DLocal (DLO) Q2 2024 earnings summary

Executive summary

• Achieved record $6.0B TPV in Q2 2024, up 38% year-over-year and 14% quarter-over-quarter, with strong merchant growth and broad-based vertical performance in commerce, on-demand delivery, remittance, SaaS, and ride-hailing.

• Revenue reached $171M, up 6% year-over-year but down 7% quarter-over-quarter, mainly due to currency devaluations in Nigeria and Egypt.

• Gross profit was $70M, down 1% year-over-year but up 11% quarter-over-quarter, reflecting improved processing costs and merchant repricing impacts.

• Adjusted EBITDA was $43M, down 18% year-over-year but up 16% quarter-over-quarter, with margin improvements driven by higher gross profit and disciplined OPEX investment.

• Net income surged 161% quarter-over-quarter and 3% year-over-year to $46M, aided by non-cash mark-to-market gains on Argentine bond investments.

Financial highlights

• TPV: $6.0B (+38% YoY, +14% QoQ); Revenue: $171M (+6% YoY, -7% QoQ); Gross profit: $70M (-1% YoY, +11% QoQ).

• Adjusted EBITDA: $43M, margin 25%; net income: $46M, aided by $23M non-cash gain on Argentine bonds.

• Free cash flow was $35M, with a 77% conversion rate; liquidity stood at $306M in own funds.

• Gross profit margin was 41%; Adjusted EBITDA margin over revenue was 24.9% in Q2 2024.

• Cash and equivalents totaled $531.6M, including $186M own funds and $345.4M merchant funds.

Outlook and guidance

• 2024 guidance: TPV of $24.5–26.5B, gross profit of $280–300M, and Adjusted EBITDA of $180–200M, revised downward due to weaker EM currencies and higher Tier Zero merchant mix.

• Guidance reflects slower volume ramp-ups, lower take rates, and continued investment in long-term projects.

• Adjusted EBITDA guidance prioritizes long-term investments over short-term margin defense.

• Expect continued moderate decline in take rates due to local-to-local growth and Tier Zero merchant concentration, but declines are controlled.

• Sequential improvement in margins expected as investment cycle moderates, with a return to historical margin levels projected for late 2025.