In addition to the machine, Stone’s new strategy to double profits in four years includes integrating with Linx as a means to attract new customers through its software business. The Stone Company exceeded expectations in the third quarter, surprising the market, and the management believes that investors should maintain their optimism.
The company aims to achieve an annual profit of R$1.9 billion by 2024, with a total of up to R$4.3 billion by 2027, which would more than triple its bottom line. This ambitious goal was announced at the company’s Investor Day in New York.
CEO Pedro Zinner explains that the focus of their profitable cash flow business strategy is to prioritize growth speed. However, they now see many opportunities to improve profitability through efficiency. Zinner emphasized in an interview with EXAME Invest that the goal is not to change the strategy, but rather to clarify its implementation and focus on the most lucrative opportunities.
The section of micro, small, and medium-sized enterprises (MPMEs) is highlighted in Stone’s strategy. While this group has always been a priority, its importance has been reinforced. With a take rate of 2.7 percent, Stone aims to grow faster than the industry average, handling payments worth more than R$600 billion by 2027.
To achieve this growth, Stone plans to integrate its financial services and software businesses. The goal is to supply the software company’s customers with financial products, solidifying Stone as a “one-stop-shop” solution for MPMEs in key sectors such as grocery stores, restaurants, pharmacies, and petrol stations.
Stone’s integration strategy with Linx’s software business was further solidified by the announcement. In October, Stone announced its plan to restructure and incorporate Linx into its core business, a move that had been long-awaited by the market since the acquisition of Linx in 2020.
Financial services also play a crucial role in Stone’s revenue generation. The company’s financial services platform, initially focused on payments but now expanded to include banking and credit solutions, is currently undergoing an expansion phase. Stone’s chief strategist, Lia Matos, believes that the software aspect of the business is a key differentiator and holds great potential for monetizing their customer base.
At the beginning of the year, Stone saw an opportunity to resume lending and strengthen its banking vertical. The company faced significant challenges in 2021 due to the wave of insolvencies, but now, two years later, they believe it is time to cautiously resume operations.
Stone’s CFO, Mateus Scherer, shared that they have already restarted lending activities, with R$113 million in available credit. Their goal is to reach R$800 million next year and exceed R$5.5 billion in card transactions by the end of 2027.
In addition to credit, Stone aims to expand its range of financial services. The company currently holds deposits of R$4.5 billion and plans to grow to R$7 billion next year and R$14 billion by 2027.
Overall, Stone is confident in its new strategy to double profits within four years. With a focus on efficiency and integration, the company aims to become a leading provider of financial services and software solutions for MPMEs, driving their growth and profitability in the years to come.
