PicS N.V. Annual Report - How They Did This Year

I’ve put together this guide to help you understand how PicS N.V. (the parent company of PicPay) performed. I’ve broken down the complex filings into plain English so you can decide if this company fits your investment goals.

1. What does this company do?

PicPay is a major Brazilian financial technology company. Think of them as a "digital wallet" and financial hub. They want to be the only app you open for your financial life—from paying utility bills to getting loans. They call this goal "Principality." Their app combines payments, credit cards, loans, insurance, and a marketplace. They aim to make money from the high volume of your daily transactions.

2. How they measure success

Because PicPay is still building, they track their progress using three specific metrics:

• Average Revenue per User: This tracks how well they sell multiple products to the same person.
• Cost to Serve: This measures how much it costs to keep a user on the platform, excluding credit losses.
• Total Addressable Market: They are betting that as Brazil moves from cash to "Pix" (the central bank’s instant payment system), they can capture that growth by being the main app people use.

3. Financial Health: Are they making money?

PicPay has moved from losing money to turning a profit.

• Profit Growth: They reported a profit of R$1.14 billion in 2025. This is a big jump from R$251.8 million in 2024 and R$37.4 million in 2023.
• The "But": They lost R$692.9 million in 2022. They plan to keep spending heavily on marketing and technology. This means their profits could swing up and down significantly. Investors should know that these profits depend on their ability to manage loans while still paying to attract new customers.

4. Major Wins and Changes

• Lending Shift: They now lend their own money instead of acting as a middleman for banks. This increases potential profit margins, but it also increases their risk. Their loan portfolio grew from R$10.6 billion in 2024 to R$24.1 billion in 2025.
• Loan Losses: Because they are lending more, they must set aside more cash for "bad loans." They increased these reserves from 8.2% to 13.1% of their total portfolio. This shows they are being more cautious as they grow.

5. Key Risks

• The "Bad Loan" Trap: Their credit-scoring model is new and hasn't been tested during a major economic crisis. If their math is wrong, they could face massive losses that wipe out their capital.
• Cybersecurity: They do not have insurance for cyberattacks. A data leak or a long app outage could lead to heavy fines, the loss of their banking license, and a damaged reputation.
• Concentrated Control: The Batista family holds 100% of the Class B shares, giving them 95% of the voting power. As a retail investor, you have almost no say in how the company is run.
• Internal Controls: They admitted to "material weaknesses" in their financial reporting. This means their accounting systems aren't as strong as they should be, which could lead to errors in their financial updates.

Bottom Line: PicPay is growing fast and is now profitable, but they are taking on big risks by lending their own money. The combination of family control, lack of cyber insurance, and weak internal accounting suggests this is a high-risk investment. Before you decide to invest, weigh their impressive profit growth against the potential for volatility and the limited influence you will have as a shareholder.