Dlocal Limited ((DLO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Dlocal Limited painted a picture of strong financial performance and growth, with record-breaking metrics and strategic expansions driving a positive outlook. Despite these achievements, the company acknowledged challenges such as currency devaluation and potential external regulatory risks.
Record-Breaking TPV and Revenue Growth
Dlocal Limited reported a remarkable achievement in its Total Payment Volume (TPV), which soared to a record high of $9.2 billion. This represents a 53% increase year-over-year and a 14% rise quarter-over-quarter. Additionally, revenue reached an all-time high of $256 million, marking a 50% year-over-year growth.
Strong Performance in Core Markets
The company experienced a robust rebound in its core markets, particularly Brazil and Mexico, which significantly contributed to its revenue growth. These markets, along with other rapidly growing geographies, played a crucial role in Dlocal’s financial success.
New Licenses and Product Innovation
Dlocal expanded its operational footprint by acquiring new licenses in the UAE, Turkey, and the Philippines. The company also introduced innovative products, including SmartPix in Brazil and Buy Now Pay Later integrations, showcasing its commitment to product development.
Increased Guidance
The company provided an optimistic outlook, expecting to reach the upper limit of its previous guidance for TPV and revenue by the end of the year. Furthermore, Dlocal anticipates exceeding the upper limit for gross profit and adjusted EBITDA.
Operational Efficiency
Dlocal achieved a record gross profit of $99 million and an adjusted EBITDA of $70 million, reflecting a 64% year-over-year increase. The adjusted EBITDA to gross profit ratio improved for the fifth consecutive quarter, reaching 71%, underscoring the company’s operational efficiency.
Argentine Peso Devaluation Impact
The devaluation of the Argentine peso negatively impacted Dlocal’s net income, reducing it to $43 million. Without this currency effect, net income would have been $53 million, highlighting the financial impact of currency fluctuations.
Challenges in Egypt
Dlocal faced challenges in Egypt, experiencing partial volume loss due to a large merchant implementing redundancies. Additionally, lower FX spreads resulting from currency devaluation posed further challenges.
Potential Risks from Tariffs and Regulations
The company highlighted potential risks from tariffs on cross-border e-commerce in Mexico and other regulatory changes that could affect future performance, indicating a cautious approach to navigating these challenges.
Forward-Looking Guidance
Dlocal Limited remains optimistic about the second half of 2025, expecting to reach the upper limit of its guidance for TPV and revenue. The company also forecasts that gross profit and adjusted EBITDA will exceed expectations. However, this guidance is tempered by potential global economic and regulatory risks.
In conclusion, Dlocal Limited’s earnings call reflected a strong financial performance with record-breaking growth metrics and strategic expansions. While challenges such as currency devaluation and regulatory risks were acknowledged, the company remains optimistic about its future prospects, supported by its robust operational efficiency and innovative product offerings.