Core Viewpoint - DLocal's strong Q2 performance led to a significant stock price increase and an upgrade in rating by HSBC, reflecting positive market sentiment and growth potential [1][2]. Financial Performance - DLocal reported Q2 revenue of $256 million, exceeding market expectations by 11% and up from $171 million in the same period last year [1]. - The company's Q2 earnings per share (EPS) were $0.14, surpassing the market average estimate of $0.13, although slightly down from $0.15 in the previous year [1]. - HSBC raised its target price for DLocal to $15, indicating a potential upside of 28.31% from the closing price [1]. Analyst Insights - Analyst Neha Agarwal highlighted DLocal's significant long-term growth potential and recent growth momentum, suggesting the company is on the right track [2]. - HSBC increased its EPS forecasts for DLocal for 2025 to 2027 by 6% to 9%, with a projected gross profit of $396 million for 2025 [2]. - Morgan Stanley maintained a "neutral" rating on DLocal but raised its target price to $15, noting a year-to-date stock price increase of over 25% compared to a 10% rise in the S&P 500 [2].

Group 1 - DLocal Limited (NASDAQ: DLO) is characterized by a low price-to-earnings ratio combined with a 50% revenue growth, indicating strong growth potential despite being a small company [1] - The company is well established in its industry, suggesting a solid market position and operational stability [1] - The analysis focuses on identifying undervalued stocks with growth potential, aligning with value investment strategies [1]

Group 1 - DLocal reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, but down from $0.15 per share a year ago, representing an earnings surprise of +7.69% [1] - The company posted revenues of $256.46 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 11.00%, compared to $171.28 million in the same quarter last year [2] - DLocal has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Group 2 - The stock has underperformed the market, losing about 2.6% since the beginning of the year, while the S&P 500 gained 9.6% [3] - The current consensus EPS estimate for the coming quarter is $0.15 on revenues of $245.84 million, and for the current fiscal year, it is $0.60 on revenues of $969.24 million [7] - The Zacks Industry Rank for Financial Transaction Services is in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - The company achieved a record high Total Payment Volume (TPV) of $9.2 billion, marking a 53% year-over-year growth and a 14% quarter-over-quarter increase [4][18] - Revenue reached $256 million, growing 50% year-over-year or 63% on a constant currency basis, with an 18% quarter-over-quarter increase [5][19] - Gross profit hit a record of $99 million, up 42% year-over-year or approximately 55% on a constant currency basis [5][20] - Net income for the quarter totaled $43 million, negatively impacted by the Argentine peso devaluation [5][25] - Free cash flow was $48 million, a significant 22% increase from the first quarter [8][25] Business Line Data and Key Metrics Changes - Growth was particularly strong in remittances and commerce, followed by SaaS, delivery, streaming, and ride-hailing, with some weaknesses in advertising [18] - The company added three new licenses in the UAE, Turkey, and the Philippines, enhancing its portfolio of financial services licenses [8] Market Data and Key Metrics Changes - The top three markets now represent less than 50% of revenues, down eight percentage points since 2023, indicating increased geographic diversification [12] - Revenue in the rest of the markets is growing almost three times faster compared to the last four quarters [12] Company Strategy and Development Direction - The company is focused on expanding its merchant base and increasing share of wallet by integrating additional Alternative Payment Methods (APMs) [9] - The strategy includes significant investment in product innovation, with recent launches such as SmartPix in Brazil and buy now, pay later integrations [13][14] - The company aims to leverage stablecoin solutions, positioning itself as a key player in the emerging technology space [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, citing strong performance in the first half and sustained momentum across businesses [27][29] - Risks highlighted include evolving macroeconomic conditions, regulatory changes, and potential currency devaluation [28][29] Other Important Information - The company announced a transition to a majority independent Board and the cancellation of treasury shares held on the balance sheet [30][32] Q&A Session Summary Question: What drove the better-than-expected results? - Management noted strong momentum across Brazil, Mexico, and other markets, with a significant increase in localization of payments by global merchants [36][39] Question: Is the growth coming from a few particular merchants or across the board? - The growth is driven by the top 20 merchants, indicating a broad-based increase rather than concentration in a few [41][43] Question: Can you clarify the one-off processing costs in Brazil? - Management confirmed that part of the gain was a reversal, but Brazil is expected to sustain momentum in gross profit [47][50] Question: How do you see stablecoins impacting the business? - Management views stablecoins as an opportunity rather than a threat, emphasizing the company's unique position in providing on-ramps and off-ramps for stablecoin transactions [51][53] Question: What is the outlook for take rates? - Management expects a gradual decline in take rates, influenced by increased volumes and the introduction of new products [56][57] Question: Can you elaborate on tariffs as a risk? - Management highlighted potential risks from increased tariffs on cross-border e-commerce, particularly in Mexico, but noted no current negative impacts [66][70] Question: What is the strategy for offline payments? - The company is developing capabilities for offline payments in response to specific merchant contracts, indicating a shift in strategy [71][72] Question: What should be expected regarding operating expenses in the second half of the year? - Management anticipates an increase in operating expenses due to hiring and expansion into new markets and products [73][74]

Financial Data and Key Metrics Changes - The company achieved a record high Total Payment Volume (TPV) of $9.2 billion, marking a 53% year-over-year growth and a 14% quarter-over-quarter increase [5][18] - Revenue reached $256 million, growing 50% year-over-year and 63% on a constant currency basis [19] - Gross profit hit a record of $99 million, up 42% year-over-year or approximately 55% on a constant currency basis [20] - Net income for the quarter totaled $43 million, negatively impacted by the Argentine peso devaluation [6][24] - Free cash flow was $48 million, reflecting a 22% increase from the first quarter [24] Business Line Data and Key Metrics Changes - Growth was particularly strong in remittances and commerce, with notable contributions from Brazil, Mexico, Argentina, Turkey, South Africa, and Pakistan [18][19] - The company added three new licenses in UAE, Turkey, and the Philippines, enhancing its portfolio of financial services licenses [8] Market Data and Key Metrics Changes - The top three markets now represent less than 50% of revenues, indicating increased geographic diversification [13] - Revenue in the rest of the markets is growing almost three times faster compared to the last four quarters [13] Company Strategy and Development Direction - The company is focused on expanding its merchant base and increasing share of wallet by integrating additional Alternative Payment Methods (APMs) [10] - Investment in product innovation continues, with recent launches including SmartPix in Brazil and buy now, pay later integrations [14][15] - The company is positioning itself to leverage stablecoin opportunities, emphasizing its capabilities in on-ramps and off-ramps for stablecoins [15][52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2025, despite potential risks from macroeconomic changes and regulatory shifts [26] - The company is confident in its ability to navigate challenges and seize opportunities in emerging markets [27] Other Important Information - The company announced a new CFO, Guillermo Lopez Perez, and emphasized its commitment to transitioning to a majority independent Board [28][30] - The company plans to cancel treasury shares held on its balance sheet, reflecting strong underlying business growth [30] Q&A Session Summary Question: What drove the better-than-expected results? - Management noted strong momentum across the board, particularly in Brazil and Mexico, with a pickup in interest in localizing payments from global merchants [36][38] Question: Is the growth coming from a few particular merchants or across the board? - The growth is driven by the top 20 merchants, indicating a broad-based increase rather than concentration in a few [40][41] Question: Can you clarify the one-off processing costs in Brazil? - Part of the gain was a reversal, but Brazil is expected to sustain its momentum moving forward [49] Question: How do you see stablecoins impacting the business? - Management views stablecoins as an opportunity rather than a threat, emphasizing their unique position in the stablecoin value chain [51][52] Question: What is the outlook for take rates? - The general trend for take rates is slightly downward, but the pace of decline may be more gradual than previously expected [57][58] Question: Can you elaborate on tariffs as a risk? - Tariffs could hinder cross-border commerce, which is the largest category serviced by the company, but no negative impacts have been observed so far [68][70] Question: What is the strategy for offline payments? - The company is developing capabilities to process payments at POSs in the physical world, responding to specific merchant contracts [71][72] Question: What should be expected regarding operating expenses in the second half of the year? - Operating expenses are expected to continue increasing due to hiring and expansion into new markets and products [73][74]

Financial Performance - dLocal reported quarterly earnings of 14 cents per share, meeting analyst consensus estimates [1] - Quarterly revenue reached $256.45 million, exceeding the Street estimate of $229.65 million and increasing from $171.27 million in the same period last year [1] - Total Payment Volume hit a record $9.2 billion in Q2, up 53% year-over-year from $6 billion in Q2 2024 and up 14% from $8.1 billion in Q1 2025 [2] Management Commentary - CEO Pedro Arnt highlighted solid growth and disciplined execution, emphasizing the acceleration in key financial metrics and the value provided to merchants [3] Future Outlook - dLocal anticipates fiscal 2025 revenue growth of 30% to 40% year-over-year [3] Stock Performance - dLocal stock increased by 15.48% to $13.50 in after-hours trading [4]

Financial Performance - Total Payment Volume (TPV) reached a record high of $9.2 billion, a 53% year-over-year increase and a 14% quarter-over-quarter increase[13] - Revenue increased by 50% year-over-year to $256 million, and 18% quarter-over-quarter[14] - Gross profit grew by 42% year-over-year to $99 million, and 17% quarter-over-quarter[15] - Adjusted EBITDA increased by 64% year-over-year to $70 million, and 21% quarter-over-quarter, with an Adjusted EBITDA to Gross Profit ratio of 71%[16] - Free cash flow (FCF) was $48 million, a 156% year-over-year increase and a 22% quarter-over-quarter increase, with an FCF to net income ratio at 113%[18] Business Growth and Expansion - The company secured 3 payment licenses/authorizations in UAE, Turkey, and Philippines[12] - Cross-border TPV increased by 75% year-over-year, driven by commerce, SaaS, remittances, and ride-hailing verticals[52] - Local-to-local TPV increased by 35% year-over-year, driven by commerce, on-demand delivery, and ride-hailing verticals[52] Product Innovation - Launched SmartPix, a proprietary solution for the Brazilian market, enabling automated, recurring, and on-demand payments[12, 35] - Continued BNPL integrations and a growing number of on- and off-ramps for select stablecoin partners[12] Guidance Update - The company provided an upward adjustment on its full-year 2025 guidance for TPV, Revenue, Gross Profit and Adjusted EBITDA[12] - New TPV guidance is 40%-50% YoY growth, revenue guidance is 30%-40% YoY growth, gross profit guidance is 27.5%-37.5% YoY growth, and Adjusted EBITDA guidance is 40%-50% YoY growth[79]

[Key Business Highlights](index=3&type=section&id=Key%20Business%20Highlights) dLocal achieved record TPV, revenue, gross profit, and adjusted EBITDA in Q2 2025, with strong year-over-year growth across all key metrics and improved operating leverage, leading to an upward revision of full-year 2025 guidance [Summary of Q2 2025 Performance](index=3&type=section&id=Summary%20of%20Q2%202025%20Performance) dLocal achieved record TPV, revenue, gross profit, and adjusted EBITDA in Q2 2025, with strong year-over-year growth across all key metrics, continuous improvement in operating leverage, and an upward revision of full-year 2025 guidance Key Financial Metrics for Q2 2025 | Metric | 2Q25 (million USD) | 2Q24 (million USD) | YoY Growth | 1Q25 (million USD) | QoQ Growth | YoY Growth (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TPV | 9,200 | 6,000 | +53% | 8,100 | +14% | +65% | | Revenue | 256 | 171 | +50% | 217 | +18% | +63% | | Gross Profit | 99 | 70 | +42% | 85 | +17% | +55% | | Adjusted EBITDA | 70 | 43 | +64% | 58 | +21% | - | | EBITDA | 61 | 34 | +79% | 51 | +20% | - | - Adjusted EBITDA as a percentage of gross profit reached **71%**, marking the fifth consecutive quarter of growth and demonstrating sustained operating leverage[8](index=8&type=chunk) - Free cash flow remained strong at **$48 million**[9](index=9&type=chunk) - Full-year 2025 guidance for TPV, revenue, gross profit, and adjusted EBITDA was raised[9](index=9&type=chunk) [Letter to Shareholders](index=4&type=section&id=Letter%20to%20Shareholders) The CEO highlighted strong Q2 2025 growth and execution, with record TPV, revenue, and gross profit, alongside strategic diversification and capital reallocation to mitigate currency impacts [CEO's Message](index=4&type=section&id=CEO%27s%20Message) The CEO emphasized strong Q2 2025 growth with record TPV, revenue, and gross profit, noting robust core market performance, faster growth in other regions, and strategic capital reallocation to mitigate currency impacts - TPV reached **$9.2 billion**, marking the third consecutive quarter of over **50% year-over-year growth**[11](index=11&type=chunk) - Revenue and gross profit reached **$256 million** and **$99 million** respectively, both achieving new historical highs[11](index=11&type=chunk) - Net income for the quarter was **$43 million**, negatively impacted by the Argentine Peso devaluation on the bond portfolio, with over **80%** of Argentine funds reallocated to US Treasuries[12](index=12&type=chunk) - Free cash flow for the quarter was **$48 million**, reflecting strong underlying operations[13](index=13&type=chunk) [Strategic Growth Initiatives](index=4&type=section&id=Strategic%20Growth%20Initiatives) dLocal expanded its global footprint by securing new payment licenses in the UAE, Turkey, and the Philippines, focusing on increasing wallet share with existing merchants, attracting new ones, and entering new countries to capture market opportunities - Three new payment licenses/authorizations were obtained in the UAE, Turkey, and the Philippines, expanding the financial services license portfolio across the Global South[14](index=14&type=chunk) - Currently serving nearly **760 merchants**, with the top **50 clients** averaging operations in **11 countries** and **48 payment methods**, up from **8 countries** and **35 payment methods** 18 months prior[14](index=14&type=chunk) - Revenue from the top three markets decreased to **47%** of total revenue (down **8 percentage points** from 2023), while revenue from other markets grew almost three times faster[14](index=14&type=chunk) [Corporate Governance and Capital Structure Changes](index=5&type=section&id=Corporate%20Governance%20and%20Capital%20Structure%20Changes) The board is implementing significant changes, including a commitment to a majority independent board, establishing new committees, planning to cancel treasury shares, and appointing a new CFO and SVP of Corporate Development - Commitment to transition to a majority independent board, with the search for new independent directors already underway[18](index=18&type=chunk) - Establishment of a Nominating and Corporate Governance Committee and a Compensation Committee[18](index=18&type=chunk) - Cancellation of treasury shares currently on the balance sheet to return excess capital to shareholders[18](index=18&type=chunk) - Guillermo Lopez Perez appointed as the new Chief Financial Officer, and Christopher Stromeyer as Senior Vice President of Corporate Development and Head of Investor Relations[16](index=16&type=chunk)[17](index=17&type=chunk) [Tech Update](index=7&type=section&id=Tech%20Update) dLocal continues to invest in product innovation, launching SmartPix in Brazil, expanding BNPL integrations across markets, and advancing stablecoin remittance solutions through strategic partnerships [Product Innovation and Deployments](index=7&type=section&id=Product%20Innovation%20and%20Deployments) dLocal continues to invest in product innovation, launching SmartPix in Brazil to enhance Pix payments, expanding "Buy Now, Pay Later" (BNPL) integrations in multiple markets without credit risk, and advancing stablecoin remittance solutions through a partnership with BVNK - Launched SmartPix in Brazil, a solution that redefines the Pix experience and replicates most card payment functionalities and conveniences for merchants[22](index=22&type=chunk) - Introduced "Buy Now, Pay Later" (BNPL) integrations in multiple markets, allowing merchants to benefit from significant credit demand without dLocal assuming credit risk[23](index=23&type=chunk) - Made progress in stablecoin solutions, solidifying its position as a perfect on-ramp and off-ramp provider for stablecoin participants and merchants through a partnership with BVNK[24](index=24&type=chunk) [Business highlights](index=9&type=section&id=Business%20highlights) dLocal achieved record TPV in Q2 2025, driven by strong pay-ins and cross-border transactions, with robust revenue growth across Latin America, Africa, and Asia, and high net revenue retention from existing merchants [Total Payment Volume (TPV) Breakdown](index=9&type=section&id=Total%20Payment%20Volume%20%28TPV%29%20Breakdown) Q2 2025 TPV reached a record $9.2 billion, primarily driven by strong pay-ins and cross-border transactions, with significant contributions from verticals like commerce, on-demand delivery, and ride-hailing Q2 2025 TPV Breakdown by Product and Type | TPV Type | 2Q25 (million USD) | Share | 2Q24 (million USD) | Share | YoY Growth | 1Q25 (million USD) | QoQ Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **By Product** | | | | | | | | | Pay-ins | 6,395 | 69% | 4,273 | 71% | +50% | - | +18% | | Pay-outs | 2,816 | 31% | 1,763 | 29% | +60% | - | +6% | | **By Flow** | | | | | | | | | Cross-border | 4,719 | 51% | 2,701 | 45% | +75% | - | +11% | | Local to Local | 4,493 | 49% | 3,334 | 55% | +35% | - | +17% | | **Total TPV** | 9,212 | 100% | 6,035 | 100% | +53% | 8,100 | +14% | - Strong performance in Pay-ins TPV was primarily driven by verticals such as commerce, on-demand delivery, ride-hailing, SaaS, and streaming[28](index=28&type=chunk) - Quarter-over-quarter growth in Cross-border TPV was driven by verticals including commerce, SaaS, remittances, and ride-hailing across various markets[29](index=29&type=chunk) [Revenue by Geography and Merchant Type](index=9&type=section&id=Revenue%20by%20Geography%20and%20Merchant%20Type) Latin America contributed 79% of total revenue with 46% YoY growth, while Africa and Asia grew 65% YoY, and existing merchants showed strong expansion with a 145% Net Revenue Retention (NRR) Q2 2025 Revenue Breakdown by Geography | Geography | 2Q25 (million USD) | Share | 2Q24 (million USD) | Share | YoY Growth | QoQ Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Latin America | 202.7 | 79% | 138.7 | 81% | +46% | +24% | | - Brazil | 47.0 | 18% | 42.3 | 25% | - | - | | - Argentina | 31.6 | 12% | 20.5 | 12% | - | - | | - Mexico | 45.7 | 18% | 35.8 | 21% | - | - | | - Other LatAm | 78.4 | 31% | 40.1 | 23% | - | - | | Africa & Asia | 53.7 | 21% | 32.6 | 19% | +65% | 0% | | - Egypt | 17.6 | 7% | 15.0 | 9% | - | - | | - Other Africa & Asia | 36.1 | 14% | 17.5 | 10% | - | - | | **Total Revenue** | 256.5 | 100% | 171.3 | 100% | +50% | +18% | - Revenue from existing merchants grew **54% year-over-year**, with a Net Revenue Retention (NRR) of **145%**, indicating strong growth from existing merchant expansion[31](index=31&type=chunk) - New merchant revenue contributed significantly, primarily from commerce, streaming, and remittances verticals[35](index=35&type=chunk) [Gross Profit by Geography](index=9&type=section&id=Gross%20Profit%20by%20Geography) Latin America accounted for 74% of total gross profit with 37% YoY growth, driven by transaction volume and favorable payment mix in Brazil and Argentina, while Africa and Asia gross profit grew 56% YoY despite an Egyptian impact Q2 2025 Gross Profit Breakdown by Geography | Geography | 2Q25 (million USD) | Share | 2Q24 (million USD) | Share | YoY Growth | QoQ Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Latin America | 73.6 | 74% | 53.5 | 77% | +37% | +24% | | - Brazil | 24.3 | 25% | 19.2 | 28% | - | - | | - Argentina | 14.1 | 14% | 7.6 | 11% | - | - | | - Mexico | 11.9 | 12% | 8.8 | 13% | - | - | | - Other LatAm | 23.4 | 24% | 17.9 | 26% | - | - | | Africa & Asia | 25.3 | 26% | 16.3 | 23% | +56% | 0% | | - Egypt | 12.9 | 13% | 9.8 | 14% | - | - | | - Other Africa & Asia | 12.4 | 13% | 6.5 | 9% | - | - | | **Total Gross Profit** | 98.9 | 100% | 69.8 | 100% | +42% | +17% | - Quarter-over-quarter growth in Latin America's gross profit was primarily driven by increased transaction volumes and a favorable payment mix in Brazil and Argentina[33](index=33&type=chunk) - Quarter-over-quarter growth in Africa and Asia's gross profit was negatively impacted by Egypt, but excluding Egypt, it grew by **$3 million**, primarily due to strong performance in markets like South Africa[34](index=34&type=chunk)[41](index=41&type=chunk) [Financial highlights](index=12&type=section&id=Financial%20highlights) dLocal achieved strong Q2 2025 financial performance with significant YoY growth in TPV, revenue, gross profit, operating profit, and adjusted EBITDA, though net income decreased due to currency depreciation and fund reallocation [Key Financial Metrics](index=12&type=section&id=Key%20Financial%20Metrics) dLocal demonstrated strong Q2 2025 financial performance with significant year-over-year growth across TPV, revenue, gross profit, operating profit, adjusted EBITDA, and EBITDA, while net income decreased due to currency depreciation and fund reallocation Key Financial Metrics for Q2 2025 | Metric | 2Q25 (million USD) | 2Q24 (million USD) | YoY Change | 1Q25 (million USD) | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | TPV | 9,212 | 6,035 | +53% | 8,100 | +14% | | Revenue | 256.5 | 171.3 | +50% | 216.8 | +18% | | Gross Profit | 98.9 | 69.8 | +42% | 84.9 | +17% | | Gross Profit Margin | 39% | 41% | -2p.p | 39% | 0p.p | | Operating Profit | 55.8 | 30.2 | +85% | 45.8 | +22% | | Adjusted EBITDA | 70.1 | 42.7 | +64% | 57.9 | +21% | | Adjusted EBITDA Margin | 27% | 25% | +2p.p | 27% | 0p.p | | Adjusted EBITDA/Gross Profit | 71% | 61% | +10p.p | 68% | +3p.p | | Net Income | 42.8 | 46.2 | -7% | 46.7 | -8% | | Diluted EPS | 0.14 | 0.15 | - | 0.15 | - | | Free Cash Flow | 48.4 | 19.0 | +156% | 39.7 | +22% | - Net financial result was a **$3.8 million loss**, compared to a **$28 million gain** in Q2 2024, primarily due to the negative impact of Argentine Peso depreciation on the bond portfolio[41](index=41&type=chunk) - As of June 30, 2025, dLocal held **$476.9 million** in cash and cash equivalents, with **$253.8 million** in corporate cash and cash equivalents[43](index=43&type=chunk) [2025 Guidance Update](index=14&type=section&id=2025%20Guidance%20Update) dLocal raised its full-year 2025 guidance for TPV, revenue, gross profit, and adjusted EBITDA, reflecting strong first-half performance and anticipated continued growth momentum, while also highlighting potential risks from macroeconomic changes and currency depreciation 2025 Guidance Update | Metric | Original 2025 Guidance (YoY) | New 2025 Guidance Range (YoY) | | :--- | :--- | :--- | | TPV | 35% - 45% | 40% - 50% | | Revenue | 25% - 35% | 30% - 40% | | Gross Profit | 20% - 25% | 27.5% - 37.5% | | Adjusted EBITDA | 20% - 30% | 40% - 50% | - Potential risks highlighted by the company include changes in global macroeconomic, monetary, and trade landscapes affecting emerging markets; recent tariff increases in Mexico and potential trade barriers in other markets; changes in Brazil's fiscal regime; and the potential impact of currency depreciation and/or foreign exchange regime changes in Argentina and Egypt[44](index=44&type=chunk)[47](index=47&type=chunk) [Appendix](index=15&type=section&id=Appendix) This section provides definitions for key operational metrics, reconciliations for non-IFRS measures, earnings per share calculations, consolidated financial statements, and company information with forward-looking statements [Definition of selected operational metrics](index=20&type=section&id=Definition%20of%20selected%20operational%20metrics) This section defines key operational metrics used by dLocal, including API, cross-border payments, local payment methods, local-to-local payments, Net Revenue Retention (NRR), pay-ins, pay-outs, new merchant revenue, existing merchant revenue, and Total Payment Volume (TPV) - **API**: Application Programming Interface, used by software developers to integrate with specific services or applications[69](index=69&type=chunk) - **Cross-border Payments**: Payment transactions where dLocal collects funds in one currency and settles in a different currency and/or geographic location[70](index=70&type=chunk) - **Net Revenue Retention (NRR)**: Measures the retention and growth of dLocal's merchants, calculated by dividing revenue from all customers in the current period/year by revenue from the same customers in the prior period/year[72](index=72&type=chunk) - **TPV**: Total Payment Volume, referring to the total value of all payments successfully processed through dLocal's payment platform[75](index=75&type=chunk) [Reconciliation of Non-IFRS Measures](index=15&type=section&id=Reconciliation%20of%20Non-IFRS%20Measures) This section details the definitions and reconciliations for Adjusted EBITDA, Adjusted Net Income, and constant currency metrics (TPV, revenue, gross profit), noting that dLocal considers Adjusted EBITDA an IFRS measure per IFRS 8, while others are non-IFRS - **Adjusted EBITDA** is defined as operating profit before depreciation, amortization, financial income and costs, impairment loss/gain on financial assets, transaction costs, non-cash share-based payment expenses, other operating gains/losses, other non-recurring costs, and inflation adjustment[49](index=49&type=chunk) Adjusted EBITDA Reconciliation (Q2 2025) | Item | 2025 Q2 (thousand USD) | | :--- | :--- | | Profit for the period | 42,808 | | Income tax expense | 8,188 | | Depreciation and amortization | 5,540 | | Financial income and costs, net | 3,785 | | Non-cash share-based payment expenses | 4,911 | | Other operating losses | 2,480 | | Impairment loss/(gain) on financial assets | 1,415 | | Inflation adjustment | 984 | | **Adjusted EBITDA** | **70,111** | Constant Currency Metrics Reconciliation (Q2 2025 vs Q2 2024) | Metric | 2Q25 (Reported) | 2Q24 (Reported) | YoY Change (Reported) | 2Q25 (Constant Currency) | 2Q24 (Constant Currency) | YoY Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TPV | 9,212 | 6,035 | 53% | 9,960 | 6,035 | 65% | | Revenue | 256 | 171 | 50% | 279 | 171 | 63% | | Gross Profit | 99 | 70 | 42% | 108 | 70 | 55% | [Earnings per share](index=18&type=section&id=Earnings%20per%20share) This section explains the calculation of basic and diluted earnings per share, based on profit attributable to group owners and weighted average ordinary shares, including adjustments for dilutive potential ordinary shares Earnings Per Share Calculation (Q2 2025) | Item | 2025 Q2 | | :--- | :--- | | Profit attributable to ordinary shareholders (USD) | 42,810,218 | | Weighted average number of ordinary shares | 289,578,429 | | Adjustments for calculation of diluted EPS | 11,543,051 | | Weighted average number of ordinary shares for diluted EPS | 301,121,480 | | **Basic EPS** | **0.15** | | **Diluted EPS** | **0.14** | [Consolidated Financial Statements](index=21&type=section&id=Consolidated%20Financial%20Statements) This section presents dLocal's unaudited consolidated statements of comprehensive income, financial position, and cash flows for the three and six months ended June 30, 2025, and 2024, detailing the company's financial performance and health Consolidated Statement of Comprehensive Income Summary (Q2 2025 vs Q2 2024) | Item (thousand USD) | 2025 Q2 | 2024 Q2 | | :--- | :--- | :--- | | Revenue | 256,458 | 171,279 | | Cost of sales | (157,573) | (101,468) | | Gross profit | 98,885 | 69,811 | | Operating profit | 55,765 | 30,195 | | Profit before tax | 50,996 | 56,299 | | Profit for the period | 42,808 | 46,239 | | Total comprehensive income for the period | 47,111 | 40,635 | Consolidated Statement of Financial Position Summary (As of June 30, 2025 vs June 30, 2024) | Item (thousand USD) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total current assets | 1,120,364 | 1,118,920 | | Total non-current assets | 100,948 | 76,764 | | **Total Assets** | **1,221,312** | **1,195,684** | | Total current liabilities | 766,517 | 747,877 | | Total non-current liabilities | 6,615 | 5,405 | | **Total Liabilities** | **773,132** | **753,282** | | Total equity attributable to owners of the Group | 447,960 | 442,287 | | **Total Equity** | **448,180** | **442,402** | Consolidated Statement of Cash Flows Summary (Q2 2025 vs Q2 2024) | Item (thousand USD) | 2025 Q2 | 2024 Q2 | | :--- | :--- | :--- | | Net cash generated from operating activities | 124,459 | 28,808 | | Net cash used in investing activities | (10,493) | 2,894 | | Net cash used in financing activities | (150,520) | (82,837) | | Net increase/(decrease) in cash and cash equivalents | (36,554) | (51,135) | | Cash and cash equivalents at end of period | 476,939 | 531,620 | [Company Information and Forward-Looking Statements](index=24&type=section&id=Company%20Information%20and%20Forward-Looking%20Statements) This section provides details for the conference call and webcast, an overview of dLocal's business as an emerging markets payment platform, and a cautionary note regarding forward-looking statements, emphasizing inherent risks and uncertainties - dLocal powers local payments in emerging markets through its "One dLocal" platform (one direct API, one platform, and one contract), connecting global enterprise merchants with billions of emerging market consumers across **40+ countries** in Africa, Asia, and Latin America[82](index=82&type=chunk) - Forward-looking statements, including guidance, are based on management's current expectations and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed[84](index=84&type=chunk)[85](index=85&type=chunk) - dLocal undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[86](index=86&type=chunk)

Core Viewpoint - dLocal Limited has appointed Guillermo López Pérez as the new Chief Financial Officer, enhancing its leadership team and supporting its growth strategy in the cross-border payments sector [1][2][4]. Group 1: Appointment Details - Guillermo López Pérez will join dLocal in the coming months and will report directly to CEO Pedro Arnt [1]. - The appointment is seen as a strategic move to strengthen dLocal's leadership, with Guillermo bringing over 25 years of experience in finance and payments from companies like Visa and American Express [2][4]. Group 2: Guillermo's Background - Guillermo has previously served as CFO at Featurespace, focusing on fraud prevention, and held leadership roles at Tink and Visa's Continental Europe business [2]. - His extensive experience includes a 13-year tenure at American Express, where he held various leadership positions [2]. Group 3: Company Strategy and Vision - Guillermo expressed enthusiasm about contributing to dLocal's growth in emerging markets and strengthening its position in the cross-border payments sector [3]. - The company aims to drive growth, enhance operational excellence, and deliver long-term value to stakeholders [3][4]. Group 4: Company Overview - dLocal operates a technology-first payments platform that connects global enterprise merchants with consumers in over 40 emerging market countries across Africa, Asia, and Latin America [5]. - The "One dLocal" platform allows global companies to manage payments, pay-outs, and fund settlements efficiently without needing multiple local entities or payment processors [5].

Core Insights - dLocal achieved a record Total Payment Volume (TPV) of US$9.2 billion in Q2 2025, marking a 53% year-over-year increase and a 14% increase from Q1 2025 [7][11] - The company reported strong financial performance with significant growth in revenue, gross profit, and adjusted EBITDA, reflecting a healthy business model [5][10] - dLocal's management has updated its full-year 2025 guidance, indicating optimism based on strong performance in the first half of the year [2][6] Financial Performance - Revenue for Q2 2025 reached US$256.5 million, up 50% year-over-year from US$171.3 million in Q2 2024 [10][11] - Gross profit was US$98.9 million, representing a 42% increase compared to US$69.8 million in Q2 2024 [10][11] - Adjusted EBITDA for the quarter was US$70.1 million, a 64% increase from US$42.7 million in Q2 2024, with an adjusted EBITDA margin of 27% [10][11] Cash Flow and Liquidity - dLocal generated US$48 million in free cash flow for Q2 2025, a 156% increase year-over-year [10][11] - As of June 30, 2025, the company had US$476.9 million in cash and cash equivalents, including US$253.8 million in corporate cash [10][11] Market and Operational Highlights - The company experienced solid results in Brazil and Mexico, with the fastest growth occurring in other geographies, leading to increased diversification [1][7] - dLocal's operational leverage improved, with adjusted EBITDA over gross profit increasing to 71% for Q2 2025, marking the fifth consecutive quarter of improvement [1][10] Governance and Strategic Initiatives - dLocal is transitioning to a majority independent Board of Directors and has initiated the search for additional independent directors [8] - The company plans to cancel treasury shares, highlighting its commitment to returning excess capital to shareholders [8]