Stone’s Path to Profitability: Integrating with Linx and Expanding Financial Services

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In addition to the machine: Stone’s strategy to double profits in four years. The company’s strategy now includes integrating with Linx in an effort to attract new customers via its software business.

The Stone Company has exceeded expectations in the third quarter, surprising the market with its performance. The company’s management is projecting a positive outlook for investors, urging them to remain optimistic about its future prospects.

The main target for Stone is to achieve an annual profit by 2024, cumulating in a substantial sum of up to 2027. This would effectively triple the current bottom line of the company’s balance sheet. This ambitious goal was officially announced today at Stone’s Investor Day event in New York.

CEO Pedro Zinner explained that the company has developed a robust and profitable cash flow business strategy. While the company has historically prioritized rapid growth, Zinner highlighted that there are now numerous opportunities to enhance efficiency and improve overall profitability.

Importantly, Stone is focusing on the micro, small, and medium-sized enterprises (MSMEs) market segment. This group has always been a priority for the company, but its importance has been further emphasized. With a targeted take rate of 2.7 percent, Stone aims to outpace the industry average and process payments worth over [insert value] by 2027.

In an interview with EXAME Invest, Zinner stressed that the goal is not to change the company’s strategy, but rather to ensure clear and effective implementation while concentrating on the most lucrative opportunities. While the main business remains in acquiring new customers, Stone aims to go beyond card machines by integrating financial services and software into its offerings.

The growth strategy will be driven by synergies between the different business divisions. The objective is to expand from within, catering to the software company’s existing customer base with a range of financial products. Stone intends to solidify its position as a “one-stop-shop” solution for MSMEs, with a particular focus on grocery stores, restaurants, pharmacies, and petrol stations.

“We want to inform the market about the verticals that offer the greatest potential for value extraction through the combination of financial services and software,” said Zinner.

The announcement of Stone’s integration strategy with Linx’s software business has generated significant interest. In October, Stone revealed plans to restructure its core business to incorporate Linx. This move was long-awaited and demanded by the market, following Stone’s acquisition of Linx in 2020.

Financial services have been identified as the main revenue driver for Stone. The company’s financial services platform initially focused on payments, but it has now expanded to include banking and credit solutions. Currently in an expansion phase, Stone’s chief strategist, Lia Matos, believes that the greatest potential for monetizing its customer base lies in software as a differentiating factor.

At the beginning of this year, Stone identified an opportunity to revive its lending operations, particularly in the banking sector. The company faced significant challenges in 2021 due to the wave of insolvencies, but it is now cautiously resuming lending activities.

“We have resumed lending this year and currently have [insert value] in available credit. Our goal is to reach [insert value] next year and surpass [insert value] by the end of 2027,” stated Mateus Scherer, Stone’s CFO.

In addition to credit, Stone is also looking to expand its range of financial services. The company currently holds deposits amounting to [insert value], and its aim is to grow this figure to [insert value] next year and [insert value] by 2027. This expansion in financial services will further contribute to Stone’s overall growth and profitability.

Overall, Stone’s strategy to double profits within four years is comprehensive and ambitious. The company is focused on integrating with Linx to expand its software business and attract new customers. Additionally, Stone is targeting the MSME market segment and aiming to outpace industry growth rates. With a combination of efficient implementation, synergies across different business divisions, and an emphasis on financial services and software, Stone is well-positioned to achieve its goals and deliver strong financial performance in the coming years.