2 EARNINGS PRESENTATION | Q4 2024 Pedro Arnt Chief Executive Officer Mark Ortiz Chief Financial Officer EARNINGS PRESENTATION | Q4 2024 3 Safe Harbor 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 risk ...

DLocal Limited. (NASDAQ:DLO) Q4 2024 Earnings Conference Call February 27, 2025 5:00 PM ET Company Participants Mirele Aragão - Head of Investor Relations Pedro Arnt - Chief Executive Officer Maria Oldham - SVP Corporate Development, IR & Strategic Finance Mark Ortiz - Chief Financial Officer Sergio Fogel - President and chief Strategy Officer Conference Call Participants Tito Labarta - Goldman Sachs Guilherme Grespan - JPMorgan James Friedman - SIG Group Neha Agarwala - HSBC Cassie Chan - BofA Operator Goo ...

DLocal (DLO) Q4 2024 Earnings Call February 28, 2025 08:10 AM ET Company Participants Pedro Arnt - Director & CEOMark Ortiz - Chief Financial OfficerTito Labarta - Vice President Conference Call Participants Guilherme Grespan - Equity Research AnalystJamie Friedman - Senior FinTech and IT Services Research AnalystNeha Agarwala - AnalystCassie Chan - Analyst Operator Good day, and thank you for standing by. Welcome to the D Local fourth quarter '20 '20 '4 results. At this time, all participants are in a list ...

Core Viewpoint - DLocal reported quarterly earnings of $0.15 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.14 per share a year ago [1]. Financial Performance - The company posted revenues of $204.49 million for the quarter ended December 2024, which was 1.56% below the Zacks Consensus Estimate, and an increase from $188.01 million year-over-year [2]. - DLocal has not surpassed consensus revenue estimates in the last four quarters [2]. Stock Performance - DLocal shares have increased approximately 24.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.3% [3]. - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.13, with expected revenues of $208.2 million, and for the current fiscal year, the estimate is $0.59 on revenues of $939.42 million [7]. - The estimate revisions trend for DLocal is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6]. Industry Context - The Financial Transaction Services industry, to which DLocal belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8].

Core Insights - dLocal reported a Total Payment Volume (TPV) of $25.6 billion for the full year 2024, representing a 45% year-over-year increase, with revenue reaching $746 million, up 15% year-over-year [1][3][6] - The company achieved a Net Revenue Retention Rate of 113% and a Gross Profit of $295 million, which is a 6% increase year-over-year [1][3][6] - Adjusted EBITDA for the year was $189 million, reflecting a 7% decrease year-over-year, indicating some pressure on profitability despite revenue growth [1][3][6] Financial Performance - In Q4 2024, dLocal's TPV reached $7.7 billion, a 51% increase year-over-year and an 18% increase quarter-over-quarter [2][20] - Revenue for Q4 was $204 million, up 9% year-over-year and 10% quarter-over-quarter, driven by strong performance in Egypt and other emerging markets [2][20][29] - Gross Profit for Q4 was $84 million, a 20% increase year-over-year, with a gross profit margin of 41% [20][22][29] Market Dynamics - The company is focusing on expanding into newer, more attractive markets, which has contributed to the strong TPV growth [3][6][7] - dLocal's business model benefits from a large addressable market in emerging and frontier markets, where 85% of the world's population resides [7][18] - The company is experiencing a shift in payment mix and take rates, with a focus on higher take rate markets to offset compression [10][15][29] Operational Highlights - dLocal's investments in product development and operational capabilities are aimed at achieving greater scalability and efficiency [4][12][18] - The company added 9 licenses and registrations in 2024, including a significant license from the UK FCA, enhancing its competitive edge [12][18] - Cash generation remains strong, with $425.2 million in cash and cash equivalents as of December 31, 2024, despite a decrease from the previous year [24][29] Future Outlook - For 2025, dLocal expects TPV growth of 35% to 45% year-over-year, with revenue growth projected at 25% to 35% [14][18] - The company anticipates gross profit growth of 20% to 25% and Adjusted EBITDA growth between 20% and 30% year-over-year [14][18] - dLocal's strategy focuses on capturing the potential of digital payments in high-growth regions while driving operational efficiencies [18][19]

Core Viewpoint - DLocal (DLO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [4]. DLocal's Earnings Outlook - DLocal is projected to earn $0.50 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of 13.8% [8]. - Over the past three months, the Zacks Consensus Estimate for DLocal has increased by 2.9%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - DLocal's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - DLocal (DLO) has reached a significant support level and shows potential as a good investment from a technical perspective, having recently broken through the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average (SMA) is a popular tool among traders as it provides insights into a stock's price over a shorter period and helps smooth out price fluctuations, with the ability to show trend reversal signals more effectively than longer-term moving averages [2] - DLO has moved 7% higher over the last four weeks and is currently rated as a Zacks Rank 2 (Buy), supported by positive earnings estimate revisions, with no earnings estimates lowered in the past two months and one estimate raised for the current fiscal year [3] Group 2 - Investors are encouraged to consider adding DLO to their watchlist due to the important technical indicator and the positive movement in earnings estimate revisions [4]

Core Viewpoint - dLocal is positioned as a vital player for global merchants aiming to penetrate emerging markets, connecting them to over 2 billion users through a diverse range of local payment methods [1][2] Group 1: Business Growth and Performance - dLocal's shares are currently 81% below their all-time highs, yet the company has experienced a 600% increase in sales since its IPO in 2021, indicating a stronger business foundation [2][3] - The company has expanded its service from 8 countries with 80 payment methods in 2016 to 40 countries with over 900 payment options today, although this rapid growth has impacted its margins [5] - dLocal's free cash flow (FCF) margin stands at 21%, demonstrating financial stability despite the challenges of growth [6] Group 2: Market Potential - dLocal targets countries in Latin America, Africa, and the Asia-Pacific region, which are projected to grow their urban GDP 3.5 times faster than developed markets through 2040 [7] - By 2028, these emerging markets are expected to generate over $3.7 trillion in digital payments annually, presenting a long-term growth opportunity for dLocal [8] Group 3: Leadership and Strategic Moves - The appointment of CEO Pedro Arnt, who previously served as CFO at MercadoLibre, is seen as a positive development, suggesting confidence in dLocal's potential [10][12] - Arnt's experience in transforming MercadoLibre into a leading e-commerce platform positions him well to guide dLocal through its growth phase [12] Group 4: Financial Strategies - Despite its growth-focused strategy, dLocal has initiated share buybacks, utilizing a $100 million plan in 2022 and half of a $200 million plan in the following year, reducing its share count by 2% annually [14] - The company's net take rate has remained stable over the last three quarters, indicating a potential stabilization of margins, with the stock trading at 27 times FCF, slightly below the S&P 500 average [15]

Core Viewpoint - dLocal Limited refutes recent allegations from a short-seller report, claiming they are inaccurate and misleading, driven by parties with vested interests in the company's stock price decline [1] Group 1: Company Response to Allegations - The company asserts that it has previously investigated similar allegations thoroughly, with an independent review conducted by its Audit Committee, which found no substantiation for the prior claims [2] - dLocal emphasizes its commitment to corporate governance, financial integrity, and regulatory compliance, urging investors to rely on its audited financial statements rather than short-seller reports [3] - The company has no further comments on the allegations and is focused on executing its strategy and delivering value to stakeholders, with an upcoming earnings call scheduled for February 27, 2025 [4] Group 2: Company Overview - dLocal operates a technology-first payments platform that connects global enterprise merchants with billions of consumers in emerging markets across regions such as APAC, the Middle East, Latin America, and Africa [5] - The "One dLocal" concept allows global companies to manage payments, payouts, and fund settlements through a single API and platform, simplifying operations in various markets [5]

Group 1 - dLocal Limited plans to release its financial results for the fourth fiscal quarter ended December 31, 2024 on February 27, 2025 after market close [1] - A conference call and video webcast will be hosted on February 27, 2025 at 5:00 p.m. Eastern Time [1] - The conference call can be accessed via audio webcast on the company's investor relations website, with an archive available for one year [2] Group 2 - dLocal operates a technology-first payments platform that connects global enterprise merchants with billions of consumers in emerging markets across APAC, the Middle East, Latin America, and Africa [3] - The "One dLocal" concept allows global companies to manage payments, pay-outs, and fund settlements through a single direct API, platform, and contract, eliminating the need for multiple local entities and payment processors [3]