← All companies ← PAC Manual PAM → ← OOMA IT Services & Consulting PEGA →
PAGS, PagSeguro Digital Ltd. Class A
A software business, earning high margins on code once it is written.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Gross margin has run about 48% and operating margin about 32% through the cycle, a solid spread between what it charges and what the product costs to make. That margin has stayed fairly steady relative to where it runs (22%–33% over the years), so unit growth and cost discipline, not a moving line, are the lever. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2015–2024
realized figures from each filing · older years to the left| 2015’15 | 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | TTMTTMDec 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| R$675M | R$1.1B | R$2.5B | R$4.3B | R$5.7B | R$6.8B | R$10.4B | R$15.3B | R$15.9B | R$18.8B | R$18.8B | RevenueRevenue |
| R$292M | R$515M | R$1.2B | R$2.2B | R$2.9B | R$3.0B | R$4.7B | R$7.9B | R$7.8B | — | R$10.7B | Gross profitGross prof. |
| 43% | 45% | 48% | 51% | 52% | 45% | 45% | 51% | 49% | — | 57% | Gross marginGross mgn |
| — | — | — | — | — | R$1.9B | R$2.3B | R$4.9B | R$5.3B | R$6.1B | R$6.1B | Operating incomeOp. inc. |
| — | — | — | — | — | 27.6% | 21.8% | 32.0% | 33.1% | 32.6% | 32.6% | Operating marginOp. mgn |
| R$35M | R$127M | R$479M | R$909M | R$1.4B | R$1.3B | R$1.2B | R$1.5B | R$1.7B | R$2.1B | R$2.1B | Net incomeNet inc. |
| — | 18% | 30% | 25% | 29% | 27% | 22% | 14% | 18% | 11% | 11% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| R$48M | R$77M | R$454M | (R$1.8B) | R$489M | R$2.2B | R$898M | R$3.5B | R$4.0B | (R$3.4B) | (R$3.4B) | Operating cash flowOp. cash |
| R$19M | R$31M | R$52M | R$95M | R$128M | R$376M | R$769M | R$1.1B | R$1.4B | R$1.6B | R$1.6B | DepreciationDeprec. |
| (R$6M) | (R$81M) | (R$77M) | (R$2.8B) | (R$1.0B) | R$485M | (R$1.0B) | R$914M | R$990M | (R$7.1B) | (R$7.1B) | Working capital & otherWC & other |
| R$3M | R$2M | R$8M | R$62M | R$333M | R$1.5B | R$972M | R$1.1B | R$952M | R$1.1B | R$1.1B | CapexCapex |
| 0.5% | 0.2% | 0.3% | 1.4% | 5.8% | 22.3% | 9.3% | 7.1% | 6.0% | 6.0% | 6.0% | Capex / revenueCapex/rev |
| R$44M | R$75M | R$446M | (R$1.8B) | R$360M | R$1.8B | R$129M | R$2.5B | R$3.0B | (R$4.5B) | (R$4.5B) | Owner earningsOwner earn. |
| 6.6% | 6.6% | 17.7% | −42.1% | 6.3% | 26.1% | 1.2% | 16.0% | 19.1% | −24.2% | −24.2% | Owner earnings marginOE mgn |
| R$44M | R$75M | R$446M | (R$1.8B) | R$155M | R$630M | (R$74M) | R$2.5B | R$3.0B | (R$4.5B) | (R$4.5B) | Free cash flowFCF |
| 6.6% | 6.6% | 17.7% | −42.1% | 2.7% | 9.2% | −0.7% | 16.0% | 19.1% | −24.2% | −24.2% | Free cash flow marginFCF mgn |
| R$174K | — | R$239M | — | — | — | — | — | — | — | R$239M | Dividends paidDiv. paid |
| — | — | — | R$40M | R$2M | R$45M | R$258M | R$291M | R$399M | R$784M | — | BuybacksBuybacks |
| 8% | 20% | 55% | 14% | 17% | 14% | 11% | 13% | 12% | 14% | 20% | Return on equityROE |
| 8% | — | 28% | — | — | — | — | — | — | — | 18% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| R$7M | R$211M | R$277M | R$2.8B | R$2.8B | R$2.6B | R$2.6B | R$2.9B | R$3.7B | R$1.4B | R$1.4B | Cash & investmentsCash+inv |
| — | R$1.7B | R$3.5B | R$8.1B | R$10.5B | R$16.0B | R$23.4B | R$36.2B | R$41.8B | R$57.6B | R$41.8B | ReceivablesReceiv. |
| — | R$21M | R$62M | R$89M | R$62M | R$30M | R$50M | R$13M | R$34M | R$2M | R$2M | InventoryInvent. |
| — | R$62M | R$92M | R$165M | R$256M | R$336M | R$578M | R$449M | R$514M | R$663M | R$663M | Accounts payablePayables |
| — | R$1.7B | R$3.5B | R$8.0B | R$10.3B | R$15.7B | R$22.9B | R$35.8B | R$41.3B | R$57.0B | R$41.1B | Operating working capitalOper. WC |
| — | R$2.3B | R$4.0B | R$11.0B | R$13.5B | R$19.2B | R$26.7B | R$39.8B | R$48.7B | R$64.6B | R$64.6B | Current assetsCur. assets |
| — | R$1.7B | R$3.3B | R$4.7B | R$5.9B | R$11.6B | R$19.0B | R$29.7B | R$34.4B | R$42.7B | R$42.7B | Current liabilitiesCur. liab. |
| — | 1.3× | 1.2× | 2.3× | 2.3× | 1.7× | 1.4× | 1.3× | 1.4× | 1.5× | 1.5× | Current ratioCurr. ratio |
| — | R$5M | R$11M | R$67M | R$400M | R$1.8B | R$2.3B | R$2.5B | R$2.5B | R$2.6B | R$2.6B | Net PP&ENet PP&E |
| — | R$2.4B | R$4.2B | R$11.4B | R$14.6B | R$22.3B | R$31.1B | R$45.3B | R$55.1B | R$72.9B | R$72.9B | Total assetsAssets |
| — | — | — | — | — | 17.2× | 2.9× | 1.6× | 1.6× | 1.6× | 1.6× | Interest coverageInt. cov. |
| R$462M | R$627M | R$867M | R$6.6B | R$8.0B | R$9.3B | R$10.5B | R$11.8B | R$13.2B | R$14.7B | R$10.5B | Shareholders’ equityEquity |
| Per share | |||||||||||
| 262.29B | 262.29B | 262.29B | 317.65B | 328.17B | 329.29B | 330.31B | 327M | 322M | 316M | 327.89B | Shares out (diluted)Shares |
| R$0.00 | R$0.00 | R$0.01 | R$0.01 | R$0.02 | R$0.02 | R$0.03 | R$46.88 | R$49.56 | R$59.51 | R$0.06 | Revenue / shareRev/sh |
| R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$4.60 | R$5.14 | R$6.70 | R$0.01 | EPS (diluted)EPS |
| R$0.00 | R$0.00 | R$0.00 | R$-0.01 | R$0.00 | R$0.01 | R$0.00 | R$7.50 | R$9.47 | R$-14.39 | R$-0.01 | Owner earnings / shareOE/sh |
| R$0.00 | R$0.00 | R$0.00 | R$-0.01 | R$0.00 | R$0.00 | R$-0.00 | R$7.50 | R$9.47 | R$-14.39 | R$-0.01 | Free cash flow / shareFCF/sh |
| R$0.00 | — | R$0.00 | — | — | — | — | — | — | — | R$0.00 | Dividends / shareDiv/sh |
| R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$0.00 | R$3.35 | R$2.96 | R$3.58 | R$0.00 | Cap. spending / shareCapex/sh |
| R$0.00 | R$0.00 | R$0.00 | R$0.02 | R$0.02 | R$0.03 | R$0.03 | R$36.20 | R$41.14 | R$46.40 | R$0.03 | Book value / shareBVPS |
The diluted share count moved ×1/1009.78 into 2022 — shares retired, not a split the totals corroborate — and the per-share figures carry the counts as filed.
The diluted share count moved ×1037.31 into TTM — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +205.4%/yr | +409.2%/yr |
| EPS | +232.8%/yr | +337.8%/yr |
| Dividends / share | +3604.6%/yr (2-yr) | +3604.6%/yr (2-yr) |
| Capital spending / share | +304.8%/yr | +412.2%/yr |
| Book value / share | +209.9%/yr | +352.9%/yr |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2024 the business reported R$2.1B of profit but (R$4.5B) of owner earnings: R$6.7B less than the profit line, taken out by capital spending and the timing of cash.
| FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | |
|---|---|---|---|---|---|
| Reported net income | R$2.1B | R$1.7B | R$1.5B | R$1.2B | R$1.3B |
| Depreciation & amortizationnon-cash charge added back | +R$1.6B | +R$1.4B | +R$1.1B | +R$769M | +R$376M |
| Working capital & othertiming of cash in and out, other non-cash items | −R$7.1B | +R$990M | +R$914M | −R$1.0B | +R$485M |
| Cash from operations | (R$3.4B) | R$4.0B | R$3.5B | R$898M | R$2.2B |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −R$1.1B | −R$952M | −R$1.1B | −R$769M | −R$376M |
| Owner earnings | (R$4.5B) | R$3.0B | R$2.5B | R$129M | R$1.8B |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | — | — | — | −R$204M | −R$1.1B |
| Free cash flow | (R$4.5B) | R$3.0B | R$2.5B | (R$74M) | R$630M |
| Owner-earnings marginowner earnings ÷ revenue | -24% | 19% | 16% | 1% | 26% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Much of fiscal 2024's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- ThinOperating income R$6.1B ÷ interest expense R$3.7B
What this means
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
- Debt under-captured — leverage unknown, not low
What this means
This company pays far more interest than its tagged debt implies (the rest sits under segment dimensions the data source strips), so its net cash or net debt cannot be read honestly: the gap is unknown, not zero, and 'net cash' here would be exactly the fiction the figure is meant to prevent. Judge it on the record and owner earnings instead.
- Long (60+ days)DSO 810 + DIO 0 − DPO 30 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Debt under-capturedIndustry peers: median 5%
What this means
This company's interest bill implies far more debt than its filings tag at the consolidated level (the rest sits under segment dimensions the data source strips), so invested capital, and the return on it, cannot be read honestly. Judge this one on Owner Earnings and the record instead.
- Solid through the cycle10-yr median margin, range -42%–26%; latest (R$4.5B) = operating cash (R$3.4B) − maintenance capex R$1.1BIndustry peers: median 10%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -24% of revenue this year, a 7% median across 10 years.
- Are earnings backed by cash? -1.61×Thinly cash-backedCash from ops (R$3.4B) ÷ net income R$2.1B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- No surplus to allocate
What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 0.71×HarvestingCapex R$1.1B ÷ depreciation R$1.6B
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · R$18.8B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.51×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt —Debt ≤ working capital · —
What this means
The filings tag only a fraction of the debt this company's interest bill implies (much of it sits under segment dimensions the data source strips), so this test can't be run honestly.
- Earnings stability PassA profit every year (10-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 2 of 9 tagged yrs
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design. One year of this record is untagged in the data, with the dividend paid on both sides; a lone missing tag is treated as unknown, not a suspension, so the streak is judged on the tagged years.
- Earnings growth PassEarnings +33% over the record · +723%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are R$5.56/share (latest year R$6.70), the averaged base the calculator's gate runs on, and book value is R$33.22/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2015–2024
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 10 of 10
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Operating margin 25% → 33% (2-yr avg ends)
In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.
What this means
Through the cycle the operating margin widened — about 25% early to 33% lately, median 32% — pricing power intact or improving.
- Worst year 2021 · 21.8% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2024Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investmentsR$1.4B
- ReceivablesR$41.8B
- InventoryR$2M
- Other current assetsR$21.4B
- Debt due within a yearR$4.5B
- Accounts payableR$663M
- Other current liabilitiesR$37.6B
From the company's latest filing.
How the cash was used, 2015–2024
Over the record, the business generated R$6.5B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- ReinvestedR$6.1B · 94%
- DividendsR$239M · 4%
- BuybacksR$1.8B · 28%
- Returned to ownersR$2.1B
105% of the owner earnings the business produced over the span, R$239M as dividends and R$1.8B as buybacks.
- Source of funding−R$1.7B
Reinvestment and shareholder returns ran R$1.7B beyond the operating cash the business generated, so the gap was financed off the balance sheet.
- Average price paid for buybacks—
Buybacks ran R$1.8B over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count25.0%
The diluted count rose from 262289M to 327890M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend recordR$0.00/sh
Paid in 2 of the years on record, the per-share dividend growing about 137143% a year. It was never cut over the span.
- Return on what it retained2%
Of the earnings it kept rather than paid out (R$8.6B over the span), annual owner earnings (first three years vs last three) grew R$129M, so each retained R$1 added about 0.02 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Peers, IT Services & Consulting
The same industry, side by side on owner economics and what the growth costs. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record | Sales & marketinglatest FY | Stock paylatest FY |
|---|---|---|---|---|---|---|---|
| VRSKVerisk Analytics Inc. | $3.1B | 65% | 40.3% | 14% | 32% | — | 1.8% |
| TASKTaskUs Inc. | $1.2B | — | 10.2% | 10% | 8% | — | 2.5% |
| SSTKShutterstock Inc. | $990M | 59% | 7.7% | 24% | 13% | 22.3% | 6.2% |
| LZLegalZoom.com Inc. | $756M | 66% | 3.3% | — | 15% | 34.6% | 15.0% |
| TCXTucows Inc. | $390M | 24% | -0.2% | 0% | 10% | 12.4% | 1.8% |
| INODInnodata Inc. | $252M | 39%3y | -0.8% | -1% | 3% | — | 4.4% |
| WKEYWISeKey International Holding Ltd | $19M | 44% | -90.5% | -203%4y | -73% | — | — |
| PAGSPagSeguro Digital Ltd. Class A | as filed: R$18.8B | 48% | 32.0% | — | 7% | — | — |
| Group median | — | 48% | 5.5% | — | 9% | — | — |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. PagSeguro Digital Ltd. Class A reports in BRL, and every figure here (owner earnings, book value, the share count) is on that BRL, ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share in BRL. A US ADR price in dollars bundles the ADR-to-ordinary ratio and the exchange rate, so it will not reconcile with these figures and would throw the multiple off.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what PagSeguro Digital Ltd. Class A has delivered.
PagSeguro Digital Ltd. Class A’s latest year shows negative owner earnings, below the record’s own through-cycle owner earnings. So the tool opens on the through-cycle base, the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.
Through the cycle, PagSeguro Digital Ltd. Class A earns about R$1.2B on its 6.6% median owner-earnings margin. This year’s −24.2% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.
—
9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner earnings (R$4.5B) on 316M shares outstanding (a weighted average, the only count this filer tags); net debt R$3.1B. The if-converted diluted count is 327890M, 103631% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits off the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← PAC its page in the Manual PAM →
Industry order: ← OOMA the IT Services & Consulting chapter PEGA →