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What changed in XP Inc.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of XP Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+603 added−659 removedSource: 20-F (2025-04-24) vs 20-F (2024-04-26)

Top changes in XP Inc.'s 2024 20-F

603 paragraphs added · 659 removed · 492 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

172 edited+44 added−74 removed354 unchanged
Biggest changeIn recent years, economic and political instability has led to a negative perception of the Brazilian economy and higher volatility in the Brazilian securities markets, which also may adversely affect us and our Class A common shares. • Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future would harm our business and the price of our Class A common shares.
Biggest changeThis involvement as well as Brazil’s political and economic conditions could harm us and the price of our Class A common shares. • Inflation and certain measures by the Brazilian government to curb inflation have historically harmed the Brazilian economy and Brazilian capital markets, and high levels of inflation in the future would harm our business and the price of our Class A common shares. • Economic uncertainty and political instability in Brazil may harm us and the price of our Class A common shares. • Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares. • Infrastructure and workforce deficiency in Brazil may impact economic growth and have a material adverse effect on us. • Developments and the perceptions of risks in other countries, including other emerging markets, the United States and Europe, may harm the Brazilian economy and the price of our Class A common shares.
We cannot assure you that the external service providers will be able to continue to provide these services to meet our current needs in an efficient and cost-effective manner, or that they will be able to adequately expand their services to meet our needs in the future.
We cannot assure you that our external service providers will be able to continue to provide these services to meet our current needs in an efficient and cost-effective manner, or that they will be able to adequately expand their services to meet our needs in the future.
Under the Internal Revenue Code of 1986, as amended, or the “Code,” we will be a passive foreign investment company, or “PFIC,” for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (1) 75% or more of our gross income consists of “passive income;” or (2) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income.” Passive income generally includes dividends, interest, certain non-active rents and royalties, and capital gains.
Under the Internal Revenue Code of 1986, as amended, or the “Code,” we will be a passive foreign investment company, or “PFIC,” for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (1) 75% or more of our gross income consists of “passive income”; or (2) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, “passive income.” Passive income generally includes dividends, interest, certain non-active rents and royalties, and capital gains.
Our systems and operations, or those of our third-party providers, could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized entry and computer viruses. We do not maintain insurance policies specifically for property and business interruptions.
Our systems and operations, or those of our third-party providers, could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, unauthorized physical entry and computer viruses. We do not maintain insurance policies specifically for property and business interruptions.
Also, for our accounting, risk management and internal control processes, we rely on several other software that are subject to malfunction, errors, bugs and/or security issues.
Also, for our accounting, risk management and internal control processes, we rely on several other software services that are subject to malfunction, errors, bugs and/or security issues.
While the precise effect of the ongoing armed conflict and these sanctions on the Russian and global economies remains uncertain, should tensions continue to increase, markets may face continued volatility as well as economic and security consequences including, but not limited to, supply shortages of different kinds, increases in prices of commodities, including piped gas, oil and agricultural goods, among others.
While the precise effect of the ongoing armed conflict and these sanctions on the Russian, the Middle Eastern and global economies remains uncertain, should tensions continue to increase, markets may face continued volatility as well as economic and security consequences including, but not limited to, supply shortages of different kinds, increases in prices of commodities, including piped gas, oil and agricultural goods, among others.
In addition, whether we will be a PFIC in 2024 or in any future year is uncertain because, among other things, our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time (which may be determined, in part, by reference to the market price of our Class A common shares, which could be volatile).
In addition, whether we will be a PFIC in 2025 or in any future year is uncertain because, among other things, our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time (which may be determined, in part, by reference to the market price of our Class A common shares, which could be volatile).
If successful, their development efforts could render our services less desirable to clients, resulting in the loss of clients or a reduction in the fees we could generate from our service offerings. Substantial and increasingly intense competition within our industry may harm our business. The financial services market is highly competitive.
If successful, their development efforts could render our services less desirable to clients, resulting in the loss of clients or a reduction in the fees we could generate from our service offerings. Substantial and increasingly intense competition within our industry may harm our business. T he financial services market is highly competitive.
We cannot assure you that there are written agreements in place with every third party or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us to obtain reimbursement from such third parties in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data.
We cannot assure you that there are written agreements in place with every third party service provider or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us to obtain reimbursement from such third parties in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data.
As a foreign private issuer, we have different disclosure and other requirements than U.S. domestic registrants. As a foreign private issuer, we are subject to different disclosure and other requirements than domestic U.S. registrants.
As a foreign private issuer, we are subject to different disclosure and other requirements than domestic U.S. registrants.
Defects in our systems or those of third parties, errors or delays in the processing of transactions, telecommunications failures or other difficulties could result in: • loss of revenues; • loss of clients; • loss of client data; • loss of licenses or authorizations with the CVM, the Central Bank, the Superintendency of Private Insurance ( Superintendência de Seguros Privados ), or “SUSEP,” and/or any other applicable authority; • loss of our membership to the B3 and/or loss of access to the trading facilities of the B3; • fines imposed by applicable regulatory authorities and other issues relating to non-compliance with applicable financial services or data protection requirements; • a failure to receive, or loss of, Central Bank authorizations to operate as a financial services provider in Brazil; • fines or other penalties imposed by the Central Bank, as well as other measures taken by the Central Bank, including intervention, temporary special management systems, the imposition of insolvency proceedings, and/or the out-of-court liquidation of XP CCTVM and any of our subsidiaries to whom licenses may be granted in the future; • harm to our business or reputation resulting from negative publicity; • exposure to fraud losses or other liabilities; • additional operating and development costs; and/or • diversion of technical and other resources.
Defects in our systems or those of third parties, errors or delays in the processing of transactions, telecommunications failures or other difficulties could result in: • loss of revenues; • loss of clients; • loss of client data; • loss of licenses or authorizations with the CVM, the Central Bank, the Superintendency of Private Insurance ( Superintendência de Seguros Privados ), or “SUSEP,” and/or any other applicable authority; • loss of our membership to the B3 and/or loss of access to the trading facilities of the B3; • fines imposed by applicable regulatory authorities and other issues relating to non-compliance with applicable financial services or data protection requirements; • a failure to receive, or loss of, Central Bank authorizations to operate as a financial services provider in Brazil; • fines or other penalties imposed by the Central Bank, as well as other measures taken by the Central Bank, including intervention, temporary special management systems, the imposition of insolvency proceedings, and/or the out-of-court liquidation of XP CCTVM and any of our subsidiaries to whom licenses may be granted in the future; • harm to our business or reputation resulting from negative publicity; 14 FORM 20-F « Table of Contents • exposure to fraud losses or other liabilities; • additional operating and development costs; and/or • diversion of technical and other resources.
We cannot ensure that the Biden administration will adopt policies designed to promote macroeconomic stability and fiscal discipline, as well as domestic and foreign investment, which may materially and adversely impact the trading price of securities of Brazilian issuers, including our common shares.
We cannot ensure that the Trump administration will adopt policies designed to promote macroeconomic stability and fiscal discipline, as well as domestic and foreign investment, which may materially and adversely impact the trading price of securities of Brazilian issuers, including our common shares.
Based on our operations, income, assets and certain estimates and projections, including as to the relative values of our assets, including goodwill, which is based on the market price of our Class A common shares, we do not believe we were a PFIC for our 2023 taxable year.
Based on our operations, income, assets and certain estimates and projections, including as to the relative values of our assets, including goodwill, which is based on the market price of our Class A common shares, we do not believe we were a PFIC for our 2024 taxable year.
This amendment aims to consolidate certain taxes (i.e., ICMS, IPI, ISS and PIS/COFINS), currently levied on revenues from the sales of goods and services, into three principal taxes: Goods and Services Tax (“IBS”), Contribution on Goods and Services (“CBS”) and the Excise Tax (“IS”).
This legislation aims to consolidate certain taxes (i.e., ICMS, IPI, ISS and PIS/COFINS), currently levied on revenues from the sales of goods and services, into three principal taxes: Goods and Services Tax (“IBS”), Contribution on Goods and Services (“CBS”) and the Excise Tax (“IS”).
Moreover, the LGPD does not preclude the enforcement of administrative sanctions set forth in other laws dealing with privacy and data protection matters, such as the Consumer Defense Code and the Brazilian Internet Law ( Marco Civil da Internet ).
Moreover, the LGPD does not preclude the imposition of administrative sanctions set forth in other laws dealing with privacy and data protection matters, such as the Consumer Defense Code and the Brazilian Internet Law ( Marco Civil da Internet ).
To remain competitive, we must continue to enhance and improve the functionality and features of our services. We may face material delays in introducing new services, products and enhancements. If this happens, our customers may forego the use of our websites and use those of our competitors.
To remain competitive, we must continue to enhance and improve the functionality and features of our services. We may face material delays in introducing new services, products and enhancements. If this happens, our customers may forgo the use of our websites and use those of our competitors.
Our performance depends on the overall health and growth of the Brazilian economy. Brazilian GDP growth has fluctuated over the past few years, with a contraction of 4.1% in 2020, and a growth of 4.6% in 2021, 2.9% in 2022 and 2.9% in 2023.
Our performance depends on the overall health and growth of the Brazilian economy. Brazilian GDP growth has fluctuated over the past few years, with a contraction of 4.1% in 2020, and a growth of 4.6% in 2021, 2.9% in 2022, 2.9% in 2023 and 3.4% in 2024.
Additional Information—B. Memorandum and Articles of Association—Principal Differences between Cayman Islands and U.S. Corporate Law.” We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
See “Item 10. Additional Information—B. Memorandum and Articles of Association—Principal Differences between Cayman Islands and U.S. Corporate Law.” We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.
In addition, any decrease in the number of dealer clients competing for trades on our trading platforms could cause our dealer clients to forego the use of our platform and instead use platforms that provide access to more competitive trading environments and prices.
In addition, any decrease in the number of dealer clients competing for trades on our trading platforms could cause our dealer clients to forgo the use of our platform and instead use platforms that provide access to more competitive trading environments and prices.
The acceptance and popularity of our platform is partially premised on the reliability and performance of the relevant underlying products and information on our platform. We rely on the relevant third-party providers of the relevant products for the authenticity of their underlying products and the comprehensiveness, accuracy and timeliness of the related financial information.
We offer certain third-party financial products. The acceptance and popularity of our platform is partially premised on the reliability and performance of the relevant underlying products and information on our platform. We rely on the relevant third-party providers of the relevant products for the authenticity of their underlying products and the comprehensiveness, accuracy and timeliness of the related financial information.
As of December 31, 2023, we did not have any relevant direct or indirect exposure to Russia, Belarus, Ukraine or Israel through our operations, employee base, investments, suppliers or securities trading.
As of December 31, 2024, we did not have any relevant direct or indirect exposure to Russia, Belarus, Ukraine or Israel through our operations, employee base, investments, suppliers or securities trading.
These administrative sanctions could be enforced by other public authorities, such as the public prosecutor’s offices and consumer protection agencies together with sanctions and fines under the LGPD. We cannot assure you that our LGPD compliance efforts will be deemed appropriate or sufficient by regulatory authorities or by courts.
These administrative sanctions could be enforced by other public authorities, such as the public prosecutor’s offices and consumer protection agencies together with sanctions and fines under the LGPD. We cannot assure you that our LGPD compliance efforts will be deemed appropriate or sufficient by regulatory authorities or by courts of competent jurisdiction.
Our existing and new financial products and services could fail to attain sufficient market acceptance for many reasons, including: • investors are not willing to deploy their funds in a timely or efficient manner; • we may fail to predict market demand accurately and provide products and services that meet this demand in a timely fashion; • users may not like, find useful or agree with any changes; • there may be defects, errors or failures on our platform; • there may be negative publicity about our financial products and services or our platform’s performance or effectiveness; • if new financial products and services or changes to our platform do not comply with Brazilian laws, regulations or rules applicable to us; • there may be competing products and services introduced or anticipated to be introduced by our competitors; and • there may be changes in our clients’ preferences towards low-risk investments with traditional banks, which could decrease our net inflows from both new and existing clients.
Our existing and new financial products and services could fail to attain sufficient market acceptance for many reasons, including: • investors are not willing to deploy their funds in a timely or efficient manner; • we may fail to predict market demand accurately and provide products and services that meet this demand in a timely fashion; • users may not like, find useful or agree with any changes; • there may be defects, errors or failures on our platform; • there may be negative publicity about our financial products and services or our platform’s performance or effectiveness; 29 FORM 20-F « Table of Contents • if new financial products and services or changes to our platform do not comply with Brazilian laws, regulations or rules applicable to us; • there may be competing products and services introduced or anticipated to be introduced by our competitors; and • there may be changes in our clients’ preferences towards low-risk investments with traditional banks, which could decrease our net inflows from both new and existing clients.
We and the market price of our Class A common shares may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation: • growth or downturn of the Brazilian economy; • interest rates and monetary policies; • exchange rates and currency fluctuations; 31 FORM 20-F « Table of Contents • inflation; • liquidity of the domestic capital and lending markets; • import and export controls; • exchange controls and restrictions on remittances abroad and payments of dividends; • modifications to laws and regulations according to political, social and economic interests; • fiscal policy, monetary policy and changes in tax laws; • economic, political and social instability, including general strikes and mass demonstrations; • labor and social security regulations; • epidemics, pandemics and other public health crises; • energy and water shortages and rationing; • commodity prices; and • other political, diplomatic, social and economic developments in or affecting Brazil.
We and the market price of our Class A common shares may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation: • growth or downturn of the Brazilian economy; • interest rates and monetary policies; • exchange rates and currency fluctuations; • inflation; • liquidity of the domestic capital and lending markets; • import and export controls and tariffs; • exchange controls and restrictions on remittances abroad and payments of dividends; • modifications to laws and regulations according to political, social and economic interests; • fiscal policy, monetary policy and changes in tax laws; • economic, political and social instability, including general strikes and mass demonstrations; • labor and social security regulations; • epidemics, pandemics and other public health crises; • energy and water shortages and rationing; • commodity prices; and • other political, diplomatic, social and economic developments in or affecting Brazil.
Nonetheless, data subjects, the public prosecutor’s offices and private associations, for example, are also able to file lawsuits in courts to enforce the provisions of the LGPD and seek redress.
Nonetheless, data subjects, the public prosecutor’s offices and private associations, for example, are also able to file lawsuits to enforce the provisions of the LGPD and seek redress.
In the scope of our activities, we share information with third parties, including thousands of IFAs, commercial partners, third-party service providers and other agents, who collect, process, store and transmit sensitive data, and we may be held responsible for any failure or cybersecurity breaches attributed to these third parties insofar as they relate to the information we share with them.
Moreover, in the scope of our business activities, we disclose information to third parties, including thousands of IFAs, commercial partners, third-party service providers and other agents, who collect, process, store and transmit sensitive information, and we may be held responsible for any failure or cybersecurity breaches attributed to these third parties insofar as they relate to the information we share with them.
As administrative sanctions established by Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais) , or the “LGPD” are now enforceable, cybersecurity incidents and data breach or leakage events may subject us to penalties.
As administrative sanctions established by Law No. 13,709/2018 (Lei Geral de Proteção de Dados Pessoais) , or the “LGPD” are now enforceable, cybersecurity incidents and personal data breach or leakage events may subject us to penalties under LGPD.
Through our relationship with our clients, we may be impacted by: (i) the deterioration of credit quality in our loan portfolio and the consequent increase in delinquencies due to social, environmental, or climatic events affecting our clients and operations, either through some eventual social, environmental, or climatic damage, a decrease in profitability and an increase in costs to our company or sector arising from physical or transitional climate risks and non-compliance with social, environmental, or climatic laws and regulations, which could also adversely affect our profitability; (ii) social, environmental, or climatic events related to clients and operations we support, which could adversely affect the value of our brand and our reputation; (iii) indirect financial liability to clients and operations in the event of social, environmental, or climatic damages that could also subject us to additional reputation risks; (iv) deterioration of financial and non-financial collateral due to social, environmental, or climatic events, such as the reduction of market value of a company's stocks or assets, a decrease in the financial value of properties that may be contaminated, affected by physical impacts of climate change, or non-compliance with social and environmental legislation related to the property, reducing the recoverable value in our portfolios; and (v) the deterioration of the market value of companies in our proprietary portfolios due to social, environmental, or climatic events, adversely impacting our revenue and profitability.
Through our relationship with our clients, we may be impacted by: (i) the deterioration of credit quality in our loan portfolio and the consequent increase in delinquencies due to social, environmental, or climatic events affecting our clients and operations, either through some eventual social, environmental, or climatic damage, a decrease in profitability and an increase in costs to our company or sector arising from physical or transitional climate risks and non-compliance with social, environmental, or climatic laws and regulations, which could also adversely affect our profitability; (ii) social, environmental, or climatic events related to clients and operations we support, which could adversely affect the value of our brand and our reputation; (iii) risk of indirect liability related to social, environmental or climatic damage caused by clients and operations we finance; (iv) deterioration of financial and non-financial collateral due to social, environmental, or climatic events, such as the reduction of market value of a company's stocks or assets, a decrease in the financial value of properties that may be contaminated, affected by physical impacts of climate change, or non-compliance with social and environmental legislation related to the property, reducing the recoverable value in our portfolios; and (v) the deterioration of the market value of companies in our proprietary portfolios due to social, environmental, or climatic events, adversely impacting our revenue and profitability.
XP CCTVM depends in part on the performance of its IFAs. If XP CCTVM is unable to hire, retain and qualify such IFAs, our business may be harmed. XP CCTVM, one of our principal operating subsidiaries and a securities broker, has a broad network of IFAs, and our business depends in part on such IFAs.
If XP CCTVM is unable to hire, retain and qualify such IFAs, our business may be harmed. XP CCTVM, one of our principal operating subsidiaries and a securities broker, has a broad network of IFAs, and our business depends in part on such IFAs.
We have developed well-regarded and widely known brands, including “XP Investimentos,” “Clear,” “Rico,” “XP Asset Management,” “Infomoney,” “XP Educação,” “XP Seguros”, “XP Investments” and, after regulatory approval, Banco Modal and Modal DTVM that have contributed significantly (and recently in the case of Modal Group) to the success of our business.
We have developed well-regarded and widely known brands, including “XP Investimentos,” “Clear,” “Rico,” “XP Asset Management,” “Infomoney,” “XP Educação,” “XP Seguros,” “XP Investments” and “Banco XP” and, after regulatory approval, Banco Modal and Modal DTVM that have contributed significantly (and recently in the case of Modal Group) to the success of our business.
See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Executive Officers.” The ability to attract, recruit, develop and retain qualified employees and continue to strengthen our existing infrastructure and systems is critical to our success and growth. If we are not able to do so, our business and prospects may be materially and adversely affected.
Directors and Senior Management—Executive Officers.” The ability to attract, recruit, develop and retain qualified employees and continue to strengthen our existing infrastructure and systems is critical to our success and growth. If we are not able to do so, our business and prospects may be materially and adversely affected.
Other sanctions by the U.K. include major Russian banks from the U.K. financial system, stopping them from accessing sterling and clearing payments, preventing major Russian companies and the country from raising finances or borrowing money on the U.K. markets, and establishing limits on deposits Russians can make at U.K. banks.
Other sanctions by the U.K. include major Russian banks from the U.K. financial system, stopping them from accessing sterling and clearing payments, preventing major Russian companies and the country from raising finances or borrowing money on the U.K. markets, establishing limits on deposits Russians can make at U.K. banks and other sanctions against Iran and North Korea.
Under the relevant laws and regulations of Brazil (including CVM Resolution No. 35 and Central Bank Resolution No. 3978/2020), we are generally required to keep the records of our communications with customers concerning our services for at least a period of five years, including from IFAs.
Under the relevant laws and regulations of Brazil (including CVM Resolution No. 35), we are generally required to keep the records of our communications with customers concerning our services for at least a period of five years, including from IFAs.
In July 2021, Law No. 13,148/2021 increased the CSLL rate by 5% for all Brazilian financial entities until December 2021 (Brazilian banks were subject to a CSLL rate of 25% until December 31, 2021) and for all other financial entities, including insurance companies (these companies were subject to a CSLL rate of 20%, until December 31, 2021).
In July 2021, Law No. 14,183/2021 increased the CSLL rate by 5% for all Brazilian financial entities until December 2021 (Brazilian banks were subject to a CSLL rate of 25% until December 31, 2021) and for all other financial entities, including insurance companies (these companies were subject to a CSLL rate of 20%, until December 31, 2021).
In addition, cash held by our funds with the prime broker, administrator or custodian will not be segregated from the prime broker’s, administrator’s or custodian’s own cash, and the funds will therefore rank as unsecured creditors in relation thereto. 16 FORM 20-F « Table of Contents If we lose key personnel, our business, financial condition and results of operations may be adversely affected.
In addition, cash held by our funds with the prime broker, administrator or custodian will not be segregated from the prime broker’s, administrator’s or custodian’s own cash, and the funds will therefore rank as unsecured creditors in relation thereto. If we lose key personnel, our business, financial condition and results of operations may be adversely affected.
A “mark-to-market” election may be available that will alter the consequences of PFIC status if our Class A common shares are regularly traded on a qualified exchange. For further discussion, see “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations.”
A “mark-to-market” election may be available that will alter the consequences of PFIC status if our Class A common shares are regularly traded on a qualified exchange. For further discussion, see “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations.” 41 FORM 20-F « Table of Contents
Our reputation could be harmed and we could experience reduced user traffic to our platform, which would adversely affect our business and financial performance. 15 FORM 20-F « Table of Contents Furthermore, as investors access the underlying products through our platform, they may have the impression that we are at least partially responsible for the quality and performance of these products.
Our reputation could be harmed and we could experience reduced user traffic to our platform, which would adversely affect our business and financial performance. Furthermore, as investors access the underlying products through our platform, they may have the impression that we are at least partially responsible for the quality and performance of these products.
The impairment of a significant portion of these assets would negatively affect our business, financial condition and results of operations. As of December 31, 2023, our balance sheet includes goodwill and intangible assets that amounted to R$3,728 million. These assets consist primarily of identified goodwill and intangible assets associated with our acquisitions and investments in associates and joint ventures.
The impairment of a significant portion of these assets would negatively affect our business, financial condition and results of operations. As of December 31, 2024, our balance sheet includes goodwill and intangible assets that amounted to R$4,139 million. These assets consist primarily of identified goodwill and intangible assets associated with our acquisitions and investments in associates and joint ventures.
There has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that allow individuals access to a broad audience of consumers and other interested persons.
Use of social media may adversely impact our reputation. There has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that allow individuals access to a broad audience of consumers and other interested persons.
Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring, and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.
Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring, and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations We are subject to cybersecurity risks and have experienced cybersecurity incidents and attempted breaches in the past.
The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer. Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company.
The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer. 39 FORM 20-F « Table of Contents Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company.
These new rules may expose us to additional risks in connection with contractual arrangement we enter into with influencers (e.g., conflicts of interests, validation and disclosure of documents containing services offered by XP CCTVM. Our expansion into new products, services, technologies, and geographic regions subjects us to additional risks.
These new rules may expose us to additional risks in connection with contractual arrangement we enter into with influencers (e.g., conflicts of interests, validation and disclosure of documents containing services offered by XP CCTVM). 30 FORM 20-F « Table of Contents Our expansion into new products, services, technologies, and geographic regions subjects us to additional risks.
Corporate Law.” 39 FORM 20-F « Table of Contents We may need to raise additional capital in the future by issuing securities or may enter into corporate transactions with an effect similar to a merger, which may dilute your interest in our share capital and affect the trading price of our Class A common shares.
Corporate Law.” We may need to raise additional capital in the future by issuing securities or may enter into corporate transactions with an effect similar to a merger, which may dilute your interest in our share capital and affect the trading price of our Class A common shares.
A devaluation of the real relative to the U.S. dollar may also, as in the context of the current economic slowdown, decrease consumer spending, increase deflationary pressures and reduce economic growth. 33 FORM 20-F « Table of Contents On the other hand, an appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts.
A devaluation of the real relative to the U.S. dollar may also, as in the context of the current economic slowdown, decrease consumer spending, increase deflationary pressures and reduce economic growth. On the other hand, an appreciation of the real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts.
As of April 24, 2024, the real /U.S. dollar exchange rate reported by the Central Bank was R$5.159 per US$1.00, a depreciation of 6.6% of the real since December 31, 2023. There can be no assurance that the real will not appreciate or further depreciate against the U.S. dollar or other currencies in the future.
As of December 31, 2024, the real /U.S. dollar exchange rate reported by the Central Bank was R$6.192 per US$1.00, a depreciation of 27.7% of the real since December 31, 2023. There can be no assurance that the real will not appreciate or further depreciate against the U.S. dollar or other currencies in the future.
Operating and Financial Review and Prospects—A. Operating Results—Brazilian Macroeconomic Environment.” Economic uncertainty and political instability in Brazil may harm us and the price of our Class A common shares. Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy.
Operating and Financial Review and Prospects—A. Operating Results—Brazilian Macroeconomic Environment.” 31 FORM 20-F « Table of Contents Economic uncertainty and political instability in Brazil may harm us and the price of our Class A common shares. Brazil’s political environment has historically influenced, and continues to influence, the performance of the country’s economy.
Any additional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits, and result in the imposition of material penalties and fines under state and federal laws or regulations, which could seriously harm our business, financial condition or results of operations.
Any additional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could cause us to incur costs to conform to any new requirements, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits, and result in the imposition of material penalties and fines under state and federal laws or regulations, which could materially harm our business, financial condition or results of operations.
An impairment of a significant portion of goodwill and intangible assets could have a material adverse effect on our business, financial condition and results of operations. 30 FORM 20-F « Table of Contents If we do not respond to rapid technological changes, our services could become obsolete and we could lose customers.
An impairment of a significant portion of goodwill and intangible assets could have a material adverse effect on our business, financial condition and results of operations. If we do not respond to rapid technological changes, our services could become obsolete and we could lose customers.
In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere. Judgments of Brazilian courts to enforce our obligations with respect to our Class A common shares may be payable only in reais. Most of our assets are located in Brazil.
In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere. 40 FORM 20-F « Table of Contents Judgments of Brazilian courts to enforce our obligations with respect to our Class A common shares may be payable only in reais. Most of our assets are located in Brazil.
In addition, these dealer clients also provide us with data via feeds and through the transactions they execute on our trading platforms, which is an important input for our market data offerings. Our dealer clients also buy and sell through traditional methods, including by telephone, email and instant messaging, and through other trading platforms.
In addition, these dealer clients also provide us with data via feeds and through the transactions they execute on our trading platforms, which is an important input for our market data offerings. 8 FORM 20-F « Table of Contents Our dealer clients also buy and sell through traditional methods, including by telephone, email and instant messaging, and through other trading platforms.
Board Practices ESG – Environmental, Social and Governance Committee.” 17 FORM 20-F « Table of Contents In addition, ESG matters and concerns relating to the use of misleading labels and marketing materials in relation to investment products have been the subject of increased focus by regulatory authorities in the EU.
Board Practices – Environmental, Social and Governance Committee.” In addition, ESG matters and concerns relating to the use of misleading labels and marketing materials in relation to investment products have been the subject of increased focus by regulatory authorities in the EU.
On June 14, 2023, the agency affirmed the rating at BB- and revised the outlook on Brazil to positive. • In December 2015, Moody’s placed Brazil’s Baa3’s issue and bond ratings under review for downgrade and subsequently downgraded the issue and bond ratings to below investment grade, at Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, taking into account the low growth environment and the challenging political scenario.
On December 19, 2023, the agency raised its rating from BB- to BB and revised the outlook on Brazil to stable. • In December 2015, Moody’s placed Brazil’s Baa3’s issue and bond ratings under review for downgrade and subsequently downgraded the issue and bond ratings to below investment grade, at Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, taking into account the low growth environment and the challenging political scenario.
Although such agreements expired, we cannot predict whether we will need to enter into similar agreements with CADE or the Central Bank in connection to any new transaction we might do in the future. 23 FORM 20-F « Table of Contents We are subject to anti-corruption, anti-bribery, anti-money laundering and sanctions laws and regulations.
Although such agreements expired, we cannot predict whether we will need to enter into similar agreements with CADE or the Central Bank in connection to any new transaction we might do in the future. We are subject to anti-corruption, anti-bribery, anti-money laundering and sanctions laws and regulations.
The exercise by holders of our Class B common shares of their preemptive rights may impair our ability to raise funds, or adversely affect the terms on which we are able to raise funds, as we may not be able to offer to new investors the quantity of our shares that they may desire to purchase.
The exercise by XP Control of its preemptive rights with respect to our Class B common shares may impair our ability to raise funds, or adversely affect the terms on which we are able to raise funds, as we may not be able to offer to new investors the quantity of our shares that they may desire to purchase.
An increasing number of organizations, including large clients and businesses, other large technology companies, financial institutions and government institutions, have disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including on portions of their websites, networks or infrastructure, or those of third parties who provide services to them.
An increasing number of organizations, including large clients and businesses, other large technology companies, financial institutions and government institutions, are the target of, and have been impacted by, breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including on or against portions of their websites, networks or infrastructure, or those of third parties who provide services to them.
Under our Memorandum and Articles of Association, the holders of our Class B common shares, XP Control and ITB, are entitled to preemptive rights to purchase additional common shares in the event that there is an increase in our share capital and additional common shares are issued, upon the same economic terms and at the same price, in order to maintain their proportional ownership interests, which are approximately 18.8% and 7.8% of our outstanding shares, respectively.
Under our Memorandum and Articles of Association, the holder of our Class B common shares, XP Control is entitled to preemptive rights to purchase additional common shares in the event that there is an increase in our share capital and additional common shares are issued, upon the same economic terms and at the same price, in order to maintain their proportional ownership interests, which are approximately 19.24% of our outstanding shares.
Any proceeding or action, and any related indemnification obligation, could damage our reputation, force us to incur significant expenses in defense of these proceedings, divert the attention of our management, increase our costs of doing business or result in the imposition of financial penalties. In 2023, the SEC issued rule No. 33-11216.
Any proceeding or action, and any related indemnification obligation, could damage our reputation, force us to incur significant expenses in defense of these proceedings, divert the attention of our management, increase our costs of doing business or result in the imposition of financial penalties.
A significant portion of our revenues is derived from one of our principal operating subsidiaries, XP CCTVM. For the years ended December 31, 2023, 2022 and 2021, the average net revenue of XP CCTVM represented 54% of our total consolidated net revenue for such periods.
A significant portion of our revenues is derived from one of our principal operating subsidiaries, XP CCTVM. For the years ended December 31, 2024, 2023 and 2022, the average net revenue of XP CCTVM represented 51% of our total consolidated net revenue.
Liquidity is the ability to meet current and future cash flow needs on a timely basis at a reasonable cost.
XP CCTVM is subject to liquidity risks. XP CCTVM is subject to liquidity risks. Liquidity is the ability to meet current and future cash flow needs on a timely basis at a reasonable cost.
In 2022, the real appreciated 6.5% to R$5.218 per US$1.00 on December 31, 2022 The real/U.S. dollar exchange rate reported by the Central Bank was R$4.841 per US$1.00 on December 31, 2023, which reflected a 7.2% appreciation of the real against the U.S. dollar during 2023.
In December 31, 2023 The real/U.S. dollar exchange rate reported by the Central Bank was R$4.841 per US$1.00, which reflected a 7.2% appreciation of the real against the U.S. dollar during 2023.
Our daily activities as well as our revenues, AuC and AuM can be directly impacted by: (i) increased compliance costs for meeting new regulations related to social, environmental, and climate issues set by various regulatory bodies that require us to exercise greater control and disclose more information to regulators and stakeholders; (ii) restrictions on opening new accounts, conducting operations, and launching new products that are not aligned with the company's Environmental, Social, and Climate Responsibility Policy, or “PRSAC”; (iii) difficulties in raising capital and attracting new clients and investors due to greater activism and scrutiny from clients, investors, and multilateral agencies related to social, environmental, and climate issues; (iv) physical damage to our facilities due to extreme weather events, resulting in increased costs; (v) financial impact from receiving fines or having our activities halted due to non-compliance with social, environmental, and climate regulations; and (vi) reputational impact if we fail to meet voluntary commitments we have made, which could also impact the market value of our brand.
Our daily activities as well as our revenues, AuC and AUM can be directly impacted by: (i) increased compliance costs for meeting new regulations related to social, environmental, and climate issues set by various regulatory bodies that require us to exercise greater control and disclose more information to regulators and stakeholders; (ii) restrictions on opening new accounts, conducting operations, and launching new products that are not aligned with the company's Environmental, Social, and Climate Responsibility Policy, or “PRSAC”; (iii) difficulties in raising capital and attracting new clients and investors due to greater activism and scrutiny from clients, investors, and multilateral agencies related to social, environmental, and climate issues (see “—Certain Risks Relating to Our Business and Industry — We are subject to increasing scrutiny from certain investors with respect to the societal and environmental impact of investments made at our platform, which may constrain capital deployment opportunities and adversely impact our ability to attract new customers or raise capital”); (iv) physical damage to our facilities due to extreme weather events, resulting in increased costs; (v) financial impact from receiving fines or having our activities halted due to non-compliance with social, environmental, and climate regulations; and (vi) reputational impact if we fail to meet voluntary commitments we have made, which could also impact the market value of our brand.
The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status: • In 2015, Standard & Poor’s initially downgraded Brazil’s credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade.
Subsequently, the three major rating agencies have downgraded Brazil’s investment-grade status on multiple occasions: • In 2015, Standard & Poor’s initially downgraded Brazil’s credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade.
Accordingly, as a foreign private issuer, we are not required to (i) have a board that is composed of a majority of “independent directors,” as defined under the rules of Nasdaq; (ii) have a compensation committee that is composed entirely of independent directors; or (iii) have a nominating and corporate governance committee that is composed entirely of independent directors. 40 FORM 20-F « Table of Contents See “Item 10.
Accordingly, as a foreign private issuer, we are not required to (i) have a board that is composed of a majority of “independent directors,” as defined under the rules of Nasdaq; (ii) have a compensation committee that is composed entirely of independent directors; or (iii) have a nominating and corporate governance committee that is composed entirely of independent directors.
If competitors introduce new products and services using new technologies or if new industry standards and practices emerge, our existing technology and systems may become obsolete.
If competitors introduce new products and services using new technologies, including artificial intelligence (“AI”) tools or technologies or if new industry standards and practices emerge, our existing technology and systems may become obsolete.
These uncertainties include: • the volatility of domestic and international financial, bond and stock markets, and the markets for funds and other asset classes; • extensive governmental regulation; • litigation; • intense competition; • poor performance of investment products that our advisors recommend or sell or that are otherwise sold or distributed on our platform, including poor performance of investment portfolios as a result of strategies or other trading actions; • substantial fluctuations in the volume and price level of securities; and • dependence on the solvency of various third parties.
These uncertainties include: • the volatility of domestic and international financial, bond and stock markets, and the markets for funds and other asset classes; • extensive governmental regulation; • litigation; • intense competition; • poor performance of investment products that our advisors recommend or sell or that are otherwise sold or distributed on our platform, including poor performance of investment portfolios as a result of strategies or other trading actions; • substantial fluctuations in the volume and price level of securities; and • dependence on the solvency of various third parties. 17 FORM 20-F « Table of Contents As a result, our revenues and earnings may vary significantly from quarter to quarter and from year to year.
A second round between candidates was necessary as none of the candidates obtained more than 50% of the valid votes. The second round was held on October 30, 2022, and the new president was elected with 50.90% of the votes.
New presidential elections were held in Brazil, with a first round on October 2, 2022. A second round between candidates was necessary as none of the candidates obtained more than 50% of the valid votes. The second round was held on October 30, 2022, and the new president was elected with 50.90% of the votes.
This may in turn lead to changes in fair value of assets and liabilities that are recognized in our income statement.
This may result in changes in fair value of assets and liabilities that are recognized in our income statement.
These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liability, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business.
Each of the foregoing types of actions and attacks could disrupt our delivery of products and services or make them unavailable, or result in the exposure of our sensitive, proprietary, and/or personal information, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liability, subject us to lawsuits, fines, sanctions, or other enforcement actions, distract our management or increase our costs of doing business.
If an active trading market is not maintained, investors may not be able to resell their shares at or above offering price and our ability to raise capital in the future may be impaired.
Certain Risks Relating to Our Class A Common Shares An active trading market for our common shares may not be sustainable. If an active trading market is not maintained, investors may not be able to resell their shares at or above offering price and our ability to raise capital in the future may be impaired.
An increase in volume on our systems or other errors or events could cause them to malfunction. Most of our trade orders to buy or sell securities or invest in the broad range of asset classes we offer are received and processed electronically. This method of trading is heavily dependent on the integrity of the electronic systems supporting it.
Most of our trade orders to buy or sell securities or invest in the broad range of asset classes we offer are received and processed electronically. This method of trading is heavily dependent on the integrity of the electronic systems supporting it.
Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate between the real, the U.S. dollar and other currencies. In 2021, the real depreciated 7% to R$5.581 per US$1.00 on December 31, 2021.
Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate between the real, the U.S. dollar and other currencies. In 2022, the real appreciated 6.5% to R$5.218 per US$1.00.
Poor investment performance could lead to a loss of assets under management and a decline in revenues. Distributing investment fund quotas managed by third parties or by our asset managers represents a relevant part of our business, which income is a percentage of the management and/or performance fee related to such funds.
Distributing investment fund quotas managed by third parties or by our asset managers represents a relevant part of our business, which income is a percentage of the management and/or performance fee related to such funds.
With respect to trademarks, loss of rights may result from term expirations, owner abandonment and forfeiture or cancellation proceedings before the Brazilian Patent and Trademark Office (Instituto Nacional da Propriedade Industrial), or the “INPI.” In addition, if we lose rights over registered trademarks, we would not be entitled to use such trademarks on an exclusive basis, and therefore, third parties would be able to use similar or identical trademarks to identify their products or services, which could adversely affect our business.
With respect to trademarks, loss of rights may result from term expirations, owner abandonment and forfeiture or cancellation proceedings before the Brazilian Patent and Trademark Office (Instituto Nacional da Propriedade Industrial), or the “INPI.” In addition, if we lose rights over registered trademarks, we would not be entitled to use such trademarks on an exclusive basis, and therefore, third parties would be able to use similar or identical trademarks to identify their products or services, which could adversely affect our business. 25 FORM 20-F « Table of Contents We may also be subject to costly litigation in the event our services and technology infringe upon or otherwise violate a third party’s proprietary rights.
If, as a result of legislation or judicial decisions, XP CCTVM is required to classify IFAs as employees, XP CCTVM would incur significant additional expenses for compensating IFAs, potentially retroactively to the past five years and including expenses associated with the application of wage and hour laws (including minimum wage, overtime, meal and rest period requirements), vacation, 13th-month salary, Fundo de Garantia do Tempo de Serviço, or “FGTS,” severance, employee benefits, social security contributions, taxes, and penalties (including collective moral damages in case of a collective lawsuit). 11 FORM 20-F « Table of Contents Moreover, on February 14, 2023, the CVM issued CVM Resolution No. 178, which replaced CVM Resolution No. 16 on June 1, 2023.
If, as a result of legislation or judicial decisions, XP CCTVM is required to classify IFAs as employees, XP CCTVM would incur significant additional expenses for compensating IFAs, potentially retroactively to the past five years and including expenses associated with the application of wage and hour laws (including minimum wage, overtime, meal and rest period requirements), vacation, 13th-month salary, Fundo de Garantia do Tempo de Serviço, or “FGTS,” severance, employee benefits, social security contributions, taxes, and penalties (including collective moral damages in case of a collective lawsuit).
We are not currently a defendant in any proprietary rights infringement proceedings. Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks.
Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims or could prevent us from registering our brands as trademarks.
Any systems failure that causes interruptions in our operations could have a material adverse effect on our business, financial condition and results of operations. 14 FORM 20-F « Table of Contents We rely on a number of external service providers for certain key market information and data, technology, processing and supporting functions.
Any systems failure, including any infrastructure or other failure outside of our control, that causes interruptions in our operations could have a material adverse effect on our business, financial condition and results of operations. We rely on a number of external service providers for certain key market information and data, technology, processing and supporting functions.
Poor investment performance by the investment funds managed by third parties or by our asset managers for a number of reasons including as a result of overall market declines, could hinder our growth and reduce our revenues because (1) existing clients might withdraw funds in favor of better performing products or fixed income products, such as government debt, which would result in lower investment advisory and other fees; (2) our ability to attract capital from existing and new clients might diminish; and (3) the negative investment performance will directly reduce our managed assets and revenues base, which may have a material adverse effect on our business, financial condition, results of operations and the price of our Class A common shares.
Poor investment performance by the investment funds managed by third parties or by our asset managers for a number of reasons including as a result of overall market declines, could hinder our growth and reduce our revenues because (1) existing clients might withdraw funds in favor of better performing products or fixed income products, such as government debt, which would result in lower investment advisory and other fees; (2) our ability to attract capital from existing and new clients might diminish; and (3) the negative investment performance will directly reduce our managed assets and revenues base, which may have a material adverse effect on our business, financial condition, results of operations and the price of our Class A common shares. 10 FORM 20-F « Table of Contents Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise, or disruption of our services could expose us to liability and protracted and costly litigation and damage our reputation.
If these proposals are enacted, they may harm our profitability by increasing our tax liabilities, increasing our tax compliance costs, or otherwise affecting our financial condition, results of operations and cash flows. Moreover, we are subject to tax laws and regulations that may be interpreted differently by tax authorities and us.
The Supplementary Law No. 214 and proposal for income tax, if is enacted, may harm our profitability by increasing our tax liabilities, increasing our tax compliance costs, or otherwise affecting our financial condition, results of operations and cash flows. Moreover, we are subject to tax laws and regulations that may be interpreted differently by tax authorities and us.
In addition, our Memorandum and Articles of Association provide that at any time when there are Class A common shares in issue, additional Class B common shares may only be issued pursuant to (1) a share split, subdivision of shares or similar transaction or where a dividend or other distribution is paid by the issue of shares or rights to acquire shares or following capitalization of profits; (2) a merger, consolidation, or other business combination involving the issuance of Class B common shares as full or partial consideration; or (3) an issuance of Class A common shares, whereby holders of the Class B common shares are entitled to purchase a number of Class B common shares that would allow them to maintain their proportional ownership and voting interests in XP (following an offer by us to each holder of Class B common shares to issue to such holder, upon the same economic terms and at the same price, such number of Class B common shares as would ensure such holder may maintain a proportional ownership and voting interest in XP pursuant to our Memorandum and Articles of Association).
Due to the ten-to-one voting ratio between our Class B and Class A common shares, our controlling shareholder, XP Control, controls a majority of the combined voting power of our common shares and therefore is able to elect a majority of the members of our board of directors, so long as the total number of the issued and outstanding Class B common shares is at least 10% of the voting share rights of the Company. 37 FORM 20-F « Table of Contents In addition, our Memorandum and Articles of Association provide that at any time when there are Class A common shares in issue, additional Class B common shares may only be issued pursuant to (1) a share split, subdivision of shares or similar transaction or where a dividend or other distribution is paid by the issue of shares or rights to acquire shares or following capitalization of profits; (2) a merger, consolidation, or other business combination involving the issuance of Class B common shares as full or partial consideration; or (3) an issuance of Class A common shares, whereby holders of the Class B common shares are entitled to purchase a number of Class B common shares that would allow them to maintain their proportional ownership and voting interests in XP (following an offer by us to each holder of Class B common shares to issue to such holder, upon the same economic terms and at the same price, such number of Class B common shares as would ensure such holder may maintain a proportional ownership and voting interest in XP pursuant to our Memorandum and Articles of Association).
There can be no guarantee that we will have sufficient financial and personnel resources to comply with any new regulations or successfully compete in the context of a changing regulatory environment.
There can be no guarantee that we will have sufficient financial and personnel resources to comply with any new regulations or successfully compete in the context of a changing regulatory environment. The laws regulating privacy rights and data protection have evolved considerably over recent years.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeIn 2023, we made further progress in advancing our ESG agenda through our four pillars of action: 1) We aim to provide sustainable investment solutions , including the issuance of ESG securities, ESG-labeled products, ESG education for stakeholders, and a dedicated ESG research team: • Since 2021, we offer ESG portfolios for our private banking customers, a dedicated ESG credit portfolio for institutional investors and an ESG recommended portfolio, composed of 10 names that we believe combine high ESG standards and solid fundamentals, aiming to outperform B3’s Corporate Sustainability Index (ISE) over the long-term. • In 2023, our ESG Research team produced over 20 thematic reports and analyzed the ESG performance of more than 136 companies under XP Research coverage. • We believe we have the largest sustainable investment platform in Brazil, with 38 ESG-labeled investment funds available, including equity, fixed income, hedge fund, index, private equity, and pension funds, featuring both local and global strategies. • We have launched three ESG ETFs on B3, as well as seven ESG COEs (structured notes).
Biggest changeIn 2024, we continued to make significant progress in advancing our ESG agenda through our key material topics: 1) We aim to provide sustainable investment solutions , in the best interest of our clients focus on ESG integration in processes, products and services: • Since 2021, we have been offering ESG portfolios, in the best interests of our clients, such as the ESG recommended portfolio, composed of 10 names that we believe combine high ESG standards and solid fundamentals, aiming to outperform B3’s Corporate Sustainability Index (ISE) over the long-term. • In 2024, the research team published 126 ESG-focused reports, of which 10 were thematic reports and 46 were updates on relevant topics to the agenda.
These include XP Tribes, comprising two to three managers each, that help guide and support our development priorities across numerous projects, and XP Squads, comprising autonomous integrated teams of eight to ten people, including a product owner and business expert, a UX specialist, a technology leader and several developers, that collaborate to create new technologies and solutions or improve our current offerings.
These include XP Tribes, comprising two to three managers each, that help guide and support our development priorities across numerous projects, and XP Squads, comprising autonomous integrated teams of eight to ten people, including a product owner and business expert, a UX specialist, a technology leader and several developers, that collaborate to create new technologies and solutions or improve our current offerings.
These teams focus on the complete customer experience, conducting client interviews, prototyping, behavior analysis and user tests. One of the most visible external examples of our technology capabilities is the suite of technology applications that we provide to our clients and partners.
These teams focus on the complete customer experience, conducting client interviews, prototyping, behavior analysis and user tests. One of the most visible external examples of our technology capabilities is the suite of technology applications that we provide to our clients and partners.
Corporate Interest Held by Financial Institutions in Nonfinancial Companies Pursuant to CMN Resolution No. 5,043 of November 25, 2022, as amended, or “CMN Resolution No. 5,043,” financial institutions may only directly or indirectly hold equity in legal entities (incorporated locally or abroad) that supplement or subsidize the financial institutions’ activities, provided they obtain prior authorization from the Central Bank and that the invested entity does not hold, directly or indirectly, equity of the referred financial institution.
Corporate Interest Held by Financial Institutions in Nonfinancial Companies Pursuant to CMN Resolution No. 5,043 of November 25, 2022, as amended, or “CMN Resolution No. 5,043,” financial institutions may only directly or indirectly hold equity in legal entities (incorporated locally or abroad) that supplement or subsidize the financial institutions’ activities, provided that they obtain prior authorization from the Central Bank and that the invested entity does not hold, directly or indirectly, equity of the referred financial institution.
To be authorized by the CVM to engage in such activity, legal entities that operate as asset managers must (1) have a registered office in Brazil; (2) have securities portfolio management as a corporate purpose and be duly incorporated and registered with the National Register of Legal Entities – CNPJ; (3) have one or more officers duly certified as asset managers as approved by CVM to take on liability for securities portfolio management, pursuant to CVM Resolution No. 21; (4) appoint a compliance officer and a risk management officer; (5) be controlled by reputable shareholders (direct and indirect), who have not been convicted of certain crimes detailed in article 3, VI of CVM Resolution No. 21; (5) not be unable or suspended from occupying a position in financial institution or other entities authorized to operate by the CVM, the Central Bank, SUSEP or PREVIC, and not have been banned from asset management activities by judicial or administrative decisions; (6) put in place and maintain personnel and IT resources appropriate for the size and types of investment portfolio it manages; and (7) execute and provide the applicable forms to the CVM so as to prove its capacity to carry out such activities, pursuant to CVM Resolution No. 21.
To be authorized by the CVM to engage in such activity, legal entities that operate as asset managers must (1) have a registered office in Brazil; (2) have securities portfolio management as a corporate purpose and be duly incorporated and registered with the National Register of Legal Entities – CNPJ; (3) have one or more officers duly certified as asset managers as approved by CVM to take on liability for securities portfolio management, pursuant to CVM Resolution No. 21; (4) appoint a compliance officer and a risk management officer; (5) be controlled by reputable shareholders (direct and indirect), who have not been convicted of certain crimes detailed in article 3, VI of CVM Resolution No. 21; (6) not be unable or suspended from occupying a position in financial institution or other entities authorized to operate by the CVM, the Central Bank, SUSEP or PREVIC, and not have been banned from asset management activities by judicial or administrative decisions; (7) put in place and maintain personnel and IT resources appropriate for the size and types of investment portfolio it manages; and (8) execute and provide the applicable forms to the CVM so as to prove its capacity to carry out such activities, pursuant to CVM Resolution No. 21.
This same regulation requires asset managers to maintain a website, with extensive current information, including, but not limited to, (1) an updated annual filing form (formulário de referência); (2) a code of ethics; (3) rules, procedures and a description of internal controls in order to comply with CVM Resolution No. 21; (4) a risk management policy; (5) a policy of purchase and sale of securities by managers, employees and the company; (6) a pricing manual for assets from the securities portfolios managed by such asset manager, even if the manual has been developed by a third party; and (7) a policy of apportionment and division of orders among the securities portfolios. 73 FORM 20-F « Table of Contents Moreover, under CVM Resolution No. 21, asset management firms are forbidden from (1) making public assurances of profitability levels based on the historical performance of portfolio and market indexes; (2) modifying the basic features of the services they provide without following the prior appropriate procedures under the asset management agreement and regulations; (3) making promises as to future results of the portfolio; (4) contracting or granting loans on behalf of their clients, subject to certain exceptions set out in regulation; (5) providing a surety, corporate guarantee, acceptance or becoming a joint obligor in any other form, with respect to the managed assets; (6) neglecting, under any circumstances, the rights and intentions of the client; (7) trading the securities from the portfolios they manage with the purpose of obtaining brokerage revenues or rebates for themselves or third parties; or (8) subject to certain exceptions set out in the regulation, acting as a counterparty, directly or indirectly, to clients.
This same regulation requires asset managers to maintain a website, with extensive current information, including, but not limited to, (1) an updated annual filing form (formulário de referência); (2) a code of ethics; (3) rules, procedures and a description of internal controls in order to comply with CVM Resolution No. 21; (4) a risk management policy; (5) a policy of purchase and sale of securities by managers, employees and the company; (6) a pricing manual for assets from the securities portfolios managed by such asset manager, even if the manual has been developed by a third party; and (7) a policy of apportionment and division of orders among the securities portfolios. 71 FORM 20-F « Table of Contents Moreover, under CVM Resolution No. 21, asset management firms are forbidden from (1) making public assurances of profitability levels based on the historical performance of portfolio and market indexes; (2) modifying the basic features of the services they provide without following the prior appropriate procedures under the asset management agreement and regulations; (3) making promises as to future results of the portfolio; (4) contracting or granting loans on behalf of their clients, subject to certain exceptions set out in regulation; (5) providing a surety, corporate guarantee, acceptance or becoming a joint obligor in any other form, with respect to the managed assets; (6) neglecting, under any circumstances, the rights and intentions of the client; (7) trading the securities from the portfolios they manage with the purpose of obtaining brokerage revenues or rebates for themselves or third parties; or (8) subject to certain exceptions set out in the regulation, acting as a counterparty, directly or indirectly, to clients.
Companies subject to this regulation are also required to appoint one of their Officers as head of compliance and register such individual in accordance with the Anti-Money Laundering Law and SUSEP Circular No. 612/2020. 85 FORM 20-F « Table of Contents Along the same lines, CVM Resolution No. 50 of August 31, 2021, as amended, or “CVM Resolution No. 50,” which entered into force on October 1, 2021, establishes, among other obligations, that persons who engage in, on a permanent or occasional basis, as a main or ancillary activity, cumulatively or not, the custody, issuance, distribution, settlement, trade, intermediation, consultancy or management of bonds or securities, and independent audit within the scope of the stock exchange market must adopt rules, procedures and internal controls in accordance with previously and expressly established procedures to confirm the registration information of its clients, keep such information updated and monitor the transactions carried out thereby, so as to prevent the use of the account by third parties and identify the end beneficiaries of the transactions, such entities shall also identify and closely monitor the business relations maintained with politically exposed person.
Companies subject to this regulation are also required to appoint one of their Officers as head of compliance and register such individual in accordance with the Anti-Money Laundering Law and SUSEP Circular No. 612/2020. 83 FORM 20-F « Table of Contents Along the same lines, CVM Resolution No. 50 of August 31, 2021, as amended, or “CVM Resolution No. 50,” which entered into force on October 1, 2021, establishes, among other obligations, that persons who engage in, on a permanent or occasional basis, as a main or ancillary activity, cumulatively or not, the custody, issuance, distribution, settlement, trade, intermediation, consultancy or management of bonds or securities, and independent audit within the scope of the stock exchange market must adopt rules, procedures and internal controls in accordance with previously and expressly established procedures to confirm the registration information of its clients, keep such information updated and monitor the transactions carried out thereby, so as to prevent the use of the account by third parties and identify the end beneficiaries of the transactions, such entities shall also identify and closely monitor the business relations maintained with politically exposed person.
The independent auditors and the audit committee, if applicable, must notify the Central Bank, within three business days, of the existence or evidence of error or fraud, such as: • lack of compliance with rules and regulations, which could affect the business of the audited entity; • fraud of any amount conducted by the management of the institution; • relevant fraud conducted by employees of the institution or of third parties; and • relevant errors in the accounting records of the audited entity. 87 FORM 20-F « Table of Contents Audit Committee CMN Resolution No. 4,910 requires financial institutions and other institutions authorized by the Central Bank to operate in Brazil, as well as for clearinghouses and clearance and custody service providers that (1) present reference equity equal to, or greater than, R$1 billion; (2) manage third-party funds in amounts equal to, or greater than, R$1 billion; or (3) have deposits and funds under management in a total amount equal to, or greater than, R$5 billion, to maintain an audit committee (comitê de auditoria).
The independent auditors and the audit committee, if applicable, must notify the Central Bank, within three business days, of the existence or evidence of error or fraud, such as: • lack of compliance with rules and regulations, which could affect the business of the audited entity; • fraud of any amount conducted by the management of the institution; • relevant fraud conducted by employees of the institution or of third parties; and • relevant errors in the accounting records of the audited entity. 85 FORM 20-F « Table of Contents Audit Committee CMN Resolution No. 4,910 requires financial institutions and other institutions authorized by the Central Bank to operate in Brazil, as well as for clearinghouses and clearance and custody service providers that (1) present reference equity equal to, or greater than, R$1 billion; (2) manage third-party funds in amounts equal to, or greater than, R$1 billion; or (3) have deposits and funds under management in a total amount equal to, or greater than, R$5 billion, to maintain an audit committee (comitê de auditoria).
These groups include: • Corporate Risk – this group is focused on identifying, classifying and mitigating operational, reputational, environmental and strategic risks, including any potential internal fraud; • Financial Risk – this group is focused on monitoring our financial positions and managing our exposure to liquidity risk, market risk, and credit risk; and 69 FORM 20-F « Table of Contents • Fraud Prevention – this group is comprised of fraud experts, data scientist, database administrators, investigators and regulator staff, who focus on managing our antifraud strategy and ensuring the legitimacy of client transactions; their work entails: (1) detecting and preventing potential external fraud with different models of client authentication, such as user logins; (2) managing our transaction verification services; (3) monitoring financial advisors activities; (4) employee and partner fingerprinting; (5) managing our data tokenization and token management technology; and (6) managing our biometric facial recognition technology, among others.
These groups include: • Corporate Risk – this group is focused on identifying, classifying and mitigating operational, reputational, environmental and strategic risks, including any potential internal fraud; • Financial Risk – this group is focused on monitoring our financial positions and managing our exposure to liquidity risk, market risk, and credit risk; and 67 FORM 20-F « Table of Contents • Fraud Prevention – this group is comprised of fraud experts, data scientist, database administrators, investigators and regulator staff, who focus on managing our antifraud strategy and ensuring the legitimacy of client transactions; their work entails: (1) detecting and preventing potential external fraud with different models of client authentication, such as user logins; (2) managing our transaction verification services; (3) monitoring financial advisors activities; (4) employee and partner fingerprinting; (5) managing our data tokenization and token management technology; and (6) managing our biometric facial recognition technology, among others.
We believe the continued promotion of these products is not in the best interests of investors, but they continue to generate high fees for the traditional banks. • 56 FORM 20-F « Table of Contents • Source : Séries temporais – Brazilian Central Bank • High Costs and Spreads – We believe overall fees and spreads for financial products in Brazil are too high and are driven by (1) the closed platforms of the incumbent banks who often limit their customer’s selection of financial products to those created and controlled by each bank; (2) the promotion of inefficient financial products that pay very low yields, such as poupança; and (3) the high, asset-heavy infrastructure costs of the incumbent banks. • Poor Customer Service – We believe the incumbent banks and other service providers generally provide poor customer service in Brazil based on market surveys, given the lack of market competition and alternative choices available to their clients.
We believe the continued promotion of these products is not in the best interests of investors, but they continue to generate high fees for the traditional banks. 54 FORM 20-F « Table of Contents Source : Séries temporais – Brazilian Central Bank • High Costs and Spreads – We believe overall fees and spreads for financial products in Brazil are too high and are driven by (1) the closed platforms of the incumbent banks who often limit their customer’s selection of financial products to those created and controlled by each bank; (2) the promotion of inefficient financial products that pay very low yields, such as poupança; and (3) the high, asset-heavy infrastructure costs of the incumbent banks. • Poor Customer Service – We believe the incumbent banks and other service providers generally provide poor customer service in Brazil based on market surveys, given the lack of market competition and alternative choices available to their clients.
Moreover, the total amount of fixed assets must be limited to 50.0% of the institution’s regulatory working capital; • they shall comply with the principles of selectivity, guarantee, liquidity and risk diversification; 74 FORM 20-F « Table of Contents • financial institutions are prohibited from granting loans or advances without an appropriate agreement formalizing such debt; • financial institutions may not grant loans to, or guarantee the transactions of, their affiliates, except in certain limited circumstances (see “—Other Rules —Transactions with Affiliates” below); • the registered capital and total net assets of financial institutions must be compatible with the rules governing share capital and minimum capitalization enforced by the Central Bank for each type of financial institution; and • financial institutions shall maintain internal policy and procedures governing their relationships with clients and users of their products and services.
Moreover, the total amount of fixed assets must be limited to 50.0% of the institution’s regulatory working capital; • they shall comply with the principles of selectivity, guarantee, liquidity and risk diversification; 72 FORM 20-F « Table of Contents • financial institutions are prohibited from granting loans or advances without an appropriate agreement formalizing such debt; • financial institutions may not grant loans to, or guarantee the transactions of, their affiliates, except in certain limited circumstances (see “—Other Rules —Transactions with Affiliates” below); • the registered capital and total net assets of financial institutions must be compatible with the rules governing share capital and minimum capitalization enforced by the Central Bank for each type of financial institution; and • financial institutions shall maintain internal policy and procedures governing their relationships with clients and users of their products and services.
Other important responsibilities of the Central Bank are as follows: • controlling and approving the organization, operation, transfer of control and corporate reorganization of financial institutions and other institutions authorized to operate by the Central Bank; • managing the daily flow of foreign capital and derivatives; • establishing administrative rules and regulation for the registration of foreign investments; • monitoring remittances of foreign currency; • controlling the repatriation of funds (in case of a serious deficit in Brazil’s payment balance, the Central Bank may limit remittances of profits and prohibit remittances of capital for a limited period); • receiving compulsory collections and voluntary deposits in cash from financial institutions; 77 FORM 20-F « Table of Contents • executing rediscount transactions and granting loans to banking financial institutions and other institutions authorized to operate by the Central Bank; • intervening in the financial institutions or placing them under special administrative regimes, and determining their compulsory liquidation; and • acting as depositary of the gold and foreign currency.
Other important responsibilities of the Central Bank are as follows: • controlling and approving the organization, operation, transfer of control and corporate reorganization of financial institutions and other institutions authorized to operate by the Central Bank; • managing the daily flow of foreign capital and derivatives; • establishing administrative rules and regulation for the registration of foreign investments; • monitoring remittances of foreign currency; • controlling the repatriation of funds (in case of a serious deficit in Brazil’s payment balance, the Central Bank may limit remittances of profits and prohibit remittances of capital for a limited period); • receiving compulsory collections and voluntary deposits in cash from financial institutions; • executing rediscount transactions and granting loans to banking financial institutions and other institutions authorized to operate by the Central Bank; • intervening in the financial institutions or placing them under special administrative regimes, and determining their compulsory liquidation; and 75 FORM 20-F « Table of Contents • acting as depositary of the gold and foreign currency.
Such reports must be (a) approved by the board of directors of the financial institution or, absent the board of directors, by its officers; and (b) made available to the Central Bank for at least five years. 88 FORM 20-F « Table of Contents Foreign Investment in National Financial Institutions In accordance with Article 192 of the Constitution, Article 52, II, of the Brazilian Transitory Constitutional Rulings enacted in 1988, or “ADCT,” foreign investors (regardless of being an individual or entity and irrespective of their nationality) are prevented from controlling, acquiring or increasing equity interest held in a Brazilian financial institution, directly or indirectly, unless there is a bilateral international treaty or such foreign acquisition or increase is in the interest of the Brazilian government.
Such reports must be (a) approved by the board of directors of the financial institution or, absent the board of directors, by its officers; and (b) made available to the Central Bank for at least five years. 86 FORM 20-F « Table of Contents Foreign Investment in National Financial Institutions In accordance with Article 192 of the Constitution, Article 52, II, of the Brazilian Transitory Constitutional Rulings enacted in 1988, or “ADCT,” foreign investors (regardless of being an individual or entity and irrespective of their nationality) are prevented from controlling, acquiring or increasing equity interest held in a Brazilian financial institution, directly or indirectly, unless there is a bilateral international treaty or such foreign acquisition or increase is in the interest of the Brazilian government.
CFTC-registered introducing brokers are subject to expansive requirements under the Commodity Exchange Act and CFTC and NFA rules, including requirements relating to, among other things, sales practices, regulatory capital, anti-money laundering, financial reporting, supervision and recordkeeping. 90 FORM 20-F « Table of Contents The violation of laws, rules or regulation that govern the activities of an SEC-registered broker-dealer or CFTC-registered introducing broker could result in administrative or court proceedings, censures, fines, penalties, disgorgement, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses, the issuance of cease-and-desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.
CFTC-registered introducing brokers are subject to expansive requirements under the Commodity Exchange Act and CFTC and NFA rules, including requirements relating to, among other things, sales practices, regulatory capital, anti-money laundering, financial reporting, supervision and recordkeeping. 88 FORM 20-F « Table of Contents The violation of laws, rules or regulation that govern the activities of an SEC-registered broker-dealer or CFTC-registered introducing broker could result in administrative or court proceedings, censures, fines, penalties, disgorgement, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses, the issuance of cease-and-desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.
We believe these competitive strengths form the foundations of our business and drive value creation for our shareholders. 59 FORM 20-F « Table of Contents Investment platform Our open product platform, which we believe is a pioneer in the market and is the most complete among Brazilian players, combines: (i) a wide network of third party partners such as independent asset managers, medium-sized banks and insurance companies; (ii) a comprehensive range of proprietary products that includes our Asset, our funds administration business and our global investment platform; and (iii) capital markets access powered by our Investment Banking business, which originates IPOs and debt issuances.
We believe these competitive strengths form the foundations of our business and drive value creation for our shareholders. 57 FORM 20-F « Table of Contents Investment platform Our open product platform, which we believe is a pioneer in the market and is the most complete among Brazilian players, combines: (i) a wide network of third party partners such as independent asset managers, medium-sized banks and insurance companies; (ii) a comprehensive range of proprietary products that includes our Asset, our funds administration business and our global investment platform; and (iii) capital markets access powered by our Investment Banking business, which originates IPOs and debt issuances.
As a result, XP Apps enable users to incorporate a range of activities across their customer experience journeys, such as managing their accounts, executing trades, performing custom analytics and creating custom reports. 67 FORM 20-F « Table of Contents Bull - Pro Bull is our free, cloud-based trading platform designed for retail and institutional traders, that includes powerful data visualization, custom simulations, analytics, and advance graphics tools that can be used from any internet connected device, such as a desktop, tablet, mobile phone and smart watch.
As a result, XP Apps enable users to incorporate a range of activities across their customer experience journeys, such as managing their accounts, executing trades, performing custom analytics and creating custom reports. 65 FORM 20-F « Table of Contents Bull - Pro Bull is our free, cloud-based trading platform designed for retail and institutional traders, that includes powerful data visualization, custom simulations, analytics, and advance graphics tools that can be used from any internet connected device, such as a desktop, tablet, mobile phone and smart watch.
Financial Holding Brazil Indirectly 100.00 % 100.00 % 100.00 % XPE Infomoney Educação Assessoria Empresarial e Participações Ltda. Digital content services Brazil Indirectly 100.00 % 100.00 % 100.00 % Tecfinance Informática e Projetos de Sistemas Ltda. Rendering of IT services Brazil Indirectly 99.70 % 99.73 % 99.73 % XP Corretora de Seguros Ltda.
Financial Holding Brazil Directly 100.00 % 100.00 % 100.00 % XPE Infomoney Educação Assessoria Empresarial e Participações Ltda. Digital content services Brazil Indirectly 100.00 % 100.00 % 100.00 % Tecfinance Informática e Projetos de Sistemas Ltda. Rendering of IT services Brazil Indirectly 99.70 % 99.70 % 99.73 % XP Corretora de Seguros Ltda.
The same obligation is imposed upon asset managers (such as XP Gestão, XP Advisory, XP PE Gestão de Recursos Ltda., XP Vista and XP Allocation Asset Management Ltda.) and insurance companies and insurance brokers (such as XP CS and XP VP). 86 FORM 20-F « Table of Contents Bank Secrecy Brazilian financial institutions, by virtue of Supplementary Law No. 105 of January 10, 2001, are also subject to strict secrecy rules on transactions, and are required to preserve the confidential nature of their assets and liabilities transactions and of the services provided to their clients.
The same obligation is imposed upon asset managers (such as XP Gestão, XP Advisory, XP PE Gestão de Recursos Ltda., XP Vista and XP Allocation Asset Management Ltda.) and insurance companies and insurance brokers (such as XP CS and XP VP). 84 FORM 20-F « Table of Contents Bank Secrecy Brazilian financial institutions, by virtue of Supplementary Law No. 105 of January 10, 2001, are also subject to strict secrecy rules on transactions, and are required to preserve the confidential nature of their assets and liabilities transactions and of the services provided to their clients.
Legislation Applicable to Financial Institutions and Portfolio Managers in Brazil The current Brazilian banking and financial institutional system was established by Law No. 4,595 of December 31, 1964, as amended, or the “Banking Law.” 71 FORM 20-F « Table of Contents The Banking Law laid out the structure of the national financial system, which is made up of the CMN, the Central Bank, Banco do Brasil S.A., the National Bank for Economic and Social Development – BNDES, or the “BNDES,” and other public or private financial institutions.
Legislation Applicable to Financial Institutions and Portfolio Managers in Brazil The current Brazilian banking and financial institutional system was established by Law No. 4,595 of December 31, 1964, as amended, or the “Banking Law.” 69 FORM 20-F « Table of Contents The Banking Law laid out the structure of the national financial system, which is made up of the CMN, the Central Bank, Banco do Brasil S.A., the National Bank for Economic and Social Development – BNDES, or the “BNDES,” and other public or private financial institutions.
In addition to BC#, the Central Bank is planning to launch a new digital currency and blockchain platform, Drex. 58 FORM 20-F « Table of Contents • Increasing Demand for Better UX Experiences – As customers engage in more digital channels, they are increasingly demanding sleeker, more powerful and more convenient UX, similar to the consumer technology products and software applications that they interact with in other areas of their daily lives.
In addition to BC#, the Central Bank is planning to launch a new digital currency and blockchain platform, Drex. 56 FORM 20-F « Table of Contents • Increasing Demand for Better UX Experiences – As customers engage in more digital channels, they are increasingly demanding sleeker, more powerful and more convenient UX, similar to the consumer technology products and software applications that they interact with in other areas of their daily lives.
Similarly, other lending products, commonly found in larger markets, such as home equity loans, are very limited in Brazil. 57 FORM 20-F « Table of Contents Key Market Trends • Favorable and Highly Aligned Regulatory Initiatives – The Central Bank is actively promoting what it calls financial democratization policies that seek to provide easier access to financial markets, and better and more transparent financial services.
Similarly, other lending products, commonly found in larger markets, such as home equity loans, are very limited in Brazil. 55 FORM 20-F « Table of Contents Key Market Trends • Favorable and Highly Aligned Regulatory Initiatives – The Central Bank is actively promoting what it calls financial democratization policies that seek to provide easier access to financial markets, and better and more transparent financial services.
We also own a number of domain names registered in Brazil, including “xp.com.br,” “leadr.com.br,” “rico.com.br,” “clear.com.br” and “infomoney.com.br,” and abroad such as “xpi.us.” As of December 31, 2023, we held a 21.83% equity interest in “O Primo Rico Midia, Educacional e Participações Ltda.,” with the remaining interest held by our partner, Thiago Lolkus Nigro, which owns the trademark PRIMO RICO.
We also own a number of domain names registered in Brazil, including “xp.com.br,” “leadr.com.br,” “rico.com.br,” “clear.com.br” and “infomoney.com.br,” and abroad such as “xpi.us.” As of December 31, 2024, we held a 21.83% equity interest in “O Primo Rico Midia, Educacional e Participações Ltda.,” with the remaining interest held by our partner, Thiago Lolkus Nigro, which owns the trademark PRIMO RICO.
As a local insurer, XP Seguros is subject to the insurance laws and regulation generally applicable to life and private retirement carriers in Brazil. 89 FORM 20-F « Table of Contents XP CS is an insurance brokerage company focused on life and retirement insurance brokerage, duly licensed by SUSEP to operate in the insurance market as per SUSEP Circular Letter No. 510 of January 22, 2015, and registered with SUSEP under No. 10,0628468.
As a local insurer, XP Seguros is subject to the insurance laws and regulation generally applicable to life and private retirement carriers in Brazil. 87 FORM 20-F « Table of Contents XP CS is an insurance brokerage company focused on life and retirement insurance brokerage, duly licensed by SUSEP to operate in the insurance market as per SUSEP Circular Letter No. 510 of January 22, 2015, and registered with SUSEP under No. 10,0628468.
This also includes the development of policies, standards, and procedures, as well as compliance with regulatory standards related to ESG and climate; 63 FORM 20-F « Table of Contents • Methodologies and analysis - We developed internal ESG and social, environmental, and climate risk methodologies, such as (i) social, environmental, and climate rating methodologies, (ii) climate sensitivity, (iii) financed greenhouse gas emissions, and (iv) carbon footprint of investment funds and equity portfolios.
This also includes the development of policies, standards, and procedures, as well as compliance with regulatory standards related to ESG and climate; 61 FORM 20-F « Table of Contents • Methodologies and analysis - We developed internal ESG and social, environmental, and climate risk methodologies, such as (i) social, environmental, and climate rating methodologies, (ii) climate sensitivity, (iii) financed greenhouse gas emissions, and (iv) carbon footprint of investment funds and equity portfolios.
Our digital research retail platform is free and has over 450 thousand monthly visitors that come to our website, which utilizes a robust SEO strategy to attract new viewers, along with educational content and in-person events. • EXPERT Event – our annual conference for clients, IFAs and partners has become the largest investment event in Latin America.
Our digital research retail platform is free and has over 868 thousand monthly visitors that come to our website, which utilizes a robust SEO strategy to attract new viewers, along with educational content and in-person events. • EXPERT Event – our annual conference for clients, IFAs and partners has become the largest investment event in Latin America.
For further information, see note 36 to our audited consolidated financial statements included elsewhere in this annual report. 72 FORM 20-F « Table of Contents Securities Brokerage Firms Securities trading in stock exchange markets shall be carried out exclusively by securities brokerage firms (such as XP CCTVM) and certain other authorized institutions.
For further information, see note 36 to our audited consolidated financial statements included elsewhere in this annual report. 70 FORM 20-F « Table of Contents Securities Brokerage Firms Securities trading in stock exchange markets shall be carried out exclusively by securities brokerage firms (such as XP CCTVM) and certain other authorized institutions.
XP DTVM is authorized by the Central Bank to, among other activities, carry out public offering and distribution of bonds and securities, provide securities portfolio management services and carry out operations in the foreign exchange market. 70 FORM 20-F « Table of Contents • Banco Modal was originally founded under the name Modal S.A.
XP DTVM is authorized by the Central Bank to, among other activities, carry out public offering and distribution of bonds and securities, provide securities portfolio management services and carry out operations in the foreign exchange market. 68 FORM 20-F « Table of Contents • Banco Modal was originally founded under the name Modal S.A.
On January 6, 2022, we entered into a binding agreement to merge Banco Modal S.A., or “Modal,” with Banco XP through certain corporate acts pursuant to which Banco XP would deliver up to 19.5 million newly issued XP Inc. Class A common shares in the form of XP BDRs to shareholders of Modal.
On January 6, 2022, we entered into a binding agreement to acquire Banco Modal S.A., or “Modal,” with Banco XP through certain corporate acts pursuant to which Banco XP would deliver up to 19.5 million newly issued XP Inc. Class A common shares in the form of XP BDRs to shareholders of Modal.
Brasil IV Fundo de Investimento em Participações (the predecessor-in-interest to GA Bermuda) and DYNA III held 2,036,988,542 shares (prior to giving effect to the Share Split) of XP Brazil, which were all of the shares of XP Brazil, our Brazilian principal non-operating holding company.
Brasil IV Fundo de Investimento em Participações (the predecessor-in-interest to GA Bermuda) and DYNA III held 2,036,988,542 shares (prior to giving effect to the Share Split) of XP Brazil, which were all of the shares of XP Brazil, our Brazilian principal non-operating holding company at the time.
In addition, the XP Model has resulted in several strategic and operating advantages, including: • Highly Efficient Financial Model – We believe our technology-driven business model provides us with significant scale and operating efficiencies, including: 60 FORM 20-F « Table of Contents ▪ Asset-Light, Low-Cost Structure – Our technology-driven business model is asset-light and highly scalable.
In addition, the XP Model has resulted in several strategic and operating advantages, including: • Highly Efficient Financial Model – We believe our technology-driven business model provides us with significant scale and operating efficiencies, including: 58 FORM 20-F « Table of Contents ▪ Asset-Light, Low-Cost Structure – Our technology-driven business model is asset-light and highly scalable.
Our cross-sell products include our credit card, digital account, FX solutions, insurance and more. 61 FORM 20-F « Table of Contents • Corporate & SMB – We intend to offer better business solutions by leveraging existing relationships to gain penetration with products like FX, derivatives, loans, and insurance, among others.
Our cross-sell products include our credit card, digital account, FX solutions, insurance and more. 59 FORM 20-F « Table of Contents • Corporate & SMB – We intend to offer better business solutions by leveraging existing relationships to gain penetration with products like FX, derivatives, loans, and insurance, among others.
Our Support Functions 68 FORM 20-F « Table of Contents In order to provide, fulfill and support our products, services and platforms, we have built a robust yet efficient operations organization that leverages our technology to onboard our clients, provide high-quality customer support and conduct our fraud prevention and risk management.
Our Support Functions 66 FORM 20-F « Table of Contents In order to provide, fulfill and support our products, services and platforms, we have built a robust yet efficient operations organization that leverages our technology to onboard our clients, provide high-quality customer support and conduct our fraud prevention and risk management.
The asset-light nature of our business model requires minimal capital expenditures to facilitate growth, with expenditures amounting to 1.3%, 1.0% and 2.9% of net revenues for the years ended December 31, 2023, 2022 and 2021, respectively. ▪ Strong Free Cash Flow Generation – Our business model operating efficiencies enables us to generate strong cash flow in various market conditions, and enables us to continue investing in the growth of our existing business; • Network Effects – As we grow our business, we believe our model demonstrates distinct self-reinforcing network effects that help compound our growth; and • Powerful Combination of Attributes – The success of XP is due to the combination of capabilities, trusted brand, size and scalability of the XP Model that have been developed and nurtured over time.
The asset-light nature of our business model requires minimal capital expenditures to facilitate growth, with expenditures amounting to 1.9%, 1.3% and 1% of net revenues for the years ended December 31, 2024, 2023 and 2022, respectively. ▪ Strong Free Cash Flow Generation – Our business model operating efficiencies enables us to generate strong cash flow in various market conditions, and enables us to continue investing in the growth of our existing business; • Network Effects – As we grow our business, we believe our model demonstrates distinct self-reinforcing network effects that help compound our growth; and • Powerful Combination of Attributes – The success of XP is due to the combination of capabilities, trusted brand, size and scalability of the XP Model that have been developed and nurtured over time.
Acquisition of Minority Stakes in Research Companies On September 3 and 8, 2021, respectively, we announced the acquisition of minority stakes in two research groups, Levante Holding S.A. and Solaise S.A. (also known as OHM Research). On February 2, 2022, we announced the acquisition of a minority stake in another research group, Inside Research S.A.
Acquisition of Minority Stakes in Research Companies On September 3 and 8, 2021, respectively, we announced the acquisition of minority stakes in two research groups, Suno, Levante and Solaise (also known as OHM Research). On February 2, 2022, we announced the acquisition of a minority stake in another research group, Inside Research S.A.
As shown in the following chart, we generate a significant amount of our revenues from existing clients and Client Assets, which is recurring and predictable in nature. 53 FORM 20-F « Table of Contents % of Retail Revenue from New Clients vs.
As shown in the following chart, we generate a significant amount of our revenues from existing clients and Client Assets, which is recurring and predictable in nature. 51 FORM 20-F « Table of Contents % of Retail Revenue from New Clients vs.
For example, these products include: 64 FORM 20-F « Table of Contents Name Type Description Clients Brokerage Securities Investment Products Hundreds of equity securities and futures, such as: • Equities, iShares, or “ETFs” and BDRs; • Dollar, Ibovespa and rate futures; and • Commodities, such as feeder cattle, coffee, soy; corn, ethanol, oil and gold. • Retail • Institutional Fixed Income Securities Investment Products Over 150 fixed income securities, including: Bank Deposits: LCI, LCA, CDB, and LC; Corporate Bonds: Debentures, CRI, CRA, LF and FIDC; Sovereign Bonds: NTN-B, NTN-F, LTN, LFTs; and Interest Rate Swaps • Retail • Institutional Mutual, Hedge and Private Equity Funds Investment Products • Over 200 XP Asset Management Funds; • Over 500 third-party funds curated by XP from over 160 asset managers; and • Over 140 international funds. • Retail • Institutional Structured Products Investment Products Derivatives and synthetic instruments including: • Derivatives – Structures set up with options, using the margin as security.
For example, these products include: 62 FORM 20-F « Table of Contents Name Type Description Clients Brokerage Securities Investment Products Hundreds of equity securities and futures, such as: • Equities, iShares, or “ETFs” and BDRs; • Dollar, Ibovespa and rate futures; and • Commodities, such as feeder cattle, coffee, soy; corn, ethanol, oil and gold. • Retail • Institutional Fixed Income Securities Investment Products Over 275 fixed income securities, including: Bank Deposits: LCI, LCA, CDB, and LC; Corporate Bonds: Debentures, CRI, CRA, LF and FIDC; Sovereign Bonds: NTN-B, NTN-F, LTN, LFTs; and Interest Rate Swaps • Retail • Institutional Mutual, Hedge and Private Equity Funds Investment Products • Over 200 XP Asset Management Funds; • Over 500 third-party funds curated by XP from over 160 asset managers; and • Over 100 international funds. • Retail • Institutional Structured Products Investment Products Derivatives and synthetic instruments including: • Derivatives – Structures set up with options, using the margin as security.
These include: ▪ User Base of Clients – This includes our (1) over 4.5 million retail clients who buy and sell the financial products on our platform as of December 31, 2023, benefiting from our ecosystem because they can access a much broader portfolio of financial products, from hundreds of different providers, and get help finding the product that is right for them, all in a user-friendly way, with exceptionally low fees; and (2) over 800 commercial clients as of December 31, 2023, such as institutions and corporate issuers, fund managers, private banks, corporate treasuries and insurance companies, who provide additional liquidity and unique financial products for our platform.
These include: ▪ User Base of Clients – This includes our (1) approximately 4.7 million retail clients who buy and sell the financial products on our platform as of December 31, 2024, benefiting from our ecosystem because they can access a much broader portfolio of financial products, from hundreds of different providers, and get help finding the product that is right for them, all in a user-friendly way, with exceptionally low fees; and (2) over 800 commercial clients as of December 31, 2024, such as institutions and corporate issuers, fund managers, private banks, corporate treasuries and insurance companies, who provide additional liquidity and unique financial products for our platform.
We train our customer service personnel to (1) understand the daily activities and processes across the client journey in order to help resolve customer issues more effectively; (2) prioritize positive client experiences and long-term relationships above short-term performance results; and (3) leverage and promote our advanced technologies to serve our clients more efficiently. ▪ Collateralized Credit Products – Since 2020, we began to offer to our XP-brand clients access to low-fee collateralized credit lines to improve their experience within the XP ecosystem.
We train our customer service personnel to (1) understand the daily activities and processes across the client journey in order to help resolve customer issues more effectively; (2) prioritize positive client experiences and long-term relationships above short-term performance results; and (3) leverage and promote our advanced technologies to serve our clients more efficiently. ▪ Collateralized Credit Products – We have offered our XP-brand clients access to low-fee collateralized credit lines to improve their experience within the XP ecosystem since 2020.
Our content also helps our clients navigate and evolve through their journey as investors, which we believe helps them optimize their asset allocations over time. • Infomoney – acquired in 2011, Infomoney is the largest investment-related website in Latin America, with approximately 7.4 million monthly unique visitors as of December 31, 2023. • XP Educação – a key part of our mission since our founding, XP Educação is a leading financial education portal in Brazil.
Our content also helps our clients navigate and evolve through their journey as investors, which we believe helps them optimize their asset allocations over time. • Infomoney – acquired in 2011, Infomoney is the largest investment-related website in Latin America, with approximately 7.5 million monthly unique visitors as of December 31, 2024. • XP Educação – a key part of our mission since our founding, XP Educação is a leading financial education portal in Brazil.
Brazil’s GDP growth fluctuated significantly over the past decade, with Brazil going through different recessions, political turmoil and the COVID-19 outbreak, our core investment KPIs kept growing consistently, with Client Assets reaching R$1.1 trillion in December 31, 2023. 55 FORM 20-F « Table of Contents Key Market Challenges We believe the Brazil financial services industry faces several important market challenges that create market inefficiencies and opportunities for disruption, including: • Highly Concentrated Market – In Brazil, the financial services market continues to be controlled by a few traditional financial institutions.
Brazil’s GDP growth fluctuated significantly over the past decade, with Brazil going through different recessions, political turmoil and the COVID-19 outbreak, our core investment KPIs kept growing consistently, with Client Assets reaching R$1.2 trillion in December 31, 2024. 53 FORM 20-F « Table of Contents Key Market Challenges We believe the Brazil financial services industry faces several important market challenges that create market inefficiencies and opportunities for disruption, including: • Highly Concentrated Market – In Brazil, the financial services market continues to be controlled by a few traditional financial institutions.
These products appear as one single (synthetic) asset for the client, facilitating monitoring of performance and single taxation, and can have lower costs compared with investing in assets/derivatives separately. • Retail • Institutional Credit Cards Credit Products We offer to our clients in both XP and Rico a Visa Infinite Credit Card free of charges and with a pioneer “Investback” program - a cash-back program that automatically invests at least 1% of every paid invoice in a liquid fixed-income fund on behalf of the customer as a reward. • Retail Loan operations/Collateralized Credit Products Credit Products Our platform offers hassle-free, low-interest personal loans secured on the customer’s invested assets, which allows for rates below market averages. 90-day NPL is zero due to the structured nature of the credit. • Retail Retirement Plans and Life Insurance Investment Products XP branded solutions a nd distribution of over 266 funds from 105 leadi ng independent insurers and asset managers, including: • Pension and social security funds; and • Life and travel insurance products of the main independent providers, with similar characteristics to those offered in more developed markets. • Retail • Institutional Wealth Management Services Investment Products A suite of asset organization, succession planning and other services. • Retail Other Investment Products Investment Products • Real Estate funds of corporate assets logistics, retail and receivables; and • Equity and debt capital markets solutions. • Retail • Institutional Our Marketing, Sales and Distribution 65 FORM 20-F « Table of Contents We market our brands and value-proposition through our proprietary media and we sell our products and services through our omni-channel distribution network and online portals, which are part of our self-reinforcing ecosystem that promotes XP’s products and services.
These products appear as one single (synthetic) asset for the client, facilitating monitoring of performance and single taxation, and can have lower costs compared with investing in assets/derivatives separately. • Retail • Institutional Credit Cards Credit Products We offer to our clients in both XP and Rico a Visa Infinite Credit Card free of charges and with a pioneer “Investback” program - a cash-back program that automatically invests at least 1% of every paid invoice in a liquid fixed-income fund on behalf of the customer as a reward. • Retail Loan operations/Collateralized Credit Products Credit Products Our platform offers hassle-free, low-interest personal loans secured on the customer’s invested assets, which allows for rates below market averages. 90-day NPL is almost zero due to the structured nature of the credit. • Retail Retirement Plans and Life Insurance Investment Products XP branded solutions and distribution of over 296 funds from 109 leading independent insurers and asset managers, including: • Pension and social security funds; and • Life insurance products of the main independent providers, with similar characteristics to those offered in more developed markets. • Retail • Institutional Wealth Management Services Investment Products A suite of asset organization, succession planning and other services. • Retail Other Investment Products Investment Products • Real Estate funds of corporate assets logistics, retail and receivables; and • Equity and debt capital markets solutions. • Retail • Institutional 63 FORM 20-F « Table of Contents Our Marketing, Sales and Distribution We market our brands and value-proposition through our proprietary media and we sell our products and services through our omni-channel distribution network and online portals, which are part of our self-reinforcing ecosystem that promotes XP’s products and services.
In accordance with the Basel Committee principles, other relevant rules for financial institutions are CMN Resolution No. 4,955 of October 21, 2021, as amended, or “CMN Resolution No. 4,955”, and CMN Resolution No. 4,958, as amended, or “CMN Resolution No. 4,958”, which set out the methodology for calculating the reference capital and the ascertainment of the minimum requirements for the reference capital, the main capital and additional capital.
In accordance with the Basel Committee principles, other relevant rules for financial institutions are CMN Resolution No. 4,955 of October 21, 2021, as amended, or “CMN Resolution No. 4,955,” and CMN Resolution No. 4,958, as amended, or “CMN Resolution No. 4,958,” which set out the methodology for calculating the reference capital and the ascertainment of the minimum requirements for the reference capital, the main capital and additional capital.
Our Fraud Prevention and Risk Management Our fraud prevention and risk management operations are primarily managed by three different groups that are staffed with more than 77 employees dedicated to auditing and mitigating our company risk exposure.
Our Fraud Prevention and Risk Management Our fraud prevention and risk management operations are primarily managed by three different groups that are staffed with more than 270 employees dedicated to auditing and mitigating our company risk exposure.
Mediation of information systems Brazil Indirectly 100.00 % 99.99 % 99.99 % XP Advisory Gestão Recursos Ltda. Asset management Brazil Indirectly 99.53 % 99.55 % 99.54 % XP Vista Asset Management Ltda. Asset management Brazil Indirectly 99.99 % 99.99 % 99.50 % XP Controle 4 Participações S.A.
Mediation of information systems Brazil Indirectly 100.00 % 100.00 % 99.99 % XP Advisory Gestão Recursos Ltda. Asset management Brazil Indirectly 99.53 % 99.53 % 99.55 % XP Vista Asset Management Ltda. Asset management Brazil Indirectly 99.99 % 99.99 % 99.99 % XP Controle 4 Participações S.A.
We believe we have established ourselves as the leading alternative to the traditional banks, with a large and fast-growing ecosystem of retail investors, institutions, and corporate issuers, built over many years that reached 4.5 million active clients.
We believe we have established ourselves as the leading alternative to the traditional banks, with a large and fast-growing ecosystem of retail investors, institutions, and corporate issuers, built over many years that reached approximately 4.7 million active clients.
We estimate that the total addressable market size was close to R$500 billion in gross revenues in 2023, including adjacent markets complementary to XP's core market, such as insurance, credit and debit cards, and other loans. Our Environmental, Social and Governance Commitment Since 2020, we recognize that the ESG agenda is an ongoing journey.
We estimate that the total addressable market size was close to R$600 billion in gross revenues in 2024, including adjacent markets complementary to XP's core market, such as insurance, credit and debit cards, and other loans. Our Environmental, Social and Governance Commitment Since 2020, we recognize that the ESG agenda is an ongoing journey.
Main product developments include: (1) retirement plans platform launched in 2019; (2) collateralized credit in 2020; (3) Visa Infinite credit cards in 2021; and (4) digital account, international investments platform and life insurance in 2022. • Empowerment of XP Advisors to Provide Enhanced Quality & Experience - By providing our advisors with our cutting-edge proprietary software in order to personalize client’s asset allocation and risk management, we are able to continue to differentiate ourselves with higher quality end-to-end services, and smarter curated advice.
Main product developments include: (1) retirement plans platform launched in 2019; (2) collateralized credit in 2020; (3) Visa Infinite credit cards in 2021; and (4) digital account, international investments platform and life insurance in 2022. 48 FORM 20-F « Table of Contents • Empowerment of XP Advisors to Provide Enhanced Quality & Experience - By providing our advisors with our cutting-edge proprietary software in order to personalize client’s asset allocation and risk management, we are able to continue to differentiate ourselves with higher quality end-to-end services, and smarter curated advice.
Pursuant to the Anti-Money Laundering Law, banks (such as Banco XP), securities brokers (such as XP CCTVM), securities distributors, asset managers (such as XP Gestão, XP Advisory and XP Vista), leasing companies, credit card companies, insurance companies and insurance brokers (such as XP VP and XP CS, respectively), among others, must: (1) identify and maintain up-to-date records of their clients, for a period of at least five years; (2) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currencies, involving securities, bonds, credit, financial instruments, metals or any asset that if converted into cash exceed the amount set forth by the competent authorities, and which shall be in accordance with the instruction issued by these authorities; (3) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currency, involving securities, bonds, credit, instruments, metals, or any asset that if converted into cash exceeds the applicable minimum amount set forth by the relevant authorities, such transactions must be in accordance with guidance on amount, timing and counterparties from the relevant authorities; (4) adopt AML internal control policies and procedures that are compatible with the size of the company; (5) register and maintain up-to-date records with the appropriate regulatory agency (i.e., the Brazilian Financial Intelligence Unit (Unidade de Inteligência Finceira), or “UIF,” CVM and/or SUSEP); (6) comply with UIF’s requests and obligations; (7) pay special attention to any transaction that, in light of the provisions set forth by competent authorities, may indicate the existence of a money laundering crime; (8) report all transactions referred to in items 2, 3 and 7 to UIF within twenty-four hours, while abstaining from notifying their customers of such report; and (9) confirm to the applicable regulatory agency (i.e., UIF, CVM and/or SUSEP) that no offending transactions have occurred.
Such regulation further prohibits individuals from using the financial system for the aforementioned illicit acts. 82 FORM 20-F « Table of Contents Pursuant to the Anti-Money Laundering Law, banks (such as Banco XP), securities brokers (such as XP CCTVM), securities distributors, asset managers (such as XP Gestão, XP Advisory and XP Vista), leasing companies, credit card companies, insurance companies and insurance brokers (such as XP VP and XP CS, respectively), among others, must: (1) identify and maintain up-to-date records of their clients, for a period of at least five years; (2) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currencies, involving securities, bonds, credit, financial instruments, metals or any asset that if converted into cash exceed the amount set forth by the competent authorities, and which shall be in accordance with the instruction issued by these authorities; (3) keep up-to-date records of all transactions, for a period of at least five years, in Brazilian and foreign currency, involving securities, bonds, credit, instruments, metals, or any asset that if converted into cash exceeds the applicable minimum amount set forth by the relevant authorities, such transactions must be in accordance with guidance on amount, timing and counterparties from the relevant authorities; (4) adopt AML internal control policies and procedures that are compatible with the size of the company; (5) register and maintain up-to-date records with the appropriate regulatory agency (i.e., the Brazilian Financial Intelligence Unit (Unidade de Inteligência Finceira), or “UIF,” CVM and/or SUSEP); (6) comply with UIF’s requests and obligations; (7) pay special attention to any transaction that, in light of the provisions set forth by competent authorities, may indicate the existence of a money laundering crime; (8) report all transactions referred to in items 2, 3 and 7 to UIF within twenty-four hours, while abstaining from notifying their customers of such report; and (9) confirm to the applicable regulatory agency (i.e., UIF, CVM and/or SUSEP) that no offending transactions have occurred.
Our BDRs started trading at the B3 on October 4, 2021 under the symbol “XPBR31.” 43 FORM 20-F « Table of Contents On December 10, 2021, IUPAR concluded a corporate reorganization within its partial spin-off resulting in the transfer of (1) 39,386,461 Class A common shares to its shareholder Itaúsa; (2) 9,906,362 Class A common shares to São Carlos Investimentos Ltda.; and (3) 9,906,362 Class A common shares to São Marcos Investimentos Ltda., holdings held by João Moreira Salles and Walther Moreira Salles Junior, respectively.
Our BDRs started trading at the B3 on October 4, 2021 under the symbol “XPBR31.” On December 10, 2021, IUPAR concluded a corporate reorganization within its partial spin-off resulting in the transfer of (1) 39,386,461 Class A common shares to its shareholder Itaúsa; (2) 9,906,362 Class A common shares to São Carlos Investimentos Ltda.; and (3) 9,906,362 Class A common shares to São Marcos Investimentos Ltda., holdings held by João Moreira Salles and Walther Moreira Salles Junior, respectively.
The table below is a list of our subsidiaries, joint ventures and associated companies: Direct and indirect interest Name Principal activities Country Investment type 2023 2022 2021 XP Investimentos S.A. Holding Brazil Directly 100.00 % 100.00 % 100.00 % XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.
The table below is a list of our subsidiaries, joint ventures and associated companies: Direct and indirect interest Name Principal activities Country Investment type 2024 2023 2022 XP Investimentos S.A. Holding Brazil Indirectly 100.00 % 100.00 % 100.00 % XP Investimentos Corretora de Câmbio, Títulos e Valores Mobiliários S.A.
In addition, we license technology from third parties. As of December 31, 2023, we did not own any Brazil-issued patents or copyrights.
In addition, we license technology from third parties. As of December 31, 2024, we did not own any Brazil-issued patents or copyrights.
XP Educação provides seminars, classes and learning tools to help investors, entrepreneurs and executives to evolve through their respective journeys and according to their specific needs. • EXPERT Platform – our proprietary investment phygital content platform, comprising a research group with over 30 specialists serving retail clients in Portuguese and institutional clients in English.
XP Educação provides seminars, classes and learning tools to help investors, entrepreneurs and executives to evolve through their respective journeys and according to their specific needs. • EXPERT Platform – our proprietary investment phygital content platform, comprising a research group of specialists serving retail clients in Portuguese and institutional clients in English.
In terms of ethnicity, we had 17.6% representation of black individuals in the company in 2020, and by 2023, we reached a milestone of 20%.
In terms of ethnicity, we had 17.6% representation of black individuals in the company in 2020, and by 2024, we reached a milestone of 20%.
According to our estimates for 2022, we believe the total addressable market size, including adjacent markets that could be complementary to XP, such as insurance, credit and debit cards and other loans was approximately R$500 billion in gross revenues before funding costs.
According to our estimates for 2024, we believe the total addressable market size, including adjacent markets that could be complementary to XP, such as insurance, credit and debit cards and other loans was approximately R$600 billion in gross revenues before funding costs.
CVM Resolution No. 21 defines asset/portfolio management activities as professional activities directly or indirectly related to the operation, maintenance and management of securities portfolios, including the investment of funds in the securities market on behalf of clients. CVM Resolution No. 21 provides for two categories of asset managers: (1) trustee administrator and/or (2) portfolio manager.
CVM Resolution No. 21 defines asset/portfolio management activities as professional activities directly or indirectly related to the operation, maintenance and management of securities portfolios, including the investment of funds in the securities market on behalf of clients. CVM Resolution No. 21 provides for two categories of asset managers: (i) trustee administrator and/or (ii) portfolio manager.
Insurance Broker Brazil Indirectly 99.99 % 99.99 % 99.99 % XP Gestão de Recursos Ltda. Asset management Brazil Indirectly 95.50 % 95.60 % 94.90 % XP Finanças Assessoria Financeira Ltda. Investment consulting service Brazil Indirectly 99.99 % 99.99 % 99.99 % Infostocks Informações e Sistemas Ltda.
Insurance Broker Brazil Indirectly 99.99 % 99.99 % 99.99 % XP Gestão de Recursos Ltda. Asset management Brazil Indirectly 95.80 % 95.50 % 95.60 % XP Finanças Assessoria Financeira Ltda. Investment consulting service Brazil Indirectly 99.99 % 99.99 % 99.99 % Infostocks Informações e Sistemas Ltda.
The banking and capital markets regulatory framework in Brazil is further supplemented by the regulation issued by CMN, CVM and the Central Bank, and self-regulation policies, such as those issued by various associations, over-the-counter organized markets and securities exchanges, that govern their members and participants, (for example, B3, the Brazilian Association of Financial and Capital Markets Entities, or “ANBIMA,” and the Brazilian Association of Investment Analysts, or “APIMEC”).
The banking and capital markets regulatory framework in Brazil is further supplemented by the regulation issued by CMN, CVM and the Central Bank, and self-regulation policies, such as those issued by various associations, over-the-counter organized markets and securities exchanges, that govern their members and participants, (for example, B3, ANBIMA, and the Brazilian Association of Investment Analysts, or “APIMEC”).
We leverage our business model to serve a diverse group of retail, corporate and institutional clients in local and international markets, with offices in Brazil, New York and Miami. We currently serve over 4.5 million active retail clients who have an investment account with us.
We leverage our business model to serve a diverse group of retail, corporate and institutional clients in local and international markets, with offices in Brazil, New York and Miami. We currently serve approximately 4.7 million active retail clients who have an investment account with us.
Based on data from the sources indicated below, we believe we are the: 49 FORM 20-F « Table of Contents • #1 Ranked Financial Investment Brand in Brazil – with an NPS of 72 as of December 2023; • #1 Independent Financial Investment Platform in Brazil – with Client Assets of R$1.1 trillion as of December 31, 2023; • #1 Independent Digital Platform for Investors in Brazil – with three digital portals: XP , Rico ™ and Clear ™, serving clients directly, XP Inc. has the largest number of followers on Instagram (over 1.6 million as of December 31, 2023) among investment firms in Brazil; • #1 Independent Financial Investment Network in Brazil – with a range of proprietary XP Advisory Services and approximately 14,300 IFAs as of December 31, 2023, who onboard new clients onto the XP Platform; • #1 Financial Media Portal in Latin America – with approximately 7.4 million monthly unique visitors to our Infomoney ™ website as of December 31, 2023; approximately 99% of our website traffic in this period was originated organically by viewers without being driven from a related site or advertisement according to third-party traffic data from Similar web; and • #1 Financial Services Event in Latin America – with over 126,000 attendees at our annual EXPERT conference held both in-person and virtually in August 2023, we believe it ranks as the largest investment services event in Latin America and one of the largest in the world based on an internal analysis of third-party data.
Based on data from the sources indicated below, we believe we are the: • #1 Ranked Financial Investment Brand in Brazil – with an NPS of 70 as of December 2024; • #1 Independent Financial Investment Platform in Brazil – with Client Assets of R$1.2 trillion as of December 31, 2024; • #1 Independent Digital Platform for Investors in Brazil – with three digital portals: XP , Rico ™ and Clear ™, serving clients directly, XP Inc. has the largest number of followers on Instagram (over 6.6 million as of December 31, 2024) among investment firms in Brazil; • #1 Independent Financial Investment Network in Brazil – with a range of proprietary XP Advisory Services and approximately 14,000 IFAs as of December 31, 2024, who onboard new clients onto the XP Platform; • #1 Financial Media Portal in Latin America – with approximately 7.5 million monthly unique visitors to our Infomoney ™ website as of December 31, 2024; approximately 48% of our website traffic in this period was originated organically by viewers without being driven from a related site or advertisement according to third-party traffic data from Similar web; and 47 FORM 20-F « Table of Contents • #1 Financial Services Event in Latin America – with over 84,000 attendees at our annual EXPERT conference held both in-person and virtually in August 2024, we believe it ranks as the largest investment services event in Latin America and one of the largest in the world based on an internal analysis of third-party data.
As illustrated in the following graphic, the key components of our model include: (1) a mission-driven culture; (2) a self-reinforcing ecosystem; (3) a superior products and services platform; and (4) a differentiated, advanced technology platform. • A Mission-Driven Culture – Our culture remains central to XP and we remain vigilant in preserving and nurturing it, so that it can continue to guide our firm by promoting: (1) a strong collaborative environment within our company; (2) a clear focus on our mission to improve people’s lives by empowering them as investors; (3) a zero-fee pricing philosophy wherever possible; (4) a strong, long-term client-centric focus which we prioritize ahead of maximizing short-term gains; and (5) an energetic entrepreneurial spirit with a commitment to innovation and the pursuit of improvement. 51 FORM 20-F « Table of Contents • A Self-Reinforcing Ecosystem – We believe we have developed a valuable ecosystem of clients, distribution channels and media content that are a powerful lead-generation engine, reinforcing each other and helping promote XP’s products and services as they grow.
As illustrated in the following image, our differentiation pillars in the market are based on four principles: These principles are linked to the key components of our business model: (1) a mission-driven culture; (2) a self-reinforcing ecosystem; (3) a superior products and services platform; and (4) a differentiated, advanced technology platform. • A Mission-Driven Culture – Our culture remains central to XP and we remain vigilant in preserving and nurturing it, so that it can continue to guide our firm by promoting: (1) a strong collaborative environment within our company; (2) a clear focus on our mission to improve people’s lives by empowering them as investors; (3) a zero-fee pricing philosophy wherever possible; (4) a strong, long-term client-centric focus which we prioritize ahead of maximizing short-term gains; and (5) an energetic entrepreneurial spirit with a commitment to innovation and the pursuit of improvement. 49 FORM 20-F « Table of Contents • A Self-Reinforcing Ecosystem – We believe we have developed a valuable ecosystem of clients, distribution channels and media content that are a powerful lead-generation engine, reinforcing each other and helping promote XP’s products and services as they grow.
Brazil is in the early stages of this process and we estimate our Client Assets as of December 31, 2023 to account for nearly 9% of a market totaling R$ 12.6 trillion. In addition, equities as an asset class is still incredibly underpenetrated among retail investors, with only approximately 0.8% of Brazilians having an active brokerage account.
Brazil is in the early stages of this process and we estimate our Client Assets as of December 31, 2024 to account for nearly 12% of a market totaling R$ 7.3 trillion. In addition, equities as an asset class is still incredibly underpenetrated among retail investors, with only approximately 0.8% of Brazilians having an active brokerage account.
Given our leadership, scale, brand and competitive advantages provided by our XP Model , we believe we will benefit from and continue to be a catalyst for: • Continued Growth of the Investment Assets Addressable Market – According to our estimates, the total addressable market of investment assets in Brazil is expected to reach R$ 15 trillion in 2025 with a compound annual growth rate, or CAGR, of 9%. • Continued Expansion of Our Addressable Market into New Areas – We have made significant progress in disrupting the investment services of traditional banks, which can be among the hardest to penetrate, due to the difficulty in gaining customer trust, and have one of the highest switching costs in the financial services industry, due to the expense and tax impact of moving accounts.
Given our leadership, scale, brand and competitive advantages provided by our XP Model , we believe we will benefit from and continue to be a catalyst for: • Continued Growth of the Investment Assets Addressable Market – According to our estimates, the total addressable market of investment assets in Brazil is expected to reach R$9.4 trillion in 2026. • Continued Expansion of Our Addressable Market into New Areas – We have made significant progress in disrupting the investment services of traditional banks, which can be among the hardest to penetrate, due to the difficulty in gaining customer trust, and have one of the highest switching costs in the financial services industry, due to the expense and tax impact of moving accounts.
Poupança accounts account for 10.6% of all individual investors assets in Brazil, according to our estimates, despite paying relatively low interest rates, often lower than the SELIC rate in Brazil, and occasionally even lower than the inflation rate, as shown in the graph below.
Poupança accounts account for 10.8% of all individual investors assets in Brazil, according to our estimates as of December 31, 2024, despite paying relatively low interest rates, often lower than the SELIC rate in Brazil, and occasionally even lower than the inflation rate, as shown in the graph below.
Clear is a 100% digital service, with innovative collateral management tools and proprietary front ends designed for retail active traders, and is integrated with the best trading platforms available in the market. 66 FORM 20-F « Table of Contents • IFA Network – Our proprietary distribution network of approximately 14,300 IFA partners, who solicit new clients and help us onboard them as XP clients.
Clear is a 100% digital service, with innovative collateral management tools and proprietary front ends designed for retail active traders, and is integrated with the best trading platforms available in the market. 64 FORM 20-F « Table of Contents • IFA Network – Our proprietary distribution network of approximately 14,000 IFA partners as of December 31, 2024, who solicit new clients and help us onboard them as XP clients.
The indirect holders of such common shares and our indirect controlling shareholders did not change as a result of such XP Controle corporate reorganization, since XP Control is under same control as XP Controle. On April 29, 2022, ITB Holding acquired 3,388,652 Class A common shares and 9,341,368 Class B common shares from XP Controle.
The indirect holders of such common shares and our indirect controlling shareholders did not change as a result of such XP Controle corporate reorganization, since XP Control is under same control as XP Controle. 42 FORM 20-F « Table of Contents On April 29, 2022, ITB Holding acquired 3,388,652 Class A common shares and 9,341,368 Class B common shares from XP Controle.
As a result of our enhanced business model and market position, our revenue tends to be more diversified now than it was a few years ago, with new business lines representing close to 17% of total revenues in 2023, making our business less cyclical.
As a result of our enhanced business model and market position, our revenue tends to be more diversified now than it was a few years ago, with new business lines representing close to 21.6% of total revenues in 2024, making our business less cyclical.
Asset management Brazil Indirectly 100.00 % — — For more details about our organizational structure please refer to note 5 to our audited consolidated financial statements. D.
Holding Brazil Indirectly 100.00 % 100.00 % — % For more details about our organizational structure please refer to note 5 to our audited consolidated financial statements. D.
Asset management Brazil Indirectly 98.10 % 98.70 % 98.70 % XP Controle 5 Participações Ltda. Holding Brazil Indirectly 100.00 % 96.00 % 92.00 % Carteira Online Controle de Investimentos Ltda. - ME Investment consolidation platform Brazil Indirectly — 100.00 % 99.99 % Antecipa S.A Receivables Financing Market Brazil Indirectly 100.00 % 100.00 % 100.00 % XP Allocation Asset Management Ltda.
Asset management Brazil Indirectly 97.90 % 98.10 % 98.70 % XP Controle 5 Participações Ltda. Holding Brazil Indirectly 100.00 % 100.00 % 96.00 % Carteira Online Controle de Investimentos Ltda. - ME Investment consolidation platform Brazil Indirectly — — 100.00 % Antecipa S.A Receivables Financing Market Brazil Indirectly 25.00 % 100.00 % 100.00 % XP Allocation Asset Management Ltda.
We believe there is a large addressable market opportunity remaining in our core business and significant market share to win since, as of December 31, 2023, our Client Assets (assets under custody) accounts for only 9% of a R$ 12.6 trillion market, according to our internal estimates.
We believe there is a large addressable market opportunity remaining in our core business and significant market share to win since, as of December 31, 2024, our Client Assets (assets under custody) accounts for only 12% of a R$ 7.3 trillion market, according to our internal estimates.
As set forth in CVM Resolution No. 20, except in relation to the cases set forth therein, securities analysts (both individuals and legal entities) and other professionals that effectively participate in the preparation of the reports, are prohibited from the following activities: • issuing analyst reports aiming to obtain, for itself or for third parties, unfair advantages; • omitting information about conflicts of interest in analyst reports; • trading, on behalf of themselves or of third parties, securities covered by the analysts’ reports or derivatives backed in such securities for a period of 30 days prior to and five days after the disclosure of the analyst report about such security or its issuer; • trading, on behalf of themselves or of third parties, securities covered by the analyst reports or derivatives backed in such securities in the opposite direction of the recommendations or conclusions expressed in the analyst reports for (1) six months as of the disclosure of such report; or (2) until the disclosure of a new report about the same issuer or security, if such disclosure occurs within the six-month period mentioned above; • participating, directly or indirectly (1) in any activity related to the public offering of securities, including sales efforts involving products or services related to the capital markets and efforts for prospecting new clients or jobs; (2) in the structuring of financial products and securities; and (3) in any activity related to M&A financial consulting; and • disclosing the analyst reports or their content, even partially, to persons that are not part of the analyst team, in particular the issuer or the securities the subject of the analyst report before its publication, disclosure or distribution through the proper channels.
In carrying out its services, securities analysts must act with integrity, good faith and professional ethics, and the analysts’ reports must be prepared by the analyst applying the care and diligence expected from a professional in its position. 73 FORM 20-F « Table of Contents As set forth in CVM Resolution No. 20, except in relation to the cases set forth therein, securities analysts (both individuals and legal entities) and other professionals that effectively participate in the preparation of the reports, are prohibited from the following activities: • issuing analyst reports aiming to obtain, for itself or for third parties, unfair advantages; • omitting information about conflicts of interest in analyst reports; • trading, on behalf of themselves or of third parties, securities covered by the analysts’ reports or derivatives backed in such securities for a period of 30 days prior to and five days after the disclosure of the analyst report about such security or its issuer; • trading, on behalf of themselves or of third parties, securities covered by the analyst reports or derivatives backed in such securities in the opposite direction of the recommendations or conclusions expressed in the analyst reports for (1) six months as of the disclosure of such report; or (2) until the disclosure of a new report about the same issuer or security, if such disclosure occurs within the six-month period mentioned above; • participating, directly or indirectly (1) in any activity related to the public offering of securities, including sales efforts involving products or services related to the capital markets and efforts for prospecting new clients or jobs; (2) in the structuring of financial products and securities; and (3) in any activity related to M&A financial consulting; and • disclosing the analyst reports or their content, even partially, to persons that are not part of the analyst team, in particular the issuer or the securities the subject of the analyst report before its publication, disclosure or distribution through the proper channels.
These research companies disseminate analyses and professional knowledge about investments with simple and accessible language. The products are very close to Clear’s customer base, which currently does not have its own analysis area, and we believe this is more than efficient hiring and building such an area at internally. In October 2023, we sold our minority interest in OHM Research.
These research companies disseminate analyses and professional knowledge about investments with simple and accessible language. The products are very close to Clear’s customer base, which currently does not have its own analysis area, and we believe this is more than efficient hiring and building such an area at internally.
The country has the seventh largest population and the nineth largest economy in the world with over 203 million people and a GDP of nearly US$2.2 trillion in 2023.
The country has the seventh largest population and the tenth largest economy in the world with over 203 million people and a GDP of nearly US$2.2 trillion in 2024.
HUB also provides a comprehensive suite of tools for IFAs that enable them to: (1) access client information in real time; (2) manage their CRM application and organize their schedules and meetings on the go; (3) monitor client activity, net funding and upcoming maturities; (4) quickly define and chart investment strategies remotely; and (5) communicate with clients across a range of platforms and third-party applications XP App Enhances our advisory services and product platform through a suite of proprietary apps.
HUB also provides a comprehensive suite of tools for IFAs that enable them to: (1) access client information in real time; (2) manage their CRM application and organize their schedules and meetings on the go; (3) monitor client activity, net funding and upcoming maturities; (4) quickly define and chart investment strategies remotely; and (5) communicate with clients across a range of platforms and third-party applications.
We also intend to continue to grow our base of active retail clients, which reached 4.5 million as of December 31, 2023, an increase of 14% year over year, as well as our base of institutional trading partners and corporate issuers who provide additional liquidity and products to our platform.
We also intend to continue to grow our base of active retail clients, which reached approximately 4.7 million as of December 31, 2024, an increase of 3% year over year, as well as our base of institutional trading partners and corporate issuers who provide additional liquidity and products to our platform.
XP Vista had assets of R$131 million (representing 0.1% of our combined assets) as of December 31, 2021, R$239 million (representing 0.1% of our combined assets) as of December 31, 2022 and R$266 million (representing 0.1% of our combined assets) as of December 31, 2023.
XP Vista had assets of R$239 million (representing 0.1% of our combined assets) as of December 31, 2022, R$266 million (representing 0.1% of our combined assets) as of December 31, 2023 and R$332 million (representing 0.1% of our combined assets) as of December 31, 2024.
XP Seguros had assets of R$109 million (representing 0.1% of our combined assets) as of December 31, 2021, R$163 million (representing 0.1% of our combined assets) as of December 31, 2022 and R$134 million (representing 0.1% of our combined assets) as of December 31, 2023.
XP Seguros had assets of R$163 million (representing 0.1% of our combined assets) as of December 31, 2022, R$134 million (representing 0.1% of our combined assets) as of December 31, 2023 and R$229 million (representing 0.1% of our combined assets) as of December 31, 2024.
Digital assets Brazil Indirectly 100.00 % 100.00 % 100.00 % XPAC Sponsor LLC Special Purpose Acquisition (SPAC) Sponsor Cayman Directly 100.00 % 100.00 % 100.00 % XProject LTD Holding Cayman Directly 100.00 % 100.00 % 100.00 % XP Ativos Digitais Intermediações S.A.
Educational content services Brazil Indirectly 100.00 % 100.00 % 100.00 % Xtage Intermediação S.A. Digital assets Brazil Indirectly 100.00 % 100.00 % 100.00 % XPAC Sponsor LLC Special Purpose Acquisition (SPAC) Sponsor Cayman Directly 100.00 % 100.00 % 100.00 % XProject LTD Holding Cayman Directly 100.00 % 100.00 % 100.00 % XP Ativos Digitais Intermediações S.A.
Financial services Brazil Indirectly 100.00 % — — Galapos Consultoria e Participações Ltda. Consulting services Brazil Indirectly 100.00 % — — W2D Tecnologia e Soluções Ltda. Rendering of IT services Brazil Indirectly 100.00 % — — XP Sports Asset Management Ltda.
Consulting services Brazil Indirectly 100.00 % 100.00 % — % W2D Tecnologia e Soluções Ltda. Rendering of IT services Brazil Indirectly — % 100.00 % — % XP Sports Asset Management Ltda. Asset management Brazil Indirectly 100.00 % 100.00 % — % XP Holding Participações Ltda.
We continued to build our educational course offerings, created what we believe is the largest investment conference in the world, developed the largest financial information online portal in Latin America and developed a range of social media and digital influencer programs to promote our services and brand. 50 FORM 20-F « Table of Contents • Diversification and Enhancement of Our Direct Digital Channels and Brands – We expanded our distribution significantly by leveraging our growing ecosystem to (1) grow and enhance XP Direct , our primary digital portal for investors and our internal team of financial advisors; and (2) develop new digital channels, such as Rico , our digital portal brand for self-directed investors, and Clear , our digital portal and online trading platform brand for retail active traders.
We continued to build our educational course offerings, created what we believe is the largest investment conference in the world, developed the largest financial information online portal in Latin America and developed a range of social media and digital influencer programs to promote our services and brand. • Diversification and Enhancement of Our Direct Digital Channels and Brands – We expanded our distribution significantly by leveraging our growing ecosystem to (1) grow and enhance XP Direct , our primary digital portal for investors and our internal team of financial advisors; (2) develop new digital channels, such as Rico , our digital portal brand for self-directed investors, and Clear , our digital portal and online trading platform brand for retail active traders; and (3) develop our Direct Channel, with internal advisors that have been growing strongly in the recent years.
XP VP recorded total revenue and income of R$78 million during 2021 (representing 0.6% of our consolidated total revenue and income), R$217 million during 2022 (representing 1.6% of our consolidated total revenue and income) and R$271 million during 2023 (representing 1.8% of our consolidated total revenue and income). Banco XP S.A.
XP VP recorded total revenue and income of R$217 million during 2022 (representing 1.6% of our consolidated total revenue and income), R$271 million during 2023 (representing 1.8% of our consolidated total revenue and income) and R$308 million during 2024 (representing 1.8% of our consolidated total revenue and income). Banco XP S.A.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

96 edited+15 added−28 removed108 unchanged
Biggest changeDespite the unfavorable scenario for equity capital markets, our debt capital markets revenue has been more relevant, as we believe it tends to be less volatile in different macroeconomic scenarios. • a R$362 million decrease in brokerage commissions, driven by a 11% decrease in the average daily traded volume in equities in the year ended December 31, 2022. 111 FORM 20-F « Table of Contents • a R$91 million increase in management fees, as a result of (1) management fees from our funds and managed portfolios, which grew 17.6% from R$782 million to R$920 million, driven mostly by a 11% increase in Retail AUM, and of (2) fees from distributions (rebates from management fees) of funds managed by third-party asset managers, Management fees attributable to funds managed by third parties (fees from distributions) decreased from 48% of total management fees for the year ended December 31, 2021 to 42% for the year ended December 31, 2022, while management fees attributable to funds and portfolios managed by our asset managers increased from 52% to 58% during the same period.
Biggest changeDespite the unfavorable scenario for equity capital markets, our debt capital markets revenue has been more relevant, as we believe it tends to be less volatile in different macroeconomic scenarios; 104 FORM 20-F « Table of Contents • an increase of R$142 million in brokerage commissions, driven by an increase in the average daily volume traded in shares in the year ended December 31, 2024; • a R$115 million increase in management fees, as a result of a 9% increase in Retail Fund’s Client Assets.
Other operating income (expenses) , net. We recorded other operating income/expenses, net of R$11 million for the year ended December 31, 2023 compared to other operating income, net of R$257 million for the year ended December 31, 2022.
We recorded other operating income/expenses, net of R$11 million for the year ended December 31, 2023 compared to other operating income, net of R$257 million for the year ended December 31, 2022.
These balances may fluctuate substantially from quarter to quarter and were the key drivers to the net cash flow from operating activities figures; (3) increases in our banking activities from loans operations, market funding operations mainly derived from deposits (time deposits), structured operations certificates (COEs) and financial bills as a result of our expected growth in new financials services verticals; and (4) other financial liabilities as structure financing, credit card operations among others.
These balances may fluctuate substantially from quarter to quarter and were the key drivers to the net cash flow from operating activities figures; (3) increases in our banking activities from loans operations, market funding operations mainly derived from deposits (time deposits), structured operations certificates (COEs) and financial bills as a result of our expected growth in new financials services verticals; and (4) other financial liabilities as structure financing, credit card operations among others.
Net Cash Flows used in Investing Activities Our net cash flows used in investing activities decreased from R$372 million in the year ended December 31, 2022 to a cash generated of R$539 million in the year ended December 31, 2023, primarily affected by: (1) R$705 million in investments in subsidiaries, associates and joint ventures, mostly related to our asset management strategy, which decreased from R$244 million in the year ended December 31, 2022; and (2) R$196 million in investments in intangible assets and property plants and equipment, mostly IT infrastructure and capitalized software, which increased from R$127 million in the year ended December 31, 2022.
Our net cash flows used in investing activities decreased from R$372 million in the year ended December 31, 2022 to a cash generated of R$539 million in the year ended December 31, 2023, primarily affected by: (1) R$705 million in investments in subsidiaries, associates and joint ventures, mostly related to our asset management strategy, which decreased from R$244 million in the year ended December 31, 2022; and (2) R$196 million in investments in intangible assets and property plants and equipment, mostly IT infrastructure and capitalized software, which increased from R$127 million in the year ended December 31, 2022.
See “Item 4. Information on the Company—D. Property, Plants and Equipment—Intellectual Property.” D. Trend Information For a discussion of trend information, see “Item 4. Information on the Company—B. Business Overview—Key Market Trends.” E. Critical Accounting Estimates Not applicable. See note 4 to our audited consolidated financial statements included elsewhere in this annual report.
Property, Plants and Equipment—Intellectual Property.” D. Trend Information For a discussion of trend information, see “Item 4. Information on the Company—B. Business Overview—Key Market Trends.” E. Critical Accounting Estimates Not applicable. See note 4 to our audited consolidated financial statements included elsewhere in this annual report.
Retail – Gross Total Revenues Retail gross total revenues include all types of revenue and income streams directly related to retail clients, including, but not limited to: (1) management and performance fees from funds managed by our asset managers, and rebates from management and performance fees from mutual funds managed by third-party asset managers, that are distributed to our retail clients; (2) rebates from management fees from retirement plans funds issued by third-party insurance companies or XP VP that are distributed to our retail clients; (3) management fees from exclusive funds of high net worth retail clients; (4) brokerage commissions earned on trading of stock, futures and derivatives listed on the B3 (although we charge zero commissions on self-directed trading of equities on Rico and Clear, and of futures on the three brands); (5) securities placement fees earned on structured operations certificates (COEs) sales to retail clients; (6) the distribution fee component from securities placement fees earned on the sale of funds and fixed income and equity securities to retail clients; (7) net income from corporate, bank and government fixed income securities and from derivatives sold to retail clients; (8) net interest income from credit products, such as loans and credit cards (interchange fees included), and (9) net income earned on Float Balances, which we allocate in soverign bonds; (10) net income earned on demand deposits; (11) insurance brokerage fees from insurance products sold to retail clients from third-party insurance companies and premiums from insurance products sold to retail clients by XP VP; (12) Digital Content revenues generated from selling XP Educação educational courses and content sold to retail clients and to non-client individuals, selling branded content articles, direct media advertisements on websites or mobile sites, Infomoney TV insertions, and other advertising and digital content fees generated by Infomoney; and (13) sale of research reports and educational courses to retail clients and other non-client subscribers.
Retail – Gross Total Revenues Retail gross total revenues include all types of revenue and income streams directly related to retail clients, including, but not limited to: (1) management and performance fees from funds managed by our asset managers, and rebates from management and performance fees from mutual funds managed by third-party asset managers, that are distributed to our retail clients; (2) rebates from management fees from retirement plans funds issued by third-party insurance companies or XP VP that are distributed to our retail clients; (3) management fees from exclusive funds of high net worth retail clients; (4) brokerage commissions earned on trading of stock, futures and derivatives listed on the B3 (although we charge zero commissions on self-directed trading of equities on Rico and Clear, and of futures on the three brands); (5) securities placement fees earned on structured operations certificates (COEs) sales to retail clients; (6) the distribution fee component from securities placement fees earned on the sale of funds and fixed income and equity securities to retail clients; (7) net income from corporate, bank and government fixed income securities and from derivatives sold to retail clients; (8) net interest income from credit products, such as loans and credit cards (interchange fees included), and (9) net income earned on Float Balances, which we allocate in sovereign bonds; (10) net income earned on demand deposits; (11) insurance brokerage fees from insurance products sold to retail clients from third-party insurance companies and premiums from insurance products sold to retail clients by XP VP; (12) Digital Content revenues generated from selling XP Educação educational courses and content sold to retail clients and to non-client individuals, selling branded content articles, direct media advertisements on websites or mobile sites, Infomoney TV insertions, and other advertising and digital content fees generated by Infomoney; and (13) sale of research reports and educational courses to retail clients and other non-client subscribers.
Fixed management fees are charged on a monthly basis and performance-based management fees for the majority of our funds are charged in June and December of each year. • Insurance brokerage fees, which consist of (1) fees from distributions (rebates from fixed and performance-based management fees) of retirement plans managed by third-party asset managers sold to our retail clients; and (2) rebates on Whole Life insurance products issued by third-party insurance companies, sold to our retail clients. • Educational services fees, which consist of fees we charge in connection with the financial education and investment-related courses produced by XP Educação and sold to our retail clients and to non-clients, as part of our digital content offerings. 107 FORM 20-F « Table of Contents • Commission Fees, which consist mainly of interchange fees, related to credit card transactions, and loan operations structuring fees. • Other services, which consist of several small revenue streams, including (1) fees charged to retail clients with negative cash balances (typically as a result of margin calls related to equities and derivatives trading); (2) advertising and other digital content fees generated by Infomoney; and (3) issuer services advisory fees from M&A and other financial advisory mandates. • Deduction from sales taxes and contributions on revenues, including taxes on services (ISS) and contributions on revenues (Social Integration Program – PIS, and Social Security Program – COFINS).
Fixed management fees are charged on a monthly basis and performance-based management fees for the majority of our funds are charged in June and December of each year. • Insurance brokerage fees, which consist of (1) fees from distributions (rebates from fixed and performance-based management fees) of retirement plans managed by third-party asset managers sold to our retail clients; and (2) rebates on Whole Life insurance products issued by third-party insurance companies, sold to our retail clients. • Educational services fees, which consist of fees we charge in connection with the financial education and investment-related courses produced by XP Educação and sold to our retail clients and to non-clients, as part of our digital content offerings. 102 FORM 20-F « Table of Contents • Commission Fees, which consist mainly of interchange fees, related to credit card transactions, and loan operations structuring fees. • Other services, which consist of several small revenue streams, including (1) fees charged to retail clients with negative cash balances (typically as a result of margin calls related to equities and derivatives trading); (2) advertising and other digital content fees generated by Infomoney; and (3) issuer services advisory fees from M&A and other financial advisory mandates. • Deduction from sales taxes and contributions on revenues, including taxes on services (ISS) and contributions on revenues (Social Integration Program – PIS, and Social Security Program – COFINS).
Results of Operations Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 The following table sets forth our income statement data for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Variation (%) (R$ millions, except for percentages) Income statement data Net revenue from services rendered 6,532 5,940 10 % Net income from financial instruments at amortized cost and at fair value through other comprehensive income 1,573 1,145 37 % Net income from financial instruments at fair value through profit or loss 6,756 6,262 8 % Total revenue and income 14,860 13,347 11 % Operating costs and expenses Operating costs (4,399) (3,871) 14 % Selling expenses (169) (139) 22 % Administrative expenses (5,461) (5,641) (3) % Other operating income (expenses), net 11 257 (96) % Expected credit losses (361) (94) 283 % Interest expense on debt (617) (402) 53 % Share of profit or (loss) in joint ventures and associates 74 (12) (704) % Income before income tax 3,936 3,445 14 % Income tax expense (37) 136 (127) % Net income for the year 3,899 3,580 9 % n.m. = not meaningful.
Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 The following table sets forth our income statement data for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Variation (%) (R$ millions, except for percentages) Income statement data Net revenue from services rendered 6,532 5,940 10 % Net income from financial instruments at amortized cost and at fair value through other comprehensive income 1,573 1,145 37 % Net income from financial instruments at fair value through profit or loss 6,756 6,262 8 % Total revenue and income 14,860 13,347 11 % Operating costs and expenses Operating costs (4,399) (3,871) 14 % Selling expenses (169) (139) 22 % Administrative expenses (5,461) (5,641) (3) % Other operating income (expenses), net 11 257 (96) % Expected credit losses (361) (94) 283 % Interest expense on debt (617) (402) 53 % Share of profit or (loss) in joint ventures and associates 74 (12) (704) % Income before income tax 3,936 3,445 14 % Income tax expense (37) 136 (127) % Net income for the year 3,899 3,580 9 % n.m. = not meaningful.
This increase was primarily attributable to an increase in our effective tax rate to 0.9% for the year ended December 31, 2023 from -3.9% for the year ended December 31, 2022, as a result of revenues at the level of entities and investment funds which adopt different taxation regimes according to the applicable rules in their jurisdictions.
This decrease was primarily attributable to an increase in our effective tax rate to 0.9% for the year ended December 31, 2023 from -3.9% for the year ended December 31, 2022, as a result of revenues at the level of entities and investment funds which adopt different taxation regimes according to the applicable rules in their jurisdictions.
Despite the unfavorable scenario for equity capital markets, our debt capital markets revenue has been more relevant, as we believe it tends to be less volatile in different macroeconomic scenarios. 109 FORM 20-F « Table of Contents • a R$111 million decrease in brokerage commissions, driven by a 5% decrease in the average daily traded volume in equities in the year ended December 31, 2023. • a R$47 million increase in management fees, as a result of (1) fees from distributions (rebates from management fees) of funds managed by third-party asset managers and management fees attributable to funds managed by third parties (fees from distributions) increased from 42% of total management fees for the year ended December 31, 2022 to 44% for the year ended December 31, 2023, or R$48 million, while management fees attributable to funds and portfolios managed by our asset managers decreased from 58% to 56%, or R$ 1 million, during the same period.
Despite the unfavorable scenario for equity capital markets, our debt capital markets revenue has been more relevant, as we believe it tends to be less volatile in different macroeconomic scenarios; • a R$111 million decrease in brokerage commissions, driven by a 5% decrease in the average daily traded volume in equities in the year ended December 31, 2023; 106 FORM 20-F « Table of Contents • a R$47 million increase in management fees, as a result of (1) fees from distributions (rebates from management fees) of funds managed by third-party asset managers and management fees attributable to funds managed by third parties (fees from distributions) increased from 42% of total management fees for the year ended December 31, 2022 to 44% for the year ended December 31, 2023, or R$48 million, while management fees attributable to funds and portfolios managed by our asset managers decreased from 58% to 56%, or R$ 1 million, during the same period.
In 2022, the real appreciated 0.6% to R$5.287 per US$1.00 on December 31, 2022. The real /U.S. dollar exchange rate reported by the Central Bank was R$4.841 per US$1.00 on December 31, 2023, which reflected a 7.8% appreciation of the real against the U.S. dollar during 2023.
In 2022, the real appreciated 6.5% to R$5.287 per US$1.00 on December 31, 2022. The real /U.S. dollar exchange rate reported by the Central Bank was R$4.841 per US$1.00 on December 31, 2023, which reflected a 7.8% appreciation of the real against the U.S. dollar during 2023.
(6) Comparing the US$ closing selling exchange rate as reported by the Central Bank at the end of the period’s last day with the day immediately prior to the first day of the period discussed.53 (7) Average unemployment rate for year as measured by the IBGE.
(6) Comparing the US$ closing selling exchange rate as reported by the Central Bank at the end of the period’s last day with the day immediately prior to the first day of the period discussed. (7) Average unemployment rate for year as measured by the IBGE.
Given the size and economies of scale of our platform and the recurring nature of our revenues due to our business model, we generate a significant amount of our revenues from our current balance of Client Assets and new Client Assets from existing clients, versus Client Assets from new clients (activated within the last twelve months), as shown in the following chart. 102 FORM 20-F « Table of Contents % of Retail Revenue from New Clients vs.
Given the size and economies of scale of our platform and the recurring nature of our revenues due to our business model, we generate a significant amount of our revenues from our current balance of Client Assets and new Client Assets from existing clients, versus Client Assets from new clients (activated within the last twelve months), as shown in the following chart. 97 FORM 20-F « Table of Contents % of Retail Revenue from New Clients vs.
This proprietary approach incorporates a unique combination of capabilities, services and technologies to deliver a highly differentiated and integrated client experience, with significant operating efficiency advantages that have enabled us to scale and grow profitably. 93 FORM 20-F « Table of Contents Our technology-driven business model is asset-light and highly scalable.
This proprietary approach incorporates a unique combination of capabilities, services and technologies to deliver a highly differentiated and integrated client experience, with significant operating efficiency advantages that have enabled us to scale and grow profitably. 91 FORM 20-F « Table of Contents Our technology-driven business model is asset-light and highly scalable.
We believe a simple cohort data analysis demonstrates this trend in our business and our significant opportunity in the future. For example, we measured the net new money invested with us over time across seven cohorts, which were defined as new clients that became active on our platform annually since January 2017.
We believe a simple cohort data analysis demonstrates this trend in our business and our significant opportunity in the future. For example, we measured the net new money invested with us over time across seven cohorts, which were defined as new clients that became active on our platform annually since January 2018.
We therefore continue to make investments, which may result in increased costs, to strengthen our cybersecurity measures. 104 FORM 20-F « Table of Contents Implementation of Our Marketing Strategy Our marketing strategy is designed to grow our business and platforms by reinforcing brand recognition and confidence associated with the XP brand and our related brands.
We therefore continue to make investments, which may result in increased costs, to strengthen our cybersecurity measures. 99 FORM 20-F « Table of Contents Implementation of Our Marketing Strategy Our marketing strategy is designed to grow our business and platforms by reinforcing brand recognition and confidence associated with the XP brand and our related brands.
This variation is primarily due to a decrease of R$82 million income related to incentives from third parties, mainly as a result of the joint development of retail products and also the association of such entities with the XP ecosystem for the year ended December 31, 2022.
This variation is primarily due to a decrease of R$261 million income related to incentives from third parties, mainly as a result of the joint development of retail products and also the association of such entities with the XP ecosystem for the year ended December 31, 2022.
US$ in the period (6) 7.8 6.5 (11.7) Unemployment rate (7) 7.8 9.3 11.1 Sources: FGV, IBGE, IPEA, Central Bank and Bloomberg. (1) Inflation (IGP-M) is the general market price index measured by the FGV. (2) Inflation (IPCA) is a broad consumer price index measured by the IBGE.
US$ in the period (6) (21.8) 7.8 6.5 Unemployment rate (7) 6.2 7.8 9.3 Sources: FGV, IBGE, IPEA, Central Bank and Bloomberg. (1) Inflation (IGP-M) is the general market price index measured by the FGV. (2) Inflation (IPCA) is a broad consumer price index measured by the IBGE.
Given that: (1) Banco XP and Banco Modal are taxed at a 45% income tax rate; (2) XP CCTVM and XP Seguradora are taxed at a 40% income tax rate; (3) XP Gestão, XP Educação, XP Corretora de Seguros, XP Vista, XP PE and XP Allocation and holding entities are taxed at a 34% income tax rate; (4) XP Finanças, Infomoney, Tecfinance and other operating entities are taxed at a 10.9% tax rate on revenues (34% rate on a presumed net margin of 32%); and (5) XP Investments and XP Investments UK LLP are taxed at US and UK tax rates, respectively.
Given that: (1) Banco XP and Banco Modal are taxed at a 45% corporate income tax rate; (2) XP CCTVM and XP Seguradora are taxed at a 40% corporate income tax rate; (3) XP Gestão, XP Educação, XP Corretora de Seguros, XP Vista, XP PE and XP Allocation and holding entities are taxed at a 34% corporate income tax rate; (4) XP Finanças, Infomoney, Tecfinance and other operating entities are taxed at a 10.9% tax rate on revenues (34% corporate income tax rate on a presumed net margin of 32%); and (5) XP Investments and XP Investments UK LLP are taxed at U.S. and UK tax rates, respectively.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of December 31, 2023 and 2022 and for each of three years in the period ended December 31, 2023 and the notes thereto, included elsewhere in this annual report.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of December 31, 2024 and 2023 and for each of three years in the period ended December 31, 2024, 2023 and 2022 and the notes thereto, included elsewhere in this annual report.
For more information, see note 6 to our audited consolidated financial statements included elsewhere in this annual report. 113 FORM 20-F « Table of Contents Net Cash Flows from Operating Activities Our net cash flows from operating activities for the year ended December 31, 2023 increased to a net cash generated of R$8,127 million from a net cash generated of R$1,804 million in the year ended December 31, 2022, primarily driven by: (1) higher balance of securities and derivatives that we hold in the ordinary course of our business as a retail investment distribution platform and as an institutional broker-dealer (with respect to the sale of fixed income securities and structured notes); (2) our strategy to allocate excess cash and cash equivalents from treasury funds, from Float Balances and from retirement plans balances to securities and other financial assets.
For more information, see note 6 to our audited consolidated financial statements included elsewhere in this annual report. 108 FORM 20-F « Table of Contents Net Cash Flows from Operating Activities Our net cash flows from operating activities for the year ended December 31, 2024 increased to a net cash generated of R$11,179 million from a net cash generated of R$8,127 million in the year ended December 31, 2023, primarily driven by: (1) higher balance of securities and derivatives that we hold in the ordinary course of our business as a retail investment distribution platform and as an institutional broker-dealer (with respect to the sale of fixed income securities and structured notes); (2) our strategy to allocate excess cash and cash equivalents from treasury funds, from Float Balances and from retirement plans balances to securities and other financial assets.
Administrative expenses for the year ended December 31, 2023 were R$5,461 million, an decrease of R$180 million, or 3%, from R$5,641 million for the year ended December 31, 2022.
Administrative expenses for the year ended December 31, 2023 were R$5,461 million, a decrease of R$ 180 million, or 3%, from R$5,641 million for the year ended December 31, 2022.
Our net cash flows from operating activities for the year ended December 31, 2022 increased to a net cash generated of R$1,804 million from a net cash used of R$4,020 million in the year ended December 31, 2021, primarily driven by: (1) higher balance of securities and derivatives that we hold in the ordinary course of our business as a retail investment distribution platform and as an institutional broker-dealer (with respect to the sale of fixed income securities and structured notes); (2) our strategy to allocate excess cash and cash equivalents from treasury funds, from Float Balances and from retirement plans balances to securities and other financial assets.
Our net cash flows from operating activities for the year ended December 31, 2023 increased to a net cash generated of R$8,127 million from a net cash generated of R$1,804 million in the year ended December 31, 2022, primarily driven by: (1) higher balance of securities and derivatives that we hold in the ordinary course of our business as a retail investment distribution platform and as an institutional broker-dealer (with respect to the sale of fixed income securities and structured notes); (2) our strategy to allocate excess cash and cash equivalents from treasury funds, from Float Balances and from retirement plans balances to securities and other financial assets.
Our business requires minimal capital expenditures to facilitate growth, with expenditures amounting to 1.3% of net revenues for the year ended December 31, 2023, an increase from 1.0% of net revenues in 2022. Key Business Metrics The following table sets forth our key business metrics as of and for the periods indicated.
Our business requires minimal capital expenditures to facilitate growth, with expenditures amounting to 1.9% of net revenues for the year ended December 31, 2024, an increase from 1.3% of net revenues in 2023. Key Business Metrics The following table sets forth our key business metrics as of and for the periods indicated.
The following table shows data for real GDP, inflation and interest rates in Brazil and the U.S. dollar/real exchange rate at the dates and for the periods indicated. 105 FORM 20-F « Table of Contents For the year ended December 31, 2023 2022 2021 (in percentages, except as otherwise indicated) Real growth (contraction) in gross domestic product 2.9 2.9 4.6 Inflation (IGP-M) (1) (3.2) 5.5 17.8 Inflation (IPCA) (2) 4.6 5.8 10.1 Long-term interest rates–TJLP (average) (3) 7.1 7.2 4.8 CDI interest rate (average) (4) 13.0 12.4 4.4 Period-end exchange rate–R$ per US$1.00 4.841 5.218 5.581 Average exchange rate–R$ per US$1.00 (5) 4.993 5.165 5.397 Appreciation (depreciation) of the real vs.
The following table shows data for real GDP, inflation and interest rates in Brazil and the U.S. dollar/real exchange rate at the dates and for the periods indicated. 100 FORM 20-F « Table of Contents For the year ended December 31, 2024 2023 2022 (in percentages, except as otherwise indicated) Real growth (contraction) in gross domestic product 3.4 3.2 3.0 Inflation (IGP-M) (1) 6.5 (3.2) 5.5 Inflation (IPCA) (2) 4.8 4.6 5.8 Long-term interest rates–TJLP (average) (3) 7.6 6.6 7.2 CDI interest rate (average) (4) 10.9 13.0 12.4 Period-end exchange rate–R$ per US$1.00 6.192 4.841 5.218 Average exchange rate–R$ per US$1.00 (5) 5.399 4.993 5.165 Appreciation (depreciation) of the real vs.
Existing Clients The breakdown set forth in the chart above considers only the portion of retail revenues that we track on a client level that represents: (1) for 2021, 85% of total retail revenues; (2) for 2022, 86% of total retail revenues; and (3) for 2023, 91% of total retail revenues.
Existing Clients The breakdown set forth in the chart above considers only the portion of retail revenues that we track on a client level that represents: (1) for 2022, 86% of total retail revenues; (2) for 2023, 91% of total retail revenues; and (3) for 2024, 92% of total retail revenues.
Besides that, we offer to our customers other types of collateral agreements, such as letters of guarantee. Capital Expenditures In the years ended December 31, 2023, 2022 and 2021, we made capital expenditures of R$196 million, R$127 million, and R$353 million, respectively.
Besides that, we offer to our customers other types of collateral agreements, such as letters of guarantee. Capital Expenditures In the years ended December 31, 2024, 2023 and 2022, we made capital expenditures of R$330 million, R$196 million, and R$127 million, respectively.
To the extent that we are able to cross-sell these products and services and develop and introduce new products and services to our existing clients and attract new clients, we expect our revenues and financial income to continue to grow and our margins to increase. 103 FORM 20-F « Table of Contents • Development of New Products and Services – We strive to stay on the cutting edge of the financial technology solutions industry by developing and launching new products and services and intend to continue to invest in product development to build new products and services and to bring them to market.
To the extent that we are able to cross-sell these products and services and develop and introduce new products and services to our existing clients and attract new clients, we expect our revenues and financial income to continue to grow and our margins to increase. • Development of New Products and Services – We strive to stay on the cutting edge of the financial technology solutions industry by developing and launching new products and services and intend to continue to invest in product development to build new products and services and to bring them to market.
This decrease was primarily attributable to: • a R$215 million, or 5%, decrease in personnel expenses related to an decrease in total employee headcount (from 6,928 employees as of December 31, 2022 to 6,669 employees as of December 31, 2023). • a R$54 million, or 8%, increase in data processing expenses, mainly related to consultancy services in connection with the operation and maintenance of our platform’s software. • a R$90 million, or 23%, decrease in third parties’ services, mainly due to the optimization of expenses with technological solutions related to social and online media; • a R$8 million, or 8%, increase in depreciation of property and equipment and right-of-use assets as a result of new leases contracts; and • a R$38 million, or 40%, increase in amortization of intangible assets as a result of Banco Modal acquisition.
This increase was primarily attributable to: • a R$215 million, or 5%, decrease in personnel expenses related to an decrease in total employee headcount (from 6,928 employees as of December 31, 2022 to 6,669 employees as of December 31, 2023); • a R$54 million, or 8%, increase in data processing expenses, mainly related to consultancy services in connection with the operation and maintenance of our platform’s software; • a R$90 million, or 23%, decrease in third parties’ services, mainly due to the optimization of expenses with technological solutions related to social and online media; • a R$8 million, or 8%, increase in depreciation of property and equipment and right-of-use assets as a result of new leases contracts; and • a R$38 million, or 40%, increase in amortization of intangible assets as a result of Banco Modal acquisition. 107 FORM 20-F « Table of Contents Other operating income (expenses), net.
Significant Factors Affecting Our Results of Operations We believe that our results of operations and financial performance are driven by the following factors: Growth of Our Retail Client Assets We generate a significant portion of our revenues from fees derived from our balance of Retail Client Assets, including advisory fees, commissions, distribution fees from product manufacturers and asset management fees across various solution categories.
Significant Factors Affecting Our Results of Operations We believe that our results of operations and financial performance are driven by the following factors: 96 FORM 20-F « Table of Contents Growth of Our Retail Client Assets We generate a significant portion of our revenues from fees derived from our balance of Retail Client Assets, including advisory fees, commissions, distribution fees from product manufacturers and asset management fees across various solution categories.
Share of profit or (loss) in joint venture and associates is related to equity accounting. 108 FORM 20-F « Table of Contents Income before Income Tax Income before income tax consists of our net revenue and income minus our operating costs, selling and administrative expenses, other net other operating expenses and interest expenses.
Share of profit or (loss) in joint venture and associates is related to equity accounting. 103 FORM 20-F « Table of Contents Income before Income Tax Income before income tax consists of our net revenue and income minus our operating costs, selling and administrative expenses, others deductible expenses and interest expenses.
Income Tax Expense Income tax expense for the year ended December 31, 2023 was a R$37 million income, an increase of R$173 million from a R$136 million expense for the year ended December 31, 2022.
Income Tax Expense Income tax expense for the year ended December 31, 2023 was a R$37 million expense, a decrease of R$173 million from a R$136 million income for the year ended December 31, 2022.
Accordingly, the effective tax rate of our consolidated operations fluctuates over time according to the portion of our total net income that was generated in each of these entities. For 2023, 2022 and 2021, our effective tax rate was 0.9%, -3.9% and 5.8% respectively.
Accordingly, the effective tax rate of our consolidated operations fluctuates over time according to the portion of our total net income that was generated in each of these entities. For 2024, 2023 and 2022, our effective tax rate was 9.4%, 0.9% and -3.9% respectively.
We then eliminated the appreciation in the value of the invested assets so that we could calculate the accumulated net inflow of new money by each cohort. As our company is growing, our ecosystem is expanding and our brand is getting stronger, we see faster increases in net new money.
We then eliminated the appreciation in the value of the invested assets so that we could calculate the accumulated net inflow of new money by each cohort. 95 FORM 20-F « Table of Contents As our company is growing, our ecosystem is expanding and our brand is getting stronger, we see faster increases in net new money.
Net revenues from services rendered represented a decrease of R$256 million within total revenue and income, driven by: • a R$286 million decrease in revenue from securities placements, primarily attributable to the decrease in mandates where we acted as placement agents or underwriters for third-party transactions in the domestic and international capital markets.
Net revenues from services rendered represented an increase of R$893 million within total revenue and income, driven by: • a R$306 million increase in revenue from securities placements, primarily attributable to the increase in mandates where we acted as placement agents or underwriters for third-party transactions in the domestic and international capital markets.
Net income from financial instruments represented R$1,526 million of the increase in total revenue and income, driven by the growth in our retail investment distribution platform (whose retail clients grew 14% and Client Assets grew 16% period-over-period), in our institutional businesses, and the increase in our Adjusted Gross Financial Assets balances. Operating Costs and Expenses Operating costs.
Net income from financial instruments represented R$1,278 million of the increase in total revenue and income, driven by the growth in our retail investment distribution platform (whose number of retail clients grew 20% and Client Assets grew 19% period-over-period), in our institutional businesses, and the increase in our Adjusted Gross Financial Assets balances. Operating Costs and Expenses Operating costs.
As of December 31, 2023, we were in compliance with the covenants in our loan agreements and debentures. Off-balance Sheet Arrangements As of December 31, 2023, the off-balance sheet arrangements total an amount of R$8,913 million (compared to R$5,015 million as of December 31, 2022).
As of December 31, 2024, we were in compliance with the covenants in our loan agreements and debentures. Off-balance Sheet Arrangements As of December 31, 2024, the off-balance sheet arrangements total an amount of R$7,874 million (compared to R$8,913 million as of December 31, 2023).
Net Cash Flows from Financing Activities Our net cash flows from financing activities decreased from cash used in financing activities of R$200 million in the year ended December 31, 2022 to R$4,395 million in the year ended December 31, 2023, primarily due to (1) the acquisition of treasury shares under the share buy-back program in the total amount of R$916 million; (2) the proceeds from the issuance of debentures in the total amount of R$373 million; and (3) borrowings mostly derived from our loans agreements with Banco Nacional de México in a total amount of R$2,253 million; (4) the payments of borrowings, lease liabilities and debt securities in the total amount of R$2,557 million; and (5) dividends paid in the total amount of R$3,542 million. 114 FORM 20-F « Table of Contents Our net cash flows from financing activities decreased from cash provided to financing activities of R$6,639 million in the year ended December 31, 2021 to a cash used in financing activities of R$200 million in the year ended December 31, 2022, primarily due to (1) the acquisition of treasury shares under the share buy-back program in the total amount of R$1,815 million; (2) the proceeds from the issuance of debentures in the total amount of R$1,891 million; and (3) the payments of borrowings, lease liabilities and debt securities in the total amount of R$278 million.
Net Cash Flows from Financing Activities Our net cash flows from financing activities decreased from a cash used in financing activities of R$4,395 million in the year ended December 31, 2023 to R$5,784 million in the year ended December 31, 2024, primarily due to (1) the acquisition of treasury shares under the share buy-back program in the total amount of R$1,354 million; (2) the proceeds from the issuance of debt securities in the total amount of R$1,159 million; (3) the payments of borrowings, lease liabilities and debt securities in the total amount of R$3,552 million; and (4) dividends paid in the total amount of R$2,037 million. 109 FORM 20-F « Table of Contents Our net cash flows from financing activities decreased from cash used in financing activities of R$200 million in the year ended December 31, 2022 to R$4,395 million in the year ended December 31, 2023, primarily due to (1) the acquisition of treasury shares under the share buy-back program in the total amount of R$916 million; (2) the proceeds from the issuance of debentures in the total amount of R$373 million; and (3) borrowings mostly derived from our loans agreements with Banco Nacional de México in a total amount of R$2,253 million; (4) the payments of borrowings, lease liabilities and debt securities in the total amount of R$2,557 million; and (5) dividends paid in the total amount of R$3,542 million.
The average rate is calculated by using the average of reported exchange rates by the Central Bank on each business day during a monthly period and on the last day of each month during an annual period, as applicable. 106 FORM 20-F « Table of Contents Year Period-End Average (1) Low (2) High (3) 2019 4.031 3.946 3.651 4.259 2020 5.196 5.158 4.021 5.937 2021 5.581 5.397 4.894 5.879 2022 5.218 5.166 4.618 5.704 2023 4.841 4.995 4.720 5.446 Source: Central Bank.
The average rate is calculated by using the average of reported exchange rates by the Central Bank on each business day during a monthly period and on the last day of each month during an annual period, as applicable. 101 FORM 20-F « Table of Contents Year Period-End Average (1) Low (2) High (3) 2020 5.196 5.158 4.021 5.937 2021 5.581 5.397 4.894 5.879 2022 5.218 5.166 4.618 5.704 2023 4.841 4.995 4.720 5.446 2024 6.192 5.828 5.426 6.209 Source: Central Bank.
As of December 31, 2023, the total amount was R$ 2.2 billion. 3.250% Senior Notes Due 2026 On June 24, 2021, we issued senior notes due 2026 in an aggregate principal amount of US$750.0 million.
As of December 31, 2024, the total amount was R$ 1.2 billion. 3.250% Senior Notes Due 2026 On July 1, 2021, we issued senior notes due 2026 in an aggregate principal amount of US$750.0 million.
The following table shows the generation and use of cash for the periods indicated: For the year ended December 31, 2023 2022 2021 (R$ millions) Cash flow data Income before income tax 3,936 3,445 3,815 Adjustments to reconcile income before income tax 1,193 1,097 1,560 Income tax paid (403) (371) (784) Contingencies paid (53) (3) (3) Interest paid (141) (198) (81) Changes in assets and liabilities 3,595 (2,166) (8,528) Net cash flows from (used in) operating activities 8,127 1,804 (4,020) Net cash flows from (used in) investing activities 539 (372) (1,151) Net cash flows from (used in) financing activities (4,395) (200) 6,639 Net increase in cash and cash equivalents 4,271 1,232 1,468 Effects of exchange rate changes on cash and cash equivalents (28) (17) (377) Our cash and cash equivalents include cash on hand, interbank certificate deposits with banks and other highly liquid securities purchased under agreements to resell with original maturities of nine months or less, which have an immaterial risk of change in value.
The following table shows the generation and use of cash for the periods indicated: For the year ended December 31, 2024 2023 2022 (R$ millions) Cash flow data Income before income tax 4,986 3,936 3,445 Adjustments to reconcile income before income tax 2,910 1,193 1,097 Income tax paid (542) (403) (371) Contingencies paid (8) (53) (3) Interest paid (349) (141) (198) Changes in assets and liabilities 4,183 3,595 (2,166) Net cash flows from (used in) operating activities 11,179 8,127 1,804 Net cash flows from (used in) investing activities (1,667) 539 (372) Net cash flows from (used in) financing activities (5,784) (4,395) (200) Net increase in cash and cash equivalents 3,727 4,271 1,232 Effects of exchange rate changes on cash and cash equivalents (28) (28) (17) Our cash and cash equivalents include cash on hand, interbank certificate deposits with banks and other highly liquid securities purchased under agreements to resell with original maturities of nine months or less, which have an immaterial risk of change in value.
Retail Gross Total Revenues increased 12% from R$10,157 million for the year ended December 31, 2022 to R$11,791 million for the year ended December 31, 2023, attributable mostly to (1) growth in the client base and total Client Assets and (2) increased performance from products such as fixed income, credit cards and other retail revenue.
Retail Gross Total Revenues increased 14% from R$11,791 million for the year ended December 31, 2023 to R$13,489 million for the year ended December 31, 2024, attributable mostly to (1) growth in the client base and total Client Assets and (2) increased performance from products such as fixed income, credit cards and other retail revenue.
However, after adjusting out the net appreciation of assets, the net balance of invested assets in this cohort increased 26% after 6 months and 37% after 12 months.
However, after adjusting out the net appreciation of assets, the net balance of invested assets in this cohort increased 34% after 6 months and the same after 12 months.
New active clients accounted for 9% of our retail total gross revenues in 2023, compared to 14% in 2022 and 15% in 2021.
New active clients accounted for 8% of our retail total gross revenues in 2024, compared to 9% in 2023 and 14% in 2022.
Retail – Client Assets Retail Client Assets is the market value of all retail client assets invested through XP’s platform, including equities, fixed income securities, mutual, hedge and private equity funds (including those managed by XP Gestão, XP Advisory, XP PE Gestão de Recursos Ltda., XP Allocation Asset Management Ltda. and XP Vista, as well as by third-party asset managers), retirement plans funds (including those from XP VP, as well as by third-party insurance companies), exchanged traded funds, structured operations certificates, REITs (real estate investment funds), uninvested cash balances (Float Balances), among others.
(4) Calculated as Net Income divided by total revenue and income. 92 FORM 20-F « Table of Contents Total Client Assets Client Assets is the market value of all client assets invested through XP’s platform, including equities, fixed income securities, mutual, hedge and private equity funds (including those managed by XP Gestão de Recursos Ltda., XP Advisory, XP PE Gestão de Recursos Ltda., XP Allocation Asset Management Ltda., XP Vista Asset Management Ltda. and XP Sports Asset Management Ltda., as well as by third-party asset managers), retirement plans funds (including those from XP VP, as well as by third-party insurance companies), exchanged traded funds, structured operations certificates, REITs (real estate investment funds), uninvested cash balances (Float Balances), among others.
Net Income for the Year As a result of the foregoing, net income for the year ended December 31, 2022 was R$3,580 million, a decrease of R$12 million from R$3,592 million for the year ended December 31, 2021. B. Liquidity and Capital Resources As of December 31, 2023, we had R$9,210 million in cash and cash equivalents.
Net Income for the Year As a result of the foregoing, net income for the year ended December 31, 2023 was R$3,899 million, a decrease of R$319 million from R$3,580 million for the year ended December 31, 2022. B. Liquidity and Capital Resources As of December 31, 2024, we had R$12,910 million in cash and cash equivalents.
We believe this illustrates our significant opportunity to continue to penetrate our existing customer base and win a greater share of wallet, as shown in the following chart: Accumulated Net Inflow • January 2020 Cohort – This cohort began with an initial investment of R$5,381 million, up 53% over the January 2019 cohort.
We believe this illustrates our significant opportunity to continue to penetrate our existing customer base and win a greater share of wallet, as shown in the following chart: Accumulated Net Inflow • January 2022 Cohort – This cohort began with an initial investment of R$6,639 million, up 39% over the January 2021 cohort.
As of December 31, 2023, the total amount of the loan was R$ 0.8 million. Debentures On July 19, 2022, XP Brazil issued non-convertible debentures in the amount of R$1.8 billion (R$900 million of series 1 and R$900 million of series 2). Both series have in aggregate a maximum authorized issuance up to R$1.8 billion.
Debentures On July 19, 2022, XP Brazil issued non-convertible debentures in the amount of R$1.8 billion (R$900 million of series 1 and R$900 million of series 2). Both series have in aggregate a maximum authorized issuance up to R$1.8 billion.
This variation is primarily due to a decrease of R$261 million income related to incentives from third parties, mainly as a result of the joint development of retail products and also the association of such entities with the XP ecosystem for the year ended December 31, 2022. 110 FORM 20-F « Table of Contents Income before Income Taxes As a result of the foregoing, income before income taxes for the year ended December 31, 2023 was R$3,936 million, an increase of R$492 million, or 14%, from R$3,445 million for the year ended December 31, 2022.
This variation is primarily due to an increase of R$149 million income related to incentives from third parties, mainly as a result of the joint development of retail products and also the association of such entities with the XP ecosystem for the year ended December 31, 2023. 105 FORM 20-F « Table of Contents Income before Income Taxes As a result of the foregoing, income before income taxes for the year ended December 31, 2024 was R$4,986 million, an increase of R$1,050 million, or 27%, from R$3,936 million for the year ended December 31, 2023.
We plan to continue to invest in product development in order to maintain and increase the attractiveness of our products and services. We also plan to continue integrating value-added services, including the expansion of our asset management and wealth management services to improve the popularity of our platform, enhance customer stickiness and increase revenue streams.
We also plan to continue integrating value-added services, including the expansion of our asset management and wealth management services to improve the popularity of our platform, enhance customer stickiness and increase revenue streams.
This decrease was primarily attributable to a decrease in our effective tax rate to (3.9)% for the year ended December 31, 2022 from 5.8% for the year ended December 31, 2021, as a result of revenues at the level of entities and investment funds which adopt different taxation regimes according to the applicable rules in their jurisdictions.
This increase was primarily attributable to an increase in our effective tax rate to 9.4% for the year ended December 31, 2024 from 0.9% for the year ended December 31, 2023, as a result of revenues at the level of entities and investment funds which adopt different taxation regimes according to the applicable rules in their jurisdictions.
Net Income for the Year As a result of the foregoing, net income for the year ended December 31, 2023 was R$3,899 million, an increase of R$319 million from R$3,580 million for the year ended December 31, 2022.
Net Income for the Year As a result of the foregoing, net income for the year ended December 31, 2024 was R$4,515 million, an increase of R$615 million from R$3,899 million for the year ended December 31, 2023.
Our future capital requirements will depend on several factors, including our growth rate, the expansion of our research and development efforts, employee headcount, marketing and sales activities, the introduction of new features to our existing products and the continued market acceptance of our products. 116 FORM 20-F « Table of Contents C. Research and Development, Patents and Licenses, Etc.
Our future capital requirements will depend on several factors, including our growth rate, the expansion of our research and development efforts, employee headcount, marketing and sales activities, the introduction of new features to our existing products and the continued market acceptance of our products. C. Research and Development, Patents and Licenses, Etc. See “Item 4. Information on the Company—D.
Corporate & Issuer Services – Gross Total Revenues Corporate & Issuer Services gross total revenues include capital markets security placement fees earned from corporate clients that hire XP for structuring, underwriting or placement of debt (such as Debentures, Infrastructure Bonds, CRIs, CRAs, FIDCs, LFs) or equity securities (IPOs, follow-ons, block trades and tender offers), the majority of which are sold to our retail clients given the breadth and reach of our platform.
A portion of our management fees are calculated based on the performance of the mutual funds we manage or distribute. 93 FORM 20-F « Table of Contents Corporate & Issuer Services – Gross Total Revenues Corporate & Issuer Services gross total revenues include capital markets security placement fees earned from corporate clients that hire XP for structuring, underwriting or placement of debt (such as Debentures, Infrastructure Bonds, CRIs, CRAs, FIDCs, LFs) or equity securities (IPOs, follow-ons, block trades and tender offers), the majority of which are sold to our retail clients given the breadth and reach of our platform.
As of April 24, 2024, the real /U.S. dollar exchange rate reported by the Central Bank was R5.159 per US$1.00, a depreciation of 6.6% of the real since December 31, 2023. There can be no assurance that the real will not depreciate or appreciate further against the U.S. dollar.
As of December 31, 2024, the real /U.S. dollar exchange rate reported by the Central Bank was R$6.192 per US$1.00, which reflected a 21.8% depreciation of the real against the U.S. dollar during 2024. There can be no assurance that the real will not depreciate or appreciate further against the U.S. dollar.
As of and for the year ended December 31, 2023 2022 2021 Operating Metrics (Unaudited) Total Client Assets (in R$ billions) 1,122 946 815 Total Net Inflow (in R$ bn) 105 138 230 Annualized Retail Take Rate 1.28 % 1.29 % 1.43 % Active clients (in thousands) 4,531 3,877 3,416 Headcount (EoP) 6,669 6,928 6,192 IFAs (in thousands) 14.3 12.3 10.3 Retail DATs (in millions) 2.2 2.4 2.7 Retirement Plans Client Assets (in R$ billions) 73.2 60.5 47.7 Cards TPV (in R$ billion) 40.9 24.9 10.3 Loan Portfolio (in R$ billion) 28.6 22.2 12.8 Financial metrics (in R$ millions) Gross revenue and income 15,726 14,036 12,799 Retail (1) 11,791 10,157 9,793 Institutional 1,516 1,919 1,277 Corporate & Issuer Services (1) 1,576 1,295 1,213 Other 842 666 516 Total revenue and income 14,860 13,347 12,077 Gross Margin (%) ( ² ) 68.0 % 70.3 % 70.8 % EBT 3,936 3,445 3,815 EBT Margin (%) ( ³ ) 26.5 % 25.8 % 31.6 % Net Income 3,899 3,580 3,592 Net Margin (%) (4) 26.2 % 26.8 % 29.7 % (1) Revenues associated with corporate clients, companies with annual revenues above R$700 million, were segregated from retail clients, which include individuals and companies with lower revenues.
As of and for the year ended December 31, 2024 2023 2022 Operating Metrics (Unaudited) Total Client Assets (in R$ billions) 1,227 1,122 946 Total Net Inflow (in R$ bn) 103 105 138 Annualized Retail Take Rate 1.29 % 1.28 % 1.29 % Active clients (in thousands) 4,684 4,531 3,877 Headcount (EoP) 7,442 6,669 6,928 Total Advisors 18.2 17.2 14.7 Retail DATs (in millions) 2.3 2.2 2.4 Retirement Plans Client Assets (in R$ billions) 81 73 61 Cards TPV (in R$ billion) 48 41 25 Loan Portfolio (in R$ billion) 29 29 22 Financial metrics (in R$ millions) Gross revenue and income 17,988 15,726 14,036 Retail (1) 13,489 11,791 10,157 Institutional 1,373 1,516 1,919 Corporate & Issuer Services (1) 2,289 1,576 1,295 Other 837 842 666 Total Revenue and Income 17,031 14,860 13,347 Gross Margin (%) ( ² ) 68.6 % 68.0 % 70.3 % EBT 4,986 3,936 3,445 EBT Margin (%) ( ³ ) 29.3 % 26.5 % 25.8 % Net Income 4,515 3,899 3,580 Net Margin (%) (4) 26.5 % 26.2 % 26.8 % Adjusted Net Income 4,544 3,899 3,580 Adjusted Net Margin (%) (4) 26.7 % 26.2 % 26.8 % (1) Revenues associated with corporate clients, companies with annual revenues above R$700 million, were segregated from retail clients, which include individuals and companies with lower revenues.
Selling expenses for the year ended December 31, 2022 were R$139 million, a decrease of R$89 million, or 39%, from R$227 million for the year ended December 31, 2021, in line with the marketing guidance, that focused on alternative and efficient communication strategies. Administrative expenses.
Selling expenses for the year ended December 31, 2023 were R$169 million, an increase of R$31 million, or 22%, from R$139 million for the year ended December 31, 2022, in line with the marketing guidance, that focused on alternative and efficient communication strategies. Administrative expenses.
We develop our products and services from: (1) our internal new product structuring initiatives; (2) our internal development of new services; (3) third-party vendors who provide complementary financial products and services that we do not provide ourselves; and (4) third-party vendors who provide competitive financial products and services that are similar to those that we offer or are in similar categories.
We develop our products and services from: (1) our internal new product structuring initiatives; (2) our internal development of new services; (3) third-party vendors who provide complementary financial products and services that we do not provide ourselves; and (4) third-party vendors who provide competitive financial products and services that are similar to those that we offer or are in similar categories. 98 FORM 20-F « Table of Contents We plan to continue to invest in product development in order to maintain and increase the attractiveness of our products and services.
We expect to increase our capital expenditures to support the growth in our business and operations. We expect to meet our capital expenditure needs for the foreseeable future from our operating cash flow and our existing cash and cash equivalents.
We expect to meet our capital expenditure needs for the foreseeable future from our operating cash flow and our existing cash and cash equivalents.
The change was motivated by the growth of the Corporate business, which was irrelevant until the end of 2021 and gained traction throughout 2022. Revenue from Corporate clients is being reported in Corporate & Issuer Services. (2) Calculated as total revenue and income less operating costs, including expected credit losses, and divided by total revenue and income.
The change was motivated by the growth of the Corporate business. Revenue from Corporate clients is being reported in Corporate & Issuer Services. (2) Calculated as total revenue and income less operating costs, including expected credit losses, and divided by total revenue and income. (3) Calculated as income before income tax divided by total revenue and income.
Selling expenses for the year ended December 31, 2023 were R$169 million, an increase of R$31 million, or 22%, from R$139 million for the year ended December 31, 2022, due to higher investments in brand awareness and marketing campaigns. Administrative expenses.
Selling expenses for the year ended December 31, 2024 were R$149 million, a decrease of R$21 million, or 12%, from R$169 million for the year ended December 31, 2023, due to higher investments in brand awareness and marketing campaigns. Administrative expenses.
In addition, clearinghouse fees increased by R$16 million, operating losses by R$46 million and other costs and third-party services by R$114 million. As a percentage of total revenue and income, our operating costs increased at 29% for the year ended December 31, 2022 compared to the 28% for year ended December 31, 2021. Selling expenses.
In addition, clearinghouse fees increased by R$100 million and other costs and third-party services by R$72 million. As a percentage of total revenue and income, our operating costs were 29.7% for the year ended December 31, 2024 compared to the 29.6% for year ended December 31, 2023. Selling expenses.
We recorded other operating income/expenses, net of R$257 million for the year ended December 31, 2022 compared to other operating income, net of R$324 million for the year ended December 31, 2021.
We recorded other operating income/expenses, net of R$189 million for the year ended December 31, 2024 compared to other operating income, net of R$11 million for the year ended December 31, 2023.
Indebtedness As of December 31, 2023, we had R$2,199 million in outstanding loans, R$305 million in lease liabilities, R$2,807 million in outstanding debentures and R$3,547 million in senior notes issued by us. As of December 31, 2023, we were in compliance with all the covenants of our material loan agreements and debentures.
Indebtedness As of December 31, 2024, we had R$1,666 million in outstanding loans, R$311 million in lease liabilities, R$1,875 million in outstanding debentures and R$5,814 million in senior notes issued by us. As of December 31, 2024, we were in compliance with all the covenants of our material loan agreements and debentures.
Income before Income Taxes As a result of the foregoing, income before income taxes for the year ended December 31, 2022 was R$3,445 million, a decrease of R$371 million, or 10%, from R$3,815 million for the year ended December 31, 2021.
Income before Income Taxes As a result of the foregoing, income before income taxes for the year ended December 31, 2023 was R$3,936 million, an increase of R$492 million, or 14%, from R$3,445 million for the year ended December 31, 2022.
Our net cash flows used in investing activities decreased from R$1,151 million in the year ended December 31, 2021 to R$372 million in the year ended December 31, 2022, primarily affected by: (1) R$244 million in investments in subsidiaries, associates and joint ventures, mostly related to our asset management strategy, which decreased from R$798 million in the year ended December 31, 2021; and (2) R$127 million in investments in intangible assets and property plans and equipment, mostly IT infrastructure and capitalized software, which decreased from R$353 million in the year ended December 31, 2021.
Net Cash Flows used in Investing Activities Our net cash flows generated or used in investing activities decreased from R$539 million generated in the year ended December 31, 2023 to a cash consumption of R$1,667 million in the year ended December 31, 2024, primarily affected by: (1) R$1,394 million in investments in subsidiaries, associates and joint ventures, mostly related to our asset management strategy, which decreased from R$705 million generated in the year ended December 31, 2023; and (2) R$330 million in investments in intangible assets and property plants and equipment, mostly IT infrastructure and capitalized software, which increased from R$196 million in the year ended December 31, 2023.
Debentures • an XP Brazil regulatory capital ratio 1% or more above the minimum regulatory capital requirement as established by the Central Bank from time to time; and • an XP Brazil pre-tax income to financial expenses ratio greater than or equal to 2:1.
Certain of our loans and debentures are subject to certain restrictive covenants and require that the borrower entity (as indicated below) meet certain financial ratios, which are as follows: Debentures • an XP Brazil regulatory capital ratio 1% or more above the minimum regulatory capital requirement as established by the Central Bank from time to time; and • an XP Brazil pre-tax income to financial expenses ratio greater than or equal to 2:1.
Institutional – gross revenues totaled R$1,516 million for the year ended December 31, 2023, a 21% decrease from R$1,919 million for the year ended December 31, 2022, mainly due to lower trading activity and lower results from our fixed income, currency and commodities desk.
Institutional – gross revenues totaled R$1,373 million for the year ended December 31, 2024, a 9% decrease from R$1,516 million for the year ended December 31, 2023, mainly due to lower trading activity.
This increase was primarily attributable to a R$171 million increase in cashback costs related to credit card transactions performed by our customers and a R$93 million increase in commission and incentive costs payable to our IFAs as part of the growth of our omni-channel distribution network. Incentive costs are capitalized and amortized over the life of the signed contracts.
This increase was primarily attributable to a R$56 million increase in cashback costs related to credit card transactions performed by our customers, which are a strategy for customer acquisition, since it is a percentage of client spending and a R$390 million increase in commission and incentive costs payable to our IFAs as part of the growth of our omni-channel distribution network.
Other – Gross Total Revenues We include in Other gross revenues and income not allocated to Retail, Institutional and Corporate & Issuer Services solution categories, such as principal trading operations, which consists of investing our own net cash balances (referred to as our Adjusted Gross Financial Assets) in low-risk securities, arbitrage transactions and other investments with limited exposure to market risk. 96 FORM 20-F « Table of Contents Review of 2023 Results Retail – Our number of active clients increased 17%, from 3,877 thousand as of December 31, 2022 to 4,531 thousand as of December 31, 2023.
Other – Gross Total Revenues We include in Other gross revenues and income not allocated to Retail, Institutional and Corporate & Issuer Services solution categories, such as principal trading operations, which consists of investing our own net cash balances in low-risk securities, arbitrage transactions and other investments with limited exposure to market risk.
Gross margin decreased slightly from 70.8% to 70.3%, due to higher costs associated with credit cards. The year ended December 31, 2022 was also marked by an increase in technology solutions associated with new products, infrastructure and also in expanding our employee base.
The year ended December 31, 2024 was also marked by an increase in technology solutions associated with new products, infrastructure and also in expanding our employee base.
For further information on why our management chooses to use these non-GAAP financial measures, and on the limits of using these non-GAAP financial measures, please see “Presentation of Financial and Other Information—Special Note Regarding Non-GAAP Financial Measures.” Float Balance As of December 31 2023 2023 2022 2021 (US$) (1) (R$) (in millions) (+) Securities trading and intermediation (Liabilities) 3,500 16,944 16,063 15,598 (-) Securities trading and intermediation (Assets) (606) (2,932) (3,271) (1,406) Float Balance 2,894 14,011 12,792 14,192 (1) For convenience purposes only, amounts in reais as of December 31, 2023 have been translated to U.S. dollars using an exchange rate of R$4.8413 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2023 as reported by the Central Bank.
For further information on why our management chooses to use these non-GAAP financial measures, and on the limits of using these non-GAAP financial measures, please see “Presentation of Financial and Other Information—Special Note Regarding Non-GAAP Financial Measures.” Adjusted Net Income As of December 31 2024 2024 2023 2022 (US$) (1) (R$) (in millions) Net Income 729 4,515 3,899 3,580 PSU expiration expenses (2) (12) — — Tax expenses 7 41 — — Adjusted Net Income 734 4,544 3,899 3,580 (1) For convenience purposes only, amounts in reais as of December 31, 2024 have been translated to U.S. dollars using an exchange rate of R$6.1923 to US$1.00, the commercial selling rate for U.S. dollars as of December 31, 2024 as reported by the Central Bank.
For example, our January 2023 cohort began with an initial investment that was nearly 3 times the size of our January 2017 cohort.
For example, our January 2024 cohort began with an initial investment that was more than twice the size of our January 2018 cohort.
Non-GAAP Financial Measures This annual report presents our Float Balance, Adjusted Gross Financial Assets and Adjusted Net Asset Value and their respective reconciliations for the convenience of investors, which are non-GAAP financial measures.
Non-GAAP Financial Measures This annual report presents our Adjusted Net Income and its respective reconciliation for the convenience of investors, which is a non-GAAP financial measures.
Selling expenses decreased 39% to R$139 million for the year ended December 31, 2022 and administrative expenses increased 20% to R$5,641 million for the same period, driven by personnel expansion, data processing and third-party services. The faster expense growth compared to total revenue, resulted in a 10% lower income before income tax.
Selling expenses decreased 12%, from R$169 million to R$149 million, for the year ended December 31, 2024 and administrative expenses increased 10%, from R$5,641 to R$6,001 million for the same period, driven by higher personnel expenses and data processing. The increase in expenses and revenue resulted in a 27% higher income before income tax.
Our income before tax combined with non-cash expenses consisting primarily of (a) net foreign exchange differences of R$302 million in 2022 and R$507 million in 2021, (b) share-based plan of R$585 million in 2022 and R$561 million in 2021, (c) interest accrued of R$429 million in 2022 and R$182 million in 2021, and (d) depreciation and amortization of R$206 million in 2022 and R$232 million in 2021.
Our income before tax combined with non-cash income/expenses consisted primarily of (a) net foreign exchange differences of R$1,188 million in 2024 and R$471 million in 2023, (b) share-based plan of R$417 million in 2024 and R$366 million in 2023, (c) interest accrued of R$609 million in 2024 and R$638 million in 2023, and (d) depreciation and amortization of R$ 265 million in 2024 and R$252 million in 2023.
After adjusting out the net appreciation of assets, the net balance of invested assets in this cohort increased 70% after 6 months, 83% after 12 months, 88% after 18 months and 91% after 24 months. • January 2022 Cohort – This cohort began with an initial investment of R$6,639 million, up 39% over the January 2021 cohort.
However, after adjusting out the net appreciation of assets, the net balance of invested assets in this cohort increased 26% after 6 months and 37% after 12 months. • January 2024 Cohort – This cohort began with an initial investment of R$4,881 million, in line with January 2023 cohort.
Administrative expenses for the year ended December 31, 2022 were R$5,641 million, an increase of R$949 million, or 20%, from R$4,693 million for the year ended December 31, 2021.
Administrative expenses for the year ended December 31, 2024 were R$6,001 million, an increase of R$540 million, or 10%, from R$5,461 million for the year ended December 31, 2023.
On October 23, 2023, we entered into a credit agreement with Banco Nacional de México S.A. for a term loan in the amount of US$200 million. The loan accrues interest at a rate per annum equal to Term SOFR + 0.40% and matures on August 30, 2024.
The principal amount is due on the maturity date and interest is payable quarterly on November 30, February 29, May 30 and August 30. We paid off this agreement on the maturity date. On October 23, 2023, we entered into a credit agreement with Banco Nacional de México S.A. for a term loan in the amount of US$200 million.
It also enhances client’s relationships and attracts new clients that grow our retail platform. • a R$20 million increase in insurance brokerage fees, driven by a higher sale of retirement plans and insurance products to retail clients; • a R$371 million increase in banking fees, mainly related to interchange fees received in credit card transactions; • a R$83 million decrease in other services, including a R$85 million decrease in penalties collected from retail clients, a R$16 million decrease in client’s margin coverage fees, a R$50 million increase in other ancillary revenues related to the increase in trading operations, such as third-party trading platform fees, and revenue from marketing events; and • net of a R$37 million decrease in taxes and contributions on services.
For the year ended December 31, 2024, 5% of management fees were performance-based and 95% were non-performance-based (i.e., fixed annual fees); • a R$44 million increase in insurance brokerage fees, driven by a higher sale of retirement plans and insurance products to retail clients; • a R$207 million increase in commission fees, mainly related to interchange fees received in credit card transactions, due to the greater volume of these transactions; • a R$145 million increase in other services, including a R$34 million decrease in penalties collected from retail clients, a R$32 million increase in client’s margin coverage fees, a R$135 million increase in other ancillary revenues related to the increase in trading operations, such as third-party trading platform fees, revenue from marketing events, and education services; and • net of a R$65 million increase in taxes and contributions on services.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeBoard Diversity Matrix Board Diversity Matrix (as of December 31, 2023) Country of Principal Executive Offices: Brazil Foreign Private Issuer: Yes (the Cayman Islands) Disclosure Prohibited under Home Country Law: No Total Number of Directors: 9 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors: 1 8 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction: 0 LGBTQ+: 0 Hispanic or Latinx 0 1 Did not Disclose Demographic Background: 1 7 D.
Biggest changeStrategy and Performance Committee Our Strategy and Performance Committee , which consists of Guilherme Dias Fernandes Benchimol, Gabriel Klas da Rocha Leal, Bruno Constantino Alexandre dos Santos, Jose Luiz Acar Pedro and João Roberto Gonçalves Teixeira, assists the board of directors in discharging its responsibilities and oversight duties with respect to the development and implementation of XP’s business strategies and evaluate the performance of the company’s business strategies. 117 FORM 20-F « Table of Contents Board Diversity Matrix Board Diversity Matrix (as of December 31, 2024) Country of Principal Executive Offices: Brazil Foreign Private Issuer: Yes (the Cayman Islands) Disclosure Prohibited under Home Country Law: No Total Number of Directors: 9 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors: 1 8 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction: 0 LGBTQ+: 0 Hispanic or Latinx 0 1 Did not Disclose Demographic Background: 1 7 D.
As a result of the termination: (i) Iupar Group will no longer have the right to nominate members to our board, but together with Itaú, they are required to comply with certain registration rights requirements when selling their shares in the market; (ii) GA retains its right to nominate one board member as long as it holds at least 2% of our common shares; and (iii) our board was reduced on July 18, 2023 to 9 members (from 11) to improve its effectiveness.
As a result of the termination: (i) Iupar Group will no longer have the right to nominate members to our Board of Directors, but together with Itaú, they are required to comply with certain registration rights requirements when selling their shares in the market; (ii) GA retains its right to nominate one board member as long as it holds at least 2% of our common shares; and (iii) our Board of Directors was reduced on July 18, 2023 to 9 (nine) members (from 11) to improve its effectiveness.
Cayman Islands law does not impose a requirement that the board consist of a majority of independent directors or that such independent directors meet regularly without other members present. Nor does Cayman Islands law impose specific requirements on the establishment of a compensation committee or nominating committee or nominating process.
Cayman Islands law does not impose a requirement that the board consists of a majority of independent directors or that such independent directors meet regularly without other members present. Nor does Cayman Islands law impose specific requirements on the establishment of a compensation committee or nominating committee or nominating process.
He joined XP in 2012. Prior to joining us, he was a Co-Portfolio Management for Brazil at Emerging Markets Management in 2010, based in Washington DC, and before that a partner at BTG Pactual, where he worked for 10 years, from 2000 to 2010, responsible for proprietary Private Equity deals.
Prior to joining us, he was a Co-Portfolio Management for Brazil at Emerging Markets Management in 2010, based in Washington DC, and before that a partner at BTG Pactual, where he worked for 10 years, from 2000 to 2010, responsible for proprietary Private Equity deals.
He was also an executive officer of our US broker dealer from 2015 until 2017 and of XP Brazil, XP CCTVM, Banco XP, XP Gestão, XP Vista, XP Advisory, XP VP, Tecfinance, XP Educação and Leadr until 2023, when he ceased to be an executive officer of the Company group.
He was also an executive officer of our U.S. broker-dealer from 2015 until 2017 and of XP Brazil, XP CCTVM, Banco XP, XP Gestão, XP Vista, XP Advisory, XP VP, Tecfinance, XP Educação and Leadr until 2023, when he ceased to be an executive officer of the Company group.
Cayman Islands law does not require shareholder approval prior to an issuance of securities to the extent the securities are authorized; and 120 FORM 20-F « Table of Contents • the requirement under Section 5605(b)(2) of Nasdaq listing rules that the independent directors have regularly scheduled meetings with only the independent directors present.
Cayman Islands law does not require shareholder approval prior to an issuance of securities to the extent the securities are authorized; and • the requirement under Section 5605(b)(2) of Nasdaq listing rules that the independent directors have regularly scheduled meetings with only the independent directors present.
Employees As of December 31, 2023, 2022 and 2021, we had 6,669, 6,928 and 6,192 employees, respectively. As of December 31, 2023, all of our employees were based in our offices in São Paulo, Rio de Janeiro, New York City and Miami.
Employees As of December 31, 2024, 2023 and 2022, we had 7,442, 6,669 and 6,928 employees, respectively. As of December 31, 2024, all of our employees were based in our offices in São Paulo, Rio de Janeiro, New York City and Miami.
The audit committee is responsible for, among other things: • the appointment, compensation, retention and oversight of any auditor or accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; • pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services; • reviewing and discussing with the independent auditor its responsibilities under generally accepted auditing standards, the planned scope and timing of the independent auditor’s annual audit plan(s) and significant findings from the audit; • obtaining and reviewing a report from the independent auditor describing all relationships between the independent auditor and the Company consistent with the applicable PCAOB requirements regarding the independent auditor’s communications with the audit committee concerning independence; • confirming and evaluating the rotation of the audit partners on the audit engagement team as required by law; • reviewing with management, in separate meetings whenever the audit committee deems appropriate, any analyses or other written communications prepared by the Management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative IFRS Accounting Standards methods on the financial statements; and other critical accounting policies and practices of the Company; • reviewing, in conjunction with the Chief Executive Officer and Chief Financial Officer of the Company, the Company’s disclosure controls and procedures and internal control over financial reporting; • establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and • ratifying certain related-party transactions (as defined in our related-party transaction policy) in accordance with our related-party transaction policy.
The audit committee is responsible for, among other things: • the appointment, compensation, retention, termination and oversight of the work of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; • pre-approving the audit services and non-audit services (including the fees and terms thereof) to be provided by our independent auditor pursuant to the pre-approval procedures established by the audit committee; • discussing with the independent auditor its responsibilities under generally accepted auditing standards, the planned scope and timing of the independent auditor’s annual audit plan(s) and significant findings from the audit and any problems of difficulties encountered, including any restrictions on the scope of the auditor’s activities or on access to requested information, and any significant disagreements with management; 116 FORM 20-F « Table of Contents • evaluating the independent auditor’s qualifications, independence and performance, including by obtaining and reviewing a report from the independent auditor describing all relationships between the independent auditor and the Company consistent with the applicable PCAOB requirements regarding the independent auditor’s communications with the audit committee concerning independence; • confirming and evaluating the rotation of the audit partners on the audit engagement team as required by law; • reviewing with management, in separate meetings whenever the audit committee deems appropriate, any analyses or other written communications prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative IFRS Accounting Standards methods on the financial statements; and other critical accounting policies and practices of the Company; • reviewing, in conjunction with the Chief Executive Officer and Chief Financial Officer of the Company, the Company’s disclosure controls and procedures and internal control over financial reporting; • establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and • ratifying certain related-party transactions (as defined in our related-party transaction policy) in accordance with our related-party transaction policy.
Please see Exhibit 97.1 to this annual report. We have not been required to prepare an accounting restatement at any time during or after our last completed fiscal year and no recovery of awarded compensation is required pursuant to our compensation recoupment policy.
We have not been required to prepare an accounting restatement at any time during or after our last completed fiscal year and no recovery of awarded compensation is required pursuant to our compensation recoupment policy.
Major Shareholders.” See “Item 6. Directors, Senior Management and Employees—B. Compensation—Long-Term Incentive Plan, or “LTIP” for information on our share option long-term incentive program. 122 FORM 20-F « Table of Contents F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation We have adopted a compensation recoupment policy on November 13, 2023.
Major Shareholders.” See “Item 6. Directors, Senior Management and Employees—B. Compensation—Long-Term Incentive Plan, or “LTIP” for information on our share option long-term incentive program. F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation We have adopted a compensation recoupment policy on November 13, 2023. Please see Exhibit 97.1 to this annual report.
The following table lists our current executive officers: Name Age Position Thiago Maffra 39 Chief Executive Officer Bruno Constantino Alexandre dos Santos 48 Chief Financial Officer Fabrício Cunha de Almeida 41 General Counsel Unless otherwise indicated, the current business addresses for our executive officers is Av. Chedid Jafet, 75, Torre Sul, 30th floor, Vila Olímpia – São Paulo, Brazil 04551-065.
The following table lists our current executive officers: Name Age Position Thiago Maffra 40 Chief Executive Officer Victor Andreu Mansur Farinassi 35 Chief Financial Officer Fabrício Cunha de Almeida 42 General Counsel Unless otherwise indicated, the current business addresses for our executive officers is Av. Chedid Jafet, 75, Torre Sul, 30th floor, Vila Olímpia – São Paulo, Brazil 04551-065.
Bernardo Amaral Botelho is a member of our board of directors, a position he has held since November 2019. Mr. Amaral has been with the Company group since 2007 and was a board member of XP Brazil from August 2018 to November 2019.
Amaral has been with the Company group since 2007 and was a board member of XP Brazil from August 2018 to November 2019.
He founded the XP group in 2001 and was its CEO until May, 2021. Mr. Benchimol also served on the board of XP Brazil as the chairman from August 2018 to November 2019. Mr. Benchimol holds a bachelor’s degree in business economics from Universidade Federal do Rio de Janeiro .
He founded the XP group in 2001 and was its CEO until May, 2021. Mr. Benchimol also served on the board of XP Brazil as the chairman from August 2018 to November 2019. Mr.
The LTIP is administered by a compensation committee appointed by our board of directors consisting of not less than three members, which may consist of directors and/or officers or other management members of our company. For more information see “—C. Board Practices—Committees—Compensation Committee.” As of December 31, 2023, we had made awards consisting of 16,189 shares under the LTIP. C.
The LTIP is administered by a compensation committee appointed by our board of directors consisting of not less than three members, which may consist of directors and/or officers or other management members of our company. For more information see “—C.
The table below breaks down our full-time personnel by function as of December 31, 2023 : Function Number of employees % of Total Management 45 1 % Technology 1,366 20 % Sales and Marketing 3,524 53 % Customer Support 337 5 % General and Administrative 1,397 21 % Total 6,669 100 % Our employees in Brazil are affiliated with the unions of independent sales agents and of consulting, information, research and accounting firms for the geographic area in which they render services.
The table below breaks down our full-time personnel by function as of December 31, 2024 : Function Number of employees % of Total Management 50 1 % Technology 1,372 18 % Sales and Marketing 4,113 55 % Customer Support 336 5 % General and Administrative 1,571 21 % Total 7,442 100 % Our employees in Brazil are affiliated with the unions of independent sales agents and of consulting, information, research and accounting firms for the geographic area in which they render services.
In addition, the audit committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. Cristiana Pereira serves as chairperson of the committee.
In addition, the audit committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. Jose Luiz Acar Pedro serves as chairperson of the committee and is considered an “audit committee financial expert” as defined by the SEC.
Board of Directors As of December 31, 2023, our board of directors was composed of nine (9) members.
Board of Directors As of December 31, 2024, our board of directors was composed of nine (9) members, of which five (5) are independent.
Amaral holds a bachelor’s degree in law from Pontifícia Universidade Católica do Rio de Janeiro and an LLM in business law from IBMEC Group. 117 FORM 20-F « Table of Contents Gabriel Klas da Rocha Leal is a member of our board of directors, a position he has held since November 2019. Mr.
Benchimol holds a bachelor’s degree in business economics from Universidade Federal do Rio de Janeiro . 112 FORM 20-F « Table of Contents Bernardo Amaral Botelho is a member of our board of directors, a position he has held since November 2019. Mr.
Name Age Position Guilherme Dias Fernandes Benchimol 47 Chairman Bernardo Amaral Botelho 48 Director Gabriel Klas da Rocha Leal 42 Director Bruno Constantino Alexandre dos Santos 48 Director Fabrício Cunha de Almeida 41 Director Luiz Felipe Amaral Calabró 46 Director Martin Emiliano Escobari Lifchitz 52 Director Frederico Seabra de Carvalho 49 Director Cristiana Pereira 53 Director The following is a brief summary of the business experience of our directors.
Name Age Position Guilherme Dias Fernandes Benchimol 48 Chairman Bernardo Amaral Botelho 49 Director Gabriel Klas da Rocha Leal 43 Director Bruno Constantino Alexandre dos Santos 49 Director Jose Luiz Acar Pedro 72 Director Melissa Alves Werneck 52 Director Martin Emiliano Escobari Lifchitz 53 Director Oscar Rodríguez Herrero 53 Director João Roberto Gonçalves Teixeira 59 Director The following is a brief summary of the business experience of our directors.
Compensation Compensation of Directors and Officers Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere. 119 FORM 20-F « Table of Contents For the years ended December 31, 2023, 2022 and 2021, the aggregate compensation expense for the members of the board of directors and our executive officers for services in all capacities was R$33 million, R$69 million, and R$53 million, respectively, which includes both benefits paid in kind and compensation.
For the years ended December 31, 2024, 2023 and 2022, the aggregate compensation expense for the members of the board of directors and our executive officers for services in all capacities was R$34 million, R$33 million, and R$69 million, respectively, which includes both benefits paid in kind and compensation.
Fabrício Cunha de Almeida is a member of our board of directors, a position he has held since November 2019 and our general counsel, a position he has held since November 2019. Mr. Almeida has been the general counsel of the XP group since 2013.
Gabriel Klas da Rocha Leal is a member of our board of directors, a position he has held since November 2019. Mr. Leal has been with the Company group since 2006 and was a board member of XP Brazil until November 2019.
Leal holds a bachelor’s degree in chemical engineering from Pontifícia Universidade Católica do Rio de Janeiro and an MBA from IBMEC Group. Bruno Constantino Alexandre dos Santos is a member of our board of directors and our CFO, positions he has held since November 2019. Mr. Constantino has over 26 years’ experience in the financial markets.
Bruno Constantino Alexandre dos Santos is a member of our board of directors, position he has held since November 2019. Mr. Constantino has over 26 years’ experience in the financial markets. He joined XP in 2012.
Leal has been with the Company group since 2006 and was a board member of XP Brazil until November 2019. He was also an executive officer of XP CCTVM, Banco XP, XP VP and other Brazilian entities of the Company group until 2023, when he ceased to be an executive officer of the Company group. Mr.
He was also an executive officer of XP CCTVM, Banco XP, XP VP and other Brazilian entities of the Company group until 2023, when he ceased to be an executive officer of the Company group. Mr. Leal holds a bachelor’s degree in chemical engineering from Pontifícia Universidade Católica do Rio de Janeiro and an MBA from IBMEC Group.
Committees Audit Committee The audit committee, which consists of Luiz Felipe Amaral Calabró, Cristiana Pereira and Frederico Seabra de Carvalho, assists our board of directors in overseeing our accounting and financial reporting processes and the audits of our financial statements.
Committees Audit Committee The audit committee, which consists of Jose Luiz Acar Pedro, Oscar Rodríguez Herrero and João Roberto Gonçalves Teixeira, assists our board of directors in overseeing our accounting and financial reporting processes and the audits of our financial statements.
Maffra holds a bachelor’s degree in business administration from INSPER and an MBA from Columbia Business School. Bruno Constantino Alexandre dos Santos. See “— Board of Directors.” Fabrício Cunha de Almeida. See “— Board of Directors.” Shareholders’ Agreement On July 6, 2023, our Shareholders' Agreement executed between XP Control LLC, General Atlantic (XP) Bermuda, LP (“GA”), Itaúsa S.A.
Mr. Almeida holds a bachelor’s degree in law from Universidade Cândido Mendes in Rio de Janeiro and holds a postgraduate degree in corporate law and capital markets from FGV. 114 FORM 20-F « Table of Contents Shareholders’ Agreement On July 6, 2023, our Shareholders' Agreement executed between XP Control LLC, General Atlantic (XP) Bermuda, LP (“GA”), Itaúsa S.A.
Prior to joining us, he was a lawyer of Costa Advogados Associados from 2001 to 2007. Mr.
Prior to joining us, he was a lawyer of Costa Advogados Associados from 2001 to 2007. Mr. Amaral holds a bachelor’s degree in law from Pontifícia Universidade Católica do Rio de Janeiro and an LLM in business law from IBMEC Group.
The audit committee meets as often as it determines is appropriate to carry out its responsibilities, but in any event meets at least four times per year. 121 FORM 20-F « Table of Contents Compensation Committee Our Compensation committee, which consists of Guilherme Dias Fernandes Benchimol, Bruno Constantino Alexandre dos Santos, Gabriel Klas da Rocha Leal and Martin Emiliano Escobari Lifchitz, assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Compensation, People, Nominating and Governance Committee Our Compensation, People, Nominating and Governance Committee, which consists of Guilherme Dias Fernandes Benchimol, Melissa Werneck and Gabriel Klas da Rocha Leal, assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Our board of directors has determined that Luiz Felipe Amaral Calabró, Cristiana Pereira and Frederico Seabra de Carvalho satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Members of the audit committee hold office for a period of two years. The audit committee is governed by a charter that complies with Nasdaq rules.
Members of the audit committee hold office for a period of two years. The audit committee is governed by a charter that complies with Nasdaq rules.
Carvalho holds a bachelor’s degree in economics from Universidade de Brasilia, a bachelor’s degree in law from UDF Centro Universitário,and a master’s degree in tax law from Boston University. Executive Officers Our executive officers are responsible for the management and representation of our company.
Melissa holds a degree in Chemical Engineering from Federal University of Minas Gerais in Brazil and an MBA from the COPPEAD Graduate School of Business at the Federal University of Rio De Janeiro. Executive Officers Our executive officers are responsible for the management and representation of our company.
For further information on our board, see “—Board of Directors” and “Item 16G. Corporate Governance—Board and Governance Enhancements.” B.
For further information on our board, see “—Board of Directors” and “Item 16G. Corporate Governance—Board and Governance Enhancements.” B. Compensation Compensation of Directors and Officers Under Cayman Islands law, we are not required to disclose compensation paid to our senior management on an individual basis and we have not otherwise publicly disclosed this information elsewhere.
Prior to joining us, he was a lawyer at Barbosa, Müssnich & Aragão from 2005 to 2011. Mr. Almeida holds a bachelor’s degree in law from Universidade Cândido Mendes in Rio de Janeiro and holds a postgraduate degree in corporate law and capital markets from FGV.
He holds a degree in Business Administration from Escola Superior de Propaganda e Marketing. Fabrício Cunha de Almeida is our general counsel, a position he has held since November 2019. Mr. Almeida has been the general counsel of the XP group since 2013. Prior to joining us, he was a lawyer at Barbosa, Müssnich & Aragão from 2005 to 2011.
Removed
Luiz Felipe Amaral Calabró is an independent member of our board of directors and a member of our audit committee, a position he has held since August 2020. Mr.
Added
José Luiz Acar Pedro is a specialist in the Brazilian financial market and banking industry and is the founder and CEO of three venture capital firms in Brazil: Celerit Invest, Devas Investimentos and Acarpar Empreendimentos e Participações. He is also the founder of “Associação Amigos das Escolas” a non-profit Brazilian organization focused in improving the environment in public schools.
Removed
Calabró is a lawyer with over 20 years’ experience in capital markets; self-regulated activities in stock, derivatives and commodities exchanges; commercial law; compliance; capital markets and banking regulation; clearing and depository legal issues; investment funds and asset management regulation; consumer law, banking consumer, contracts, and civil litigation; and corporation law. After working in various law firms, Mr.
Added
He served as Executive Vice President of BCN and Bradesco, Partner and Member of the Executive Committee at BTG Pactual, CEO of Banco Pan, Chairman of the board of directors of Banco Safra and member of the board of directors at HBR Realty Empreendimentos.
Removed
Calabró worked at BSM Market Supervision at the B3 from 2007 to 2020, and is currently a partner at Levy & Salomão Advogados. Mr. Calabró holds graduate, postgraduate and master’s law degrees from the Pontifical Catholic University (PUC SP) and a PhD in commercial law from the University of São Paulo (USP).
Added
He contributed significantly to the banking industry by holding key roles in SROs such as Vice President of FEBRABAN and President of IBRI. Oscar Rodriguez Herrero brings more than 27 years of international experience in risk management, private equity and strategic consulting and will significantly enhance the credit and risk management capabilities of the Board.
Removed
Cristiana Pereira is an independent member of our board of directors and chairperson of our audit committee, positions she has held since June 2022.
Added
He previously worked at McKinsey & Co. at their offices in Miami, Madrid, and Lisbon. Then he held the positions of CRO of Banco Santander Brasil and later for the Global Wholesale Banking Business of Santander. Then Oscar joined, as a Senior Advisor, Cambridge Family Enterprise Group, where he advised international family businesses on corporate governance and risk management.
Removed
She has been a partner and founder at ACE Governance since March 2018, member of the Board and the Compensation Committee at Maestro Locadora de Veículos S.A. since June 2020, coordinator of the Audit Committee at CERC S.A. since October 2021, Coordinator of the Governance Committee and member of the Board at CESAR – Centro de Estudos e Sistemas Avançados do Recife since July 2020, and member of the Board at ARCO ILP S.A. since August 2020.
Added
He also served in the Board of Advisors of Grupo Verdi - Rodobens and lead the Risk Committee of the Board. Until earlier 2024, he served as a member of the Executive Risk Committee at Nubank, a Brazilian digital bank. Mr. Rodriguez holds a Bachelor‘s degree in business administration from CUNEF (Spain).
Removed
Previously, she was member of Fiscal Council of Bradesco S.A. from March 2020 to May 2022 member of the Board of the HBS Alumni Angels of Brazil, from 2017 to 2020, member of the Consultative Board of the Association of Public Companies in Brazil – ABRASCA from December 2015 to November 2017, member of the Consultative Board of Association of Venture Capital and Private Equity – ABVCAP from December 2015 to November 2017.
Added
He also earned a Master of Business Administration (MBA) from the Kellogg School of Management – Northwestern University in 2000. 113 FORM 20-F « Table of Contents João Roberto Gonçalves Teixeira is a member of the Board of Directors of Fleury S.A., the largest provider of premium medical diagnostic services in Brazil, and The Mosaic Co. in the USA.
Removed
From June 2010 to November 2017, she was Managing Director of Listings and Issuer Development at B3 S.A. – Brasil, Bolsa, Balcão. Ms.
Added
He is also a pro bono member of the advisory board of Artemisia, a pioneer Impact Social Business Company in Brazil, and managing partner at Inviste Participações.
Removed
Pereira holds an MBA from Harvard Business School (2004), a master’s degree from Fundação Getulio Vargas (1997) and a bachelor’s degree in Economics from State University of Campinas – UNICAMP (1992). 118 FORM 20-F « Table of Contents Frederico Seabra de Carvalho is an independent member of our board of directors and a member of our audit committee, positions he has held since July 2023.
Added
He acted as independent member and chairman of the Board of Directors of Br Malls Participações S.A. and pro bono independent member of the Investment Committee of Yunus Social Business Brazil from May 2018 to April 2023.
Removed
Mr. Carvalho has been an Operating Partner at General Atlantic since September 2012, where he provides strategic support and financial expertise to the firm’s investment teams and portfolio companies with a focus on Latin America. Before joining General Atlantic, Mr.
Added
Between 2018 and 2020 he also acted as independent member and chairman of the Board of Directors of Julius Baer Family Office in Brazil. From December 2018 until 2022, Mr.
Removed
Carvalho served as Chief Operating Officer of the Merchant Banking division at BTG Pactual Group from April 2011 to September 2012. Previously, he was a Partner in Deloitte’s Transaction Services group in São Paulo, leading deal advisory, corporate reorganization, and diligence services for major private equity investors and strategic clients in Brazil. Mr.
Added
Teixeira served as the CEO of Copersucar S.A., a Brazilian sugar, ethanol and logistics corporation, where he was responsible for managing financial and operational risks due to the complexity of the Company‘s operations.
Removed
The audit committee consists exclusively of members of our board of directors who are financially literate, and Frederico Seabra de Carvalho is considered an “audit committee financial expert” as defined by the SEC.
Added
He is also the former CEO of Banco Votorantim S.A., one of the largest Brazilian privately owned banks, from 2011 to November 2016, a period in which he also served as a Director of Febraban (Brazilian Federation of Banks). Mr. Teixeira holds a Bachelor‘s and Master‘s degree in economics from PUC-RJ.
Added
He also earned a Master of Business Administration (MBA) from the London Business School in 1995 and participated in the Executive Program at Singularity University in 2018. Melissa Alves Werneck is the Executive Vice President and Global Chief People Officer for The Kraft Heinz Company.
Added
She oversees the Company's global Human Resources function, which leads talent management and talent acquisition, leadership and capabilities development, total rewards and recognition, engagement, culture and belonging. She has served in this capacity since August 2016. She has been a board member at Fundação Heinz and subsequently Fundação Kraft Heinz for the past 12 years.
Added
Previously, she was Global Head of Human Resources, Performance and Information Technology from 2015 to 2016. Before the Kraft Heinz merger in 2015, Melissa served as Senior Vice President of Human Resources, Performance and Information Technology at H. J. Heinz Company from 2013 to 2015. Before Heinz, Melissa worked at America Latina Logística S.A.
Added
(ALL), where she served as Chief People Officer & Performance Management Vice President from 2010 to 2013, People & Performance Management Senior Director from 2009 to 2010, and as People & Performance Management Senior Manager from 2007 to 2008.
Added
Maffra holds a bachelor’s degree in business administration from INSPER and an MBA from Columbia Business School. Victor Andreu Mansur Farinassi is our Chief Financial Officer, a position he has held since August 2024. With over 15 years of experience in the financial market, he joined XP CCTVM in 2012.
Added
Throughout his career at XP, he has held several leadership positions, including Executive Director, Head of Treasury and Head of Structuring, Trading and Sales. Since 2022, he has been a key member of XP's financial team. Before joining XP, Victor gained experience at two other brokerage firms.
Added
Board Practices—Committees—Compensation, People, Nominating and Governance Committee.” As of December 31, 2024, we had made awards consisting of 15,006 shares under the LTIP. 115 FORM 20-F « Table of Contents C.
Added
However, our board of directors consists of a majority of independent directors and we have a compensation and nominating committee established, although this committee is not comprised solely of independent directors.
Added
The audit committee consists exclusively of members of our board of directors who are financially literate. Our board of directors has determined that Jose Luiz Acar Pedro, Oscar Rodríguez Herrero and João Roberto Gonçalves Teixeira satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act.
Added
The audit committee meets as often as it determines is appropriate to carry out its responsibilities, but in any event meets at least four times per year.
Added
Additionally, it oversees talent management policies, executive recruitment and retention, and the relationship between compensation policies and risk management. Regarding nominating and governance functions, the committee recommends candidates for the board and its committees, oversees annual evaluations, and advises on corporate governance and board structure.
Added
Risks, Credit and ESG Committee Our Risks, Credit and ESG Committee , which consists of Oscar Rodríguez Herrero, Bruno Constantino Alexandre dos Santos and Bernardo Amaral Botelho, assists the board of directors in overseeing the identification, assessment, and management of key enterprise risks, including cybersecurity, climate, credit, market, reputational, liquidity, and ESG-related risks.
Added
It reviews the company’s risk management framework, policies, and mitigation strategies, ensuring effective oversight of these areas. Additionally, the committee supervises ESG matters, coordinating with other Board committees as needed, and supports the development and implementation of ESG strategies, priorities, and initiatives.
Added
It also oversees credit and lending strategies, policies, and portfolio quality, monitoring trends and ensuring compliance with internal controls and financial risk management in coordination with the Audit Committee.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

14 edited+5 added−15 removed31 unchanged
Biggest change(5) 29,617,733 6.78 % — — % 1.91 % FMR LLC (6) 23,722,785 5.45 % — — % 1.53 % Executive Officers and Directors Guilherme Dias Fernandes Benchimol (7) — — % — — % — % Bernardo Amaral Botelho (7) — — % — — % — % Gabriel Klas da Rocha Leal (7) — — % — — % — % Bruno Constantino Alexandre dos Santos (7) — — % — — % — % Fabrício Cunha de Almeida (7) — — % — — % — % Luiz Felipe Amaral Calabró — — % — — % — % Martin Emiliano Escobari Lifchitz (8) — — % — — % — % Frederico Seabra de Carvalho (8) — — % — — % — % Cristiana Pereira — — % — — % — % Thiago Maffra — — % — — % — % All directors and executive officers as a group (10 persons) — — % — — % — % (1) Percentage of total voting power represents voting power with respect to all of our Class A common shares and Class B common shares, as a single class.
Biggest change(7) 36,680,224 8.45 % — — 2.50 % Executive Officers and Directors* Guilherme Dias Fernandes Benchimol (8) — — — — — Bernardo Amaral Botelho (8) — — — — — Oscar Rodríguez Herrero — — — — — Gabriel Klas da Rocha Leal (8) — — — — — Martin Emiliano Escobari Lifchitz (9) — — — — — Jose Luiz Acar Pedro — — — — — Bruno Constantino Alexandre dos Santos (8) — — — — — João Roberto Gonçalves Teixeira — — — — — Melissa Alves Werneck — — — — — Fabrício Cunha de Almeida (8) — — — — — Thiago Maffra — — — — — Victor Andreu Mansur Farinassi — — — — — All directors and executive officers as a group (12 persons) — — — — — * No Executive Officer or Director beneficially owns greater than 1% of Class A common shares or Class B common shares outstanding, respectively.
In connection with the registrations described above, we will indemnify any selling shareholder in certain situations, subject to certain restrictions, and the selling shareholder will indemnify us in certain situations, subject to certain restrictions. 126 FORM 20-F « Table of Contents Indemnification Agreements Since February 13, 2020, we entered into indemnification agreements with our directors and executive officers.
In connection with the registrations described above, we will indemnify any selling shareholder in certain situations, subject to certain restrictions, and the selling shareholder will indemnify us in certain situations, subject to certain restrictions. 121 FORM 20-F « Table of Contents Indemnification Agreements Since February 13, 2020, we entered into indemnification agreements with our directors and executive officers.
Percentages in the table below are based on 436,776,080 outstanding Class A common shares and 112,717,094 outstanding Class B common shares. Unless otherwise indicated below, the address for each beneficial owner is c/o XP Inc., Av. Chedid Jafet, 75, Torre Sul, 30th floor, Vila Olímpia – São Paulo, Brazil 04551-065.
Percentages in the table below are based on 434,047,695 outstanding Class A common shares and 103,375,726 outstanding Class B common shares. Unless otherwise indicated below, the address for each beneficial owner is c/o XP Inc., Av. Chedid Jafet, 75, Torre Sul, 30th floor, Vila Olímpia – São Paulo, Brazil 04551-065.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders The following table and accompanying footnotes present information relating to the beneficial ownership of our Class A common shares and Class B common shares as of December 31, 2023.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 118 FORM 20-F « Table of Contents A. Major Shareholders The following table and accompanying footnotes present information relating to the beneficial ownership of our Class A common shares and Class B common shares as of April 15, 2025.
Purchased agreements and repurchase agreements are highly liquid cash equivalent operations, in case of repurchase backed by our own securities or third-party securities. 125 FORM 20-F « Table of Contents The following table sets forth the total amounts of the bank deposit certificates and repurchase agreements entered into with Itaú Unibanco as of the dates indicated: Assets/(Liabilities) as of December 31, Revenue/(Expenses) for the year ended December 31, Type of transaction 2023 2022 2023 2022 2021 (in millions of R$) Securities (Bank deposit certificates) — 238 17 25 (4) Securities purchased under agreements to resell — — 5 9 19 Accounts receivable — — — 1 1 Securities sold under repurchase agreements — (3,801) (17) (196) (84) For further information, see note 26(b) to our audited consolidated financial statements included elsewhere in this annual report.
As a result, Itaú Unibanco is no longer considered a related party. 120 FORM 20-F « Table of Contents The following table sets forth the total amounts of transactions entered into with related parties as of the dates indicated: Assets/(Liabilities) as of December 31, Revenue/(Expenses) for the year ended December 31, Type of transaction 2024 2023 2024 2023 2022 (in millions of R$) Securities (Bank deposit certificates) — — — 17 25 Securities purchased under agreements to resell — — — 5 9 Accounts receivable — — — — 1 Securities sold under repurchase agreements — — — (17) (196) For further information, see note 26(b) to our audited consolidated financial statements included elsewhere in this annual report.
Memorandum and Articles of Association.” 123 FORM 20-F « Table of Contents (2) This information is based solely on the Schedule 13D/A filed with the SEC on July 11, 2023 on behalf of XP Control LLC.
For more information about the voting rights of our Class A common shares and Class B common shares, see “Item 10. Additional information—B. Memorandum and Articles of Association.” 119 FORM 20-F « Table of Contents (2) This information is based solely on the Schedule 13D/A filed with the SEC on July 11, 2023 on behalf of XP Control LLC.
The principal business address of GAP Lux, GA GenPar Lux and GA Lux is Luxembourg is 412F, Route d’Esch, L-2086 Luxembourg. (6) This information is based solely on the Schedule 13G filed with the SEC on December 31, 2023 on behalf of Dodge & Cox.
The principal business address of GAP Lux, GA GenPar Lux and GA Lux is Luxembourg is 412F, Route d’Esch, L-2086 Luxembourg. (7) This information is based solely on the Schedule 13G/A filed with the SEC on February 13, 2025 on behalf of Mawer Investment Management Ltd. The principal business address of Mawer Investment Management Ltd.
The principal business address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, CA 94104. (5) This information is based solely on the Schedule 13F-HR filed with the SEC on February 13, 2024 on behalf of General Atlantic, L.P., and several other reporting persons identified therein.
(5) This information is based solely on the Schedule 13G/A filed with the SEC on February 13, 2025 on behalf of Dodge & Cox. The principal business address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, CA 94104.
These executive officers and directors disclaim beneficial ownership of the shares held by XP Control LLC except to the extent, if any, of their respective pecuniary interest therein. (8) Mr. Escobari, independent member of our board of directors, is managing director of GA LLC and Mr. Frederico Seabra de Carvalho is an operating partner of GA LLC. Mr.
These executive officers and directors disclaim beneficial ownership of the shares held by XP Control LLC except to the extent, if any, of their respective pecuniary interest therein. (9) Mr.
Holders of our Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share. For more information about the voting rights of our Class A common shares and Class B common shares, see “Item 10. Additional information—B.
(1) Percentage of total voting power represents voting power with respect to all of our Class A common shares and Class B common shares, as a single class. Holders of our Class B common shares are entitled to 10 votes per share, whereas holders of our Class A common shares are entitled to one vote per share.
The principal business address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, CA 94104. (7) While these executive officers and directors do not own more than 1% of common shares directly in XP Inc. directly, they own equity interests in XP Control LLC.
Is 600, 517-10th Avenue SW, Calgary, Alberta, Canada, T2R 0A8. (8) While these executive officers and directors do not own more than 1% of common shares directly in XP Inc. directly, they own equity interests in XP Control LLC.
Transaction On November 10, 2022, we purchased 5,500,000 Class A common shares from Itaúsa S.A. Securities and Repurchase Agreement Transactions with Itaú Unibanco We enter into bank deposit certificates (CDBs), accounts receivable, purchased and repurchase agreements with Itaú Unibanco in the ordinary course of our business.
For more information see “Item 10. Additional Information—B. Memorandum and Articles of Association.” B. Related Party Transactions Securities and Repurchase Agreement Transactions with Itaú Unibanco We entered into bank deposit certificates (CDBs), accounts receivable, purchased and repurchase agreements with Itaú Unibanco in the ordinary course of our business.
Escobari and Mr. Carvalho disclaim beneficial ownership of the shares held by GA Bermuda except to the extent, if any, of their pecuniary interest therein.
Escobari, independent member of our board of directors, is managing director of General Atlantic, L.P. and disclaims beneficial ownership of the shares held by General Atlantic, L.P. and the other reporting persons identified in Note 6 above except to the extent, if any, of their pecuniary interest therein.
(3) This information is based solely on the Schedule 13G/A filed with the SEC on January 29, 2024 on behalf of Itaú Unibanco Holding S.A. and ITB Holding Brasil Participações Ltda.
(3) This information is based solely on the Schedule 13G/A filed with the SEC on April 23, 2025 on behalf of Blackrock, Inc. The principal business address of Blackrock, Inc. is 50 Hudson Yards, New York, New York 10001.
Removed
Shares Beneficially Owned % of Total Voting Power (1) Shareholders as of December 31, 2023 Class A Class B Shares % Shares % 5% Shareholders XP Control LLC (2) — — % 103,375,726 91.71 % 66.55 % ITB Holding Participações Ltda (3) 34,384,254 7.87 % 8,285,060 7.35 % 7.55 % Dodge & Cox (4) 30,228,845 6.92 % — — % 1.53 % Entities affiliated with General Atlantic (XP) Bermuda, L.P.
Added
Shares Beneficially Owned Shareholders as of April 15, 2025 Class A Class B Shares % Shares % % of Total Voting Power (1) 5% Shareholders XP Control LLC (2) — — 103,375,726 100.00 % 70.43 % Blackrock, Inc.
Removed
Itaú Unibanco Holding S.A. directly or indirectly, through its wholly-owned subsidiary, Itaú Unibanco S.A., holds all of the membership interests of ITB Holding Brasil Participações Ltda. and Itaú Unibanco Holding S.A. is the controlling shareholder of ITB Holding Brasil Participações Ltda.
Added
(3) 28,858,937 6.65 % — — 2.98 % Capital World Investors (4) 30,606,282 7.05 % — — 2.09 % Dodge & Cox (5) 43,153,245 9.94 % — — 2.94 % Entities affiliated with General Atlantic (XP) Bermuda, L.P. (6) 29,617,733 6.82 % — — 2.02 % Mawer Investment Management Ltd.
Removed
Itaú Unibanco Holding S.A. is controlled by IUPAR – Itaú Unibanco Participações S.A., a holding company organized under the laws of Brazil (“IUPAR”). The principal business address of Itaú Unibanco Holding S.A. is Praça Alfredo Egydio de Souza Aranha, No. 100, Torre Olavo Setubal, piso Itaú Unibanco, Parque Jabaquara, 04344-902, São Paulo, Brazil.
Added
(4) This information is based solely on the Schedule G filed with the SEC on November 13, 2024 on behalf of Capital World Investors. The principal business address of Capital World Investors is 333 South Hope Street, 55 th Floor, Los Angeles, California 90071.
Removed
The principal business address of ITB Holding Brasil Participações Ltda. is Praça Alfredo Egydio de Souza Aranha, No. 100, Torre Conceição, 7th floor, Parque Jabaquara, 04344-902, São Paulo, Brazil. (4) This information is based solely on the Schedule 13G filed with the SEC on December 31, 2023 on behalf of Dodge & Cox.
Added
(6) This information is based solely on the Schedule 13F-HR filed with the SEC on February 7, 2025 on behalf of General Atlantic, L.P., and several other reporting persons identified therein.
Removed
For more information see “Item 10. Additional Information—B. Memorandum and Articles of Association.” 124 FORM 20-F « Table of Contents B.
Added
Purchased agreements and repurchase agreements are highly liquid cash equivalent operations, in case of repurchase backed by our own securities or third-party securities. On July 10, 2023, we announced the termination of our shareholder agreement with Itaú Unibanco, originally expected to continue until October 2026.
Removed
Related Party Transactions Itaú Unibanco Holding Transaction On November 26, 2020, Itaú Unibanco Holding issued a material fact announcement and on November 27, 2020 furnished a corresponding Form 6-K to the SEC stating that its board of directors had approved the segregation of its investment in us from the Itaú Unibanco Holding conglomerate, including by transferring, through spin-off transactions, certain of its shares (representing 41.05% of our share capital as of September 30, 2020) to XPart.
Removed
XPart was incorporated on May 31, 2021 as a result of the segregation of Itaú Unibanco Holding’s investment in us. The proposed segregation was approved by Itaú Unibanco Holding shareholders on January 31, 2021 and by the U.S. Federal Reserve System, and became effective on May 31, 2021.
Removed
On February 1, 2021 and May 28, 2021, we announced our intention to carry out the merger of XPart, which was intended to enhance our corporate governance and capital structure at shareholders’ level.
Removed
On August 24, 2021, our registration statement on Form F-4 (File No. 333-257304) was declared effective by the SEC for a public offering of our Class A common shares in connection with the merger. On October 1, 2021, we consummated the merger of XPart with and into us, pursuant to which XPart ceased to exist.
Removed
In connection with the merger, XPart shareholders, including IUPAR and Itaúsa, received 225,796,528 Class A common shares issued by us, including in the form of BDRs, in the case of Brazilian or non-Brazilian residents.
Removed
Our BDRs started trading at the B3 on October 4, 2021 under the symbol “XPBR31.” Furthermore, certain changes to our Shareholders’ Agreement were agreed, which, in relation to ITB Holding, Itaú Unibanco and Itaú Unibanco Holding, became effective on May 31, 2021 and, in relation to IUPAR and Itaúsa, upon implementation of the merger.
Removed
On July 6, 2023, our shareholders’ agreement was terminated. For further information, see “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Shareholders’ Agreement.” ITB Holding Brasil Participações Ltda.
Removed
Transactions On April 29, 2022, XP Controle Participações S.A., General Atlantic (XP) Bermuda, L.P. and Dayna III Fundo de Investimento em Participações Multiestrategia transferred a total of 9,341,368 Class B common shares and 54,268,193 Class A common shares to ITB Holding Brasil Participações Ltda.
Removed
These transfers were made in connection with the transaction with Itaú Unibanco S.A. consummated on August, 2018 and pursuant to which Itaú Unibanco S.A. acquired 49.9% of the share capital of XP Investimentos S.A.
Removed
Considering that XP Controle Participações S.A. transferred all of its XP Inc common shares in this transaction, on April 29, 2022 XP Controle Participações S.A. ceased to be a XP Inc shareholder. On June 8, 2022, we purchased 1,056,308 Class B common shares from ITB Holding Brasil Participações Ltda. Itaúsa S.A.