On August 13, dLocal (NASDAQ:DLO) reported second-quarter results that were hard to poke holes in. Total payment volume hit $17.7 billion, up 92% year over year, its best pace in more than four years. Revenue climbed 56% to $399.7 million, and gross profit reached a record $127.2 million. For a company whose whole business is moving money faster and cheaper across emerging markets, this was about as strong a quarter as it gets.
Behind the headline number is a business that keeps getting stickier with the merchants it already has. Net revenue retention landed at 153%, the fifth straight quarter above 140%, and TPV retention hit 188%, meaning existing clients are adding countries, payment methods, and products rather than just processing more of the same volume. CEO Pedro Arnt called it "the highest growth rate since the first quarter of 2022."
Brazil and Argentina did the heavy lifting on profitability, with gross profit hitting records of $40 million and $20 million, powered by ride-hailing, travel and e-commerce merchants ramping up. Local-to-local transactions, where money moves within a single country rather than across borders, climbed to 61% of volume, up 6 percentage points from the first quarter, as ride-hailing and on-demand delivery merchants scaled fast.
dLocal is also pushing beyond core processing. Buy now, pay later is now live in eight markets, and the company plans to launch dMore, a merchant of record service that takes on the legal and tax headaches of entering new countries. It's also landing new categories of customers, including artificial intelligence companies and digital **** et exchanges, on top of a base that already includes four of the largest ride-hailing companies in the world.
Not every market moved in the same direction. Mexico's revenue grew 64% year over year, but sequential gross profit slipped as pricing tiers on large merchants matured and dLocal struggled to bring local processing costs down as a share of volume. CFO Guillermo Perez flagged that the company expects upward pressure on its effective tax rate starting in 2027 as countries adopt the OECD's Pillar 2 minimum tax framework, though he said it's too early to size the impact.
#dlocal #profit
Behind the headline number is a business that keeps getting stickier with the merchants it already has. Net revenue retention landed at 153%, the fifth straight quarter above 140%, and TPV retention hit 188%, meaning existing clients are adding countries, payment methods, and products rather than just processing more of the same volume. CEO Pedro Arnt called it "the highest growth rate since the first quarter of 2022."
Brazil and Argentina did the heavy lifting on profitability, with gross profit hitting records of $40 million and $20 million, powered by ride-hailing, travel and e-commerce merchants ramping up. Local-to-local transactions, where money moves within a single country rather than across borders, climbed to 61% of volume, up 6 percentage points from the first quarter, as ride-hailing and on-demand delivery merchants scaled fast.
dLocal is also pushing beyond core processing. Buy now, pay later is now live in eight markets, and the company plans to launch dMore, a merchant of record service that takes on the legal and tax headaches of entering new countries. It's also landing new categories of customers, including artificial intelligence companies and digital **** et exchanges, on top of a base that already includes four of the largest ride-hailing companies in the world.
Not every market moved in the same direction. Mexico's revenue grew 64% year over year, but sequential gross profit slipped as pricing tiers on large merchants matured and dLocal struggled to bring local processing costs down as a share of volume. CFO Guillermo Perez flagged that the company expects upward pressure on its effective tax rate starting in 2027 as countries adopt the OECD's Pillar 2 minimum tax framework, though he said it's too early to size the impact.
#dlocal #profit
5 days ago
