DLO Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

Total Payment Volume (TPV) reached $14.1 billion, representing a 73% year-on-year increase and 7% quarter-on-quarter growth, marking the sixth consecutive quarter of over 50% growth.
Gross profit hit a record $119 million, up 40% year-on-year and 2% quarter-on-quarter.
Operating profit was reported at $53 million, but adjusted for a one-off tax item, it would be $57 million, reflecting a 25% year-on-year growth.
Net income came in at $42 million, or $52 million adjusted for the tax item, indicating an 11% year-on-year growth.
Operating expenses totaled $62 million, up 58% year-on-year, influenced by prior investments and a one-off tax adjustment.

2. Strategic Updates and Business Highlights:

dLocal has expanded its operations to over 60 countries, adding new markets like Algeria, Qatar, Kuwait, and Oman.
The company now holds 38 licenses across 26 markets, with 16 additional applications in process.
Vertical diversification is emphasized, with growth across all sectors, particularly in travel (38% quarter-on-quarter growth) and on-demand delivery (24% quarter-on-quarter growth).
The company highlighted the importance of local payment methods, which are increasingly becoming primary transaction methods in emerging markets.
dLocal's revenue retention rate exceeded 140% for four consecutive quarters, showcasing strong merchant relationships.

3. Forward Guidance and Outlook:

The company maintains its full-year guidance, expecting continued topline strength despite higher operating costs in the first half of 2026.
Operating leverage is anticipated to improve in the second half of the year as the impact of prior investments moderates.
dLocal is optimistic about capturing growth opportunities in emerging markets, particularly as merchants increasingly adopt local payment processing.

4. Bad News, Challenges, or Points of Concern:

Operating expenses were higher than expected due to the carryover from 2025 investments and a nonrecurring tax adjustment, which may impact margins in the short term.
Brazil's sequential performance declined due to seasonality after a strong Q4, and while year-on-year growth remains robust, the company faces tougher comps moving forward.
The effective tax rate was elevated at 26% due to the one-off adjustment, but excluding this, it would have been approximately 16%.
The competitive landscape in Asia is challenging, with a more developed financial ecosystem, which could hinder growth in that region.

5. Notable Q&A Insights:

Management emphasized that the sequential decline in Brazil's performance was expected due to seasonality, and they remain confident in the underlying strength of the business.
The company is focused on improving operational efficiency and translating topline growth into operating profit, especially as they exit the investment cycle.
Conversations with merchants are increasingly centered around localizing payment solutions rather than just specific markets or payment methods, indicating a shift in strategic priorities.
The asset transaction in Africa is expected to enhance dLocal's capabilities and positioning in the region, although it had no immediate revenue impact.
The company is developing a Card-Present product for a major client, with expectations for a launch in the second half of the year, which could open new revenue streams.

DLO — DLocal Limited