B3 SA Brasil Bolsa Balcao
BOVESPA:B3SA3
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B3 SA Brasil Bolsa Balcao
Earnings Call Analysis
Q2-2024 Analysis
B3 SA Brasil Bolsa Balcao
In the second quarter of 2024, B3 experienced a notable 10% increase in total revenues. This growth was largely driven by the performance of its diversified business model, which mitigated the challenges faced by the cash equities market. Listed derivatives revenues saw a 10% growth due to a more volatile interest rate environment and pricing adjustments. The OTC market performed well, particularly in fixed income, with a 16% increase in revenues driven by a robust local debt capital market.
Despite the overall growth, B3's equity segment faced difficulties, recording an 11% decrease in the average daily traded volume (ADTV). However, products like BDRs, ETFs, and real estate investment funds, which grew to account for 13% of the ADTV from 10% a year earlier, helped stabilize overall volumes. The ADTV remained stable between BRL 24 billion and BRL 26 billion, reflecting an environment without significant short-term triggers for volume increase.
B3's infrastructure for finance saw a 34% growth, benefiting from a positive scenario in the auto industry and vehicle financing activity, along with the Desenrola program's impact. The Technology, Data, and Services division also experienced an 11% growth, augmented by the integration of Neurotech and higher OTC platform revenues. In terms of operational performance, listed derivatives reached an all-time record with an average daily volume (ADV) of 8.2 million contracts, a 20% increase from the previous year.
Strategically, B3 achieved significant milestones including the successful launch of bitcoin futures, surpassing an average daily volume of 100,000 contracts in July. They also implemented digital portability for retail investors and facilitated the migration of a trading venue from the U.S. to Brazil, underscoring the strength of local capital markets. Additionally, B3 introduced new indexes linked to Ibovespa, expanding their product offerings.
B3's robust revenue performance and cost discipline led to an 8% increase in recurring EBITDA, amounting to BRL 1.8 billion, with a recurring EBITDA margin of over 73%. Despite higher financial expenses due to early debt repayment, the company returned BRL 1.7 billion to shareholders through share buybacks and dividends, totaling BRL 2.3 billion in distributions for the first half of the year. The board approved increasing the share buyback program limit, reflecting confidence in the company's share price.
Looking ahead, B3 aims to maintain cost discipline, targeting the lower end of its expense guidance for the year. Excluding nonrecurring effects, such as the integration of Neurotech and the Desenrola program, expenses were managed below inflation rates. B3 remains committed to leveraging its diversified business model to sustain and propel future growth, even amidst a challenging macroeconomic environment.
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Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings results for the second quarter of 2024. [Operator Instructions] As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded.
I would now like to turn the conference over to Andre Milanez, B3's CFO, who will be joined by Fernando Campos, Investor Relations Associate Director.
Please Andre, you may proceed.
Thank you very much. Good morning, everyone, and thanks for joining our call for the second quarter results, a quarter that reinforces the efficiency of our business model, where we saw a 10% growth in our total revenues, double-digit growth in all business lines offsetting the challenging scenario that we still suffer for the cash equities market.
I think I'm going to start with a few highlights in terms of the performance of this quarter, the first one, the listed derivative segment, where we saw a 10% growth in revenue, reflecting a more volatile scenario in terms of interest rate curves, but also reflecting some pricing adjustments that we've introduced last year, which have helped to increase volumes, especially in the derivatives involving Brazilian interest rate contracts.
Another highlight, I think, goes to the OTC market, to the good performance that we saw on the fixed income market, where we saw a 16% growth in revenues, mainly driven by the good moment that we are seeing in terms of the local DCM market in Brazil. In equities, the 11% decrease in the average daily traded volume, as we discuss, still reflects this challenging macro scenario, even though that was partially offset by the good performance that we saw in the derivatives of indexes.
I think here it is worth highlighting the good performance that we have seen on other cash instruments other than equities, such as BDRs, ETFs and real estate investment funds, which, during this quarter, accounted for 13% of the ADTV compared to a percentage of 10% in the second quarter of '23, demonstrating the relevance of our product development agenda and its importance in helping to stabilize, to maintain the ADTV around the level that we are seeing, which has been the case for the last 6 months.
And we are seeing that ADTV almost stabilizing around that level of BRL 24 billion, BRL 26 billion. So I think here, even though it doesn't seem that we're going to see any short-term trigger to drive this volumes much, much higher, at least, we are starting to see these volumes stabilizing at this kind of level, even though we are still facing this more challenging scenario for equities.
And I guess in other segments, the infrastructure for finance posted a 34% growth, reflecting a more positive scenario for the auto industry and for vehicle financing activity as well as the impact of the Desenrola program, which ended in last May. Also in Technology, Data and Services, we saw a growth of 11% with the consolidation of Neurotech and higher revenues coming from our OTC platforms.
Fernando will talk now about more the operational performance and I'll come back later to discuss a little bit about other topics as well.
Thank you, Andre. Good morning, all. Starting with the cash equity segment, we saw ADTV of BRL 24 billion in cash equities, which was 11% decrease when you compare to the second quarter '23, but it was almost stable to the first quarter of '24 and pretty much in line with Andres' comment on the segment. The turnover was 135%, which was lower than the 161% that we saw in the second quarter last year, but higher than the 128% in the first quarter '24.
Regarding the fees, the increase that we saw compared to last year was due to the lower non-tariff volumes, mainly exercise of options and less -- the lower participation of market makers and liquidity providers in the volume. A highlight in the segment, as Andre mentioned, was the 18% growth in the ADV of indexes contracts, which helped to offset the lower cash equity volumes.
Going to the listed derivatives, which was the highlight of the quarter, we saw all-time record with a ADV of 8.2 million contracts, which was a 20% growth compared to second quarter last year, reflecting mainly the 31% growth in the BRL interest rate ADV. RPC decrease in -- also influenced by the BRL interest rate contracts, mainly due to the higher volume and higher concentration of contracts with shorter maturities and the adjustments in price, as Andre mentioned.
OTC, we saw positive performance in all lines, starting with the fixed income. The outstanding balance of bank funding instruments grew by 26% compared to the second quarter last year. But in here, obviously, we have the time deposits, but it's worth noting the growth in RDB, CPR and LCI as well.
And here is worth highlighting that despite the hot corporate debt market that we are seeing recently, we had a relevant amount of leasing debentures maturing at the end of 2023, which impacted the outstanding balance comparison of this product. In our OTC derivatives, issuances grew by 20% and the outstanding balance grew by 14% compared to the second quarter '23.
In Infrastructure for Finance, the improvement in the auto industry, in the credit market for this segment, it reflected on the number of financed vehicles growing by 26% compared to the second quarter '23. And finally, in Technology, Data and Services, I think here is worth highlighting the growth in OTC access, growth of 7% compared to the second quarter '23 and that this grows with the funding industry.
And it's also worth noting that the data revenue includes Neurotech revenue, which was BRL 32 million this quarter, when compared to the BRL 12 million that we saw in the second quarter last year, which was the quarter that Neurotech was incorporated only, but was incorporated in May.
So I'm returning the call to Andre to talk about the other highlights and some strategic advances.
Thanks, Fernando. And I think, as we have been saying, I think that has been a quarter where we have seen the positive impacts of this diversification and this diversified business model and where the other parts of the business were able to more than compensate. The only segment that didn't perform that well this quarter, which was equity. So diversification, finally demonstrating that it pays off and reinforcing what we have always been discussing with you that B3 is much more than just an equities exchange.
I think a few remarks in other areas before we move on to the Q&A. I think on expenses, we have been maintaining our cost discipline here and as we said, targeting towards the lower end of our guidance for this year and excluding some nonrecurring effects that we had on the quarter or at least adjusting the comparison basis, like the impacts of the consolidation of Neurotech, the Desenrola program and the end of the amortization of intangibles from the merger between BM&FBovespa and Cetip, the company would have grown expenses below the inflation for the period.
As a result of that good performance on the revenues this quarter and the cost discipline that we've seen on the expense side, our recurring EBITDA advanced 8%. We closed the quarter with a recurring EBITDA of BRL 1.8 billion and a recurring EBITDA margin of slightly above 73%.
On the net income, the story was similar. The growth slightly lower than the EBITDA growth. And the main reason was the impact of higher financial expenses during this quarter as a result of the prepayment, the early repayment of debt, the liability management exercise that we've conducted during the quarter. Even though that was positive from a net present value standpoint, we had some impact, some upfront impacts on the P&L as a result of the early repayment of the debt.
In relation to our distribution to shareholders in relation to the 2024 calendar year, we bought back shares in the total amount of BRL 1.3 billion, which, combined with dividends and interest of capital declared during the period totaled BRL 1.7 billion returned to the shareholders in the period. If we take the first 6 months of the year, the total distributions to shareholders amounted to BRL 2.3 billion, with BRL 1.5 billion in shares that were bought back, which represents roughly 2% of the company's share capital.
And recently, I think on that topic, yesterday, our Board of Directors approved an amendment to the share buyback program, increasing the limit of shares to be acquired from 230 million shares to 340 million shares and that's an indication in terms of our view about the current level of the share price.
Finally, I think there have been some strategic developments that I would like to comment on. The first one is the bitcoin future. So as you know, we've launched this product recently. It has been so far a very successful product.
And in July, we have already exceeded the average daily volume of more than 100,000 contracts. In our agenda of improving our customers' experience and reducing friction in this case, particularly for retail investors, we have implemented the digital portability of investments in our investor area.
We also had an important event, which was the migration of trading venue from a company that was previously listed in the U.S. to Brazil to our venue, which I think reinforces our view and the position of our local capital markets here.
And on data, I think we had some important developments during the quarter. We've announced the creation of 3 new indexes that are linked to the Ibovespa. And I think the main highlight here goes to the Ibovespa B3 BR plus, which will include Brazilian companies' BDRs, BDRs of companies that are listed abroad that will meet the methodology. And I think that's an important advancement in terms of our agenda of new products and indices for the market.
And I think those were my main comments. I would like now to open the floor for questions-and-answers. Thank you.
[Operator Instructions] Our first question comes from Mario Pierry from Bank of America.
Congrats on the quarter. Andre, I wanted to focus a little bit more like on the long term here. Like when we look at your CapEx, right, you're growing CapEx basically in line with inflation. CapEx as a percentage of revenues is running at about 3%. However, right, we keep hearing about potential competitive pressures that you're seeing in several products.
So my question has to do with the sources of this CapEx or basically, where are you investing? How much of this is just to maintain the operations? And how much do you think are you spending like on growing or diversifying the business? And how do you see CapEx evolving over the next couple of years?
Thanks, Mario, for the question. Look, I think our -- first, our CapEx today, as we have been discussing with you guys, is primarily composed of hardware, so like servers, equipments and these sort of things. A lot of our software development for a number of reasons has been expensed and we've discussed that particularly between '20 and '21, the transition between that year.
So there is a lot of, let's say, expenses there are affecting our P&L, which are, let's say, investment in nature. So I think it is worth for you guys to understand that there is a good chunk of investments that are made in product development, in maintaining the existing products. They are not being capitalized. They are being expensed. So today, most of the CapEx is composed by third-party software -- software acquired from third parties and hardware, okay?
Now pretty much all of that investment goes towards the evolution of our platforms. So evolving the technology and ensuring that our technology is up to date and up to standards, it's something that we do continuously. We are not seeing any needs of -- any need for a significant investment in terms of infrastructure over the next 5 years.
And we have already been investing a lot in evolving our platform, but on a more gradual and continuously way. And a lot of the investments, as you know, has been directed towards development of new products and new initiatives, which we believe are key to ensure that we are not leaving any gap or any space open that could be potentially explored by a new entrant.
So reality is that we have already been preparing ourselves for a scenario where we would face more competitive pressure. And it was for that reason that we have already been investing in the evolution of our platforms, of our technology and in a very robust and extensive road map of new products and new services that we have been offering and that we will continue to do so over the next few years.
So overall message, so far, I don't see any reasons for us to change that significantly for the next -- for the short and medium term. So we do not today identify the need of increasing significantly this level of investments as a result of this scenario.
That's very clear. And just another -- just a second question is on your -- you became a lot more active in buying back your shares, right? You said you bought back BRL 1.3 billion. Can you disclose the average price that you bought these shares at?
I think that's already disclosed in our financials. I think it was slightly above the average price, was slightly above BRL 11.
BRL 11, perfect.
Our next question comes from Tiago Binsfeld from Goldman Sachs.
Congrats on the good results. A couple of questions as well. First, on your equities ADTV. You mentioned that you see a stabilization in trends. So if you could expand on that idea and expectation from here, is this a normalized ADTV for a challenging scenario? And what could be the mid- to long-term initiatives that you can undertake to improve overall liquidity in the market? And the second question is a short one. There was a reverse of provisions, a bit higher, close to BRL 50 million this quarter. Any reason behind this? And what is the expectation for the next quarters?
Thanks, Tiago. I'll start with the one on the ADTV. That's always a tricky question, right? But we have seen this level of activity, it has been pretty stable over the last 6 months, a few months with a little bit more activity here and there, another month slightly below that.
But with the average daily traded volume hovering around BRL 24 billion, BRL 26 billion mark. So we are starting to see that this could potentially be a trend. So as I said, even though -- in the short term, we might not see any significant trigger to move that or to increase that significantly, maybe we are starting to see that there is no much room for further deterioration. But I think the next few months are going to be important to confirm that trend.
And I think on your question, I think what we are seeing today is already the result of some of the answers that we have been giving in order to try to increase activity and liquidity and the participation that these new products, which have different dynamics have been playing in helping to stabilize this activity is one of the examples of things that we can do in order to try to diversify further and incentivize activity in the market.
So more products and that's an agenda that we will continue to work on in the next few months or throughout the year in launching new products and services, which we believe is an important tool for that in the market.
Now in relation to the revenues, I think there's nothing specific. I think there were a few provisions that were reversed against revenue since they were -- they relate to provisions that were made in prior years. I think one of them was the provision for profit sharing for bonuses.
And the explanation is that we have estimates that are made at the end of the year and the actual payment occurs at the end of the first quarter. So there was a difference, not all of that reversal relates to the profit sharing provision but part of that. So an adjustment that was normal, but we do not expect anything of that nature for the following quarters.
Next question comes from Yuri Fernandes from JPMorgan.
Congrats on the quarter. I have a question on the derivatives, right? It was, I think, one of the good surprise of the quarter, the revenues. We do like to change some of the pricing tables there on the BRL and I don't think like the RPC decrease is a surprise, but the volumes, they were super strong. So my question is how sustainable is this kind of ADV?
So I'm trying to -- I know it's not very easy to reply this, but I'm trying to understand how cyclical or how structural are these new derivative level going forward? And if I may, a second question on the OTC. It was a good quarter for OTC. Don't get me wrong. But when I go to the derivatives part of OTC, revenues are growing like 4% year-over-year and registered volume or the outstanding balances, they are growing way more. So if you can provide some color on the OTC regarding derivatives, what are the moving parts here? What should we expect? And again, congrats.
Thanks, Yuri. I'll start with the question on the listed derivatives and I'll have Fernando to help me here on the OTC side. But I think, as you said, it's a tricky question. But I think we have a combination of 2 things this quarter, right?
So some structural changes, which, in our view, have been heavily influenced by some of the changes that we have introduced in terms of pricing and in terms of functionalities like the EDSs and UDSs. So that has helped to improve the volume and those are, I guess, some structural changes that we believe are going to take this level of activity to a higher level than it used to be in the past. But we also had in the quarter, volatility, particularly with all the...
The FX maybe.
Yes, uncertainties. Now primarily on the interest rate, so if you remember, we had a lot of discussion about rates and concerns about fiscal policy, a lot of volatility in the local interest rate curve, which also helped the volume of derivatives.
So I think this quarter, we had the combination of both, the reflect of some more structural changes, which we believe will continue to be present in future quarters, but also some boost coming from increased volatility, which does not necessarily will repeat itself in the following months. But I think if you look at what we've already -- have we already disclosed the figures for July...
Not total, but we have until like 20-something or...
But I mean, if you look at some of the preliminary figures for July, I think you get a feel for that. So that we have seen during the quarter, a combination of both. So part of that, you could consider something to be recurring in future quarters.
Regarding the OTC derivatives, although they are -- they have -- one of their drivers is volatility, they have a different aspect to them since they are used for mainly large operations and you have with big banks. So you have intercompany transactions, you have -- so since you have a large -- the size of the transactions are pretty large, sometimes you have discount by volumes and you see the volumes going up and the price not going up as much. So the revenue not going up as much. But it's basically that. So just in summary, same drivers, but a different kind and size of transactions and the pricing is different. So you have discounts by volume. That's mainly it.
No. Super clear. So it's a more mix driven on the OTC derivatives than, I don't know, you're reducing prices, competition, or anything like that?
Exactly. No, exactly.
Our next question comes from Kaio Prato from UBS.
I have 2 on my side, please. The first one is on expenses. We saw lower personnel expense Q-on-Q this quarter. And one of the things that you mentioned was a restructuring plan on Neoway. So I would like to first understand what happened in Neoway. And if we could see more of these effects in the upcoming quarters as well?
If you could provide a quick background here would be good. And if we can expect something similar to that related to Neurotech at some point? And then linking this to your guidance, I think we are trending towards the bottom of the guidance in terms of adjusted expense. Just would like to confirm the trend with you? And if indeed, we could expect this to continue throughout the year?
And my second question, please, is related to competition. So we continue to see some articles, interviews and a lot of discussions about the new entrant. But I would like to understand from you, if you understand that, first, the connections with your post-trading system custody or so should be tested? And second, if that is the case, I would like to understand if you're already discussing the potential connection of a new player into your systems and if there are tests going on?
Thanks, Kaio. So I'll start with the one on expenses. As we discussed, one of the key objectives that we were pursuing with Neoway was, of course, to keep the business growing, but to ensure that that growth was being pursued in a sustainable way.
So one of the objectives was to ensure that Neoway was -- would achieve a point where it was generating sufficient cash to fund its cost, its expenses. And as part of that objective, we've, together with the management team running Neoway, made some adjustments to their structure to ensure that we were focusing the efforts on the areas that we believed were more important for the development. We're ensuring that we were also having a careful look in terms of costs and sustainable growth. And we are seeing the result of some of those measures that have been taken this quarter, right?
On the case of Neurotech, I think it is a different situation because Neurotech was a business that had already reached breakeven. Having said that, we will continue to look not only on this recently acquired companies, but also on B3 in opportunities to improve efficiency.
As we said, our main objective in terms of cost management remains to be able to grow our costs more in line with inflation, finding additional efficiencies and opportunities to absorb the need of growth in our cost base as we keep evolving in our agenda of launching new products and new services. And I think we are still on track to deliver -- to arrive at the lower end of our guidance this year as we have been already discussing and signaling to you guys, okay?
Now on the other point, we will eventually have to do those connections if they plan to launch their solution to use our depository, right? And that will definitely need to be tested at some point. But I think so far, we haven't started anything in that respect. I think there might be some initial approaches that will take place over the next few months. But so far, that's where we are. There's no effective connections already in place or tests being carried out in relation to that.
Our next question comes from Jitendra Singh from HSBC.
This is Carlos Gomez from HSBC. So I have 2 questions. The first one refers to your financing business, Infrastructure Financing business. You mentioned that it is positively boosted by the Desenrola plan. So we wanted to know what a more normal level of revenues would be after Desenrola. And the second is, if you could remind us what your expected tax rate for this year would be?
Thanks, Carlos. So you're right. I think the quarter was -- the performance of the financing unit this quarter was affected by the Desenrola program, but we also saw a very strong performance in terms of recovery in a number of vehicles being financed. I think the normalized growth this quarter, if you would exclude the growth that came from the Desenrola program would be around 20, 20-something percent. So Desenrola...
Instead of 34%, right?
Yes.
Yes. So that's what was the performance and we are still seeing room for that level to remain at least for the following quarters in terms of activity. So there is still a healthy growth coming from the core activity of that unit, even though if we exclude the Desenrola program, which is no longer in place, but as we discussed also in other calls, here now, we have a business that was set up as part of that program where we have the platform already in place and we are still working in other opportunities to make that a new business line for the company.
So we already have the solution, which was very successful in the particular program, but that can also be used for a lot of different opportunities that do not necessarily depend on a new Desenrola program being launched by the government and that's an area that we have been working on and will continue to work over the course of the year.
And your next -- in your other question...
The tax rate.
On the tax rate, I don't see reasons for a much different tax rate than the one we have been posting. So if I'm not mistaken, a level of around 28%, 29% of effective tax rate, that's the level that we are expecting this year in terms of effective tax rate with the main reduction in our tax rate being the tax benefit coming from the interest on capital.
And is it fair to say that there is no discussion this year about changes to IOC?
Discussions, there is always discussions on the table, especially in relation to that topic, as you know. I mean, we have been seeing discussions around that for the past 15 years, at least, right? But at the moment, I'm not seeing any hot discussions about this topic.
And given that we have elections this year, municipal elections, I'm not sure this is an agenda that we will get a lot of traction this year. I think there's still a lot of challenges to -- in terms of concluding the VAT reform, which seems to be a much bigger priority nowadays. But we'll have to keep monitoring any discussions. But at the moment, this is not a topic that is hot on the agenda.
Our next question comes from Pedro Leduc from Itau BBA.
Congrats on the quarter. On expenses, it's trending well, but wondering if there's any seasonality we should pay attention for, especially in the fourth quarter like it usually happens? And then the second question, still on the financing infrastructure, a lot was discussed on Desenrola. But there's a new product being baked, the private payroll, which could have similarities in the systems to Desenrola, to the traditional payroll.
If that's something you guys are looking at that your systems that you've built could somehow be applied here and this would be then a product that stays? These 2 questions.
The first one was in relation to the expenses. Yes. I mean, as you know, there is some seasonality in our expenses. And if you recall, a good chunk of our personnel expenses is adjusted by inflation in -- at the end of August. So we tend to have a 1/3 and in fourth quarter, that typically are heavier as a result of those adjustments. And other than that, there are some, I'd say, year-end expenses that tend to affect the fourth quarter.
I think we have been working in order to try to, let's say, manage the seasonality between quarters in a better way this year rather than having a very concentrated quarter in terms of expenditure. But you can expect some seasonality during the second half of the year, primarily as a result of the automatic adjustment of the annual bank beginning adjustment of salaries, which is an important component of our expenses, okay?
But as I said before, and I'm just -- I think it is important to reinforce, we will continue to give -- pay a lot of attention to our cost discipline and our target to deliver the lower end of our guidance for this year.
In relation to the Desenrola, I think there are a lot of opportunities that we have been exploring that could be where that technology, that platform could be applied. So there is a lot of discussions at this stage with different uses, different applications. We do believe, as I said, this could become a business.
So the example that you mentioned could potentially be one example where, if not the whole platform part of that could be used. But so far, that's as much as I can tell you. But we have the ambition and our goal to really give other uses and make -- turn this into a business line, this platform. We are very excited with a lot of opportunities that we could have in terms of further application of the technology that was developed for this program.
I agree. Congrats again.
Our next question comes from Gustavo Schroden from Bradesco BBI.
Congrats for the strong results. Most of my questions were answered, but I'd like to explore a little bit about the financial results a little bit, I mean, below our expectations. You mentioned about the payment of the first years of debentures issuance in May. My question here is how should we expect the financial results evolving in the coming quarters, especially for this year?
And also, could you remind us what is your target for net debt to EBITDA for this year and the next year? And if you are planning some change in the financial -- in the funding size?
Thanks, Gustavo. So on the financial expenses, as I said, I think the main impact that we saw this quarter was the result of this early repayment, the liability management exercise that we did in relation to our debentures. And this should not be something that we expect to occur or the kind of impact that would affect the following quarters.
So it was a one-off as a result of this liability management exercise. As I said, we were exchanging a more expensive debt for a cheaper one, even when you consider the costs associated with both the issuance of the new debt and also the costs associated with early redemption of the existing debt, but there is some mismatch between this impact in our P&L. So you do have the impact of the early repayment hitting the P&L first before we can capture a lower financial expense over the course of the next months and year. So that was it.
So without anything of that nature in the following quarters, you can expect the financial income to resume a more regular trend with, I guess, a key component, which is difficult to predict, which is the level of cash collateral posted by third parties, which can fluctuate a little bit during the period.
So that's a more tricky, let's say, variable to estimate, but you should expect a more regular trend in the following quarters in terms of our financial results. And our guidance for this year is net debt-to-EBITDA level of 2 -- total debt, sorry, total debt to recurring EBITDA of 2x, up to 2x. And at the moment, we do not see any reasons to change that, okay?
Our next question comes from Daniel Vaz from Safra.
In your release, you mentioned a migration from a frivolous player listed in the U.S. So do you think this is a one-off? I mean what's the context in that case? And if you guys are willing to do more pushes for these migrations to the local market? And if you guys can also talk about potential changes with the tax reform, I think it's a bit early, but if you guys have any updates on that, it'd be good to hear about it.
Thanks, Daniel. I think there was, as I said in my remarks, an important movement. And of course, we -- that was primarily driven by the company, but we were there to support them on that journey and also to stimulate them on that journey. The reality is that a lot of those companies decided to list in the past in the U.S. with potentially some misconceptions about the advantages and disadvantages of having a listing abroad.
The reality in the case of that company was that they were -- it was very expensive for them. And they didn't have a lot of liquidity on that venue. They became almost an orphan stock. So for them, it was a natural decision to pursue the listing here in Brazil. And I think there are other companies in similar situations that could potentially go -- pursue the same journey.
And I think the fact that one of those companies were able to do that, I think it is an important signal for other companies. So we do expect that other companies that took a similar path in the past could also take a similar journey back this time.
Your -- and I think that the other question was in relation to the tax reform.
Yes, yes.
So the tax reform. I mean, we've -- there's still a lot of discussion around that. We have been monitoring very closely all the discussions. So far, I don't think we are expecting, let's say, significant impacts from the implementation of that reform, but this is something that we will need to continue to monitor very close in order to assess all the impact that could come from that reform.
It's difficult to do that now because there is still a lot of moving parts and a lot of topics that are being discussed. But once that's finalized, we will be able to present to you guys with a more, let's say, definitive assessment of the implications that this reform could potentially have in the company. But at the moment, we are not anticipating any significant impact.
This does conclude today's Q&A session. I would now like to invite Andre Milanez to proceed with his closing remarks. Please, Mr. Andre, you may proceed.
Thank you very much. I just wanted again to reinforce the good results that we saw during the quarter that, as I said, reinforces the value of our diversified business model. We do believe that this will continue to pay off over the course of the next quarters.
I would like also to thank you all for joining this call with us, for your continuous support and all the team that work in this quarter releases in the preparation of all the material, et cetera, for all the hard work. Have a lovely weekend ahead of you and until next time. Thank you.
That does conclude B3's audio conference for today. Thank you very much for your participation and have a wonderful day.