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 diverse geographies and verticals.

• Gross profit reached a record $78 million, up 5% year-over-year and 12% quarter-over-quarter, despite currency headwinds and softness in Brazil.

• Adjusted EBITDA was $52 million, with a margin of 28% and operational leverage improving for the second consecutive quarter.

• Net income was $26.8 million, down 42% quarter-over-quarter and 34% year-over-year, mainly due to non-cash mark-to-market effects and higher finance costs.

• Continued investments in technology, product development, and expanding the license portfolio in key emerging markets.

Financial highlights

• Revenue for Q3 was $186 million, up 13% year-over-year and 8% quarter-over-quarter, led by Egypt, Mexico, Colombia, South Africa, and Argentina.

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

• Net cash from operating activities (excluding merchant funds, less CapEx) was $26 million, up 37% from Q2, with cash conversion near 100% of net income.

• Liquidity position remains strong at $320 million, including $208 million in available cash and $112 million in short-term investments, after a $100 million share buyback.

• Cash and cash equivalents stood at $560.5 million as of September 30, 2024, up $62.4 million year-over-year and $28.9 million sequentially.

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 robust pipeline and secular trends favoring digital payments and cross-border commerce.

• Q4 results are heavily dependent on the next four weeks due to seasonality; early Q4 TPV trends are solid, with a rebound in Brazil.