dLocal's Cross-Border Strategy Discussed by CFO Mark Ortiz in Q3 2024 Earnings Report

dLocal's Cross-Border Strategy Discussed by CFO Mark Ortiz in Q3 2024 Earnings Report

Payments processor dLocal reported record revenues of $186 million in Q3 2024, marking a 13% year-over-year increase. This growth was driven by robust expansion across multiple verticals, including financial services, SaaS, delivery, advertising, and commerce. Notable regional growth was seen in emerging markets such as Argentina, Mexico, and Egypt, contributing significantly to the 41% year-over-year increase in total payment volumes (TPV) to $6.5 billion.

The company's net take rate remained stable at 1.2%, supporting revenue growth despite a lower net income that quarter. Diversified sectoral and geographic drivers helped maintain this solid take rate.

In terms of profitability, dLocal reported a record profit of 42%, with a gross profit of $78 million, up 5% year-over-year. The adjusted EBITDA margin was 28%. However, the adjusted EBITDA fell 6% year-over-year to $52 million.

To maintain and expand this growth, dLocal plans to leverage its position as a technology-first payments platform focused on global enterprise merchants in emerging markets, which continue to see rapid digital payment adoption. The company also aims to expand in high-growth emerging markets geographically, build on momentum in countries like Argentina, Mexico, and Egypt where they are already scaling, and continue to broaden its service verticals to diversify its TPV base and capitalize on growing digital payment needs.

Remittances were a significant driver of Q3 2024's growth, with 82% volume growth in remittances. Cross-border volumes rose 35% to surpass $3 billion. However, currency devaluation, volatility, and a loss in wallet share for a major Brazilian merchant created headwinds for dLocal in Q3 2024.

No changes in dLocal's adjusted EBITDA were mentioned, and no new licences were discussed in the conversation with CFO Mark Ortiz. The company has gained new licences in Nigeria, Ecuador, and Uganda for international money transfer operations, financial system auxiliary services, and payment service provider services respectively.

The company's approach to profitability was discussed in the conversation with CFO Mark Ortiz, who explained the emerging market opportunity to investors during the interview.

Key points:

| Aspect | Details | |------------------------------|----------------------------------------------------| | Q3 2024 TPV Growth | $6.5B total, +41% YoY, +8% QoQ | | Revenue Growth | +13% YoY to $185.8M | | Key Sectors Driving Growth | Financial services, SaaS, delivery, advertising, commerce | | Key Geographic Markets | Argentina, Mexico, Egypt, other emerging markets | | Net Take Rate Stability | 1.2% since Q1 2024 | | Margin & Profitability | Gross profit record $78.2M, adj. EBITDA margin 28% | | Growth Strategy | Geographic expansion, vertical diversification, tech platform leverage | | Remittances Growth | +82% YoY, significant contributor to Q3 2024 growth | | Cross-border Volumes | +35% YoY, surpassed $3bn in Q3 2024 | | Currency Challenges | Devaluation, volatility, and loss in wallet share for a major Brazilian merchant | | Licenses | Nigeria, Ecuador, Uganda for international money transfer, financial system auxiliary services, payment service provider services | | Profitability Discussion | Discussed with CFO Mark Ortiz | | Emerging Market Opportunity | Discussed with CFO Mark Ortiz |

1. The growth strategy of dLocal, a technology-focused payments platform, involves expanding in high-growth emerging markets, diversifying its service verticals, and leveraging technology to cater to global enterprise merchants in these markets.
2. In terms of business operations, dLocal has gained new licenses in Nigeria, Ecuador, and Uganda for international money transfer, financial system auxiliary services, and payment service provider services respectively.

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