, this has 3 important effects that need to be in your radar. The first is our ability to manage ever more volumes and greater volumes. This is one of the great goals of our customers. This is one of the demands, and this is what we're working on to manage larger volumes; secondly, with greater quality. It's not sufficient to service the customer. We have to resolve their problems. So the second consequence of all of these new tools that we have put at the service of our customers. Now in the third place, these transactions become less burden and they become cheaper for the customers. And why should you keep this in mind? If you look at the top here, we mentioned the volume of interactions carried out digitally. Now when we speak about self-attention or managed interactions, we have 60% and as 60% of our digital interactions, they end up being of lower cost for the customers. And they give us more revenues, which you see to the left of the chart, we're growing volume and the effect price brings a challenge in the short term when we think about the top line, which is not necessarily true when we speak about our results. As you can see, our gross revenue has been evolving despite the revenues that we have had in the last few years, and our operating margin has grown materially in very short periods of time. We have a more profitable business that is generating a good flow for the company from the financial viewpoint. And this enables us to continue to invest in new growth avenues, among which we have the banking as a service, which will be transformational going forward. This year specifically, the macro environment penalized our performance in this vertical. There is a significant concern in the market regarding what will happen with the inflation, the interest rates and of course, several companies have become more conservative with their expansion plans because of this. This has motivated us to speed up the digitation. You will see that in 2023, we have an additional effect of that shift in revenue. We have that shift to the digital part. In the past, we operated 60% of digital operations. We're getting close to 70%. So we have this impact on our revenues, but we have been able to maintain our profitability despite a more challenging scenario. We see that this scenario is improving companies look upon us with more confidence, especially after the review of policies by the Central Bank. Well, our business, of course, is in a better position, and there will be more contributions coming from the interest rate segment. Now because of these 2 factors, the company has maintained a growth of 6% per year CAGR. And this year, we're practically stable year-on-year. We would like to remind you that this was a year with several challenges in DX renegotiation, which, of course, had an impact on the process. And despite this, we were able to grow quite a bit in Pays and maintain our results in DX leading to very comfortable revenue levels in 2023. Pays performs at a faster pace than DX, it gains weighed as part of our revenues and of course, in our results. And the margins are the higher margins compared to DX. The launch of HAS , of course, will impact this growth dynamic, changing the DX going forward. I truly like to show this slide because it shows the strength of our model of action, how the operational leverage is beneficial when it comes to generating results. The company has been growing more than 20% in all of its financial metrics. EBITDA revenue, all the indicators have been growing very relevantly year-after-year and this was accentuated in 2023. We have relevant expansions per quarter, our product growing 5%, 23%, 16% growth on a quarter basis. And in the first half of the year, you will see that the gross profit has grown a great deal. The EBITDA grew 6% to 7% and a growth of more than 20% in our net revenue year after year. So this is a trend in the company of generating more results and greater profitability in each of our financial metrics. And with the benefit that we don't have this detachment between cash and results, we have been doubling and more than doubling our indicators from the viewpoint of profitability and the same happens with our cash. We had a growth of 1.5x between 2021, 2023. And in 2023, the cash generation continues to grow. We got to more than BRL 135 million, which brings us confidence in the business, we can maintain a high level of investment as you see to the right, pay out dividends, pay out a good payout to our shareholders. And of course, we have the debt, which is part of our working journey. Despite all of this, we have high availability of cash to make sure that this cycle will be very intense. We have a very low leverage, 0.10x, considering all of our liabilities, those that refer to IFRS 16. Now if we exclude that part of IFRS 16, if we only think about the debt with the bank and through the company has no debt. It has BRL 56.7 million in cash, which is quite expressive and a very sound position. And we can continue on with what we are doing. As I mentioned, we invest more and more. Last year, we had accelerated growth, BRL 63 million invested last year. This year, until half of the year, we have reached BRL 31 million and I would like to draw your attention to the fact that 90% of this investment is dedicated to each of our platforms to technology. None of this has held us back from having an excellent payback for shareholders. Last year, we paid out 50% of our profit. This year, we have already paid out BRL 12.5 million in the form of shareholder equity. Until last year, we would declare quarterly but only payout at the end of the year. That was the last time we did this. Now in 2023, we're going to pay out every quarter the amounts that we intend to pay out. As the slide before last, I would like to show you the performance of the company based on any metric you wish vis-a-vis the average market. CSU at present has the best profitability in the industry in which we operate. We show you the averages acquirers, software companies, fin techs to be able to measure our performance vis-a-vis the rest of the market in terms of ROE, ROIC and other indicators. CSU by far, has the best performance in the market, 3 or 4x better than the industry average. But this is a work of construction. We're coming closer to the market. We are sharing what we are doing and gradually this will begin to reflect on the pricing of our shares. We had an appreciation of basically 60% in the last 3 or 4 months, but there's still a significant if we look at how the company is operating. So each of these activities that we have carried out has brought us a better return. It has changed the market perception, but there's a great deal of work to be done still as the closing results. The company is entering a phase where it is in its best financial moment. We're capturing scale. We have an excellent portfolio that will enable us to grow at a faster pace, not only in terms of revenue but also profitability. We have the broadest portfolio in the market that will guarantee this new expansion cycle that we have been planning. And this second quarter was an important framework for the company because we're beginning to work with banking, in terms of payment. And we're in the phase of prospecting clients or HAS. We have an adequate capital structure. We have cash to speed up our investments for inorganic and organic growth. And of course, we're ever more attentive to the opportunities in the capital market. These are the main messages we had today. We can now go on to the question-and-answer session.

[Operator Instructions] Our first question comes from Mr. Bernardo Guttmann from XP.

The company highlighted that this quarter, it implemented the integration of its new payment platforms and bus in a single core that you call the CSU switcher. Could you better explain the real gains of using a platform like this one for companies that hire you and for CSU, which will be the benefit.

Well, I can answer that question. For the customer, it means time to market. They can service their target market and have a more aggressive and on-time implementation. This is one of the aspects. The other aspect is flexibility. We have the capacity of adding different components to make the product more complete or more differentiated in the way that it works. From our viewpoint, the cost is lower. The setup of implementation cost is lower. We have that agility of generating new business allowing us to have more accelerated growth. The CSU switcher has the benefit of being a great platform for communication between our internal complexity and being used in the market, that is the main benefit.

Our next question comes from Otavio Tanganelli from Bradesco BBI.

If we look at CSU Pays, could you share the mix of revenues that you have for means of payment, loyalty and bus and which has been the dynamic of the card volume as the originators are speaking about the deceleration of origination.

Well, I'll answer that question, Otavio. Thank you for the question. Now how do we look upon the evolution of the world of transactions. The last 4 or 5 years, the Brazilian industry has had a significant inclusion of people, not only financial inclusion, but inclusion by allowing all these people to use electronic means of payment instead of using money. So this is a market that has continued to be relevant because of the growth. And perhaps a great magic in the industry that happens is what happens between the multiple means of payments that are available for this industry. We can imagine that picks differently from what we had imagined would hamper the work of cards. Quite the contrary, it has offered an enormous benefit. Many of the users had no product to use in their day-to-day and now they have this first product. And based on this first product, we get to know about the financial life of that person, and this gives us the possibility of offering ever more products and financial services. Now the market basically is at the beginning of its journey solutions such as these still have not fully materialized, and we do understand that there will be a new cycle of expansion for this segment. What we see is that all of this traffic of transactions that ends up at the acquirer has a great deal to do with the economic cycle. The economic cycle is very difficult. And we see this more intensely in our DX operation. But in the account and card universe, as you can see, we have not had that same type of impact. Our number of cards grew 8% a year, a number of transactions with an enormous growth. So we're doing very well in that segment. And perhaps in the other direction of acquirers that are very connected to the transactions at the retail end. But here, the transactions are different. The agents working in the market are different. And from all those logos that we showed you, those that have a greater market expansion are doing very well. And we do understand that there is significant room for expansion as our clients evolve. And nowadays, we basically have revenues from the universe of cards. The other products continue to be quite initial and so we have a great deal to capture in terms of our portfolio. I do believe that this industry will continue to grow materially so and that we will benefit not only from the expansion of the industry as a whole, but due to the fact that we are entering new avenues for growth.

Our next question comes from Alex Andre from SaraInvest.

The question is the following. Could you better explain HAS works in practice, if you could give us some true examples of how it can be put into the cycle of companies, the gains that are generated for the customer and the gains for CSU.

That's a question for you.

Thank you. Well, HAS has a very obvious characteristic in terms of understanding. It is difficult to implement. You can imagine a process that has 8 steps interacting with several different systems as part of a full space and several business rules so that each step can be carried out. What you have to respect all of these features are characteristics. Now this type of process, this sequence of processes where HAS applies more specifically. It tries to automate the entry of data from wherever they come from a system, from a physical document from a digital document, they can come from an API or a customer app. So it automates the data entry. And based on that automation in the platform, we configure the process per se, the steps, and we have an engine for rules where we register all of these conditions, the peculiarity of its demand. And then we have an artificial intelligence module that will observe this to offer us insights for enhancement or perhaps bottlenecks that could exist that we have to work on. And the result is the response for the customer. Now why is it important? Because all of this is resolved through the system. And most of the IT areas of the large companies already have very relevant projects typically with restrictions in terms of labor, we're still below our needs when it comes to technology. And because of this HAS will advance the results significantly. It is a preformatted platform without the demand of having professional people working on it, so it can offer results at a faster pace. In the results that we have obtained internally and in the first cases, we designed for prospects. The benefit lies between 30% and 50% according to the case. We had an example here where we had a reduction of more than 70%, the time of execution of a process. So these are expressive results, and we're quite confident that this platform will bring true gains for several of our customers.

Our next question is from [ Carlos Suarez ].

Congratulations for your results. My question refers to expenses with G&A. What can we expect for the following quarters? Does it make sense to look at a better net revenue expense ratio because of an increase in digitation of operations.

Very good question, [ Carlos ]. Thank you. Well, there is a key point here regarding our results this second quarter. We had a large number of nonrecurring expenses. And part of the answer is included in your question as we carried out a new cycle of digitation of our operations, we had to use the entire labor force that we were using. So we had almost BRL 3 million, which are non-recurrent simply because of layoffs and this will not be repeated in the third quarter. And I do underscore the savings that you get in terms of personnel because of this low of layoffs. Yes, in the third quarter, we're going to see less administrative expenses vis-a-vis the second quarter. And it's natural that as other accounts become digitized and this will repeat itself through time. In the short term, I think everything is connected to what we did in the second quarter that will benefit the coming quarters.

Our next question comes from Malek Padilha from TC Matrix.

Congratulations for your results. I would like to hear comments on the number of units invoiced in Pays. Is this mainly due to active cards? And should we expect a counterpart in net revenues of Pays in the third quarter 23, which was the performance of the units invoiced in September? Will they maintain this trend?

Thank you, Malek, for the question. It's a pleasure to have you here with us. When it comes to the results of Pays, basically, the result comes from the number of units invoiced, as you mentioned, this encompasses accounts and cars as well. And all cards in a certain way or accounts, their payment accounts, they're using wallet. And this is what contributes to the expansion in the number of units. We did have a higher volume of processing of transactions, and our revenue is a combination of number of users and the in transactions. One of the factors that contributed to the evolution in this quarter regarding the benefit expected for the third quarter and the evolution of the Pays, this is a carryover company. Every time we increase the number of customers, we increased the number of transitions, and this is a process of accrual unless something a typical happens, but nothing that we have seen so far. Regarding September, well, we haven't gotten there yet, and we can't give you any guidance regarding that evolution, but nothing atypical is happening.

Very well the Q&A session ends here, I would like to return the floor to Mr. Pedro Alvarenga for his closing remarks.

Thank you very much for your attendance. I see that we still have some questions we were not able to address. We do have time limits because we have other meetings. However, they are all written here, we will answer question by question. It was a pleasure to be with you today, and I hope that the company will continue on its path of expansion, becoming an ever more robust company with a better performance in our operational day-to-day. We'll see you next time. Thank you very much for your attendance. Have a good day.

The CSU digital video conference ends here. We would like to thank all of you for your participation. Have a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]