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Brazilian financial products and services company XP (XP) was down around 9% after reporting lower year-on-year profitability in the second quarter, mainly due to investments in some new early-stage initiatives.

Primarily, the investments were made through a stock purchase OK with Itaú Unibanco and an additional investment of 500 million reais was made in the first half, CFO Bruno Constantino said during the company’s second quarter earnings call.

Q2 Adjusted EBITDA decreased by 2% from R$1,245m in 2Q21 to R$1,215m. Adjusted net margin decreased by 375 basis points in 2Q21 to 30.5% in 2Q22, above the mid-term guidance peak of 30%.

Adjusted net profit increased by 1% from R$1,034m in 2Q21 to R$1,046m in 2Q22.

“We know that we are in a difficult macroeconomic environment with bear markets, and this is impacting investment activities, in particular, but despite this difficult macroeconomic environment, we were able to generate our record quarterly revenues without previous,” Head of Investor Relations Andre Martins said.

Revenue amounted to R$3.43 billion (+13.6% year-on-year). Total gross revenue increased by 13% from R$3.2 billion in 2Q21 to R$3.6 billion in 2Q22.

Over the past two years, XP has beaten EPS estimates 6 times and missed 1 time. Revenue estimates have been beaten 4 times and missed 4 times.

The company has a 1-year price performance of -57.73%, while the financial sector median is -8.73%. It gets a sell rating from Seeking Alpha’s quantitative rating system.