⚠ A Revenue Line Made of Interest RatesHigh threat
StoneCo (STNE) — threat to the moat
Prepayment is a spread over the policy rate — so a quarter when it grows because the central bank raised rates is not evidence the moat widened.
Prepayment is the most profitable thing StoneCo does. A Brazilian merchant is paid for a credit-card sale in instalments over months; StoneCo advances the money immediately and keeps a discount. The discount is priced off the cost of funds, and StoneCo's funding is largely linked to the interbank rate.
That makes a substantial slice of the company's revenue a bet on Brazilian monetary policy rather than on anything StoneCo does. When the policy rate is high the spread is wide and the revenue line is enormous; when it falls, the same volume of prepayment produces materially less. The company has quantified the sensitivity in its own guidance — each hundred basis points of policy rate is worth a few hundred million reais of pre-tax profit — and its 2026 outlook has been tracking the lower end of the range for that reason.
There is a second edge to it. High rates also raise StoneCo's funding costs and squeeze the merchants who borrow, which is why the 20-F lists interest rates as affecting both revenue generation and cost of funds in the same paragraph1.
None of this is a flaw in the product; merchants genuinely want their money early and will pay for it. It is a caution about reading the earnings. A quarter in which prepayment revenue grows because the central bank raised rates is not evidence that the moat widened.
Watch prepayment revenue per real of TPV against the policy rate. If it holds while rates fall, the pricing is StoneCo's. If it falls with them, the revenue belonged to the rate.
- ReportedStoneCo's filing states that interest rates directly affect its cost of funds, most third-party funding being linked to the Brazilian interbank rate, and that higher rates can hinder customers' ability to repay credit while reducing consumption and TPV.StoneCo Ltd. Form 20-F for FY2025 (CIK 1745431) — active payment clients of 4,803.5 thousand at 31 December 2025, against 4,172.7 thousand in 2024 and 3,522.1 thousand in 2023; TPV of R$560.9 billion, against R$516.2 billion and R$438.3 billion; revenue of R$14,153.8 million and adjusted net income from continuing operations of R$2,477.2 million; more than 3.6 million banking active clients, the majority of whom are also payment clients; retail deposits of R$11,091.0 million against R$8,704.8 million and R$6,119.5 million; a credit portfolio of R$2,836 million with expected credit losses of R$389.7 million, against R$1,207.6 million and R$144.5 million a year earlier; clients divided into MSMBs (micro-merchants and SMBs) and Key Accounts, 'comprised of platform services and sub-acquirers'; StoneCo became in 2017 the first non-banking entity authorised by the Central Bank to operate as an Acquirer through a payments-institution licence, and is among the six largest players by total card volume per ABECS; distribution through proprietary and franchised hubs sold on 'service differentiation as the main driver', digital channels, and more than 500 Strategic Partners at December 2025; per the Central Bank, Pix's share of the total number of transactions rose from 1% in Q4 2020 to 52% in H1 2025 and its share of monetary volume from 1% to more than 26%; the filing warns that 'the concentration of our clients by geography and economic sector may increase our risk' and that the company experiences churn from business closures and account transfers; interest rates directly affect both revenue generation and cost of funds, most third-party funding being linked to the Brazilian interbank rate; StoneCo's own analysis notes that US MSMB take rates have been stable over five years despite penetration around 120% of consumption, and finds no indication of saturation-driven price reductions in Brazilian cities with low cash usage — FY2025 · publ. 2026 · source ↗