DLocal (US:DLO)2026-03-18 22:02Financial Data and Key Metrics Changes - Total Payment Volume (TPV) reached $41 billion, up 60% year-over-year, with a significant acceleration as the year progressed [4][5] - Revenue surpassed $1 billion for the first time, with adjusted free cash flow of $191 million, up 110% year-over-year [7][19] - Net income reached $197 million, reflecting a 63% increase year-over-year, and adjusted EBITDA as a percentage of gross profit expanded by 5 percentage points [7][21] Business Line Data and Key Metrics Changes - TPV retention reached 158% and net revenue retention was 145%, indicating strong customer loyalty and service value [5] - The Buy Now, Pay Later Fuse product grew 88% quarter-over-quarter, showing solid merchant adoption [12] - Gross profit grew 37% year-over-year, driven by sustained TPV growth with merchants [7][19] Market Data and Key Metrics Changes - The company processed payments in 44 markets across the Global South, nearly doubling its footprint over the last five years [9] - Brazil, Mexico, South Africa, and Colombia showed particularly strong TPV growth, with on-demand delivery and e-commerce sectors performing well [18][20] - Argentina's gross profit was impacted by FX volatility and election-related costs, despite strong underlying volume growth [20][41] Company Strategy and Development Direction - The company aims to capture the massive opportunity in emerging markets, with a total addressable market for digital payments estimated at over $2 trillion [13] - The strategy includes expanding into new geographic markets and enhancing product offerings, such as stablecoin solutions and card-present transactions [12][30] - The focus remains on maintaining high growth rates while ensuring operational efficiency and cash generation [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the complexities of emerging markets, emphasizing the importance of local financial infrastructure [10][26] - The company expects TPV growth in the range of 50%-60% year-over-year for 2026, with gross profit growth projected at 22.5%-27.5% [24][25] - Management highlighted the potential for new merchant contributions and product innovations to drive future growth [28][29] Other Important Information - The company plans to maintain a disciplined capital allocation strategy, including a dividend policy and a new share repurchase program [31][32] - The return on equity reached 35%, up 10 percentage points year-over-year, reflecting improved profitability and capital return policies [22] Q&A Session Summary Question: TPV growth guidance and sources - Management indicated that TPV growth will come from continued strength in Latin America, consolidation in Africa, and expansion into the Middle East and Asia [38][39] Question: Gross margin in Argentina - Management noted that FX volatility impacted gross margins but remains optimistic about Argentina's long-term growth potential [41][42] Question: Stablecoin and Buy Now, Pay Later contributions - Management expects stablecoin products to confirm product market fit in 2026, with significant contributions likely in 2027 or 2028 [43][44] Question: Brazil's revenue and gross profit growth - Brazil's strong performance was attributed to a favorable product mix and increased monetization, but such growth levels may not be sustainable [57][58] Question: Card-present operations - Management clarified that card-present transactions are part of their innovation pipeline, with no significant upfront OpEx expected in 2026 [64][69] Question: Operational efficiencies and guidance risks - Management acknowledged that operational efficiencies will be more visible in the second half of 2026 due to annualization of late 2025 hirings, with macroeconomic factors posing risks to guidance [87][88]