DLO — DLocal Limited

dLocal Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Payment Volume (TPV): Reached $41 billion for the year, up 60% year-over-year; Q4 TPV was $13 billion, growing 70% year-over-year and 26% quarter-over-quarter.
• Revenue: Crossed $1 billion for the first time, with Q4 revenue at $338 million, up 65% year-over-year and 20% quarter-over-quarter.
• Gross Profit: Increased 37% year-over-year, with Q4 gross profit at $116 million, up 38% year-over-year.
• Net Income: Totaled $197 million for the year, up 63% year-over-year; Q4 net income was $56 million, up 87% year-over-year.
• Adjusted Free Cash Flow: Reached $191 million for the year, up 110% year-over-year; Q4 adjusted free cash flow was $65 million, doubling year-over-year.
• Return on Equity (ROE): Reached 35%, up 10 percentage points year-over-year.

2. Strategic Updates and Business Highlights

• Market Expansion: dLocal now processes payments in 44 markets, nearly doubling its footprint over the past five years. Strong growth was noted in Brazil, Mexico, South Africa, and Colombia.
• Product Innovations: Launched Buy Now Pay Later products in six countries and a full-service stablecoin suite, enhancing merchant capabilities.
• Customer Retention: TPV retention rate was 158%, and net revenue retention was 145%, indicating strong customer loyalty.
• Operational Efficiency: Gross profit per employee improved, aided by AI-driven automation, which delivered productivity equivalent to about 7% of total headcount.

3. Forward Guidance and Outlook

• TPV Growth: Expected to grow by 50% to 60% year-over-year in 2026.
• Gross Profit Growth: Projected to increase by 22.5% to 27.5% year-over-year.
• Operating Profit Growth: Anticipated to rise by 27.5% to 32.5% year-over-year.
• Capital Allocation: Confirmed a dividend policy of 30% of the prior year's free cash flow, translating to $57 million, and announced a share repurchase program of up to $300 million.

4. Bad News, Challenges, or Points of Concern

• Argentina's Volatility: High FX volatility impacted gross profit margins, leading to concerns about the sustainability of growth in this market.
• Market Risks: Emerging markets remain volatile, with geopolitical and macroeconomic factors potentially affecting performance.
• Dependency on Large Merchants: The growth forecast is heavily reliant on the successful execution of contracts with large global merchants, which poses a risk if expectations are not met.

5. Notable Q&A Insights

• TPV Growth Sources: Growth is expected to come from existing markets like Brazil and new markets in Asia and the Middle East, with increased contributions from new merchants.
• Argentina's Gross Margin: The recent decline in gross profit margins due to FX volatility is expected to normalize, but the market's inherent volatility remains a concern.
• Stablecoin Adoption: While there is growing interest in stablecoins, significant volume at checkout is not yet realized; however, there is potential for corporate treasury adoption.
• Card-Present Transactions: dLocal is exploring entry into card-present processing, which could open a significant new market, but substantial investment is not anticipated until demand is confirmed.

This summary encapsulates the key points from dLocal's Q4 2025 earnings call, highlighting both the company's strong performance and the challenges it faces moving forward.