XP take rate compression continued in the second quarter, reported on Monday, August 17, from São Paulo. In total, client assets held at R$1.535 trillion, up 12 percent year on year and flat sequentially. Annualised retail take rate came in at 1.20 percent, down five basis points from a year earlier, though up two points from the first quarter.

Meanwhile, the headline financials look healthy. Net revenue rose 9 percent to R$4.9 billion, and adjusted net income gained 5 percent to R$1.4 billion. Earnings before tax expanded 15 percent, with margin reaching 32 percent. Adjusted diluted earnings per share of R$2.67 beat consensus.

The XP Take Rate Slide Runs Four Years

Multi-year is the right description of the XP take rate trend, and the series proves it. Retail take rate ran 1.40 percent in the second quarter of 2022. Then came 1.30 percent in 2023, 1.29 percent in 2024, 1.25 percent in 2025, and 1.20 percent now. The first quarter of this year touched 1.18 percent.

So that is twenty basis points of erosion across four years. The sequential uptick this quarter reads as noise inside a clear direction. Fixed income revenue fell 16 percent year on year to R$833 million, which is where the XP take rate pressure shows most plainly.

Notably, two forces sit behind that decline rather than one. Clients shifted heavily toward daily-liquidity products carrying lower take rates, and the business also absorbed mark-to-market effects. So product mix explains part of it and market conditions explain the rest.

The XP Take Rate Story Is Not in the 188 Percent Headline

Here the most-quoted number needs unpacking. Total net inflow reached R$28 billion against R$10 billion a year earlier. That gap produces the 188 percent figure.

However, look at the split. Retail net inflow was R$20 billion, up 28 percent year on year and 7 percent sequentially. Corporate and institutional flows contributed R$8 billion, reversing outflows seen in recent quarters. That reversal drives most of the gap between 28 percent and 188 percent.

That distinction matters, because retail assets carry the XP take rate under discussion. Retail gathering grew respectably. It did not grow 188 percent, and headlines built on the total figure overstate momentum in the business where fee compression is happening.

XP Take Rate Pressure Meets a Cross-Sell Answer

Diversification is doing real work against XP take rate erosion. Wholesale banking revenue climbed 32 percent to R$1.175 billion, with corporate revenue up 117 percent to R$606 million. The expanded loan portfolio reached R$78 billion, up 16 percent.

Notably, retail adjacencies grew faster than the core. Credit revenue rose 27 percent, insurance 23 percent and cards 16 percent. The funds platform added 23 percent to R$418 million. Equities remained the largest retail contributor at R$1.138 billion.

Consequently, XP is managing more money for a thinner slice and selling other products around it. That is a coherent response to structural fee compression rather than a reversal of it. Notably, adjusted net margin still narrowed 103 basis points year on year to 28.3 percent, even as EBT margin expanded. Different lines of the same income statement are moving in opposite directions.

What the XP Take Rate Trend Means Next

One watch item is already answered. Active clients reached 4.77 million, up 1 percent. Total advisors reached 18,400, also up 1 percent. Both are effectively flat while assets grew 12 percent, so growth is already almost entirely wallet share rather than market share. Headcount meanwhile rose 13 percent to 8,491.

Capital policy reflects the same reading. In the first half, XP returned R$2.5 billion to shareholders, split between R$1.5 billion in dividends and R$1.0 billion in repurchases. Management reaffirmed a target of distributing more than half of net income for the full year. A fresh R$1 billion buyback programme remains open. BIS ratio finished at 20.3 percent with common equity tier 1 at 17.1 percent.

From here, watch whether the XP take rate stabilises near 1.20 percent or resumes falling. Watch too whether fixed income recovers once mark-to-market effects wash through, since that would separate cyclical drag from permanent mix shift. Shares slipped after hours despite the earnings beat. That suggests the market is reading the same tension.

For related reading, our analysis of Revolut wealth management covers platform wealth economics. Our piece on retail investing support examines the advice layer, while our look at the true cost of capital covers lending margins. XP filed its full results with the SEC and distributed them through BusinessWire. Investing.com covered the presentation detail.

Fintechbits covers brokerage platforms, wealth management and Latin American fintech. Nothing here constitutes financial or investment advice. All analysis represents the editorial views of Fintechbits.