Core Insights - Dlocal Ltd (NASDAQ:DLO) is recognized as one of the best small-cap stocks with significant potential, particularly favored by Reddit investors due to its management, revenue growth, and expanding total addressable market [1][2]. Financial Performance - In Q1 2024, Dlocal reported a 49% increase in payment volumes and a 34% rise in revenues, but gross profit only grew by 2% due to high processing costs [3]. - The company has been investing in scaling and enhancing its functionality, which has negatively impacted profitability [3]. Market Sentiment - Redditors express optimism about Dlocal's potential for increasing profit margins through cross-selling additional services, which could lead to a higher valuation multiple [2]. - Despite the current challenges, Dlocal is viewed as a leading payments processing company in emerging markets, with expectations for continued growth and improved profitability under strong management [3].

Core Insights - dLocal has integrated with Circle Payments Network to facilitate seamless payouts in emerging markets, leveraging Circle's stablecoins for real-time cross-border payment settlements [1][2] - The integration aims to reduce the high costs and slow processing times associated with cross-border payments, which currently average 6.4% for sending $200, exceeding the UN's target of 3% [2] - The partnership enhances fund flows and enables efficient remittances and disbursements, improving the user experience for recipients in emerging markets [2][3] Group 1 - dLocal's infrastructure allows CPN participants to disburse funds in various local currencies across emerging markets, addressing the challenges of costly and slow cross-border payments [2] - Circle's Chief Business Officer emphasized the importance of creating a new payment layer to reach emerging markets quickly and cost-effectively, with dLocal's offerings being crucial to this goal [2] - The alliance is seen as a milestone in connecting global stablecoin liquidity with local payment ecosystems, enabling financial institutions and fintechs to operate more efficiently [2][3] Group 2 - The "One dLocal" concept allows global companies to manage payments, payouts, and settlements through a single API and platform, simplifying operations without the need for multiple processors [3] - Circle Technology Services operates the CPN, providing products and services to financial institutions for easier access and integration into the network [3] - CPN facilitates secure communication and direct settlement between participating financial institutions, although it does not manage customer accounts or hold funds [3]

Core Insights - DLocal Limited (DLO) reported strong Q3 results on November 12, showcasing impressive financial performance driven by a surge in payment volume on its platform, which remains underappreciated by the market [1] Financial Performance - The payment processor demonstrated significant growth in payment volume, indicating robust demand for its services [1] Investment Philosophy - The investment approach focuses on identifying mispriced securities by analyzing the underlying drivers of a company's financials, often revealed through a DCF model valuation, allowing for a comprehensive assessment of risk-to-reward [1]

Group 1 - The article provides a market analysis focusing on MercadoLibre Inc and Dlocal Ltd, highlighting their performance and market trends [1] - It discusses the growth potential in the Latin American e-commerce and fintech sectors, emphasizing the increasing adoption of digital payments [1] - The analysis includes financial metrics and comparisons, showcasing revenue growth and market share for both companies [1] Group 2 - MercadoLibre Inc is noted for its strong position in the e-commerce market, with significant year-over-year revenue increases [1] - Dlocal Ltd is highlighted for its role in facilitating cross-border payments, benefiting from the rise in online transactions [1] - The report suggests that both companies are well-positioned to capitalize on the expanding digital economy in Latin America [1]

Market Overview - U.S. stock futures showed mixed movements following a mixed trading session on Wednesday, with major benchmark indices reflecting varied changes [1][3] - The 10-year Treasury bond yielded 4.08%, while the two-year bond was at 3.57%, indicating market expectations for potential interest rate cuts by the Federal Reserve [2] Company Performance - Cisco Systems Inc. (NASDAQ:CSCO) saw a premarket increase of 7.04% after reporting positive financial results for the first quarter, maintaining a stronger price trend across all time frames despite a poor value ranking [7] - Walt Disney Co. (NYSE:DIS) was up 0.29% ahead of its earnings report, with analysts predicting earnings of $1.04 per share on revenue of $22.75 billion, also showing a strong price trend [8] - Applied Materials Inc. (NASDAQ:AMAT) rose 0.55% as analysts expect earnings of $2.10 per share on revenue of $6.67 billion, maintaining a strong price trend [8] - SoundThinking Inc. (NASDAQ:SSTI) fell 3.32% after reporting disappointing third-quarter results and lowering its FY25 sales guidance, reflecting a weaker price trend [8] - Dlocal Ltd. (NASDAQ:DLO) dropped 11.37% despite beating third-quarter estimates, as its gross profit margin declined to 37% from 42% year-over-year, indicating a weaker price trend in the short and medium terms [8] Sector Performance - Most sectors on the S&P 500 closed positively, with healthcare, financial, and materials stocks recording the largest gains on Wednesday [5] Analyst Insights - BlackRock maintains an "overweight" view on U.S. equities, supported by a softening labor market that may allow the Federal Reserve to cut interest rates, which could benefit U.S. stocks and the AI sector [9] - The firm emphasizes that AI developments are crucial for corporate earnings, which are seen as a key factor supporting U.S. market valuations compared to other developed markets [10] Economic Data - Upcoming economic data releases, including October's CPI and initial jobless claims, will be delayed due to the recent government shutdown, impacting market expectations [13]

Market Overview - U.S. stock futures showed mixed movements following a mixed trading session on Wednesday, with major indices experiencing slight fluctuations [1] - The 10-year Treasury bond yielded 4.08%, while the two-year bond was at 3.57%, indicating market expectations for potential interest rate cuts by the Federal Reserve [2] Stock Performance - Cisco Systems Inc. (NASDAQ:CSCO) saw a premarket increase of 7.04% after reporting positive financial results for the first quarter, maintaining a stronger price trend across various time frames [7] - Walt Disney Co. (NYSE:DIS) was up 0.29% ahead of its earnings report, with analysts predicting earnings of $1.04 per share on revenue of $22.75 billion, also showing a strong price trend [8] - Applied Materials Inc. (NASDAQ:AMAT) rose 0.55% with expected earnings of $2.10 per share on revenue of $6.67 billion, maintaining a strong price trend [8] - SoundThinking Inc. (NASDAQ:SSTI) fell 3.32% after disappointing third-quarter results and lowering its FY25 sales guidance, reflecting a weaker price trend [8] - Dlocal Ltd. (NASDAQ:DLO) dropped 11.37% despite beating third-quarter estimates, as its gross profit margin declined to 37% from 42% year-over-year, indicating a weaker price trend in the short and medium terms [8] Sector Performance - Most sectors on the S&P 500 closed positively, with healthcare, financial, and materials stocks recording the largest gains on Wednesday [5] Analyst Insights - BlackRock maintains an "overweight" view on U.S. equities, supported by a softening labor market that may allow the Federal Reserve to cut interest rates, which could benefit U.S. stocks and the AI sector [9] - The firm emphasizes that AI developments are crucial for corporate earnings, which are seen as a key factor supporting U.S. market valuations compared to other developed markets [10] Economic Data - Upcoming economic data releases, including October's CPI and initial jobless claims, will be delayed due to the recent government shutdown, impacting market expectations [11][13]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - DLocal reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and showing an increase from $0.15 per share a year ago, resulting in an earnings surprise of +6.25% [1] - The company achieved revenues of $282.48 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.86% and up from $185.77 million year-over-year [2] - DLocal's stock has increased approximately 29% since the beginning of the year, outperforming the S&P 500's gain of 16.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $284.85 million, and for the current fiscal year, it is $0.64 on revenues of $1.03 billion [7] - The estimate revisions trend for DLocal was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Financial Transaction Services industry, to which DLocal belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company achieved a record Total Payment Volume (TPV) exceeding $10 billion, with a gross profit surpassing $100 million, marking a nearly 60% year-over-year growth in TPV and a 32% increase in gross profit [3][4][15] - Adjusted EBITDA reached $72 million, representing 70% of gross profit, with net income growing to $52 million due to lower finance costs [4][19] - Revenue for the quarter was $282 million, up 52% year-over-year, driven by strong volume growth [16] Business Line Data and Key Metrics Changes - TPV growth was broad-based, with significant contributions from remittances, e-commerce, on-demand delivery, and SaaS verticals, while advertising showed weakness primarily due to Egypt [15][16] - Cross-border transactions grew 75% year-over-year, while local-to-local transactions increased by 46% year-over-year [15] - The company reported strong performance in Brazil, Colombia, and other LATAM regions, despite challenges in Argentina and Mexico [4][15] Market Data and Key Metrics Changes - Local payment methods in Brazil, driven by PIX, now account for over half of e-commerce volume, with expectations to reach nearly 60% by 2027 [5] - The company noted a gradual pickup in TPV in Argentina post-elections, indicating potential for growth despite currency uncertainties [24][28] - The effective income tax rate for the quarter was 15%, with expectations to diversify away from Argentine securities to reduce volatility [19] Company Strategy and Development Direction - The company aims to be a one-stop shop for emerging market financial infrastructure, focusing on local payment methods and alternative financial solutions [6][7] - Product innovation remains a priority, with recent launches including Buy Now Pay Later solutions and expanded APM capabilities [12][45] - The company is focused on navigating the complexities of emerging markets while maintaining a disciplined cost posture and strong cash generation [5][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in Argentina and Brazil, despite acknowledging risks from currency fluctuations and changing tax regimes [24][25][28] - The company expects continued strength in remittances and commerce, with no immediate signs of alarm for these verticals [30] - Management highlighted the importance of monitoring global macroeconomic conditions and potential trade barriers that could impact business [20][21] Other Important Information - The company reported a healthy adjusted free cash flow to net income conversion, reinforcing its cash-generative business model [5] - The net retention rate (NRR) increased to 149%, reflecting strong customer loyalty and upsell opportunities [9] Q&A Session Summary Question: Impact of Argentina's elections on business - Management noted a gradual pickup in TPV post-elections, indicating a positive outlook for growth in Argentina, while monitoring exchange rates closely [24] Question: Tax regime changes in Brazil - Management clarified that recent tax changes do not negatively impact the company, and they are monitoring the evolving fiscal landscape [25][26] Question: Growth drivers in remittances and e-commerce - Management highlighted strong growth across various verticals, with remittances growing over 200% year-on-year, and expressed confidence in continued strength [30] Question: Take rate concerns - Management indicated that the recent take rate compression was influenced by one-off factors and that a normalized take rate would remain above 100 basis points [31][32] Question: Brazilian market performance - Management confirmed that the growth in Brazil is broad-based and not reliant on a single merchant, with a strong rebound in cross-border transactions [36] Question: Future of local to local transactions - Management reassured that cross-border volumes have remained stable, and local to local transactions are not expected to significantly dilute overall take rates [38] Question: Alternative payment methods and their impact - Management emphasized the growing adoption of local payment methods and the potential for higher take rates from Buy Now Pay Later offerings [44][45]

Earnings Presentation 3Q25 Earnings Presentation Q1'25 ➔ 1 This presentation may contain forward-looking statements. These forward-looking statements convey dLocal's current expectations or forecasts of future events, including guidance in respect of total payment volume, revenue, gross profit and Adjusted EBITDA. Forward-looking statements regarding dLocal and amounts stated as guidance involve known and unknown risks, uncertainties and other factors that may cause dLocal's actual results, performance or a ...