CSU Digital S A : 4Q23 Earnings Release

4Q23 Results

March 20, 2024

Contact:

ri.csu.com.br

[e-mail] [phone]

CONTENTS

Quarter highlights	03
Message from Management	04
Consolidated results	06
Capex	.............................................................................................................................................................................................................	12
Operating cash generation	13
Capital structure	14
Performance by business unit	15
1.	CSU Pays (digital payments, embedded finance and loyalty and incentives)	15
1.1	Operational performance	16
1.2	Financial performance	19
2.	CSU DX (Digital Experience)	22
2.1	Operational performance	22
2.2	Financial performance	23
Capital markets	26
Subsequent events	28
Events calendar	28
Exhibits	29
1.	Income statement	29
2.	Statement of financial position	30
3.	Cash flow statement	31
4.	Reclassification of results by business unit	32
5.	Gross contribution reconciliation	33

Earnings Call

The Company will present the results through video conference with simultaneous translation to English.

Date: Thursday, March 21, 2024

PORTUGUESE AND ENGLISH

Time: 11:00 a.m. (BR) | 10:00 a.m. (NY)

Earnings conference call: click here

SÃO PAULO, MARCH 20th, 2024

CSU Digital S.A. (B3: CSUD3) ("CSU" or "Company"), leader in the Brazilian market of cutting-edge technology solutions for digital payments, embedded finance, digital experience, and customer loyalty and incentive, announces its results for the fourth quarter of 2023.

All data was prepared in accordance with accounting practices adopted in Brazil observing the pronouncements, guidelines and interpretations of the Brazilian Accounting Pronouncements Committee (CPC) duly approved by the CVM, the IFRS standards issued by IASB, and in compliance with the provisions of Law 6,404/76.

In June 2022, the Company announced the restructuring of its business units, which were renamed CSU Pays and CSU DX, replacing the former names CSU.CardSystem and CSU. Contact, respectively. Subsequently, an August 2022 Shareholders Meeting approved the corporate name change to CSU Digital S.A., and in the following month the Company's shares began trading on B3 - Bolsa, Brasil, Balcão under its new trading code CSUD3. These changes represent key steps that reposition our business, which resulted from a vast investment program that has been carried out in recent years.

Consequently, adjustments were made (please refer to Exhibit 4) to our grouping of results by business division, according to the aforementioned changes. Such adjustments more appropriately reflect the nature of our service contracts from the perspective of end- to-end platform, thereby making it possible to compare the results achieved between the time periods.

• ROCE: return on capital employed; ROE: return on equity; ROIC: return on invested capital.

Quarter and year highlights

Consistent results, solid capital structure and new portfolio

create an ideal environment for a new expansion cycle

Operational indicators:

• B2B clients: Wide-ranging contract renewals, providing even more certainty to results. Following the closing of 4Q23, in February 2024 we signed a contract with a new client of the insurance industry for Embedded Finance services.
• Registered cards and accounts: Continuous expansion reaching 36.9 million registered units this quarter (+2.8% vs. 4Q22).
• Number of transactions managed: Expansion of +24.4% vs. 2022, reaching 1.1 billion transactions in 2023. Financially, R$326.6 billion (+21.8% vs. 2022) were processed on our platforms.
• Number of CSU DX digitalized interactions: reaches an average of 71% of the total of 2023.

Technology platforms: In the first half of 2023, we completed the development of new CSU Pays platforms (new digital payments methods and Embedded Finance). In the third quarter, we launched our CSU DX hyperautomation processes platform (HAS), creating new and relevant growth opportunities.

Net revenue: Continuous expansion of operational activity levels leads once again to another quarter of revenue growth in both business units compared to the previous quarter, reaching R$135.7 million in 4Q23 (+2.5% vs. 3Q23 and +4.9% vs. 2Q23). In 2023 it totaled R$530.2 million, in a slight reduction of 1.3% compared to 2022, as a consequence of contraction at DX in the first half of the year, due to the advance of digitalization and less heated economy in the period (these effects diminished still in 2023).

Gains in efficiency: Expansion in the volume of contracted services; evolution of the digitalization agenda and disciplined expenses management lift results.

• Gross contribution: For the full year it totaled R$267.1 million with a 50.4% margin (+4.8% and +3.0 p.p. vs. 2022, respectively). The quarter saw growth of +1.5% compared to 4Q22, reaching R$68.9 million in 4Q23, with a margin of 50.7%.
• EBITDA: In 2023, it reached a record R$181.4 million, 9.2% higher compared to 2022. In the quarter, the indicator grew +12.9 % vs. 4Q22 and reached R$48.2 million, reflecting productivity gains and our non-stopfinancial diligence in controlling expenses.
• EBITDA margin: Performance gains elevated the indicator, which reached 34.2% in 2023 (+3.3 p.p. vs. 2022) and it reached 35.6% in 4Q23 (+4.7 p.p. vs. 4Q22).
• Net income: Significant annual expansion of +20.2% compared to 2022, reaching R$88.4 million in 2023, new all-time record. In the quarter, it grew 9.4% vs. 4Q22, reaching R$24.0 million in 4Q23.

Profitability and capital structure: Low financial leverage combined with high and growing profitability allow greater investments, with attractive returns and remuneration to shareholders.

• Select profitability indicators: ROCE¹, ROE, ROIC reached excellent levels of 25%, 22% and 21%, respectively.
• Earnings distribution: During the year, R$ 63.7 million was actually paid out in proceeds, part of which relates to the 2022 profit and part to the 2023 profit. In addition, another R$17.3 million will be presented to the AGM as a complementary dividend, which, if approved, will result in a 50% payout of the 2023 profit. The distribution of R$ 6.5 million in IOC for 1Q24 has also been approved for payment in April/24.

4Q23 Results
3

Message from Management

CSU Digital has undergone a profound transformation and expansion process over the last four years, based on four main pillars: digitalization, hyperautomation, portfolio expansion and use of artificial intelligence.

In the first pillar, we have focused on the digitalization of our products. This movement was essential to adapt our services to the digital environment, making them more accessible and efficient for our customers. Digitalization has allowed greater agility in financial transactions, eliminating the need for physical processes and significantly reducing response times. Additionally, digitalization has expanded our customization and integration capabilities with other platforms, providing a more complete and satisfying experience for users.

Meanwhile, CSU Digital also invested heavily in the hyperautomation of its own processes. This concept goes beyond traditional automation, seeking to automate not only individual tasks but also complete and interconnected processes. Hyperautomation has enabled the significant optimization of our operations, reducing costs, increasing efficiency and minimizing errors.

These two pillars - digitalization and hyperautomation - were fundamental for the evolution of CSU's results to become even more significant, with several operational and financial all-time- high records presented repeatedly. In 2023:

• we reached 36.9 million registered cards and accounts (+2.8% vs. 2022);
• 1.1 billion transactions were processed in our platforms (+24.4% vs. 2022), representing R$327 billion;
• the number of digitalized interactions at DX averaged 71% of the total of the year, an agenda that has allowed constant margin gains in this business unit;
• our revenue at CSU Pays continues to expand and reached R$338 million in 2023 (+5.4% vs. 2022);
• gross margin for both units grows uninterruptedly, reaching 51.7% at CSU Pays (vs. 51.4% in 2022) and 17.7% at CSU DX (vs. 16.9% in 2022), increasing the total at the Company to 39.4% (vs. 37.5% in 2022);
• the Company's EBITDA reached its record high, both in 4Q23 and in 2023, hitting R$48.2 million and a margin of 35.6% in 4Q23 (+13% and +4.7 p.p. vs. 4Q22, respectively) and R$181.4 million and a margin of 34.2% in 2023 (+9% and +3.3 p.p. vs. 2022);
• net income: in 2023 it reached a record R$88.4 million, an increase of R$14.8 million (+20.2% vs. 2022) with a margin of 16.7% (+3.0 p.p. vs. 2022), another record.

Coupled with operational improvement measures, we are building the foundations for a promising future for the Company, opening new, important growth opportunities by expanding our portfolio. We successfully completed the development of our comprehensive platform of solutions in financial transaction processing (cards, Pix, cryptocurrencies, digital accounts, transfers, payments, top-ups, among others) and which are now available embedded via API in multiple interfaces (either in CSU white-label apps or in clients' apps) in 2Q23. Subsequently, in 3Q23 we began to offer our customers -- in a broad and structured way -- the most advanced technology for hyperautomation of business processes in mass front-office,middle-office and back-office operations, with the launch of our HAS platform, a new solution from CSU DX.

With the end of this phase, CSU Digital reinforces its position as the largest and most complete platform on the market. Our solutions offer client companies the ability to provide their end customers with a complete, integrated and genuinely digital financial services experience from start to finish, regardless of their industry.

4Q23 Results

4

Finally, as the fourth pillar of our strategy, this new phase was enhanced by the massive use of artificial intelligence in both CSU Pays and CSU DX. This makes our offering more efficient than anything currently available. The application of artificial intelligence increases the levels of approval, assertiveness and customization of offerings, reduces operational errors, risks, rework and the average service time, which, consequently, improves business profitability and customer satisfaction.

Each of these recently launched initiatives has generated a lot of interest from potential customers from the most diverse industries, paving the way for a new, promising expansion cycle at the Company, whether obtaining new customers or capturing cross-selling and up- selling opportunities.

Before closing, CSU remains committed to increasing the return on invested capital for its investors. In this sense, in 2023, the Company effectively paid R$ 63.7 million, of which R$ 14.6 million were extraordinary dividends for the year 2022, R$ 22.2 million were the gross amount of IOC for the year 2022 and R$ 26.9 million were the gross amount of IOC for the year 2023. In addition, on March 19, 2024, the Board of Directors approved and will submit for approval to the General Meeting of April 29, 2024, the distribution of profits for the year, for which the proposed complementary dividends amount to R$ 17.3 million, which would increase the payout of 2023 to 50%. Finally, the Board of Directors of the Company has already approved the payment of R$

6.5 million as interest on own capital related to the results of the first quarter of 2024, to be paid on April 4.

We thank everyone for the trust placed in the current Administration.

Marcos Ribeiro Leite

Founder & CEO

4Q23 Results
5

Consolidated results

Results summary

Consolidated main indicators	4Q23	4Q22	% Var.	3Q23	% Var.	2023	2022	% Var.
(R$ thousand)	YoY	QoQ
Net revenue	135,678	138,479	-2.0%	132,356	2.5%	530,233	537,168	-1.3%
Gross contribution	68,850	67,822	1.5%	67,996	1.3%	267,112	254,835	4.8%
Contribution (%)	50.7%	49.0%	1.7 p.p.	51.4%	-0.7 p.p.	50.4%	47.4%	3.0 p.p.
Gross profit	54,294	54,329	-0.1%	53,577	1.3%	208,923	201,428	3.7%
Gross margin	40.0%	39.2%	0.8 p.p.	40.5%	-0.5 p.p.	39.4%	37.5%	1.9 p.p.
EBITDA	48,242	42,745	12.9%	46,502	3.7%	181,383	166,084	9.2%
EBITDA margin	35.6%	30.9%	4.7 p.p.	35.1%	0.5 p.p.	34.2%	30.9%	3.3 p.p.
Net income	24,041	21,978	9.4%	23,695	1.5%	88,423	73,572	20.2%
Net margin	17.7%	15.9%	1.8 p.p.	17.9%	-0.2 p.p.	16.7%	13.7%	3.0 p.p.

Net revenue:

R$ 530.2 MM

2023

Gross contribution:

R$ 267.1 MM Mg. 50.4%

2023

EBITDA:

	Net revenue: Totaled R$530.2 million in 2023, lower by 1.3% vs. 2022.
-1.3%	In the quarterly view, it is possible to note an important evolution
of these indicator since 2Q23 (+2% 3Q23 vs. 2Q23 and +3% 4Q23 vs.
yoy
3Q23), with expansion in both business units reflecting the improved
	economic and financial outlook in Brazil, which led to an increase in
	operating volumes and the end of our contract renewal cycle.
+4.8%	For a better understanding of this indicator, it is very important to
+3.0 p.p.	observe the per-vertical performance in the next sessions, considering
yoy	that they are going through very different dynamics at the moment.

Net revenue (R$ million)

R$ 181.4 MM Mg. 34.2%

2023

Net income:

R$ 88.4 MM Mg. 16.7%

2023

+9.2%				537.2	530.2
+3.3 p.p.			514.0
yoy	423.8	456.9
+20.2%
+3.0 p.p.
yoy	2019	2020	2021	2022	2023

138.5				135.7
	132.8		132.4
	129.4
4Q22	1Q23	2Q23	3Q23	4Q23

DX		DX
39%	Pays	36%
	+3.0 p.p.
4Q22		4Q23
Pays		Pays
61%		64%

4Q23 Results

6

CSU Pays (our core business) grows consistently and recurringly on an annual basis (CAGR2 of +12% p.y. since 2019), also enjoying gains in overall representation. In 2023, the unit grew +5% compared to 2022. It is worth noting that this progress was achieved in a year in which the company prioritized the renewal of its main contracts (more than 90% completed), demonstrating that this growth was due basically to its strong progress in operating volumes. This renewal phase is of major importance as it brings greater predictability to the current business and confidence for a new cycle of expansion, which is intensifying thanks to the recently expanded portfolio.

CSU DX has undergone a profound operational transformation, migrating from a traditional service model to becoming increasingly digital (71% of interactions). This movement, which initially led to greater revenue pressure, but in exchange generated greater profitability bringing the margin of this vertical to its highest value in history (+4.8% p.p. of gross margin since 2019, when this process began). It is worth noting that this dynamic seen exclusively in the customer experience operation, which is allocated to CSU DX, tends to stabilize considering the high level of digitalization already achieved and that this vertical enters a very different cycle from now on. Another important point is that, CSU DX began to encompass services with greater added value in the scope of hyperautomation of processes with massive use of artificial intelligence (AI), creating new and promising avenues of revenue growth and profitability for this unit and for the Company as a whole (cross-selling and up-selling).

In the quarterly view of CSU Digital's consolidated revenue, it is possible to note an important evolution of these indicators since 2Q23 (+2% 3Q23 vs. 2Q23 and +3% 4Q23 vs. 3Q23), with expansion in both business units reflecting the improved economic and financial outlook in Brazil, which led to an increase in operating volumes and the end of our contract renewal cycle.

For those who are not yet fully familiar with the evolution of CSU Digital's business and portfolio, the company has developed and executed over the years a model that is based on the full service concept. In this model, CSU Digital offers a robust technological infrastructure for financial services (CSU Pays), while providing all operational support (CSU DX) for these products on a daily basis with a very high degree of automation and performance, so that our customers can deliver a unique and complete experience to their users on short notice and without sizable investments.

This way of operating allows relevant synergies between products and a high degree of predictability of our revenues:

• Originally, CSU Pays main line of revenue was associated with the processing and management of card operations, in addition to the formulation and management of loyalty & incentive programs, both aimed at serving issuers. Consequently, revenue from these services has a direct correlation with the number of card units available for billing as well as the number of transactions, with different values for each type of processing. New modalities are beginning to gain relevance in this vertical with the launch of our new payment solutions (virtual cards, digital cards, wallets, Pix, Pix on Credit, Cryptocurrencies) and Embedded Finance being offered globally in an integrated fashion through CSU Switcher.
• Likewise, we guarantee all the capacity (infrastructure, people and technology) of the contracted Digital Experience (DX) services. Originally created to meet the demands of our customers in the card industry on the customer service front, this unit has undergone a true digital transformation in recent years, becoming quite dense in technology. From now on, it now has a new type of service marketed under the name HAS, which uses the best artificial intelligence tools for hyperautomation of business processes.

2 CAGR: Compound Annual Growth Rate.

4Q23 Results
7

Costs (excluding depreciation and amortization): This line suffered a significant reduction of R$19.2 million in 2023 (-6.8%vs. 2022) to reach a total of R$263.1 million compared to R$282.3 million in 2022. In the fourth quarter, the reduction was R$3.8 million (-5.4%vs. 4Q22). The savings achieved are the result of effective efficiency gains and greater consumption of digital services by customers in both business units, with a consequent reduction in personnel, postage and communication costs, in return for an increase in contracted service costs (e.g., cloud).

Gross contribution3: It reached its all-time record of R$267.1 million in the year, which represents a margin (as a function of revenue representation) of 50.4% compared to R$254.8 million and a margin of 47.4% in the previous year, an increase of R$12.3 million (+4.8% and +3.0 p.p. vs. 2022, respectively). In 4Q23 it reached R$68.9 million with a margin of 50.7%, compared to R$67.8 million and a margin of 49.0% in the same period of the previous year, an increase of R$1.1 million (+1.5% and +1.7 p.p. vs. 4Q22).

This increase is due to the greater relevance of the CSU Pays business division within the total, which has greater profitability, in addition to efficiency gains from the deep digitalization of products and processes carried out in recent years in both verticals.

Gross contribution (R$ million) and margin (%)

		42.1%	47.4%	50.4%
	40.7%
37.8%
		267.1
			254.8
		216.3
	186.1
160.1
2019	2020	2021	2022	2023

49.0%	49.0%	50.4%	51.4%	50.7%
67.8	65.1	65.2	68.0	68.9
4Q22	1Q23	2Q23	3Q23	4Q23

3 Gross Contribution: Non-accounting measure that considers net revenue minus costs, excluding depreciation and amortization inherent in said costs. See reconciliation in Exhibit 5.

4Q23 Results

8

Total costs, gross income and gross margin: If we include the depreciation and amortization relevant to the cost line presented above, the total for this group in the year was R$321.3 million compared to R$335.7 million in the previous year, a significant saving of R$14.4 million (-4.3% vs. 2022, respectively). In the quarter, the total for this line was R$81.4 million vs. R$84.2 million in 4Q22, showing a reduction of R$2.8 million (-3.3% vs. 4Q22).

As a result, gross profit in 2023 reached R$208.9 million with a margin of 39.4%, compared to R$201.4 million with a margin of 37.5% in the previous year, an increase of R$7.5 million (+3.7% and +1.9 p.p. vs. 2022, respectively). In the quarter it reached R$54.3 million, in line with the result achieved in 4Q22, with a gross margin of 40.0%, which represents a gain of +0.8 p.p. vs. 4Q22, when the gross margin was 39.2%. It is important to note that due to the resumption of revenue growth in recent quarterers demonstrated by the Company's two business units, In the second half of this year, we see an even stronger increase in the gross profit indicator, up 6.7% compared to the first half. (+1.3% in 4Q23 vs. 3Q23 and +5.8% in 3Q23 vs. 2Q23).

Gross income (R$ million) and margin (%)

			37.5%	39.4%
		32.3%
	29.7%
25.8%		201.4	208.9
		166.0
109.3	135,8
2019	2020	2021	2022	2023

39.2%	37.9%	39.2%	40.5%	40.0%
54.3	50.4	50.6	53.6	54.3
4Q22	1Q23	2Q23	3Q23	4Q23

Selling, general and administrative expenses (SG&A): In 2023, the Company's SG&A - in this case including the corresponding depreciation and amortization (D&A) - remained practically in line when compared to 2022, and totaled R$95.5 million (+0.1% vs. 2022). The maintenance of expenses at this level is due to (i) higher amounts spent in a timely manner on termination and fines, as disclosed in 2Q23, (ii) higher marketing expenses with the launch of new products,

1. the initial costs of our internationalization project, partially offset by (iv) positive effects especially in the second half of the year on personnel, consultancies and rent in line with our disclosed efficiency plan. If we excluded non-recurring expenses, in 2023 the total of this group would be R$92.5 million, which would represent a reduction of 3.0% compared to 2022.

In a quarterly view it reached R$25.8 million in 4Q23 compared to R$26.5 million in the same period of 2022, a reduction of R$0.7 million (-2.7% vs. 4Q22), explained by (i) lower personnel expenses by capturing the benefits of the structure adjustment carried out in 2Q23, (ii) lower expenses with consultancies and (iii) lower expenses with equipment and software rental for specific projects more than offsetting the (iv) initial expenses incurred related to the structuring of our operations in the United States.

Consolidated SG&A	4Q23	4Q22	% Var.	3Q23	% Var.	2023	2022	% Var.
(R$ thousand)	YoY	QoQ
General and administrative	(22,283)	(20,827)	7.0%	(18,824)	18.4%	(81,174)	(77,058)	5.3%
Depreciation and amortization	(1,894)	(1,571)	20.6%	(1,214)	56.0%	(5,713)	(8,166)	-30.0%
Sales and marketing	(1,618)	(4,122)	-60.7%	(2,736)	-40.9%	(8,637)	(10,176)	-15.1%
Total SG&A expenses	(25,795)	(26,520)	-2.7%	(22,774)	13.3%	(95,524)	(95,400)	0.1%
% of net revenue	19.0%	19.2%	-0.2 p.p.	17.2%	1.8 p.p.	18.0%	17.8%	0.2 p.p.

4Q23 Results

9

Other operating income (expenses): In 2023 it reached a net revenue of R$4.1 million compared to a net expense of R$1.5 million in the same period of the previous year, representing a positive evolution of R$5.6 million. In the quarter it resulted in a net revenue of R$3.3 million compared to a net expense of R$0.1 million, in 4Q22, also a positive evolution by R$3.4 million when compared to the same period of the previous year, mainly influenced by the reversal of provisions.

EBITDA4 and EBITDA margin: Remaining in continuous expansion, the indicator reached record levels in 2023 both from a nominal and marginal point of view, reaching R$181.4 million and 34.2% compared to R$ 166.1 million and 30.9% in the same period of 2022, an increase of R$15.3 million (+9.2% and +3.3 p.p. vs. 2022, respectively). Quarterly it also reached a record value of R$48.2 million, with a margin of 35.6% in 4Q23 compared to R$42.7 million and a margin of 30.9% in the same period of 2022, an increase of R$5.5 million (+12.9%) and +4.7 p.p. vs. 4Q22, respectively. The evolution of these indicators is due to the recognition of operational benefits, mainly from our digital transformation plan of products and processes, which has been implemented over the last few years and is aimed at increasing the operational efficiency of our verticals.

EBITDA (R$ million) and EBITDA margin (%)

	28.6%	29.5%	30.9%	34.2%
24.6%
		166.1	181.4
		151.5
	130.8
104.1
2019	2020	2021	2022	2023

30.9%	32.8%	33.3%	35.1%	35.6%
		48.2
			46.5
	43.5	43.1
42.7
4Q22	1Q23	2Q23	3Q23	4Q23

Consolidated EBITDA reconciliation	4Q23	4Q22	% Var.	3Q23	% Var.	2023	2022	% Var.
(R$ thousand)	YoY	QoQ
Net income	24,041	21,978	9.4%	23,695	1.5%	88,423	73,572	20.2%
(+) Income taxes	7,241	5,634	28.5%	6,458	12.1%	28,358	27,400	3.5%
(+) Financial result	510	69	639.1%	717	-28.9%	700	3,539	-80.2%
(+) Depr. and amort.	16,450	15,064	9.2%	15,633	5.2%	63,902	61,574	3.8%
EBITDA	48,242	42,745	12.9%	46,502	3.7%	181,383	166,084	9.2%
EBITDA margin	35.6%	30.9%	4.7 p.p.	35.1%	0.5 p.p.	34.2%	30.9%	3.3 p.p.

4 EBITDA: Prepared in accordance with CVM Instruction 527/12, it is a non-accounting gauge that consists of the net result for the period, plus taxes on profit, financial expenses net of financial income, and depreciation and amortization.

4Q23 Results

10