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The Stone Company, known for its rapid growth strategy, has recently unveiled a new approach to double its profits in just four years. In addition to their existing business model, the company plans to integrate with Linx, a software company, in order to attract new customers and expand their software offerings.
The company’s recent announcement has surprised the market and exceeded third-quarter expectations. The management of Stone Company is urging investors to remain optimistic about the company’s future prospects.
During the Investor Day held in New York, the company unveiled its ambitious goal of achieving an annual profit of a cumulative sum of up to 2024, with an even larger goal of tripling their bottom line by 2027. The company believes that by focusing on efficiency and profitability, in addition to growth, they can successfully achieve these targets.
Stone Company CEO Pedro Zinner explains that historically, the company has prioritized rapid growth. However, they now see numerous opportunities to optimize their operations and improve profitability. This shift in strategy is a result of the company’s desire to capitalize on their existing customer base and expand into new markets.
Stone Company is particularly interested in targeting micro, small, and medium-sized enterprises (MPMEs). While this group has always been a priority for the company, their importance has been further emphasized. Stone aims to grow faster than the industry average, with a target of handling payments worth more than by 2027.
In a recent interview with EXAME Invest, Zinner emphasized that their goal is not to change the overall strategy, but rather to focus on implementing it effectively and concentrating on the most lucrative opportunities. The company’s main focus will continue to be on acquiring new businesses in order to expand their financial services and software offerings, moving beyond their traditional payment terminal business.
The integration strategy with Linx’s software business is a major part of this new direction. Stone announced that they will be restructuring to fully include Linx into their core business. This move has been long-awaited by the market, as the demand for a clear combination of the two businesses has been evident since Stone’s acquisition of Linx in 2020.
Financial services are expected to be the primary revenue driver for the company. Stone’s financial services platform, initially focused on payment processing, has now expanded to include banking and credit solutions. The company sees great potential in monetizing their customer base through these additional financial services, and the integration with Linx will play a key role in achieving this.
In particular, Stone’s chief strategist Lia Matos highlights the importance of their software offerings as a key differentiator. The company believes that by combining their financial services with Linx’s software capabilities, they can provide a comprehensive “one-stop-shop” solution for MPMEs in specific verticals, such as grocery stores, restaurants, pharmacies, and petrol stations.
While 2021 has been a challenging year for Stone due to the wave of insolvencies, the company sees opportunities for growth in the near future. They have recently resumed lending operations and currently have million available in credit. The company’s goal is to reach million in credit next year and surpass billion in card transactions by the end of 2027.
Furthermore, Stone aims to expand beyond credit and banking services. They currently have billion in deposits and aspire to grow to billion next year and billion by 2027. The company sees great potential in diversifying their offerings and providing a wide range of financial services to their customers.
Overall, Stone Company’s new strategy to integrate with Linx and expand their financial services and software offerings is expected to drive their growth and profitability in the coming years. With a clear focus on efficiency and leveraging their existing customer base, the company aims to achieve significant financial milestones and establish themselves as a leading player in the market.
