PagSeguro Reports Second Quarter Results

2Q19 Net Income of R$322.8 million, up 41.8% compared to 2Q18.

2Q19 Non-GAAP Net Income of R$342.9 million.
São Paulo, August 15, 2019 – PagSeguro Digital Ltd. (“PagSeguro” or “we”) announced today its
second quarter results for the period ended June 30, 2019. Our consolidated financial statements are
presented in Reais (R$) and prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Second Quarter 2019 Financial & Operational Highlights:

• 9.4 million unique active accounts3;

• 1.4 million active PagBank users4;
• R$26.8 billion in total payment volume (“TPV”), up 58.7% compared with 2Q18;
• Active merchants of 4.7 million, growth of 1.2 million active merchants in the last
twelve months;
• R$322.8 million in Net Income, up 41.8% compared with 2Q18;
• R$342.9 million in non-GAAP Net Income, up 41.6% compared with 2Q18;
• Net Revenue from Transaction Activities and Other Services and Financial Income
of R$1,296.1 million up 52.9% compared to 2Q18;
• Non-GAAP Net Margin of 24.7%, no relevant changes compared with 2Q18
despite marketing investments in the PagBank initiative.
At and for the Three
Months Ended June 30,
Main Operational and Financial Indicators
(R$ millions, except otherwise indicated) 2019 2018 Var.%
TPV 26,750.6 16,851.2 58.7%
Active Merchants (last 12 months) - (millions) 4.7 3.5 34.8%
Total Net Revenue1 1,389.7 1,001.8 38.7%
Net Income 322.8 227.6 41.8%
Net Margin (%) 23.2% 22.7% 0.5 pp
Basic earnings per common share (EPS)2 - (R$) 1.0071 0.7417
Diluted earnings per common share (EPS) - (R$) 0.9805 0.7386

Non-GAAP Main Financial Indicators

(R$ millions, except otherwise indicated) 2019 2018 Var.%
Non-GAAP Total Net Revenue1 1,389.7 974.5 42.6%
Non-GAAP Net Income 342.9 242.1 41.6%
Non-GAAP Net Margin (%) 24.7% 24.8% 0.0 pp
Non-GAAP Basic earnings per common share (EPS)2 - (R$) 1.0698 0.7906
Non-GAAP Diluted earnings per common share (EPS) - (R$) 1.0416 0.7872
For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures,
see the last page of this earnings release.

1 Total revenue and income.

2 Weighted average number of common shares of 306.3 million at June 30, 2018 and 320.1 million at June 30, 2019.
3 Unique active accounts are active merchants, online buyers using PAGS digital wallet and active PagBank consumers
with at least one transaction in the last twelve months.
4 Active PagBank users are active merchants using one additional digital account feature / service beyond acquiring and
PagBank consumers with at least one transaction in the last twelve months.

1
 Financial Discussion:
I - Statement of Income
Non-GAAP disclosure

This press release includes certain non-GAAP measures. We present non-GAAP

measures when we believe that the additional information is useful and meaningful to
investors. These non-GAAP measures are provided to enhance investors' overall
understanding of our current financial performance and its prospects for the future.
Specifically, we believe the non-GAAP measures provide useful information to both
management and investors by excluding certain expenses, gains and losses, as the case
may be, that may not be indicative of our core operating results and business outlook.
These measures may be different from non-GAAP financial measures used by other
companies. The presentation of this non-GAAP financial information, which is not
prepared under any comprehensive set of accounting rules or principles, is not intended
to be considered separately from, or as a substitute for, our financial information
prepared and presented in accordance with IFRS as issued by the IASB. Non-GAAP
measures have limitations in that they do not reflect all of the amounts associated with
our results of operations as determined in accordance with IFRS. These measures
should only be used to evaluate our results of operations in conjunction with the
corresponding GAAP measures.
Our non-GAAP results consist of our GAAP results as adjusted to exclude the following
items:
Stock-based compensation expenses and related employer payroll taxes:
This consists of expenses for equity awards under our long-term incentive plan
(LTIP). We exclude stock-based compensation expenses from our non-GAAP
measures primarily because they are non-cash expenses and they depend on
our stock price and the exchange rate from U.S. dollars into Brazilian reais at the
time of the vesting of the equity awards. The related employer payroll taxes
depend on our stock price and the exchange rate from U.S. dollars into Brazilian
reais at the time of the exercises and the vesting date of the equity awards, over
which management has limited to no control, and as such management does not
believe these expenses correlate to the operation of our business.

Foreign exchange gain on follow-on proceeds: This consists of financial

income related to the impact of exchange rate variation on the conversion from
U.S. dollars into Brazilian reais of the proceeds from our sale of new shares in
our June 2018 follow-on offering. We exclude this foreign exchange variation
from our non-GAAP measures primarily because it is an unusual gain.

Tax related to remittance of follow-on proceeds (IOF tax): This relates to the
impact of Brazilian IOF tax (currency remittance tax) payable when we remitted
the proceeds from our sale of new shares in our June 2018 follow-on offering
from the Cayman Islands to Brazil. We exclude this IOF tax on the remittance of

2Q19 Earnings Release 2

 follow-on share proceeds from our non-GAAP measures primarily because it is
an unusual expense.

Income tax and social contribution on non-GAAP adjustments: This

represents the income tax effect related to the non-GAAP adjustments
mentioned above, except the Foreign exchange gain on follow-on proceeds.
For a reconciliation of these non-GAAP financial measures to the most directly
comparable GAAP measures, see “Reconciliation of Revenue and Income to
Non-GAAP Revenue and Income,” “Reconciliation of Expenses to Non-GAAP
Expenses,” “Reconciliation of Income Tax and Social Contribution to Non-GAAP
Income Tax and Social Contribution,” “Reconciliation of Net Income to Non-
GAAP Net Income,” “Reconciliation of Basic and diluted EPS to Non-GAAP Basic
and diluted EPS,” and “Reconciliation of GAAP Measures to Non-GAAP
Measures.”

Total revenue and income

Our Total revenue and income amounted to R$1,389.7 million in the three months
ended June 30, 2019, an increase of 38.7% from R$1,001.8 million in the three
months ended June 30, 2018, or an increase of 42.6% after non-GAAP adjustments
in the three months ended June 30, 2018.

At and for the At and for the

three months three months
Reconciliation of Total Revenue and Income to non-GAAP Total Revenue ended June 30, ended June 30,
and Income (R$ millions): 2019 2018 Var.%
Total Revenue and Income 1,389.7 1,001.8 38.7%
(-) Foreign exchange gain on follow-on proceeds [1] - (27.3) 100.0%
Non-GAAP Total Revenue and Income 1,389.7 974.5 42.6%

[1] Foreign exchange gain on follow-on proceeds: financial income of R$27.3 million related to the
impact of exchange rate variation on the conversion from U.S. dollars into Brazilian reais of the proceeds
from our sale of new shares in our June 2018 follow-on offering. We exclude this foreign exchange
variation from our non-GAAP measures primarily because it is an unusual income.

Net revenue from transaction activities and other services

Our Gross revenue from transaction activities and other services in the three months
ended June 30, 2019 amounted to R$914.1 million, an increase of R$314.2 million, or
52.4%, from R$599.9 million in the three months ended June 30, 2018. This increase
was principally due to a continued increase in our active merchant base, average
spending per merchant and TPV.

Our Gross revenue from transaction activities and other services during the three months
ended June 30, 2019 increased by a lesser percentage than our TPV, which increased to
R$26.8 billion from R$16.9 billion in the three months ended June 30, 2018. This
difference in the growth rate was driven by the mix of debit and credit card payments
2Q19 Earnings Release 3
 processed containing a higher percentage of debit card payments and within the credit
card payments processed, a lower percentage of credit card transactions made in
installments in the three months ended June 30, 2019 compared to the three months
ended June 30, 2018.

Our Deductions from gross revenue from transaction activities and other services, which
consist principally of taxes, amounted to R$115.2 million in the three months ended June
30, 2019, or 12.6% of our Gross revenue from transaction activities and other services
for the quarter. In the three months ended June 30, 2018, Deductions from gross
revenue from transaction activities and other services totaled R$84.7 million, or 14.1% of
our Gross revenue from transaction activities and other services for the quarter. The
R$30.5 million, or 36.0%, increase in these Deductions is directly related to the increase
in the gross revenue.

As a result, our Net revenue from transaction activities and other services in the three
months ended June 30, 2019 amounted to R$798.9 million, an increase of
R$283.7 million, or 55.1%, from R$515.2 million in the three months ended June 30,
2018.

Net revenue from sales

Our Gross revenue from sales in the three months ended June 30, 2019 amounted to
R$92.1 million, a decrease of R$36.0 million, or 28.1%, from R$128.1 million in the
three months ended June 30, 2018. This decrease was principally due to a different
POS devices sales mix and hardware price reductions in the three months ended June
30, 2019 when compared to the three months ended June 30, 2018.

Our Deductions from gross revenue from sales in the three months ended June 30,
2019 amounted to R$28.7 million, or 31.1% of our Gross revenues from sales for the
period. In the three months ended June 30, 2018, these Deductions totaled R$38.7
million, or 30.2% of Gross revenues from sales for the period. The small increase in
these Deductions as a percentage of our Gross revenues from sales is due to a change
in the mix of Brazilian states in which we sold POS devices since ICMS is levied by
each state at a different rate.

As a result, our Net revenue from sales in the three months ended June 30, 2019
amounted to R$63.4 million, a decrease of R$25.9 million, or 29.0%, from R$89.4
million in the three months ended June 30, 2018.

Financial income

Our Financial income, which represents the discount fees we withhold from credit card
transactions in installments for the early payment of accounts receivable, amounted to
R$497.2 million in the three months ended June 30, 2019, an increase of
R$164.6 million, or 49.5% from R$332.6 million in the three months ended June 30,

2Q19 Earnings Release 4

 2018. The growth in this activity compared to the three months ended June 30, 2018 was
driven by growth in our TPV for credit card transactions in installments.

Other financial income

Our Other financial income amounted to R$30.2 million in the three months ended June
30, 2019, a decrease of R$34.3 million from R$64.5 million in the three months ended
June 30, 2018. This decrease was due to the unusual impact of exchange rates in the
conversion from U.S. dollars into Brazilian reais of the proceeds from our sale of new
shares in our June 2018 follow-on offering, which impact amounted to R$27.3 million in
the three months ended June 30, 2018.
Expenses

Our total expenses amounted to R$928.6 million in the three months ended June 30,
2019, an increase of R$239.5 million, or 34.8%, from R$689.1 million in the three months
ended June 30, 2018.

As a percentage of our Total revenue and income, our total expenses in the three
months ended June 30, 2019 decreased by 2.0 percentage points, to 66.8% in the three
months ended June 30, 2019 from 68.8% in the three months ended June 30, 2018.

Our non-GAAP total expenses amounted to R$898.2 million in the three months ended
June 30, 2019, an increase of R$272.1 million, or 43.5%, from R$626.1 million in the
three months ended June 30, 2018.

At and for the

At and for the three
three months
months ended June
ended June 30,
30, 2019
Reconciliation of Expenses to non-GAAP Expenses (R$ millions): 2018 Var.%
Expenses (928.6) (689.1) 34.8%
(-) Share-based long-term incentive plan (LTIP) [1] 30.4 62.3 51.2%
(-) Tax related to remittance of follow-on proceeds (IOF tax) [2] - 0.7 100.0%
Total non-GAAP expenses adjustments 30.4 63.0 51.7%
Non-GAAP Expenses (898.2) (626.1) 43.5%

[1] Share-based long-term incentive plan (LTIP): Stock-based compensation expenses and related
employer payroll taxes. This consists of expenses for equity awards under our long-term incentive plan
(LTIP). We exclude stock-based compensation expenses from our non-GAAP measures primarily because
they are non-cash expenses and they depend on our stock price and the exchange rate from U.S. dollars
into Brazilian reais at the time of the vesting of the equity awards. The related employer payroll taxes
depend on our stock price and the exchange rate from U.S. dollars into Brazilian reais at the time of the
exercises and the vesting date of the equity awards, over which management has limited to no control, and
as such management does not believe these expenses correlate to the operation of our business. In the
three months ended June 30, 2019, the amount of R$30.4 million is mainly composed of the recurrent
quarterly provision. In the three months ended June 30, 2018 the amount of R$30.7 million is mainly
related to new shares issued to preexisting LTIP beneficiaries and to new employees participating in our
LTIP. The amount of R$31.6 million is related to the recurrent quarterly provision.

[2] Tax related to remittance of follow-on proceeds (IOF tax): R$0.7 million related to the impact of
Brazilian IOF tax (currency remittance tax) payable when we remitted the proceeds from our sale of new

2Q19 Earnings Release 5

 shares in our June 2018 follow-on offering from the Cayman Islands to Brazil. We exclude this IOF tax on
the remittance of follow-on proceeds from our non-GAAP measures primarily because it is an unusual
expense.

Cost of sales and services

Our Cost of sales and services amounted to R$684.4 million in the three months ended
June 30, 2019, an increase of R$201.6 million, or 41.8%, from R$482.8 million in the
three months ended June 30, 2018. As a percentage of the total of our Net revenue
from transaction activities and other services and our Net revenue from sales and our
Cost of sales and services posted a decrease of 0.4 percentage points, to 79.4% in the
three months ended June 30, 2019 from 79.8% in the three months ended June 30,
2018.

Within our Cost of sales and services line item, our Cost of services, expressed as a
percentage of our Net revenue from transaction activities and other services, decreased
to 61.6% in the three months ended June 30, 2019 from 65.9% in the three months
ended June 30, 2018, due to the mix of debit and credit card payments processed
containing a higher percentage of debit card payments and lower debit interchange fee
expenses than credit interchange fee expenses. Our Cost of sales, expressed as a
percentage of our Net revenue from sales, increased to 364.1% in the three months
ended June 30, 2019 from 160.3% in the three months ended June 30, 2018 due to
hardware price reductions.

In the three months ended June 30, 2019, our non-GAAP Cost of sales and services
amounted to R$682.0 million (reflecting the exclusion of the LTIP adjustment of R$2.4
million in the three months ended June 30, 2019), an increase of R$210.5 million, or
44.7%, from R$471.5 million in the three months ended June 30, 2018 (reflecting the
exclusion of the LTIP adjustment of R$11.3 million in the three months ended June 30,
2018). For a reconciliation of our non-GAAP Cost of sales and services to our Cost of
sales and services, see the last page of this earnings release.

Selling expenses

Our Selling expenses amounted to R$131.7 million in the three months ended June 30,
2019, an increase of R$37.3 million, or 39.5%, from R$94.4 million in the three months
ended June 30, 2018. As a percentage of our Total revenue and income, our Selling
expenses increased by 0.1 percentage points, to 9.5% in the three months ended June
30, 2019 from 9.4% in the three months ended June 30, 2018, as we continue to
leverage our selling expenses.

Administrative expenses
Our Administrative expenses amounted to R$109.9 million in the three months ended
June 30, 2019, an increase of R$0.7 million, or 0.6%, from R$109.2 million in the three
months ended June 30, 2018. As a percentage of our Total revenue and income, our
Administrative expenses decreased by 3.0 percentage points, to 7.9% in the three
months ended June 30, 2019 from 10.9% in the three months ended June 30, 2018.
2Q19 Earnings Release 6
 For the three months ended June 30, 2019 our non-GAAP Administrative expenses
amounted to R$81.9 million, an increase of R$23.7 million, or 40.6%, from R$58.2 in the
three months ended June 30, 2018, which figures exclude the LTIP adjustment of R$28.0
million in the three months ended June 30, 2019 and R$51.0 in the three months ended
June 30, 2018. Our non-GAAP Administrative expenses represented 5.9% of the total of
our non-GAAP Net revenue and income in both the three months ended June 30, 2019
and the three months ended June 30, 2018. For a reconciliation of our non-GAAP
Administrative expenses to our Administrative expenses, see the last page of this
earnings release.
Financial expenses
Our Financial expenses amounted to R$2.2 million in the three months ended June 30,
2019, a decrease of R$0.6 million, or 21.4%, from expenses of R$2.8 million in the three
months ended June 30, 2018. Expressed as a percentage of our Financial income, our
Financial expenses represented 0.4% in the three months ended June 30, 2019 and
0.8% in the three months ended June 30, 2018. This decrease was mainly driven by the
impact of R$0.7 million related to the impact of the IOF tax on the remittance of our sale
of shares in our follow-on proceeds from the Cayman Islands to Brazil in the three
months ended June 30, 2018.

Our non-GAAP Financial expenses, which exclude the IOF tax amount of R$0.7 million,
amounted to R$2.1 million in the three months ended June 30, 2018. For a reconciliation
of our non-GAAP Financial expenses to our Financial expenses, see the last page of this
earnings release.
Other (expenses) income, net

Our Other (expenses) income, net recorded an expense of R$0.5 million in the three
months ended June 30, 2019 and an income of R$0.1 million in the three months ended
June 30, 2018. In the three months ended June 30, 2019, this net amount mainly
related to civil and labor litigation proceedings expenses.

Profit before income taxes

Our Profit before income taxes amounted to R$461.1 million in the three months ended
June 30, 2019, an increase of R$148.4 million, or 47.4%, from R$312.7 million in the
three months ended June 30, 2018.

Our non-GAAP Profit before income taxes amounted to R$491.5 million in the three
months ended June 30, 2019, an increase of R$143.1 million, or 41.1% from R$348.4
million in the three months ended June 30, 2018. For a reconciliation of our non-GAAP
Profit before income taxes to our Profit before income taxes, see the last page of this
earnings release.
Income tax and social contribution

Income tax and social contribution amounted to an expense of R$138.4 million in the
three months ended June 30, 2019, an increase of R$53.2 million from R$85.1 million in

2Q19 Earnings Release 7

 the three months ended June 30, 2018. This item consists of current income tax and
social contribution and deferred income tax and social contribution.

Our effective tax rate increased by 2.8 percentage points to 30.0% in the three months
ended June 30, 2019 from 27.2% in the three months ended June 30, 2018. In the three
months ended June 30, 2018 we had a benefit of the exchange variation from U.S.
dollars to reais which is not taxable under the Companies Law of 1960 of the Cayman
Islands. In the three months ended June 30, 2019, the difference between the effective
income tax and social contribution rate and the rate computed by applying the Brazilian
federal statutory rate was mainly related to the Technological Innovation Law (Lei do
Bem), which reduces income tax charges based on investments made in innovation and
technology, such as those made by PagSeguro Brazil, our Brazilian operating subsidiary.

Our non-GAAP income tax and social contribution expense for the three months ended
June 30, 2019 amounted to R$10.3 million, a decrease of R$10.9 million, or 51.1%,
compared to R$21.2 in the three months ended June 30, 2018.

Our non-GAAP effective tax rate decreased by 0.2 percentage points to 30.3% in the
three months ended June 30, 2019, from 30.5% in the three months ended June 30,
2018.

At and for the At and for the

three months three months
Reconciliation of Income Tax and Social Contribution to Non-GAAP ended June 30, ended June 30, Var.
Income Tax and Social Contribution (R$ millions): 2019 2018 %
Income tax and social contribution (138.4) (85.1) 62.5%
(-) Income tax and social contribution on Non-GAAP adjustments [1] (10.3) (21.2) 51.1%
Non-GAAP Income tax and social contribution (148.7) (106.3) 39.9%

[1] Income tax and social contribution on non-GAAP adjustments: the amount of R$10.3 million
consists of income tax at the rate of 34% calculated on the non-GAAP adjustments. The amount of R$21.2
million consists of income tax at the rate of 34% calculated on the non-GAAP adjustments, other than the
foreign exchange gain on follow-on proceeds of R$27.3 million, which is not taxable, and the tax benefits
related to other non-GAAP adjustments.

Net income for the period

Our Net income for the period in the three months ended June 30, 2019 amounted to
R$322.8 million, an increase of R$95.2 million, or 41.8% from R$227.6 million in the
three months ended June 30, 2018.

As a percentage of our Total revenue and income, our Net income for the period
increased by 0.5 percentage points, to 23.2% in the three months ended June 30, 2019
compared with 22.7% in the three months ended June 30, 2018.

Our non-GAAP Net income for the three months ended June 30, 2019 amounted to
R$342.9 million, an increase of R$100.7 million, or 41.6%, from R$242.1 in the three
months ended June 30, 2018, reflecting the sum of the non-GAAP adjustments
described below.

2Q19 Earnings Release 8

 At and for the At and for the
three months three months
Reconciliation of Net Income to Non-GAAP Net Income (R$ ended June 30, ended June 30,
millions): 2019 2018 Var.%
Net Income 322.8 227.6 41.8%
Foreign exchange gain on follow-on proceeds [1] - (27.3) 100.0%
Share-based long-term incentive plan (LTIP) [2] 30.4 62.3 51.2%
Tax related to remittance of follow-on proceeds (IOF tax) [3] - 0.7 100.0%
Income tax on non-GAAP adjustments [4] (10.3) (21.2) 61.7%
Total non-GAAP net income adjustments 20.1 14.5 53.4%
Non-GAAP Net Income 342.9 242.1 41.6%

[1] Foreign exchange gain on follow-on proceeds: financial income of R$27.3 million related to the
impact of exchange rate variation on the conversion from U.S. dollars into Brazilian reais of the proceeds
from our sale of new shares in our June 2018 follow-on offering. We exclude this foreign exchange
variation from our non-GAAP measures primarily because it is an unusual gain.

[2] Share-based long-term incentive plan (LTIP): Stock-based compensation expenses and related
employer payroll taxes. This consists of expenses for equity awards under our long-term incentive plan
(LTIP). We exclude stock-based compensation expenses from our non-GAAP measures primarily because
they are non-cash expenses and they depend on our stock price and the exchange rate from U.S. dollars
into Brazilian reais at the time of the vesting of the equity awards. The related employer payroll taxes
depend on our stock price and the exchange rate from U.S. dollars into Brazilian reais at the time of the
exercises and the vesting date of the equity awards, over which management has limited to no control, and
as such management does not believe these expenses correlate to the operation of our business. In the
three months ended June 30, 2019, the amount of R$30.4 million is mainly composed of the recurrent
quarterly provision. In the three months ended June 30, 2018 the total amount of R$30.7 million is mainly
related to new shares issued to preexisting LTIP beneficiaries and to new employees participating in our
LTIP. The amount of R$31.6 million is related to the recurrent quarterly provision.

[3] Tax related to remittance of follow-on proceeds (IOF tax): R$0.7 million related to the impact of
Brazilian IOF tax (currency remittance tax) payable when we remitted the proceeds from our sale of new
shares in our June 2018 follow-on offering from the Cayman Islands to Brazil. We exclude this IOF tax on
the remittance of follow-on proceeds from our non-GAAP measures primarily because it is an unusual
expense.

[4] Income tax and social contribution on Non-GAAP adjustments: the amount of R$10.3 million
consists of income tax at the rate of 34% calculated on the non-GAAP adjustments. The amount of R$21.2
million consists of income tax at the rate of 34% calculated on the non-GAAP adjustments, other than the
foreign exchange gain on follow-on proceeds of R$27.3 million, which is not taxable, and the tax benefits
related to other non-GAAP adjustments.

2Q19 Earnings Release 9

 II - Cash Flow

Our cash and cash equivalents at the beginning of the six months ended June 30, 2019
amounted to R$2,763.0 million.

Our Profit before income taxes in the six months ended June 30, 2019 was
R$910.5 million.
The adjustments for revenue, income and expenses recorded in our statement of income
in the six months ended June 30, 2019 but which did not affect our cash flows totaled the
positive amount of R$188.9 million, mainly due to R$27.8 million of Share-based long-
term incentive plan (LTIP) expenses, R$74.5 million in Chargebacks, R$48.1 million of
Depreciation and amortization recorded in our statement of income and R$30.8 million of
other financial cost (net), mainly due to R$28.3 million related to interest income received
from financial investments. LTIP expenses relate to equity awards under our LTIP.
Chargebacks relate to amounts that we initially recorded as revenues but for which we
did not receive the related cash payment due primarily to fraud.
The adjustments for changes in our operating assets and liabilities in the six months
ended June 30, 2019 amounted to a negative cash flow of R$1,633.8 million:

• Our Accounts receivable item, which is presented net of transaction costs and financial
expenses we incur when we elect to receive early payment of the accounts receivable
owed to us by card issuers, consists of the difference between the opening and closing
balances of the Accounts receivable item of Current Assets and Non-current assets on
our balance sheet (R$9,871.5 million at June 30, 2019 compared to R$8,104.7 million
at year-end 2018) excluding interest income received in cash and chargebacks, which
are presented separately in the statement of cash flows. Accounts receivable
represented a negative cash flow of R$1,979.9 million in the six months ended June
30, 2019.
• Our Payables to third parties item, which is presented net of revenue from transaction
activities and financial income we receive when merchants elect to receive early
payments, consists of the difference between the opening and closing balances of the
Payables to third parties item of Current Liabilities on our balance sheet
(R$4,581.5 million at June 30, 2019 compared to R$4,324.2 million at year-end 2018).
Payables to third parties represented positive cash flow of R$257.3 million in the six
months ended June 30, 2019.
• Our Receivables from (payables to) related parties item consists of the difference
between the opening and closing balances of the Payables to related parties item (i.e.,
UOL) of Current Liabilities on our balance sheet (R$34.9 million at June 30, 2019
compared to R$30.8 million at year-end 2018). Receivables from (payables to) related
parties represented positive cash flow of R$4.1 million in the six months ended June
30, 2019.

• Our Inventories item represents changes in the carrying value of the Inventories item of
Current Assets on our balance sheet. This item represented positive cash flow of
2Q19 Earnings Release 10
 R$3.1 million in the six months ended June 30, 2019.
• Our Salaries and social charges item represent amounts that were recorded on our
statement of income, but which remained unpaid at the end of the period, principally
because they related to the final month of the period. This item represented positive
cash flow of R$35.0 million in the six months ended June 30, 2019.

• Our Trade payables item consists of the difference between the opening and closing
balances of the trade payables (R$239.5 million at June 30, 2019 compared to
R$165.2 million at year-end 2018). Trade payables represented positive cash flow of
R$73.7 million in the six months ended June 30, 2019.

• Our Taxes and contributions item represents sales taxes (ISS, ICMS, PIS and
COFINS). This item represented positive cash flow of R$6.1 million in the six months
ended June 30, 2019.

Since our statement of cash flows begins with our Profit before income taxes, it also
adjusts for cash amounts paid in respect of our income tax and social contribution, which
totaled R$52.1 million in the six months ended June 30, 2019. Our statement of cash
flows also adjusts for interest income received in cash, which represented a positive cash
flow of R$138.7 million in the six months ended June 30, 2019.

As a result of the above, our Net Cash used in operating activities in the six months ended
June 30, 2019 totaled R$447.8 million.

Our Cash flows used in investing activities in the six months ended June 30, 2019 totaled
R$2,044.7 million. This amount consisted of R$148.5 million in purchases and
development of intangible assets, which represent purchases of third-party software and
salaries and other amounts that we paid to develop internally software and technology,
which we capitalize as intangible assets, and R$1,790.1 million related to our conversion
of cash and cash equivalents to investments in Brazil’s government treasury bonds
(“LFTs”).

Our Cash flows used in financing activities in the six months ended June 30, 2019 totaled
R$15.7 million, principally related to our acquisition of the remaining 49% of R2Tech
Informática S.A. in February 2019.

After accounting for the total decrease in Cash and cash equivalents of R$2,508.3 million
discussed above, our Cash and cash equivalents at June 30, 2019 amounted to R$254.8
million.

2Q19 Earnings Release 11

 Earnings webcast
PagSeguro (NYSE: PAGS) will host a conference call and earnings webcast on August 15, 2019 at 5:30
pm ET.

Event Details

Dial–in (Brazil): +55 11 3181-8565.

Dial–in (US and other countries): +1 (412) 717-9627 or +1 (844) 204-8942

Password: PagSeguro

Webcast: http://choruscall.com.br/pagseguro/2q19.htm

About PagSeguro:
PagSeguro is a disruptive provider of financial technology solutions focused primarily on micro-
merchants, small companies and medium-sized companies in Brazil. PagSeguro’s business model covers
all of the following five pillars:

• Multiple digital payment solutions;

• In-person payments via point-of-sale (POS) devices that PagSeguro sells to merchants;
• Free digital accounts;
• Issuer of prepaid cards to clients for spending or withdrawing account balances; and
• Operating as an acquirer.

PagSeguro is an UOL Group Company that provides an easy, safe and hassle-free way of accepting
payments, where its clients can transact and manage their cash, without the need to open a bank
account. PagSeguro’s end-to-end digital ecosystem enables its customers to accept a wide range of
online and in-person payment methods, including credit cards, debit cards, meal voucher cards, boletos,
bank transfers, bank debits and cash deposits.

PagSeguro’s mission is to disrupt and democratize financial services in Brazil, a concentrated,

underpenetrated and high interest rate market, by providing an end-to-end digital ecosystem that is safe,
affordable, simple and mobile-first for both merchants and consumers.

Contacts:

Investor Relations:
PagSeguro Digital Ltd.
+55 (11) 3914-9524
[email protected]
investors.pagseguro.com

2Q19 Earnings Release 12

 UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
Three months
Three months ended
ended June %
June 30,2019
30,2018
(Amounts expressed in R$ millions)
Net revenue from transaction activities and other services 798.9 515.2 55.1%
Net revenue from sales
63.5 89.4 (29.0)%
Financial income
497.2 332.6 49.5%
Other financial income
30.2 64.5 (53.2)%

Total revenue and income

1,389.7 1,001.8 38.7%

Cost of sales and services

(684.4) (482.8) 41.8%
Selling expenses
(131.7) (94.4) 39.5%
Administrative expenses
(109.9) (109.2) 0.6%
Financial expenses
(2.2) (2.8) (21.4)%
Other expenses, net
(0.5) 0.1 (601.0)%

PROFIT BEFORE INCOME TAXES

461.1 312.7 47.4%

Current income tax and social contribution

(1.3) (99.3) (98.6)%
Deferred income tax and social contribution result
(137.0) 14.1 (1070.6)%

INCOME TAX AND SOCIAL CONTRIBUTION (138.3) (85.1) 62.5%

NET INCOME FOR THE PERIOD

322.8 227.6 41.8%

Three months
Three months ended
ended June
June 30,2019
30,2018
(Amounts expressed in R$ thousands, except
share quantities and amounts per share)
Net income attributable to:
Owners of the Company 322,400 227,168
Non-controlling interests 357
439
Weighted average number of outstanding common shares 320,114,060 306,278,562
Weighted average number of common shares diluted 328,803,051 307,583,600
Basic earnings per common share - R$ 1.0071
0.7417
Diluted earnings per common share - R$ 0.9805
0.7386

Non-GAAP Net income 342,468 242,130

Weighted average number of outstanding common shares 320,114,060 306,278,562
Weighted average number of common shares diluted 328,803,051 307,583,600
Non-GAAP Basic earnings per common share - R$ 1.0698
0.7906
Non-GAAP Diluted earnings per common share - R$ 1.0416
0.7872

2Q19 Earnings Release 13

UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
As of December 31,
As of June 30, 2019
2018
(Amounts expressed in R$ thousands)
Cash and cash equivalents 254,767 2,763,050
Financial investments 1,761,745 -
Accounts receivable 9,859,199 8,104,679
Inventories 78,494 88,551
Taxes recoverable 100,161 65,653
Other receivables 41,709 20,148
Total current assets 12,096,074 11,042,081

Judicial deposits 2,907 1,511

Accounts receivable 12,260 -
Prepaid expenses 5,001 968
Investment 1,500 -
Property and equipment 146,739 67,104
Intangible assets 425,941 305,614
Total non-current assets 594,348 375,197

TOTAL ASSETS 12,690,423 11,417,278

Payables to third parties 4,581,475 4,324,198

Trade payables 239,508 165,246
Payables to related parties 34,858 30,797
Salaries and social charges 108,984 73,936
Taxes and contributions 109,130 80,093
Provision for contingencies 8,264 7,004
Other payables 16,267 29,501
Total current liabilities 5,098,486 4,710,775

Deferred income tax and social contribution 358,625 132,125

Other payables 15,800 -
Total non-current liabilities 374,425 132,125

Share capital 26 26
Capital reserve 5,715,888 5,688,134
Equity valuation adjustments (22,785) (7,325)
Profit retention reserve 1,540,979 909,267
Treasury shares (39,532) (39,532)
7,194,576 6,550,570

Non-controlling interests 22,936 23,806

Total equity 7,217,512 6,574,376

TOTAL LIABILITIES AND EQUITY 12,690,423 11,417,278

14
UNAUDITED CONDENSED CONSOLIDATED INTERIM CASH FLOWS STATEMENT
Six months
Six months ended
ended June
June 30,2019
30,2018
(Amounts expressed in R$ thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income taxes 910,500 475,748
Expenses (revenues) not affecting cash:
Depreciation and amortization 48,135 38,548
Chargebacks 74,483 28,146
Accrual of provision for contingencies 848 1,135
Share based long term incentive plan (LTIP) 27,754 162,410
Inventory provisions 6,918 2,745
Other financial cost, net 30,783 (1,195)
Changes in operating assets and liabilities
Accounts receivable (1,979,920) (2,838,067)
Inventories 3,139 4,508
Taxes recoverable (13,999) 265
Other receivables (22,944) 3,958
Other payables 3,791 2,404
Payables to third parties 257,277 4,218
Trade payables 73,668 64,091
Receivables from (payables to) related parties 4,061 119,130
Salaries and social charges 35,048 1,356
Taxes and contributions 6,073 22,291
Provision for contingencies - (795)
(534,385) (1,909,104)
Income tax and social contribution paid (52,122) (110,844)
Interest income received 138,658 160,164
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (447,849) (1,859,784)

CASH FLOWS FROM INVESTING ACTIVITIES

Amount paid on acquisitions, net of cash acquired (15,753) -
Purchases of property and equipment (90,348) (11,749)
Purchases and development of intangible assets (148,528) (66,363)
Acquisition of financial investments (1,790,118) -
Redemption of financial investments - 211,116
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (2,044,747) 133,004

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from offering of shares - 4,744,900
Transactional costs - (186,349)
Transaction with non-controlling interest (15,992) (5,390)
Capital increase by non-controlling shareholders 305 20,334
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (15,687) 4,573,495

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,508,283) 2,846,715

Cash and cash equivalents at the beginning of the year 2,763,050 66,767
Cash and cash equivalents at the end of the year 254,767 2,913,482

15
 RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
Three Months Ended June Three Months Ended
30, 2019 June 30, 2018

(Amounts expressed in R$ (Amounts expressed in

millions, except amounts R$ millions, except
per share) amounts per share)
Total revenue and income 1,389.7 1,001.8
Less: Foreign exchange gain on follow-on proceeds - (27.3)

Non-GAAP total revenue and income (1) 1,389.7 974.5

Total expenses (928.6) (689.1)

Less: Share-based long-term incentive plan (LTIP) 30.4 62.3
Less: Tax related to remittance of follow-on proceeds (IOF tax) - 0.7

Non-GAAP total expenses (2) (898.2) (626.1)

Profit before taxes 461.1 312.7

Plus: Total non-GAAP adjustments 30.4 35.7

Non-GAAP profit before taxes (3) 491.5 348.4

Income tax and social contribution (138.4) (85.1)

Less: Income tax and social contribution on non-GAAP adjustments (10.3) (21.1)

Non-GAAP deferred income tax (4) (148.7) (106.3)

Net income 322.8 227.6

Plus: Total non-GAAP adjustments 20.1 14.5

Non-GAAP net income (5) 342.9 242.1

Basic earnings per common share - R$ 1.0071 0.7417

Diluted earnings per common share - R$ 0.9805 0.7386

Non-GAAP basic earnings per common share - R$ (6) 1.0698 0.7906

Non-GAAP diluted earnings per common share - R$ (6) 1.0416 0.7872

(1) Non-GAAP total revenue and income excludes a foreign exchange gain on our follow-on proceeds in the amount of R$27.3 million
in the three months ended June 30, 2018, which relates to the impact of exchange rate variation on the conversion from U.S. dollars
into Brazilian reais of the proceeds from our sale of new shares follow-on offering. We exclude this foreign exchange variation from
our non-GAAP measures primarily because it is unusual income. The foreign exchange gain on our follow-on proceeds is included
within Other financial income. Other financial income in the amount of R$64.5 million is therefore adjusted by excluding the foreign
exchange gain on our follow-on proceeds, resulting in non-GAAP Other financial income in the amount of R$37.2 million.
(2) Non-GAAP total expenses excludes:
(a) Stock-based compensation expenses in the total amount of R$30.4 million (R$62.3 million in the three months ended June 30,
2018), consisting of expenses for equity awards under our LTIP. This consists of expenses for equity awards under our long-
term incentive plan (LTIP). We exclude stock-based compensation expenses from our non-GAAP measures primarily because
they are non-cash expenses and they depend on our stock price and the exchange rate from U.S. dollars into Brazilian reais
at the time of the vesting of the equity awards. The related employer payroll taxes depend on our stock price and the
exchange rate from U.S. dollars into Brazilian reais at the time of the exercises and the vesting date of the equity awards, over
which management has limited to no control, and as such management does not believe these expenses correlate to the
operation of our business. The total of stock-based compensation expenses is allocated between Cost of sales and services
and Administrative expenses. Excluding the stock-based compensation expenses, Cost of sales and services in the amount of
R$684.4 million (R$482.8 million in the three months ended June 30, 2018) is adjusted by R$2.4 million (R$11.3 million in the
three months ended June 30, 2018) resulting in non-GAAP Cost of sales and services of R$682.0 million (R$471.5 million in
the three months ended June 30, 2018); and Administrative Expenses in the amount of R$109.9 million (R$109.2 million in the
three months ended June 30, 2018) is adjusted by R$28.0 million (R$51.0 million in the three months ended June 30, 2018)
resulting in non-GAAP Administrative expenses of R$81.9 million (R$58.2 million in the three months ended June 30, 2018).
(b) Tax related to remittance of follow-on share proceeds (IOF tax) in the amount of R$0.7 million in the three months ended June
30, 2018, which represents the impact of Brazilian IOF tax (currency remittance tax) payable when we remitted the proceeds
from our sale of new shares in our June 2018 follow-on offering from the Cayman Islands to Brazil. We exclude this IOF tax on
the remittance of follow-on share proceeds from our non-GAAP measures primarily because it is an unusual expense. The
IOF tax is fully allocated to Financial expenses. Financial expenses in the amount of R$2.8 million is therefore adjusted by
excluding the IOF tax, resulting in non-GAAP Financial expenses in the amount of R$2.1 million.
(3) Non-GAAP profit before taxes is equal to the sum of the adjustments described in footnotes (1) and (2) above.
(4) Non-GAAP income tax and social contribution consists of income tax at the rate of 34% calculated on the non-GAAP adjustments
described in footnotes (1) and (2) above, other than the foreign exchange gain on follow-on proceeds of R$27.3 million in the three
months ended June 30, 2018, which is not taxable, and the tax benefits related to other non-GAAP adjustments.
(5) Non-GAAP net income is equal to the sum of the adjustments described in footnotes (1), (2) and (4) above.
(6) Non-GAAP basic earnings per common share and non-GAAP diluted earnings per common share reflect the adjustments to non-
GAAP net income, which is allocated in full to Owners of the Company.

16