XP (NASDAQ:XP) reported higher first-quarter 2026 revenue and profit, while executives said market volatility and wider Brazilian credit spreads weighed on what otherwise would have been stronger growth.
Chief Executive Officer Thiago Maffra said client assets, including assets under management and assets under administration, reached BRL 2.1 trillion in the quarter, up 21% from a year earlier. XP ended the period with 18,300 advisors, a 1% year-over-year increase, and 4.8 million active clients, up 2%.
“These results reflect our ability to grow our business while maintaining disciplined capital and risk management,” Maffra said.
Credit spreads and volatility weighed on quarterly momentum
Maffra said XP entered 2026 with “solid momentum,” helped by a weaker U.S. dollar and rotation into non-U.S. assets that supported emerging market inflows and Brazil’s market dynamics. However, he said the environment changed in March as global volatility increased and domestic credit spreads widened due to technical factors.
“These developments were external to our underlying performance,” Maffra said. “Excluding these external factors, we would have delivered even stronger results, achieving double-digit growth.”
During the question-and-answer session, Maffra said XP did not incur credit losses from the spread widening, describing the impact as mark-to-market losses on tradable fixed income positions. He said the company had not realized most of those losses.
Credit spread widening continued in April, but Maffra said the impact was smaller than in March. By May, he said XP was seeing a more stable market with some buyers returning, though he did not expect spreads to compress in the second quarter.
“For the year, we don’t expect any further impacts on top line growth,” Maffra said, adding that XP remains confident it can deliver double-digit growth in 2026.
Retail revenue rises as equities and new verticals contribute
Chief Financial Officer Victor Mansur said XP is introducing a new managerial profit-and-loss and revenue breakdown, organizing its business into Retail and Wholesale segments. He said the institutional business has been incorporated into Wholesale and that the “other revenue” line has been folded into net interest margin across business lines. Mansur said the changes are IFRS compliant and do not affect gross revenue, net income or capital metrics.
Retail revenue totaled BRL 3.8 billion in the quarter, up 10% from a year earlier and down 2% sequentially. Mansur said Retail benefited from higher equity volumes, with equity revenue rising 13% from the previous quarter and 22% year over year to nearly BRL 1.2 billion. Equity revenue represented 31% of total gross revenue in the quarter.
Maffra also highlighted XP’s Retail strategy, including refined client segmentation, goal-based investing and managed portfolios. He said XP is expanding fee-based and advisory models. In response to an analyst question, Maffra said about 25% of individual client assets are currently under flat-fee or fee-based models, and he expects that share could rise to about half over the next three to five years.
XP reported BRL 19 billion of organic Retail net new money in the quarter. Corporate and institutional net new money was negative BRL 4 billion, bringing total net new money to approximately BRL 14 billion. Maffra said XP again reached its guidance of around BRL 20 billion in Retail net new money per quarter.
Wholesale segment grows as corporate revenue nears BRL 500 million
Mansur said XP’s Wholesale segment, which now includes institutional operations, grew 26% year over year across its three business lines. Corporate revenue reached nearly BRL 500 million, supported by trading solutions, derivatives and foreign exchange activity during a period of high volatility.
However, issue services revenue declined, reflecting lower volumes in tax-exempt fixed income offerings in the first quarter. Mansur said the institutional business grew both year over year and quarter over quarter, benefiting from higher trading volumes.
SG&A expenses totaled BRL 1.6 billion, up 14% year over year and down 6% from the prior quarter. XP’s last-12-month efficiency ratio was 34.6%, up 100 basis points from a year earlier. Mansur said the short-term increase was driven by revenue pressure from market events and said XP expects the ratio to normalize through the year, ending 2026 roughly flat compared with 2025.
Capital returns and CFO transition announced
XP announced a new BRL 1 billion share buyback program and declared BRL 500 million in dividends to be paid June 18. Mansur said XP has executed almost half of its existing BRL 1 billion buyback program. Combining dividends and two buyback programs, XP has announced almost BRL 2.5 billion in capital distribution in 2026.
Adjusted diluted earnings per share increased about 9% year over year, outpacing net income growth due to share repurchases. Mansur said XP’s BIS ratio ended the quarter at 20.7%, above its target range of 16% to 19% by year-end. He said XP remains committed to reaching that guidance.
XP also announced that Gustavo Alejo has been appointed as its new CFO. Maffra said the transition had been under discussion for several months and reflected XP’s desire to add an executive with more banking and credit experience as the company expands banking products for individuals and wholesale clients. He said there is no change in XP’s strategy.
Mansur, who has been with XP for almost 15 years, said he decided to step down but will remain a partner and contribute to XP’s ecosystem in new ways.
“It’s been a genuine honor,” Mansur said. “I’m sure that the best is still ahead.”
About XP (NASDAQ:XP)
XP Inc provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients.
