⚠ Losing the Ground War

Winning small merchants is a war of attrition, and it never ends. Acquiring is a low-margin, intensely competitive business in which share is contested merchant by merchant on price, service, and hardware, and holding — let alone growing — Stone's base demands continuous spending on sales teams, incentives, and technology. When the Brazilian economy softens or competition sharpens, churn rises and the cost of winning each merchant climbs, squeezing the very economics the distribution engine is supposed to protect, as the slower TPV growth and elevated churn of recent quarters showed.

Stone's scale, culture, and integrated offering make it a formidable combatant, and it has generally won more ground than it has lost. But the ground war is permanent and the terrain is hostile: there is no resting point at which the distribution advantage defends itself without further investment. That relentlessness — the need to keep spending just to hold position — churn ran elevated into 2026¹ — is the mark of a competitive market, not a placid moat, and it is a moderate, structural drag on returns.