XP Inc. (XP) Earnings Call Transcript & Summary

[Audio Gap] the low interest rate environment that we are leaving in Brazil. It's something that we've never had, and that changed the behavior of investors. And we are going to talk about that later on. Our self-reinforcing ecosystem. We also are going to talk about the recent M&A acquisitions that we've announced. And they talked to this reinforced ecosystem that we have built throughout time. Innovation and fast adaptation that's related basically to our DNA, our culture and, of course, the pandemic and how we had to adapt and innovate as probably everybody else here in this call. And we are going to try to show some features and moves that we have taken because of this dynamic. Our platform, we have announcement we just did yesterday about XP. I'm going to also talk about it later on that shows education in our DNA. We believe it's very important, especially in this low interest rate environment we are living. And specifically about the new opportunities in the M&A, as I said. So I'm going to touch bases on all those subjects throughout the presentation. So moving forward, to our next slide, KPIs. At KPIS, we have shown the numbers until April. Now we fast forward 1 month until May. We are happy to present our assets under custody above December '19. So we had BRL 409 billion at the end of the year. First quarter because of the -- especially because of the market sell-off in March, we had BRL 366 billion of assets under custody. We showed in April, BRL 385 billion. So a recover. And in May this pace of recover kept going forward, especially in terms of monthly net inflow. Remember that I mentioned in April, that the wire transfers, they were not completely blocked, but they were harmed because of the lockdown and the effects of the crisis. We still feel that in May, but we see a recovery. So we get back. I wouldn't say too normal, but we believe that April was the bottom. So we show BRL 8.3 billion of net inflow in May, which lead us to the BRL 412 billion of AUC at the end of May. Moving to the next slide, please, André. Yes. Active clients, it's the same pattern since the beginning of this year. So very healthy pace of new clients coming to our platform. This movement has also a relation with what we've seen in Brazil as a whole in terms of the equitization trend. We are going to talk about that topic specifically in the next couple of slides. But we had more than 100,000 net new clients in May alone. So when we look at the fourth quarter of 2019 as an average with 55,000 net new clients per month, and we compare to the 5 months of 2020 we see an 89% increase to, on average, 104,000 net new clients. And in May, specifically, this number was even higher. And we believe, of course, the reasons for that is not only our platform, all the efforts to enhance the platform and the benefits and the high concentration in the financial system in Brazil as a whole. But also, we believe it has to do with this equitization trend because of low interest rates, people more connected in terms of trying to absorb knowledge in terms of investments and financial allocation and et cetera. And our NPS at the end of the May -- end of May was 71, a little bit lower than the previous month, but it's still in a very high standard. Going to -- yes, this is a new KPI. So I'm going to explain what we show here. We have gotten a lot of questions from investors regarding this equitization trend, and what's going on in our platform. We see the numbers -- big 3 numbers in terms of new individuals going to the stock market. Brazil is underpenetrated in the equity world, despite the high-growth that we've seen in B3. It's nothing compared to other countries more developed. And in our platform, we also see a huge increase in terms of trading volumes. So when we look at -- what we have here is basically everything related to equity, cash equities, options, features, I'll add up. We had a daily average trade in the fourth quarter, close to 1 million per day. When we look at the average of April and May together, more than 2.5 million. So it's 127% increase in the space of 5 months. And we believe again, it has to do with this equitization and low interest rate environment in Brazil. So not only we kept growing the volume because all all these trends and the education part that we've been supporting in our ecosystem since the beginning of XP. But we also we also were able to gain market share. We are, as all of you know, we are #1 in custody in terms of retail equity, and we also are #1 in terms of retail traded volume. And as of May, our market share in custody was 25%. And in terms of traded volume, 57%. Usually, that number, when I present the ballpark, I'd say, close to 50%, that's the average throughout the years. And it's just the beginning of the year, when we add up the 3 brands that we have in our group, we've been gaining market share. And that leads to the equitization part that I've been talking about. So I would like to share these 2 graphs with you, probably a lot of you have seen it already. So what we have here are -- on the left side, we have the number of individuals in Brazil trading stocks, including [indiscernible] in the stock market, this data comes from B3. So as of May '16, we had less than 600,000 people trading stocks. And in May, the last number was close to 2.5 million. One simple math here that we can do is the following. If we think about the growth of individuals in the stock market, this year, 2020, it's on average, a pace of 8% per month. If that trend continues, before the end of next year, we are going to reach 10 million people trading stocks in Brazil. This number, 2.5 million is a little bit higher than 1% of Brazilian population. So it's nothing when we look to more mature markets. I know Brazil has a huge path to become developed and mature. But we always presented this as an opportunity in terms of how underpenetrated the stock market is in Brazil. And this environment of interest rates, you also can see down the graph in May '16, interest rates was north 14% per year, and now it's 2.25%. It's the lowest ever level of interest rates in Brazil. And that takes time to people realize they need to take some risks, accept more volatility, respecting their risk profile, but they need to diversify. Again, despite all this drop, in interest rates in Brazil, the numbers are still impressive in the sense of how investments are allocated in Brazil. Still 80% of the money is in fixed income. Most of the money is still inside 5 banks. And most of these, 80% fixed income investments in funds that charge very high management fee. In an environment of 2.25% interest rate, this is not sustainable in our view. And that's what -- we believe it has driven this trend that in our -- the way we see it, it's just the beginning. It came to stay. And another interest data is the relevance of retail investors in the secondary market. When we look at May, we see that retail investors, they were responsible for almost 1/4 of the total volume of the market compared to an average between of 15% to 20%, on average, 17% in the past. So that's another trend that we would like to highlight. So again, I think XP is very well positioned to not only benefit from the trend of equitization, but most importantly, to lead this movement in Brazil. This trend with this low interest rate environment. So moving to the recent developments. I think that's the -- yes, the next slide. Here, I'm going to touch bases on some topics we have announced to give you some more color. So we announced XP from anywhere the yes, the initiatives, the hiring of José Berenguer and also the broker dealer, that's a new announcement that we got is like a stent of quality that I'm going to explain in a while. So XP from anywhere, it's basically a function of what we have learned from the price. We all, all of a sudden, had to go home, work from home. We were not prepared, nobody was. And then we realized that we not only could do the same thing we were doing before, we all went home, but even better. The meetings were more productive, more straightforward. We had more time left to do other things, and we could connect in a better way than at the office. And all of that added together, made us think about the future. What could the feature become in terms of how XP presents itself as a company of the 21st century. And that's when we envision what we call the conception of Villa XP. We released the e-book to our employees as a concept to discuss, to listen, we've been doing a lot of research about it, especially with our employees. And we don't have anything concrete here to announce. But we do believe that this new concept give us a lot more flexibility in terms of people we can hire, where we can leave, how we can interact among ourselves, and we can do all of that becoming more and more productive. So I think XP from anywhere, it's a concept that XP its people. We are all mobile, doesn't matter where we are, we are going to be all part of the same team and same purpose. The ESG initiatives, it's something that we already have several initiatives in our company, decentralized and because we believe this is a very important topic for any company in the world, we wanted and we felt like we needed to concentrate in one person to lead all the efforts that we already, as I said, have in our company. And we chose [indiscernible]. She's been with us -- she's a Director. She's been with us for more than 3 years. She was the head of several initiatives. She was involved in the integration of Rico and Clear acquisition, also the concept and innovation, and now she is the leader of our ESG effort. And we also expect later on to have several announcements in terms of how you're going to measure, how we're going to present to all our stakeholders, our initiatives, including the investors and specifically, we have this BRL 100 million of seed capital that we decided because it talks directly with our ecosystem of independent asset managers. When we look outside Brazil, we already have, for example, here in the United States, GTS, that you can buy in Brazil, not yet. We know several asset managers that pay attention to this topic and want to create specific funds. And our intention here is to help our ecosystem to create those funds. We are going to see maybe 6, 7 different funds that are going to invest with these ESG initiatives in mind. José Berenguer, [indiscernible], for those who know him well, he has been for 7 years with JPMorgan as the CEO in Brazil. And he comes to XP to read out the wholesale banking initiatives. We basically felt like we needed someone to help us in this endeavor, especially considering we now have the bank. And we are going to have a different role in the institutional world that we had in the past before several initiatives, including the bank. And José Berenguer, he joined us after the prime team to help us in all those challenges that we are very optimistic about. And the broker dealer, it's important specialized PQO, it's stem of BSM, BSM is a self regulator body from B3. That basically, it's like a due diligence in 65 broker-dealers all over Brazil. They do not disclose which on was #1, 2 or 3, but they segregate in levels. And it has to do with quality, with risks and etcetera. And XP was in the Level 1. Level 1 is the hardest one to be. Only 11 broker-dealers were in the Level 1 out of the 65 and considering XP's, by far, XP broker-dealer is by far the most complex one in Brazil because of all the products and all the ecosystem plugged our broker-dealer that we have and all the IFA network that we have that nobody has in terms of number of sites of complexity. It's something that we believe it should be shared with investors. We are very proud of this achievement, and we are going to keep working really hard through our Director, Bernardo Mara, our CRO to keep this standard in the next years as they come. So if we can move, André, to the next one, business update. The digital bank, no news here. We don't have a specific month about the launch of the digital bank and payments and credit card, but they're going to be launched this year in the second semester. Everything that we have planned and everything that we have told you during the IPO roadshow, it's in place, and it's going really well in terms of the time line that we have in mind. And for the next year, the first semester, we are going to add other products like debit card and collateralized loans as well. In terms of international funds, as we probably have here in this call, a lot of international investors. We would like to share that it's -- we also announced it's a product that we believe makes a lot of sense. If we look at Brazilians, they are not used to invest outside of Brazil, diversifying to international funds. Mostly because of high interest rates, which has been historical in Brazil. But now with interest rates at 2.25% again, everything changed. And we believe it makes a lot of sense for investors in Brazil to have access to the best global portfolio managers of the world. And we are eager to provide that through our platform. We already have several initiatives, several products, and we want to keep adding. So I will take the opportunity and do a marketing here. If you guys want to have access of our retail investors and help Brazil to democratize its investments to the Brazilian people, please get in touch. We have a team dedicated. Fabiano and Gustavo [indiscernible], they are the leader of these initiatives. And we already have more than BRL 4 billion of assets under custody. We announced a deal with Oaktree. We're going to have a short video of Howard Marks talking a little bit about this partnership. We also had a partnership with Wellington. And we also are going to have Phil -- video of Phil, talking a little bit about it. And we want to expand that. We believe those portfolio managers are really happy with this partnership. We showed how fast we can raise funds. And as I said, because of the interest rate environment in Brazil and because of the low penetration of global funds in the Brazilian asset allocation as a whole, it makes a lot of sense to speed up these international funds products. So now I think we're going to show the short videos and then I come back right on that. Okay. Let's see if it works. [Presentation]

You're on mute. You're on mute.

I'm sorry. I will speed up so we can have more time for Q&A. Here is just an update on the IFA network. What I would like to highlight are 2 topics here on the left, the CRM tool for IFAs. That's really interesting because we also talked about it during the IPO roadshow. Because of the data that we can collect in our platform, we can use all of that data to provide intelligence behind the behavior of investors like next product to buy, to prevent churn and information that can make the profession of the IFA even better and more productive. And on the bottom, the transparency point, we also -- there is a discussion with the regulator, CVM in Brazil about transparency. It's still going on, and XP as a leader in this market, we just didn't wait. We advanced ourselves, and we inform now all the investors to the IFA, what is the funds rebate, we disclose that to clients. So you can mitigate any potential conflict of the interest, that's another talk that we keep getting some questions from investors. And again, we always -- our answer is you got to aim the long-term and do the right thing for the client always. Otherwise, you're going to lose the client. But again, we just stepped forward and did that before even the regulator decided how it's going to be. And now there is full transparency to the clients at the end of the day. So moving forward to the next one, digital content update. I'm not going to stay too long here. So we are going to have the expert. It's going to be virtual this year. We consolidated all our content in that brand expert. It became a brand so we can facilitate the sharing of content. It's going to be in July 14 to 18. And later on, when we have all the login in the site, we are going to share with all of you through our mailing and invite you because it's going to be a virtual one. So we can -- you can join us if you want to. InfoMoney and the numbers, when we look at expert in InfoMoney, also, it's been impressive, the growth because of this willingness to learn more about investments in Brazil and in this macro environment. Experts in the content platform, we got more than 160% growth compared to last year, up to April and May, 1.3 million. And InfoMoney, we had more than 15 million on average of unique visitors in April and May this year. Again, a huge growth compared to the end of last year. At XP, it's our education business that also we have different efforts of education throughout our platform. We decided to combine everything together at XP. And then we're going to have the forces. We're going to have MDAs, we are going to have a lot of content as well throughout our 3 brands, helping our clients to understand and get knowledge about education as well. And to talk about the M&A, [ Flipper and DM10, ] everything is related to our ecosystem. Flipper -- we can move to the next slide, André. So we can move on. So I can show the ecosystem. Yes. So our ecosystem, it's -- everything is connected on -- with education on the bottom of it, providing sustainability to everything in the ecosystem. And Flipper it's like financial GPS. So it was a caller, a lot of plans there to help consume investors to consolidate all their investments in banking accounts in one single app and at the end of the day, the purpose of Flipper is to let the investor tell where he or she wants to go, and then it's going to guide you through the best path to reach your goals. And it's totally complementary to our platform and what we do and with all the products that we have to help the client to achieve its goals and also to increase the share of wallet of our existing clients. Because if you can expose the investments that several potential clients and existing clients still have outside of XP inside the banks, we are very confident that those clients and potential clients should bring 100% to XP. DM10, it's an initiative in the pension and life business. It's a business that since we started our own insurance company last year. We want to grow a lot the pace of growth is lower than investments, but it's very stick in the sense that we are talking about the commitment for the long, long term. We're talking about retirement plans. And it's really strategic for us. We have been growing a lot. In April, we were #1 in terms of net new money for the pension business. But still, when we look at [indiscernible], we are very, very small. We have a little bit more than 6 billion -- compare our own insurance, 6 billion compared to more than 1 trillion in the market as a whole. And DM10, it's a tech company that comes to help us to disrupt even faster that pension and life business. And to not expand myself, I think the closing remarks is what we keep telling. Secular growth, especially with the equitization of the market, something new. Low interest rates in Brazil, we've never seen that. It's something to bear in mind. Technology, we keep investing a lot in technology. It's really important, and we believe this crisis, one of the benefits, if we can -- if I can put in this way of this crisis is that the digital part that probably would happen anyway in the next 3 to 5 years, it just happened in months, right? So people that were going digital, they had to. And that's really something really positive for a business like ours. Strong balance sheet, still all those acquisitions in M&A, they were not relevant in terms of cash. We keep a very strong cash position, which is good. And our DNA, our culture, we think that's really competitive advantage when we look to our main competitors, which are the incumbents, and we are very positive about the settler growth story ahead of us. So with now -- I'm sorry, took me a little longer than I would like. I'll open for Q&A. Lazar is going to conduct that.

Yes. Before starting the Q&A. Thank you, Bruno. Also by the end of the presentation that we can download in our website, there is also a queue research that we would like to ask you for to respond. [Operator Instructions] We already received some here, but we will start with our moderators. Please, Mariana. Your floor is yours. Make the [indiscernible].

Congrats on the numbers presented today. My first question is related to net inflows. We saw a recovery in May when compared to April. But is it still below the levels you observed back in the first quarter and fourth quarter last year? Have you continued to see that the restrictions for wire transfers now in May and also in June? Or has this normalized? And the second part of my question is related to outflows and redemptions. Are you starting to see higher redemptions with a pickup in unemployment, lower disposable income? When you look at the below data, we see large outflows in the month of April for -- especially for fixed income funds. Still some outflows in May, and I recover now in June. Are you observing the same trends at XP?

Okay. Okay. Thank you, Mariana. In terms of the wire transfers and the pickup in May, I wouldn't say it's normalized. I don't think it is. But it's not as bad as it was in April. So part of the recovery, it's because of that trend that we expect to keep getting better throughout the year. But we don't know, but we do expect to keep getting better. So it's not 100% normalized yet. In terms of your second question, the outflows, we haven't seen any different numbers in terms of outflows and churn in our platform, okay? So everything is being like historical numbers. What we have seen, and it may be related to what you have just said is, especially in April, we saw a lot of outflow in the funds platform in the fixed income funds, right? Especially for corporate bond funds. And then that money was invested either in equities or other secured. Even -- we saw a lot of also outflows from the funds to go directly to securities in the market as well. As you can see by our numbers, month by month, despite the crisis, we had a very positive net inflow. So money is coming in, we saw this shift from some funds to secured among the funds from fixed income to equities or multimarket with May numbers, what we can tell is that it's normalizing as well. So the outflows are smaller. And we saw a lot of inflows coming back to multi-market funds, like the hedge funds in Brazil as well.

Felipe, please go ahead.

Bruno, I have one question about the rebound of capital market activities. Over the past couple of weeks, we noticed that capital market activities have recovered in Brazil. Some follow-ons were concluded and the BOVESPA Index is back to 100,000 points. In the last call, I remember that I asked about the outlook for the issuer services business this year. Could you please provide an update on the pipeline of new deals on what investors are currently asking for given all the uncertainties that are still in place? I mean, perhaps a breakdown between equity follow-on, that REIT and so on and so forth. That will be my first question. Then I have other questions.

Okay. All right. Hi, Felipe. Yes, sure. I remember your question. And if I'm not mistaken, my answer was that, yes, the second quarter we do not expect to see any movement, but we do expect to resume at some point, but it will depend on the macro scenario. But for our look or the scenario that we are having now, yes, it has resumed already. So we saw REIT offering coming back to the market. We already had offering in the month of May. In terms of pipeline, following IPOs, there is a huge pipeline. If you go back before the crisis, we all are going to remember that Brazil was maybe pointing to a record year of 2020 in terms of ECM activity, right? Even greater than the golden year of 2007 that I remember really well in Brazil, which was the high up to now. And then came the crisis, it stopped. And now it's, as you said, IBOVESPA is back to 100,000 points and it's being resumed. So yes, it has resumed. I think that this as well coming back to the market. And still there is a lot of uncertainty, volatility. So it's hard for me to tell what's going to happen. I don't know. But what I can tell you is that it has resumed and we had some offers in the pipeline, it's very positive.

Well, let's take one from the audience here from Gustavo Holding from Goldman Sachs. Regarding the net inflows in May, can you share with us a profile of those clients if the profile has been changing? And what type of you would highlight?

Yes. The profile of the client, you mean May compared to -- because there is volatility on a monthly basis. That's what is important to understand. That's why I always try to aim to the long term. If we look -- even when we compare quarter-by-quarter, there is volatility. For example, if we look at high net worth individuals like billionaires, there is a month that you have a huge -- with small clients, a huge amount coming to the platform. In the next month, we don't have that. So it's going to assume that the profile has been changing. And so there is volatility, just to try to let you know that it's hard to make that analysis on a monthly comparison. But I would say that on average, we have seen a lower ticket clients coming to the platform, especially, in my view, it has to do with the equitization trend because when people -- newcomers to the market for stock market to trade equities understand better about this environment. It's a lower investment ticket and then it's a different profile of clients that -- on average, that's the main shift that we have noticed so far.

Okay. Mariana, can you please provide the second question?

Okay. Still on these new clients, when you look at the number of retail investors, as you've shown in the presentation, up almost 50% year-to-date at [indiscernible], and XP is capturing a good portion of those investors. Should we expect the pace to remain at this 100,000 new activity clients per month? Or do you expect that to decelerate going forward?

No, I hope it gets better to be honest. I mean we are working for that. I don't know on a monthly basis, Mariana, but think about that, okay? We have 50 million people in Brazil in the mix. We have -- despite all the growth that we've had, we have 90% of the investments inside the banks. Brazil is highly concentrated when we talk about the financial industry. It still is. It hasn't changed. Everything that we have told during the IPO 6 months ago, is just still in place despite all the good numbers we have shown in these first 5 months of the year. So it's not going to change. My speech here is going to be boring because I'm going to keep telling the same thing. It's a secular growth trend. We're going to keep -- we expect to keep gaining more and more clients because in our mind, considering everything we can offer, the value we offer for the clients. We shouldn't expect the clients to stay in the banks. We should expect the clients to come to our platform. And we are going to work harder and harder to become better and better. That's our goal here. So yes, I mean, I personally expect to keep this number even higher. But it's going to be -- I don't know, it depends. But we will see. It's been the 104,000 per month on average in the first 5 months of this year of net new clients. That's net. So on gross, we are getting more clients because you have the churn there, just we don't disclose that.

Okay. Just one additional one from the audience here. Marcelo Telles from Crédit Suisse. Can you comment on the revenue yield trends between April and May? And we had also some other similar questions for you to comment on revenue in overall.

Yes. That's -- you shouldn't have asked me that. That's -- no seriously...

Some trends, some trends about the moving parts.

Look, when -- yes, if I give an answer for that question, honestly, I will be talking about financial numbers, right? Because then you're going to end up with the revenue of retail, considering you have the AUC. And we are not presenting financial numbers in April or May. We are going to -- I mean we are a long-term business here, right? So I totally get anxiety, but we're going to have our second quarter numbers in 1 month -- 1.5 months from today in August, we are going to present all those numbers for you discussing details. So I'd rather -- I'm sorry for that, Telles, but I'd rather not answer or give color in terms of the take rate. Get my old speech in the last results, the first quarter results, and it's going to be the same in terms of fluctuations, trends and et cetera.

Okay. Felipe.

Well, Bruno, since you are not going to give a lot of additional color about revenue yield. I would like to ask a question, one follow-up question about the inflow of new money. If you continue to see more inflow coming from to funds versus fixed income funds. And also, I would like to ask about the possible launch of XP as you mentioned in your presentation. Can you please provide us a little bit about your expectations in terms of costs related to this launch? Because, I mean, when I see the numbers of similar buildings from Apple and [indiscernible] are quite high. So just, I mean, to get our color is should we expect hundreds of millions of reals in [indiscernible] or a little bit less than that, if you indeed end up building XP Villa?

Okay. Perfect, Felipe. Yes. Regarding the equity funds, we still have seen a positive trend on that. Lower -- what we have seen in our funds platform in May compared to April is that multi-market funds, they have gained relevance compared to equity funds, May compared to April. But equity funds they have been positive since the beginning of the year, okay, which is something that, honestly, if you asked me before the crisis, knowing it would come a sell off in, et cetera, I wouldn't guess in that direction, which is a very good retail behavior in my view that we have experienced throughout this crisis, very healthy. So up to now, a very healthy pace and behavior in the equity world as a whole. And we -- another important comment here, Felipe, when we look at the fund, the equity funds, net inflow or net outflow, stand-alone, it can be misleading because we have seen a positive -- a stronger positive net inflow in the equity space by itself, right? So as we presented, our market share in retail in equity -- in equities has gone up to 25%, the whole custody of the market. And that is related to the number of new people coming to the stock markets, especially through XP, Rico or Clear and we're having that custody in our platform. Going to your second question about Villa XP, we don't have an amount of investments for these new headquarters, okay? Not yet. We are -- we had a concept. We are working, we are selecting sites and thinking about. But you mentioned Apple. What we have in mind is a little bit different. It's not that we are going to a place where everybody is going to be there working from there. That's not about it, okay? We think the corporate world will change the way we interact here. So we are talking about a place where people can connect and can be there to interact, to brain storm, to innovate, to have a different interaction if they want to if they don't, they're going to work from home, and then they can meet in a different place if they are willing to do so. So it's a flexible new corporate environment. We are still learning from it. So we are doing, as I said, a lot of research. So the whole concept is not closed yet. And I don't have a specific number to give you in terms of how much we are going to spend. But in terms of economic sense, I have no doubt that it pays off really, really fast.

Mariana, one more, please.

Okay. One follow-up on my previous question, we see more retail investors coming to the market and also the rise of other trading platforms, your competitors. How do you see competition at this moment? And what do you consider to be the key differentiators for XP? I understand the, let's say, the range of products across the platform is quite similar. So why our clients would choose XP over the other platforms?

Okay. First of all, we believe the -- we have several different competitors, right, but we believe our main competitors are the incumbent banks. Remember that, that's where the money is. That's where the bulk of the money is. So they are our competitors. We are independent, and we believe there is a long, long way to disrupting the banks in the investment world. That's number one. In terms of our advantage and why clients would choose XP, I believe that it has to do with several different parts that when you put all together, it makes the difference. So it's not one thing. It's not the broader selection of products that you can have in our platform. It's not about the experience and the tech experience that you can have throughout our app. It's about a collection of offerings and solutions that we can provide to our clients. As I said, for example, in terms of the client experience, we have always been focused on the client, 100%. That's why NPS is our main KPI. And that makes the whole difference because each client is different. It's -- we are talking about individuals here. When you look at -- we had discussion with some players and investors question about what you believe is going to be the future. It's going to be more investments through IFA, it's going to be more XP Direct, it's going to be Sales Direct it's going to be the web service platform that you guys have launched. But what's going to be? We don't know. We believe it -- how it's going to happen together because for each client, you have a different solution, and that's where we are going. That's what the XP Genius is about in our platform. It's about understanding where you want to get and how we're going to help you to get there in the best way. That's why we acquired Flipper aiming at the open bank strategy that is coming and knowing that with that, we can understand more about those potential clients that are not in our platform and help them to achieve their goals because we are very confident that we can do much better than our competitors, the incumbent banks. So when we talk about competition, I think that is more of the same. There is no silver bullet here. We've been doing that for 20 years. That's it. We got here for 20 years with the same strategy, focus on the clients, understand the client, listen to the client, do what you have to do, be transparent do the best thing that you can do for the clients. Are we going to make mistakes? Sure. Have we made any mistakes? Sure. Are we going to correct or are going to be transparent about our mistakes when we realize that? Also, sure. That's how you create a great company. That's our belief. So it's our culture. It's our DNA. That's why I believe we're going to keep enchanting the clients, if I may say.

Just going to the -- almost the end here on the call. I'm going to take some more questions from the audience. Bruno, can you give -- can you please give more color on the recent acquisitions and also, what is the business plan for the banking businesses?

Yes, the recent more color about the recent acquisitions. Flipper and DM10. Augme was a small acquisition, a set of independent asset manager that we did at the beginning of the year. Again, Flipper, I just talked about. I think that is -- one more thing that I can say about both acquisitions is the cultural fit. It's really important for us. So Flipper, for example, the 3 co-founders, they have a very strong purpose. They want to -- if you ask them, what do you want? Why have you created this company? Because I want to help people to not [indiscernible] through their investments, to achieve their goals, and I want to consolidate everything they have. And then provide them the financial GPS like a ways. For example, you tell me where you are with your information, you tell me where you want to go, and I'm going to give you the best path to reach that point. It has a strong connection, and it's very complementary to our ecosystem. DM10, same thing, created a white label to help disrupt an industry that is full of issues. The pension business, for example, if we think how it started in Brazil, highly concentrated a small insurance comp, small insurance companies, still and very big insurance companies related to the bank, providing long products for the clients because they didn't have to considering the high interest rates in Brazil. It has changed. There is no -- you ask it, Mariana, for example, about our competitive advantage. If you look at the insurance world, there is no insurance company providing [indiscernible], the PGBL and VGBL products in Brazil the 401(k) products like in Brazil, the number of products that we have provided in such a short amount of time. We launched our insurance last year, official launch was April or May, if I'm not mistaken. We have more than 90, 9-0 funds and products. Some of them exclusive because of the relationship with independent asset managers that we continued to open because they are synthetic to our purpose to democratize the investments in Brazil, and that helps. It's the same thing with the international; platform. While we convinced Howard Marks Oaktree to come in out of Brazil, Wellington more than USD 1 trillion. We said, look, help us to -- help Brazilians to understand better about investment and have better products in our platform. And this positive relationship creates a very powerful ecosystem if you keep the focus on the clients. So again, the color for those acquisitions, that's the main point. Culture fit, great opportunity in the markets with the open bank and with the insurance business in Brazil to be disrupted. That's the main driver behind those movements. And you had one more question, sorry, Lazar, I don't know if I missed anything.

So it was all about the acquisitions and the M&A opportunities, especially in the banking segment as well.

In the banking segment. So, look, we're going to launch our digital bank. We are going to have payments. We have -- we're going to have the credit card. We have done this partnership with Visa, as you know. I don't know. We keep looking at acquisitions. We have always looked. We have this M&A -- proprietary M&A area in our company, where if you look a lot of fintechs, and everything that is complementary to our ecosystem that has this culture fits, and that we believe it can accelerate our pace of growth, and we can lead from a step like -- move steps ahead, we are going to discuss and look at the opportunities. We are always open. Remember, our 3 core values, big dream, entrepreneurship and open mind. We are open mind. We have to be. So we are always looking for opportunities.

Thank you, Bruno. Again, one special thanks for Felipe Salomao and Mariana Taddeo. We are about 1 hour from the beginning of the call. So I'm going to just give the word for Bruno once again for his final comments. Thank you.

Thank you, Lazar. So special thank you for Felipe Salomao and Mariana for moderating this call. Thank you for all of you, investors, interest in our company, in our story, and thank you for your support. I'm sorry for not answering the financial part or the take rate. I know it's important, but please hold the anxiety, we are going to launch our second quarter numbers in August. And so we're going to be back and we're going to be open to discuss about all the numbers and everything else. We are not even at the end of the quarter, right? So we're in the mid of June. But again, thank you for your interest. One more time. Thank you very much.

Thank you, Bruno. Thanks very much.

Thanks, Felipe. [Foreign Language].