XP Inc Results Presentation Deck

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#1XP Inc. 2021 Earnings Presentation#2XP Inc. Important Disclosure IN REVIEWING THE INFORMATION CONTAINED IN THIS PRESENTATION, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER. THIS INFORMATION IS BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT. This presentation is prepared by XP Inc. (the "Company," "we" or "our"), is solely for informational purposes. This presentation does not constitute a prospectus and does not constitute an offer to sell or the solicitation of an offer to buy any securities. In addition, this document and any materials distributed in connection with this presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This presentation was prepared by the Company. Neither the Company nor any of its affiliates, officers, employees or agents, make any representation or warranty, express or implied, in relation to the fairness, reasonableness, adequacy, accuracy or completeness of the information, statements or opinions, whichever their source, contained in this presentation or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. The information and opinions contained in this presentation are provided as at the date of this presentation, are subject to change without notice and do not purport to contain all information that may be required to evaluate the Company. The information in this presentation is in draft form and has not been independently verified. The Company and its affiliates, officers, employees and agents expressly disclaim any and all liability which may be based on this presentation and any errors therein or omissions therefrom. Neither the Company nor any of its affiliates, officers, employees or agents makes any representation or warranty, express or implied, as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. The information contained in this presentation does not purport to be comprehensive and has not been subject to any independent audit or review. Certain of the financial information as of and for the periods ended December 31, 2019, 2018 and 2017 has been derived from audited financial statements and all other financial information has been derived from unaudited interim financial statements. A significant portion of the information contained in this presentation is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. The Company's internal estimates have not been verified by an external expert, and the Company cannot guarantee that a third party using different methods to assemble, analyze or compute market information and data would obtain or generate the same results. Statements in the presentation, including those regarding the possible or assumed future or other performance of the Company or its industry or other trend projections, constitute forward-looking statements. These statements are generally identified by the use of words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "estimate" and "potential," among others. By their nature, forward-looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements and there can be no assurance that such forward-looking statements will prove to be correct. These risks and uncertainties include factors relating to: (1) general economic, financial, political, demographic and business conditions in Brazil, as well as any other countries we may serve in the future and their impact on our business; (2) fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve in the future; (3) competition in the financial services industry; (4) our ability to implement our business strategy; (5) our ability to adapt to the rapid pace of technological changes in the financial services industry; (6) the reliability, performance, functionality and quality of our products and services and the investment performance of investment funds managed by third parties or by our asset managers; (7) the availability of government authorizations on terms and conditions and within periods acceptable to us; (8) our ability to continue attracting and retaining new appropriately-skilled employees; (9) our capitalization and level of indebtedness; (10) the interests of our controlling shareholders; (11) changes in government regulations applicable to the financial services industry in Brazil and elsewhere; (12) our ability to compete and conduct our business in the future; (13) the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors; (14) changes in consumer demands regarding financial products, customer experience related to investments and technological advances, and our ability to innovate to respond to such changes; (15) changes in labor, distribution and other operating costs; (16) our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us; (17) the negative impacts of the COVID-19 pandemic on global, regional and national economies and the related market volatility and protracted economic downturn; and (18) other factors that may affect our financial condition, liquidity and results of operations. Accordingly, you should not place undue reliance on forward-looking statements. The forward-looking statements included herein speak only as at the date of this presentation and the Company does not undertake any obligation to update these forward-looking statements. Past performance does not guarantee or predict future performance. Moreover, the Company and its affiliates, officers, employees and agents do not undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of the presentation. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented and we do not intend to update any of these forward-looking statements. Market data and industry information used throughout this presentation are based on management's knowledge of the industry and the good faith estimates of management. The Company also relied, to the extent available, upon management's review of industry surveys and publications and other publicly available information prepared by a number of third party sources. All of the market data and industry information used in this presentation involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although the Company believes that these sources are reliable, there can be no assurance as to the accuracy or completeness of this information, and the Company has not independently verified this information. The contents hereof should not be construed as investment, legal, tax or other advice and you should consult your own advisers as to legal, business, tax and other related matters concerning an investment in the Company. The Company is not acting on your behalf and does not regard you as a customer or a client. It will not be responsible to you for providing protections afforded to clients or for advising you on the relevant transaction. This presentation also includes certain non-GAAP financial information. We believe that such information is meaningful and useful in understanding the activities and business metrics of the Company's operations. We also believe that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company's business that, when viewed with our International Financial Reporting Standards ("IFRS") results, as issued by the International Accounting Standards Board, provide a more complete understanding of factors and trends affecting the Company's business. Further, investors regularly rely on non-GAAP financial measures to assess operating performance and such measures may highlight trends in the Company's business that may not otherwise be apparent when relying on financial measures calculated in accordance with IFRS. We also believe that certain non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in the Company's industry, many of which present these measures when reporting their results. The non-GAAP financial information is presented for informational purposes and to enhance understanding of the IFRS financial statements. The non-GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for, or superior to, IFRS results. As other companies may determine or calculate this non-GAAP financial information differently, the usefulness of these measures for comparative purposes is limited. A reconciliation of such non-GAAP financial measures to the nearest GAAP measure is included in this presentation. For purposes of this presentation: "Active Clients" means the total number of retail clients served through our XP Investimentos, Rico, Clear, XP Investments and XP Private (Europe) brands, with an AUC above R$100.00 or that have transacted at least once in the last thirty days. For purposes of calculating this metric, if a client holds an account in more than one of the aforementioned entities, such client will be counted as one "active client" for each such account. For example, if a client holds an account in each of XP Investimentos and Rico, such client will count as two "active clients" for purposes of this metric. "Assets Under Custody (AUC)" means the market value of all client assets invested through XP's platform, including equities, fixed income securities, mutual funds (including those managed by XP Gestão de Recursos Ltda., XP Advisory Gestão Recursos Ltda. and XP Vista Asset Management Ltda., as well as by third-party asset managers), pension funds (including those from XP Vida e Previdência S.A., as well as by third-party insurance companies), exchange traded funds, COES (Structured Notes), REITs, and uninvested cash balances (Floating Balances), among others. 2#3Index 01 Opening Remarks 02 Highlights 03 2021 KPIs and Financials 04 Q&A#41 Opening Remarks#5Connecting the Dots to Build a Leading Ecosystem XP's revenue represent slightly more than 1% of the Brazilian Financial Industry INVESTMENTS BUILDING MOATS EDUCATION CLIENT CENTRICITY DISTRIBUTION CAPABILITIES HARD TO PENETRATE TRUSTED BRAND PROFITABILITY R$ 70 BILLION TAM 2001-2019 Building a unique business while competing with large banks INROADS INTO NEW VERTICALS LEVERS TO ACCELERATE GROWTH INSURANCE PENSION FUNDS CREDIT CREDIT CARD FX COMPANIES (SMB TO CORPORATE) R$ 350 BILLION TAM 2019-2021 Paving the way to enhance relationships and expand TAM TAM EXPANSION THE BIG DREAM GETS BIGGER + BRAZILIAN INDIVIDUALS AND COMPANIES ADRESSED + SHARE OF WALLET + CROSS SELLING XP Inc. R$ 800 BILLION TAM 2022 ONWARDS Reaping the benefits of a truly complete ecosystem 5#62 Highlights#7Highlights 2Q21 Results M&As Bond Issuance Brand Awareness Strongest Quarter Ever (Again) ▪ Broker Dealers Independent Asset Managers ■ ▪ Access to a sizeable and liquid market ▪ XP Private awarded by Euromoney as Latin America's best bank for wealth management 2021 ▪ Main Sponsor Investor in the Brazilian Olympic Committee in Tokyo 2020 XP Inc. 7#83 2021 KPIs and Financials#91 I I I KPIs Investments Total AuC R$817 Billion Active Clients 3.1 Million Net Inflows R$75 Billion +88% YoY +33% YoY +159% YoY Banking Credit Portfolio¹ R$6.8 Billion Credit Card TPV R$2.1 Billion NPL Ratio 0% +17x YoY +4x QoQ NPS³ Jun-21: 76 Financials Gross Revenue R$3.2 Billion Adjusted EBITDA² R$1.2 Billion Adjusted Net Income² R$1.0 Billion (1) Does not include Credit Card related loans and receivables (2) See appendix for a reconciliation of Adjusted Net Income and Adjusted EBITDA (3) NPS, is an independent widely known survey methodology that measures the willingness of customers to recommend a Company's products and services. The NPS calculation as of a given date reflects the average of the answers in the previous six months XP Inc. +57% YoY +77% YoY +83% YoY 9#10Revenue and Breakdown Total Gross Revenues (in R$ mn) 2,041 2Q20 +57% 3,200 2Q21 Highlights ▪ Strong growth leading to a new record, across different channels, with Retail contributing with 84% of the growth. ▪ Institutional recorded the best quarter so far, driven by intense Fixed income activity, benefiting from recent changes in Selic rate. $ RETAIL 77% ISSUER SERVICES 8% FOOD INSTITUTIONAL 12% مهمة XP Inc. DIGITAL CONTENT 1% of 2021 Total Gross Revenue Other Revenue represented 3% of Total Gross Revenues 10#11Retail Revenue and Take Rate Resilient monetization and product diversification Retail Revenue (in R$ mn) 1,475 2020 +66% 2,452 2Q21 Highlights ▪ Resilient revenue generation Retail despite steady volumes in equities and futures. Key growth drivers were Financial Products and Fixed Income. ▪ On 2Q21, Retail related revenues represented 82% of consolidated Net Income from Financial Instruments. LTM Take Rate (LTM Retail Revenue / Average AUC) Zero brokerage Clear XP Inc. Banking License Pandemic Outbreak 1.5% 1.4% 1.4% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% Note: Average AUC = (Sum of AUC from the beginning of period and each-quarter end in a given year, being 5 data points in one year)/5 New Online Pricing XP and Rico 3Q18 4Q18 1019 2019 3Q19 4Q19 1020 2020 3Q20 4Q20 1021 2021 ■ Highlights Ability to add new products and services in the platform - such as credit cards and credit, and diversified revenue profile. AUC -LTM Take Rate 11#12Institutional Institutional benefited from fixed income volumes Institutional Revenue (in R$ mn) 333 2Q20 +13% (1) Source - XP Department of Economy 7 375 2Q21 Highlights ▪ Fixed Income activity was strong - benefiting from recent increases in interest rates in Brazil - driving the channel to record its best quarter so far, despite high equity trading volumes in 2020. Revenue Growth QoQ +15% +27% Institutional Fixed Income +39% Total Revenue Growth 4.50% 2.00% 4Q20 Institutional -Selic Rate EoP 6.25% 2.75% 1Q21 Expected Selic for 2021 EoP (1) 7.25% 4.25% 2Q21 XP Inc. 12#13Adjusted EBITDA and Margin Operational Leverage despite investments in technology, client experience and product offering Operating Expenses (in R$ mn) SG&A¹ % of Net Revenue 765 ■ 2Q20 33.2% +18% 900 2Q21 29.8% Headcount Evolution (2) See appendix for a reconciliation of Adjusted EBITDA. 3 2001 19 years 2,091 3Q19 (IPO) 1.5 years 4,489 Highlights Despite growing our headcount by 53% year-over-year, continuously investing in technology and new verticals, and deploying new products, we increased efficiency, reducing expenses as a percentage of net revenue by 340 bps. 2Q21 Adjusted EBITDA² (in R$ mn) % Adj EBITDA Margin 704 2Q20 36.3% +77% 1,245 2Q21 41.3% XP Inc. Highlights ▪ Result of a scalable business model, with significant cross-sell and operating leverage opportunities ▪ Main drivers were (1) top line increase, mainly coming from Retail; (2) higher gross margins, and (3) operating leverage in SG&A. 13#14Adjusted Net Income and Margin Net margin expansion driven by strong growth in Retail, operating leverage and a lower tax rate Adjusted Net Income (in R$ mn) Adjusted Net Margin 565 ■ 2Q20 29.4% +83% 1,034 Note: See appendix for a reconciliation of Adjusted Net Income. 2Q21 Highlights Adjusted Net Income grew 83% vs. 2Q20, explained by (1) strong growth in Retail Revenue, (2) operating leverage in SG&A and (3) a lower effective tax rate. 34.2% YOY Growth Across 2021 P&L Gross Revenue +57% Adjusted EBITDA Adjusted Net Income Operating leverage +77% Margin expansion YoY +463 bps Efficient Corporate Structure +83% XP Inc. +485 bps 14#15Q&A#16Investor Relations [email protected] https://investors.xpinc.com/ XP Inc.#17Appendix#18Non-GAAP Financial Information Floating and Adjusted Gross Financial Assets Floating Balance (in R$ mn) Floating Balance (=net univested clients' deposits) Assets (-) Securities trading and intermediation Liabilities (+) Securities trading and intermediation (=) Floating Balance 2Q21 1Q21 (3,184) (2,776) (2,776) (3,184) 20,814 20,399 20,814 20,399 18,038 17,214 Adjusted Gross Financial Assets (in R$ mn) Adjusted Gross Financial Assets Assets (+) Cash (+) Securities - Fair value through profit or loss (+) Securities - Fair value through other comprehensive income (+) Securities - Evaluated at amortized cost (+) Derivative financial instruments (+) Securities purchased under agreements to resell (+) Loan Operations (+) Foreign exchange portfolio Liabilities (-) Securities loaned (-) Derivative financial instruments (-) Securities sold under repurchase agreements (-) Private Pension Liabilities (-) Deposits (-) Structured Operations (-) Financial Bills (-) Foreign exchange portfolio (-) Credit cards operations (-) Floating Balance (=) Adjusted Gross Financial Assets 2021 105,113 1,237 45,360 1021 113,590 1,557 62,855 21,629 1,916 13,587 6,741 7,964 5,041 2,204 263 (85,205) (73,704) (2,790) (2,706) (16,373) (13,564) (16,062) (44,483) (22,046) (16,897) (6,628) (4,003) (4,198) (2,841) (2,160) (83) (322) (2,324) (1,124) (307) (18,038) (17,214) 13,372 11,170 23,701 988 15,485 XP Inc. 8,174 18#19Non-GAAP Financial Information Adjusted Assets (from the factors listed below) reflects our business more realistically Simplified Balance Sheet (in R$ mn) [B] Pension Funds Assets Total Securities - Fair Value through P&L Securities Repos Securities Fair Value through OCI Securities - Trading & Intermediation Other Financial Instruments Other Assets Liabilities + Equity Total Securities - Repos Other Finan. Liab. Pension Funds Securities - Trading & Intermediation Other Liabilities & Equity [A] 114,321 45,360 8,174 23,701 2,776 16,472 17,838 [A] 114,321 16,062 19,163 22,046 20,814 36,237 22,046 22,046 [B] Pension Funds 22,046 22,046 [A-B] [C] Floating [A-B-C] 92,276 23,315 8,174 23,701 2,776 16,472 17,838 [A-B] 92,276 16,062 19,163 20,814 36,237 20,814 18,038 2,776 [C] Floating 20,814 20,814 71,462 23,315 8,174 5,663 16,472 17,838 [A-B-C] 71,462 16,062 19,163 36,237 [D] Client Liquidity & Sov. Bonds Arb. 31,546 2,225 8,174 5,663 15,485 [D] Client Liquidity & Sov. Bonds Arb. 31,546 16,062 15,485 Adjusted Assets [A-B-C-D] 39,915 21,090 988 17,838 Adjusted Liabilities & Equity [A-B-C-D] 39,915 3,678 36,237 Key factors inflating our balance sheet XP Inc. [B] Pension Funds ▪ AUM from XP Vida & Previdência is accounted in both assets and liabilities [C] Floating ▪ Uninvested cash from clients allocated in sovereign bonds [D] Client Liquidity & Sovereign Bonds Arbitrage Providing liquidity to clients with derivatives ▪ Money market funding (repos mostly) allocated into sovereign bonds targeting arbitrage ■ opportunities 60 19#20Non-GAAP Financial Information Adjusted EBITDA and Adjusted Net Income Adjusted EBITDA (in R$ mn) EBITDA (+) Share Based Compensation Adj. EBITDA Adjusted Net Income (in R$ mn) Net Income (+) Share Based Compensation (+/-) Taxes Adj. Net Income 2Q21 1,080 165 1,245 2Q21 931 165 (63) 1,034 2Q20 663 40 704 2020 540 40 (16) 565 YoY 63% 309% 77% YoY 72% 309% 292% 83% 1Q21 864 178 1,043 1Q21 734 178 (67) 846 QoQ 25% -7% 19% QoQ 27% -7% -6% 22% XP Inc. 20

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