Thank you, operator, and good evening, everyone. Joining us here on the call, we have our CEO, Thiago Piau; Lia Matos, Chief Strategy Officer; and our CFO, Marcelo Baldin.

Today, we will present our first quarter 2022 results, discuss some recent trends and provide an updated outlook for our business. I will now pass it over to Thiago so he can share highlights of our performance and some key insights starting on page 4 of our presentation.

Thiago?

Thank you, Rafa, and good evening, everyone. As I said in our previous earnings call, I believe we are well-positioned to drive strong growth and improving profitability in 2022.

Our first quarter results show that we are on the right track. We produced strong TPV and revenue growth, together with a significant improvement in our operating margins.

Our growth engine remains strong. Despite seasonality, we achieved our all-time high revenue of BRL 2.1 billion, that is 10% above the midrange of our guidance.

As a result, pro forma revenue growth accelerated to 87% in first quarter, up from 51% in last quarter, our highest growth rate since the fourth quarter 2018. This strong revenue growth was driven by two key factors: a higher client monetization driven by our new pricing policies; and an accelerated MSM TPV growth, which reached 93% in first quarter, exceeding the top of our guidance of 83%.

This strong TPV growth was a result of both active client base growth and a continued improvement in our go-to-market strategy for TON and Stone products. On the profitability side, our adjusted earnings before taxes reached BRL 163 million in the quarter, which was 16% above our guidance represents an almost ten-fold increase on a sequential basis.

As we mentioned last quarter, we reorganized the company into two segments; Financial Services and Software because we believe this will increase transparency, reduce complexity and enable us to better manage our business. As you can see from our reporting both of our segments performed well in the quarter.

Within Financial Services, revenue increased by 107.8% driven by solid expansion of client monetization. As a result of our new price initiatives, MSMB take rates reached 2.06%, which was 35 basis points above the previous quarter, and the quality of our client mix improved within both TON and Stone products.

The net addition of clients decelerated in the quarter, but this was mainly driven by the churn of lower-profitability clients. Finally, we continue to expand our banking platform with transactional products, generating more engagement and increasing opportunities to monetize clients in the future.

In our Software segment, pro forma revenue growth reached 27%, driven by a strong performance in the Core Software and the consolidation of certain acquisitions made in the period. Within the Core, we generated revenue growth of 32%, driven by stronger new sales and higher average ticket per client.

We are also gaining operating leverage in the Software segment with 12% adjusted EBITDA margin in first quarter, a significant improvement compared with 9% adjusted EBITDA margins in the fourth quarter 2021. To help us execute our extensive roadmap, we will be welcoming two seasoned leaders to our team, a new CTO and a new Head of Credit.

We have also assigned a new VP of Finance for our Software division. The company has also recently welcomed two new Board members, resulting in a Board composed of 90% independent members with very diverse background and deep experience in technology and financial services.

I'm pleased with the direction of our results in first quarter, and I think this is a solid first step to producing strong results in 2022. I'm also encouraged that we are seeing the same positive trends so far in the second quarter.

With that, I will now pass it over to Lia, who will provide more detail about our first quarter performance and strategic update. Lia?

Thank you, Thiago, and good evening, everyone. I will start today with some performance highlights and then do a quick deep dive on the main drivers of our performance.

On page 5, we show a summary of our main financial and operating highlights. And I just want to touch on a couple of points here.

As Thiago mentioned, our total revenue surpassed a record mark of BRL 2 billion this quarter, with growth accelerating to 139%, and or 87% pro forma for Linx. I think one takeaway of our strong growth performance is it does confirm our ability to implement the new pricing strategies laid out in the fourth quarter of 2021 while maintaining strong TPV growth.

These strategies, together with the tighter cost management, enabled us to also see a significant recovery in profitability with an adjusted EBT margin of 7.9% compared to 0.9% in the fourth quarter of 2021. Moving to page 6.

As you can see, we're presenting our financial results in two segments. Our fintech businesses are managed in our Financial Services segment and our vertical POS and ERP solutions as well as the digital commerce solutions are managed within our Software segment.

Lastly, we have a third bucket for non-allocated activities, which we manage separately. This change in reporting aligns with how we manage the business and is consistent with the changes we have implemented in our leadership team and management systems.

We have made the historical data for these segments available for your review in the appendix of this earnings release. Let's now take a closer look at each of our two businesses.

I'll talk first about Financial Services on pages 7 to 12 and then move to Software on slide 13. In Financial Services, we produced very strong growth during the quarter with more than BRL 1.7 billion in revenue, more than doubling compared with last year and increasing on a sequential basis, despite historical seasonality.

Perhaps more importantly, profitability rebounded significantly with adjusted EBT of BRL 146 million, a more than fourfold increase from the previous quarter and a 620 basis point sequential margin improvement. I think this begins to show a shift in our profitability trajectory, which we will continue to focus on throughout 2022.

On slide 8, I want to talk about our client base trends. During the quarter, we reached 1.9 million MSMB clients and the net addition of 168,000 clients.

As anticipated in our last earnings call, we saw a sequential deceleration in net adds, but this deceleration was mostly a result of churning of lower-profitability clients. Taking a closer look, the 168,000 net adds was comprised of 184,000 new additions in the TON product while the Stone and Pagar.me products experienced a decrease of 15,000 clients.

Let me take a moment to break this down further and explain to you what is happening. As we've mentioned, we have shifted the commercial strategy to onboard smaller clients onto the TON product as opposed to the Stone product, because it better suits their needs and has a better unit economic profile for us.

As a result, there are two effects taking place here. First, the majority of our new sales for smaller clients are directed towards TON.

And second, the majority of our churn comes from less-profitable small clients still using the Stone product. Moving on to slide 9, we can see that our strong TPV growth was a result of not only the client base growth, but also of the improvement in the quality of our client base.

TPV in the MSMB segment grew over 93%, above the top range of our guidance, while the average TPV per client also increased in both Stone and TON products as a result of the shift in commercial strategy that I just mentioned. Take rates also improved materially in the first quarter of 2022 to 2.06%, an increase of 35 basis points compared with the previous quarter.

As a result of our evolving commercial strategy, where we're optimizing our client mix of solutions based on customer needs, we're increasingly focused on our overall MSMB TPV and client base metrics versus thinking about our business separately between Stone, Pagar.me and TON. To align with this strategy and provide investors a better and more consistent perspective on our performance, we will focus on reporting on overall MSMB metrics, rather than by specific products starting now in the second quarter.

In slide 10, we highlight the continued expansion and engagement with our banking platform. This quarter, we surpassed 0.5 million clients actively using our digital banking accounts, more than doubled compared with the previous year.

We have been growing our base, while also increasing ARPAC, which reached BRL 33 in the first quarter, growing 32% sequentially. Shifting to slide 11, I want to quickly update you on our credit business.

Our legacy credit portfolio is performing in line with our expectations. This quarter, we had a cash inflow of around BRL 250 million from clients paying us back, and we are on track to entirely derisk principal capital.

Given this performance, our portfolio was recognized at a fair value of BRL 268 million in our balance sheet in the first quarter of 2022 compared with over BRL 2 billion one year ago. Finally, on slide 12, we show some KPIs of our key accounts business.

TPV grew 9% versus last year as we continue to deprioritize our sub-acquirer operation. In contrast, our Platform Services business continues to grow fast, accelerating its growth to 114%.

Our take rate for the key account business continued to improve at 0.84% for the quarter, increasing sequentially as a result of both repricing and mix shift towards Platform Services, which have higher take rates than Sub-acquirers. Now let's shift to give some highlights on our Software business performance on slide 13 and 14.

Starting with the top-line, Software revenue reached BRL 327 million in the quarter, up 27% pro forma for Linx and our pro forma adjusted EBITDA margin improved 370 basis points this quarter to 12.3%. On slide 14, I want to touch a little bit on the drivers of this performance and the progress of our software strategy.

First, the core software business produced a strong growth of 32% as a result of the increase in number of locations using our POS and ERP solutions and an increase in the average ticket, while the digital segment revenue decreased 2% as a reflection of tougher comps and the need for performance improvement. Second, we're gaining scale and improving margins with an annualized revenue of BRL 1.3 billion we are able to continue to generate operating leverage from our integration efforts and efficiency gains in costs and expenses, and we expect this trend to continue.

Finally, we see plenty of room to grow organically in current verticals, expand vertical coverage with new investments, increasing our reach to help merchants become more productive, sell more and grow. Now I want to pass it over to Rafael, so we can discuss in more detail some of our key financial metrics.

Rafa?

Thanks, Lia. Starting on slide 15.

Without going into too much detail on the numbers that Thiago and Lia have already walked you through, I do want to note three things; first, we see strong continued growth trends; second, we see these results in both Software and Financial Services segment; third and most importantly, we are starting to see our profitability rebound. On slide 16 and 17, we show our P&L and adjusted P&L for the quarter.

As we have already discussed top-line trends in detail, I will move directly to slide 17 to focus on our costs and expenses pro forma for Linx. In this quarter, we observed operating leverage across all our costs and expenses line items, both on a sequential and annual basis, with the minor exception of selling expenses quarter-over-quarter, which were impacted by additional marketing expenses that are part of our contract with Global.

It is important to note here that most of this institutional marketing will not affect our cash flow since we prepaid BRL 230 million of marketing expenses in the first quarter of 2021, which was fully funded by cash received from Grupo Globo. Now let me highlight the most relevant efficiency gains quarter-over-quarter.

Our costs with TAG, our platform of receivables, decreased from BRL 64 million in the fourth quarter of 2021 to close to BRL 32 million in this quarter. We still have room to improve on this line and we expect to continue gaining operating leverage in our cost to serve in the coming quarters.

We gained almost 200 basis points margin in administrative expenses due to better cost control in third party services, facilities, travel expenses, among others. And for the first time over the last year, we saw financial expenses decreased as a percentage of revenue by 260 basis points.

Despite continued increase in interest rates in Brazil, our new pricing policy more than offset the higher absolute level of financial expenses. Now moving to page 18, as we indicated in our previous earnings call, we are taking important steps to reorganize the business and bring in additional seasoned and talented people to strengthen our team.

This quarter, I'm happy to announce that we are welcoming Marcus Fontoura, formerly at Microsoft, Google, Yahoo! and IBM as our Chief Technology Officer; and Gregor Ilg, former Head of Santander Brasil SME's retail risk, who has 15 years of experience in credit and is expected to join the team as Head of Credit after his garden leave.

Also, Osmar Castellani, who has joined our team last year, was designated as the new VP of Finance for our Software division. We would also like to highlight that we welcome two new independent Board members, Patricia Verderesi Schindler, former JPMorgan Chief Risk Officer, Chair of Audit Committee at Raizen, and Board member at Credit Suisse Brazil; and Mauricio Luchetti, who has 19 years' experience at Ambev, deep expertise in HR and Management and also an extensive board experience.

As a result, our Board is currently comprised of 90% independent directors. Lastly, as we just announced in a separate filing, we have recently approved a new incentive plan pool, an important step towards attracting and retaining talent to support the execution of our strategy and to align incentives between our shareholders and the management partners, who will lead the next phase of our growth.

With these steps, we believe that we are moving in the right direction to strengthen our team and governance practices, increasing the long-term value generation for our stakeholders. To finalize our presentation, let's move to page 19, where we share our second quarter 2022 outlook for the business.

For the second quarter, we expect the total revenue and income between BRL 2.15 billion and BRL 2.2 billion, representing year-over-year growth pro forma for Linx between 148% and 154%. If we exclude the credit product, which had a negative impact on our second quarter 2021 top line, the pro forma revenue should grow between 70% and 74%.

We expect revenue growth to be driven substantially by the growth of our MSMB business, projected to reach TPV between BRL 67 billion and BRL 68 billion, representing a year-over-year growth between 71% and 73%. Because of the extent of the repricing that took place in the first quarter, we still expect our net client adds to continue to be affected in the second quarter.

Regarding our EBT guidance, we expect our business to continue improving profitability with adjusted EBT above BRL 185 million in the second quarter when adjusting for financial expenses of our bond. This compares with BRL 163 million achieved in the first quarter.

From the second quarter onwards, we have decided to stop adjusting the financial expenses related to the bond from our adjusted P&L. This decision was driven by the partial sale of our stake in Banco Inter, an investment which was fully funded by the issuance of our bond.

We have sold 21.5% of our stake in Banco Inter through the cash-out option offered in their corporate restructuring. With this change in adjustment, the adjusted EBIT EBT should be above BRL 90 million in the second quarter 2022, compared to BRL 82 million in the first quarter 2022, considering the same metric.

We believe 2022 marks the recovery of our profitability, while maintaining strong levels of growth and advancing on our purpose of serving Brazilian entrepreneurs. With that said, operator, can you please open the call up to questions?

Hi. Good evening Thiago and Lia and Rafael, thank you for the call and taking my questions.

A couple of questions, I guess. One, in terms of repricing, I know you kind of gave the guidance for Q2, but is there still more room to continue repricing do you think in the second half of the year?

Or do you think that, once interest rates stabilize, then you won't be able to reprise anymore? Just to get a sense of how that should relate going forward and how that can impact the take rates and margins more for the second half of the year and if there's some operating leverage there or not.

And then, my second question, just to understand -- I understand you had the cash-out option for Banco Inter. So why sell the stake so soon, right?

Is that a loss compared to when you bought it? Do you think that, that may have been a mistake?

Or do you see -- what are the benefits of that partnership at this point, anything that you can highlight there in terms of where you can leverage from the partnership with Banco Inter?

Hello Tito, Thiago here. Thank you very much for your question.

I will the repricing and flat margins question, and then I will talk about Inter? So first talking about repricing margins, we still saw interest rates increasing significantly year-to-date in Brazil.

And as this has been the main factor driving our margin here, we decided to set a balanced approach in order to consistently increase our margins, while keeping strong growth levels and protecting our relationship with our clients, which in the end of the day is what matters in our company. So we believe that we are improving our balance.

And this trend will continue in the coming quarters. So I think, Tito, that there was a very good first step on first quarter.

The guidance that we are giving in the second quarter is because we are seeing the same trend in the first quarter in the second quarter. So we are confident with the numbers we gave.

And these trends of better balancing our profitability using a new pricing, margins will continue across the year. It's not a one-time thing.

I think it's a new dynamic regarding the company, and this is driving our profitability. Regarding Banco Inter, we really like the team, as we always say.

We continue to collaborate with them in many fronts, but we are driving our focus to our core business. We decided to sell this partial stake in connection with the organization, given the premium that was involved and the environment around interest rates in Brazil and tax.

So it was a tactical decision. The rest of our shares, we will receive BDRs and then shares of Banco Inter in [indiscernible].

So that was our decision. Regarding the bond as we said, despite the fact that it was issued to fully fund these investments, now we are seeing this as part of our capital structure going forward, given that the asset has decreased in value, and therefore, we decided to stop adjusting for the second quarter onwards.

So I think that no big change in terms of our relationship with Banco Inter and how much we are admire them. But this was a tactical move given the opportunity presented to us.

Okay. Great.

Thank you, Thiago. That's helpful.

If I can ask just one follow-up on the repricing. How much does it depend on the competitive environment?

Because, I think, a lot of your competitors have been repricing just from higher interest rates. Is it very dependent on what your competitors do?

As you mentioned, prime net adds will continue to be impacted due to the repricing. So I just wanted to get a sense in terms of like thinking of like future growth.

Is there -- how do you -- how are you balancing that growth with margins and the repricing? Just to get a sense of if one could potentially offset the other at some point.

Great, Tito. I think that I can talk about competition, and I can talk a little bit about net adds as you just mentioned too.

In the end of the day, I don't see that competition changes the way we decide to price our products. But given that competition is being much more rational today, it opens more space for this balance to be made with much better room, I would say.

So I'm not seeing any change in terms of competition from what we have discussed last quarter. We see players overall taking rational pricing decisions here.

In small and medium clients, we see more competition for new players. In large clients, we see more acquire strong incumbent banks.

So I think that that's the take regarding competition. If I can give you some color regarding net adds, what we can say is that there are two elements here to consider.

You have churn and new sales. But before I double-click on both, it's important to highlight that we are seeing a good balance between pricing policy and net adds in the pace that we have here.

Our MSMB client base, as you saw increased 10% quarter-on-quarter, but the profitability of that client base is much better. So I think that the balance that the company is reaching is a good balance.

When we talk about churn, as we mentioned during the call the majority is concentrated on less-profitable clients. Those clients have lower average TPV.

We are talking about clients that transact between BRL 0 and BRL 7,000 a month. Additionally, as we mentioned we are shifting our commercial strategy, directing those smaller clients to TON product.

So what you can see here as an effect of this strategy is that the TPV growth is accelerating. So we have 93% TPV growth in the MSMB.

And both the two products, Stone and TON, the average TPV on both products are increasing as well. So we think that the balance between both products are set in the right place.

Regarding new sales, the pace in the first quarter we are seeing 72% of the pace that we had in the fourth quarter. So still a strong pace in sales.

They are a little bit impacted by our pricing policy, but we think that we have a much better balance now. So, those are the main highlights in terms of net adds.

So, I think that in the end of the day, it's much more about how we are organizing our products to address the needs of our clients than only competition, but those are the color that they can provide.

Okay, great. That’s very helpful.

Thank you, Thiago.

Thank you very much, Tito.

Yes. Hi.

Thanks for taking my questions and congratulations on the results. Can you provide some more color on the banking solutions, specifically around your ability to greatly improve monetization?

Hi, Josh. This is Lia here.

Thank you for the question. So regarding banking, I think there's two key takeaways here.

So, we continue to see the number of digital accounts grow as well as ARPAC on a sequential basis. It's important to remember that active account growth is mainly driven by the growth of our payments client base, so there was a little bit of the effect similar to the trends in net asset that Thiago just described, but we did see increased penetration of banking within our overall payments client base.

So, we continue to see this expansion happening. And regarding ARPAC, we also saw this improvement, the sequential improvement that I explained.

And this is driven by increased engagement, which is reflected in, of course, floating revenue, but also activation of new features, such as insurance, which we highlight the growth and the scaling that we're having with our insurance solutions. So over time, what we expect is, as we continue to increase our client base in payments, we will continue to penetrate those relationships also with banking.

The way that we scale our banking solution is, when we sell Stone to a new client, we sell the acquiring solution with a sort of bundled offering of banking as well. And that's the entry point of the banking relationship.

And over time, as the TPV from the acquiring gets -- becomes a cash in the banking, this is the first step towards activating new features and monetizing that relationship. So, in the summery, I think those are the takeaways that we can highlight in terms of banking.

I don't know, Thiago, do you want to add anything?

Just a little bit here in terms of monetization today. We are focused on three main products, which is, as more engagement we have from our clients, more account balance we have.

So the floating revenue that we produce taking interest rates on those deposits to the company, it's a good monetization roadmap. The second one is interchange in the cash out that they used -- when they use the cash-out is a very good role to monetize banking through the cards.

And I think that insurance now is starting to produce better results. We are increasing our exposure to the insurance product, because we are confident in the product we built.

And what I like this execution is that we don't take the risk in the insurance project. So we designed the project with other insurance partners.

They kept the product in their balance sheet. We received the fee on this relationship, but we don't bear the risk.

So, it's a very light execution. So I think that the combination of the floating revenue with increased engagement revenue that we have in the cash-outs when client is using the card and now the insurance product produced monetization in a very good level.

Excellent. Thank you very much.

That's helpful detail. I'd like to switch gears now over towards the software side.

So now that Linx sub-acquiring business has fully migrated to the Stone platform, are you turning your attention towards cross-selling Stone payments to Linx' legacy client base? How have those cross-selling efforts been performing so far?

So great question, Josh. So in terms of penetrating Linx client base or software in general, right, client base with payments -- we provided some color on those numbers last quarter.

What we can say right now is, those numbers are more or less in line this quarter, but with the difference that we have fully migrated the residual volume that existed still in Linx space into Stone's platform. So now we have fully concluded that migration process.

And our focus right now is really driven towards, improving those integrations in the acquiring side, but also fixed in the QR Code gateway integration onto the POS, so that we can prioritize on those two areas in terms of cross-sell of payment solutions to software client base. The platform TPV growth that you saw of 114% is very much driven by those Linx pay volumes migrating on to the Stone platform.

And we continue to see opportunity to increase that up-sell looking forward. So I think that's the main takeaway.

Great. Thank you very much.

Thank you, Josh.

Hi. Thank you and good results here.

Rafa, I had a question for you. I think its slide 17 there, but it's in -- it's not entirely intuitive to me why the Financial Service expenses would have declined.

I realize you say in the side of this slide that you repriced, but that's a revenue observation. That's not an expense observation.

Yes, so it's slide 17, when you talk about financial expenses and it being down 20 basis points sequentially. So what's that about?

Hi Jamie, thank you for the question. So what we show here, if you look at our financial expenses, there are two main drivers here.

One is a CDI in Brazil, right, the average interest rates and the other one is TPV. So if you look at the TPV in the first quarter for seasonal reason, the TPV decreases a little bit, so it tends to decrease the financial expenses.

By the other hand, the CDI continued to increase. That's why, on an absolute number basis, you see our financial expenses increasing from BRL 611 million to BRL 622 million.

What I mentioned regarding the financial expenses was, as a percentage of revenue, it decreased by 2.6 percentage points. And the main reason was our repricing that we did, especially in prepayment that more than offset the increase in absolute number in financial expenses.

So I was mentioning regarding the revenue, as compared to revenue. But on an absolute basis, given the CDI increase the financial expenses still increased a little bit quarter-over-quarter.

Okay. I understand now.

And then on slide 14, Lia, the digital revenue declining 2%, so is that just because of tough comps in e-commerce, or is there something else going on there?

Hi, Jamie, thank you for the question. So as I mentioned, I think, there's two drivers.

Number one, tough comps. I think we saw many digital-focused players, sort of, posting the same, sort of, tough comps regarding the market just because of easing out of pandemic restrictions and the comparison in terms of digital volumes, right?

But on top of that, we do have the need to improve some of our digital solutions. So when we think about our digital solution set within Linx, it's a combination of ads, engagement solutions and platforms, both OMS and Linx Commerce.

And when we look at the combination of that, we see OMS performing well in terms of the operational drivers, so increasing the number of omnichannel stores and increasing the GMV overall, which is really where our focus is, because our focus in the digital strategy is to help those core clients to digitize. However, some of the solutions, like engagement solutions, did see some performance problems and the need to improve that performance.

So overall, I think our focus really continues on to driving the digitization of those core clients. And on those operational metrics, we are evolving positively.

Lia, can I add…

Thank you.

Add some comments here?

Please go ahead.

Thiago here speaking. Just a comment about the digital.

I think, we do have different comps. But here, we have different solutions.

So when you see the OMS, which is the solution that makes our clients through sell-through channel the firm is doing quite well. E-commerce platform is evolving well.

The engagement tools that we have I think that they are working well. But on the other hand we have two solutions like retargeting that regulation change in the way that use cookies and all the protection about the data.

It impacted the business, and we have another business with solutions for clients to manage different profiles in social media that was impacted by changes that Facebook did. So bundling all of our solutions, I think that you saw that decrease in 2%.

We are focused on improving our execution there, but the most strategic solutions we have in digital are really working well and we do have tougher comps. So I think that in the next quarters, we will bring better results of digital as the team is working to produce better solutions here for our clients.

Got it. Thank you for that.

I will jump back in the queue.

Thank you very much, Jamie.

Thanks, Jamie.

Hi, team. Good evening, everyone.

So I have two questions on my side here, please. The first one is related to the prepayment business.

So we have been hearing that with the mandatory register of card receivables and the platforms, I would say, working more properly nowadays some players are already bidding for the agendas of some competitors. So I just would like to understand if indeed you are seeing this movement in the industry nowadays?

And how is the company positioning for it? And also as a consequence, if we could see this positive effect of your repricing in the industry reducing again and quicker going forward because of this new environment?

And then I will follow-up with my second question, please.

Hi Kaio, Thiago here. Thank you very much for the question.

What I can say about the registry environment and the dynamics with prepayments is that, we are still not seeing this in our client base, so it's not relevant in our client base still, and we are still not confident to put efforts on the product of prepaying other acquirers. Because for us, the execution in terms of the registry and the settlement of those transactions, we still have risks, operational risks involved, so we are still not confident.

I know that there are some executions in the market. I think that there -- by the way, that we are seeing there is still very small, but we would like to see that part of the industry much better in terms of performance, because we see this as a very big opportunity for us.

But I think that we don't have still the maturity needed on the system to bring this risk for us, because at the end of the day, if we full prepay and not [indiscernible] result then the settlement will not come to us and it can put risks for the company. So, let's see if the registry system matures and we get comfortable to start this execution with more efforts.

Okay, great. Thanks.

And the second one, I just would like to understand how are you thinking about your commercial team. So we are seeing some players discussing an increase in the sales team, and we know that Stone is always assessing team.

So, I would like to know what's your view, first about the overall commercial team in the payments industry and specifically about if you already made any change during the first half of this year or if you foresee anything going forward, and what could this mean in terms of expenses and operating leverage going forward? Thanks.

Great, Kaio. In terms of the team, what I can say is in the fourth quarter when we saw our margins dropped and it took us too long to adjust our pricing policies, so the contribution margin per clients decreased in the fourth quarter, we decided to not be aggressive in terms of hiring.

So we stopped the hiring process. We lost some of our personnel with regular turnover.

So, the average number of people from the fourth quarter to the first quarter diminished a little bit. Now that we have put our pricing policy on track and we have our execution organized in the way that we expect, we are increasing our sales force back again, because at the end of the day, the key differentiation that Stone has is the presence in the counter of our clients, the proximity that we generate with them, the level of service.

So we will invest on growing our team, our commercial and sales team, but we are not seeing that this will decrease our margin at all. I think that we already learned how to go through those cycles.

So when we say that we will increase our margins and we will increase our profitability in the next quarters, we are already factoring in our expectation to increase our sales personnel. And I think that what I can tell you regarding that, and I think just an additional color on the net adds is that in the second quarter, we are seeing basically the same trends that we saw last quarter, in the first quarter.

But we see a much better performance in terms of sales. So it is possible that we deliver a better net adds in the second quarter than we delivered in the first quarter.

Let's see. Part of that is because we are improving our sales strategy and our sales team.

Just -- Thiago, if I may add one point, Kaio. It's important to also emphasize that we still see a lot of white space to continue to grow through our hub strategy.

So not only by increasing the density where we're already present, opening new hubs. And I think this view hasn't changed at all.

Regarding this evolution of our commercial strategy, we are focusing our sales agents and the hub operation on those larger SMB clients because that value proposition of proximity that was explained really coupled with a much better service, right, and an attractive unit economic profile of those clients. We really see that that's a very strong value proposition, and we see a lot of white space to continue to grow there.

So we really see vast opportunity for continuing to grow.

Okay, great. Thank you very much.

Thank you, Kaio.

Hey, everyone. Thanks a lot for taking my question.

Just wanted to get a sense on the inflation aspect as to, how much was it a helper in the first quarter? And does your 2Q guidance also factor in the -- increase in inflation?

Hello Sheriq, Thiago here. Thank you very much for the question.

I think that we're experiencing here, it's much more related to us gaining market share on the MSMB segment than inflation. Of course, that inflation creates an effect on our TPV and contributed to our revenue.

But when you see the level of growth that we are presenting in our overall TPV and mainly on the TPV on the MSMB clients with 93% year-on-year, I think that the inflation is a very small component compared to the market share gain that we are experiencing. And when you see the expansion with the guidance that we are giving for the second quarter what has driven that expansion is market share gains.

Understood. Thank you.

And one last question from my end. On the credit, the revenue front, any update on the timing as to when would you -- when would we see credit disbursement begin?

Again I mean I see that you have appointed a new Head of Credit, and he's not supposed to join until October 2022. So would that be like a good time frame to consider, or would you prefer starting of disbursing credit prior to that?

I think you have -- you did a very good observation regarding the beginning of Gregor. And I think that Gregor as the new Head of Credit will help us a lot in terms of knowledge in how to conduct the credit product.

In credit, we are trying to promise less and deliver more in the end of the day. I think that the team is doing a very good job rebuilding our product and our infrastructure to connect our credit solutions with our hubs and create a better experience and renegotiation capabilities for our clients with a better scoring process.

So I think that the team is moving well. I'm trying not to create too many promises in terms of timing, because we want to have the time to make it right.

I think that we keep in the same way that we were in the last quarter.

Thanks a lot. Thank you very much.

Thank you, Sheriq. Thank you very much for the questions.

Hello, everyone. Thanks, Thiago, Lia, Rafael and team.

My question is on something, Lia, you mentioned, I guess, the reset and focus on smaller clients at TON given the better unit economics. If you can share some color on that and how you think about that -- that would be helpful.

And then I just had a quick question on the insurance side, the fees that you're registering. Are those cash payments upfront from the providers that you're registering, or are those revenues are going to be recurring overtime?

Like is it going to be registered as over the life of the product, or is it an upfront fee? Thank you.

Hey, Jason. Thank you for the question.

So just regarding the commercial strategy that I mentioned so within the MSMB segment, the shift that I explained was smaller clients shifting on to the TON product because overall the TON value proposition is a better -- much better fit for that subsegment within MSMB both from the perspective of the model itself, right? So the acquisition cost that we have through this digital distribution and a much lower cost to serve because these clients, they accept a more self-service type of offering at more attractive prices for them.

So we've been really able to adapt and improve our go-to-market strategy for this subsegment, right? And really target the most profitable clients within the subsegment.

As Thiago explained, we look at this client more or less between zero and 7,000 of average TPV monthly. But when you look at the evolution of average TPV within this segment that we disclosed on page 9 of the presentation, I think this highlights the evolution that we saw, right?

So it's not so much about us focusing there, but it's about us really improving our commercial strategy to optimize the go-to-market and the offerings between the micro clients that we focus more with the TON product and the larger SMB clients that we focus more with the Stone products through the hub model that I just said. So it's really this optimization that we've been talking about.

Lia, can I add small comments?

Sure.

Jason, Thiago here. Thank you very much for the question.

I just don't want to give a sense that we are changing focus and focus on the micro merchant segment. We continue to be laser focused on the SMB, where you see -- where we see the best unit economics.

If you see the TPV in Stone and Pagar.me product in the SMB segment grew 74% year-on-year, so we continue to be focused there. We found a very good value proposition with the TON product to address a new avenue of growth in the micro segment.

And the clients that had small volumes that we were onboarding in Stone, we are redirecting them through TON, but we continue to be focused on the SMB where you see -- where we see the best profitability in the industry. But as we have the capability, we built the product, I think that the team could have found a very good value proposition and a good balance with unit economics, we decided to allocate capital to the micro merchant space, and we will continue to do so, but our focus is in the SMB.

Hi, Jamie, Rafael here. Regarding your second question about insurance, yes, you're right.

So as we have a commission-based business in insurance, we earn the fee upfront, regardless of what happens then with the relationship of the insurance company with a client. We aim to make this business -- despite upfront cash, we aim to make this business a recurring one, because after it expires, usually after a year, we aim to renew and resell that same product to that client.

So that's the idea. When you look at our ARPAC numbers that we put out there in our banking system, what we do is, for that operational metric, we make it monthly over a year.

So we don't put that upfront in our ARPAC calculation. So, that's the way our insurance product works.

That's helpful. And just as a follow-up on a comment about resuming credit origination.

I think from what I understood looking to what was done in the first quarter, we should be waiting probably some time until your new Head of Credit is on board. So it's probably a next year story at best, I guess.

In terms of tests -- this is Thiago here again. I think that in terms of testing the product, we will continue to test the functionalities that we built.

But in order to expand the sale of the credit product, I think that it will be much more to end towards the end of the year.

Thank you very much.

Thank you.

Hi, guys. Good afternoon.

Thanks for taking my question. Two questions here from my side.

Thiago, how should -- how do you think about your overall employee base, right? I was looking at your 20-F.

You recently disclosed you have more -- close to 15,000 employees. Do you think there's room to improve in headcount?

You being a tech company, how do you see the size of your employee base today? And if you can make any changes?

And then the second question is related to the recent press release that you issued that your co-founder selling shares in the company, if you can give us what is your interpretation, how we should interpret this news? Thank you.

Hi, Mario, Thiago here. Thank you very much for the question.

When we think about the team and the size of the team, there's two things here. One is how we create capacity to give the services that we provide today to our clients and how we create overcapacity to continue to grow the business in the scale that we are.

I think that what we are doing in the previous six months is that we are using part of the operational leverage that we've built in the past. And that's why you are seeing that we are not growing our team in the last four or five months.

And you will see this as an operational leverage on the lines of administrative expenses, on the cost of service. So, I think that we will continue to gain operational leverage both in cost of service and administrative expenses, because we've built the operational leverage in the past.

And now, I think that we have a very good size of team for the entire year. So we are not growing the team, because we did it in the past and it took the time to train the team.

Regarding the second question, actually, I don't know about this news about any co-founder selling shares. What we -- is that Eduardo make the choice of changing his Class B shares to Class A shares that will be owned directly for -- through his family vehicles, but there's no news about any of the co-founders here selling shares, just to be precise.

Okay. So -- yes, you're right.

The news is that, as you published, right, he's converting his shares. And so I wanted to understand then what is the purpose of doing that.

Mario, can you hear me?

Yes.

Okay. Well, it's working now.

I think that I said -- as I said, Mario, this is a personal decision of Eduardo, following his departure from the Board, and it has to do with the personal restructuring in his family vehicles. He is just converting his Class B to Class A, and he will own this directly in the company.

The two confounders will still have approximately 40% with power, which is a common level in other companies around the world, if you see tech companies in U.S. André continues as our Chairman and very close to the company.

As always, Eduardo continue to be available whenever the company needs to give advice to be helpful to us. So there's nothing changing in the day-to-day of the company.

It's just a personal decision of Eduardo as he left the Board three months ago, nothing major to comment here.

Okay. And then final question for me, on Banco Inter, right, as you disclosed, you sold about, I disclosed, you sold about, I think it was 21% of your position in Inter.

You took advantage right of the cash-out. How do you look at this stake going forward?

Is this something that you still plan -- when you announced the acquisition, right, you had plans for developing potential business opportunities with Inter? Is this completely out of question now?

Do you think that your remaining shares, there you're going to be seller of the shares, or how should we think of your relationship with Inter going forward and the need then to hold shares of Inter?

Mario, I think that no update here about it. Relationship with them doesn't change.

The way that we admire what they are building, it doesn't change. We continue to have some efforts in terms of creating synergies between, The Company but we have to focus on our core.

So I think that the move that we made of selling this 21% stake was a tactical move because of the price that was offered, the environment that we are seeing, and it was as simple as that. We continue to have almost 80% of our shares there.

We continue to be engaged to create future value. So no update here, but we are trying to be focused on the core of our business and the new organization that we have with our two segments.

I think that we have a lot to deliver we are seeing that we are keeping growth for the year. We are balancing this with a much better profitability profile.

We want to keep things simple, focus on the core, deliver results consistently quarter-over-quarter. I think it's much more about focus than any other thing.

Okay. Thank you very much.

Thank you very much, Mario.

Hi. How are you?

Thanks for allowing me to join this call. Appreciate it.

So I wanted to see -- most of the questions have been asked, but I wanted to see if we could focus on the financial expenses line? And given all the investor focus on that line, I was curious if you can walk us through your thoughts on next quarter and for the full year?

Can you just, sort of, walk us through from a modeling standpoint? What is the right way to be thinking about that line?

And maybe bring into play your thoughts on the central bank interest rates and so forth to help us understand what we might be expecting on that line. And if you want to discuss financial income as well, I'd love to kind of get a sense of both of those lines to the extent you're able to discuss.

Thanks.

Hi, Jeff, Rafael here. Thank you for the question.

So, I think, as I said, if you think from a modeling perspective, the financial expenses, they should evolve with our TPV growth, right, and also the average interest rates in Brazil. So if you look, for example, the average CDI in Brazil in the first quarter of 2021, it was 2.02%.

In the first quarter of 2022, that number increased to 10.27%. So if you look at that average CDI over time, our financial expenses should grow with that, together with the growth in our TPV.

So you should expect the financial expenses line to keep growing on an absolute number over time. However, when we look at our topline and if you look at our financial income line is our line that's growing faster, right?

Because especially the repricing of clients. So although we have an increase in financial expenses, we also expect a very strong increase in financial income.

So that's, sort of, the dynamics that we see this year. And from the comments that Thiago made that we'll keep adjusting our pricing policy according to the CDI increase in a way that we balance the growth that we have with the level of profitability that is desirable for us.

So I think those are in a very simple way, the main drivers of that line going forward.

Okay. Great.

Appreciate it. And then separately, I apologize if I missed this earlier, but similarly, on the active payment client lines, really it's your net adds.

Are you able to give us a sense of what the right way to think about the next few quarters are on the net adds line? I'm just curious, if you can help us put together everything that's happening, especially, with SMBs.

It seems like that did -- that was very strong this quarter. So just want to make sure we all have the right set of expectations as we're thinking ahead.

Thank you.

Hi, Jeff, Thiago here. I think that to give color about net adds going forward, as I said as we are seeing a better performance in terms of sales this quarter, but with still the same type of trends regarding churn in the lower clients, I think, that the balance will be the same or a little bit better net adds in the second quarter.

Let's see. And I think that going forward that should increase.

Because as we edge pricing policy, the churn effect will diminish and then the sales speed that we have will continue or be a little bit better if we execute better. So, what I can give you as a color is we will keep or increase a little bit for the second quarter, let's see, because sales are performing well.

And then as churn reduce, and we are already starting to see some of that effect for the third quarter, I think the net adds will increase compared to first and second quarter. And I think that, on a quarter-on-quarter basis, I can give you more color about the dynamics.

Okay, great. Thanks very much.

Appreciate it.

Thank you, Jeff. Jeff, just one comment.

I think your question was very, very good. And I think that we are still missing to giving more perspective about long-term trends, both in terms of growth, TPV and margins.

So we are targeting to do an Investor Day by the end of the year. And in the Investor Day, we will talk much more about medium and longer term to have the time to help everyone with modeling and to see the company with a much good perspective.

So, I expect that we execute this in the end of the year. Until the end of the year, I think that we will continue to give more color on a quarter-on-quarter basis in our metrics.

Hi. Congratulations on the results, and thank you for giving us additional disclosures.

It's very helpful understanding the company. If I can just ask about the Software segment, the operations seem to have improved quarter-on-quarter.

But how should we think about it in the coming year or two years? How much more potential of gaining synergies do you have with the Linx -- integration of the Linx operations?

And what kind of margin, EBITDA margins can we expect from the software side of the business? Thank you so much.

Hi, Neha. Thank you for your question.

Lia here. So I think regarding margin trends in Software, a few things to highlight.

Number one, we still have impact in the software business regarding the costs related to Linx Pay. Because as we explained, we finalized 100% of the migration of those clients, but the costs associated with the Linx Pay legacy business has not been fully phased out yet.

We expect that to happen over the next quarters. And of course, as this happens, this will impact positively our margins.

I think the second element to highlight that both portfolio companies which were -- that were invested within Stone, that were integrated within our software business as well as the digital business, they are less mature. So as they mature, of course, we expect also that to contribute positively to margins.

And even on top of those effects, we are already seeing, as I showed in the numbers, some operational leverage, right, through efficiency gains in cost and expenses and operational leverage, which have already positively impacted those margins. I think over the next quarters, what we can expect is, EBITDA margins continue to improve sequentially and to stabilize.

We talked about this last quarter, more or less on the range of 20. So, I think this is what we can say regarding margin evolution in software.

Sorry, Lia. You mentioned EBITDA margin is around 20%?

Your line got cut a bit.

Yes, yes, yes. 20%.

Okay, great. Thank you so much.

That’s very …

Neha…

Yeah.

Hi Neha, Thiago here. Just an additional color, I think that the range between 20% -- 20% revenue growth in Software is a good range for medium-term.

I think that this 20% level of EBITDA is really, really doable. The team is improving a lot the execution on software and the discipline around the way we manage the business.

I'm very happy to see the integration between Linx and the portfolio of companies that we have invested and acquired overtime. Linx already operates with an EBITDA bigger than that, so we are bringing the efficiency of the Linx management team to the growth that our entrepreneurs built.

And this combination is showing this profile that we are giving with revenue growing between 20% and 30%, EBITDA coming in to around 20%, I think that you will see positive news on a quarter-on-quarter basis this year. And I think that between the fourth quarter and first quarter next year, I think that the margin profile will be much closer to what we are talking here.

So very happy to see the execution of software with discipline, focusing on clients in different segments is really working well. I think that now we have the execution in software on track.

Perfect, very helpful. Thank you so much.

Thank you, Neha.

Thank you, Neha.

Thank you. Good evening everyone.

First and foremost, thank you for the increased disclosure. I know a lot of ground has been covered in this call already.

I would like to pick your brains a little bit around CapEx, if I may. You had BRL 242 million this quarter, lower than the last, as you had advanced the terminal purchases, obviously.

Can you give us an update on this subject a bit? How your supply chains are doing?

How is it flex playing a role, inventory vis-à-vis the growth you're seeing, which seems better than expected even, so an update on this. Thank you.

Hi, Pedro Rafael here. Thank you for the question.

So as you said, regarding CapEx we should see lower CapEx overall this year, right, as we mentioned in last call because especially at the end of last year, we prepaid a lot of CapEx regarding POS because of the microchip shortage that was being discussed last year. Of course, now we are much better adjusted regarding inventory and lead times so on.

And in the first quarter, we actually still had part of that -- those contracts that we had done CapEx. So it's still pretty high.

But if you look at overall in 2022, despite our very strong growth compared to 2021, we should see lower levels of CapEx. So I think that, we took the right decision last year to protect our growth and derisk our growth in terms of potential shortage of components.

And I think that had give, us room to keep growing in the second half of last year. And now we are -- we have adequate inventory and lead times so we can continue to grow further.

So I think that the situation has normalized much more this year.

Okay. Good.

Good. Good.

Can I add two points? Pedro just to add two points here and give you a little bit more color.

I think that the decision in the fourth quarter was not an easy one. I think that the team made the right decision to advance investments in our inventory because we hold prices.

We've got the supply we needed. But with that the team expanded the number of providers.

So I think that now we have much more providers and new models of hardware that we use here. So I'm not worried with the inventory chain and the supply chain.

And I'm not worried with the lead time. I think that the team did a very good job.

It has put in pressure in the fourth quarter in terms of cash flows, but I think that it was the right decision over the long-term. That's why we are seeing lower CapEx expenditures -- capital expenditures quarter and we see in the second quarter the same trends.

Perfect. Thank you so much for adding.

While we're talking about terminals, can you give us an update on the TON cap solution maybe on the terminal fee payment? How is it evolving?

What have you learned so far? Is it maybe worth investing more behind it?

Is it contributing relevantly already? So just on this a follow-up.

Thank you.

Yes, Pedro. I think to give a color on that, I think, the team did a good job to invest on that technology.

We were the first one to launch this product view. When you see clients from zero to 7, 000 a month, as we say, there is a part of those clients which are clients that process BRL 1,000 or BRL 2,000 a month.

And we think that for the future we have to focus more on these type of solutions where we don't have the hardware because it's too expensive -- this operation and it brings pressure for the cost of acquisition of clients. So we can offer a value proposition for them based on that functionality.

So the test phase was really well. I think that the card brands increased the ability of clients to transact using that technology and we will put more efforts towards that direction in the rest of the year.

I think that it was the right move, and we will continue to invest on the strategy on the second half of the year.

Thank you so much.

Thank you, Pedro.

Thank you for taking the question here. Two questions.

Unfortunately, not very quick ones, one of them is a bit complex. But starting with the quicker one, I guess, my question is, we – where only have your margins moving back to the 20s, right?

And when I'm looking here at the model, before 2018 when you had below 5% market share, you still are pretty much running a loss. And then you, sort of, break this breakeven and reach 30s in 2018 market share and you roll your way the market share to-date to something around 10% to 12%, like depending on how you look at the data?

And your margins are obviously due to several reasons, but basically close to zero again, even adjusting for interest -- mark-to-market volatility. I look at the largest player is like a 25% market share.

And it doesn't seem like your results are escalated by credit or anything anymore. This is your printing low margins as they are.

So my question to you here is, how do you see kind of this margin bouncing back? I mean, you had as much as 40% margin.

Is it -- it can come from a few factors, right? Either you're going to dilute a lot of your costs, which at 11% market share, growing 70%.

You will be the biggest player probably in two years. Or you believe that you're going to increase your prices more than the average industry or you believe that you're nominally going to cut costs.

So the bottom line of the question, I think, is pretty easy, right? We're like particularly more bullish on the industry.

We're seeing everybody increasing prices. But that's not a reason why Stone should look better than the industry.

And that's kind of the question I want to drill like the margin evolution, better than market, where exactly you see it coming from. My second one, asked already is -- my understanding is that you had something of BRL 200 million in losses realized with the sale of Inter stake.

And I want to basically understand, if you hypothetically did the full, say, let's say, had BRL 1 billion in losses, could you have use the earnings or the pre-tax earnings of Stone in the following years to benefit from this tax credit or not? Because my understanding is that if you actually have bigger losses, you would probably be -- because of a non-operating investment, you would be limited to non-operating gains in future years.

And basically, what I'm trying to get at is you would be tax inefficient to have sold everything this year, because you're probably not going to have repeat that rate. Those are my two questions.

Sorry for running on.

Hi, Domingos. It's Thiago here.

Thank you very much for the question. I understood your point.

I think that when we think about margin improvement in this consistently quarter-on-quarter work that we are doing, there are three main factors. One factor, as you mentioned, is the new pricing policy that we are using for the core products.

And I think that we still have room to improve that. The other part, I think that is that we are choosing the mix of clients that have more profitability, and that contributes to the core, too.

The second effect of more than the core is monetization in banking. Because as we increase engagements with banking solutions, it's basically we are not applying capital to acquire those clients, because we already have in our client base.

We are increasing the engagement using our app in a self-service way, and the monetization role that we have with interest rates on the balance with the cash-out in the interchange in the card and for insurance will bring better margins for the company. And third, we will dilute cost and administrative expenses and then selling expenses, but not now because we are still growing a lot.

And you will see those effects, too. I think that this year you will see a lot of cost dilution compared to revenue.

And you see administrative expenses dilution compared to revenue. So you will see that effect on a quarter-on-quarter basis this year.

And then we see that we will increase monetization and spreads on the core offering that we have and increase monetization with more activation of banking clients, because at the end of the day, we don't have two products for clients. It's one platform that they have payments, banking.

Now they have access to insurance, and they will have access to more working capital projects. So I think that the strategy of improving margin has these three effects.

Domingos, its Rafael here, let me answer your second part of the question. Thank you for that.

I think regarding the loss in Banco Inter, if you look our P&L and our adjusted P&L, you'll see that we are not getting any tax benefit into the negative mark-to-market of Inter. We are constantly evaluating the best tax alternatives for our investments.

But at this moment, there is no -- we are not considering tax benefit, as you said, for negative mark-to-market or losses with Banco Inter. And one complement to Thiago's answer regarding the first question is...

If I may, just before you go back to Thiago, I understand the mark-to-market…

Sure.

…doesn't necessarily allow you to benefit from the tax credit. But once you realize the loss, you can.

So my question is, if you realize, the BRL 300 million, you can use this year. My question is, if you realize the full, let's say, BRL 1 billion in losses, would you lose it, or be limited to non-operational gains, or could you use, 2023, 2024 earnings before taxes from Stone to amortize or to benefit from this product?

Yes, Domingos, that's right. So if you look at the investment in Inter, it's a Cayman entity, right?

So it's not tactical. So that's why today, even on a realized loss, we do not consider as of today us benefiting from such loss from a tax perspective.

So this is related to the entity where it is located, right? Yeah, Thiago, do you want to add?

Yes. Just a small comment here, Domingos, so we made the investment through our Cayman entity, Stone Co, which is the company that is listed, and we raised the bond on that same entity to.

When we did the bond was made to fully fund the investment in Inter. I think that we just made the decision of taking this opportunity of the cash-out method.

We have discussed with them about it. Now that we have decided to change the way we managerially see our capital structure, moving the bonds to fund prepayments and keeping the bond because of the prices that we have executed the bond in the past and the duration that the bond has I think it's accretive for us to keep.

What we are doing is that we are looking -- going back to the drawing board in our tax strategy. And once we have in how we handle the bonds overtime and tax implication, we will give you more update on that.

But today, it's in a different entity. That's why we're not capturing the benefit of the tax -- the tax shield.

Very clear, very clear, guys. Thank you.

I'm listening to this, as I'm sure a lot of other investors who are listening in and thinking you through this vehicle, you're not going to benefit from any tax shield. So given how shares moved today, it wasn't like the best decision.

Are we right, or are we wrong in listening this way?

I don't understood quite, well Domingos. Can you please repeat the question?

Yeah -- no, what I meant is if you had invested this, let's say, let's say, underneath Brazil, you would have been able to use some of those credits in the operation. You're right you will be able to offset your profits in Brazil with the realized losses in Inter?

I think that there is other factor that we factor in, in that decision, and we can chat, offline with you to give more update about the way we reason -- the reason why we use the entity and what we are doing now. But I think that it's just simple as that.

We made through that entity, now that we are taking the bond managerially to the structure of the financial platform, we will reorganize the way that we handle this to the future. And we will give you more update about it.

Thank you, Thiago. You bet.

Thank you very much, Domingos.

Hello, everyone. Thiago here, back again.

I'd just like to say, a big thank you to you all. A big thank you for our team for the efforts in the quarter and see you next quarter.

Bye-bye.