Inter &INTR

Inter reported profit of 19 cents per share, slightly ahead of the 18 cents analysts expected. Revenue reached about 520 million dollars, also topping estimates. The company is successfully adding users to its "super-app," which now serves over 45 million customers.

The bank hit its "Rule of 50" goal, a measure where revenue growth and return on equity, how much profit it generates with shareholder money, combine to exceed 50 percent. This is a sign that the business is becoming more efficient as it scales. By getting more users to use the app for everything from banking to shopping, Inter is growing its earnings without the high costs of opening physical branches.

See the full quarter, and how our tracked metrics did

Key highlights

• Profitability and growth benchmarks: The company reached its Rule of 50 goal, a measure of efficiency, with net revenue growing 31.7% and return on equity hitting 16.3% in the second quarter. This is important for owners because it shows the business can grow its sales while earning more on the money it reinvests.
• Rising lending volume: The total loan portfolio grew 29% to R$55.4 billion, which is more than three times the growth seen in the broader Brazilian market. Loans to individual clients rose 11% compared to a year ago, showing the company is successfully selling more banking products to its current users.
• Expanding profit margins: The net interest margin, which is the difference between what the bank earns on loans and what it pays to borrow money, increased to 10.12% from 9.07% a year ago. This expansion was driven by a shift into higher-paying private payroll loans and higher interest earnings from credit cards.
• Client engagement increasing: Active clients grew to 26.4 million, and the activation rate, meaning the portion of total customers who use the app for banking, reached 58.3%. High engagement is helping lower the cost to serve each customer, which remained stable at R$13.2 despite the larger user base.
• Higher credit risk: The percentage of loans overdue by more than 90 days rose to 5.1% from 4.4% last year. Management says this was mostly due to the rapid growth of the new private payroll loan product, which accounted for 53 basis points of the increase.
• Improving cost efficiency: Management expects the gap between net revenue and expenses to widen further as they continue to improve operations and grow revenue. Total operating expenses grew 19% in the second quarter, which was much slower than the 32% growth in net revenue, helping the efficiency ratio improve to 42.1%.

Our take: A strong quarter that shows the company can grow much faster than its peers while becoming more profitable. Reaching the Rule of 50 benchmark is a major milestone, proving the business is no longer just chasing users but is building a high-return banking machine. This result reinforces the case for a long-term compounder.