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01/10 19:14
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance, with record high revenue, improved gross profit, and adjusted EBITDA. Despite potential risks, the company remains optimistic about future growth, particularly in Argentina and Brazil. The Q&A session supports this sentiment, with analysts showing confidence in growth prospects despite uncertainties. The company's market cap suggests a moderate reaction, leading to a positive stock price prediction.
TPV (Total Payment Volume) $10.4 billion, representing significant growth of 59% year-over-year and 13% quarter-over-quarter. Growth was driven by remittances, e-commerce, on-demand delivery, and SaaS verticals. However, it was negatively impacted by the depreciation of the Argentine peso.
Gross Profit $103 million, up 32% year-over-year and 4% quarter-over-quarter. Growth was driven by volume increases in Brazil, Argentina, and Colombia, but offset by challenges in Egypt, Argentina, and Mexico due to factors like tariffs, cost pressures, and macroeconomic volatility.
Revenue $282 million, up 52% year-over-year and 10% quarter-over-quarter. Growth was driven by volume increases.
Adjusted EBITDA $72 million, up 37% year-over-year and 2% quarter-over-quarter. Growth was supported by disciplined expense management and operating leverage.
Net Income $52 million, driven by lower finance costs following a reduction in exposure to Argentine peso-denominated bonds.
Free Cash Flow $38 million for the quarter, reflecting the cash-generative nature of the business model.
Buy Now, Pay Later Fuse: Launched in six countries with plans to expand to two more. It has shown 2.5x growth in volumes quarter-over-quarter, deployed via a revenue share model with no credit risk.
APMs-on-file capabilities: Expanded to cover 27 local payment methods across 16 countries, improving checkout conversion rates significantly, e.g., a 34 percentage point increase in Peru.
Emerging markets expansion: Strong growth in Brazil, Colombia, and other LatAm, Africa, and Asia segments. Local payment methods like Pix in Brazil now account for over half of e-commerce volume.
Crypto corridors: Emerging as a significant opportunity, with dLocal positioned as a key provider for stablecoin and fiat transactions across 40+ markets.
TPV growth: Achieved $10.4 billion, a 59% year-over-year increase, marking the fourth consecutive quarter of over 50% growth.
Gross profit: Reached $103 million, up 32% year-over-year, driven by volume growth in key markets like Brazil and Colombia.
Adjusted EBITDA: Recorded at $72 million, representing 70% of gross profit, showcasing disciplined expense management.
Merchant diversification: Top 3 markets are growing slower than others, reducing market concentration. Top 10 merchants' concentration is also decreasing over time.
Partnerships: Collaborated with Western Union, Bolt, Fireblocks, and Google to expand payment solutions and infrastructure.
Volatile macro situation in Argentina: The company faces challenges due to economic instability in Argentina, including currency depreciation and inflation adjustments, which have impacted financial results and increased costs.
Temporary cost pressure in Mexico: The company is experiencing margin pressure in Mexico due to a payment mix shift and increased tariffs on imports, which have slowed TPV growth in the region.
Share of wallet losses in Egypt: The company has faced a full quarter's effect of share of wallet losses in Egypt, impacting revenue and growth in the region.
Increased tariffs in Mexico: Recent tariff increases on low-value goods in Mexico have caused a slowdown in business operations and TPV growth.
Shifting fiscal and tax regimes in Brazil: Potential changes in fiscal and tax policies in Brazil pose a risk to the company's operations and financial performance in the region.
Currency devaluations and FX regime changes: The company is exposed to risks from potential currency devaluations and changes in foreign exchange regimes in markets like Egypt, Bolivia, and Argentina.
Noncash IFRS inflation adjustment in Argentina: The company has been impacted by noncash IFRS inflation adjustments in Argentina, adding to financial volatility.
Temporary margin pressure in Mexico: A payment mix shift in Mexico has led to temporary margin pressure, affecting profitability.
TPV (Total Payment Volume): Expected to exceed the high end of the range shared during the second quarter '25 earnings call. Market share and merchant traction remain very strong.
Revenue: Tracking around the upper limit for the year.
Gross Profit and Adjusted EBITDA: Likely to be between the midpoint and the upper level of the guidance range.
Emerging Market Trends: Local payment methods are expected to account for nearly 60% of e-commerce volumes by 2027. Buy Now, Pay Later solutions are growing faster than the overall market and have significant potential. Crypto corridors through stablecoins are rapidly emerging, opening new business opportunities.
Product Innovation: Buy Now, Pay Later Fuse launched in 6 countries with plans to expand to 2 more shortly. APMs-on-file capabilities now cover 27 local payment methods across 16 countries, with rapid growth expected.
Macroeconomic Risks: Potential headwinds include increased tariffs in Mexico, shifting fiscal and tax regimes in Brazil, and potential currency devaluations or changes in FX regimes in markets like Egypt or Bolivia.
The selected topic was not discussed during the call.
The earnings call highlights strong financial performance, with record high revenue, improved gross profit, and adjusted EBITDA. Despite potential risks, the company remains optimistic about future growth, particularly in Argentina and Brazil. The Q&A session supports this sentiment, with analysts showing confidence in growth prospects despite uncertainties. The company's market cap suggests a moderate reaction, leading to a positive stock price prediction.
The earnings call presents a mixed picture. While there is strong DTC sales growth and margin expansion, concerns arise from increased inventory, SG&A expenses, and a decline in partner sales. The Q&A section reveals a lack of specific guidance on back-to-school trends, raising uncertainty. Despite positive aspects like a share buyback program and improved net loss, these are offset by inventory management challenges and store disruptions. Given the market cap of $2.36 billion, the stock is likely to experience a neutral movement, with no strong catalysts to push it significantly in either direction.
The earnings call highlights strong financial performance, with significant TPV growth and improved EBITDA. Positive momentum is expected to continue, driven by emerging markets and new product offerings. While there are some risks, such as tariffs and declining take rates, management remains optimistic. The Q&A session reinforces the positive sentiment, with analysts acknowledging the strong results and management's strategic positioning. The market cap suggests moderate stock price sensitivity, leading to a positive outlook for the next two weeks.
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