DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a
technology - first payments platform today announced its financial
results for the second quarter ended June 30, 2024.
We continue to see strong growth in our
business, achieving another quarterly record of $6.0 billion of TPV
during the second quarter of 2024, an increase of nearly 40%
year-over-year. This occurred despite the tough comparison with
last year's 80% growth during the same period. The evolution of
this key metric demonstrates our continued ability to grow as we
gain share of wallet from our global merchant base and add new
merchants to the mix. It also underscores our unique value
proposition as a trusted partner for some of the largest and most
sophisticated global companies across emerging markets.
The TPV performance was good across multiple
verticals, including continued strong growth in the commerce,
on-demand delivery, and remittance verticals; accelerating growth
from SaaS and ride-hailing. This kind of sustained and well
diversified TPV growth, with a focused commitment to low-risk
high-reputation verticals, sets us up well for long-term success.
We believe that our year-over-year growth showcases a unique in
class combination of growth while focusing on reputable verticals,
which sets us apart from relevant comps base, who either grow less,
over index high-risk verticals, or do both.
Net take rates have held up sequentially,
despite unfavorable events, like repricing by our largest merchant
at the beginning of the year, material currency devaluations in
Nigeria and Egypt, and continued weakening across most emerging
markets currencies. The stable sequential net take rate and growing
TPV during the quarter translated to 11% quarter-over-quarter gross
profit growth.
Our OPEX, excluding non-cash share-based
compensation, grew by only $1 million sequentially, after previous
quarters of sequential growth above $4 million, as we adjusted our
cash spend to the weaker gross profit. As mentioned previously,
there is a limit to how much we are willing to defend margins in
the short-term, as we are committed to certain investments, which
are crucial for our long-term success, particularly those in our
engineering pool, back-office capabilities and behind our license
portfolio. But, to balance this out, we are always revising other
discretionary spending to make sure it matches our topline
performance and is aligned with our general philosophy of
frugality. Consequently, our Adjusted EBITDA reached $43 million,
reflecting our still lean structure and disciplined spending. Our
cash generation also accelerated versus the prior quarter, posting
a $35 million of Free Cash Flow from own funds, a conversion rate
of 77%, up $23 million and 7 percentage points compared to the
second quarter of 2023.
These highlights also come with certain
challenges that we are focused on rapidly addressing.
Year-over-year gross profit performance was flat, primarily due to
a 13% decline in LatAm. This decline was driven by (i) the
Argentine FX devaluation and (ii) the repricing by our largest
merchant in Brazil and Mexico. Despite stellar Africa and Asia
gross profit growth of 79% year-over-year, it did not suffice to
offset those two events.
Taking a step back from a short-term quarterly
prism, dLocal remains an incredibly strong company, with a
fantastic total addressable market, attractive business model and
extremely promising future, that at some point will be reflected in
capital market performance. To keep things in perspective:
- We maintain strong product market validation as witnessed by
almost 40% year-over-year and 14% quarter-over-quarter TPV
growth;
- Still run a high margin financial
model with Adjusted EBITDA to Gross Profit at 60%+ and ability to
scale from there to previous levels;
- Cash conversion is strong and
growing as EBITDA increased sequentially, with a cash conversion
close to 100% for the last twelve months.
When we analyze the potential of all this
compounded over time, it is hard to not be optimistic about our
future, despite the inherent challenges and volatility existent in
emerging markets. The long term future is bright, and our own
ability to execute is the most important factor.
Our optimism in the future is also reflected in
our capital allocation strategy. Our business has an attractive
cash generation profile, and we see upside in our stock as we grow
and scale; and as a consequence of this we have bought back stock
during the quarter at a rapid pace.
As known, emerging markets are inherently
volatile, which can, and often do, impact our short-term results.
However, our long-term view remains optimistic as stated earlier.
The quarterly bottom-up review of our pipeline and existing
contracts, where we project out probable market growth, and new
commercial opportunities on a merchant-by-merchant basis, gets us
to the following revised outlook for 2024:
- TPV of $24.5-26.5 billion; due to slower volume ramp-ups,
pipeline volume even more skewed towards Tier 0 merchants, and
weakening currencies in emerging markets
- Gross profit of $280-300 million; in addition to the reasons
outlined above, driven by increased local-to-local flows, and
- Adjusted EBITDA of $180-200 million, supporting crucial
long-term investments that enhance our value proposition and
internal controls
We continue to thrive across emerging markets,
embracing their complexities and delivering simple, effective
solutions to our merchants. Our focus remains on execution and
long-term growth. Our commitment to our merchants and our expertise
in these regions enable us to consistently win business from these
global merchants. As we scale, this growth will help mitigate
short-term volatility and dilute market fluctuations. Therefore, it
is crucial to continue focusing on TPV growth, increasing our share
of wallet, and adding new clients - all of which we have
consistently delivered since the company's inception, while driving
operational leverage in the business once we get through the
current disciplined investment cycle we are in.
We are thankful for the continued support and
confidence in our vision. We are committed to executing our
strategy and driving long-term value for our shareholders. We look
forward to updating you on our progress in the coming quarters.
Second quarter 2024 Financial
Highlights
- Total Payment Volume (“TPV”)
reached a record US$6.0 billion in the second quarter, up 38%
year-over-year compared to US$4.4 billion in the second quarter of
2023 and up 14% compared to US$5.3 billion in the first quarter of
2024.
- Revenues amounted to US$171.3
million, up 6% year-over-year compared to US$161.1 million in the
second quarter of 2023 and down 7% compared to US$184.4 million in
the first quarter of 2024. This quarter-over-quarter decline was
mostly driven by the currency devaluation in Nigeria and Egypt,
despite the healthy TPV growth.
- Gross profit was US$69.8 million in
the second quarter of 2024, down 1% compared to US$70.8 million in
the second quarter of 2023 and up 11% compared to US$63.0 million
in the first quarter of 2024. The improvement in gross profit
quarter-over-quarter was primarily due to (i) temporary FX dynamics
in Nigeria; (ii) positive performance of Argentina, Other LatAm and
Other Africa and Asia countries; and (iii) Brazil, with lower
processing costs following renegotiation with processors, and
change in payment mix, which partially offset the impact of key
merchant repricing (full impact in second quarter of 2024 versus
two months in first quarter of 2024).
- As a result, gross profit margin
was 41% in this quarter, compared to 44% in the second quarter of
2023 and 34% in the first quarter of 2024.
- Gross profit over TPV was at 1.2%
decreasing from 1.6% in the second quarter of 2023 and flat
compared to the first quarter of 2024, mainly due to FX dynamics in
Nigeria and Egypt and renegotiation with processors in Brazil,
which combined were sufficient to offset the incremental sequential
impact of the above-mentioned top merchant repricing..
- Operating income was US$30.2
million, down 37% compared to US$47.8 million in the second quarter
of 2023 and up 12% compared to US$26.9 million in the first quarter
of 2024, impacted by higher gross profit and disciplined OPEX
investment. In this context, operating expenses grew by 72%
year-over-year and 10% quarter-over-quarter, with a clear
allocation tilt towards investments focused on Product Development
& IT capabilities; coupled with investment to strengthen our
back-office capabilities for future growth. In addition, in the
second quarter of 2024, we recorded an extraordinary US$1.6 million
operating loss as we wrote-off certain amounts related to
merchants/processors off-boarded by dLocal.
- As a result, Adjusted EBITDA was
US$42.7 million , down 18% compared to US$52.0 million in the
second quarter of 2023 and up 16% compared to US$36.8 million in
the first quarter of 2024.
- Adjusted EBITDA margin was 25%,
compared to the 32% recorded in the second quarter of 2023 and 20%
in the first quarter of 2024. On the annual comparison, the
decrease is explained by the gross profit dynamics and our decision
to sustain many of the long-term investments, as previously
mentioned. Following the same trend, Adjusted EBITDA over gross
profit of 61% decreased compared to 74% in the second quarter of
2023 and increased compared to 58% in the first quarter of
2024.
- Net financial income was US$28.0
million, compared to US$7.5 million in the second quarter of 2023
and US$0.3 million in the first quarter of 2024.
- Effective income tax rate was 18%,
compared to 16% in the second quarter of 2023 and 29% in the first
quarter of 2024, closer to levels of previous quarters.
- Net income for the second quarter
of 2024 was US$46.2 million, or US$0.15 per diluted share, up 3%
compared to a profit of US$44.8 million, or US$0.15 per diluted
share, for the second quarter of 2023 and up 161% compared to a
profit of US$17.7 million, or US$0.06 per diluted share for the
first quarter of 2024. During the second quarter of 2024, net
income was mostly impacted by higher finance income, given the $23
million non-cash mark to market effect related to Argentine bonds
investments used to hedge our local currency position in that
market.
- As of June 30, 2024, dLocal had
US$531.6 million in cash and cash equivalents, including US$186.2
million of own funds and US$345.4 million of merchants’ funds. The
consolidated cash position decreased by US$17.8 million from
US$549.4 million as of June 30, 2023. When compared to the US$572.4
million cash position as of March 31, 2024, it decreased by US$40.7
million, mainly explained by the US$81.8 million of own funds used
to buy back the company’s own shares, in connection to the US$200
million Share Buyback Program announced in May 2024.
The following table summarizes our key performance
metrics:
|
|
Three months ended 30 of June |
Six months ended 30 of June |
|
|
2024 |
2023 |
% change |
2024 |
2023 |
% change |
|
Key Performance metrics |
(In millions of US$ except for %) |
|
TPV |
6,035 |
4,373 |
38% |
11,346 |
7,948 |
43% |
|
Revenue |
171.3 |
161.1 |
6% |
355.7 |
298.4 |
19% |
|
Gross Profit |
69.8 |
70.8 |
-1% |
132.8 |
132.6 |
0% |
|
Gross Profit margin |
41% |
44% |
-3p.p |
37% |
44% |
-7p.p |
|
Adjusted EBITDA |
42.7 |
52.0 |
-18% |
79.5 |
97.5 |
-19% |
|
Adjusted EBITDA margin |
25% |
32% |
-7p.p |
22% |
33% |
-10p.p |
|
Adjusted EBITDA/Gross Profit |
61% |
74% |
-12p.p |
60% |
74% |
-14p.p |
|
Profit |
46.2 |
44.8 |
3% |
64.0 |
80.2 |
-20% |
|
Profit margin |
27% |
28% |
-1p.p |
18% |
27% |
-9p.p |
|
|
|
|
|
|
|
|
First quarter 2024 Business
Highlights
- During the second quarter of 2024,
pay-ins TPV increased 34% year-over-year and 17%
quarter-over-quarter to US$4.3 billion, accounting for 71% of the
TPV.
- Pay-outs TPV increased by 49%
year-over-year and 7% quarter-over-quarter to US$1.8 billion,
accounting for the remaining 29% of the TPV.
- Cross-border TPV increased by 22%
year-over-year and 11% quarter-over-quarter to US$2.7 billion.
Cross-border volume accounted for 45% of the TPV in the second
quarter of 2024.
- Local-to-local TPV increased by 55%
year-over-year and 16% quarter-over-quarter to US$3.3 billion.
Local-to- local volume accounted for 55% of the TPV in the second
quarter of 2024.
- LatAm revenue increased 9%
year-over-year to US$138.7 million, accounting for 81% of total
revenue. On the annual comparison, the growth was primarily driven
by commerce and streaming in Mexico, and strong performance of
Other LatAm, across different verticals. Sequentially, LatAm
revenue grew by 11% mainly driven by recovery in Argentina revenues
due to strong performance across commerce and on-demand delivery
verticals.
- In the Africa and Asia region,
revenue decreased by 5% year-over-year, primarily driven by lower
revenues in Nigeria due to Naira devaluation in February 2024,
despite strong growth performance in Egypt across advertising and
streaming verticals; and in Other Africa and Asia. The currency
devaluation is also the main driver of the sequential
decrease.
- LatAm gross profit decreased by 13%
year-over-year and increased by 10% quarter-over-quarter to US$53.5
million, accounting for 77% of total gross profit. Most of the
year-over-year decline is explained by Argentina, due to lower FX
spreads following the currency devaluation in December 2023. In the
region, gross profit was also impacted by Mexico, due to merchant
repricing and local-to-local increase; and by Chile, given lower
cross-border volumes. Other LatAm markets showed a 10%
year-over-year increase in gross profit, driven by Tier 0
merchants’ growth. Sequentially, the growth was mainly driven by
the (i) growth in Argentina, and other LatAm markets, primarily
Colombia and Costa Rica; and (ii) Brazil, with lower processing
costs following renegotiation with processors, coupled with change
in payment mix. Those two factors partially offset the impact of a
key merchant repricing, with full impact in the second quarter of
2024 compared to 2 months in previous one.
- Africa and Asia gross profit
increased by 79% year-over-year to US$16.3 million, accounting for
the remaining 23% of total gross profit. This annual comparison is
explained by our overall growth in Egypt; ramp-up of our merchants
in South Africa, primarily in the commerce vertical; and temporary
FX dynamics in Nigeria. Sequentially, gross profit increased by
13%, attributable to temporary FX dynamics in Nigeria and growth in
Other Africa and Asia.
- During the quarter, Revenue from
Existing Merchants reached US$161.7 million compared to US$ 177.1
million in the first quarter of 2024. The quarter-over-quarter
comparison was negatively affected by the currency devaluation, as
previously discussed, despite healthy volume growth. On the annual
comparison, Revenue from Existing Merchants increased by 8% and the
net revenue retention rate, or NRR, reached 100%, which was
impacted by Nigeria currency devaluation.
- Revenue from New Merchants
accounted for US$9.6 million in the second quarter of 2024 compared
to US$ 11.2 million in the same quarter of the prior year.
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 30 of June |
Six months ended 30 of June |
|
|
2024 |
% share |
2023 |
% share |
2024 |
% share |
2023 |
% share |
|
Pay-ins |
4,273 |
71 |
% |
3,190 |
73 |
% |
7,930 |
70 |
% |
5,693 |
72 |
% |
|
Pay-outs |
1,763 |
29 |
% |
1,184 |
27 |
% |
3,416 |
30 |
% |
2,255 |
28 |
% |
|
Total TPV |
6,035 |
100 |
% |
4,373 |
100 |
% |
11,346 |
100 |
% |
7,948 |
100 |
% |
|
In millions of US$ except for % |
Three months ended 30 of June |
Six months ended 30 of June |
|
|
2024 |
% share |
2023 |
% share |
2024 |
% share |
2023 |
% share |
|
Cross-border |
2,701 |
45 |
% |
2,219 |
51 |
% |
5,127 |
45 |
% |
4,179 |
53 |
% |
|
Local-to-local |
3,334 |
55 |
% |
2,154 |
49 |
% |
6,219 |
55 |
% |
3,769 |
47 |
% |
|
Total TPV |
6,035 |
100 |
% |
4,373 |
100 |
% |
11,346 |
100 |
% |
7,948 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables below present a breakdown of dLocal’s
revenue by geography:
|
In millions of US$ except for % |
Three months ended 30 of June |
Six months ended 30 of June |
|
|
2024 |
% share |
2023 |
% share |
2024 |
% share |
2023 |
% share |
|
Latin America |
138.7 |
81 |
% |
126.9 |
79 |
% |
264.1 |
74 |
% |
225.1 |
75 |
% |
|
Brazil |
42.3 |
25 |
% |
41.2 |
26 |
% |
85.3 |
24 |
% |
64.0 |
21 |
% |
|
Argentina |
20.5 |
12 |
% |
20.7 |
13 |
% |
34.3 |
10 |
% |
40.7 |
14 |
% |
|
Mexico |
35.8 |
21 |
% |
28.3 |
18 |
% |
69.9 |
20 |
% |
51.0 |
17 |
% |
|
Chile |
12.3 |
7 |
% |
14.2 |
9 |
% |
24.7 |
7 |
% |
28.4 |
10 |
% |
|
Other LatAm |
27.8 |
16 |
% |
22.5 |
14 |
% |
49.9 |
14 |
% |
41.0 |
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
Africa & Asia |
32.6 |
19 |
% |
34.3 |
21 |
% |
91.6 |
26 |
% |
73.3 |
25 |
% |
|
Nigeria |
1.1 |
1 |
% |
20.4 |
13 |
% |
8.3 |
2 |
% |
47.3 |
16 |
% |
|
Egypt |
15.0 |
9 |
% |
4.7 |
3 |
% |
54.0 |
15 |
% |
8.1 |
3 |
% |
|
Other Africa & Asia |
16.5 |
10 |
% |
9.2 |
6 |
% |
29.2 |
8 |
% |
17.9 |
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
171.3 |
100 |
% |
161.1 |
100 |
% |
355.7 |
100 |
% |
298.4 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables below present a breakdown of dLocal’s
gross profit by geography:
|
In millions of US$ except for % |
Three months ended 30 of June |
Six months ended 30 of June |
|
|
2024 |
% share |
2023 |
% share |
2024 |
% share |
2023 |
% share |
|
Latin America |
53.5 |
77 |
% |
61.7 |
87 |
% |
102.1 |
77 |
% |
114.5 |
86 |
% |
|
Brazil |
19.2 |
28 |
% |
19.6 |
28 |
% |
37.1 |
28 |
% |
30.6 |
23 |
% |
|
Argentina |
7.6 |
11 |
% |
13.8 |
19 |
% |
12.8 |
10 |
% |
31.6 |
24 |
% |
|
Mexico |
8.8 |
13 |
% |
10.6 |
15 |
% |
18.7 |
14 |
% |
17.5 |
13 |
% |
|
Chile |
8.3 |
12 |
% |
8.9 |
13 |
% |
15.7 |
12 |
% |
18.0 |
14 |
% |
|
Other LatAm |
9.6 |
14 |
% |
8.7 |
12 |
% |
17.7 |
13 |
% |
16.8 |
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
Africa & Asia |
16.3 |
23 |
% |
9.1 |
13 |
% |
30.7 |
23 |
% |
18.1 |
14 |
% |
|
Nigeria |
2.0 |
3 |
% |
0.2 |
0 |
% |
2.5 |
2 |
% |
2.6 |
2 |
% |
|
Egypt |
9.8 |
14 |
% |
4.2 |
6 |
% |
20.1 |
15 |
% |
6.9 |
5 |
% |
|
Other Africa & Asia |
4.5 |
7 |
% |
4.7 |
7 |
% |
8.1 |
6 |
% |
8.5 |
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total Gross Profit |
69.8 |
100 |
% |
70.8 |
100 |
% |
132.8 |
100 |
% |
132.6 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Finally, dLocal is unable to present a quantitative
reconciliation of forward-looking guidance for Adjusted EBITDA and
Adjusted EBITDA over gross profit, which are forward-looking
non-IFRS measures, because dLocal cannot reliably predict certain
of their necessary components, such as impairment gains/(losses) on
financial assets, transaction costs, and inflation adjustment.
The table below presents a reconciliation of
dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin to net
income:
|
$ in thousands |
Three months ended 30 of June |
Six months ended 30 of June |
|
|
2024 |
2023 |
2024 |
2023 |
| Profit for the
period |
46,239 |
44,791 |
63,957 |
80,241 |
| Income tax expense |
10,060 |
8,774 |
17,174 |
13,055 |
| Depreciation and
amortization |
4,089 |
2,869 |
7,851 |
5,384 |
| Finance income and costs,
net1 |
(28,045) |
(7,459) |
(28,344) |
(8,850) |
| Share-based payment non-cash
charges |
6,776 |
1,421 |
11,237 |
3,750 |
|
Other operating loss2 |
1,553 |
- |
3,372 |
- |
|
Impairment loss / (gain) on financial assets |
76 |
(21) |
(101) |
30 |
|
Inflation adjustment |
1,941 |
1,661 |
4,309 |
2,680 |
|
Other non-recurring costs |
- |
- |
- |
1,229 |
|
Adjusted EBITDA |
42,689 |
52,036 |
79,455 |
97,519 |
|
|
|
|
|
|
Note: 1In Q2 2024, the Finance income and costs,
net line was impacted by the non-cash mark to market effect related
to Argentine bonds investments in the amount of US$22.8 million.
2In Q2 2024, the company wrote-off certain amounts related to
merchants/processors off-boarded by dLocal.
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 13). 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 30 of June |
Six months ended 30 of June |
|
|
2024 |
2023 |
2024 |
2023 |
|
Net income as reported |
46,239 |
44,791 |
63,957 |
80,241 |
|
Inflation adjustment |
1,941 |
1,661 |
4,309 |
2,680 |
|
Loan - exchange difference |
5,831 |
1,815 |
12,560 |
1,815 |
|
Fair value (loss) / gains of financial assets at FVTPL (bonds) |
(22,774) |
(3,565) |
(33,589) |
(3,654) |
|
Impairment loss / (gain) on financial assets |
76 |
(21) |
(101) |
30 |
|
Share-based payment non-cash charges |
6,776 |
1,421 |
11,237 |
3,750 |
|
Other operating (gain)/loss |
1,553 |
- |
3,372 |
- |
|
Other non-recurring costs |
- |
- |
- |
1,229 |
|
Tax on adjustments |
5,998 |
(613) |
4,638 |
(644) |
|
Adjusted net income |
45,640 |
45,490 |
66,383 |
85,447 |
|
|
|
|
|
|
Note: 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 13). 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. Unaudited quarterly results.
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-month and six-month periods ended June 30, 2024
and 2023.
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 30 of June |
Six months ended 30 of June |
|
|
2024 |
2023 |
2024 |
2023 |
|
Profit attributable to common shareholders (thousands USD) |
46,244 |
44,697 |
63,952 |
80,141 |
|
Weighted average number of common shares |
293.430.253 |
291,700,873 |
294.781.316 |
293,403,907 |
|
Adjustments for calculation of diluted earnings per share |
14.996.249 |
16,160,368 |
15.348.015 |
16,358,508 |
|
Weighted average number of common shares for calculating diluted
earnings per share |
308.426.502 |
307,861,241 |
310.129.331 |
309,762,415 |
|
Basic earnings per share |
0.16 |
0.15 |
0.22 |
0.27 |
|
Diluted earnings per share |
0.15 |
0.15 |
0.21 |
0.26 |
|
|
|
|
|
|
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.
Conference call and webcast
dLocal’s management team will host a conference call and audio
webcast on August 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 more than
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.
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.
Rounding: We have made rounding adjustments to
some of the figures included in this interim report. Accordingly,
numerical figures shown as totals in some tables may not be an
arithmetic aggregation of the figures that preceded them.
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 guidance in respect of total
payment volume, gross profit, Adjusted EBITDA, and Adjusted EBITDA
over gross profit margin. Forward-looking statements regarding
dLocal and amounts stated as guidance 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. In addition, dLocal is unable to present a
quantitative reconciliation of forward-looking guidance for
Adjusted EBITDA and Adjusted EBITDA over gross profit, which are
forward-looking non-IFRS measures, because dLocal cannot reliably
predict certain of their necessary components, such as impairment
gains/(losses) on financial assets, transaction costs, and
inflation adjustment.
dLocal Limited Certain
financial information Consolidated Condensed Interim Statements of
Comprehensive Income for the three-month and six-month periods
ended June 30, 2024 and 2023 (In thousands of U.S. dollars, except
per share amounts)
|
|
Three months ended30 of June |
Six months ended30 of June |
|
|
2024 |
2023 |
2024 |
2023 |
|
Continuing operations |
|
|
|
|
|
Revenues |
171,279 |
161,138 |
355,709 |
298,425 |
|
Cost of services |
(101,468) |
(90,378) |
(222,927) |
(165,828) |
|
Gross profit |
69,811 |
70,760 |
132,782 |
132,597 |
|
|
|
|
|
|
|
Technology and development expenses |
(6,408) |
(2,640) |
(11,873) |
(4,930) |
|
Sales and marketing expenses |
(4,505) |
(3,106) |
(9,136) |
(7,963) |
|
General and administrative expenses |
(27,074) |
(17,268) |
(51,406) |
(32,548) |
|
Impairment (loss)/gain on financial assets |
(76) |
21 |
101 |
(30) |
|
Other operating (loss)/gain |
(1,553) |
- |
(3,372) |
- |
|
Operating profit |
30,195 |
47,767 |
57,096 |
87,126 |
|
Finance income |
29,247 |
18,878 |
47,504 |
25,866 |
|
Finance costs |
(1,202) |
(11,419) |
(19,160) |
(17,016) |
|
Inflation adjustment |
(1,941) |
(1,661) |
(4,309) |
(2,680) |
|
Other results |
26,104 |
5,798 |
24,035 |
6,170 |
|
Profit before income tax |
56,299 |
53,565 |
81,131 |
93,296 |
|
Income tax expense |
(10,060) |
(8,774) |
(17,174) |
(13,055) |
|
Profit for the period |
46,239 |
44,791 |
63,957 |
80,241 |
|
|
|
|
|
|
|
Profit attributable to: |
|
|
|
|
|
Owners of the Group |
46,244 |
44,697 |
63,952 |
80,141 |
|
Non-controlling interest |
(5) |
94 |
5 |
100 |
|
Profit for the period |
46,239 |
44,791 |
63,957 |
80,241 |
|
|
|
|
|
|
|
Earnings per share (in USD) |
|
|
|
|
|
Basic Earnings per share |
0.16 |
0.15 |
0.22 |
0.27 |
|
Diluted Earnings per share |
0.15 |
0.15 |
0.21 |
0.26 |
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Items that may be reclassified to profit or loss: |
|
|
|
|
|
Exchange difference on translation on foreign operations |
(5,604) |
1,675 |
(6,273) |
3,163 |
|
Other comprehensive income for the period, net of
tax |
(5,604) |
1,675 |
(6,273) |
3,163 |
|
Total comprehensive income for the period, net of
tax |
40,635 |
46,466 |
57,684 |
83,404 |
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
|
|
|
|
Owners of the Group |
40,642 |
46,371 |
57,678 |
83,305 |
|
Non-controlling interest |
(7) |
95 |
6 |
99 |
|
Total comprehensive income for the period |
40,635 |
46,466 |
57,684 |
83,404 |
|
|
|
|
|
|
dLocal Limited Certain
financial information Consolidated Condensed Interim Statements of
Financial Position as of June 30, 2024 and December 31, 2023 (In
thousands of U.S. dollars)
|
|
30 of June, 2024 |
31 of December, 2023 |
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
531,620 |
536,160 |
|
Financial assets at fair value through profit or loss |
120,297 |
102,677 |
|
Trade and other receivables |
455,503 |
363,374 |
|
Derivative financial instruments |
622 |
2,040 |
|
Other assets |
10,878 |
11,782 |
|
Total Current Assets |
1,118,920 |
1,016,033 |
|
|
|
|
|
Non-Current Assets |
|
|
|
Financial assets at fair value through profit or loss |
- |
1,710 |
|
Trade and other receivables |
1,787 |
- |
|
Deferred tax assets |
1,913 |
2,217 |
|
Property, plant and equipment |
3,576 |
2,917 |
|
Right-of-use assets |
3,508 |
3,689 |
|
Intangible assets |
60,637 |
57,887 |
|
Other Assets |
5,343 |
- |
|
Total Non-Current Assets |
76,764 |
68,420 |
|
TOTAL ASSETS |
1,195,684 |
1,084,453 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Trade and other payables |
719,097 |
602,493 |
|
Lease liabilities |
782 |
626 |
|
Tax liabilities |
26,907 |
20,800 |
|
Derivative financial instruments |
815 |
948 |
|
Provisions |
276 |
362 |
|
Total Current Liabilities |
747,877 |
625,229 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
Deferred tax liabilities |
2,299 |
753 |
|
Lease liabilities |
3,106 |
3,331 |
|
Total Non-Current Liabilities |
5,405 |
4,084 |
|
TOTAL LIABILITIES |
753,282 |
629,313 |
|
|
|
|
|
EQUITY |
|
|
|
Share Capital |
574 |
591 |
|
Share Premium |
173,093 |
173,001 |
|
Treasury Shares |
(181,670) |
(99,936) |
|
Capital Reserve |
32,812 |
21,575 |
|
Other Reserves |
(14,829) |
(9,808) |
|
Retained earnings |
432,307 |
369,608 |
|
Total Equity Attributable to owners of the
Group |
442,287 |
455,031 |
|
Non-controlling interest |
115 |
109 |
|
TOTAL EQUITY |
442,402 |
455,140 |
|
|
|
|
dLocal Limited Certain interim
financial information Consolidated Condensed Interim Statements of
Cash flows for the three-month and six-month periods ended June 30,
2024 and 2023 (In thousands of U.S. dollars)
|
|
Three months ended30 of June |
Six months ended30 of June |
|
|
2024 |
2023 |
2024 |
2023 |
|
Cash flows from operating activities |
|
|
|
|
|
Profit before income tax |
56,299 |
53,565 |
81,131 |
93,296 |
|
Adjustments: |
|
|
|
|
|
Interest income from financial instruments |
(6,473) |
(15,313) |
(13,915) |
(22,212) |
|
Interest charges for lease liabilities |
44 |
52 |
87 |
95 |
|
Other finance expense |
1,673 |
765 |
1,800 |
1,202 |
|
Finance expense related to derivative financial instruments |
2,446 |
4,634 |
12,324 |
9,869 |
|
Net exchange differences |
(1,469) |
3,551 |
6,168 |
4,082 |
|
Fair value gain on financial assets at fair value through profit or
loss |
(22,774) |
(3,565) |
(33,589) |
(3,654) |
|
Amortization of Intangible assets |
3,690 |
2,492 |
7,114 |
4,668 |
|
Depreciation of Property, plant and equipment and right-of-use |
410 |
377 |
737 |
716 |
|
Disposals of property, plant and equipment, intangible assets and
right-of-use asset |
(62) |
- |
11 |
- |
|
Share-based payment expense, net of forfeitures |
6,776 |
1,421 |
11,237 |
3,750 |
|
Other operating loss/(gain) |
1,553 |
- |
3,372 |
- |
|
Net Impairment loss/(gain) on financial assets |
76 |
(21) |
(101) |
30 |
|
Inflation adjustment |
(5,982) |
- |
(11,874) |
- |
|
|
36,207 |
47,957 |
64,502 |
91,842 |
|
Changes in working capital |
|
|
|
|
|
Increase in Trade and other receivables |
(69,322) |
(50,312) |
(102,158) |
(59,386) |
|
Decrease/(increase) in Other assets |
(716) |
(1,597) |
2,503 |
12,157 |
|
Increase in Trade and other payables |
67,268 |
148,761 |
113,232 |
190,139 |
|
Decrease in Tax Liabilities |
8,870 |
(2,279) |
7,750 |
(3,341) |
|
Decrease/(increase) in Provisions |
(90) |
(252) |
(86) |
(557) |
|
Cash from operating activities |
42,218 |
142,278 |
85,743 |
230,854 |
|
Income tax paid |
(13,409) |
(2,774) |
(16,967) |
(6,816) |
|
Net cash from operating activities |
28,808 |
139,504 |
68,776 |
224,038 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Acquisitions of Property, plant and equipment |
(440) |
(608) |
(1,226) |
(657) |
|
Additions of Intangible assets |
(4,842) |
(4,339) |
(9,864) |
(8,145) |
|
Acquisitions of financial assets at FVTPL |
(96,841) |
(48,139) |
(96,841) |
(48,139) |
|
Net collections/acquisitions of financial assets at FVPL |
98,544 |
478 |
98,301 |
1,523 |
|
Interest collected from financial instruments |
6,473 |
15,155 |
13,915 |
21,975 |
|
Net cash used in investing activities |
2,894 |
(37,453) |
4,285 |
(33,443) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Repurchase of shares |
(81,751) |
(61,011) |
(81,751) |
(97,929) |
|
Share-options exercise |
92 |
84 |
92 |
153 |
|
Interest payments on lease liability |
(44) |
(52) |
(87) |
(95) |
|
Principal payments on lease liability |
26 |
(146) |
(69) |
(276) |
|
Finance expense paid related to derivative financial
instruments |
(888) |
(9,184) |
(11,039) |
(11,337) |
|
Other finance expense paid |
(272) |
(768) |
(399) |
(1,205) |
|
Net cash (used in) / provided by financing
activities |
(82,837) |
(71,077) |
(93,253) |
(110,689) |
|
Net increase in cash flow |
(51,135) |
30,975 |
(20,192) |
79,906 |
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the
period |
572,357 |
517,892 |
536,160 |
468,092 |
|
Net increase in cash flow |
(51,135) |
30,975 |
(20,192) |
79,906 |
|
Effects of exchange rate changes on cash and cash equivalents |
10,398 |
519 |
15,652 |
1,388 |
|
Cash and cash equivalents at the end of the
period |
531,620 |
549,386 |
531,620 |
549,386 |
Investor Relations Contact:
investor@dlocal.com
Media Contact: media@dlocal.com
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