DLocal (US:DLO)2025-05-14 22:02Financial Data and Key Metrics Changes - The total payment volume (TPV) reached $8 billion, reflecting a 53% year-over-year growth and a 5% quarter-over-quarter increase [7][17] - Revenue hit a record high of $217 million, up 18% year-over-year and 36% in constant currency [19] - Gross profit reached $85 million, up 35% year-over-year or nearly 60% on a constant currency basis [20] - Net income for the quarter was $47 million, up 57% quarter-over-quarter and 163% year-over-year [24] - Free cash flow amounted to $40 million, representing a 22% increase from the previous quarter [25] Business Line Data and Key Metrics Changes - Cross-border flows grew 14% quarter-over-quarter and 76% year-over-year, reaching $4 billion [17] - Local to local TPV decreased by 3% quarter-over-quarter but increased by 33% year-over-year [18] - The pay-ins business grew 2% quarter-over-quarter and 49% year-over-year, while the payouts business grew 12% quarter-over-quarter and 61% year-over-year [18] Market Data and Key Metrics Changes - Strong growth was noted in emerging markets, particularly in Chile, Pakistan, Nigeria, Turkey, and Brazil [8] - The company experienced robust growth across multiple verticals, including remittances, commerce, financial services, and streaming [8] Company Strategy and Development Direction - The company is focused on strategic investments in technology and operations to enhance efficiency and service quality [6][12] - There is a commitment to leveraging automation and AI to drive operational efficiency and optimize performance [11][12] - The company aims to expand its licensed portfolio to navigate complex regulatory environments [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of emerging markets despite short-term macroeconomic headwinds [30][31] - The company anticipates continued demand for localized payment solutions as emerging markets gain prominence [32] - Management reaffirmed full-year guidance and commitment to disciplined execution for sustainable growth [33] Other Important Information - The Board of Directors approved a dividend policy, with an extraordinary cash dividend of approximately $150 million [26][27] - The company plans to return 30% of free cash flow as annual dividends starting in 2026 [27] Q&A Session Summary Question: Growth in Argentina and Mexico - Management indicated that growth in Argentina appears sustainable due to increased interest from global merchants, while Mexico requires better execution to reignite growth [38] Question: Operating Expenses - Operating expenses grew 3% in the quarter, with management indicating a focus on responsible expense management [45][48] Question: Performance in Other LATAM - Strong performance in Other LATAM was attributed to improved take rates and volume growth in frontier markets, particularly in Chile [56] Question: Brazil's Revenue and Gross Profit - Management noted that Brazil is beginning to stabilize, with volume growth expected to improve as execution enhances [64] Question: Competition and Market Dynamics - Management acknowledged that share losses in Mexico and Brazil could be attributed to competitive dynamics but expressed confidence in regaining market share through improved execution [78][82] Question: M&A Opportunities - The company is exploring M&A opportunities, particularly in acquiring subscale fintech companies that could complement its existing services [88] Question: Future Operating Expenses - Management expects operating expenses to increase in the coming quarters as investments ramp up, particularly in technology [92]