DLocal Limited Q2 FY2025 earnings call

• Business delivered solid growth with TPV, revenue, and gross profit at record highs. - Added three new licenses: UAE, Turkey, and Philippines. - Launched SmartPix in Brazil, multiple Buy Now Pay Later integrations, and made progress on stablecoin solutions. - Demonstrated operational leverage with higher revenues per employee and ongoing AI/automation initiatives. - Net income was impacted by Argentine pesos devaluation but free cash flow was $48 million for the quarter.

In the second quarter of 2025, dLocal achieved a record high TPV of $9.2 billion. Revenue reached $256 million, representing a 50% year-over-year growth, and gross profit was $99 million, up 42% year-over-year. Core markets such as Brazil and Mexico rebounded and performed solidly, while other geographies grew at an even faster pace. TPV grew 53% year-over-year, with revenue and gross profit also reaching all-time highs. The TPV growth was broad-based across cross-border, local-to-local, pay-in, and payout flows.

• Expect to end the year around the upper limit of initial TPV and revenue guidance. - Believe gross profit and adjusted EBITDA will exceed previous upper limits due to strong first-half performance and sustained momentum.

• Evolving macroeconomic and trade landscape globally and its impact on emerging market consumers. - Increases in tariffs on cross-border e-commerce in Mexico and potential regulatory changes in other markets. - Shifting fiscal regimes in Brazil. - Potential currency devaluation and changes in capital controls in operating markets.

Q: Tito Labarta from Goldman Sachs asked about the higher guidance, what drove the better-than-expected results and the sustainability of ~50% TPV growth.

A: Pedro Arnt stated the strong results were spread across the board with Brazil, Mexico rebounding, and other regions performing well. He also discussed the S-curve of merchant adoption and the role of global merchants localizing payments.

Q: Guilherme Grespan from JPMorgan inquired about Brazil's one-off processing costs and stablecoins.

A: Pedro Arnt explained part of the result was a reversal of a one-off cost and that stablecoins are seen as an opportunity due to dLocal's position in on-ramps and off-ramps for stablecoins.

Q: Jamie Friedman from Susquehanna International Group asked about the trajectory of take rates.

A: Pedro Arnt said take rates are likely to continue a gradual decline but with new products like Buy Now Pay Later potentially offsetting some of the decline.

Q: Neha Agarwala from HSBC asked about the impact of tariffs and offline products.

A: Pedro Arnt discussed tariff risks related to cross-border commerce and mentioned developing capabilities for offline merchants in response to specific merchant contracts.

Q: Matt Coad from Truist asked about net take rate and growth from top merchants.

A: Pedro Arnt talked about take rate trends being influenced by various mix shifts and the growth of top merchants using dLocal in more markets