DLocal Ltd (DLO) Share Price

DLO $10.70 + 18%! ?
We increased payments volume in Argentina, Mexico, Egypt and Other Latam - mainly in Colombia and Peru - as well as Other Africa and Asia, with strong performance in South Africa.
?We reported record volume in our higher take rate cross-border (XB) business, surpassing the $3 billion quarterly mark in flows for the first time.

Exhibit 99.1
?Total Payment Volume (“TPV”) reached a record US$6.5 billion in the third quarter, up 41% year-over-year compared to US$4.6 billion in the third quarter of 2023 and up 8% compared to US$6.0 billion in the second quarter of 2024.
?Revenues amounted to US$185.8 million, up 13% year-over-year compared to US$163.9 million in the third quarter of 2023 and up 8% compared to US$171.3 million in the second quarter of 2024. This quarter-over-quarter increase was mostly driven by the performance in Argentina and Egypt, as well as the positive results in Other Latam and Other Africa and Asia.
?Gross profit was US$78.2 million in the third quarter of 2024, up 5% compared to US$74.5 million in the third quarter of 2023 and up 12% compared to US$69.8 million in the second quarter of 2024. The improvement in gross profit quarter-over-quarter was primarily due to volume growth in Egypt, South Africa, Mexico and Other Latam markets. These positive factors were partially offset by (i) Brazil, given the share losses on credit card payments of a top merchant, as they were granted a payment license and were required to connect directly with acquirers in order to remain compliant; and (ii) Argentina, as we had higher expatriation costs.
?As a result, gross profit margin was 42% in this quarter, compared to 45% in the third quarter of 2023 and 41% in the second quarter of 2024.
?Gross profit over TPV was at 1.2% decreasing from 1.6% in the third quarter of 2023 and stable compared to the second quarter of 2024.
?Operating income was US$41.1 million, down 20% compared to US$51.5 million in the third quarter of 2023 and up 36% compared to US$30.2 million in the second quarter of 2024, a result of re-ignited growth and cost management. In this context, operating expenses grew by 61% year-over-year, with most of the growth allocated to Product Development & IT capabilities, with the Technology and development expenses increasing by 88% year-over-year while Sales and
1 Source: FXC Intelligence – Market Sizing dataset.
Exhibit 99.1
Marketing expenses and General and Administrative expenses grew by 35%. On the sequential comparison, operating expenses decreased 6% quarter-over-quarter, a reflection of our continued disciplined approach to expense management.
?As a result, Adjusted EBITDA was US$52.4 million , down 6% compared to US$55.6 million in the third quarter of 2023 and up 23% compared to US$42.7 million in the second quarter of 2024.
?Adjusted EBITDA margin was 28%, compared to the 34% recorded in the third quarter of 2023 and 25% in the second quarter of 2024. On the annual comparison, the decrease is explained by the long-term investments, as mentioned since previous quarters. Following the same trend, Adjusted EBITDA over gross profit of 67% decreased compared to 75% in the third quarter of 2023 and increased compared to 61% in the second quarter of 2024.
?Net financial cost was US$10.1 million, compared to a finance income of US$1.5 million in the third quarter of 2023 and US$28.0 million in the second quarter of 2024, as explained in the Net Income section.
?Our effective income tax rate decreased to 8% from 18% last quarter, primarily driven by lower pre tax income in Argentina. On a year-to-date basis, our effective tax rate stands at 18%.
?Net income for the third quarter of 2024 was US$26.8 million, or US$0.09 per diluted share, down 34% compared to a profit of US$40.4 million, or US$0.13 per diluted share, for the third quarter of 2023 and down 42% compared to a profit of US$46.2 million, or US$0.15 per diluted share for the second quarter of 2024. During the current period, net income was mostly impacted by the (i) positive US$23 million non-cash mark to market effect related to the Argentine bond investments in the second quarter of 2024, as mentioned last quarter; and (ii) higher finance costs this quarter mainly driven by exchange differences and higher cost of hedges. Adjusted net income for the third quarter of 2024 was US$43.4 million, down 12% compared to US$49.2 million for the third quarter of 2023 and down 5% compared to US$45.6 million for the second quarter of 2024.
?As of September 30, 2024, dLocal had US$560.5 million in cash and cash equivalents, including US$208.0 million of own funds and US$352.5 million of merchants’ funds. The consolidated cash position increased by US$62.4 million from US$498.2 million as of September 30, 2023. When compared to the US$531.6 million cash position as of June 30, 2024, it increased by US$28.9 million.

Ouch!

DLO 10Q due 3/18