UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2022
Commission File Number: 001-38353


PagSeguro Digital Ltd.
(Name of Registrant)
Conyers Trust Company (Cayman) Limited,
Cricket Square, Hutchins Drive, P.O. Box 2681,
Grand Cayman, KY1-1111, Cayman Islands
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒    Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T Rule 101(b)(1):
Yes ☐    No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T Rule 101(b)(7):
Yes ☐    No ☒




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PagSeguro Digital Ltd.

Unaudited condensed consolidated interim financial statements

As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021



Contents

Unaudited condensed consolidated interim financial statements


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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim balance sheet
As of September 30, 2022 and December 31, 2021
(All amounts in thousands of reais)
Note September 30, 2022 December 31, 2021
Assets
Current assets
Cash and cash equivalents 5 1,404,519 1,794,362
Financial investments 6 1,073,816 782,647
Accounts receivable 7 34,569,772 23,428,522
Inventories 52,062 49,537
Tax receivable 8 460,248 469,490
Other receivables 148,878 194,776
Total current assets 37,709,295 26,719,334
Non-current assets
Accounts receivable 7 731,360 228,880
Judicial deposits 44,062 40,224
Deferred income tax and social contribution 19 102,952 120,762
Other receivables 15,591 11,710
Investment 1,574 15,666
Property and equipment 11 2,671,757 2,289,052
Intangible assets 12 1,999,296 1,650,176
Total non-current assets 5,566,592 4,356,470
Total assets 43,275,887 31,075,804











The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim balance sheet
As of September 30, 2022 and December 31, 2021
(All amounts in thousands of reais)
Note September 30, 2022 December 31, 2021
Liabilities and equity
Current Liabilities
Payables to third parties 13 14,947,305 13,217,150
Deposits 14 10,795,295 3,056,444
Borrowings 18 986,695 1,005,787
Derivative Financial Instruments 26 157,013 14,317
Trade payables 371,730 578,004
Payables to related parties 9 450,987 543,621
Salaries and social security charges 15 300,759 259,724
Taxes and contributions 16 73,467 63,934
Provision for contingencies 17 42,782 27,653
Deferred revenue 131,887 162,566
Other liabilities 28,922 73,719
Total current liabilities 28,286,842 19,002,919
Non-current liabilities
Deposits 14 1,843,401 77,552
Deferred income tax and social contribution 19 1,530,326 1,391,760
Provision for contingencies 17 14,526 13,910
Deferred revenue 19,106 17,300
Other liabilities 70,058 70,165
Total non-current liabilities 3,477,417 1,570,687
Total liabilities 31,764,259 20,573,606
Equity
Share capital 20 26 26
Treasury shares 20 (376,598) (285,011)
Capital reserve 20 6,089,360 6,076,286
Retained earnings 20 5,829,755 4,732,624
Equity valuation adjustments 20 (22,373) (22,372)
Other comprehensive income 20 (8,543) 645
Total equity 11,511,628 10,502,198
Total liabilities and equity 43,275,887 31,075,804

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of income
For the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais, unless otherwise stated)
  Three-month period Nine-month period
Note September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Revenue from transaction activities and other services 22 2,292,079 1,792,161 6,602,349 4,725,259
Financial income 22 1,697,222 937,743 4,638,118 2,381,336
Other financial income 22 46,126 45,861 132,469 105,969
 
Total revenue and income   4,035,427 2,775,765 11,372,936 7,212,564
 
Cost of sales and services 23 (1,862,164) (1,502,018) (5,501,843) (3,943,121)
Selling expenses 23 (530,840) (367,893) (1,510,591) (1,099,775)
Administrative expenses 23 (185,343) (273,029) (554,611) (687,998)
Financial expenses 23 (920,656) (209,823) (2,296,843) (387,995)
Other income (expenses), net 23 (111,123) (1,821) (224,564) 26,034
 
Profit before income taxes   425,301 421,181 1,284,484 1,119,709
 
Current income tax and social contribution 19 1,603 (7,652) (26,518) (29,290)
Deferred income tax and social contribution 19 (46,617) (91,983) (160,835) (225,403)
 
 
Income tax and social contribution   (45,014) (99,635) (187,353) (254,693)
         
Net income for the period   380,287 321,546 1,097,131 865,016
 
Attributable to:  
Equity holders of the parent
  380,287 321,393 1,097,131 864,706
Non-controlling interests
  153 310
 
 
Basic earnings per common share - R$ 21 1,1639 0,9727 3,3501 2,6188
Diluted earnings per common share - R$ 21 1,1562 0,9669 3,3285 2,6019





The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of comprehensive income
For the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais)
Three-month period Nine-month period
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Net income for the period 380,287 321,546 1,097,131 865,016
Other comprehensive income that may be reclassified to the statement of income in subsequent periods
Currency translation adjustment 1 220 (717) (284)
Loss on investments designated at fair value through OCI 662 221 249 561
Derivative Financial Instruments through OCI 3,969 (13,084)
Income tax and social contribution (1,574) (75) 4,364 (191)
Other comprehensive income for the period 383,345 321,912 1,087,943 865,102
Attributable to
Equity holders of the parent 383,344 321,759 1,087,942 864,792
Non-controlling interests 153 310
Net income for the period
383,344 321,912 1,087,942 865,102




The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of changes in equity
For the nine-month period ended September 30, 2022 and 2021
(All amounts in thousands of reais)
        Capital reserve Profit reserve          
  Note   Share capital Treasury shares Capital reserve Share-based long-term incentive plan (LTIP) Retained earnings Equity valuation adjustments Other comprehensive income Total Non-controlling interests Total equity
On December 31, 2020   26 (13,609) 5,690,089 94,199 3,566,522 (22,372) 491 9,315,346 12,113 9,327,459
Net income for the period 864,706 864,706 310 865,016
Currency translation adjustment (284) (284) (284)
Gain on financial assets through other OCI 370 370 370
Shares issued 138,665 (138,665)
Share based long term incentive plan (LTIP) 264,232 264,232 264,232
(LTIP) of treasury shares 13,410 (13,410)
On September 30, 2021 26 (199) 5,828,754 206,355 4,431,228 (22,372) 577 10,444,370 12,423 10,456,793
Net income for the period 301,396 301,396 (128) 301,268
Currency translation adjustment 167 167 167
Loss on financial assets through OCI (99) (99) (12,295) (12,394)
Non-controlling
Shares issued
Share based long term incentive plan (LTIP) 41,176 41,176 41,176
Acquisition of treasury shares (284,812) (284,812) (284,812)
(LTIP) of treasury shares
On December 31, 2021   26 (285,011) 5,828,754 247,532 4,732,624 (22,372) 645 10,502,198 10,502,198
Net income for the period 20 1,097,131 1,097,131 1,097,131
Currency translation adjustment
20 (717) (717) (717)
Gain on financial assets through OCI 20 164 164 164
Derivative Financial Instruments through OCI 20 (8,636) (8,636) (8,636)
Share based long term incentive plan (LTIP) 20 113,307 113,307 113,307
Acquisition of treasury shares 20 (191,819) (191,819) (191,819)
(LTIP) of treasury shares 20 100,234 (100,234)
On September 30, 2022 26 (376,596) 5,828,754 260,605 5,829,754 (22,372) (8,543) 11,511,628 11,511,628

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of cash flows
For the nine-month period ended September 30, 2022 and 2021
(All amounts in thousands of reais)
Nine-month period
September 30, 2022 September 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income taxes 1,284,484 1,119,709
Expenses (revenues) not affecting cash:
Depreciation and amortization
824,004 543,126
Chargebacks and ECL
792,950 450,051
Accrual of provision for contingencies
27,969 19,911
Share based long term incentive plan (LTIP)
113,307 326,282
Reversal of taxes and contributions
(29,114)
Loss on disposal of property, equipment, intangible and investment assets
189,308 20,444
Interest accrued
1,063,441 84,400
Other (income) cost, net
14,925 1,480
Changes in operating assets and liabilities
Accounts receivable
(14,955,359) (5,194,108)
Financial investments (mandatory guarantee)
(209,556) 2,069
Inventories
(2,525) (64,403)
Taxes recoverable
102,909 (97,710)
Other receivables
38,187 2,512
Deferred revenue
(28,872) (10,695)
Other liabilities
(35,479) (13,821)
Payables to third parties
1,124,710 883,004
Trade payables
(219,709) 42,466
Receivables from (payables to) related parties
(118,883) 311,165
Deposits
9,096,672 1,854,936
Salaries and social charges
41,035 9,460
Taxes and contributions
23,615 31,358
Provision for contingencies
(17,139) (12,994)
(850,006) 279,528
Income tax and social contribution paid
(86,560) (57,412)
Interest income received
2,525,849 541,881
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,589,283 763,997
CASH FLOWS FROM INVESTING ACTIVITIES
Amount paid on acquisitions, net of cash acquired
(44,471)
Purchases of property and equipment
(1,027,025) (701,338)
Purchases and development of intangible assets
(731,361) (527,555)
Redemption (Acquisition) of financial investments
393 2,293
NET CASH USED IN INVESTING ACTIVITIES (1,757,993) (1,271,071)
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of cash flows
For the nine-month period ended September 30, 2022 and 2021
(All amounts in thousands of reais)
Nine-month period
September 30, 2022 September 30, 2021
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings
250,000
Payment of borrowings
(250,000)
Payment of borrowings Interest
(15,337)
Acquisition of treasury shares
(191,819)
Payment of leases
(13,977) (10,603)
NET CASH USED IN FINANCING ACTIVITIES (221,133) (10,603)
DECREASE IN CASH AND CASH EQUIVALENTS (389,843) (517,677)
Cash and cash equivalents at the beginning of the period
1,794,362 1,640,065
Cash and cash equivalents at the end of the period
1,404,519 1,122,388


The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
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PagSeguro Digital Ltd.
Unaudited condensed consolidated interim statement of cash flows
For the nine-month period ended September 30, 2022 and 2021
(All amounts in thousands of reais)

1.General information
PagSeguro Digital Ltd. ("PagSeguro Digital" or the "Company") is a holding company with its principal executive offices located in Cayman Islands, a subsidiary of Universo Online S.A. ("UOL"), referred to, together with its subsidiaries, as the "PagSeguro Group", and was incorporated on July 19, 2017. A total of 99.99% of the shares of PagSeguro Internet Instituição de Pagamento S.A. ("PagSeguro Brazil") were contributed to PagSeguro Digital on January 4, 2018 and PagSeguro Digital maintains control of PagSeguro Brazil.

PagSeguro Brazil is a privately held corporation established on January 20, 2006 and engages in providing financial technology solutions and services and corresponding related activities, focused principally on micro-merchants and small and medium-sized businesses ("SMEs").

On March 18, 2021, PagSeguro Group constituted a holding company incorporated as a subsidiary of PagSeguro Digital called PagSeguro Holding Ltd (“PSHC”). Additionally, during the third quarter of 2021, Pagseguro Group established four new subsidiaries under PSHC: Pagseguro Chile SPA (“Pagseguro Chile”), Pagseguro Colombia S.A.S (“Pagseguro Colombia”), PSGP México S.A de C.V. (“PSGP Mexico”) and Pagseguro Peru S.A.C. (“Pagseguro Peru”).

In June 2022, BoaCompra Tecnologia Ltda., changed its name to PagSeguro Tecnologia Ltda. (“PagSeguro Tecnologia”), as part of a marketing stategy to bring the entity closer to PagSeguro’s brand.

The subsidiaries of PagSeguro Digital are PagSeguro Brazil, PagSeg Participações Ltda. (“PagSeg”), BS Holding Financeira Ltda. (“BS Holding”) and PSHC. The PagSeguro Group subsidiaries are as follows:

PagSeguro Brazil subsidiaries are PagSeguro Biva Securitizadora de Créditos Financeiras S.A. ("Biva Sec"), Fundo de Investimento em Direitos Creditórios - PagSeguro ("FIDC"), RegistraSeguro S.A. ("RegistraSeguro"), Wirecard Brazil Instituição de Pagamento S.A. ("MOIP") and Concil Inteligência em Conciliação S.A (“Concil”).
PagSeg subsidiaries are Net+Phone Telecomunicações Ltda. ("Net+Phone"), Pagseguro Tecnologia, BCPS Online Services Lda. ("BCPS"), CDS Serviços Financeiros Ltda. ("CDS"), Pagseguro Biva Serviços Financeiros Ltda. (“Biva Serviços”) and PagBank Participações Ltda (“PagBank”).
PagBank subsidiaries are Tilix Digital Ltda. ("TILIX"), YAMÍ Software & Inovação Ltda. ("YAMÍ") and Zygo Serviços de Tecnologia S.A. ("ZYGO").
PSHC subsidiaries are Pagseguro Chile, Pagseguro Colombia, Pagseguro Peru and PSGP México.
BS Holding subsidiary are BancoSeguro S.A. (“Bancoseguro”) and Paginvest CTVM Ltda. (“Paginvest").
Biva Serviços subsidiary is Pagseguro Biva Correspondente Bancário Ltda. (“Biva Corban”).

These consolidated financial statements include Pagseguro Brazil, PagSeg, PSHC, BS Holding and the corresponding subsidiaries.

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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
1.1    Additional Information
During the year ended December 31, 2021, the Company observed that, in the first three months, there was an increase in the number of people infected by COVID-19 and consequently the return of partial shutdowns and social isolation in several cities and states of the country. In the second quarter of 2021, most of the cities in Brazil accelerated the vaccination of the population, and consequently, the Company saw a graduate reopening process, with the extension of opening hours of commercial activities. In the third and fourth quarters of 2021, the Company observed the return of social events of the public, and consequently the growth of transaction payment volume (“TPV”).

During the nine-month period ended September 30, 2022, Brazil observed a decrease in the number of people infected and the total deaths by COVID-19, and social events and commercial activities generally returned to a level similar to that observed before the pandemic. These circumstances resulted in higher TPV and consequently higher revenues for the Company.

The Company has a significant variable cost structure mainly related to TPV, such as processing, interchange, card scheme fees and chargebacks. Marketing and sales expenses are also variable and depend on the Company’s strategy to leverage new products and services such as PagBank. The Company is also still accompanying the evolution of the Brazilian economy and reassessing, when necessary, the provisions for loss allowance for expected credit losses.

The Company has a solid position in terms of cash, liquidity and working capital levels and in the year ended December 31, 2021, as well as in the first nine months of 2022, has not faced the necessity of impairment of assets due to COVID-19.

Furthermore, geopolitical instability arising from conflicts, such as the ongoing war in Ukraine, and the resulting imposition of sanctions, taxes or tariffs against Russia and Russia’s response to such sanctions (including retaliatory acts, such as cyberattacks and sanctions against other countries) could adversely affect the global economy or specific international, regional and domestic markets, including the Brazilian market. Such events could have an adverse effect on our business and financial performance through increased worldwide inflation, greater compliance costs, higher volatility in foreign currency exchange rates, destabilized supply chains and further market disruptions, including from cyberattacks targeting technologies that we rely on or the markets in which we or our customers operate. At this moment, the Company does not see any significant impact in its operations as a result of the conflict.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
2. Presentation and preparation of the unaudited condensed consolidated interim financial statements and significant accounting policies
These unaudited condensed consolidated interim financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standard Board (“IASB”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements.

These unaudited condensed consolidated interim financial statements for three and nine-month periods ended September 30, 2022 were authorized for issuance by the PagSeguro Digital’s Board of Directors on November 18, 2022.

2.1.    Basis of preparation of the condensed consolidated interim financial information

These unaudited condensed consolidated interim financial statements for the three and nine-month periods ended September 30, 2022 have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the IASB and disclose all (and only) the applicable significant information related to the financial statements, which is consistent with the information utilized by management in the performance of its duties.

These unaudited condensed consolidated interim financial statements do not include all the notes of the type normally included in an annual consolidated financial statement. Accordingly, this report is to be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2021 (the “Annual Financial Statements”).

The accounting policies and critical accounting estimates and judgments adopted are consistent with those of the previous financial year and corresponding interim reporting period.

2.2.    New accounting standards not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the consolidated financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

-IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current measurement model where estimates are remeasured in each reporting period. Contracts are measured using the building blocks of discounted probability-weighted cash flows, an explicit risk adjustment and a contractual service margin (CSM) representing the unearned profit of the contract which is recognised as revenue over the coverage period.

The standard allows a choice between recognising changes in discount rates either in the statement of profit or loss or directly in other comprehensive income. The choice is likely to reflect how insurers account for their financial assets under IFRS 9. An optional, simplified premium allocation approach is permitted for the liability for the remaining coverage for short duration contracts, which are often written by non-life insurers.


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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
2.2.    New accounting standards not yet effective (Continued)

There is a modification of the general measurement model called the ‘variable fee approach’ for certain contracts written by life insurers where policyholders share in the returns from underlying items. When applying the variable fee approach, the entity’s share of the fair value changes of the underlying items is included in the CSM. The results of insurers using this model are therefore likely to be less volatile than under the general model.

Targeted amendments made in July 2020 aimed to ease the implementation of the standard by reducing implementation costs and making it easier for entities to explain the results from applying IFRS 17 to investors and others. The amendments also deferred the application date of IFRS 17 to 1 January 2023. The group does not expect the new IFRS to materially impact its results of operations.

-Amendment to IAS 1 "Presentation of Financial Statements": issued in May 2020, with the objective of clarifying that liabilities are classified as current or non-current, depending on the rights that exist at the end of the period. The classification is not affected by the entity's expectations or events after the reporting date (eg, receipt of a waiver or breach of covenant). The amendments also clarify what "settlement" of a liability refers to under IAS 1. The amendments to IAS 1 are effective as of January 1, 2023. The group does not expect the new amendment to materially impact its results of operations.

-Amendment to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies: in February 2021 the IASB issued a new amendment to IAS 1 on disclosure of "material" accounting policies rather than "significant" accounting policies. The amendments define what "material accounting policy information" is and explain how to identify it. It also clarifies that immaterial accounting policy information does not need to be disclosed, but if so, it should not obscure the relevant accounting information. To support this change, the IASB also amended the "IFRS Practice Statement 2 Making Materiality Judgments" to provide guidance on how to apply the concept of materiality to accounting policy disclosures. This amendment is effective as of January 1, 2023. The group does not expect the new amendment to materially impact its results of operations.

-Amendment to IAS 8 - Accounting Policies, Change in Estimate and Error Rectification: the amendment issued in February 2021 clarifies how entities must distinguish changes in accounting policies from changes in accounting estimates, as changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events, as well as to the current period. This amendment is effective as of January 1, 2023. The group does not expect the new amendment to materially impact its results of operations.

-Amendment to IAS 12 - Income Taxes: the amendment issued in May 2021 requires entities to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. This typically applies to lease transactions (right-of-use assets and lease liabilities) and decommissioning and restoration obligations, as an example, and will require the recognition of additional deferred tax assets and liabilities. This amendment is effective as of January 1, 2023.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
3. Consolidation of subsidiaries
On September 30, 2022
Company Assets Liabilities Equity Net income (loss) for the period Ownership - % Level
Pagseguro Brazil 27,341,026 18,322,583 9,018,442 764,906 99.99 Direct
BS Holding 745,151 5,218 739,934 1,207 99.99 Direct
Pagseg Participações 776,461 870 775,591 71,397 99.99 Direct
Pagseguro Holding 5,028 6,133 (1,106) (161) 99.99 Direct
Pagbank Participações 177,174 22,787 154,388 (16,281) 99.99 Indirect
Paginvest (i) 2,000 2,000 100.00 Indirect
Net+Phone 403,808 58,961 344,848 72,924 99.99 Indirect
Pagseguro Tecnologia 357,280 134,049 223,231 10,202 99.99 Indirect
BCPS 1,772 (51) 1,823 483 99.99 Indirect
BSEC 1,757,306 1,745,839 11,467 4,372 99.99 Indirect
Biva Serviços 45,759 5,155 40,604 3,356 99.99 Indirect
Biva Corban 18,075 809 17,266 1,512 99.99 Indirect
FIDC 5,285,975 781,015 4,504,960 1,624,465 100.00 Indirect
TILIX 13,891 1,677 12,214 (185) 99.99 Indirect
BancoSeguro 20,821,714 20,117,951 703,763 (8,952) 100.00 Indirect
Yamí 2,894 815 2,079 (646) 99.99 Indirect
Registra Seguro 5,000 18 4,982 (18) 99.99 Indirect
CDS 10,932 703 10,230 756 99.99 Indirect
Zygo 4,875 12,337 (7,461) (11,196) 99.99 Indirect
Moip 733,824 577,962 155,861 (35,404) 100.00 Indirect
Concil 12,112 12,777 (664) (5,473) 100.00 Indirect
Pagseguro Chile 34 95 (61) (68) 100.00 Indirect
Pagseguro Colombia 992 1,400 (408) (414) 100.00 Indirect
PSGP México 1,031 1,384 (352) (370) 100.00 Indirect
Pagseguro Peru 14 286 (272) 281 100.00 Indirect
On December 31, 2021 (except for net income (loss), that is presented to nine-month period ended September 30, 2021)
On December 31, 2021
Company Assets Liabilities Equity Net income (loss) for the period Ownership - % Level
Pagseguro Brazil 23,863,783 15,250,100 8,613,683 773,576 99.99 Direct
BS Holding 545,693 7,019 538,674 19,313 99.99 Direct
Pagseg Participações 648,175 5,870 642,305 73,792 99.99 Direct
Pagseguro Holding (i) 36 36 99.99 Direct
Pagbank Participações 180,053 9,385 170,668 (2,270) 99.99 Indirect
Net+Phone 375,347 103,424 271,923 43,483 99.99 Indirect
Pagseguro Tecnologia 456,934 243,905 213,029 10,494 99.99 Indirect
BCPS 2,022 (52) 2,074 222 99.99 Indirect
BSEC 1,446,640 1,439,545 7,095 3,727 99.99 Indirect
Biva Serviços 42,901 5,653 37,248 3,115 99.99 Indirect
Biva Corban 21,200 5,446 15,754 8,519 99.99 Indirect
FIDC 4,770,455 816,980 3,953,475 1,728,015 100.00 Indirect
TILIX 13,972 1,573 12,399 5,011 99.99 Indirect
BancoSeguro 10,320,430 9,807,767 512,663 19,326 100.00 Indirect
Yamí 2,087 861 1,226 44 99.99 Indirect
Registra Seguro 5,000 9 4,991 (7) 99.99 Indirect
CDS 10,057 5,583 4,474 (2,842) 99.99 Indirect
Zygo 2,013 4,278 (2,265) (7,099) 99.99 Indirect
Moip 787,659 596,429 191,230 2,999 100.00 Indirect
Concil 2,390 3,080 (690) (424) 100.00 Indirect
Pagseguro Chile (i) 7 7 100.00 Indirect
Pagseguro Colombia (i) 28 28 100.00 Indirect
PSGP México (i) 1 1 100.00 Indirect
Pagseguro Peru (i) 13 13 100.00 Indirect

(i) Entities with very limited or no operation.
The operational context of the subsidiaries is to be read in conjunction with the annual financial statements for the year ended December 31, 2021.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
4. Segment reporting
Operating segments are determined based on the information reported and reviewed by the Board of Directors, which is responsible for allocating resources and assessing the performance of the business and to make PagSeguro Group's strategic decisions.

Considering that all decisions are based on consolidated reports, and that all decisions related to strategic and financial planning, purchases, investments and the allocation of funds are made on a consolidated basis, the PagSeguro Group and its subsidiaries operate in a single segment, as financial service agents.

Main companies of PagSeguro Group are domiciled in Brazil and have revenue arising from local customers and customers located abroad. The main revenue is related to sales from the domestic market. The revenue from international market represents 0.7%, and 1% for the three and nine-month periods ended September 30, 2022, respectively (2.3% and 2.8% for three and nine-month periods ended September 30, 2021 respectively).

5. Cash and cash equivalents
September 30, 2022 December 31, 2021
Short-term bank deposits 578,051 569,816
Short-term investment 826,468 1,224,546
1,404,519 1,794,362

Cash and cash equivalents are held for the purpose of meeting short-term cash needs and include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three-month or less and with immaterial risk of change in value.

Short-term bank deposits is mainly represented by amounts to cover instant payments (PIX), cash on ATMs and clients payments.

Short-term investments consist mainly of investments in Brazilian Treasury Bonds ("LFTs") with an average return of 100% of the Basic Interest Rate (SELIC, 13.75% per year on September 30, 2022 and 9.25% per year on December 31, 2021).

6. Financial investments
Consists of investments in LFTs, in the amount of R$1,073,816 in September 30, 2022 (R$782,647 in December 31, 2021) with an average return of 100% of the Basic Interest Rate (SELIC, 13.75% per year on September 30, 2022 and 9.25% per year on December 31, 2021), invested to comply with certain requirements for authorized payment institutions as set forth by the Brazilian Central Bank regulation. This financial asset was classified at fair value through other comprehensive income. Unrealized accumulated gain on LFTs in September 30, 2022 totaled R$130 (gain of R$164 in the nine-month period ended September 30, 2022).
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
7. Accounts receivable
September 30, 2022 December 31, 2021
Visa Master Hipercard Elo Amex Total Visa Master Hipercard Elo Amex Total
Legal obligors
Itaú 2,354,069 5,398,946 728,853 8,481,868 1,333,262 2,045,134 757,306 4,135,702
Bradesco 2,152,584 209,360 1,199,023 426,439 3,987,406 1,630,756 160,690 842,352 296,696 2,930,494
Nubank 3,606,582 3,606,582 2,045,699 2,045,699
Santander 664,816 2,427,889 8,200 3,100,905 818,937 1,464,314 3,253 2,286,504
Banco do Brasil 2,229,270 295,537 551,439 3,076,246 1,384,872 77,639 467,305 1,929,816
Banco Carrefour 145,778 960,791 1,106,569 121,398 744,030 865,428
Porto Seguro 685,787 181,694 867,481 550,352 141,924 692,276
CEF 269,445 173,395 376,800 819,640 206,969 136,125 257,929 601,023
Banco C6 800,713 800,713 481,017 481,017
Banco Cooperativo Sicoob 4,001 723,142 727,143 466,030 466,030
Sicredi 383,263 332,397 715,660 233,081 202,562 435,643
Banco Inter 525,053 525,053 407,601 407,601
Banco Bradescard 310,601 75,360 18,727 404,688 362,978 91,016 9,368 463,362
Midway 269,755 126,466 396,221 199,605 94,396 294,001
Banco Votorantim 358,353 358,353 316,917 316,917
Banco XP 333,326 333,326 197,903 197,903
Realize 150,308 180,803 331,111 85,992 161,637 247,629
Banco Pan 55,702 271,956 327,658 52,514 271,717 324,231
Will Financeira 311,663 311,663 55,972 55,972
Banco Original 299,219 299,219 168,343 168,343
Outros 1,499,186 965,259 333,046 1,118 2,798,609 1,337,653 984,499 215,379 770 2,538,301
Total card issuers(i) 11,507,891 18,224,578 728,853 2,479,035 435,757 33,376,114 8,516,272 10,517,262 757,306 1,792,333 300,719 21,883,892
Current card issuers 33,231,976 21,883,892
Non – Current card issuers 144,138
Cielo – Elo 174 42,662
Getnet 75,532 97,248
Other 5,931 11,716
Total acquirers (ii) 81,637 151,626
Working capital loans 813,282 1,069,671
Working capital loans ECL (iii) (494,106) (256,927)
Credit card receivables 1,014,126 726,095
Credit card receivables ECL (iii) (399,559) (174,046)
Other credit iniciatives 825,856 110,050
Other credit iniciatives ECL (iii) (8,911) (6,166)
Total credit receivables 1,750,688 1,468,676
Current 1,163,467 1,239,796
Non – Current 587,221 228,880
Other accounts receivable 96,582 156,700
Other accounts receivable ECL (3,888) (3,493)
Total accounts receivable 11,507,891 18,224,578 728,853 2,479,035 435,757 35,301,133 8,516,272 10,517,262 757,306 1,792,333 300,719 23,657,402
Current 34,569,772 23,428,522
Non – Current 731,361 228,880
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
7.    Accounts receivable (Continued)

(i) Card issuers: receivables derived from transactions where PagSeguro Brazil acts as the financial intermediary in operations with the issuing banks, related to the intermediation agreements between PagSeguro Brazil and Visa, Mastercard, Hipercard, Amex or Elo. However, PagSeguro Brazil’s contractual accounts receivable are with the financial institutions, which are the legal obligors on the accounts receivable payment. Additionally, amounts due within 27 days of the original transaction, including those that fall due with the first installment of installment receivables, are guaranteed by Visa, Mastercard, Hipercard, Amex or Elo, as applicable, if the legal obligors do not make the payment.
(ii) Acquirers: refers to card processing transactions to be received from the acquirers, which are a third parties acting as financial intermediaries between the issuing bank and PagSeguro Brazil.
(iii) The ECL (“expected credit losses”), are measured according to the IFRS 9. The provision rates are based on the internal credit rating that considers external information and are based on days past due. Every report date, PagSeguro reassesses the premises to adjust the historical credit loss experience with prospective information.
(iv) Refers to other dispersed receivables from legal obligors.

The maturity analysis of accounts receivable is as follows:

September 30, 2022 December 31, 2021
Past due after 91 days 751,035 325,263
Past due within 31 to 90 days 110,867 93,753
Past due within 30 days 80,154 84,447
Due within 30 days 12,363,185 3,924,701
Due within 31 to 120 days 13,142,216 12,033,372
Due within 121 to 180 days 4,674,985 3,457,830
Due within 181 to 360 days 4,353,793 3,808,539
Due after 360 days 731,361 370,128
Expected credit losses (906,463) (440,631)
35,301,133 23,657,402

8. Tax Receivable
September 30, 2022 December 31, 2021
Income tax and Social contribution (i) 413,703 294,955
Social integration program (ii) 34,804 167,701
Other 11,741 6,834
460,248 469,490
(i)The increase is mainly related to withholding taxes from FIDC quotas redeemed during 2022 amounted to R$1,072,980, representing withholding taxes of R$139,319
(ii)Refers to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) recoverable on transaction activities and other services.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
9. Related-party balances and transactions
i)Balances and transactions with related parties

September 30, 2022 December 31, 2021
Payables Payables
Immediate parent
UOL - sales of services (a)
10,719 16,216
UOL - shared service costs (b)
10,484 19,093
UOL – Deposits (c)
219,050 248,271
Affiliated companies
UOL Edtech Tecnologia Educacional S.A - Deposits (c)
103,773 229,250
Digital Services UOL S.A - sales of services (d)
9,546 7,612
Compass. UOL S.A. (d)
13,940 12,853
Web Jump Design em Informática Ltda.- Deposits (c)
12,493
Ingresso.com Ltda. - Depositis (c)
20,293
Invillia Desenvolvimento de Produtos Digitais Ltda – Deposits (c)
35,427
Compass. UOL Tecnologia Ltda (d)
5,040
Others
10,222 10,326
450,987 543,621
(a)Sales of services refer mainly to the purchase of advertising services from UOL.
(b)Shared services costs mainly related to payroll costs that are incurred by the parent company UOL and are charged to PagSeguro Group.
(c)Certificate of deposits (CD) acquired by UOL, UOL Edtech Tecnologia Educacional S.A, Web Jump Design em Informática Ltda., Ingresso.com Ltda., Invillia Desenvolvimento de Produtos Digitais Ltda. and others from BancoSeguro with interest rate between 110% to 115% per year of CDI. The maturity analysis is as follows:
September 30, 2022 December 31, 2021
Due within 31 to 120 days 24,808
Due within 121 to 180 days 193,592
Due within 181 to 365 days 369,576 283,929
394,384 477,521
(d)This payable refers mainly to colocation and cloud services.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
9.    Related-party balances and transactions (continued)

ii)    Revenue and expense from transactions with related parties

Nine-month period
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Revenue Expense Revenue Expense Revenue Expense Revenue Expense
Immediate parent
UOL - shared service costs (a)
40,638 68,017 96,722 109,409
UOL - sales of services (b)
779 21,783 839 24,028 2,339 66,619 2,424 69,915
UOL - deposits (c)
5,218 628 12,678 947
Affiliated companies
Digital Services UOL S.A. (d)
642 577 1,855 2,289
UOL Edtech Tecnologia Educacional S.A. – Deposits (c)
3,569 4,881 11,984 4,881
Compass. UOL S.A.(d)
38,825 24,004 102,753 65,281
Transfolha Transportadora e Distribuição Ltda.
3,598 12,485
Others
155 3,997 215 594 8,305 768 1,630
934 114,671 1,054 125,733 2,933 300,916 3,192 266,837
(a)Shared services costs mainly related to payroll costs sharing that are incurred by the parent company UOL and are charged to PagSeguro. Such costs are included in administrative expenses.
(b)Sale of services expenses is related to advertising services from UOL and revenue is related to intermediation fees.
(c)Expenses are related to UOL and UOL Edtech Tecnologia Educacional S.A., of BancoSeguro's Certificate of Deposits (CD).
(d)Expenses related to colocation and cloud services.

iii)Key management compensation

Key management compensation includes short and long-term benefits of PagSeguro Brazil's executive officers. The short and long-term compensation related to the executive officers for the three and nine month periods ended September 30, 2022 amounted to R$9,225 and R$20,300 (R$222 and R$39,642 for the three and nine month periods ended September 30, 2021).
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
10. Business combinations
On August 12, 2021, PagSeguro Brazil acquired 100% of the share capital and obtained control of Concil. Total consideration amounted to R$43,896 and the total net assets acquired at fair value amounted to R$23,165. The consideration paid in cash amounted to R$35,000 and the remaining portion in amount of R$8,896 was recognized in other liabilities and will be retained for the achievement of metrics. Concil main activity is in the information technology industry, focused on the processing of back-office solutions, including reconciliation services for the capture of credit cards with acquirers and sub acquirers.
The preliminary purchase price allocation ("PPA") was completed on September 30, 2021, which included the recognition of a customer portfolio with a fair value of R$3,839, non-compete agreement of R$940 and software of R$33,136. The Company has also recognized a contingency liability and indemnification assets of R$7,848 resulting in the recognition of goodwill of R$20,731, which is attributable mainly to operational synergy and cost reductions.
The PPA was elaborated considering projections for the period of five years based on management's budgets for Concil and applying an inflation rate plus the estimated growth of GDP of services (fluctuating from 2.0% to 4.5% per year) in order to project future cash flows, with a discount rate based on the weighted average cost of capital (fluctuating from 17.5% to 19.5% per year).
These acquisitions are in accordance with PagSeguro Group's business strategies, ramping up investments on new technologies, products, and services for the Group’s digital ecosystem. The fair value of assets and liabilities acquired is detailed in our annual financial statements for the year ended December 31, 2021.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
11. Property and equipment
a)Property and equipment are composed as follows:

September 30, 2022
Cost Accumulated depreciation Net
Data processing equipment 201,206 (62,835) 138,371
Machinery and equipment (i) 3,452,989 (1,002,191) 2,450,799
Buildings Leasing (ii) 98,544 (39,289) 59,255
Other 33,766 (10,434) 23,332
Total 3,786,505 (1,114,749) 2,671,757
December 31, 2021
Cost Accumulated depreciation Net
Data processing equipment 106,643 (51,294) 55,349
Machinery and equipment (i) 2,798,823 (654,360) 2,144,463
Buildings Leasing (ii) 94,048 (26,928) 67,120
Other 29,909 (7,789) 22,120
Total 3,029,423 (740,371) 2,289,052
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
11. Property and equipment (continued)

b)The changes in cost and accumulated depreciation were as follows:

Data processing equipment Machinery and equipment (i) Buildings Leasing (ii) Other Total
On December 31, 2020
Cost 77,413 1,881,556 79,890 22,114 2,060,973
Accumulated depreciation (35,572) (204,154) (12,621) (6,013) (258,360)
Net book value 41,841 1,677,402 67,269 16,101 1,802,613
On December 31, 2021
Opening balance
Cost 29,230 917,267 14,156 7,796 968,449
Purchases
29,940 931,859 15,013 10,478 987,290
Disposals
(1,226) (14,601) (857) (2,902) (19,586)
Acquisition of subsidiary
516 9 220 745
Depreciation (15,722) (450,206) (14,305) (1,777) (482,010)
Depreciation
(16,407) (453,593) (14,804) (3,137) (487,941)
Disposals
1,063 3,389 499 1,445 6,396
Acquisition of subsidiary
(378) (3) (85) (466)
Net book value 55,349 2,144,463 67,120 22,120 2,289,052
On December 31, 2021          
Cost 106,643 2,798,823 94,048 29,909 3,029,423
Accumulated depreciation (51,294) (654,360) (26,928) (7,789) (740,371)
Net book value 55,349 2,144,463 67,120 22,120 2,289,052
On September 30, 2022
Opening balance
Cost 94,563 654,168 4,496 3,857 757,082
Purchases
96,120 925,575 4,496 5,330 1,031,521
Disposals (iii)
(1,557) (271,407) (1,473) (274,437)
Depreciation (11,541) (347,831) (12,361) (2,645) (374,378)
Depreciation
(11,653) (477,614) (12,361) (2,893) (504,521)
Disposals (iii)
112 129,783 248 130,143
Net book value 138,371 2,450,798 59,255 23,332 2,671,757
On September 30, 2022  
Cost 201,206 3,452,989 98,544 33,766 3,786,505
Accumulated depreciation (62,835) (1,002,191) (39,289) (10,434) (1,114,749)
Net book value 138,371 2,450,798 59,255 23,332 2,671,757
(i)Net book value of POS devices is R$2,399,327 (R$2,091,671 as of December 31, 2021), which are depreciated over 5 years. The depreciation of POS in the nine-month period ended September 30, 2022, amounted to R$472,790 (R$319,703 in the nine-month period ended September 30, 2021). On September 30, 2022, PagSeguro have contractual obligations to acquire POS devices in the amount of R$978,995 (R$1,650,885 on December 31, 2021).
(ii)The leasing context is to be read in connection with the annual financial statements for the year ended December 31, 2021. As of September 30, 2022, PagSeguro had a lease liability presented in other current liabilities in the amount of R$16,707 (R$15,690 in December 31, 2021) and as non-current liability in the amount of R$42,638 (R$51,521 in December 31, 2021). In the nine month period ended September 30, 2022, the Company incurred in financial expenses related to these leases of R$13,977 (R$10,603 in the nine month period ended September 30, 2021).
(iii)The net book value of disposals is R$ 144,294 of which R$ 274,437 are cost and R$ 130,143 are accumulated depreciation. During the nine months period ended September 30, 2022, the Company revised its business strategy towards a specific group of merchants and observed no future economic benefit is expected from them, resulting in the provision for write off of POS devices allocated to these merchants in the net book value of R$134,306 (R$262,364 are cost and R$128,058 are accumulated depreciation).
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
12. Intangible assets
a)Intangible assets are composed as follows:
September 30, 2022
Cost Accumulated amortization Net
Expenditures related to software and technology (i) 2,615,810 (1,035,265) 1,580,545
Software licenses 250,936 (85,486) 165,450
Goodwill (ii) 209,908 209,908
Other 67,768 (24,375) 43,393
3,144,422 (1,145,126) 1,999,296
December 31, 2021
Cost Accumulated amortization Net
Expenditures related to software and technology (i) 2,016,541 (772,804) 1,243,737
Software licenses 196,854 (53,129) 143,725
Goodwill (ii) 209,908 209,908
Other 67,768 (14,962) 52,806
2,491,071 (840,895) 1,650,176
(i)The PagSeguro Group capitalizes expenses incurred with the development of platforms, which are amortized over their useful lives of approximately five years.
(ii)The balances comprise the goodwill arising from the acquisition of the companies Biva, BancoSeguro, Yamí, Zygo, Moip and Concil.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
12. Intangible assets (continued)
b)The changes in cost and accumulated amortization were as follows:
Expenditures with software and technology
Software licenses Goodwill Other Total
On December 31, 2020
Cost 1,319,061 103,256 169,667 62,786 1,654,770
Accumulated amortization (501,319) (29,060) (771) (531,150)
Net book value 817,742 74,196 169,667 62,015 1,123,620
On December 31, 2021
Cost 697,480 93,597 40,241 4,983 836,301
Additions (i) 715,382 97,103 40,589 4,983 858,057
Disposals
(18,167) (3,645) (348) (22,160)
Acquisition of subsidiary
265 139 404
Amortization (271,485) (24,068) (14,192) (309,745)
Amortization (278,220) (24,290) (14,192) (316,702)
Disposals 6,735 222 6,957
Net book value 1,243,737 143,725 209,908 52,806 1,650,176
On December 31, 2021
Cost 2,016,541 196,854 209,908 67,768 2,491,071
Accumulated amortization (772,804) (53,129) (14,962) (840,895)
Net book value 1,243,737 143,725 209,908 52,806 1,650,176
On September 30, 2022
Cost 599,269 54,082 653,351
Additions (i)
676,918 54,443 731,361
Disposals (ii)
(77,649) (361) (78,010)
Amortization (262,461) (32,357) (9,413) (304,231)
Amortization
(307,727) (32,690) (9,413) (349,830)
Disposals
45,266 333 45,599
Net book value 1,580,545 165,450 209,908 43,393 1,999,296
On September 30, 2022
Cost 2,615,810 250,936 209,908 67,768 3,144,422
Accumulated amortization (1,035,265) (85,486) (24,375) (1,145,126)
Net book value 1,580,545 165,450 209,908 43,393 1,999,296

(i) Refers to several and diverse expenditures with software and technology, mainly related to customer experience functionalities, such as, digital payment and digital banking account. Goodwill recorded in business combinations in 2021 are related to Concil and MOIP acquisitions.
(ii) The net book value of disposals is R$ 32,411 of which R$ 78,010 are cost and R$ 45,599 are accumulated amortization. During the three months period ended September 30, 2022, the Company revised some softwares originated from acquired companies and observed no future economic benefit is expected from them, resulting in the write off of some related softwares in the net book value of R$29,264 (R$73,182 are costs and R$43,918 are accumulated amortization).
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
13. Payables to third parties
Payables to third parties, in the amount of R$14,947,305 (R$13,217,150 as of December 31, 2021) correspond mainly to amounts to be paid to merchants related to transactions carried out by their card holders, net of the intermediation fees and discounts applied. PagSeguro Brazil's average settlement terms agreed upon with commercial establishments is up to 14 days.

Of the total amount of payables to third parties, R$832,343 (R$533,436 as of December 31, 2021) refer to the balance of transactions settled on merchant's payment account and available to be used by them and R$5,901,223 (R$5,167,577 as of December 31, 2021) refer to the balance of the clients maintained in their banking accounts that are invested by the Company in Certificate of Deposits with 30 days of maturity and interest average rate of 66% of CDI (59% of CDI in December 2021).
14. Deposits

September 30, 2022 December 31, 2021
Certificate of Deposit (i) 10,185,903 2,510,818
Interbank deposits (ii) 2,247,931 404,998
Corporate securities (iii) 204,862 218,180
12,638,696 3,133,996
Current 10,795,295 3,056,444
Non - Current 1,843,401 77,552
(i)The average return is 117% of CDI (163% of CDI in December 2021). From the total amount, R$2,018,322 refer to certificate of deposits with interest rates correlated to the IPCA (Brazilian inflation rates) and fixed rates that started in 2022. For these certificates of deposit, the Company entered into derivative financial instruments (“Swaps”) with the specific objective of protecting said deposit from fluctuations arising from inflation, changing IPCA and fixed rates for CDI rates. In September 2022, the Company recorded the net effects of the Swaps in the amount of R$13,877 (Note 26).
(ii)The average return is 112% of CDI (118% of CDI in December 2021).
(iii)The average return is 141% of CDI (152% of CDI in December 2021).

The maturity analysis of deposits based on due date of the agreements (disregarding that some can be withdrawn at any time, which is limited to the contracts with a due date of less than 365 days) is as follows:


September 30, 2022 December 31, 2021
Due within 30 days 1,139,741  646,232 
Due within 31 to 120 days 2,692,094  1,029,936 
Due within 121 to 180 days 1,822,017  313,008 
Due within 181 to 360 days 5,141,443  1,067,268 
Due to 361 days or more days 1,843,401  77,552 
12,638,696  3,133,996 
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
14. Deposits (continued)
The changes in deposits were as follows:
On December 31,2020 766,086
Additions 4,929,926
Withdraws (2,667,612)
Interest 105,596
On December 31,2021 3,133,996
Additions (i) 20,535,001
Withdraws (11,438,329)
Interest 408,028
On September 30, 2022 12,638,696
(i)Increase is mainly related to higher volume of deposits issued due to attractiveness of interest rates paid.
15. Salaries and social security charges
September 30, 2022 December 31, 2021
Payroll accruals (i)
145,233 75,151
Profit sharing
66,879 75,076
Payroll taxes (LTIP) (ii)
42,484 61,359
Social charges
34,940 39,200
Other
11,223 8,938
300,759 259,724
(i)Refers to 13th salary, provision for vacation, among others. Increase in September 30, 2022 is mainly related to the fact there was no 13th salary provision in December 31, 2021.
(ii)Refers to social charges and income tax over LTIP and LTIP goals balances. A significant portion of the balances recorded as of December 31, 2021 was paid during the first quarter of 2022.
16. Taxes and contributions
September 30, 2022
December 31, 2021
Taxes
Services tax and other (i)
178,356 171,902
Social integration program (ii)
29,234 26,832
Social contribution on revenues (ii)
199,872 164,330
Income tax and social contribution (iii)
2,771 31,865
Other
20,078 12,596
430,311 407,525
September 30, 2022 December 31, 2021
Judicial deposits (v)
Services tax (i)
(160,225) (159,101)
Social integration program (ii)
(27,484) (25,789)
Social contribution on revenues (ii)
(169,135) (158,701)
(356,844) (343,591)
73,467 63,934
(i)Refers to tax on revenues.
(ii)Refers mainly to Social Integration Program (PIS) and Social Contribution on Revenues (COFINS) charged on financial income.
(iii)Refers to the income tax and social contribution payable.
(iv)The PagSeguro Group obtained court decisions to deposit the amount related to the payments in escrow for matters discussed in items "i" and "ii" and above.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
17. Provision for contingencies
PagSeguro Group is party to labor and civil litigation in progress and are discussing such matters at the administrative and judicial levels, for which in some cases the PagSeguro Group has made corresponding judicial deposits. The likelihood of a negative outcome is assessed periodically and adjusted by management, when appropriate. Such assessment considers the opinion of its external legal advisors.

September 30, 2022 December 31, 2021
Civil 36,451 33,343
Labor 32,041 18,387
68,492 51,730
Labor Deposits (11,184) (10,167)
(11,184) (10,167)
   
57,308 41,563
Current 42,782 27,653
Non-Current 14,526 13,910

Below it is demonstrated the movements of the provision for contingencies in the nine-month period ended September 30, 2022:

On December 31,2020 28,804
Accrual 25,907
Settlement (17,760)
Interest 4,610
On December 31,2021 41,563
Accrual 27,969
Settlement (17,139)
Interest 4,915
On September 30,2022 57,308

The movements of the labor deposits in the nine-month period ended September 30, 2022 is mainly related to interest in the period.

The PagSeguro Group is party to tax and civil lawsuits involving risks classified as possible losses, for which no provision was recognized on September 30, 2022, totaling R$592,568 (December 31, 2021 - R$504,691). The increase is mainly related to interest in the period. The main tax and labor lawsuit classified as possible losses are disclosed in our annual financial statements of the year ended December 2021.
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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
18. Borrowings
In November 2021, the PagSeguro Group entered in a US$180 million borrowing agreement with maturity one year from the execution date and the payment will occur in a single instalment at the due date. At the moment the agreement was signed, the foreign exchange rate was R$ 5.6227 per US dollar amounting in R$1,012,086. Interest on the borrowing is paid at the maturity of the financing, together with the total settlement of the financial instrument. On September 30, 2022, the borrowing amounted to R$986,695 (R$1,005,787 as of December 31, 2021). The main impact of this decrease in the borrowing is related to foreign exchange rate, which on September 30, 2022 was R$ 5.4066 per US dollar.

For the same financing, the Company entered into derivative financial instruments (“Swaps”) for the borrowing in foreign currency, with the specific objective of protecting said borrowing from fluctuations arising from the exchange rate variation mentioned above. The overall charges related to the financing, considering all the costs of the operation, are equivalent to 109.4% of the CDI representing R$98,930 of interest recorded as financial expenses in 2022. In September 2022, the Company recorded the effects of the Swaps in the amount of R$143,136 basically represented by the difference in foreign exchange rates at the time of signing the borrowing agreement and September 2022, plus interest. For more details about financial instruments, see note 26.

In February 2022, the Group entered in a R$250 million borrowing agreement with maturity in three months from the execution date, the interest rate is 112% of CDI and the payment would occur in a single instalment as the due date. In May 2022, the borrowing agreement was re-signed with new maturity for an additional three months and was settled in August 2022 in the principal amount of R$250 million and the interests paid were R$7,015 in May and R$8,322 in August.

The proceeds from these borrowings were directed to working capital for the Company’s ordinary course activities, and they are not linked to satisfying other borrowing limits or covenants.

The table below demonstrates the changes in the borrowings:
On December 31,2020
Additions 1,012,086
Interest accrual 8,018
Financial Instruments (14,317)
On December 31,2021 1,005,787
Additions 250,000
Interest accrual 114,267
Payment of principal (250,000)
Payment of interest (15,337)
Financial Instruments (i) (118,022)
On September 30,2022 986,695
(i)For further details refer to note 26.

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PagSeguro Digital Ltd.
Notes to the unaudited condensed consolidated interim financial statements
As of September 30, 2022 and for the three and nine-month periods ended September 30, 2022 and 2021
(All amounts in thousands of reais unless otherwise stated)
19. Income tax and social contribution
a)Reconciliation of the deferred income tax and social contribution

Tax losses Tax credit Technological inovation (i) Other temporary differences -assets (ii) Other temporary differences -liability (iii) Total
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