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Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 5:00 p.m. ET Chief Executive Officer - Pedro Arnt Chief Financial Officer - Guillermo Lopez Perez SVP of Corporate Development - Christopher Stromeyer Head of Investor Relations - Mirele de Aragao Operator: Good day, and thank you for standing by. Welcome to the dLocal Second Quarter 2026 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I will now turn the call over to the company. Unknown Executive: Good afternoon, and thank you all for joining our earnings call today. If you have not seen the earnings release, as always, a copy is posted in the Financials section of the Investor Relations website. On the call today, you have Pedro Arnt, Chief Executive Officer; Guillermo Lopez Perez, Chief Financial Officer; Christopher Stromeyer, SVP of Corporate Development; and Mirele de Aragao, Head of Investor Relations. A slide presentation has been provided to accompany the prepared remarks. This event is being broadcast live via webcast, and both the webcast and presentation may be accessed through dLocal's website at investor.dLocal.com. The recordings will be available shortly after the event is concluded. Before proceeding, let me mention that any forward-looking statements included in the presentation or mentioned in this conference call are based on currently available information and dLocal's current assumptions, expectations and projections about future events. Whilst the company believes that our assumptions, expectations and projections are reasonable given currently available information, you are cautioned not to place undue reliance on those forward-looking statements. Actual results may differ materially from those included in dLocal's presentation or discussed in this conference call, for a variety of reasons, including those described in the forward-looking statements and Risk Factors section of dLocal's filings with the Securities and Exchange Commission, which are available on dLocal's Investor Relations website. Now I will turn the conference over to dLocal. Thank you. Pedro Arnt: Good afternoon, everyone, and thank you for joining us today. Our results for the second quarter of 2026 are yet another proof point of our continued traction and execution. There are 4 main trends I'd like to kick off with, that best summarize the current strength of our business. TPV reached $17.7 billion, accelerating to 92% year-over-year, the highest growth rate since the first quarter of 2022. We've processed more in the second quarter than what we did throughout all of 2023. Second, our net revenue retention was 153%, the fifth straight quarter above 140% as we continue to deepen our relationships with our merchants. Our gross profit hit $127 million, up 29% year-on-year. We've now hit an annualized rate of more than $500 million in gross profit. And finally, our operating leverage is improving with operating profit as a percentage of gross profit, up 6 percentage points quarter-over-quarter to reach 50%. As messaged previously, we expect further operating leverage improvements to kick in during the next 2 quarters as we benefit from the deployment of automations and AI we have been investing in and spending in key areas that was front-loaded to the first semester of this year softens out. On TPV, the metric that reflects market share, growth was extraordinary this quarter, but even more importantly, has been consistently strong. TPV growth has remained above 50% year-over-year for 7 consecutive quarters, with the last 3 quarters at above 70%, and furthermore, growth has accelerated over the past 5 quarters, reaching its higher year-over-year rate in over 4 years. Although the pace and scale of this growth will naturally create more demanding comparisons as we move through the second half of the year and into 2027, what we are seeing today reflects the positive returns on investments we have made in our platform and our portfolio of licenses. It serves as a testament to the trust merchants place in us as they build and grow across emerging markets. This trust is a direct result of the execution on our value proposition. Through a single integration, our merchants access the locally relevant payment methods, local card schemes and the financial infrastructure they need to operate and grow across more than 60 emerging markets. Our licenses, local teams and operating expertise help them navigate complexity and improve performance in each country, ultimately increasing substantially their chances of a successful go-to-market deployment in the places that they partner with us. Today, more than 760 leading global merchants trust dLocal. This includes four of the largest ride-hailing companies operating in emerging markets, 5 of the 10 largest e-commerce platforms, the top 5 video streaming platforms and 7 of the 10 largest remittance companies, amongst many other of the world's best businesses. We are now also starting to serve some of the world's preeminent AI companies and digital asset exchanges. The trust that these merchants place in us is translating into deeper relationships over time as they add countries, payment methods and products. Consequently, our TPV retention rate of 188% this quarter demonstrates the depth of these relationships. This quarter alone, several Tier 0 merchants had significant ramp-ups in some of our largest markets such as Brazil and Argentina, demonstrating that the opportunity remains substantial even in more established markets. We also continue to see our merchants expand into new geographies at a very rapid pace. Across our portfolio, we continue to gain both share of wallet and market share across the global South. Share of wallet increased by 2 percentage points year-over-year in the first half to the low teens, and we now estimate our share of EM digital payments to be in the low single digits. Despite our growth, the opportunity to deepen relationships across our merchant base and capture even more new merchants remains massive. Asia Pacific is a clear example of this and one we're increasingly excited about. It is the largest, very fast-growing and highly fragmented region with significant untapped opportunity that we serve. It has become one of our strategic priorities as we have been expanding our presence and investments throughout that region. All of this growth that we're seeing today reflects the investments we've made in our platform over the last several quarters and years. Those investments are delivering tangible results, and they continue to strengthen the foundation for our next phase of growth. Our focus remains on three areas: First, we continue to broaden our offering and invest in performance through our optimization capabilities. In the end, the performance and breadth of our One dLocal offering is the single most important factor for our continued growth and success. Second, we are embedding AI and automation across the business. This is already increasing our development capacity with meaningfully higher monthly deployments and shorter lead times. And we expect the positive impact on our cost structure from our automation efforts to become increasingly visible starting in the second half of the year, across different areas of the company. And third, we're expanding the value-added services we offer merchants, creating additional opportunities and revenue streams over time. We will soon launch dMore, our merchant of record solution through which dLocal acts as the legal seller on behalf of the merchant, allowing us to offer our clients a more comprehensive go-to-market solution. And our buy now, pay later offering continues to expand and improve and is now live in eight markets. We will continue to invest with discipline behind these priorities and the others we have as we continue to scale out the business. With that, let me turn it over to Guillermo to walk you through our quarterly financial results. Guillermo Perez: Thank you, Pedro. Good afternoon, everyone. Let me start by briefly summarizing the key financial highlights for this record quarter. As Pedro mentioned, we had an exceptional quarter in volume, which translated into another quarter of record gross profit. Operating profit improved 22% sequentially, and we also began to see operating leverage improvements emerge during the quarter, with operating profit as a percentage of gross profit up 6 percentage points sequentially. Net income increased 28% year-over-year and roughly 30% sequentially. And EPS also benefited from the execution of our share repurchase program. And cash generation remained strong with adjusted free cash flow conversion of 86% of net income in the first half of the year. Let me now dive into the details, beginning with volume performance. Volume reached $17.7 billion in the second quarter, up 92% year-on-year. First half growth was exceptional, broad-based across our merchants and verticals and helped by favorable FX. Ride-hailing was the largest contributor to sequential growth. One large global merchant was an important driver, but the growth wasn't concentrated just there. Several ride-hailing and on-demand delivery merchants expanded meaningfully too. Travel remittances, e-commerce, SaaS and advertising also contributed to growth. Financial services were down modestly, mostly seasonality of some travel-related merchants in LATAM. So our business mix continues to evolve. Local-to-local flows hit 61% of TPV, up 6 percentage points from Q1. The increase is local-to-local mix was primarily driven by the growth of ride-hailing and on-demand delivery, which are inherently local-to-local businesses. This volume growth translated into another record quarter of gross profit. Gross profit reached $127 million, up 29% year-over-year and 7% sequentially. Brazil and Argentina were the primary drivers. In Brazil, gross profit reached a record $40 million, supported by the ramp-up of ride-hailing and travel merchants alongside sustained e-commerce growth. Argentina also delivered record gross profit with $20 million, driven by broad-based growth across e-commerce, ride-hailing and on-demand delivery as well as lower advancement costs. Elsewhere in Latin America, gross profit grew 6% sequentially and 32% year-over-year. Mexico kept growing volume well. Gross profit was modestly lower sequentially though, and the mix shifted to local-to-local and some large merchants ramp-ups reached their final pricing tiers. In Africa and Asia, gross profit was down sequentially. That's mainly due to a lower share of higher spread markets like Mozambique and Vietnam, where Q1 has gains that don't necessarily recur, as we flagged last quarter. Turning to expenses. Total operating expenses were $63 million, up 46% year-over-year and down 4% sequentially. The year-over-year increase reflects three factors: the annualization of investments made in the second half of 2025; higher average salaries driven by the annual merit cycle and a limited number of senior strategic hires; and higher marketing spend concentrated in the first half around our World Cup campaign and large merchant events. Sequentially, the reduction reflects in part the absence of the $4.4 million non-recurring prior year tax item recorded in OpEx in Q1. Headcount remained broadly stable sequentially, while gross profit per employee increased. From here, we don't expect material increases in headcount this year. As a result, operating profit reached $64 million, up 15% year-over-year and 22% sequentially. Operating profit represented 50% of gross profit, an increase of 6 percentage points from Q1. As Pedro mentioned, we have invested heavily in automation. As those initiatives deploy and as we annualize our second half 2025 investments, we expect operating leverage to become increasingly visible during the rest of the year. Finally, below the operating line, net income reached $55 million, up 28% year-over-year. Diluted EPS was $0.18, supported by earnings growth and helped by the execution of our share repurchase program. Under the $300 million program authorized in March up to the end of Q2, we have repurchased approximately 6.9 million Class A shares for $86 million. All of these shares have been canceled. The reported effective tax rate for the quarter was approximately 16%. Excluding the non-recurring prior year tax adjustment, the normalized effective tax rate for the first half was 15%. As we have discussed, the effective tax rate can vary quarter-to-quarter based on country and business mix. Adjusted free cash flow was $69 million, up 41% year-over-year, with adjusted free cash flow conversion of 125% of net income. Cash flow from operations before working capital changes increased to $83 million, reflecting higher operating profit, but free cash flow also benefited from a partial reversal of last quarter's temporary working capital effects, which was partially offset by higher income tax paid. With that, I will hand it over back to Pedro. Pedro Arnt: Thank you, Guillermo. Following the strength we've seen in the first half, we are updating our annual guidance. Looking ahead, we continue to see strong momentum across multiple verticals and geographies. This strength is broad-based and gives us the confidence to raise our TPV growth guidance to 60% to 70% year-over-year. It's worth reinforcing why TPV remains such an important metric for us. Payments is ultimately a scale business. As our volumes grow, we gain greater leverage with downstream providers, deepen our FX liquidity and generate more data to improve performance. These dynamics reinforce one another over time and are central to the long-term value creation of our business model. Following the strength in volumes and the continued ramp-up of several large merchants, we are also raising our gross profit growth guidance to 25% to 30% year-over-year. We are maintaining our operating profit growth guidance of 27.5% to 32.5% year-over-year only because, as Guillermo discussed, annual operating profit will be dragged down by the non-recurring prior year tax item and FX headwinds that we did not expect in the original forecast. As always, our outlook is subject to the inherent volatility of the emerging markets in which we operate. That said, we believe this guidance best reflects what we see in the business as of today. And with that, I'll hand it over to Chris to lead us through some questions on the quarterly results. Christopher Stromeyer: Hello, everyone, from a wintery but sunny day here in Montevideo, Uruguay. As we did last quarter, we want to take a few minutes here to cover the key themes that we think will be relevant to investors from this quarter. Pedro, Guillermo, thank you so much for being here with us again. And Pedro, let me start with you. We delivered another spectacular quarter in terms of TPV growth with evident share of wallet gains across our portfolio. As we move into tougher comps going forward, what gives you confidence that we can keep delivering high growth in the medium term? Pedro Arnt: So big picture, the growth we're seeing is a reflection of two things: the market opportunity, which is still enormous and will continue to be enormous, but also the returns on the investments we've been making to improve performance, broaden product offering and strengthening our competitive positioning. And so those are trends that we feel comfortable, will sustain themselves in time. Looking at it a little bit shorter term, the first half of the year also benefited from a ramp-up of some large global merchant expansion deals, both into existing geographies and new markets. So for example, the largest Tier 0 merchant that Guillermo discussed previously, that ramp-up across key markets is already completed. So the headwinds from the tiered pricing impact as they ramped up, which have been significant factors over recent quarters, becomes less pronounced going forward. One interesting data point is if we exclude this one very large merchant relationships and a few currency volatility effects, net take rate would have been very close to flat quarter-over-quarter despite TPV growth that still would have been in excess of 65% year-on-year. So even as we enter these tougher year-on-year comps from these ramp-ups that were -- already have been behind us, we really don't see any signs of the overall growth model slowing down, and we continue to expect share of wallet gains across the existing merchant base, expansion into new merchants, going into new geographies and then, as always, continue to offer more payment methods and new products. So the investment thesis is one of a durable growth opportunity, again, supported by size of market and an overall secular trend towards digitalization of emerging market economies globally. So as we continue to execute, we feel very, very enthusiastic about the mid to long-term opportunities of this business. Christopher Stromeyer: Great. Guillermo, going over to you, turning from growth to profitability. Operating expenses declined modestly quarter-over-quarter. But I think more importantly, our full year guidance implies further and important improvements in operating leverage in the following quarters. What gives you confidence in that trajectory? Guillermo Perez: Well, there are a few things that are coming together to give me some confidence. The first one, I would say the big one is timing. There's a lot of investments we made in the second half of last year. They are now fully in our numbers in the first half. So I think that headwind will fade in the second half. We also have front-loaded marketing into the first half. So we have the World Cup campaign. We have a large merchant event and that happened in the first half of the year, and that shouldn't repeat in the second half. It's also worth saying that the first half carried one-off costs that we don't expect to happen in the second half. So we have higher credit loss provisions that we expected. We have higher operational losses. We have the prior year tax adjustments. So we don't expect that level of one-offs in the second half, although it must be said that those are always difficult to predict. And also finally, headcount, as you can see in the earnings script, has been broadly flat. There's a salary step-up that was really the merit cycle that we do every year and a few senior hires that we did. And now that's embedded into our base. And there's the automation program that Pedro mentioned, that we should still to roll out throughout the organization and help us see some of that leverage in the second half of the year. One thing I would mention and that I would flag is that if you take some combinations of our guidance ranges, you can back into an OpEx cut that's bigger than what we have currently planned. So cost discipline always carries some risk. So we'd rather hold the operating profit guidance as it is and let the gross profit upside and the cost normalization play out. I think that's the way we are balancing the near term with the long-term investments that we need in this growing business. Christopher Stromeyer: So following up on what Guillermo said about automation, which is what's actually happening operationally in the company. Pedro, can you give us some more color on how we're seeing our AI efforts and where we are on that trajectory? Pedro Arnt: Yes. So we're really seeing AI as a core enabler across the company as we increasingly embed it across engineering, compliance, operations, commercial, customer support. And there are tangible results already, although we expect more to come, especially in the back half of the year. So as we've said previously, over 60% of code is already AI generated. That's led to -- I think it's nearly doubling of engineering deployments year-over-year and a significant reduction of lead times in our software development cycle. And that's how we're supporting volume growth that is over 80% for H1, with headcount, as Guillermo just said, which is really broadly stable overall. And that bodes well for the long-term operational leverage of the business model. So when I look ahead, I see further efficiency opportunities through AI and automation and more of a medium-term look as we expand our product portfolio and cover more and more countries. We expect to be able to selectively add headcount, but primarily feet on the ground and localization, while at a centralized and overall middle and back office level, which is always relevant in a payments company, we expect to be able to really push the envelope in terms of automation and high operational leverage there. Christopher Stromeyer: Great. Turning to taxes, where investors have seen some volatility in the last few quarters in terms of our effective tax rate. How should they think about the tax rate going forward? Guillermo Perez: So quarter-to-quarter, the tax rate will keep moving. And it depends on the country and the business mix. So there's going to continue to be that volatility in coming quarters. Now looking ahead and based on the legislation currently enacted, we do expect some upward pressure on our ETR, particularly in jurisdictions that are implemented the OECD's Pillar 2 framework, which we are expected to impact us starting in 2027. It's important to say that there is still regulatory developments under discussion across several of the countries in which we operate. So it's too early for us to quantify the ultimate impact, but we continue to evaluate these changes with our external advisers, and we will provide updates as appropriate. That said, more on this year, excluding the quarter-to-quarter volatility that I discussed and the prior year tax adjustments, our normalized effective tax rate for the first half provides a reasonable reference point for the remainder of the year. Christopher Stromeyer: Great. And one last one, Pedro, before we open the line, let me just come back to you. From everything we've covered during the earnings presentation, during this conversation, for you, what are the most important takeaways that you'd like to leave our investor community with? Pedro Arnt: Yes. So first of all, is the strength of the execution, right, and the kind of growth that, that's delivered, but more importantly, that it should continue to deliver. And all of this supported by the fact that our relationships with global merchants are increasingly deeper and stickier. You see that in the retention rates we mentioned during the prepared remarks. And we're seeing merchants adding countries, adding payment methods and now beginning to add products that they use from us. And so that generates the kind of positive cycle where we can continue to invest in platform and product and innovation, and we see the returns of those investments, allowing us to capture what is a sizable market opportunity going forward. Second, and this is somewhat related to scale, somewhat related to AI and somewhat inherent to the business model, is the operating leverage long-term. You're going to see some of that in the second half as the business continues to scale and the automation initiatives that we've mentioned get deployed. And longer term, the balancing act becomes one of making sure that we find that right equilibrium between continued deliverance of operating leverage, while at the same time, investing to keep that flywheel going. This is a highly attractive cash-generative financial model, and that gives us the ability to continue investing to carry out that flywheel, yet consistently return value to shareholders. So really, we think the company is in a really strong position right now, and we just need to continue executing on our strategic plan. Christopher Stromeyer: Great. Thank you very much, Pedro, Guille. This concludes our conversation, and we now open the line to questions. Operator: [Operator Instructions] Our first question will be coming from the line of Tito Labarta of Goldman Sachs. Daer Labarta: I mean, very impressive on the TPV growth. I guess, I mean, just to understand what drove such a large increase in the quarter? I know you gave some color there on some merchants and ride hailing, et cetera. But was there anything like unexpected? I mean, I don't think anybody was modeling 90% year-over-year TPV growth. So just to understand that dynamic, and it seems like there's still room for that to continue to grow at a very healthy pace? And Pedro, you mentioned that there was that one merchant that negatively impacted the statement, but if it wasn't for that, it would have been flat. I just kind of missed, if you can just mention that again because I think on the other hand, what everybody is trying to figure out is what is the floor on the take rate? And I know there's an inverse relationship between TPV growth and take rate and there's a lot of local-to-local volume in Brazil and Mexico. But help us think about the take rate and TPV growth. Pedro Arnt: Thanks, Tito. If you look at the vertical performance quarterly, I think it paints a picture in terms of phenomenal strength around ride-hailing and travel primarily. Ride-hailing has doubled Q-on-Q. It's not even a year-on-year number. And that's just a reflection of some very rapid expansion into numerous new markets and significant share of wallet gains across a few key counterparts, very, very large global companies that have really, I think, pumped dLocal up to a whole new tier in terms of the importance and the amount of volume that they flow through us. In a way, I think this is a confirmation of what we've always said that even relative share of wallet of our existing merchants allows for significant room to grow. And when we see that happen, you have this kind of acceleration in TPV. So it sets up tough comps for next year. But on the flip side, there are plenty, plenty of merchants and global opportunities where if we continue to execute well and deliver performance and cost, we can see this kind of massive ramp-up. And then on take rate, I think -- thanks for the question. If you will, the flip side, but it's not really a flip side. That's just a consequence maybe of overfocusing on take rates. When merchants have these significant spikes in volume, they do rapidly hit new pricing tiers. That's still all incremental gross profit to us, and it's very positive, but it does drive down the headline take rate. Were you to back out that one very large ride-hailing merchants mix gains at a lower take rate, take rate would have been relatively flat sequentially. That doesn't necessarily signal a bottom, Tito, but it does show that there is potentially increasingly an asymptotic shape to this. And more importantly, I think it confirms what we've said all along, that incremental TPV at incremental gross profit is really the financial model here and not managing to any specific take rate. Daer Labarta: And so just to clarify then, so it was just that one ride-hailing merchant, which seems to have given you a lot of volume. Excluding that one, take rates would have been relatively flat. And then in terms of -- you mentioned your wallet share, right? But how about like with ride-hailing merchants or with maybe your top 10 merchants, what -- how does the wallet share maybe compare to that versus the average overall? Pedro Arnt: So yes, this is a very large global merchant. So interestingly, even with this massive ramp-up for that merchant, it's not like we're maxing out share of wallet or that it has a significantly different share of wallet with us, but that won't always be the case. I think it's fair to say that in some cases, a very rapid ramp-up could mean that we become significant in terms of share of wallet. And remember, we measure share of wallet exclusively in markets where we operate. This ramp-up, as you've seen, is very much focused on LATAM, which means that in the future, potentially, there still could be more and more share of wallet gains from someone like this if we're able to serve them in a growing number of African, Middle Eastern or Asian markets. So we still have a very large untapped addressable market ahead of us if we continue to execute, even when you look at it on a per merchant basis. Operator: Our next question is coming from the line of Jamie Friedman of Susquehanna International Group. James Friedman: So in terms of the annual operating profit growth guidance, I know there were a couple of one-timers that you're calling out, foreign exchange and tax. I apologize if I missed this, but did you quantify the effect of those? And if not, could you? Guillermo Perez: I think you're referring to when I quantify how to think about tax in the remaining of the year. So there was the onetime tax impact that we booked in Q1, there was a one-off, and it's not repeatable. If you normalize for that item in Q1, the tax rate was about 15% in Q1 and Q2, so around 16%. And what I was trying to say is that if you think about the balance of the year, that normalized tax rate in the first half should be a good example of what we would expect for the remainder of the year. Now in terms of FX, I don't know exactly what you referred. I mean we talked about the FX headwind that we saw on volume, and that is included in some of the presentations that we shared. But obviously, it's very difficult for me how FX will impact the remainder of the year from a volume or gross profit perspective. James Friedman: So -- But the operating profit guidance of 27.5% to 32.5% growth for the year is unchanged. But -- I may be mistaken, but I thought that you had mentioned -- so we know about the tax in the Q1. And then I thought... Pedro Arnt: Jamie, let me see if we can help you walk through this. What we're saying is we are not adjusting stuff out. Operating profit is operating profit. So with the $4.4 million of prior year tax, plus the fact that if you look at currencies, they've actually become a little bit of a headwind versus where they were at the beginning of the year when we issued the guidance. Those two effects lead us to leave the guidance unchanged. If you look at the matrix slide, what we're saying is were we to adjust out the prior year tax period, it's likely we would have raised the operating income guidance as well. But we'd rather not adjust and just give you guys this kind of clarity. James Friedman: Yes. No, I got it. When you say the matrix slide, you're talking about the bridge, right? Pedro Arnt: The guidance update, you'll see that it indicates that. James Friedman: Operating profit... Pedro Arnt: Even [indiscernible] We would have seen the year coming in around the upper range of the original guidance and potentially would have also raised guidance on operating profit. James Friedman: I got you. Okay. All right. Sorry to belabor that, but I think that, that is something investors are really focused on. And then let's see, in terms of the local-to-local, so -- sorry, I'm going to Page 21. Yes, pay-ins, payouts, local-to-local. So okay. How should we be thinking about the composition of those dimensions, both pay-in payouts and local-to-local cross-border and their impact on take rates? Pedro Arnt: Yes. Payouts in general have a lower take rate. They're instrumental many times in generating liquidity for us and having a better margin on the pay-in business, but they are lower take rate. And then local-to-local don't have the FX component that cross-border does, and those are also lower take rate. So when we mention a very large ride-hailing merchant, ride-hailing typically has a strong mix of local settlement because they need cash in market to settle to the driver. Therefore, those are lower take rates. And so that kind of explains why in part, if you back out for that very large ramp-up in volume coming from a local-to-local ride-hailing merchant, you would have gotten flat take rate on the rest of the book. James Friedman: Okay. Now I got you. And just to clarify, sorry, is that sequentially? That's sequentially, not year-over-year, right? Pedro Arnt: These comments have all been sequential, yes. Operator: Next question will come from Guilherme Grespan of JPMorgan. Guilherme Grespan: My question is on the outlook for the second half and going forward, Pedro. I think the message is super clear that we could see costs slowing down a little bit. But my question is how much costs are tied to the strong performance, commercial performance that you're printing, right? Because there's a positive effect here. We always want companies to cut costs, but in some way, there's a positive effect, I think, on revenues as you invest in headcount expansion. So in the end, I'm not 100% sure how much of your very strong TPV and revenues in some way are tied to the investments you have been making on the business. So my question is more looking forward, if there is any risk that you -- as you slow down a little bit costs and the investments, if we could see the top line that today has a very strong momentum, it also lose a little bit of momentum. How do you think about this trade-off? Pedro Arnt: Let me take a first cut at this, and Guille can complement me. There's obviously always a relationship between what you're investing and how you're growing. However, if you listen to the prepared remarks, I think we've highlighted three factors that we think drive the ability to really manage costs for the second half of the year. One is simply that you will no longer have the prior year tax impact. Two, marketing spend because of the World Cup campaign, where we were a World Cup sponsor, was heavily tilted to the first half of the year and doesn't happen in the second half of the year. And third, the operating leverage that we're expecting to see. And the first two are already confirmed. The third is the one that we need to confirm as it plays out, is driven by the deployment of a lot of the automations and AI-driven replacements of headcount that we will carry out in the second half of the year. So it doesn't necessarily have a detrimental impact to top line growth because this is where the leverage is coming from. I don't think it's that the World Cup marketing has a direct pass-through to growth. That's just long-term merchant relationship building. So I think we're fairly confident that this is a business model that can continue to deliver strong growth and operating leverage into the future. Guilherme Grespan: That's clear. And just a follow-up, very quick one on the point. I think it was asked in the call, it's on the FX point. I was just curious, like you mentioned that FX played a little bit against the beginning of the year. But just in what portion of the business, Pedro, because I'm trying to reconcile here, the EM FX had a very strong performance, right, year-to-date. Most of the countries had a positive tailwind from FX. So just trying to understand why it was a headwind throughout the -- this first half? Pedro Arnt: So I think -- Go ahead. Guillermo Perez: Yes. So if I think about OpEx and some of the FX impacts that we mentioned in Q1 is if you think about the footprint of our resources, they are in countries whose currency has appreciated against the dollar. So we're talking countries like Brazil, for example, or Uruguay. And it's difficult to predict going forward, but that's the impact that we're seeing in the first half. That said, it's not some of the most material impact that has had in terms of OpEx growth. So as we said in the first half, the majority of the impact came from the investments that we did in the second part of last year. Operator: And our next question will be coming from the line of Pedro Leduc of Itau BBA. Pedro Leduc: Congrats on the quarter. And here, Pedro, I'm trying to also puzzle things together a little bit. I mean you're pacing on a much stronger TPV or pilot client traction pace, gross profit pace, choosing to reinvest a little bit, yes. But you go in 2027 with a lot more momentum, when I [indiscernible] my model, the pace that you're ending this year at for gross profit. And a little bit also tied to the second question, I'm not sure how much I carry from it also in terms of the reinvestments that you're doing? Of course, it should be more, but relatively speaking, for 2027? Pedro Arnt: Okay. Thanks, Pedro. I think you're picking up on something which is important, and I don't want to get too ahead of myself in terms of giving '27 guidance. But I think the nature that this year is playing out with more expenses and OpEx in the first half of the year than the second half of the year, we've called out World Cup, we've called some of the prior year tax issues, you're going to have a very strong operating leverage exiting Q4. I don't think you guys should then project that into all of '27 linearly. Because '27 should be better spread out in terms of where the spend occurs as well. And we're trying to make sure we find the right balance here between investing for the long-term and delivering operating leverage. So again, we'll address this when we issue the guidance for '27. Now it's a bit premature. But what I'm trying to say is be careful with grabbing Q4 margin structures and assuming it continues to leverage from there. That may not be the case. Full year '27 versus '26, certainly, we're committed to very consistent operating leverage, but not necessarily Q4 exit rate to '27 full year. I hope that helps. Pedro Leduc: Yes, you got exactly the outcome I was getting here. So it helps me paint the picture a little bit. Operator: The next question is coming from the line of Matthew Coad of Truist. Matthew Coad: I have one more on the take rate. If I look at the monetization bridge slide that you guys provide, which is really helpful, it looks like there was like a 5 bps impact from lower FX spreads in Vietnam and overall volatility. Could you kind of unpack that a little bit more for us? Would you expect this to potentially reverse in the back half of the year or at least for this headwind to go away? And yes, it kind of like goes into -- if I look at the implied guide for the take rate in the back half of the year, it's 75 basis points versus 72 this quarter. So I'm just trying to connect the dots because usually, the take rate is a little bit lower in 4Q? Pedro Arnt: Okay. Let me start with the easier one, which is the FX spreads Vietnam. I think what you've seen with our business consistently is that there are pockets of the emerging world, which at times show very, very large spreads on FX because of macroeconomic volatility. So for periods of time, it's been Argentina, for other periods, it's been Egypt. For others, it's been Bolivia. For others, it's been Nigeria. The beginning of this year we saw that in Vietnam. And then the spreads in that market have significantly compressed when you compare Q2 to Q1. So I think this is inherent in certain pockets of our footprint, smaller markets, more volatile, but that have periods of very high profitability. And this is just inherent in the business. I think the good thing is that as we deliver more and more time, kind of our thesis has been playing out that which pocket of the emerging world is high spread changes, but there always seems to be somewhere a period. Volatility, I think, is a little bit more predictable going forward. It should lessen, I think, into the back half. There's about 1/3 to slightly less than half of that volatility that really was very much Q1 related of this year. And unless something else happens in terms of quick dislocations of currency values, I don't think you'll have this level of volatility in future quarters. A lot of this happened in Mozambique to be very specific. So yet another pocket of the emerging world. Matthew Coad: And then maybe more fun of a question here. Like when you first provided your 2026 guidance, you gave a nice bridge in terms of the breakdown of incremental TPV where you broke it up into share of wallet gains in existing countries and new countries, new merchants, new products. I wanted to focus on the new merchants and the new products aspect of that guide. Could you just give us a reminder or update us on how that's trending compared to your original expectations? And then could you also double-click on the merchant of record solution business? Kind of curious like what geos, what verticals, where do you see product market fit there? Pedro Arnt: Okay. Yes. The answer there is no material changes. Directionally, if we were to update that data, you would see more performance from share of wallet gains of the existing book, less from new merchants and less from new products. I think the new merchants for existing merchants is almost more of a mix thing just that as we've said, there's been more than one existing merchant with very, very strong share of wallet gains that have exceeded initial forecasts. On the new product issue, I think it's fair to say they're slightly behind where we'd like them to be right now, and there's work to be done there. Merchant of record, again, I think it's an attempt at having a broader portfolio of products to see which ones stick, which ones have a faster ramp-up. Merchant of record, I think if I were to give a proxy from a competitor, it's -- it does some of the things Stripe Atlas does and then more. It essentially places more of the burden of setting up a local entity, filing taxes, collecting taxes on us and less on the merchant. So it's a product that allows merchants to accelerate their go-to-market into a new country even faster because not only do they not have to deal with payments under dMore, they don't have to deal with many other statutory issues and tax issues. So we're just trying to do more and more of the heavy lifting when it comes to opening operations into a new emerging market. And obviously, those products allow us to capture a higher take rate. Operator: Next question is coming from the line of Camila Azevedo of UBS. Camila Villaça Azevedo: Congrats on the results. I have one question in terms of the regional and vertical analysis when we talk about Brazil, Argentina overall. So while we saw strong TPV and gross profit in Brazil and Argentina, we saw a sequential decrease in gross profit in Mexico. So could you please provide more detail on the cost pressures and also volume price tiers affecting the Mexico market, please? Pedro Arnt: Great. So Mexico, I think it's worth covering. So thank you for the question. Mexico obviously continues to have very strong TPV growth. It actually had very strong revenue growth of 64% year-on-year. So I'd say top line is very strong, and then disappointing gross profit line, if you will. But the reason I'm calling out the revenue is that what that points to is that, that's primarily a cost issue. So what's happening in Mexico is the decline in our pricing power which is not that marked, that's why revenues continue to grow 64%, have been significantly offset by not being able to push down our cost structure. Our cost structure in Mexico is actually as a percentage of TPV slightly up. So what we need to do a better job at, and I think scale and just further negotiation with processing partners should allow us to get there, is to manage the Mexican cost basis, primarily that of processing payments better, and that should begin to align gross profit growth closer to revenue growth, which continues to be very strong. So there's work to be done in Mexico, but it's more cost management, which I feel relatively confident we will deliver on. Did you ask about another region, Camila? Sorry, I was focusing on Mexico. Operator: Pardon me, this is the operator. Camila has left the stage. Our next question is coming from the line of Neha Agarwala of HSBC. Neha Agarwala: Apologies if I'm making you repeat any of the answers. I just wanted to get a bit more color. You mentioned that you are gaining more share with your existing merchants that is where -- that is what is driving the strong TPV momentum that we are seeing. What is allowing you to gain this share? Is it the conversion rates that you're providing which is better or just the breadth of the platform? And I know there's not one silver bullet, but a mix of things. But if you can put in hierarchies as to what are the key things that is allowing you to win more business with your merchants? And would that also translate into more accelerated take rate pressure as margins quickly hit the tiered pricing as we saw that impact to take it in this quarter as well? So should we see a more accelerated compression in that take rate in the near term as you grow more with existing merchants? Pedro Arnt: Yes. Thanks. I think you've hit on some of the key drivers of a merchant decision on how to give us more markets, more volume, more products. It's a combination of conversion rate, price and obviously also service model and quality of service. I wish there were one answer for every single merchant. I think different merchants and different verticals will focus more on different things. Very low-margin businesses may be more price sensitive, higher-margin business will be more conversion rate or service model sensitive. But those are usually, I think, the three factors that drive decision. And given the strength and sustained strength of our TPV growth, I think it's fair to say that we're definitely doing a good job on delivering value on conversion, service model and price. If you want a more specific readout on the current quarter results, I think it would be fair to say that this very rapid ramp-up of one global merchant is a good example of when -- because we have a multi-market relationship with them, we're able to ramp them up very quickly at a lower take rate, but it's still significantly accretive to gross profit. And then there are other secondary benefits that come from this, right? As our TPV grows across the market, it allows us -- hasn't happened in Mexico, it's definitely happening everywhere else, to lower our cost of processing, which then improves our net take rate across the rest of the book. Just because pricing is flat, cost is coming down. But on this specific win, I think it is a combination of them realizing that a rapid ramp-up gets them to lower price tiers and that we've reached a level of operational excellence that they can trust us with this level of share of wallet. Going forward, I think this is -- I'm going to be careful here. But given what we're seeing today, I think our expectation is not of accelerating take rate decline into the end of the year. That's as far forward as I'll give you an indication of what we're seeing today. Neha Agarwala: Got it, Pedro. If I can just clarify there, would it be fair to assume that part of the take rate decline that we saw sequentially in this particular quarter could be maybe reversed in third quarter because it was driven by mix shift, which you can't control, which might change again next quarter and also FX-related volatility? So could we see part of the net take rate pressure ease in third quarter? Pedro Arnt: I think implied in our revised guidance is not a reversal of take rate. It is a deceleration in the rate at which take rate declines. We've raised TPV guidance, which means, I think the way we're managing the model is to even stronger market share gains and TPV acceleration, all in accretive gross profit deals, which means we've also raised the gross profit range, but not necessarily because take rates are going up, but rather on the strength of TPV growth. Operator: Thank you. And that does conclude today's conference call. Thank you all for joining. You may now disconnect. Before you buy stock in DLocal, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DLocal wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends DLocal and recommends the following options: long January 2027 $7 calls on DLocal and short January 2027 $10 calls on DLocal. The Motley Fool has a disclosure policy. DLocal (DLO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. TPV growth reached 92% year-over-year, the highest rate since Q1 2022, driven by massive share of wallet gains within existing Tier 0 merchants. Performance was bolstered by a significant ramp-up of a single large global ride-hailing merchant across key markets like Brazil and Argentina. Net revenue retention remained strong at 153%, marking the fifth consecutive quarter above 140% as merchants expanded into new geographies and products. Operating leverage improved by 6 percentage points sequentially, driven in part by the absence of a prior-year tax item, with further improvements from AI and automation investments expected in the second half of the year. The shift toward local-to-local flows, now 61% of TPV, reflects the inherent structure of high-growth verticals like ride-hailing and on-demand delivery. Management attributes market share gains to the 'One dLocal' value proposition, offering a single integration for complex emerging market financial infrastructure. Gross profit hit an annualized rate of over $500 million, supported by record performance in Brazil ($40 million) and Argentina ($20 million). Raised annual TPV growth guidance to 60%-70% and gross profit growth to 25%-30% based on strong first-half momentum. Operating profit growth guidance is maintained at 27.5%-32.5%, accounting for non-recurring tax items and unexpected FX headwinds. Management expects operating leverage to become increasingly visible in the second half of 2026 as front-loaded marketing and merit cycle costs normalize. The deployment of AI-generated code, currently at 60%, is expected to further reduce lead times and support volume growth without material headcount increases. Future growth will focus on the Asia Pacific region, identified as a strategic priority due to its high fragmentation and untapped digital payment opportunity. A $4.4 million non-recurring prior year tax adjustment in Q1 continues to weigh on the full-year reported operating profit growth. OECD Pillar 2 framework implementation is expected to create upward pressure on the effective tax rate starting in 2027. Lower spreads in volatile markets like Vietnam and Mozambique created sequential gross profit headwinds in the Africa and Asia segments. Mexico gross profit was impacted by a shift to local-to-local mix and large merchants reaching final pricing tiers, necessitating better cost management. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that excluding one very large ride-hailing merchant's ramp-up, the net take rate would have been relatively flat sequentially. The decline is a direct consequence of merchants hitting higher volume pricing tiers, which remains accretive to total gross profit. Management expects a deceleration in the rate of take rate decline rather than a reversal in the second half of the year. Confidence in H2 leverage stems from the absence of one-time Q1 tax items and the conclusion of front-loaded World Cup marketing spend. AI initiatives have doubled engineering deployments, allowing the company to scale TPV by 80%+ while keeping headcount broadly stable. Management cautioned against linearly projecting Q4 exit margins into 2027, as they will continue balancing leverage with growth investments. dMore allows dLocal to act as the legal seller, handling entity setup and tax filing to accelerate merchant go-to-market timelines. This value-added service is designed to capture higher take rates by assuming more operational burden from the merchant. The product is part of a broader strategy to deepen relationships beyond simple payment processing.

DLocal Limited reported past second-quarter 2026 results with sales of US$399.66 million and net income of US$54.64 million, alongside higher earnings per share versus a year earlier. The company also lifted its total payment volume growth guidance while keeping operating profit growth targets intact, underscoring confidence in scaling its payments platform efficiently. With strong payment volume guidance now in place, we’ll explore what this means for DLocal’s investment narrative and future growth drivers. The future of work is here. Discover the 40 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. For DLocal, I think the core belief you need as a shareholder is that the company can keep scaling its cross-border payments platform while defending its margins in competitive, often volatile emerging markets. The latest quarter supports that thesis: strong top-line growth, record gross profit and nearly US$18 billion of total payment volume show that demand for its local payment rails remains solid, and the raised TPV and gross profit guidance suggests management sees that momentum continuing. In the near term, key catalysts look tied to how quickly new partnerships like ACI Worldwide and Stable Sea translate into higher volumes and better monetization, and whether index inclusions deepen institutional interest. On the risk side, the long history of share price volatility, rich earnings multiples versus the wider financials sector, and a relatively fresh board still matter, and this earnings beat does not fully erase those concerns so much as buy time to execute. However, one risk that investors should be aware of may not be obvious from the headline numbers. Despite retreating, DLocal's shares might still be trading 37% above their fair value. Discover the potential downside here. Eleven Simply Wall St Community members see DLocal’s fair value scattered between about US$14.50 and US$23.46, underlining how far opinions can differ. Against that backdrop of wide estimates, the recent acceleration in payment volumes and unchanged operating profit guidance put the spotlight on whether DLocal can convert scale into durable profitability, a question that can meaningfully influence how the market eventually prices the stock. Readers can benefit from weighing these contrasting views before forming their own stance. Explore 11 other fair value estimates on DLocal - why the stock might be worth just $14.50! Disagree with this assessment? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your DLocal research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free DLocal research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate DLocal's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: We've uncovered the 11 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. Capitalize on the AI infrastructure supercycle with our selection of the 55 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. DLocal (DLO) is back in focus after reporting second quarter figures that included nearly US$18b in total payment volume and record gross profit, alongside higher full year growth guidance for TPV and gross profit. See our latest analysis for DLocal. DLocal’s latest guidance update and strong second quarter metrics come after a mixed share price run, with a 34.06% 90 day share price return but a 1 year total shareholder return that declined 2.20% and a 5 year total shareholder return that declined 74.81%. If this kind of payment growth has your attention, it could be a good moment to look wider in fintech and payment processing and check out the 20 top founder-led companies After DLocal’s sharp rebound and richer guidance, bulls point to fast growing TPV and solid profitability, while bears highlight the long term share price damage and regional risks. Which side does the valuation math lean toward next? DLocal’s last close at $14.76 sits well below a fair value of $50.96 in the most followed narrative, which frames a wide gap between price and projected cash flows. Read the complete narrative. This narrative focuses on rich free cash flow, strong returns on capital and a long runway of assumptions. Curious how those moving parts combine into that $50.96 figure? The full breakdown shows exactly which growth and margin inputs do the heavy lifting. Result: Fair Value of $50.96 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, DLocal still faces meaningful risks, including regional exposure in key Latin American markets and a long-term share price decline that could limit investor confidence. Find out about the key risks to this DLocal narrative. The DCF driven narrative paints DLocal as significantly undervalued. The P/E picture is more cautious. At 22.5x earnings, DLocal trades above the US Diversified Financial industry on 16.9x and also above its own fair ratio of 17.9x, which suggests a valuation premium rather than a discount. Which signal do you trust more today? For investors weighing these conflicting signals, it can help to see how current pricing compares to both peers and that fair ratio in more detail, then decide whether the premium feels justified based on risk and growth expectations. See what the numbers say about this price — find out in our valuation breakdown. Given the mixed messages on DLocal so far, the most useful next step is to inspect the numbers yourself and stress test the assumptions that matter to you. To see what some investors already like about the stock, take a closer look at the 4 key rewards If DLocal has sharpened your focus on quality opportunities, do not stop here. Broaden your watchlist now so you are not chasing the next move late. Target stronger long term value potential by scanning companies that currently look mispriced using the 51 high quality undervalued stocks. Build a sturdier core portfolio by reviewing financially resilient stocks with the solid balance sheet and fundamentals stocks screener (49 results). Spot future standouts early by checking the screener containing 18 high quality undiscovered gems before they draw wider attention. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in DLocal Limited? Here are five stocks we like better. DLocal delivered record second-quarter results: Total payment volume surged 92% year over year to $17.7 billion, while gross profit rose 29% to $127 million and net income increased 28% to $55 million. Growth was led by ride-hailing and merchant expansion across travel, remittances, e-commerce and delivery, with local-to-local transactions reaching 61% of TPV. Brazil and Argentina posted record gross profit, although Mexico and some African and Asian markets faced margin pressure. The company raised its full-year outlook, now expecting TPV growth of 60%–70% and gross-profit growth of 25%–30%, while maintaining operating-profit growth guidance of 27.5%–32.5%. Management also highlighted increasing AI-driven automation, a planned merchant-of-record product and continued share repurchases. AI Is Selling Off, But These 5 Stocks Could Benefit Next DLocal (NASDAQ:DLO) reported second-quarter 2026 total payment volume of $17.7 billion, up 92% from a year earlier, as growth in ride-hailing, travel, remittances, e-commerce and other verticals drove record volume and gross profit. Chief Executive Officer Pedro Arnt said the company processed more volume in the quarter than it did during all of 2023. The result marked DLocal’s fastest TPV growth since the first quarter of 2022 and extended its streak of growth above 50% year over year to seven consecutive quarters. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be dLocal Keeps Winning, but the Stock Still Has Something to Prove Gross profit rose 29% year over year to $127 million, while operating profit increased 15% to $64 million. Net income reached $55 million, up 28% from a year earlier, and diluted earnings per share were $0.18. Arnt said the company’s merchant relationships continued to deepen, with clients adding countries, payment methods and products. DLocal reported net revenue retention of 153% and TPV retention of 188% during the quarter. The company said it serves more than 760 global merchants across more than 60 emerging markets. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand 3 Emerging Market Stocks Leveraging South America’s Momentum Ride-hailing was the largest contributor to sequential TPV growth, according to Chief Financial Officer Guillermo Lopez Perez. While one large global merchant was an important driver, he said growth was also supported by several ride-hailing and on-demand-delivery companies expanding meaningfully. Travel, remittances, e-commerce, software-as-a-service and advertising also added to growth. Financial-services volumes were modestly lower, which Lopez Perez attributed primarily to seasonality among certain travel-related merchants in Latin America. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Local-to-local flows represented 61% of TPV, up 6 percentage points from the first quarter. The shift reflected rapid growth in ride-hailing and on-demand-delivery activity, which typically requires local settlement. During the question-and-answer portion of the call, Arnt said the rapid expansion of a large global ride-hailing merchant had pushed the company into “a whole new tier” of volume. He added that, excluding that merchant and certain currency-volatility effects, net take rate would have been close to flat sequentially even as TPV growth would have remained above 65% year over year. Arnt said high-volume merchant ramp-ups can lead clients to reach lower pricing tiers more quickly, reducing headline take rates while still generating incremental gross profit. He said DLocal is focused on growing TPV and gross profit rather than managing to a specific take-rate target. Brazil and Argentina were the principal contributors to gross-profit growth. Brazil generated record gross profit of $40 million, supported by ramp-ups in ride-hailing and travel merchants and continued e-commerce growth. Argentina produced record gross profit of $20 million, driven by e-commerce, ride-hailing and on-demand delivery, as well as lower advancement costs. Elsewhere in Latin America, gross profit increased 6% sequentially and 32% year over year. Mexico continued to post strong volume growth, though gross profit declined modestly from the prior quarter. Arnt said Mexico’s revenue rose 64% year over year, but costs as a percentage of TPV increased slightly as DLocal was unable to reduce processing costs enough to offset lower pricing. He said the company needs to improve cost management and negotiations with processing partners in that market. Gross profit in Africa and Asia declined sequentially, mainly because of a smaller contribution from higher-spread markets including Mozambique and Vietnam. Lopez Perez said first-quarter gains in those markets were not necessarily recurring. Total operating expenses were $63 million, up 46% from a year earlier but down 4% sequentially. The year-over-year increase reflected the annualization of second-half 2025 investments, higher average salaries following the annual merit cycle, selected senior hires and marketing spending concentrated in the first half, including a World Cup campaign and merchant events. Operating profit represented 50% of gross profit, up 6 percentage points sequentially. Lopez Perez said DLocal does not expect material headcount increases for the remainder of the year. Management said it expects operating leverage to become more visible in the second half as marketing spending eases, prior-period items do not recur and the company deploys automation and artificial-intelligence initiatives. Arnt said more than 60% of DLocal’s code is AI-generated, contributing to nearly doubled engineering deployments year over year and shorter software-development lead times. The company expects automation to support efficiency across engineering, compliance, operations, commercial functions and customer support. DLocal also plans to launch dMOR, its merchant-of-record solution, which would allow the company to act as the legal seller on a merchant’s behalf. Arnt said the offering is designed to handle local entity setup, tax filings and other statutory requirements in addition to payments. Its buy-now, pay-later offering is currently live in eight markets. Following first-half performance, DLocal raised its full-year TPV growth outlook to 60% to 70% year over year and increased projected gross-profit growth to 25% to 30%. The company maintained its operating-profit growth outlook of 27.5% to 32.5%. Arnt said the unchanged operating-profit guidance reflects a $4.4 million prior-year tax item recorded in first-quarter operating expenses and foreign-exchange headwinds relative to the assumptions in its original forecast. Lopez Perez said adjusted free cash flow was $69 million in the quarter, up 41% year over year, with conversion equal to 125% of net income. Under a $300 million share-repurchase authorization approved in March, DLocal had repurchased about 6.9 million Class A shares for $86 million through the end of the second quarter; all repurchased shares were canceled. The reported effective tax rate was approximately 16% for the quarter, while the normalized rate for the first half was 15% excluding the nonrecurring prior-year tax adjustment. Lopez Perez said the tax rate may continue to fluctuate by country and business mix, and that potential OECD Pillar Two effects beginning in 2027 could create upward pressure, though the company said it was too early to quantify the impact. dLocal is a fintech company specializing in cross-border payments and payouts for global merchants operating in emerging markets. Headquartered in Montevideo, Uruguay, the company offers a technology platform that simplifies complex payment flows, enabling businesses to connect with local payment methods through a single integration. The dLocal platform supports a wide range of local payment options, including credit and debit cards, bank transfers, e-wallets and cash-based methods. It incorporates risk-management tools, compliance services and anti-fraud solutions to help clients navigate regulatory requirements and minimize payment failures across diverse jurisdictions. dLocal serves merchants in sectors such as e-commerce, online marketplaces, digital content and gig economy platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "DLocal Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Payment Volume (TPV): $17.7 billion, up 92% year over year. Net Revenue Retention: 153%, marking the fifth consecutive quarter above 140%. Gross Profit: $127 million, up 29% year over year and 7% sequentially. Operating Profit: $64 million, up 15% year over year and 22% sequentially. Operating Profit as % of Gross Profit: 50%, up 6 percentage points quarter over quarter. Net Income: $55 million, up 28% year over year. Diluted EPS: $0.18. Adjusted Free Cash Flow: $69 million, up 41% year over year, with a conversion rate of 125% of net income. Total Operating Expenses: $63 million, up 46% year over year and down 4% sequentially. Effective Tax Rate: Approximately 16% for the quarter; normalized rate of 15% for the first half. Share Repurchase: Approximately 6.9 million Class A shares repurchased for $86 million under the $300 million program. Guidance: Raised TPV growth guidance to 60%-70% year over year and gross profit growth guidance to 25%-30% year over year. Warning! GuruFocus has detected 4 Warning Signs with DLO. Is DLO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. TPV reached $17.7 billion, up 92% year-over-year, the highest growth rate since Q1 2022, with processed volume exceeding all of 2023. Net revenue retention hit 153%, marking the fifth consecutive quarter above 140%, indicating deepening merchant relationships. Gross profit reached a record $127 million, up 29% year-over-year, with an annualized run rate exceeding $500 million. Operating leverage improved, with operating profit as a percentage of gross profit up 6 percentage points sequentially to 50%, and further improvements expected in H2. Raised full-year guidance for TPV growth to 60-70% and gross profit growth to 25-30%, reflecting strong momentum and broad-based growth across verticals and geographies. Net take rate declined due to a large ride-hailing merchant ramping up and hitting lower pricing tiers, though excluding this, take rate would have been flat sequentially. Gross profit in Africa and Asia declined sequentially due to lower spreads in markets like Mozambique and Vietnam, which are not expected to recur. Operating expenses increased 46% year-over-year due to annualized investments, higher salaries, and front-loaded marketing, though they declined sequentially. Operating profit guidance was maintained at 27.5-32.5% growth, dragged down by a $4.4 million non-recurring prior-year tax item and FX headwinds. Effective tax rate is expected to face upward pressure from OECD Pillar Two framework implementation starting in 2027, with potential impact not yet quantified. Q: What drove the exceptional 92% year-over-year TPV growth in Q2 2026, and what is the outlook for take rates given the rapid ramp-up of large merchants?A: Pedro Arnt (CEO) attributed the growth to phenomenal strength in ride-hailing and travel verticals, with ride-hailing volume doubling quarter-over-quarter due to rapid expansion into new markets and significant share-of-wallet gains with large global merchants. Regarding take rates, he noted that when merchants have significant volume spikes, they rapidly hit new pricing tiers, which drives down the headline take rate but remains accretive to gross profit. Excluding one very large ride-hailing merchant, net take rate would have been nearly flat sequentially, suggesting an increasingly asymptotic shape to take rate decline. He emphasized that incremental TPV at incremental gross profit is the financial model, not managing to a specific take rate. Q: What gives management confidence in the trajectory of operating leverage improvements in the second half of 2026?A: Guillermo Lopez Perez (CFO) cited several factors: the annualization of investments made in the second half of 2025, which are now fully embedded in first-half numbers; front-loaded marketing spend in H1 (World Cup campaign and large merchant events) that won't repeat; one-off costs in H1 including higher credit loss provisions, operational losses, and the prior-year tax adjustment; and broadly stable headcount. Additionally, the automation and AI program should begin delivering cost benefits in H2. He cautioned that cost discipline carries risk, so they prefer to hold operating profit guidance unless gross profit upside and cost normalization play out. Q: How are AI and automation efforts impacting the business operationally, and what is the long-term outlook for headcount and operational leverage?A: Pedro Arnt (CEO) stated that AI is a core enabler across engineering, compliance, operations, commercial, and customer support. Over 60% of code is now AI-generated, leading to nearly a doubling of engineering deployments year-over-year and significant reductions in software development lead times. This supports volume growth exceeding 80% in H1 with broadly stable headcount. Looking ahead, he expects further efficiency gains through AI and automation, with selective headcount additions primarily in local "feet on the ground" roles, while centralized middle and back-office functions should see high operational leverage. Q: How should investors think about the effective tax rate going forward, given recent volatility?A: A company representative explained that quarter-to-quarter tax rates will continue to move based on country and business mix. Looking ahead, upward pressure on the effective tax rate is expected, particularly from jurisdictions implementing the OECD's Pillar Two framework, which is expected to impact starting in 2027. However, regulatory developments are still under discussion across several countries, making it too early to quantify the ultimate impact. For the remainder of 2026, the normalized effective tax rate of 15% from the first half provides a reasonable reference point. Q: Why was the operating profit growth guidance maintained despite raising TPV and gross profit guidance?A: Pedro Arnt (CEO) clarified that operating profit is operating profit, and they are not adjusting out items. The $4.4 million prior-year tax item recorded in Q1 OpEx and FX headwinds versus the original forecast led them to leave the operating profit guidance unchanged. He noted that were they to adjust out the prior-year tax item, they would likely have raised the operating income guidance as well. The guidance bridge slide indicates the year would come in around the upper range of the original guidance without that item. Q: How should we think about the composition of pay-ins vs. pay-outs and local-to-local vs. cross-border flows, and their impact on take rates?A: Pedro Arnt (CEO) explained that payouts generally have lower take rates but are instrumental in generating liquidity and improving margins on pay-in business. Local-to-local flows lack the FX component of cross-border transactions and also carry lower take rates. The large ride-hailing merchant ramp-up has a strong mix of local settlement (needed to pay drivers in-market), which explains the lower take rate. Excluding that merchant, the rest of the book would have shown a flat take rate sequentially. Q: Is there a risk that slowing cost growth could negatively impact the strong top-line momentum?A: Pedro Arnt (CEO) acknowledged there is always a relationship between investment and growth but highlighted three factors enabling cost management in H2: the absence of the prior-year tax impact, marketing spend normalization (World Cup campaign was H1-heavy), and operating leverage from AI-driven automation deployment. He expressed confidence that the business model can continue delivering strong growth and operating leverage, as the cost reductions are not tied to areas that directly drive top-line growth. Q: What drove the sequential gross profit decline in Mexico despite strong TPV growth, and what is the outlook?A: Pedro Arnt (CEO) noted that Mexico had very strong revenue growth of 64% year-over-year, but gross profit was disappointing due to a cost issue rather than pricing. While pricing power has declined modestly, the cost structure in Mexico as a percentage of TPV has slightly increased. Management needs to better manage processing costs, and scale plus further negotiations with processing partners should help align gross profit growth closer to revenue growth. He expressed confidence in delivering on cost management improvements in Mexico. Q: What is allowing DLocal to gain more share of wallet with existing merchants, and should we expect accelerated take rate compression?A: Pedro Arnt (CEO) cited a combination of conversion rate, price, and service quality as key drivers, with different merchants prioritizing different factors. The rapid ramp-up of one global merchant demonstrates the ability to scale quickly at a lower take rate while remaining accretive to gross profit. He noted that as TPV grows, it enables lower processing costs, which improves net take rate across the rest of the book. Looking forward, he does not expect accelerating take rate decline into year-end. Q: Could the sequential take rate decline reverse in Q3, given it was driven by mix shift and FX volatility?A: Pedro Arnt (CEO) clarified that the revised guidance implies a deceleration in the rate of take rate decline, not a reversal. The raised TPV guidance reflects even stronger market share gains and TPV acceleration through accretive gross profit deals. The gross profit range was raised based on the strength of TPV growth rather than expectations of take rate improvement. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

TPV reached nearly US$18 billion (+92% year-over-year), the 7th consecutive quarter of 50%+ growth, and continued acceleration over the last 5 quarters.Record gross profit: US$127 million (+29% year-over-year). Operating profit: US$64 million (+15% year-over-year), with Operating Profit/Gross Profit ratio reaching 50% (+6 p.p. quarter-over-quarter); operating leverage to improve in the second half of 2026. Net income at US$55 million (+28% year-over-year), diluted EPS $0.18 (vs. $0.14 in 1Q26). Adj. Free Cash Flow US$69 million (+41% year-over-year), Adj. FCF/Net income conversion of 125%. Guidance update: TPV guidance raised to 60–70% year-over-year and Gross profit to 25–30% year-over-year; Operating profit guidance maintained at 27.5–32.5% year-over-year. MONTEVIDEO, Uruguay, Aug. 13, 2026 (GLOBE NEWSWIRE) -- DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), the leading cross-border financial infrastructure platform connecting global merchants to emerging markets, today announced its financial results for the second quarter ended June 30, 2026. dLocal’s management team will host a conference call and audio webcast on August 13, 2026 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. “TPV growth has remained above 50% year-over-year for seven consecutive quarters, with the last three quarters at or above 70%. Growth has also accelerated over the past five quarters, reaching its highest year-over-year rate in four years. Although the pace and scale of this growth will naturally create more demanding comparisons as we move through the second half of the year and into 2027, what we are seeing today reflects the positive returns on the investments we have made in our platform and portfolio of licenses. It is also a testament to the trust merchants place in us as they build and grow across emerging markets,” said Pedro Arnt, CEO of dLocal. Second quarter 2026 financial highlights dLocal reports in US dollars and in accordance with IFRS as issued by the IASB Total Payment Volume (“TPV”) reached US$17.7 billion in the second quarter of 2026, up 92% year-over-year compared to US$9.2 billion in the second quarter of 2025 and up 26% compared to US$14.1 billion in the first quarter of 2026. In constant currency, TPV growth for the period would have been 80% year-over-year. Revenues amounted to US$399.7 million, up 56% year-over-year compared to US$256.5 million in the second quarter of 2025 and up 19% compared to US$335.9 million in the first quarter of 2026. In constant currency, revenue growth for the period would have been 50% year-over-year. The quarter-over-quarter comparison was driven by volume growth. Gross profit was US$127.2 million in the second quarter of 2026, a new record, up 29% compared to US$98.9 million in the second quarter of 2025 and up 7% compared to US$118.7 million in the first quarter of 2026. In constant currency, gross profit growth for the period would have been 23% year-over-year. The quarterly comparison was driven by (i) Brazil, supported by the ramp-up of ride-hailing and travel merchants alongside sustained e-commerce growth; (ii) Argentina, driven by broad-based growth across e-commerce, ride-hailing and on-demand delivery, as well as lower advancement costs; partially offset by (iii) Mexico, with large Tier 0 merchants hitting higher volume pricing tier along with cost pressure. Underlying volume and revenue growth (64% YoY) remain solid; and (iv) Africa and Asia, with lower contribution from higher FX spread markets (Mozambique and Vietnam) and one-off cost increase in Nigeria. As a result, gross profit margin was 32% in this quarter, compared to 39% in the second quarter of 2025 and 35% in the first quarter of 2026. Gross profit over TPV was at 0.72%, decreasing from 1.07% in the second quarter of 2025 and from 0.84% in the first quarter of 2026, reflecting the higher local-to-local share, the ramp-up of large merchants, and the natural margin dynamics of scaling volume with established merchants and into new payment methods, products, and countries. Operating expenses reached US$63.0 million for the second quarter of 2026, up 46% year-over-year and down 4% quarter-over-quarter. The year- over-year increase reflects the annualization of investments made in the second half of 2025, higher average salaries driven by the annual merit cycle and a limited number of senior strategic hires, and higher marketing spend concentrated in the first half around the World Cup campaign and large merchant events. The sequential decrease partly reflects the absence of the US$4.4 million non-recurring prior-year tax item recorded in OPEX in the first quarter of 2026. As a result, Operating profit was US$64.2 million, up 15% year-over-year and 22% quarter-over- quarter. The Operating Profit to Gross Profit ratio was 50%, up 6 p.p. quarter-over-quarter compared to 44% as reported in the first quarter of 2026 and down 6 p.p. year-over-year compared to 56% as reported in the second quarter of 2025. Net financial result was a US$2.3 million gain, compared to a net finance loss of US$3.8 million in the second quarter of 2025 and a net finance gain of US$5.2 million in the first quarter of 2026. Our effective income tax rate for the period was approximately 16%, in line with the second quarter of 2025 and lower when compared to 26% for the first quarter of 2026, which was elevated by the non-recurring prior-period adjustment, as explained in the previous quarter. Net income for the second quarter of 2026 was US$54.8 million, or US$0.18 per diluted share, up 28% compared to a profit of US$42.8 million, or US$0.14 per diluted share, for the second quarter of 2025, and up 31% compared to a profit of US$41.9 million, or US$0.14 per diluted share, for the first quarter of 2026. The quarterly comparison is explained by higher operational profit and lower tax expenses. Adjusted free cash flow for the second quarter of 2026 amounted to US$68.5 million, up 41% year-over-year compared to US$48.4 million in the second quarter of 2025, and up substantially compared to US$14.7 million in the first quarter of 2026. The improvement reflects the normalization of the temporary working-capital effects (including timing in tax-credit netting and receivables from advancement operations) that had weighed on the first quarter of 2026. As of June 30, 2026, dLocal had US$794.9 million in total cash and cash equivalents, which includes US$369.1 million of Corporate cash and cash equivalents. The Corporate cash and cash equivalents increased by US$115.3 million from US$253.8 million as of June 30, 2025. When compared to the US$451.8 million Corporate cash and cash equivalents position as of March 31, 2026, it decreased by US$82.7 million quarter-over-quarter, explained by the dividends payment and execution of the share repurchase program. Under the $300 million program authorized in March 2026, the Company has repurchased approximately 6.9 million Class A shares for US$86.1 million through the end of the second quarter. Before the date of this release, and following the Board of Directors’ approval of the Company’s financial statements for the second quarter of 2026, ended June 30, 2026, on August 12, 2026 we entered into a credit agreement with certain of our subsidiaries as initial guarantors and the lenders party thereto, providing for a U.S.$150.0 million senior unsecured credit facility. The facility matures on August 14, 2029, and is repayable in 11 equal, quarterly installments of US$13.6 million each, plus interest, commencing six months following the borrowing date, as specified in the Credit Agreement. Interest accrues at Term SOFR (Secured Overnight Financing Rate) plus 2.00% per annum. The proceeds of the facility are intended to be used for general corporate purposes. The following table summarizes our key performance metrics: Adjusted Free Cash Flow reconciliation We calculate “Adjusted Free Cash Flow” as net cash (used in) / generated from cash flows from operating activities, less (i) changes in working capital (merchant), and (ii) capital expenditures. The working capital (merchant) is defined as (i) changes in Trade receivables net (disclosed in Note 17 to our consolidated financial statements for the period ended June 30, 2026), plus (ii) changes in Trade payables (disclosed in Note 20 to our consolidated financial statements for the period ended June 30, 2026), plus (iii) changes in Other tax liabilities (disclosed in note 21 to our consolidated financial statements for the period ended June 30, 2026). Capital expenditures consist of acquisitions of property, plant and equipment and additions of intangible assets. Management uses Adjusted Free Cash Flow as a measure for evaluating the Company's cash generation and the cash available for distribution to our shareholders as dividends pursuant to our dividend policy. Adjusted Free Cash Flow is not a financial measure recognized under IFRS and does not purport to be an alternative to cash generated from operating activities or as a measure of liquidity. Our presentation of Adjusted Free Cash Flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS. See below for a reconciliation of our Adjusted Free Cash Flow to the nearest IFRS measure. The table below presents a reconciliation of dLocal’s Adjusted Free Cash Flow reconciliation: Note: 1 Changes in working capital (merchant) consists of (i) changes in the period in the balance of trade receivables net, plus (ii) changes in the period in the balance of trade payables, plus (iii) changes in the period in the balance of other tax liabilities. 2 Capital expenditures consist of acquisitions of property, plant and equipment and Additions of Intangible Assets. dLocal Limited Certain financial information Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended June 30, 2026 and 2025 (All amounts in thousands of U.S. Dollars except share data or as otherwise indicated) dLocal Limited Certain financial information Consolidated Statements of Financial Position as of June 30, 2026 and 2025 (All amounts in thousands of U.S. dollars) dLocal Limited Certain interim financial information. Consolidated Statements of Cash flows for the the three-month and six-month periods ended June 30, 2026 and 2025 (All amounts in thousands of U.S. dollars) About dLocal dLocal builds financial infrastructure for markets of the future, connecting global enterprises with billions of emerging market consumers in more than 60 countries across high-growth markets in Africa, Asia, the Middle East, and Latin America. Through the "One dLocal" concept (one direct API, one platform, and one contract), global companies can accept payments, send payouts, and settle funds globally without the need to manage multiple local entities and integrations. For more information, visit www.dlocal.com Forward-looking statements This presentation may contain 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 and operating profit. Forward-looking statements regarding dLocal and amounts stated as guidance 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,” 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. Starting in 2026, we provide guidance in respect of Operating Profit, which management believes is useful as a measure to compare our operating results to the operations of other companies in our industry, and to assess our operating performance independently of our capital structure, tax position, and non-cash depreciation and amortization charges. Investor Relations Contact: [email protected] Media Contact: [email protected] 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 second quarter financial information in this press release has not been audited nor has it been subject to any limited review procedures, whereas the annual results for the year ended December 31, 2025 are audited.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. DLocal’s share price is still down 74.8% over the past five years, yet the latest valuation work paints a split picture, with the intrinsic value estimate pointing to upside while traditional earnings based multiples lean the other way. The stock has declined 74.8% over five years, which means long term holders have seen a heavy drawdown that now frames any debate about upside. Strong growth in payment volumes and profits can support higher earnings expectations. However, any setback in execution or a change in growth assumptions may quickly weigh on what investors are willing to pay for DLocal. On Simply Wall St’s broader checks DLocal scores 4 out of 6, which points to a mixed picture rather than a clear bargain or obvious overvaluation. For investors, the debate is whether the current price already reflects the stronger growth story or if the intrinsic value estimate suggesting DLocal is undervalued by 37.1% still leaves a reasonable margin of safety. Find out why DLocal's -2.2% return over the last year is lagging behind its peers. The Excess Returns model looks at how effectively DLocal turns its equity base into profits above its cost of capital. For DLocal, the inputs show a Book Value of $1.88 per share and a Stable EPS of $1.31 per share, based on weighted future Return on Equity estimates from 6 analysts. That sits against a Cost of Equity of $0.27 per share, which implies an Excess Return of $1.03 per share and an average Return on Equity of 41.86%. The model also uses a Stable Book Value of $3.13 per share, sourced from 4 analyst estimates. On these assumptions, the Excess Returns framework points to an intrinsic value of $23.46 per share. Compared with the current share price, this implies DLocal trades at a 37.1% discount and screens as undervalued. Because DLocal lifted its 2026 guidance for total payment volume and gross profit, the gap between this intrinsic value and the market price suggests investors are still cautious about how much of that outlook to price in. Overall, the Excess Returns work up indicates that DLocal stock appears undervalued relative to what its projected profitability on equity would justify. Our Excess Returns analysis suggests DLocal is undervalued by 37.1%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DLocal. The P/E ratio suits DLocal because investors tend to focus on earnings for profitable payment companies. On this metric, DLocal trades on a P/E of 22.5x, which is above the diversified financial industry average of 16.9x but well below the peer group average of 57.5x. This places the stock between broader sector pricing and more highly rated direct peers. The tailored fair P/E from the model sits at 17.9x, based on DLocal’s growth profile, margins, size and risk. That is lower than the current 22.5x, which indicates investors are paying a higher multiple than the model suggests is warranted even after allowing for the company’s characteristics. On this framework, the stock screens as overvalued on earnings. On the P/E multiple, DLocal stock currently looks overvalued relative to the earnings level the model treats as a fair anchor. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for DLocal sit between the excess returns upside and the P/E based caution you have just seen. They spell out which combinations of growth, margins and earnings would need to hold for DLocal's stock to be worth materially more or less than today. Each narrative links a fair value estimate to a specific set of potential catalysts and risks so you can track over time which version of DLocal's story is unfolding. Community views on DLocal are sharply split, with one side focused on its cash generation potential and the other on structural risks in emerging markets. Bull case: 34% undervalued Read the full Bull Case to see why DLocal could be undervalued Bear case: roughly fairly valued Read the full Bear Case to see why DLocal could be overvalued Do you think there's more to the story for DLocal? Head over to our Community to see what others are saying! For DLocal, the intrinsic value work using the Excess Returns model points to undervaluation, while the P/E based view flags the stock as overvalued on earnings. That gap reflects different anchors. The intrinsic value estimate leans on how efficiently future profits might compound against the equity base, while the multiple view reflects what the market is currently willing to pay for that growth and risk profile. The key question from here is whether DLocal can sustain the growth and profitability that would justify both its current P/E and the upside implied by the intrinsic value estimate. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

DLocal (DLO) came out with quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.2 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -10.00%. A quarter ago, it was expected that this online payment company would post earnings of $0.16 per share when it actually produced earnings of $0.17, delivering a surprise of +6.25%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. DLocal, which belongs to the Zacks Financial Transaction Services industry, posted revenues of $399.66 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 11.07%. This compares to year-ago revenues of $256.46 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. DLocal shares have added about 1% since the beginning of the year versus the S&P 500's gain of 13.2%. While DLocal has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for DLocal was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.22 on $385.49 million in revenues for the coming quarter and $0.82 on $1.51 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial Transaction Services is currently in the top 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Klarna (KLAR), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 18. This Swedish buy now, pay later company is expected to post quarterly loss of $0.07 per share in its upcoming report, which represents a year-over-year change of +50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Klarna's revenues are expected to be $987.94 million, up 20% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DLocal Limited (DLO) : Free Stock Analysis Report Klarna Group plc (KLAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research