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01/10 19:10
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total Payment Volume (TPV) $9.2 billion, a 53% year-over-year growth (65% in constant currency terms). Growth was driven by remittances, commerce, SaaS, delivery, streaming, and ride-hailing, with some offset from advertising weaknesses.
Revenue $256 million, a 50% year-over-year growth (63% in constant currency terms). Growth was supported by recovery in Brazil and Mexico, growth in Argentina, and contributions from Turkey, South Africa, and Pakistan. Partially offset by volume loss in Egypt and lower FX spreads due to currency devaluation.
Gross Profit $99 million, a 42% year-over-year growth (55% in constant currency terms). Growth was driven by volume increases in Argentina, Brazil, Egypt, and Mexico, as well as other markets like Bolivia, South Africa, and Turkey. Partially offset by retry costs in Chile and Colombia.
Net Income $43 million, negatively impacted by Argentine peso devaluation on bond portfolio. Excluding this effect, net income would have been $53 million. The company reduced its position in Argentine bonds by over 80%, reallocating to U.S. treasuries to reduce volatility.
Free Cash Flow $48 million, a 22% increase from the previous quarter. Reflects strong cash generation and operational strength.
Adjusted EBITDA $70 million, a 64% year-over-year growth. The adjusted EBITDA to gross profit ratio improved to 71%, marking the fifth consecutive quarter of improvement.
SmartPix: Launched in Brazil, this solution redefines the Pix experience and replicates functionalities of card-on-file payments for merchants.
Buy Now Pay Later (BNPL) integrations: Introduced in several markets, enabling merchants to benefit from credit demand in emerging markets without taking credit risk.
Stablecoin solutions: Progress made with partnerships like Circle and BVNK, leveraging dLocal's infrastructure for stablecoin transactions.
Geographic expansion: Added three new licenses in UAE, Turkey, and Philippines, enhancing global presence.
Merchant base growth: Now serving nearly 760 merchants, with top 50 clients operating in an average of 11 countries using 48 payment methods.
Record TPV: Achieved $9.2 billion in TPV, marking a 53% year-over-year growth.
Revenue and gross profit: Reached all-time highs of $256 million and $99 million, respectively.
Operational leverage: Improved adjusted EBITDA to gross profit ratio for the fifth consecutive quarter, reaching 71%.
Corporate governance: Announced transition to a majority independent Board and cancellation of treasury shares to align with best practices.
Leadership changes: Appointed Guillermo López Pérez as CFO and Christopher Stromeyer as SVP of Corporate Development.
Macroeconomic and trade landscape: The evolving global macroeconomic and trade landscape could impact emerging market consumers, potentially affecting demand and revenue.
Tariffs and regulatory changes: Recent increases in tariffs on cross-border e-commerce in Mexico and potential regulatory changes in other markets could disrupt operations and revenue streams.
Fiscal regimes in Brazil: Shifting fiscal regimes in Brazil pose a risk to financial performance and operational stability.
Currency devaluation and capital controls: Potential currency devaluation and changes in capital controls in the markets where the company operates could lead to financial volatility and reduced profitability.
Merchant redundancies in Egypt: Partial volume loss in Egypt due to a large merchant implementing redundancies in the market has negatively impacted revenue.
Retry costs in Chile and Colombia: Retry costs invoiced during the quarter in Chile and Colombia adversely affected profitability in these markets.
Operational expenses: Increased operating expenses, particularly linked to headcount growth in tech and higher third-party services, could pressure margins.
TPV and Revenue Guidance: The company expects to end the year around the upper limit of the guidance shared at the beginning of the year for TPV and revenue.
Gross Profit and Adjusted EBITDA Guidance: The company believes it is likely to exceed the previously stated upper limit for gross profit and adjusted EBITDA due to strong performance in the first half of the year and sustained momentum.
Risks to Guidance: The company highlighted risks including the evolving macroeconomic and trade landscape globally, increased tariffs on cross-border e-commerce in Mexico, potential regulatory changes in other markets, shifting fiscal regimes in Brazil, and potential currency devaluation and changes in capital controls in the markets where it operates.
H2 2025 Outlook: The company remains optimistic about the second half of 2025, emphasizing its ability to navigate challenges and seize opportunities despite inherent risks.
Dividend Payment: The company paid dividends in June, which is reflected in the decrease in corporate cash and cash equivalents.
Treasury Shares Cancellation: The company announced the cancellation of treasury shares currently held on its balance sheet. This action is intended to return excess capital to shareholders and align with corporate governance best practices.
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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