Inter shares are cheap Is INBR32 worth it?

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The result of the last quarter was a historic milestone in Inter's journey. The company added 1.5 million customers to its base and reached the level of 28 million customers, growth of +34% in the annual comparison. Its revenue grew +33% and reached R$1.9 billion, with service revenue now representing 30% of the total, reducing the company's dependence on financial intermediation activities. In the main financial metrics, Inter also delivered good numbers; the average revenue per active customer (ARPAC) was R$46, while the average cost to serve (CTS) was R$12.5 and the customer acquisition cost was R$27. What was most surprising was that 2Q23 was the second semester followed by a drop in total expenses, and Inter's efficiency ratio (expenses/revenues) fell to 53% (-15 pp), thus, Inter managed to deliver a profit record R$64 million.


The company expects the efficiency index to remain close to 50% in the second half of the year, which indicates that the result for the year 2023 could be around R$240 million, representing an inflection point and marking the beginning of the era of results growing and robust. Since the cell phone number list IPO in 2018, Inter has focused on two aspects, (i) increasing its customer base, reaching 28 million customers (7x more than the guidance given at the time of going public) and (ii) expanding its ecosystem of products and services, building 7 business verticals and currently having more than 100 products. During this period, the company, which was never a fan of the philosophy of accumulating losses and finding a way to deliver profits later, grew as much as possible while keeping its results close to zero.




Inter integrated business model Source: Inter Regarding the next steps, Inter has already announced that it intends to enter two more new sectors, that it will launch Inter Ventures to invest in other fintechs and its plans are to make new acquisitions, increase its penetration in the American market and enter new countries in the Americas and Europe. Over the next 5 years, Inter intends to continue growing at an accelerated pace, but placing more emphasis on engagement, base profitability, operational leverage and increased use of capital. These initiatives will result in increased efficiency and profits. The company's objectives for 2027 are (i) to reach 60 million customers, (ii) to achieve an efficiency ratio of 30% and (iii) to deliver a return on equity (ROE) of 30%. In the same period, the company expects to reach a credit portfolio of R$100 billion (R$27 billion currently) and deliver a profit of R$5 billion.