XP Inc. Annual Report - How They Did This Year

I’m writing this guide to help you understand how XP Inc. performed this year. Instead of digging through hundreds of pages of complex filings, I’ve broken down the key takeaways so you can decide if this company fits your investment goals.

1. What does this company do?

Think of XP Inc. as the "financial supermarket" of Brazil. They started as a brokerage but have grown into a massive ecosystem. They now offer banking, insurance, asset management, and financial education. They aren't just one company; they are a collection of specialized entities working together to handle every part of a customer's financial life. Their "open platform" strategy allows them to sell both their own products and those from other providers to retail and institutional clients.

2. Financial Performance & Health

As of December 31, 2025, XP remains a major player. Here is what you should know:

• Currency Matters: XP keeps its books in Brazilian Reais. They convert these into U.S. dollars for convenience. If the Real weakens against the Dollar, their financial results look worse to U.S. investors, even if the business is doing well in Brazil.
• Concentration Risk: Over half of their total revenue (51%) comes from just one subsidiary, XP CCTVM. This is their main brokerage arm. If this branch hits a regulatory or operational snag, it could significantly hurt the entire company’s profit.
• Share Structure: They have about 516.7 million shares outstanding. Most are Class A shares held by the public, which carry one vote each. Founders and executives hold Class B shares, which carry ten votes each. This structure ensures founders keep control over the company’s direction, regardless of what public shareholders want.

3. Major Wins and Challenges

The big story here is integration. XP wants to be your bank, insurer, and advisor all in one. However, watch their "Net Promoter Score" (NPS), which measures how likely customers are to recommend XP to a friend.

Their NPS dropped from 72 in 2023 to 65 in 2025. While 65 is still strong, the downward trend suggests that as they grow, maintaining the high-quality service that defined their early success is becoming a tougher challenge.

4. What’s Next & Risks

XP is in a growth phase, but they face significant hurdles:

• Regulatory Burden: Because they operate in multiple countries, they face a mountain of red tape. They must follow strict U.S. and Brazilian financial laws. This is expensive and forces management to spend more time on legal compliance than on growing the business.
• Data Privacy: Brazil has strict data protection laws. If XP mishandles sensitive customer data, they face massive fines or could even be forced to stop processing data, which would paralyze their digital operations.
• Market Sensitivity: Their profit depends on the economy. If trading volumes or interest rates in Brazil decline, their fee income shrinks. However, their fixed costs—like technology and staff—remain high, which can squeeze their profit margins.
• Antitrust Scrutiny: Because XP dominates the Brazilian brokerage market, regulators watch them for unfair competition. Defending against these investigations is a major drain on time and money.

Final Takeaway for Investors

When deciding if XP Inc. belongs in your portfolio, weigh their dominant market position against the risks of their "all-in-one" strategy. If you believe they can successfully navigate the regulatory landscape and reverse the recent dip in customer satisfaction, their integrated platform offers a unique way to gain exposure to the Brazilian financial sector. If you prefer companies with less regulatory exposure or more stable, predictable service metrics, you may want to look closer at their upcoming quarterly updates to see if these trends stabilize.