DLocal (DLO) Q3 2024 earnings summary

Executive summary

• Achieved record total payment volume (TPV) of $6.5 billion in Q3 2024, up 41% year-over-year and 8% quarter-over-quarter, with strong growth across multiple geographies and verticals.

• Delivered record gross profit of $78 million, up 5% year-over-year and 12% quarter-over-quarter, despite currency headwinds and softness in Brazil.

• Revenue grew 13% year-over-year and 8% quarter-over-quarter to $186 million, driven by diverse verticals and geographies.

• Adjusted EBITDA reached $52 million, up 23% quarter-over-quarter, with margin improvement and strong cash conversion.

• Net income was $27 million, down 42% quarter-over-quarter and 34% year-over-year, mainly due to non-cash mark-to-market effects and higher finance costs.

Financial highlights

• Gross profit margin was 42%, up from 41% last quarter but down from 45% a year ago.

• Adjusted EBITDA margin was 28% for the quarter, with adjusted EBITDA/gross profit ratio at 67%, up 6 percentage points quarter-over-quarter.

• Adjusted net income (excluding Argentine bond and intercompany loan impacts) was $43 million, down 5% quarter-over-quarter and 12% year-over-year.

• Cash and cash equivalents stood at $560.5 million as of September 30, 2024, up $62.4 million year-over-year.

• Net cash from operating activities (excluding merchant funds, less CapEx) was $26 million, nearly 100% of net income.

Outlook and guidance

• Guidance for the full year remains unchanged, with Q4 expected to benefit from seasonal commerce volume increases, especially around Black Friday.

• Management remains optimistic about long-term growth, citing a strong pipeline and ongoing secular trends favoring digital payments and cross-border commerce.

• Q4 results are heavily dependent on the next few weeks due to seasonality; early Q4 trends are solid, but caution is advised due to market volatility.

• Management continues to invest in technology and operations for future growth, focusing on operational leverage and cost efficiencies.

• Forward-looking statements highlight ongoing risks and uncertainties, especially regarding Adjusted EBITDA guidance due to unpredictable components.