dLocal Reports 2023 Fourth Quarter and Full year Financial Results
- Impressive financial results for full year 2023 and Q4 2023 with Total Payment Volume reaching US$17.7 billion, up 67% YoY, and Revenue hitting US$650 million, up 55% YoY.
- Significant growth in Net Revenue Retention Rate at 150% and Gross Profit at US$277 million, up 37% YoY.
- Adjusted EBITDA of US$202 million, up 32% YoY, showcasing strong profitability and financial performance.
- Focus on emerging markets with growth in key regions like Brazil, Mexico, Africa, and Asia, driving revenue expansion.
- Challenges in Argentina due to temporary shifts in business mix and currency devaluation, impacting short-term performance.
- Strategic investments in license portfolio, banking partnerships, and team expansion to drive long-term growth and profitability.
- Appointment of new CFO, Mark Ortiz, and new independent Board member, Veronica Raffo, to strengthen executive team and governance.
- Reaffirmation of mid-term guidance with expectations of TPV growth, gross profit, and Adjusted EBITDA for 2024, showcasing commitment to sustainable growth.
- Short-term challenges in Argentina affecting business mix and gross profit margin.
- Sequential decrease in Gross Profit margin and Adjusted EBITDA margin in Q4 2023.
- Negative impact on net income due to non-cash effects and currency fluctuations.
- Downward trend in Adjusted EBITDA margin in Q4 2023 compared to previous quarters.
- Impact of higher expatriation costs on Gross Profit margin in Q4 2023.
Insights
The financial results of dLocal Limited highlight significant year-over-year growth in key financial metrics such as Total Payment Volume (TPV), revenue, gross profit and Adjusted EBITDA. The TPV's 67% increase indicates a robust expansion in the volume of transactions processed by the company, which is a critical indicator of market penetration and customer adoption. The 55% revenue growth aligns with the increase in TPV, suggesting effective monetization of the increased transaction volume.
Furthermore, the Net Revenue Retention Rate (NRR) of 150% is particularly noteworthy. An NRR exceeding 100% typically indicates that existing customers are spending more over time, which can be a sign of strong customer satisfaction and upselling effectiveness. The Adjusted EBITDA's 32% year-over-year growth, coupled with a high ratio of Adjusted EBITDA to Gross Profit (73%), suggests that the company is not only growing but also maintaining profitability despite scaling operations.
From a liquidity perspective, the generation of $166 million in Free Cash Flow (FCF) and a robust cash balance position the company well for strategic investments or shareholder returns. However, investors should be mindful of the potential volatility in emerging markets, as evidenced by the impact of the Argentine peso devaluation on the company's financials. This highlights the geopolitical and currency risks inherent in dLocal's business model.
dLocal's impressive performance in Brazil and Mexico, with revenue increases of 89% and 72% year-over-year respectively, underscores the company's strategic focus on key emerging markets. The entry into five new markets within a year signifies aggressive expansion and a commitment to capturing market share in high-growth regions. The company's ability to attract five of the six largest tech companies by market cap as clients is a testament to the platform's scalability and the trust large enterprises place in dLocal's payment solutions.
The emphasis on strengthening the engineering talent pool and investing in back-office capabilities indicates a long-term strategy focused on sustainable growth. However, the reliance on emerging markets, while offering substantial growth opportunities, also presents risks such as political instability, regulatory changes and economic volatility. Investors should consider the balance between the growth potential in these markets and the associated risks.
The reported growth in TPV and revenue from emerging markets such as Africa and Asia, which saw a 114% increase in revenue year-over-year, reflects broader economic trends where digital payments are rapidly expanding in regions with rising consumer and business digital adoption. dLocal's strategy to deepen relationships with global banking partners and grow its license portfolio aligns with the need for robust financial infrastructure to support this growth.
However, the company's forward-looking statements regarding expected TPV growth of 40% to 50% for 2024 suggest a deceleration in growth rate. This projected slowdown may be indicative of maturing markets or increasing competition. The focus on maintaining high EBITDA margins while investing for long-term growth presents a challenge in balancing short-term profitability with the necessary expenditures to sustain long-term market leadership in the rapidly evolving digital payments industry.
Full Year 2023 results
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Revenue of US
Gross Profit of US
Adjusted EBITDA of US
Fourth Quarter 2023
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dLocal reports in US dollars and in accordance with IFRS as issued by the IASB
MONTEVIDEO, Uruguay , March 18, 2024 (GLOBE NEWSWIRE) -- DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a technology - first payments platform today announced its financial results for the fourth quarter ended December 31, 2023.
“I am proud to share the extraordinary results we delivered during 2023. Despite facing market tests and macro challenges, our team continued to execute our strategy, investing with discipline, and putting our merchants at the center of everything we do. Our 2023 performance demonstrates the resilience of our value proposition and business model. We are now serving 5 of the 6 largest tech companies in the world as measured by market cap. Yet we have only begun to tap into the immense opportunity ahead of us. We remain committed to realizing our long-term ambition: unlocking the potential of emerging markets.
During 2023 we achieved a record TPV of US
We remain focused on driving gross profit dollars growth. Gross profit grew
We experienced sound growth across our diverse verticals. In 2023, our platform solution gained traction, especially with marketplace merchants, expanding into 5 key markets in just one year. From a geographic standpoint, we saw very strong performance in our key markets, Brazil and Mexico, with revenues increasing
We grew our global team from 726 in 2022 to 901 people by the end of 2023, located across 49 countries. We continue to build upon our existing strengths by making investments in key capabilities, including: 1) growing our license portfolio, with 10 incremental registries and licences granted in 2023, 2) deepening our relationships with global banking partners, adding more Global Systemically Important Banks, continental and nationally market leading banks for our processing, FX and hedging activities - around
We ended the year with a robust liquidity position, having generated US
Looking ahead, I am even more excited for what's to come. For 2024 we expect TPV growth of
Finally, let me share that after a few months working with Sebastian as co-CEOs, we will continue to collaborate closely and shape dLocal’s bright future but now from different roles. It is truly an honor and a privilege to share that I am taking on the role of CEO, while Sebastian is stepping down from his executive position but remains an active member of the Board and will be fully dedicated to leveraging his vast experience to lead the newly established Commercial, Business Development and M&A Committee as part of the company's Board of Directors. I am sure Seba will continue to be an instrumental piece in DLO’s long term successful story.
In addition, in another step to strengthen our executive team, I am thrilled to reveal that Mark Ortiz will be joining the company as Chief Financial Officer, commencing on April 15. Mark brings a wealth of experience, boasting three decades of senior financial leadership at General Electric. Mark's extensive background includes living, working, and traveling across over 20 markets, aligning seamlessly with our mission to unleash the potential of emerging markets. We extend our gratitude to Diego Cabrera Canay for his invaluable contributions to dLocal.
As we advance as a listed company, we are delighted to announce the appointment of Veronica Raffo as a new independent Board member, effective immediately. Verónica is a partner in FERRERE, a leading law firm in Uruguay, and participates actively in its management and strategic leadership. She has more than 25 years of experience advising high profile global clients in areas of labor law, compliance audits, and corporate governance. Ms Raffo is a member of the “International Bar Association”, a member of the IBA’s Committee on Labor and Industrial Relations, a Director at the Vance Center’s Project for the Advancement of Women Lawyers, and has consistently been recognized amongst the most reputed Uruguayan business leaders by the Corporate Reputation Business Monitor (MERCO). Veronica will replace Mr. Jitendra Gupta who has decided to step down from our Board. We thank Jitendra for his service since our pre-IPO process and the guidance he has offered the company over this time.
Finally, I want to make sure we thank our global team, our valued customers, and our investors for their continued support. They are what allow us to continue pursuing our mission of unlocking the potential of emerging markets.” said Pedro Arnt, CEO of dLocal
Fourth quarter 2023 Financial Highlights
- Total Payment Volume (“TPV”) reached a record US
$5.1 billion in the fourth quarter, up55% year-over-year compared to US$3.3 billion in the fourth quarter of 2022 and up11% compared to US$4.6 billion in the third quarter of 2023. - Revenues amounted to US
$188.0 million , up59% year-over-year compared to US$118.4 million in the fourth quarter of 2022 and up15% compared to US$163.9 million in the third quarter of 2023. - Gross profit was US
$69.7 million in the fourth quarter of 2023, up27% year-over-year compared to US$55.1 million in the fourth quarter of 2022 and a6% decrease when compared to US$74.5 million in the third quarter of 2023. - During the fourth quarter of 2023, the strong performance of our merchants across most of our markets was in part offset by our business in Argentina, driven by: 1) what we believe to be a temporary shift in business mix, with higher local to local revenues compared to prior periods as a consequence of tighter capital controls leading up to the year end government transition, and 2) impact from the significant devaluation of the Argentine peso towards the end of the quarter. Despite what we view as short term headwinds, we continue with our long term view that Argentina is a relevant market for us and our merchants. Excluding Argentina, revenues increased by
70% year-over-year and27% quarter-over-quarter, whereas gross profit grew by48% year-over-year and7% quarter-over-quarter. - Gross profit margin was
37% in this quarter, compared to47% in the fourth quarter of 2022 and45% in the third quarter of 2023. Sequentially, gross profit margin was negatively impacted by higher expatriation costs. - Gross profit over TPV was at
1.4% decreasing from1.6% in the third quarter of 2023 and from1.7% in the fourth quarter of 2022 mainly due to shifts in country mix and business mix, with lower share of pay-ins and cross-border volumes. - Adjusted EBITDA was US
$49.2 million in the fourth quarter of 2023, up22% year-over-year compared to US$40.4 million in the fourth quarter of 2022 and down11% compared to US$55.6 million in the third quarter of 2023. - Adjusted EBITDA margin was
26% in the fourth quarter of 2023, compared to the34% recorded both in the third quarter of 2023 and fourth quarter of 2022. Adjusted EBITDA margin contracted, in line with gross profit margin. - Adjusted EBITDA over gross profit remained best in class at
71% in the fourth quarter of 2023, compared to75% in the third quarter of 2023 and73% a year ago. - Net financial income was US
$1.0 million , compared to US$1.5 million in the third quarter of 2023 and compared to a loss of US$3.1 million in the fourth quarter of 2022. - Effective income tax rate was
21% in the fourth quarter of 2023 compared to17% in the fourth quarter of 2022 and18% in the third quarter of 2023, as a result of the country mix, with higher local-to-local share of pre-tax income and the non-deductibility of IFRS inflation adjustment. - Net income for the fourth quarter of 2023 was US
$28.5 million , or US$0.10 per diluted share, up47% compared to a profit of US$19.4 million , or US$0.06 per diluted share, for the fourth quarter of 2022 and down29% compared to a profit of US$40.4 million , or US$0.13 per diluted share for the third quarter of 2023. - During the fourth quarter of 2023, net income was affected by two non-cash effects: IFRS inflation adjustment accounting during a quarter of significant devaluation of the Argentine Peso, and exchange differences from USD liabilities held by our Argentina subsidiary during that period; these were partially offset by the fair value gain on our Argentine dollar-linked bonds. Adjusted Net Income (excluding these non-cash effects, in addition to other non-recurring items in line with our Adjusted EBITDA calculation) was
$40.6 million during the period.
The following table summarizes our key performance metrics:
| Three months ended 31 of December | Twelve months ended 31 of December | |||||
| 2023 | 2022 | % change | 2023 | 2022 | % change | |
| Key Performance metrics | (In millions of US$ except for %) | |||||
| TPV | 5,111 | 3,296 | 55% | 17,677 | 10,567 | 67% |
| Revenue | 188.0 | 118.4 | 59% | 650.4 | 418.9 | 55% |
| Gross Profit | 69.7 | 55.1 | 27% | 276.9 | 202.2 | 37% |
| Gross Profit margin | -9p.p | -6p.p | ||||
| Adjusted EBITDA | 49.2 | 40.4 | 22% | 202.3 | 153.1 | 32% |
| Adjusted EBITDA margin | -8p.p | -5p.p | ||||
| Adjusted EBITDA/Gross Profit | -3p.p | -3p.p | ||||
| Profit | 28.5 | 19.4 | 47% | 149.1 | 108.7 | 37% |
| Profit margin | -1p.p | -3p.p | ||||
Fourth quarter 2023 Business Highlights
- During the fourth quarter of 2023, pay-ins TPV increased by
59% year-over-year and8% quarter-over-quarter to US$3.7 billion , accounting for72% of the TPV. - Pay-outs TPV increased by
47% year-over-year and19% quarter-over-quarter to US$1.4 billion , accounting for the remaining28% of the TPV. - Cross-border TPV increased by
28% year-over-year and slightly contracted by1% quarter-over-quarter to US$2.2 billion . Cross-border volume accounted for44% of the TPV in the fourth quarter of 2023. - Local-to-local TPV increased by
86% year-over-year and22% quarter-over-quarter to US$2.9 billion . Local-to-local volume accounted for56% of the TPV in the fourth quarter of 2023. - LatAm revenue increased
42% compared to the fourth quarter of 2022 and contracted by3% quarter-over-quarter to US$131.5 million , accounting for70% of total revenue. In the fourth quarter of 2023, we continue to experience strong revenue growth in our largest markets, Brazil and Mexico. In Brazil revenues doubled year-over-year and increased12% quarter-over-quarter, whereas in Mexico, they increased59% year-over-year and18% quarter-over-quarter. The sequential contraction was mainly driven by Argentina. - Africa and Asia revenue grew by
121% year-over-year and103% quarter-over-quarter to US$56.5 million , accounting for the remaining30% of total revenue. Part of the growth was driven by Nigeria which revenues doubled year-over-year and increased by 3x quarter-over-quarter driven by the widening spread between the official and the parallel exchange rates, which conversely, also resulted in higher expatriation costs. Excluding Nigeria, revenues increased by144% year-over-year and by44% quarter-over-quarter in Africa and Asia showing the continued growth across Africa and Asia. - During the quarter, dLocal continued delivering strong revenue growth both from existing and from new customers. Revenue from Existing Merchants increased to US
$176.3 million in the fourth quarter of 2023. The net revenue retention rate, or NRR, in the fourth quarter of 2023 reached149% . - Revenue from New Merchants was US
$11.8 million in the fourth quarter of 2023.
The table below presents a breakdown of dLocal’s TPV by product and type of flow:
| In millions of US$ except for % | Three months ended 31 of December | Twelve months ended 31 of December | ||||||
| 2023 | % share | 2022 | % share | 2023 | % share | 2022 | % share | |
| Pay-ins | 3,701 | 2,334 | 12,823 | 7,905 | ||||
| Pay-outs | 1,410 | 962 | 4,855 | 2,661 | ||||
| Total TPV | 5,111 | 100% | 3,296 | 100% | 17,677 | 100% | 10,567 | 100% |
| In millions of US$ except for % | Three months ended 31 of December | Twelve months ended 31 of December | ||||||
| 2023 | % share | 2022 | % share | 2023 | % share | 2022 | % share | |
| Cross-border | 2,235 | 1,745 | 8,670 | 6,077 | ||||
| Local-to-local | 2,876 | 1,550 | 9,007 | 4,489 | ||||
| Total TPV | 5,111 | 100% | 3,296 | 100% | 17,677 | 100% | 10,567 | 100% |
The table below presents a breakdown of dLocal’s revenue by geography:
| In millions of US$ except for % | Three months ended 31 of December | Twelve months ended 31 of December | ||||||
| 2023 | % share | 2022 | % share | 2023 | % share | 2022 | % share | |
| Latin America | 131.5 | 70% | 92.9 | 78% | 492.7 | 76% | 345.4 | 82% |
| Brazil | 50.2 | 27% | 23.4 | 20% | 159.0 | 24% | 84.0 | 20% |
| Argentina | 10.5 | 6% | 14.2 | 12% | 75.1 | 12% | 77.6 | 19% |
| Mexico | 35.6 | 19% | 22.4 | 19% | 116.8 | 18% | 68.0 | 16% |
| Chile | 14.9 | 8% | 13.9 | 12% | 55.7 | 9% | 52.5 | 13% |
| Other LatAm | 20.3 | 11% | 18.9 | 16% | 86.1 | 13% | 63.3 | 15% |
| Africa & Asia | 56.5 | 30% | 25.6 | 22% | 157.7 | 24% | 73.6 | 18% |
| Nigeria | 28.4 | 15% | 14.1 | 12% | 84.0 | 13% | 33.8 | 8% |
| Other Africa & Asia | 28.1 | 15% | 11.5 | 10% | 73.7 | 11% | 39.8 | 9% |
| Total Revenue | 188.0 | 100% | 118.4 | 100% | 650.4 | 100% | 418.9 | 100% |
Special note regarding Adjusted EBITDA and Adjusted EBITDA Margin
dLocal has only one operating segment. dLocal measures its operating segment’s performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources.
Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the changes in fair value of financial assets and derivative instruments carried at fair value through profit or loss, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, and inflation adjustment. dLocal defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by consolidated revenues.
Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (“Operating Segments”), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segment’s performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocal’s performance measures may not be comparable to those of other entities. Finally, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA and Adjusted EBITDA over gross profit, which are forward-looking non-IFRS measures, because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.
The table below presents a reconciliation of dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin to net income:
| $ in thousands | Three months ended 31 of December | Twelve months ended 31 of December | ||
| 2023 | 2022 | 2023 | 2022 | |
| Profit for the period | 28,481 | 19,364 | 149,086 | 108,697 |
| Income tax expense | 7,476 | 3,935 | 29,428 | 11,586 |
| Depreciation and amortization | 3,604 | 2,457 | 12,225 | 8,147 |
| Finance income and costs, net | (996) | 3,071 | (11,394) | 6,590 |
| Share-based payment non-cash charges | 4,850 | 3,810 | 11,922 | 8,684 |
| Other operating (gain)/loss | - | (9) | - | 697 |
| Secondary offering expenses¹ | - | - | - | 89 |
| Impairment loss / (gain) on financial assets2 | (657) | 5,640 | (3,135) | 5,534 |
| Inflation adjustment | 6,040 | 132 | 12,537 | 1,037 |
| Other non-recurring costs³ | 434 | 2,014 | 1,663 | 2,014 |
| Adjusted EBITDA | 49,232 | 40,414 | 202,332 | 153,075 |
Note: 1Corresponds to expenses assumed by dLocal in relation to secondary offerings of its shares which occurred in 2021. 2In 2022, the Company utilized FTX Trading Ltd. (“FTX”) services for the repatriation of funds from one country. On November 11, 2022, when FTX filed for Chapter 11 bankruptcy in the United States, the Company had deposits of
Special note regarding Adjusted Net Income
Adjusted Net Income is a non-IFRS financial measure. As used by dLocal Adjusted net income is defined as the profit for the period (net income) excluding impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, and other operating (gain)/loss, in line with our Adjusted EBITDA calculation (see detailed methodology for Adjusted EBITDA in page 9). It further excludes the accounting non-cash charges related to the fair value gain from the Argentine dollar-linked bonds and the exchange difference loss from the intercompany loan denominated in USD that we granted to our Argentine subsidiary to purchase the bonds. In addition, it excludes the inflation adjustment based on IFRS rules for hyperinflationary economies. We believe Adjusted Net Income is a useful measure for understanding our results for operations while excluding for certain non-cash effects such as currency devaluation and inflation. Our calculation for Adjusted Net Income may differ from similarly-titled measures presented by other companies and should not be considered in isolation or as a replacement for our measure of profit for the period as presented in accordance with IFRS.
The table below presents a reconciliation of dLocal’s Adjusted net income:
| $ in thousands | Three months ended 31 of December | Twelve months ended 31 of December | ||
| 2023 | 2022 | 2023 | 2022 | |
| Net income, as reported | 28,481 | 19,364 | 149,086 | 108,697 |
| Share-based payment non-cash charges | 4,850 | 3,810 | 11,922 | 8,684 |
| Other operating (gain)/loss | - | (9) | - | 697 |
| Secondary offering expenses | - | - | - | 89 |
| Impairment loss / (gain) on financial assets | (657) | 5,640 | (3,135) | 5,534 |
| Inflation adjustment1 | 6,040 | 132 | 12,537 | 1,037 |
| Other non-recurring costs | 434 | 2,014 | 1,663 | 2,014 |
| Fair value loss / (gains) of financial assets at FVTPL2 | (50,754) | - | (78,640) | - |
| Exchange difference - intercompany loan in USD | 51,858 | - | 81,024 | - |
| Income tax expense on adjustments3 | 386 | (1) | 834 | 56 |
| Adjusted net income | 40,638 | 30,950 | 175,291 | 126,808 |
Note: ¹Following IAS 29 requirements, Argentina’s economy is considered hyperinflationary. In this sense, the financial statements of the Argentinian subsidiaries were restated to reflect the purchasing power of the currency and therefore a gain on net monetary position arose. ²During Q4 2023 we recognized a fair value gain of US
Earnings per share
We calculate basic earnings per share by dividing the profit attributable to owners of the group by the weighted average number of common shares issued and outstanding during the three-months and twelve-month periods ended December 31, 2023 and 2022.
Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all dilutive potential common shares into common shares.
The following table presents the information used as a basis for the calculation of our earnings per share:
| Three months ended 31 of December | Twelve months ended 31 of December | |||
| 2023 | 2022 | 2023 | 2022 | |
| Profit attributable to common shareholders (thousands USD) | 28,515 | 19,357 | 148,964 | 108,683 |
| Weighted average number of common shares | 290,657,015 | 295,455,429 | 291,982,305 | 295,623,703 |
| Adjustments for calculation of diluted earnings per share | 5,008,261 | 17,783,776 | 10,976,123 | 17,514,944 |
| Weighted average number of common shares for calculating diluted earnings per share | 295,665,276 | 313,239,205 | 302,958,428 | 313,138,646 |
| Basic earnings per share | 0.10 | 0.07 | 0.51 | 0.37 |
| Diluted earnings per share | 0.10 | 0.06 | 0.49 | 0.35 |
This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements”. The quarterly financial information in this press release has not been audited, whereas the annual results for the year ended December 31, 2023 and as of December 31, 2022 are audited.
Outlook full year 2024
- We are including TPV guidance this year, as we believe this is the most relevant operational metric for the company and the cleanest indicator of market share. Additionally, along with adjusted EBITDA and as we always emphasize, we also focus on maximizing absolute dollar gross profit growth. Thus, we decided to guide for growth profit as well.
- As outlook for the full year 2024, we expect to grow our TPV to between US
$25 t o US$27 billion and gross profit to between US$320 and US$360 million in 2024. Our expectations for TPV and gross profit assume increased mix coming from “Tier 0” merchants as we continue to ramp-up those global relationships, driving incremental TPV and wallet share from the world's leading tech companies, but at lower take rates. In addition, we see sustained growth in our local to local business, and mix of growth shifting to less mature markets, where our operations have not reached scale. Our gross profit outlook assumes normalization of foreign exchange spreads in certain dual currency rate markets. - In terms of profitability, we expect Adjusted EBITDA between US
$220 t o US$260 million and Adjusted EBITDA over gross profit margin around70% . - We are committed to running a financial model that combines robust mid term gross profit growth with an EBITDA margin that is best-in-class. As such we are re-affirming our mid term outlook of: 1)
25% -35% gross profit CAGR growth and 2)75% + Adjusted EBITDA over gross profit margin. Our 2024 outlook implies a temporary deviation from mid-term guidance as we prepare the business for sustainable long term growth. In 2024, we will invest primarily in tech, mostly to grow our tech team, followed by investments in operations and sales. As we look beyond 2024, once we conclude our short term investment cycle in tools, processes, and people, we believe we will start to see the operational leverage inherent to our business to kick in.
| FY2023 | FY2024 Outlook range | YoY Growth range | |
| TPV (US$ billion) | 18 | 25-27 | 40 |
| Gross profit (US$ million) | 277 | 320-360 | 15 |
| Adjusted EBITDA (US$ million) | 202 | 220-260 | 10 |
Outlook amounts for the full year 2024 are estimates and are based on current management expectations. Amounts are subject to change and we undertake no duty to update this outlook.
Conference call and webcast
dLocal’s management team will host a conference call and audio webcast on March 19th, 2024 at 8:30 a.m. Eastern Time. Please click here to pre-register for the conference call and obtain your dial in number and passcode.
The live conference call can be accessed via audio webcast at the investor relations section of dLocal’s website, at https://investor.dlocal.com/. An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov.
About dLocal
dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in more than 40 countries across APAC, the Middle East, Latin America, and Africa. Through the “One dLocal” platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and pay-out processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.
Definition of selected operational metrics
“API” means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, and service providers) to facilitate the money transfer process.
“Cross-border” means a payment transaction whereby dLocal is collecting in one currency and settling into a different currency and/or in a different geography.
“Local payment methods” refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets.
“Local-to-local” means a payment transaction whereby dLocal is collecting and settling in the same currency.
“Net Revenue Retention Rate” or “NRR” is a U.S. dollar-based measure of retention and growth of dLocal’s merchants. NRR is calculated for a period or year by dividing the Current Period/Year Revenue by the Prior Period/Year Revenue. The Prior Period/Year Revenue is the revenue billed by us to all our customers in the prior period. The Current Period/Year Revenue is the revenue billed by us in the current period to the same customers included in the Prior Period/Year Revenue. Current Period/Year Revenue includes revenues from
any upselling and cross-selling across products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, in respect of such merchant customers, and excludes revenue from new customers on-boarded in the preceding twelve months. As most of dLocal revenues come from existing merchants, the NRR rate is a key metric used by management, and we believe it is useful for investors in order to assess our retention of existing customers and growth in revenues from our existing customer base.
“Pay-in” means a payment transaction whereby dLocal’s merchant customers receive payment from their customers.
“Pay-out” means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocal’s merchant customers.
“Revenue from New Merchants” means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year.
“Revenue from Existing Merchants” means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year.
“TPV” dLocal presents total payment volume, or TPV, which is an operating metric of the aggregate value of all payments successfully processed through dLocal’s payments platform. Because revenue depends significantly on the total value of transactions processed through the dLocal platform, management believes that TPV is an indicator of the success of dLocal’s global merchants, the satisfaction of their end users, and the scale and growth of dLocal’s business.
Forward-looking statements
This press release contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events, including guidance in respect of total payment volume, gross profit, Adjusted EBITDA, gross profit CAGR and Adjusted EBITDA over gross profit margin. Forward-looking statements regarding dLocal and amounts stated as guidance are based on current management expectations and involve known and unknown risks, uncertainties and other factors that may cause dLocal’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” sections of dLocal’s filings with the U.S. Securities and Exchange Commission. Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof. In addition, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA and Adjusted EBITDA over gross profit, which are forward-looking non-IFRS measures, because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.
dLocal Limited
Certain financial information
Consolidated Statements of Comprehensive Income for the three-month and twelve-month periods ended December 31, 2023 and 2022
(In thousands of U.S. dollars, except per share amounts)
| Three months ended 31 of December | Twelve months ended 31 of December | |||
| 2023 | 2022 | 2023 | 2022 | |
| Continuing operations | ||||
| Revenues | 188,005 | 118,428 | 650,351 | 418,925 |
| Cost of services | (118,286) | (63,326) | (373,492) | (216,758) |
| Gross profit | 69,719 | 55,102 | 276,859 | 202,167 |
| Technology and development expenses | (4,024) | (1,607) | (12,650) | (6,348) |
| Sales and marketing expenses | (4,710) | (3,891) | (17,120) | (13,335) |
| General and administrative expenses | (20,641) | (17,471) | (70,567) | (48,343) |
| Impairment (loss)/gain on financial assets | 657 | (5,640) | 3,135 | (5,534) |
| Other operating (loss)/gain | - | 9 | - | (697) |
| Operating profit | 41,001 | 26,502 | 179,657 | 127,910 |
| Finance income | 57,913 | 5,732 | 128,228 | 18,078 |
| Finance costs | (56,917) | (8,803) | (116,834) | (24,668) |
| Inflation adjustment | (6,040) | (132) | (12,537) | (1,037) |
| Other results | (5,044) | (3,203) | (1,143) | (7,627) |
| Profit before income tax | 35,957 | 23,299 | 178,514 | 120,283 |
| Income tax expense | (7,476) | (3,935) | (29,428) | (11,586) |
| Profit for the period | 28,481 | 19,364 | 149,086 | 108,697 |
| Profit attributable to: | ||||
| Owners of the Group | 28,515 | 19,357 | 148,964 | 108,683 |
| Non-controlling interest | (34) | 7 | 122 | 14 |
| Profit for the period | 28,481 | 19,364 | 149,086 | 108,697 |
| Earnings per share (in USD) | ||||
| Basic Earnings per share | 0.10 | 0.07 | 0.51 | 0.37 |
| Diluted Earnings per share | 0.10 | 0.06 | 0.49 | 0.35 |
| Other comprehensive income | ||||
| Items that may be reclassified to profit or loss: | ||||
| Exchange difference on translation on foreign operations | (9,054) | 508 | (7,713) | 20 |
| Other comprehensive income for the period, net of tax | (9,054) | 508 | (7,713) | 20 |
| Total comprehensive income for the period, net of tax | 19,427 | 19,872 | 141,373 | 108,717 |
| Total comprehensive income for the period | ||||
| Owners of the Group | 19,463 | 19,870 | 141,255 | 108,708 |
| Non-controlling interest | (36) | 2 | 118 | 9 |
| Total comprehensive income for the period | 19,427 | 19,872 | 141,373 | 108,717 |
dLocal Limited
Certain financial information
Consolidated Statements of Financial Position as of December 31, 2023 and December 31, 2022
(In thousands of U.S. dollars)
| 31 of December, 2023 | 31 of December, 2022 | |
| ASSETS | ||
| Current Assets | ||
| Cash and cash equivalents | 536,160 | 468,092 |
| Financial assets at fair value through profit or loss | 102,677 | 1,295 |
| Trade and other receivables | 363,374 | 240,446 |
| Derivative financial instruments | 2,040 | 1,206 |
| Other assets | 11,782 | 56,789 |
| Total Current Assets | 1,016,033 | 767,828 |
| Non-Current Assets | ||
| Financial assets at fair value through profit or loss | 1,710 | - |
| Deferred tax assets | 2,217 | 362 |
| Property, plant and equipment | 2,917 | 2,734 |
| Right-of-use assets | 3,689 | 3,934 |
| Intangible assets | 57,887 | 51,443 |
| Total Non-Current Assets | 68,420 | 58,473 |
| TOTAL ASSETS | 1,084,453 | 826,301 |
| LIABILITIES | ||
| Current Liabilities | ||
| Trade and other payables | 602,493 | 407,874 |
| Lease liabilities | 626 | 686 |
| Tax liabilities | 20,800 | 11,695 |
| Derivative financial instruments | 948 | 544 |
| Provisions | 362 | 1,473 |
| Total Current Liabilities | 625,229 | 422,272 |
| Non-Current Liabilities | ||
| Deferred tax liabilities | 753 | 1,016 |
| Lease liabilities | 3,331 | 3,393 |
| Total Non-Current Liabilities | 4,084 | 4,409 |
| TOTAL LIABILITIES | 629,313 | 426,681 |
| EQUITY | ||
| Share Capital | 591 | 592 |
| Share Premium | 73,065 | 164,307 |
| Capital Reserve | 21,575 | 16,185 |
| Other Reserves | (9,808) | (1,448) |
| Retained earnings | 369,608 | 219,993 |
| Total Equity Attributable to owners of the Group | 455,031 | 399,629 |
| Non-controlling interest | 109 | (9) |
| TOTAL EQUITY | 455,140 | 399,620 |
dLocal Limited
Certain interim financial information
Consolidated Statements of Cash flows for the three-month and twelve-month periods ended December 31, 2023 and 2022
(In thousands of U.S. dollars)
| Three months ended 31 of December | Twelve months ended 31 of December | |||
| 2023 | 2022 | 2023 | 2022 | |
| Cash flows from operating activities | ||||
| Profit before income tax | 35,957 | 23,299 | 178,514 | 120,283 |
| Adjustments: | ||||
| Interest income from financial instruments | (7,159) | (5,743) | (49,588) | (18,114) |
| Interest charges for lease liabilities | 110 | 44 | 578 | 177 |
| Other finance expense | 2,503 | (11,881) | 5,623 | 3,851 |
| Finance expense related to derivative financial instruments | 5,497 | 17,076 | 28,013 | 17,076 |
| Net exchange differences | 50,100 | 12,311 | 82,620 | 1,877 |
| Fair value loss on financial assets at fair value through profit or loss | (50,754) | 11 | (78,640) | 36 |
| Amortization of Intangible assets | 3,251 | 2,082 | 10,816 | 6,891 |
| Depreciation of Property, plant and equipment | 156 | 208 | 782 | 738 |
| Amortization of Right-of-use asset | 197 | 167 | 627 | 518 |
| Revenue reduction related to prepaid assets | - | 108 | - | 565 |
| Share-based payment expense, net of forfeitures | 4,850 | 3,810 | 11,922 | 8,684 |
| Net Impairment loss/(gain) on financial assets | 2,796 | 64 | 318 | (42) |
| Inflation adjustment | 9,041 | - | 9,041 | - |
| 56,545 | 41,556 | 200,626 | 142,540 | |
| Changes in working capital | ||||
| Increase in Trade and other receivables | (51,154) | (11,565) | (123,246) | (49,438) |
| Decrease/(increase) in Other assets | 13,258 | (52,687) | 45,007 | (56,015) |
| Increase in Trade and other payables | 52,654 | (15,732) | 194,619 | 130,714 |
| Decrease in Tax Liabilities | (6,591) | (961) | (10,967) | (4,245) |
| (Decrease) / Increase in Provisions | (275) | (67) | (1,111) | (237) |
| Cash from operating activities | 64,437 | (39,456) | 304,928 | 163,319 |
| Income tax paid | (2,996) | (1,912) | (11,475) | (8,868) |
| Net cash from operating activities | 61,441 | (41,368) | 293,453 | 154,451 |
| Cash flows from investing activities | ||||
| Acquisition of Property, plant and equipment | 21 | (128) | (965) | (987) |
| Additions of Intangible assets | (4,757) | (3,650) | (17,260) | (11,365) |
| Payments of contingent consideration | - | - | - | (665) |
| Acquisitions of financial assets at FVTPL | (15,847) | - | (117,517) | - |
| Net collections of financial assets at FVTPL | 3,721 | 191 | 1,487 | (327) |
| Interest collected from financial instruments | 7,159 | 5,278 | 49,588 | 17,649 |
| Net cash provided by / (used in) investing activities | (9,703) | 1,691 | (84,667) | 4,305 |
| Cash flows from financing activities | ||||
| Repurchase of shares | - | (2,021) | (97,929) | (2,021) |
| Share-options exercise | - | 215 | 153 | 3,939 |
| Borrowing proceeds | - | - | - | 14,782 |
| Borrowing repayments | - | (14,603) | - | (19,967) |
| Interest payments on borrowings | - | (1,600) | - | (1,600) |
| Interest payments on lease liability | (110) | (44) | (578) | (177) |
| Principal payments on lease liability | (315) | (266) | (1,103) | (391) |
| Lease cancellation | - | 5 | - | 5 |
| Finance expense paid related to derivative financial instruments | (7,640) | (19,646) | (28,443) | (19,646) |
| Other finance expense paid | (2,851) | 2,109 | (5,971) | (2,251) |
| Net cash (used in) / provided by financing activities | (10,916) | (35,851) | (133,871) | (27,327) |
| Net increase in cash flow | 40,822 | (75,528) | 74,915 | 131,429 |
| Cash and cash equivalents at the beginning of the period | 498,165 | 542,298 | 468,092 | 336,197 |
| Net increase in cash flow | 40,822 | (75,528) | 74,915 | 131,429 |
| Effects of exchange rate changes on cash and cash equivalents | (2,827) | 1,322 | (6,847) | 466 |
| Cash and cash equivalents at the end of the period | 536,160 | 468,092 | 536,160 | 468,092 |
Investor Relations Contact:
investor@dlocal.com
Media Contact:
marketing@dlocal.com
FAQ
What was dLocal's Total Payment Volume for the full year 2023?
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