DLO DLocal Ltd

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number: 001-40451

DLocal Limited

(Exact name of registrant as specified in its charter)

Dr. Luis Bonavita 1294

Montevideo

Uruguay 11300

+1 (424) 392-7437

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐ No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐ No ☒

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TABLE OF CONTENTS

EXHIBIT

99.1		Press release dated May 14, 2024 - DLocal Limited Reports 2024 First Quarter Results
99.2		DLocal Limited Unaudited Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023
99.3		Quaterly Report 2024 - dLocal Reports 2024 First Quarter Financial Results
99.4		dLocal Q1 2024 Earnings Presentation

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	DLocal Limited
	By:	/s/ Mark Ortiz
	Name:	Mark Ortiz
	Title:	Chief Financial Officer

 

Date: May 14, 2024

 

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dLocal Reports 2024 First Quarter Financial Results

 

First Quarter 2024

US$5.3 billion Total Payment Volume, up 49% year-over-year and 4% quarter-over-quarter

Revenue of US$184 million, up 34% year-over-year and down -2% quarter-over-quarter

129% Net Revenue Retention Rate

Gross Profit of US$63 million, up 2% year-over-year and down -10% quarter-over-quarter

Adjusted EBITDA of US$37 million, down -19% year-over-year and -25% quarter-over-quarter

 

 

dLocal reports in US dollars and in accordance with IFRS as issued by the IASB

 

Montevideo, Uruguay May 14th, 2024 — DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a technology - first payments platform today announced its financial results for the first quarter ended March 31, 2024.

“We started the year with strong TPV growth, achieving a record quarterly TPV of US$5.3 billion, increasing nearly 50% YoY. TPV growth was solid across many verticals, with ecommerce nearly tripling, remittances practically doubling, and ride-hailing, SaaS, each growing north of 50% YoY. All this is a testament to the value our solution offers to our merchants across diverse verticals, and our increasingly strong competitive position and sustained share of wallet gains.

In addition, in 1Q24, we saw cross-border (“XB”) processing hit a new record of $2.4B in TPV with volumes increasing by 9% QoQ. Cross-border remains the core of our value proposition, and witnessing a return to sequential growth is a great indicator. Local-to-local, despite being flat QoQ driven by seasonal effects, delivered TPV growth at nearly 80% YoY. The ongoing success of our local processing confirms that our world-class orchestration offering - which includes our AI powered smart routing to optimize traffic routes to deliver higher conversion rates, robust fallback and redundancy offering, efficient fraud prevention engines, best in class KYC/compliance layer, and merchant specific features - provides to global merchants a superior offer to what they can receive through direct integrations to local acquirers and alternative payment methods.

Our payouts business grew 17% QoQ and over 50% YoY. The quarterly pick up is particularly interesting, and driven by a strong Q1 ramp-up in remittance corridors for our partners. This growing number of corridors not only represents an interesting vertical in itself, but it also fosters opportunities for cross border growth in pay-ins as it improves the liquidity and pricing we can offer our merchants.

We believe nothing sets us up better for long term success than this kind of sustained TPV growth compounding over multiple years.

As we move down our P&L, the quarter is less of a clear cut success than our TPV growth indicates. We delivered solid revenue growth, north of 30% YoY, while gross profit growth was relatively flat, at 2% YoY. Revenue and gross profit decreased 2% and 10% QoQ. Mixed results during the first quarter are explained by a few relevant drivers: i) one of our largest merchants achieved a new level in our tiered pricing scheme, and also re-negotiated fees, as their contract came up for renewal. Given our still relatively high concentration on Top 10 merchants, such a higher volume price tiering alongside the renegotiation directly impacted our revenue growth; ii) our product mix shifted towards lower monetizing pay-out volumes, with core pay-in verticals such as e-commerce and advertising are seasonally weaker in Q1; iii) delays from our merchants in a few important new launches that were scheduled for Q1 slowing down anticipated volume ramp-ups; iv) tighter FX spreads in Argentina and lower cross-border mix compared to a year ago.

From a geographic standpoint, we saw very strong performance in our key markets, Brazil and Mexico, with revenues increasing 89% and 50% YoY respectively, and gross profit growing, 63% and 44% YoY, respectively. The weaker QoQ performance was driven by seasonality in the commerce vertical, in addition to the higher volume price tiering alongside the renegotiation of this top merchant. In Mexico, although revenues dropped, gross profit grew driven by improvements in our cost structure as we gained scale and negotiating power vis-à-vis processors. In Africa and Asia, we saw strong revenue and gross profit growth, increasing by 51% and 60% YoY, respectively.

We decided to sustain our planned investment increases as we continue building dLocal for the long-term, despite the gross profit presented in this quarter. The main areas of expense increases QoQ were: tech-related expenses, including engineers, software licenses and infrastructure expenses; and salaries and wages across our operations, compliance and finance teams. We net added 50 FTEs during the quarter, growing our global team to 951 people, with most of the hires in tech, sales and operations in Uruguay, Argentina, Brazil and Spain. As a result, the higher OPEX alongside the weaker gross profit, led to Adjusted EBITDA of $37M declining 19% YoY and 25% QoQ.

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Although we acknowledge the quarterly gross profit results are disappointing, we do not see a structural issue. Trend-wise, performance improved as the quarter progressed, with a weak first two months of the year, totalling $37M, while March gross profit came in at $25M, above the monthly average for Q4. We are confident our gross profit will rebound, and we view these OPEX investments in capability building, internal mechanisms, and technology, as strategic for our long term success.

Our liquidity position remains robust, ending 1Q24 with US$320 million of funds, including US$212 million of available cash for general corporate purposes and US$108 million of short-term investments. Considering the robust cash position, the Board has authorised a new share repurchase program to purchase Class A common shares of up to $200 million dollars. The plan will expire on the earliest of May 2025 or upon reaching the $200 million dollar repurchase limit. The share repurchases may be made from time to time through open market transactions, block trades, privately negotiated transactions or otherwise, and are subject to market and business conditions, levels of available liquidity, cash requirements for other purposes, regulatory considerations, and other relevant factors. This share repurchase program underpins our confidence in the prospects of our business and our ability to continue to generate sufficient future cash to carry out our ambitious strategic plan.

Our actual performance versus guidance will hinge mainly on our own execution, but will be affected by a few exogenous variables: macroeconomic conditions, merchant go-live timing on signed contracts, and regulatory changes, and FX rates, to name a few. We manage and de-risk these variables as much as possible, but they still hold a level of unpredictability that is characteristic of emerging markets. That is simply the reality of our business. As we continue to gain scale and improve our diversification in terms of revenues and geographies, we believe these variables will impact to a lesser extent our results.

With that context in mind, we are working on delivering on our 2024 guidance. At this point, and to the best of our current data and expectations, we believe we are tracking towards those objectives, although with greater likelihood of coming in towards the lower end of the issued ranges.

I want to close by thanking our global team, our valued customers, and our investors for their continued support. The year just started and we see plenty of opportunities and growth, but most importantly, we continue to have a high conviction in our massive opportunity in the long run. The share buyback is a testament of this conviction. We steer our business for decades, not quarters. We remain fully committed to realizing our long-term ambition: unlocking the potential of emerging markets.” said Pedro Arnt, CEO of dLocal

 

First quarter 2024 Financial Highlights

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The following table summarizes our key performance metrics:

 

	Three months ended 31 of March
	2024	2023	% change
Key Performance metrics	(In millions of US$ except for %)
TPV	5,310	3,574	49%
Revenue	184.4	137.3	34%
Gross Profit	63.0	61.8	2%
Gross Profit margin	34%	45%	-11p.p
Adjusted EBITDA	36.8	45.5	-19%
Adjusted EBITDA margin	20%	33%	-13p.p
Adjusted EBITDA/Gross Profit	58%	74%	-15p.p
Profit	17.7	35.5	-50%
Profit margin	10%	26%	-16p.p

 

 

First quarter 2024 Business Highlights

 

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The tables below present a breakdown of dLocal’s TPV by product and type of flow:

 

In millions of US$ except for %	Three months ended 31 of March
	2024	% share	2023	% share
Pay-ins	3,657	69%	2,503	70%
Pay-outs	1,653	31%	1,072	30%
Total TPV	5,310	100%	3,574	100%

 

 

In millions of US$ except for %	Three months ended 31 of March
	2024	% share	2023	% share
Cross-border	2,426	46%	1,960	55%
Local-to-local	2,884	54%	1,615	45%
Total TPV	5,310	100%	3,574	100%

 

 

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The tables below present a breakdown of dLocal’s revenue by geography:

 

In millions of US$ except for %	Three months ended 31 of March
	2024	% share	2023	% share
Latin America	125.4	68%	98.2	72%
Brazil	43.1	23%	22.8	17%
Argentina	13.8	7%	20.0	15%
Mexico	34.0	18%	22.7	17%
Chile	12.4	7%	14.2	10%
Other LatAm	22.1	12%	18.5	13%
Africa & Asia	59.0	32%	39.0	28%
Nigeria	7.2	4%	26.9	20%
Egypt	39.0	21%	3.5	3%
Other Africa & Asia	12.8	7%	8.7	6%
Total Revenue	184.4	100%	137.3	100%

 

 

The tables below present a breakdown of dLocal’s gross profit by geography:

 

 

In millions of US$ except for %	Three months ended 31 of March
	2024	% share	2023	% share
Latin America	48.6	77%	52.8	85%
Brazil	17.9	28%	11.0	18%
Argentina	5.2	8%	17.8	29%
Mexico	9.9	16%	6.9	11%
Chile	7.5	12%	9.1	15%
Other LatAm	8.1	13%	8.0	13%
Africa & Asia	14.4	23%	9.0	15%
Nigeria	0.5	1%	2.4	4%
Egypt	10.3	16%	2.7	4%
Other Africa & Asia	3.6	6%	3.9	6%
Total Gross Profit	63.0	100%	61.8	100%

 

 

 

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Special note regarding Adjusted EBITDA and Adjusted EBITDA Margin

 

dLocal has only one operating segment. dLocal measures its operating segment’s performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources.

 

Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the changes in fair value of financial assets and derivative instruments carried at fair value through profit or loss, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, and inflation adjustment. dLocal defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by consolidated revenues.

 

Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (“Operating Segments”), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segment’s performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocal’s performance measures may not be comparable to those of other entities.

 

The table below presents a reconciliation of dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin to net income:

 

 

$ in thousands	Three months ended 31 of March
	2024	2023
Profit for the period	17,718	35,450
Income tax expense	7,114	4,281
Depreciation and amortization	3,762	2,515
Finance income and costs, net	(299)	(1,391)
Share-based payment non-cash charges	4,461	2,329
Other operating loss¹	1,819	-
Impairment loss / (gain) on financial assets	(177)	51
Inflation adjustment	2,368	1,019
Other non-recurring costs²	-	1,229
Adjusted EBITDA	36,766	45,483

 

Note: ¹In Q1 2024, the company wrote-off certain amounts related to merchants off-boarded by dLocal. ²It includes non-recurring costs related to an internal review of the allegations made by a short-seller report, including fees from independent counsel, independent global expert services and forensic accounting advisory firm.

 

 

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Special note regarding Adjusted Net Income

 

Adjusted Net Income is a non-IFRS financial measure. As used by dLocal Adjusted net income is defined as the profit for the period (net income) excluding impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, and other operating (gain)/loss, in line with our Adjusted EBITDA calculation (see detailed methodology for Adjusted EBITDA in page 9). It further excludes the accounting non-cash charges related to the fair value gain from the Argentine dollar-linked bonds and the exchange difference loss from the intercompany loan denominated in USD that we granted to our Argentine subsidiary to purchase the bonds. In addition, it excludes the inflation adjustment based on IFRS rules for hyperinflationary economies. We believe Adjusted Net Income is a useful measure for understanding our results for operations while excluding for certain non-cash effects such as currency devaluation and inflation. Our calculation for Adjusted Net Income may differ from similarly-titled measures presented by other companies and should not be considered in isolation or as a replacement for our measure of profit for the period as presented in accordance with IFRS.

 

The table below presents a reconciliation of dLocal’s Adjusted net income:

 

 

$ in thousands	Three months ended 31 of March
	2024	2023
Net income as reported	17,718	35,450
Inflation adjustment	2,368	1,019
Loan - exchange difference	6,729	-
Fair value (loss) / gains of financial assets at FVTPL (bonds)	(10,815)	(89)
Impairment loss / (gain) on financial assets	(177)	51
Share-based payment non-cash charges	4,461	2,329
Other operating (gain)/loss	1,819	-
Other non-recurring costs	-	1,229
Tax on adjustments	(1,361)	(31)
Adjusted net income	20,742	39,958

 

 

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Earnings per share

 

We calculate basic earnings per share by dividing the profit attributable to owners of the group by the weighted average number of common shares issued and outstanding during the three-months period ended March 31, 2024.

 

Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all dilutive potential common shares into common shares.

 

	Three months ended 31 of March
	2024	2023
Profit attributable to common shareholders (thousands USD)	17,708	35,444
Weighted average number of common shares	296,093,840	295,125,862
Adjustments for calculation of diluted earnings per share	14,028,247	16,441,184
Weighted average number of common shares for calculating diluted earnings per share	310,122,087	311,567,046
Basic earnings per share	0.06	0.12
Diluted earnings per share	0.06	0.11

 

This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements”. The quarterly financial information in this press release has not been audited, whereas the annual results for the year ended December 31, 2023 are audited.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Conference call and webcast

dLocal’s management team will host a conference call and audio webcast on May 14th, 2024 at 5:00 p.m. Eastern Time. Please click here to pre-register for the conference call and obtain your dial in number and passcode.

 

The live conference call can be accessed via audio webcast at the investor relations section of dLocal’s website, at https://investor.dlocal.com/. An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov.

 

About dLocal

dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in 40 countries across Africa, Asia, and Latin America. Through the “One dLocal” platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and pay-out processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.

 

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Definition of selected operational metrics

“API” means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, and service providers) to facilitate the money transfer process.

 

“Cross-border” means a payment transaction whereby dLocal is collecting in one currency and settling into a different currency and/or in a different geography.

 

“Local payment methods” refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets.

 

“Local-to-local” means a payment transaction whereby dLocal is collecting and settling in the same currency.

 

“Net Revenue Retention Rate” or “NRR” is a U.S. dollar-based measure of retention and growth of dLocal’s merchants. NRR is calculated for a period or year by dividing the Current Period/Year Revenue by the Prior Period/Year Revenue. The Prior Period/Year Revenue is the revenue billed by us to all our customers in the prior period. The Current Period/Year Revenue is the revenue billed by us in the current period to the same customers included in the Prior Period/Year Revenue. Current Period/Year Revenue includes revenues from

any upselling and cross-selling across products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, in respect of such merchant customers, and excludes revenue from new customers on-boarded in the preceding twelve months. As most of dLocal revenues come from existing merchants, the NRR rate is a key metric used by management, and we believe it is useful for investors in order to assess our retention of existing customers and growth in revenues from our existing customer base.

 

“Pay-in” means a payment transaction whereby dLocal’s merchant customers receive payment from their customers.

 

“Pay-out” means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocal’s merchant customers.

 

“Revenue from New Merchants” means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year.

 

“Revenue from Existing Merchants” means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year.

 

“TPV” dLocal presents total payment volume, or TPV, which is an operating metric of the aggregate value of all payments successfully processed through dLocal’s payments platform. Because revenue depends significantly on the total value of transactions processed through the dLocal platform, management believes that TPV is an indicator of the success of dLocal’s global merchants, the satisfaction of their end users, and the scale and growth of dLocal’s business.

 

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Forward-looking statements

This press release contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events, including in respect of guidance provided previously regarding our total payment volume, gross profit, Adjusted EBITDA, gross profit CAGR and Adjusted EBITDA over gross profit margin. Forward-looking statements regarding dLocal and our ability to achieve our guidance ranges are based on current management expectations and involve known and unknown risks, uncertainties and other factors that may cause dLocal’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” sections of dLocal’s filings with the U.S. Securities and Exchange Commission. Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.

 

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dLocal Limited

Certain financial information

Consolidated Condensed Interim Statements of Comprehensive Income for the three-month period ended March 31, 2024 and 2023

(In thousands of U.S. dollars, except per share amounts)

 

	Three months ended 31 of March
	2024	2023
Continuing operations
Revenues	184,430	137,287
Cost of services	(121,459)	(75,450)
Gross profit	62,971	61,837
Technology and development expenses	(5,465)	(2,290)
Sales and marketing expenses	(4,631)	(4,857)
General and administrative expenses	(24,332)	(15,280)
Impairment (loss)/gain on financial assets	177	(51)
Other operating (loss)/gain	(1,819)	-
Operating profit	26,901	39,359
Finance income	18,257	6,988
Finance costs	(17,958)	(5,597)
Inflation adjustment	(2,368)	(1,019)
Other results	(2,069)	372
Profit before income tax	24,832	39,731
Income tax expense	(7,114)	(4,281)
Profit for the period	17,718	35,450
Profit attributable to:
Owners of the Group	17,708	35,444
Non-controlling interest	10	6
Profit for the period	17,718	35,450
Earnings per share (in USD)
Basic Earnings per share	0.06	0.12
Diluted Earnings per share	0.06	0.11
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange difference on translation on foreign operations	(669)	1,488
Other comprehensive income for the period, net of tax	(669)	1,488
Total comprehensive income for the period, net of tax	17,049	36,938
Total comprehensive income for the period
Owners of the Group	17,036	36,934
Non-controlling interest	13	4
Total comprehensive income for the period	17,049	36,938

 

 

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dLocal Limited

Certain financial information

Consolidated Condensed Interim Statements of Financial Position as of March 31, 2024 and December 31, 2023

(In thousands of U.S. dollars)

	31 of March, 2024	31 of December, 2023
ASSETS
Current Assets
Cash and cash equivalents	572,357	536,160
Financial assets at fair value through profit or loss	107,777	102,677
Trade and other receivables	396,387	363,374
Derivative financial instruments	2,256	2,040
Other assets	8,563	11,782
Total Current Assets	1,087,340	1,016,033
Non-Current Assets
Financial assets at fair value through profit or loss	-	1,710
Deferred tax assets	2,183	2,217
Property, plant and equipment	3,454	2,917
Right-of-use assets	3,538	3,689
Intangible assets	59,485	57,887
Total Non-Current Assets	68,660	68,420
TOTAL ASSETS	1,156,000	1,084,453
LIABILITIES
Current Liabilities
Trade and other payables	650,184	602,493
Lease liabilities	699	626
Tax liabilities	21,503	20,800
Derivative financial instruments	891	948
Provisions	366	362
Total Current Liabilities	673,643	625,229
Non-Current Liabilities
Deferred tax liabilities	2,452	753
Lease liabilities	3,163	3,331
Total Non-Current Liabilities	5,615	4,084
TOTAL LIABILITIES	679,258	629,313
EQUITY
Share Capital	591	591
Share Premium	73,157	73,065
Capital Reserve	26,036	21,575
Other Reserves	(10,208)	(9,808)
Retained earnings	387,044	369,608
Total Equity Attributable to owners of the Group	476,620	455,031
Non-controlling interest	122	109
TOTAL EQUITY	476,742	455,140

 

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dLocal Limited

Certain interim financial information

Consolidated Condensed Interim Statements of Cash flows for the three-month period ended March 31, 2024 and 2023

(In thousands of U.S. dollars)

	Three months ended 31 of March
	2024	2023
Cash flows from operating activities
Profit before income tax	24,832	39,731
Adjustments:
Interest income from financial instruments	(7,442)	(6,899)
Interest charges for lease liabilities	43	43
Other finance expense	127	437
Finance expense related to derivative financial instruments	9,878	5,235
Net exchange differences	7,637	531
Fair value gain on financial assets at fair value through profit or loss	(10,815)	(89)
Amortization of Intangible assets	3,424	2,176
Depreciation of Property, plant and equipment and right-of-use	338	339
Disposals of property, plant and equipment, intangible assets and right-of-use asset	62	-
Share-based payment expense, net of forfeitures	4,461	2,329
Other operating loss/(gain)	1,819	-
Net Impairment loss/(gain) on financial assets	(177)	51
Inflation adjustment	(5,892)	-
	28,295	43,884
Changes in working capital
Increase in Trade and other receivables	(32,836)	(9,074)
Decrease/(increase) in Other assets	3,219	13,754
Increase in Trade and other payables	45,964	41,378
Decrease in Tax Liabilities	(1,120)	(1,062)
Decrease/(increase) in Provisions	4	(305)
Cash from operating activities	43,526	88,575
Income tax paid	(3,558)	(4,042)
Net cash from operating activities	39,968	84,533
Cash flows from investing activities
Acquisitions of Property, plant and equipment	(786)	(49)
Additions of Intangible assets	(5,022)	(3,806)
Net collections/acquisitions of financial assets at FVPL	(243)	1,045
Interest collected from financial instruments	7,442	6,820
Net cash used in investing activities	1,391	4,010
Cash flows from financing activities
Repurchase of shares	-	(36,918)
Share-options exercise	-	69
Interest payments on lease liability	(43)	(43)
Principal payments on lease liability	(95)	(130)
Finance expense paid related to derivative financial instruments	(10,151)	(2,153)
Other finance expense paid	(127)	(437)
Net cash (used in) / provided by financing activities	(10,416)	(39,612)
Net increase in cash flow	30,943	48,931
Cash and cash equivalents at the beginning of the period	536,160	468,092
Net increase in cash flow	30,943	48,931
Effects of exchange rate changes on cash and cash equivalents	5,254	869
Cash and cash equivalents at the end of the period	572,357	517,892

 

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Investor Relations Contact:

investor@dlocal.com

 

Media Contact:

media@dlocal.com

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Exhibit 99.2

 

 

 

 

 

DLocal Limited

Unaudited Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

 

 

 

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DLocal Limited

Consolidated Condensed Interim Statements of Comprehensive Income

For the three-month periods ended March 31, 2024 and 2023

(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

 

				Three months ended
		Notes		March 31, 2024				March 31, 2023
Continuing operations
Revenues		6			184,430				137,287
Cost of services		6			(121,459	)			(75,450	)
Gross profit					62,971				61,837
Technology and development expenses		7			(5,465	)			(2,290	)
Sales and marketing expenses		8			(4,631	)			(4,857	)
General and administrative expenses		8			(24,332	)			(15,280	)
Net impairment losses on trade receivables		16			177				(51	)
Other operating loss					(1,819	)			—
Operating profit					26,901				39,359
Finance income		11			18,257				6,988
Finance costs		11			(17,958	)			(5,597	)
Inflation adjustment		11			(2,368	)			(1,019	)
Other results					(2,069	)			372
Profit before income tax					24,832				39,731
Income tax expense		12			(7,114	)			(4,281	)
Profit for the period					17,718				35,450
Profit attributable to:
Owners of the Group					17,708				35,444
Non-controlling interest					10				6
Profit for the period					17,718				35,450
Earnings per share
Basic Earnings per share		13			0.06				0.12
Diluted Earnings per share		13			0.06				0.11
Other comprehensive Income
Items that may be reclassified to profit or loss:
Exchange difference on translation on foreign operations					(669	)			1,488
Other comprehensive income for the period, net of tax					(669	)			1,488
Total comprehensive income for the period					17,049				36,938
Total comprehensive income for the period is attributable to:
Owners of the Group					17,036				36,934
Non-controlling interest					13				4
Total comprehensive income for the period					17,049				36,938

 

The accompanying notes are an integral part of these Consolidated Condensed Interim Financial Statements.

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DLocal Limited

Consolidated Condensed Interim Statements of Financial Position

As of March 31, 2024 and December 31, 2023

(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

 

		Notes		March 31, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents		14		572,357		536,160
Financial assets at fair value through profit or loss		15		107,777		102,677
Trade and other receivables		16		396,387		363,374
Derivative financial instruments		21		2,256		2,040
Other assets		17		8,563		11,782
Total Current Assets				1,087,340		1,016,033
Non-Current Assets
Financial assets at fair value through profit or loss				—		1,710
Deferred tax assets				2,183		2,217
Property, plant and equipment				3,454		2,917
Right-of-use assets				3,538		3,689
Intangible assets		18		59,485		57,887
Total Non-Current Assets				68,660		68,420
TOTAL ASSETS				1,156,000		1,084,453
LIABILITIES
Current Liabilities
Trade and other payables		19		650,184		602,493
Lease liabilities				699		626
Tax liabilities		20		21,503		20,800
Derivative financial instruments		21		891		948
Provisions		22		366		362
Total Current Liabilities				673,643		625,229
Non-Current Liabilities
Deferred tax liabilities				2,452		753
Lease liabilities				3,163		3,331
Total Non-Current Liabilities				5,615		4,084
TOTAL LIABILITIES				679,258		629,313
EQUITY		13
Share Capital				591		591
Share Premium				73,157		73,065
Capital Reserve				26,036		21,575
Other Reserves				(10,208)		(9,808)
Retained earnings				387,044		369,608
Total Equity Attributable to owners of the Group				476,620		455,031
Non-controlling interest				122		109
TOTAL EQUITY				476,742		455,140
TOTAL LIABILITIES AND EQUITY				1,156,000		1,084,453

 

The accompanying notes are an integral part of these Consolidated Condensed Interim Financial Statement

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DLocal Limited

Consolidated Condensed Interim Statements of Changes in Equity

For the three-month periods ended March 31, 2024 and 2023

(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

 

		Notes		Share Capital		Share Premium		Capital Reserve		Other Reserves		Retained Earnings		Total		Non- controlling interest		Total equity
Balance as of January 1st, 2024				591		73,065		21,575		(9,808)		369,608		455,031		109		455,140
Comprehensive Income for the period
Profit for the period				—		—		—		—		17,708		17,708		10		17,718
Exchange difference on translation on foreign operations				—		—		—		(400)		(272)		(672)		3		(669)
Total Comprehensive Income for the period				—		—		—		(400)		17,436		17,036		13		17,049
Transactions with Group owners in their capacity as owners
Share-based plan vested and exercised		13		—		92		—		—		—		92		—		92
Share-based payments net of forfeitures		9		—		—		4,461		—		—		4,461		—		4,461
Repurchase of shares		13		—		—		—		—		—		—		—		—
Transactions with Group owners in their capacity as owners				—		92		4,461		—		—		4,553		—		4,553
Balance as of March 31, 2024				591		73,157		26,036		(10,208)		387,044		476,620		122		476,742
Balance as of January 1st, 2023				592		164,307		16,185		(1,448)		219,993		399,629		(9)		399,620
Comprehensive Income for the period
Profit for the period				—		—		—		—		35,444		35,444		6		35,450
Exchange difference on translation on foreign operations				—		—		—		858		632		1,490		(2)		1,488
Total Comprehensive Income for the period				—		—		—		858		36,076		36,934		4		36,938
Transactions with Group owners in their capacity as owners
Share-options exercise		13		—		1,300		(1,231)		—		—		69		—		69
Repurchase of shares		13		(5)		(36,913)		—		—		—		(36,918)		—		(36,918)
Share-based payments		9		—		—		2,329		—		—		2,329		—		2,329
Transactions with Group owners in their capacity as owners				(5)		(35,613)		1,098		—		—		(34,520)		—		(34,520)
Balance as of March 31, 2023				587		128,694		17,283		(590)		256,069		402,043		(5)		402,038

 

The accompanying notes are an integral part of these Consolidated Condensed Interim Financial Statements.

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DLocal Limited

Consolidated Condensed Interim Statements of Cash Flows

For the three-month periods ended March 31, 2024 and 2023

(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

 

				Three months ended
		Notes		March 31, 2024		March 31, 2023
Cash flows from operating activities
Profit before income tax				24,832		39,731
Adjustments:
Interest income from financial instruments		11		(7,442)		(6,899)
Interest charges for lease liabilities		11		43		43
Other finance expense				127		437
Finance expense related to derivative financial instruments				9,878		5,235
Net exchange differences				7,637		531
Fair value gain on financial assets at fair value through profit or loss		11		(10,815)		(89)
Other operating loss		24		1,819		—
Amortization of Intangible assets		10		3,424		2,176
Depreciation of Property, plant and equipment and right-of-use		10		338		339
Disposals of property, plant and equipament, intagible assets and right-of-use asset				62		—
Share-based payment expense, net of forfeitures		9		4,461		2,329
Net Impairment loss/(gain) on financial assets		16		(177)		51
Inflation adjustment				(5,892)		—
				28,295		43,884
Changes in working capital
Increase in Trade and other receivables		16		(32,836)		(9,074)
Decrease/(increase) in Other assets		17		3,219		13,754
Increase in Trade and other payables		19		45,964		41,378
Decrease in Tax Liabilities		20		(1,120)		(1,062)
Decrease in Provisions		22		4		(305)
Cash from operating activities				43,526		88,575
Income tax paid				(3,558)		(4,042)
Net cash from operating activities				39,968		84,533
Cash flows from investing activities
Acquisitions of Property, plant and equipment				(786)		(49)
Additions of Intangible assets		18		(5,022)		(3,806)
Net investments				(243)		1,045
Interest collected from financial instruments				7,442		6,820
Net cash used in investing activities				1,391		4,010
Cash flows from financing activities
Repurchase of shares		13		—		(36,918)
Share-options exercise				—		69
Interest payments on lease liability				(43)		(43)
Principal payments on lease liability				(95)		(130)
Finance expense paid related to derivative financial instruments				(10,151)		(2,153)
Other finance expense paid				(127)		(437)
Net cash (used in)/provided by financing activities				(10,416)		(39,612)
Net increase in cash flow				30,943		48,931
Cash and cash equivalents at the beginning of the period				536,160		468,092
Effects of exchange rate changes on cash and cash equivalents				5,254		869
Cash and cash equivalents at the end of the period				572,357		517,892

 

The accompanying notes are an integral part of these Consolidated Condensed Interim Financial Statements.

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DLocal Limited

Notes to the Consolidated Condensed Interim Financial Statements

At March 31, 2024

(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

 

 

1. General information and Significant Events during the period

1.1. General information

 

DLocal Limited (“dLocal” or the “Company”) was established on October 5, 2016 as a limited liability holding company in Malta (together with its subsidiaries as the “Group”.) On April 14, 2021, the Group was reorganized under dLocal and domiciled and incorporated in the Cayman Islands. The Company holds a controlling financial interest in the Group.

The Group processes payment transactions, enabling merchants located in developed economies (mainly United States, Europe and China) to receive payments (“pay-ins”) from customers in emerging markets, and to facilitate payments (“pay-outs”) to customers in emerging markets. As of the date these Consolidated Condensed Interim Financial Statements were issued, the Group continued its focus on geographic expansion, increasing the total number of in-network countries.

The Group processes local payments in emerging markets through its network of acquirers and payments processors. Through its partnership with financial institutions, the Group expatriates/repatriates funds to/from developed economies where the merchant customers elect settlement in their preferred currency (mainly U.S. Dollar and Euro). These consolidated condensed interim financial statements include dLocal’s subsidiaries.

The Group is licensed and regulated in the EU as an Electronic Money Issuer, or EMI, and Payment Institution, or PI, and registered as a Money Service Business with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, or FinCEN, and operates and may be licensed, as applicable, in many countries in emerging markets, primarily in the Americas, Asia and Africa.

In addition, the Group is subject to laws aimed at preventing money laundering, corruption and the financing of terrorism. This regulatory landscape is constantly changing, including as a consequence of the implementation of the Fifth Anti-Money Laundering Directive (Directive (EU) 2018/843, “MLD5”) and the proposed amendments to the MLD4, often referred to as the fourth Anti-Money Laundering Directive.

 

1.2. Significant events during the period

(a) Class action lawsuits

On February 23 and February 28, 2023, respectively, we were named, along with several of our senior executives and/or directors, as defendants in certain putative class action lawsuits filed in the Supreme Court of the State of New York, New York County, asserting claims under Sections 11, 12, and 15 of the Securities Act of 1933, based in significant part on the short-seller report. These matters, Zappia et al. v. DLocal Limited et al., Index No. 151778/2023 (Sup. Ct. N.Y. Cty.), and Hunt et al. v. DLocal Limited et al., Index No. 651058/2023 (Sup. Ct. N.Y. Cty.), or the Zappia and Hunt Actions, allege, among other things, that the registration statement for our June 2021 initial public offering reflected certain material misstatements or omissions.

On March 3, 2023, plaintiffs in the two actions filed a stipulation and proposed order consolidating the cases and appointing putative lead counsel. The parties also agreed to a schedule for plaintiffs’ filing of an amended complaint and a subsequent briefing schedule for a motion to dismiss the amended complaint.

On May 12, 2023, plaintiffs in the Zappia and Hunt Actions jointly filed a consolidated amended complaint. On July 11, 2023, we filed a motion to dismiss the complaint. Plaintiffs filed their opposition brief on August 15, 2023, and we filed a reply in further support of our motion to dismiss on September 22, 2023. Our motion to dismiss is now fully briefed, and, on February 29, 2024, the court presided over

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oral argument on the motion. The court has not yet issued a decision on the motion, and no other proceedings are currently ongoing or scheduled.

We have also been named, along with several of our senior executives and/or directors, in a putative class action lawsuit filed in the U.S. District Court for the Eastern District of New York, asserting claims under Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder. This lawsuit, captioned Laurenzi v. dLocal Ltd., et al., 1:23-cv-07501 (E.D.N.Y.) (Laurenzi Action), was initiated on October 6, 2023. On January 4, 2024, the Court appointed a Lead Plaintiff. On March 18, 2024, Lead Plaintiff filed an amended class action complaint. The amended complaint alleges misstatements and omissions in the registration statement for our June 2021 initial public offering and in various public filings and press releases during the period of June 2, 2021 through June 5, 2023. Pursuant to a schedule agreed upon with Lead Plaintiff’s counsel, we filed on April 30, 2024 a letter, as required by court rules, requesting a pre-motion conference regarding an anticipated motion to dismiss the Laurenzi Action in full. Lead Plaintiff will respond to that letter by May 14, 2024.

Due to the preliminary posture of the above described lawsuits as of the date of issuance of these unaudited consolidated condensed interim financial statements, the Management and its legal advisors are unable to evaluate the likelihood of an adverse outcome or estimate a range of potential losses and no provision for contingencies have been recorded for the aforementioned matters. DLocal Limited intends to defend itself vigorously in these actions. As of the date of issuance of the Company’s interim financial statements there were no further updates in this regard.

(b) Developments in Argentina
 

Argentina is subject to extensive foreign exchange regulations which were revised as recently as December 2023. We and our legal advisors consider our activities to be carried out in compliance with applicable laws and regulations, including compliance with foreign exchange market and tax regulations. As of the date of this interim report, no provision for contingencies has been recorded for the aforementioned matters.

Additionally, given the magnitude of our business in Argentina, we continue to show additional economic commitment to make an aggregate investment over time in the country.On March 15, 2024 and March 18, 2024, the Group has made two acquisitions of the TV25 bond and acquired with own funds 2,252,755 bonds, issued by the Treasury department of Argentina through a public bidding process. Furthermore, see note 15 Financial Assets at Fair Value through profit or loss of the Consolidated Interim Financial Statements, included elsewhere in this Interim Report.

 

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2. Presentation and preparation of the Consolidated Condensed Interim Financial Statements and significant accounting policies

 

2.1. Basis of preparation of consolidated condensed interim financial information

 

These Consolidated Condensed Interim Financial Statements for the three months ended March 31, 2024 have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” as issued by the International Accounting Standard Board.

 

These Consolidated Condensed Interim Financial Statements do not include all the notes of the type normally included in an annual consolidated financial statement. Accordingly, this report should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023 (the “Annual Financial Statements”).

 

The accounting policies and critical accounting estimates and judgments adopted, except for those explicitly indicated on these Consolidated Condensed Interim Financial Statements, are consistent with those of the previous financial year and corresponding interim reporting period.

 

All amounts are presented in thousands of U.S. Dollars except share data or as otherwise indicated.

 

These Consolidated Condensed Interim Financial Statements for the three months ended March 31, 2024 were authorized for issuance by the dLocal’s Board of Directors on May 13, 2024.

 

2.2. Share-based payments

 

During the three months ended March 31, 2024 , the Group granted new share options and restricted share units under the Amended and Restated 2020 Global Share Incentive Plan to executives and employees in return for their services, which represented changes in the composition of share options outstanding at the end of the period.

 

2.2.1. Employee Share Purchase Plan (“ESPP”)

 

Set out below are summaries of restricted share units and share options granted under the plan:

 

		March 31, 2024				December 31, 2023
		Average				Average
		exercise price		Number of		exercise price		Number of
		(U.S. Dollars)		options, PSUs and RSUs		(U.S. Dollars)		options and RSUs
At the beginning of the period		6.86		6,962,302		8.30		3,534,561
Granted during the period		10.72		553,561		5.53		4,340,239
Exercised during the period		—		—		2.25		(663,897)
Forfeited during the period		15.16		(109,096)		14.06		(248,601)
At the end of the period		7.25		7,406,767		6.86		6,962,302
Vested and exercisable at the end of the period		3.60		1,872,904		7.03		704,006

 

No options expired during the periods covered by the above table.

As of March 31, 2024, the Group has 204,685 PSUs, 3,783,282 RSUs, and 3,418,800 Stock Options outstanding.

As of March 31, 2024, total compensation expense of the plans was USD 4,461 (March 31, 2023 - USD 2,329) as presented in Note 9 Employee Benefits.

 

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2.3. New accounting pronouncements

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2023, except for the adoption of new standards effective as of 1 January 2024. The Company is assessing the impact of the standard.

2.4. Impact of IFRS Accounting Standards issued but not yet applied by the Group

In August 2023, the IASB amended IAS 21 to help entities to determine whether a currency is exchangeable into another currency, and which spot exchange rate to use when it is not. These new requirements will apply for annual reporting periods beginning on or after 1 January 2025. The Company is assessing the impact of the standard.

On 9 April 2024, the IASB issued a new standard IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

• the structure of the statement of profit or loss;

• required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and

• enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

IFRS 18 will replace IAS 1; many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its ‘operating profit or loss’.

IFRS 18 will apply for reporting periods beginning on or after 1 January 2027 and also applies to comparative information.

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3. Accounting estimates and judgments

 

Accounting estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The critical accounting estimates and judgments adopted on these Consolidated Condensed Interim Financial Statements are consistent with those of the previous financial year and corresponding interim reporting period.

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4. Consolidation of subsidiaries

 

DLocal Limited, located in Cayman Islands, is the parent company of the Group and acts as a holding company for subsidiaries whose main activity is cross-border and local payments, enabling international merchants to access end customers in emerging markets. Its revenue comes from dividends receivable from subsidiaries and share of profit from subsidiary partnership.

There were no changes since December 31, 2023 in the accounting practices adopted for consolidation of the Company’s direct and indirect interests in its subsidiaries for the purposes of these unaudited interim condensed consolidated financial statements. The following entity was incorporated by the Group during the three month period ended March 31, 2024.

 

						% of equity interest held by Dlocal
Entity name		Country of incorporation		Principal activities		March 31, 2024
Dlocal Solutions Private Limited (India)		India		Collection entity	(¹)	99.99%
Dlocal Nicaragua S.A.		Nicaragua		Collection entity	(¹)	100%
Dlocal Malaysia Sdn. Bhd.		Malaysia		Collection entity	(¹)	100%
CRI Demerge Costa Rica SRL		Costa Rica		Collection entity	(¹)	100%
Demerge Singapore PTE Ltd		Singapore		Collection entity	(¹)	100%

(1) The Group has determined that the acquisition or incorporation of this subsidiary during 2024 does not constitute a business according to IFRS 3.

 

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5. Segment reporting

 

The Group operates as a single operating segment, “payment processing”. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”) who is the Group’s Executive Team represented by executive officers and directors holders of ordinary shares of the immediate parent of the Company. The Group has determined that its Executive Team is the chief operating decision maker as they determine the allocation of resources and assess performance.

The Executive Team evaluates the Group’s financial information and resources, and assess the financial performance of these resources based on consolidated Revenue, Adjusted EBITDA and Adjusted EBITDA margin as further described below.

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

The Executive Team assesses the financial performance of the Group’s sole segment by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is defined as the consolidated profit from operations before financing and taxation for the applicable reporting period before depreciation of PP&E, amortization of right-of-use assets and intangible assets. It also excludes adjustments applied to subsidiaries operating hyperinflationary environments, other operating loss, impairment gain/loss on financial assets, other non-recurring costs and share-based payment non-cash charges. The Group defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by Revenue.

The Group reconciles the segment’s performance measure to profit for the period as presented in the Consolidated Condensed Interim Statements of Comprehensive Income as follows:

 

			Three months ended
		Note	March 31, 2024		March 31, 2023
Profit for the period (1)			17,718		35,450
Income tax expense		12	7,114		4,281
Inflation adjustment		11	2,368		1,019
Finance income		11	(18,257)		(6,988)
Finance costs		11	17,958		5,597
Depreciation and amortization		10	3,762		2,515
Other operating loss			1,819		—
Impairment gain on financial assets		16	(177)		51
Other non-recurring costs (2)		8	—		1,229
Share-based payment non-cash charges, net of forfeitures		9	4,461		2,329
Adjusted EBITDA			36,766		45,483
Revenue			184,430		137,287
Adjusted EBITDA			36,766		45,483
Adjusted EBITDA margin			19.9%		33.1%

 

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The Group’s revenue, results and assets for this one reportable segment can be determined by reference to the Consolidated Condensed Interim Statement of Comprehensive Income and Consolidated Condensed Interim Statement of Financial Position.

 

As required by IFRS 8 Operating Segments, below are presented applicable entity-wide disclosures related to dLocal’s revenues.

 

Revenue breakdown by region and country

 

The Group’s revenues arise from operations in many countries, where the merchants´ customers are based.

The following table presents the Group’s revenue by region and country where the payments from/to the merchant customers in certain regions represented at least 10% of Total Revenues amounted on the first quarter:

 

		Three months ended
		March 31, 2024		March 31, 2023
LatAm		125,390		98,238
Brazil		43,068		22,817
Mexico		34,033		22,706
Argentina		13,798		20,023
Chile		12,353		14,232
Other countries		22,138		18,460
Asia and Africa		59,040		39,049
Egypt		39,010		3,470
Nigeria		7,247		26,928
Other countries		12,783		8,651
Revenues		184,430		137,287

 

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Revenue with large customers

 

For the three months ended March 31, 2024, the Group’s revenue from its top 10 merchants represented 65% of revenue (58% of revenue for the three months ended March 31, 2023). For the three months ended March 31, 2024 there is two customer (one customer for the three months ended March 31, 2023) that on an individual level accounted for more than 10% of the total revenue.

 

Non current assets by country

 

 

The Company does not have any non-current assets located in the entity´s country of domicile.

Material non-current assets are the Intangible Assets described in Note 18: Intangible Assets.

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6. Revenues and Cost of Services

 

(a) Revenue and Gross profit description

 

dLocal generates revenue by facilitating payment processing for international merchants, allowing them to expand their operations into targeted emerging markets.

 

The breakdown of revenue from contracts with customers per type of service is as follows:

 

		Three months ended
		March 31, 2024		March 31, 2023
Transaction revenues (i)		183,283		135,509
Other revenues (ii)		1,147		1,778
Revenues from payment processing		184,430		137,287
Cost of services		(121,459)		(75,450)
Gross profit		62,971		61,837

 

 

(b) Revenue recognized at a point in time and over time

 

Transaction revenues are recognized at a point in time when the payment transaction, or its reversal in the case of chargeback and refunds, is processed. Other revenues are recognized as revenue at a point in time when the respective performance obligation is satisfied. The Group did not recognize revenues over time for the three months ended March 31, 2024 and 2023.

 

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(c) Cost of services

 

Cost of services are composed of the following:

 

		Three months ended
		March 31, 2024		March 31, 2023
Processing costs (i)		116,201		71,803
Hosting expenses (ii)		1,774		1,558
Salaries and wages (iii)		584		437
Amortization of intangible assets (iv)		2,900		1,652
Cost of services		121,459		75,450

 

 

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7. Technology and development expenses

 

Technology and development expenses are composed of the following:

 

		Three months ended
		March 31, 2024		March 31, 2023
Salaries and wages (i)		2,520		1,003
Software licenses (ii)		1,489		669
Infrastructure expenses (iii)		1,090		442
Information and technology security expenses (iv)		52		76
Other technology expenses		314		100
Total Technology and development expenses		5,465		2,290

 

 

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8. Sales and marketing expenses and General and administrative expenses

 

Sales and marketing expenses and General and administrative expenses are composed of the following:

 

		Three months ended
Sales and marketing expenses		March 31, 2024		March 31, 2023
Salaries and wages (i)		3,853		3,522
Marketing expenses (ii)		778		1,335
Total Sales and marketing expenses		4,631		4,857
General and administrative expenses		March 31, 2024		March 31, 2023
Salaries and wages (i)		13,584		7,148
Third-party services (iii)		5,414		4,574
Other operating expenses (iv)		5,334		3,558
Total General and administrative expenses		24,332		15,280

 

 

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9. Employee Benefits

 

Employee benefits is composed of the following:

 

		Three months ended
		March 31, 2024		March 31, 2023
Salaries, wages and contractor fees (i)		20,225		13,587
Share-based payments (ii)		4,461		2,329
Total employee benefits		24,686		15,916

 

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10. Amortization and Depreciation

 

Amortization and depreciation expenses are composed of the following:

 

		Three months ended
		March 31, 2024		March 31, 2023
Amortization of intangible assets		3,424		2,176
Right-of-use asset amortization		89		144
Depreciation of Property, plant & equipment		249		195
Total Amortization and Depreciation		3,762		2,515

 

For further information related to amortization of intangible assets refer to Note 18: Intangible Assets.

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11. Other Results

 

Other results is composed of the following categories:
 

		Three months ended
		March 31, 2024		March 31, 2023
Interest Income from Financial Instruments (i)		7,442		6,899
Fair value gains of financial assets at FVPL (i)		10,815		89
Finance income		18,257		6,988
		Three months ended
		March 31, 2024		March 31, 2023
Finance expense related to derivative financial instruments (ii)		(10,151)		(4,586)
Other finance expenses (iii)		(7,764)		(968)
Interest charges for lease liabilities (iv)		(43)		(43)
Finance costs		(17,958)		(5,597)
Inflation adjustment (v)		(2,368)		(1,019)
Other results		(2,069)		372

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12. Income Tax

 

Income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average income tax rate used for the three months ended March 31, 2024 is 28.6%, compared to 10.8% for the three months ended March 31, 2023. The effective income tax rate increase is explained by an increase in the results of subsidiaries located in countries where the income tax rate is higher.

 

The income tax charge recognized in profit and losses is the following:

 

		Three months ended
Current Income Tax		March 31, 2024		March 31, 2023
Current Income Tax on profits for the period		(5,381)		(3,631)
Total Current Income Tax expense		(5,381)		(3,631)
Deferred income tax		March 31, 2024		March 31, 2023
(Decrease) / Increase in deferred income tax assets		(34)		186
Increase in deferred income tax liabilities		(1,699)		(836)
Total Deferred income tax expense		(1,733)		(650)
Income Tax expense		(7,114)		(4,281)

 

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13. Capital management

 

(a) Share capital

 

Authorized shares, as well as issued and fully paid-up shares, are presented below:

 

		March 31, 2024				March 31, 2023
		Amount		USD		Amount		USD
Issued and Fully Paid Up Shares of USD 0.002 each
Class A Common Shares		162,116,726		323		159,741,936		319
Class B Common Shares		134,054,192		268		134,054,192		268
		296,170,918		591		293,796,128		587
Share Capital evolution
Share Capital as at January 1		295,991,665		591		296,029,870		592
i) Issue of common shares at USD 0.002		179,253		—	*	133,697		—
ii) Repurchase of shares		—		—		(2,367,439)		(5)
Share capital as of March 31, 2024		296,170,918		591		293,796,128		587

 

* Amounts are rounded to the nearest thousand and should not be interpreted as zero.

At the date of this interim report, the total authorized share capital of the Group was USD 3,000, divided into 1,500,000,000 shares par value USD 0.002 each, of which:

The remaining 250,000,000 authorized but unissued shares are presently undesignated and may be issued by our board of directors as common shares of any class or as shares with preferred, deferred or other special rights or restrictions.

 

The rights of the holders of Class A Common Shares and Class B Common Shares are identical, except with respect to voting, conversion and transfer restrictions applicable to the Class B Common Shares. Each Class A Common Share is entitled to one vote while Class B Common Shares are entitled to five votes each. Each Class B Common Share is convertible into one Class A Common Share automatically upon transfer, subject to certain exceptions. Holders of Class A Common Shares and Class B Common Shares vote together as a single class on all matters unless otherwise required by law.

 

 

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(b) Capital reserve

The Capital reserve corresponds to reserves related to the share-based plans, as described in Note 2.11: Share-based payments and warrants to the Annual Financial Statements for the year ended December 31, 2023. Accordingly, this reserve is related to share-based payment compensation plans of the Group.

 

The following table shows a breakdown of the consolidated condensed interim statement of financial position line item ‘Capital Reserves’ and the movements in these reserves during the periods.

 

		2024		2023
Balances as of January 1		21,575		16,185
Share-options exercise		—		(1,231)
Share-based payments charges		4,461		2,329
Balance as of March 31		26,036		17,283

 

 

 

(c) Other Reserves

 

The reserves for the Group relate to cumulative translation adjustment representing differences on conversion of assets and liabilities at the reporting date.

 

The following table shows a breakdown of the consolidated statement of financial position line item ‘Other Reserves’ and the movements in these reserves during the periods.

 

		2024		2023
		Cumulative Translation Adjustment		Cumulative Translation Adjustment
Balances as of January 1		(9,808)		(1,448)
Movement of other reserves		(400)		858
Balance as of March 31		(10,208)		(590)

 

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d) Earnings per share

 

The Group calculates basic and diluted earnings per share as discussed in Note 2.13: Equity of the Annual Financial Statements. The calculations performed to derive basic and diluted EPS during the three months ended March 31, 2024 and 2023:

 

		Three months ended
		March 31, 2024		March 31, 2023
Profit attributable to common shareholders (U.S. Dollars)		17,708,000		35,443,588
Weighted average number of common shares		296,093,840		295,125,862
Adjustments for calculation of diluted earnings per share(1)		14,028,247		16,441,184
Weighted average number of common shares for calculating diluted earnings per share		310,122,087		311,567,046
Basic earnings per share		0.06		0.12
Diluted earnings per share		0.06		0.11

 

 

1 For the three months ended March 31, 2024, the adjustment corresponds to the dilutive effect of i) 6,788,288 average shares related to share-based payment warrants described in Note 2.11: Share-based payments and warrants contracts to the Annual Financial Statements for the year ended December 31, 2023; and ii) 7,239,959 average shares related to share-based payment plans with employees (14,660,321 and 1,780,863 respectively for the three months ended March 31, 2023).

 

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14. Cash and cash equivalents

 

Cash and cash equivalents breakdown is presented below:

 

		March 31, 2024		December 31, 2023
Own Balances		211,891		222,808
Merchant Clients Funds		360,466		313,352
		572,357		536,160

 

As of March 31, 2024, USD 572,357 (USD 536,160 on December 31, 2023) represents cash on hand, demand deposits with financial institutions and other short-term liquid financial instruments.

Own Balances correspond to cash and cash equivalents of the Group while Merchant Clients Funds correspond to freely available funds collected from the merchants’ customers, that can be invested in secure, liquid low-risk assets until they are transferred to the merchants in accordance with the agreed conditions with them or transferred to Own Funds accounts for the portion that corresponds to the Group fees. As of March 31, 2024 , Merchant Clients Funds includes USD 86,076 pending to be transferred to Own Funds accounts (USD 59,900 as of December 31, 2023).

 

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15. Financial assets at fair value through profit or loss

 

Financial assets at fair value through profit or loss include the following:

 

		Maturity date		Coupon rate (%)		Linked with		March 31, 2024		December 31, 2023
Bonds issued by the Treasury Department of Argentina
TV24 (i)		April, 2024		0.4		U.S. Dollar		94,517		94,667
TV25		June, 2025				U.S. Dollar		2,350		—
TDG24 (i)		April, 2024		3.25		U.S. Dollar/CER index*		9,047		8,059
TDE25		January, 2025		3.25		U.S. Dollar/CER index*		1,863		1,661
								107,777		104,387

*Stabilization Reference Coefficient adjusted by inflation

(i) According to the respective maturity date, the bond TV24 was fully settled during April, 2024. We then used the funds to acquire new financial assets and bonds to reinforce our economic commitment.

Information about the Group’s impact on profit or loss of bonds is discussed in Note 11: Other Results

 

All of the Group’s listed bonds investments are listed on the Argentinian Stock Exchange (Bolsas y Mercados Argentinos - BYMA). For the investments classified as FVPL, the impact of a 10%, increase in the Argentinian Index at the reporting date on profit or loss would have been an increase of USD 10,567 after tax. An equal change in the opposite direction would have decreased profit or loss by USD 10,567 after tax.

 

 

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16. Trade and other receivables

 

Trade and Other Receivables of the Group are composed of the following:

 

		March 31, 2024		December 31, 2023
Trade receivables		345,120		319,921
Loss allowance		(77)		(459)
Trade receivables net		345,043		319,462
Advances and other receivables		51,344		43,912
		396,387		363,374

 

Trade Receivables represents uncollateralized gross amounts due from acquirers, processors, merchants and preferred suppliers for services performed that will be collected in less than one year, so they are classified as current. No financial assets are past due. All Trade and other receivables have been assigned in “normal” credit risk rating which applies to financial assets for which a significant increase in credit risk has not occurred since initial recognition.

 

Loss allowance and impairment losses

 

The following table presents the evolution of the loss allowance:

 

		2024		2023
Opening book value as at January 1		(459)		(280)
Decrease in loss allowance for trade receivables		370		(318)
Reversal of write-off		12		139
Total as at March 31		(77)		(459)

 

(i) For the period ended March 31, 2024 our net impairment losses on financial assets was USD 177, compared to USD 51 for the three months ended March 31, 2023.

 

Initial recognition and subsequent measurement the Group applies the simplified approach to determine expected credit losses on trade receivables.

To measure the expected credit losses, trade and other receivables have been grouped based on shared credit risk characteristics and the days past due (only 0-30 past due bucket as of March 31, 2024 and December 31, 2023 because there are no other material buckets of the outstanding receivables).

 

The expected loss rates are based on the payment profiles of debtors over a period of 48 months before year end and the corresponding historical credit losses experienced within this period. The historical loss rate is adjusted to reflect current and forward-looking information on credit risk ratings of the countries in which the Group sells its services which affects the ability of the debtors to settle the receivables. On that basis, the average expected credit loss rate of the 0-30 past due bucket was determined at 0.1% for both periods three months ended March 31, 2024 and three months ended March 31, 2023.

 

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17. Other Assets

 

Other assets are composed of the following:

 

Current		March 31, 2024		December 31, 2023
Money held in escrow and guarantees due to: (i)		8,363		11,635
-Banks requirements		4,314		3,000
-Processors and others requirements		3,926		5,072
-Credit card requirements		123		3,563
Rental guarantees		200		147
Total current Other Assets		8,563		11,782

 

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18. Intangible Assets

 

Intangible assets of the Group correspond to acquired software, capitalized expenses related to internally generated software and acquired merchant agreements, and are stated at cost less accumulated amortization.

 

		March 31, 2024						December 31, 2023
		Internally generated software		Acquired intangible assets		Total		Internally generated software		Acquired intangible assets (ii)		Total
Cost		40,446		39,901		80,347		23,752		39,335		63,087
Accumulated amortization		(16,683)		(5,777)		(22,460)		(7,972)		(3,672)		(11,644)
Opening book value		23,763		34,124		57,887		15,780		35,663		51,443
Additions (i)		4,145		877		5,022		16,694		566		17,260
Amortization of the period		(2,900)		(524)		(3,424)		(8,710)		(2,106)		(10,816)
Total at end of the period		25,008		34,477		59,485		23,764		34,123		57,887
Cost		44,591		40,778		85,369		40,446		39,901		80,347
Accumulated amortization		(19,583)		(6,301)		(25,884)		(16,682)		(5,778)		(22,460)

 

(i) The additions of the three months ended March 31, 2024 include USD 4,145 related to capitalized salaries and wages (USD 3,806 as of March 31, 2023).

 

		As of March 31, 2024		As of December 31, 2023
Cost		85,369		80,347
Accumulated amortization		(25,884)		(22,460)
Net book amount		59,485		57,887

 

As of March 31, 2024 , and December 31, 2023 no indicator of impairment related to intangible assets existed, so the Group did not perform an impairment test.

 

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19. Trade and other payables

 

Trade and Other Payables are composed of the following:

 

		March 31, 2024		December 31, 2023
Trade Payables		619,974		572,394
Accrued Liabilities		10,387		10,192
Other Payables		19,823		19,907
Total Trade and other payables		650,184		602,493

 

Trade and other payables are classified as current liabilities as the payment is due within one year or less. Moreover, the carrying amounts are considered to be the same as fair values, due to their short – term nature.

 

Trade Payables correspond to liabilities with Merchants, either related to payin transactions processed or payout transactions to be processed at their request. Accrued Liabilities mainly correspond to obligations with legal and tax advisors, and auditors. Other Payables mainly correspond to obligations related to processors costs and the acquisitions of office goods and services necessary for the ordinary course of the business.

 

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20. Tax Liabilities

 

The tax liabilities breakdown is as follows:

 

		March 31, 2024		December 31, 2023
Income tax payable		20,225		20,280
Other tax liabilities		1,278		520
Income tax perception		579		159
Digital services withholding VAT		630		341
Other Taxes		69		20
Total Tax Liabilities		21,503		20,800

 

 

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21. Derivative financial instruments

 

Derivative financial instruments: forward agreements

 

The Group’s operations are in various foreign currencies and consequently are exposed to foreign currency risk. As a consequence, the Group uses derivative instruments, delivery and non-delivery currency forward contracts, to reduce the volatility of earnings and cash flows, caused by the exchange rate variation in which dLocal is exposed on the conversion of local currency into the settlement currency (usually US dollars). All outstanding derivatives are recognized in the Group’s consolidated balance sheets at fair value and the impact are recognized on profit or loss, as shown on the tables below.

 

The Group uses foreign exchange forward contracts to manage some of its transaction exposures. The spot element of foreign exchange forward contracts are designated as hedging instruments in fair value hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to 12 months.

 

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In USD thousand		Outstanding notional amount as of March 31, 2024		Outstanding balance as of March 31, 2024 - Derivative financial assets / (liabilities)		Outstanding notional amount as of December 31, 2023		Outstanding balance as of December 31, 2023 - Derivative financial assets / (liabilities)
Assets
Non-delivery forwards
Buy EUR
US Dollar		—		—		29,113,656		480
Moroccan Dirham		738,007		1		—		—
Buy USD
Brazilian Reais		3,590,980		13		—		—
Indian Rupee		2,966,010		6		—		—
Peruvian Sol		—		—		—		—
Vietnamese Dong		2,653,486		5		—		—
Argentine Peso		—		—		3,400,000		7
Egyptian Pound		17,225,012		2,083		20,865,500		1,479
Sell EUR
US Dollar		(14,609,513)		148		—		—
Sell USD
Southafrican Rand		—		—		(2,344,571)		12
Peruvian Sol		—		—		(1,251,563)		62
Total				2,256				2,040
Liabilities
Non-delivery forwards
Buy EUR
US Dollar		30,444,063		(444)		—		—
Moroccan Dirham		—		—		1,490,406		(51)
Buy USD
Brazilian Reais		—		—		3,715,176		(30)
Argentine Peso		3,900,000		(148)		—		—
Chilean Peso		12,425,126		(27)		19,873,706		(174)
Uruguayan Peso		3,384,913		(108)		2,552,177		(48)
United Arab Emirates Dirham		133,072		(0)		—		—
Indian Rupee		—		—		2,397,451		(7)
Southafrican Rand		30,026,056		(159)		8,127,767		(230)
Peruvian Sol		—		—		1,200,000		(67)
Vietnamese Dong		—		—		4,054,096		(32)
Saudi Riyal		6,763,988		—		—		—
Moroccan Dirham		4,175,614		(1)		6,263,269		(240)
Sell EUR
US Dollar		—		—		(6,323,275)		(40)
Sell USD
Indian Rupee		—		—		(950,435)		(1)
Brazilian Reais		(120,606)		(1)		—		—
Vietnamese Dong		(631,472)		(3)		—		—
Moroccan Dirham		—		—		(3,274,071)		(28)
Total				(891)				(948)

 

 

		March 31, 2024		March 31, 2023
Net gain on foreign currency forwards recognized in ‘Costs of Services’		10,541		790
Net loss on foreign currency forwards recognized in ‘Finance Costs’		(10,160)		(4,586)

 

 

 

 

 

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(i) Classification of derivatives

 

Derivatives are financial instruments entered into only for economic hedging purposes and not contracted as speculative investments.

However, where derivatives do not meet the hedge accounting criteria, they are classified as ‘held for trading’ for accounting purposes and are accounted for at fair value through profit or loss.

The full fair value of hedging derivatives is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months, otherwise they are classified as a current asset or liability. Derivatives held for trading are classified as a current asset or liability.

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22. Provisions

 

(a) Current or potential proceedings

 

Provisions for the period are related to current or potential proceedings where the management understands, based on the Group’s legal advisors’ assessment, that it is more likely than not that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

 

(b) Movements in current or potential proceedings

 

Movements in current or potential proceedings are set out below:

 

		March 31, 2024		December 31, 2023
Opening book value		362		1,473
Reversal to labor provision		—		(1,150)
Interest charges for labor provision		4		39
Total at end of the period		366		362

 

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23. Related parties

 

 

(a) Related Party Transactions

Dlocal Argentina S.A. entered into a loan agreement with Dlocal Group in June 2023 for a total amount of USD 100,000 with maturity date on June, 2024. The main purpose of the loan was the acquisition of the Argentinian bonds as detailed on note 1.2 (b) and note 15. As both subsidiaries are fully consolidated, outstanding balances have been eliminated. The main impact on these consolidated financial statements refers to foreign exchange losses on the Dlocal Argentina S.A.

 

(b) Key Management compensation

 

The compensation of the Executive Team during the period can be analyzed as follows:

 

		Three months ended
		March 31, 2024		March 31, 2023
Short-term employee benefits – Salaries and wages		740		459
Long-term employee benefits – Share-based payment		3,546		676
		4,286		1,135

 

(c) Transactions with other related parties

 

The following transactions occurred with related parties:

 

		Three months ended
		March 31, 2024		March 31, 2023
Transactions with merchants – Revenues		241		235
Transactions with preferred suppliers (Collection entities) – Costs		(1)		(8)
Transactions with other related parties – Financial expenses (item (a))		(6,729)		—

 

(d) Outstanding balances arising from transactions with other related parties

 

The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:

 

		March 31, 2024		December 31, 2023
Transactions with merchants – trade receivables		385		367
Transactions with merchants – trade payables		—		(303)
Transactions with preferred suppliers (Collection entities) – trade payables		(4)		—
Transactions with preferred suppliers (Collection entities) – trade receivables		—		150

 

Outstanding balances are unsecured and are repayable in cash.

 

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24. Fair value hierarchy

 

The following tables show financial instruments recognized at fair value for the period ended March 31, 2024 and December 31, 2023, analyzed between those whose fair value is based on:

 

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

 

• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

 

• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based upon observable market data.

The table also includes financial instruments measured at amortized cost. The Group understands that the book value of such instruments approximates their fair value.

 

March 31, 2024		FVPL		Amortized cost		Total		Level 1		Level 2
Assets
Cash and Cash Equivalents		—		572,357		572,357		—		—
Financial Assets at Fair Value through Profit or Loss		107,777		—		107,777		107,777		—
Other Assets		—		8,563		8,563		—		—
Trade and Other Receivables		—		396,387		396,387		—		—
Derivative financial instruments		2,256		—		2,256		—		2,256
		110,033		977,307		1,087,340		107,777		2,256

 

December 31, 2023		FVPL		Amortized cost		Total		Level 1		Level 2
Assets
Cash and Cash Equivalents		—		536,160		536,160		—		—
Financial Assets at Fair Value through Profit or Loss		104,387		—		104,387		104,387		—
Other Assets				11,782		11,782		—
Trade and Other Receivables		—		363,374		363,374		—		—
Derivative financial instruments (1)		2,040		—		2,040		—		2,040
		106,427		911,316		1,017,743		104,387		2,040

 

March 31, 2024		FVPL		Amortized cost		Total		Level 1		Level 2
Liabilities
Trade and Other Payables		—		(650,184)		(650,184)		—		—
Lease liabilities		—		(3,862)		(3,862)		—		—
Derivative financial instruments		(891)		—		(891)		—		(891)
		(891)		(654,046)		(654,937)		—		(891)

 

December 31, 2023		FVPL		Amortized cost		Total		Level 1		Level 2
Liabilities
Trade and Other Payables		—		(602,493)		(602,493)		—		—
Lease Liabilities		—		(3,957)		(3,957)		—		—
Derivative financial instruments (1)		(948)		—		(948)		—		(948)
		(948)		(606,450)		(607,398)		—		(948)

 

 

There were no changes of items between level 2 and level 3, acquisitions, disposals nor gains or losses recognized in profit for the period related to level 3 instruments. Consequently, for the periods

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ended March 31, 2024 and December 31, 2023, the Group did not recognized any financial assets under level 3.

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