XP Inc. (XP): BCG Matrix [Dec-2025 Updated]

You're looking at XP Inc.'s shifting growth engine, so here is the BCG analysis mapping where capital is best deployed in late 2025. Honestly, the picture shows a classic tension: the Core Retail segment is printing cash, hitting a record R$1.3 billion in Net Income, but the real momentum is in the Stars, where Corporate & Issuer Services is driving 32% growth. Still, we have flat Institutional revenue acting like a Dog, while high-potential areas like Cards and new products-which grew 24%-are burning significant SG&A to fight for share as Question Marks. Check out the full breakdown below to see which engine needs fuel and which one you should just let run.

Background of XP Inc. (XP)

XP Inc. (XP) operates as a leading, technology-driven platform in Brazil, providing trusted, low-fee financial products and services to a broad client base. The company's core mission is to disintermediate the traditional financial institutions by democratizing access to a wider range of services, educating new investor classes, and developing empowering technology applications. This focus has positioned XP Inc. as a significant player in the country's financial digitalization trend.

XP Inc.'s offerings are split into two main areas: financial advisory services and an open financial product platform. The advisory segment serves retail, high-net-worth, international, corporate, and institutional clients. The platform gives access to over 800 investment products, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, and real-estate investment funds (REITs) from XP and its partners.

The company has shown strong profitability metrics through the first half of 2025. For the second quarter of 2025, XP Inc. reported a record net income of R$1.321 billion, marking an 18% year-over-year increase. This performance resulted in a net margin of 29.7% and a return on equity (ROE) of 24.4% for that quarter. Total client assets under management and administration grew to R$1.9 trillion by the end of Q2 2025, which was a 17% increase compared to the prior year.

A key strategic move involves transitioning toward a fee-based revenue model, which global peers favor for long-term stability. As of Q2 2025, 5% of total client assets were under fee-based arrangements, with management setting a target to reach 7%-8% in the coming years. Furthermore, diversification through cross-sell verticals-like credit cards and insurance-is accelerating; these new products generated $256 million in revenue in Q2 2025, representing a 146% year-over-year jump. Specifically, life insurance written premiums surged 45% year-over-year in that period.

Financially, XP Inc. maintains a robust capital structure, evidenced by a Common Equity Tier 1 (CET1) capital ratio of 18.5%, which is comfortably above the Brazilian sector average of 12%. Management reaffirmed its full-year revenue growth target of approximately 10% for 2025 and is aiming for an average of BRL 20 billion in retail net new money per quarter. To support shareholder returns, the company is executing a BRL 1 billion share buyback program.

XP Inc. (XP) - BCG Matrix: Stars

You're looking at the Stars quadrant, where XP Inc.'s business units are showing high market share in what are clearly growing markets. These are the leaders right now, but they still soak up a lot of cash to maintain that growth trajectory. If XP Inc. keeps this momentum until the market growth naturally slows, these units are set to become the next generation of Cash Cows. This is where the strategy dictates we invest heavily.

The growth story in Q3 2025 was undeniably led by the Corporate & Issuer Services (C&IS) segment. This unit saw its revenue surge by an impressive 32% year-over-year, hitting R$729 million for the quarter. Also showing powerful expansion is the Expanded Loan Portfolio, which grew 33% year-over-year to reach R$67 billion as of Q3 2025. These figures defintely signal high-growth market positioning.

Here's a quick look at the scale of these high-growth drivers as of the third quarter of 2025:

Investment banking, which is essentially what the C&IS segment represents for XP Inc., is the main incremental growth driver here, acting as a high-margin engine. This is not just about volume; it's about the quality of the revenue. For instance, the Corporate division within C&IS delivered solid growth, with revenues increasing 77% year-over-year to R$406 million in Q3 2025. This segment is becoming a co-pilot for the whole company, providing reliable, sticky revenue streams.

The strength in these areas supports XP Inc.'s overall financial health, even as the core retail side faces margin pressure from the high Selic rate environment. You can see this resilience in the record bottom line:

• Net Income reached a record R$1.33 billion in Q3 2025.
• Net Income grew 12% year-over-year.
• The company maintains a strong BIS Capital Ratio of 21.2% as of Q3 2025.
• XP Inc. holds a dominant market position in local broker-dealer activities, a key indicator of high relative market share.

XP Inc. (XP) - BCG Matrix: Cash Cows

You're looking at the core engine of XP Inc., the business unit that reliably funds everything else. In the BCG framework, this is the Cash Cow: high market share in a mature space, printing cash flow with minimal new investment needed for growth.

The Core Retail segment is definitely that engine for XP Inc. In Q3 2025, this segment was responsible for generating approximately 74.95% of the total gross revenue, which hit R$4.942 billion for the quarter. That scale is what gives you the stability you want to see in a market leader.

The sheer size of the asset base ensures a steady stream of fees, even if the market growth slows down a bit. Total Client Assets reached R$1.425 trillion as of Q3 2025, marking a solid 12% year-over-year increase. That growth, driven by both net inflows and market appreciation, secures the fee base for the foreseeable future.

Here's a quick look at the core numbers supporting this cash generation:

This segment's high profitability is what we expect from a market leader that has already won the initial land grab. Q3 2025 Net Income hit a record R$1.33 billion, showing management is effectively milking the gains while keeping costs disciplined. You don't need massive promotion spending here; you need efficiency.

The strategy for a Cash Cow like this pivots to infrastructure and efficiency, not aggressive market share battles. Investments here aim to lower the cost to serve, which directly boosts the cash flow you extract. The efficiency ratio target around 34.7% shows they are focused on this leverage play. Anyway, the goal is to maintain the current level of productivity or 'milk' the gains passively.

The stability provided by the Retail segment allows for other strategic moves, like funding Question Marks or servicing corporate debt. Key supporting metrics that underscore this stability include:

• Net Income reached a record R$1.33 billion.
• Total Client Assets stood at R$1.425 trillion.
• Retail Net Inflow was R$20 billion in the quarter.
• The company announced a dividend of R$500 million.
• The BIS capital ratio remains high at 21.2%.

The focus is on maintaining that high market share through service quality, not expensive advertising wars. If onboarding takes 14+ days, churn risk rises, so infrastructure improvements help maintain that competitive advantage.

XP Inc. (XP) - BCG Matrix: Dogs

You're looking at the parts of XP Inc. (XP) business that aren't showing much zip, the ones stuck in low-growth territory with a small slice of the market. Honestly, these units are where capital can get trapped if you aren't careful. For the Institutional segment, the story in Q3 2025 was one of stagnation. Revenue held steady at R$340 million year-over-year (YoY), which is effectively flat growth. This suggests that while the segment isn't burning cash, it certainly isn't driving the top-line acceleration you see elsewhere in the business. It's a unit that requires minimal new investment, but the relative returns just aren't there right now.

The pressure on core fee generation is definitely visible when you look at the Retail Take Rate. The annualized Retail Take Rate dipped to 1.24% in Q3 2025, marking a 9 bps drop YoY. This compression is a clear signal of fee pressure, often caused by clients shifting assets toward lower-margin, highly liquid products, which is a direct result of the challenging macro backdrop. Here's a quick look at how the main retail revenue components performed in that quarter:

The high Selic rate environment, sitting at 15%, is fundamentally changing client behavior, which directly hurts traditional core lines. You see this clearly in the revenue figures for Equities, which actually shrank by 1% YoY, coming in at R$1,043 million in Q3 2025. Fixed Income, which had been a relative bright spot earlier, also saw a 2% YoY decline to R$921 million as clients favored daily liquidity instruments over longer-duration assets. These are the classic characteristics of a Dog: low growth in a mature or constrained market, and revenue streams that are either flat or shrinking.

When managing these units, the focus shifts to minimizing cash consumption and maximizing any residual value, as expensive turn-around plans rarely pay off. For XP Inc. (XP), the implications for these Dog-like areas are:

• Institutional revenue was flat YoY at R$340 million in Q3 2025.
• Equities revenue declined 1% YoY to R$1,043 million.
• Retail take-rate pressure is evident at 1.24%.
• The high 15% Selic rate is driving mix toward low-margin products.
• These segments require minimal investment but yield low relative returns.

Finance: draft 13-week cash view by Friday.

XP Inc. (XP) - BCG Matrix: Question Marks

You're looking at business units that are burning cash now but have the potential to become future market leaders. These are the high-growth markets where XP Inc. is still fighting for a meaningful slice of the pie. Honestly, it's where the strategic bets are being placed.

The new product suite, encompassing FX, Global, and Digital Accounts, is showing serious momentum. Revenue for these initiatives grew by 24% YoY, hitting R$250 million. That kind of top-line acceleration in new areas is exactly what you want to see from a Question Mark, but it's not yet translating into dominant market share, which is why they remain in this quadrant.

Here's a quick look at the financial commitment and growth metrics for these high-potential areas as of Q3 2025:

The Life Insurance segment, specifically XPV&P, is expanding its premium base aggressively, with Gross Written Premiums growing 25% YoY. Still, the market share, as reported by Susep for individual PGBL and VGBL, remains stable at only 5.0%. This stable share in a growing market suggests the product is gaining traction but hasn't yet achieved the critical mass needed to shift out of the Question Mark zone. It needs a big push to secure more shelf space.

The push for scale is evident in the card business. Total Active Cards reached 1.5 million in Q3 2025, representing an 11% YoY increase. This is a classic low-share play against established incumbents in the payments space. You're spending to acquire users and build out the ecosystem, hoping that scale eventually drives down the cost-to-serve and increases cross-selling revenue.

To fuel this necessary market share grab, XP Inc. is making substantial upfront expenditures. Selling, General & Administrative (SG&A) expenses totaled R$1.7 billion in Q3 2025, a 10% YoY increase. These high demands on cash flow are the defining feature of Question Marks; you invest heavily now to avoid becoming a Dog later. The decision point is clear: either invest heavily to convert these units into Stars, or divest them if the path to market leadership looks too costly or too slow. You've got to decide which ones get the next big funding round by year-end.