DLO - Earnings call transcript Q2 2021

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Operator

Hello, everyone. Welcome to DLocal's Second Quarter 2021 Results Conference Call. This event is being recorded. At this time, all participants are in a listen-only mode. After the DLocal management team concludes their personal remarks, prepared remarks, there will be a question-and-answer session. to call going to I'm Instructions] turn over the DLocal. [Operator

Unidentified Company Representative

quarterly Welcome call to operator. earnings our Thanks, first conference IPO. after our

As presentation shortly is after also is available. The and DLocal's this event be live also at reminder, available will website the webcast through maybe is being where investor.dlocal.com the replay via access a broadcast event concluded.

currently DLocal's this any the presentation Before assumptions, in conference are projections proceeding, events. included call let about and forward me statements available based expectations, and on mention current mentioned in information that future or

this company those While forward-looking to and these Commission, projections available in and discussed variety for forward-looking on or and reasons, included Risk place described registration lieu that Relations Investor those information, filings the sections reasonable currently other available a with from Form statements on website. including Exchange reliance statements. believes DLocal's statement and presentation Actual in their of assumptions, of which Securities not undue DLocal's on are are the results Factors expectations, you on may cautioned DLocal's F-X are conference call materially of in the differ

begin will Officer. to Chief over Now, Seba, the presentation. Sebastián our you Kanovich, turn I conference may your Executive

Sebastián Kanovich

Chief X, are company. joining Officer. everyone Pandit, XXXX I'm our our for our joined first to we interest you June and an after Diego This results our and and our our your on call business by is update thank we earnings IPO our present Chief excited thanks Hello on Financial and conference for Canay, Cabrera Sumita quarter second call. Today. Operating Officer; in

X. Slide Let's get right into on it

hear are you We for first are to some the us aware our that story joining of time.

what the recap believe we a we our providing problems is and merchants of are who are are addressable our addressing we market. for we what are, So

on of growth We an a financial performance. provide followed will of our future by vectors then our update review

end. Q&A a at time leave will session We the for

enables DLocal billions consumers. we? seamlessly So global market who merchants of with are emerging connect to

single contract Our a platform, One merchant. presents dLocal, global solution, single integration and single API,

We of our merchants are across emerging Kuaishou, our America, Microsoft, some supports InDriver count markets Today, Wix. BXB our we global as customers, largest Rappi, merchants Africa are such Asia. focused and XX and as infrastructure entirely Mailchimp, in to proud and Latin Wikimedia, the

Now to results. the

The second quarter compared quarter Total when quarter grew year-over-year to of has ever. XXXX, the been second volume, billion US$X.X our process best reaching the XXX% quarter. during TPV,

first quarter quarter. company we this single Our represents it's the in have a the as TPV for a time US$X billion milestone surpassed

our XXXX. our As XXX% may remember, quarter in grew TPV first year-over-year of we you

So our growth has continued as well to as accelerate both year-over-year quarter-over-quarter.

the revenues growth million, XXXX second Our second year-over-year compared $XX XXX% the increased quarter in to representing to of of quarter XXXX.

from benefit high margin adjusted Slide briefly QX as cost let to well XXXX as with continues our us compare maintain as X, continue along discipline we year to EBITDA our and XXXX XXXX. business Our efficiency QX growth. vis-à-vis full performance

We every have with financial metric you. have discussed we improved

versus second quarter XX% QX. $XX of $XX growth million million quarter-over-quarter Our revenue is in

year XXXX. XXX% growth compared XX% full QX XXXX of revenue QX to and Our in XXX% in

XXXX. KPI QX in achieved highlighted rate XXXX retention we revenue already have key versus full XXX% previously year We as impressive and the QX a in in net XXX% metric XXX% retention net an XXXX [indiscernible],

XXXX quarter its goes continue stages operate as of XX%. consumers and through adjusted our adjusted EBITDA Our EBITDA QX for QX with in margin margin than at that pandemic evolve on adjusted our and in higher the the in. margin multiple different countries comparison EBITDA in remains first their we stable XXXX XX% to the behaviors Merchants

on these payment and new to We changes will to effect a and believe cost adoption alternative business. methods. seeing wider have stay continue are positive are We less behavior more consumer utilization, of here our

in growth business continued merchants we our During our both seen existing from using new and this platform. quarter, have

global Our merchants. focused remain continued serving our will has to and on thrive employee base

of or This embraced be is for model us. work, not have office new we our from. a home choose as employees hybrid continue work work We to to about flexible

pre-COVID, physical location, a to had given and of flexible market roster As seen network. our emerging in approach we merchants global extensive

example, based us while on three Diego this is calling in For California, from in Sumita the different call of I'm Uruguay. and locations. are today in Israel, is

Africa efforts our presence continued Southeast front in have We expansion and our the growing Asia. on

half of We launched in countries new have this four first the year.

XX in merchants the plus of quarter new second We added XXXX. have

benefit from as diversification streaming, growth advertising, our of return across retail, of has verticals as work to the the gradual continue from to economy. We opening benefited post-pandemic this such accelerated so business verticals, and some

Our with investment in previous our our with quarter, margins continued remained people. have and even stable infrastructure in comparison

continued as our technology invest key and platform in to tremendous people, above in of products markets, The to our in we to functions. growth. We DLocal strengthen merchants headcount and XXX% have employee we We grew opportunity the intend and serve, and hire count we continue see pursue in year-over-year. that

disciplined and coming growth continue has decrease in intend and in quarters. to date profitability Our till investing us position. our a therefore with approach We to the unique growth may provided margins

our are addressing? our we three will primary are will merchants. maintain brought that we to discipline problems for challenges every X, We this are contribute are the to dollar margin. that what our ensure Slide There new solving we

rapidly building are methods are access more even in payments methods markets the XX participate that, are replaced consumers fragmentation this available continued commerce. newly for we nature to Cash without the methods consumers Merchants as diverse seeing countries trend offering royalties payment very are digital online end in and to themselves. we local of getting opportunities payment growing methods. payment top adopt by First, On a serve. by keen of digital

our keeping and lower rates friction multiple for simple high conversion on third, emerging Second, acquirers in may get And payment achieving a and deliver challenge to merchants. We while automatic under routing control healthy fraud conversion transactions validation dynamic we through complex methods. rates is markets.

as imagine would markets in the serve, to merchants two Slide with may no A offer user, payments our you FX capabilities are user an know processing emerging market fund transaction collection, market frameworks direction region X, delivery We in who a ride-hailing user of global management, to pay-in to regulatory from enable opposite or A pay-in this those of emerging traveled changing any a global company withholding For management flow you fund tax typical a same. merchants. merchant tax we emerging requires markets FX settlement. fund fund merchant up the in enterprise a merchant routing have pay-out requires a the the keep processing you from the we our merchant will, payments and an management, to disbursement flow typical and to pay-outs you smart and income for and worker, food markets. remember, driver if payment collection. tax both

payment methods, platform local notes, alternative enables of by our as cards, banks wallets, as Our all local this and payment including XXX institutions. and acquirers, to bank well leveraging plus methods, connectivity nonfinancial

ourself to are and markets instead local connect We the acquirers where operate. acquirer in not we multiple an

have to recently issuance-as-a-service global launched, We our merchants.

current Sumita you. We a complementary have with to launched our to offering. product be our this first merchant over to expect pilot highly product and

Sumita Pandit

Thanks, Seba. Slide X.

the tailwinds, expanding They goods, and the global in driving had equalization the such rise than purchasing investors in consumption online services buy power continues expand is that countries to, rise their even purchasing goods have that trends. is as the a that power have towards quickly outside developed the keen merchants middle their domestic is pursue business economies of more move products benefits growth. and users meeting Western by industry always going increasing aspirational class markets their of promised the from to Our physical commerce, of is to Global with economy are of digital along across forecast. access growth to strong the there and these digital globalization borders that own trend

and of second payments the organically a global We border continue result, makes powerful. XX% growth our measure first than AMI we local our trillion the process China a the which to Also, merchants, grew local the and The estimated of of pay-ins, achieved even cross very a billion not an than China. blur. both for full-year expected higher versus is market implies pay-outs. be this addressable not $X.X growth quarter, at Slide of of all year-over-year in includes AMI TPV $X.X of We however, XXXX, basis. ahead percentage of serve volume traditional complexity countries was E-commerce is e-commerce at countries serve, year-over-year to grow our in pay-outs volume markets our opportunity XXX% annual half commerce expects is the by trillion $X.X does quarter us. market serve. small to volume, we more in solution merchants. the quarter. of commissioned impressive on increase with in our our share in As an transactions. billion grew a because This And processed TPV for XXXX study we borders trillion US$X.X volume pay-outs grow XXX% X. to to include is comprised We In in XX% which minimal rate. the TPV, we is at first fraction of a XX%. of pay-ins to we we e-commerce what $X.X This our therefore we

Sebastián Kanovich

and geographic growth, product We vectors expansion primary have of three commercial efforts, expansion.

to three growth cross we of On through account levers, availability merchants, add management the are commercial sell to on new side, our availability and focused effort clients. organic

of front, portfolio On and with improvements launch and features with pay-outs, in new the our the our product continue enhance lines. product together product pay-ins we to development for

presence our we operate, are constantly On into significant we new countries. deepening together with in the our expand where to efforts vector, geographic the expansion countries offering currently

platform and of example Vietnam, added an the in we to latter, QX. Guatemala have our Malaysia, As

are platform, the leverage financial merchant our the a business operating of power our Our results relationship. of our of stickiness and the of reflection

pursue of and flow strong our EBITDA XX accelerate margin, We Rule vectors, supports call of Our our some expansion. three XXX% plan XXXX, any XXX% The plus was in that revenue will strategy in growth XXX% this business XXXX the may to of an opportunities QX XXXX. inorganic generation or growth commercial to also you believe metric, geographic time of We efforts, including market. accelerate our cash product, QX that in to as inorganic

Sumita Pandit

new expansion with click merchants. and Slide growth Let's XX, our commercial in saw double relationships existing these vector. three on We vectors.

that Asia. actively including China and market their We Latin expand in America, Africa local merchants are into targeting to expand are looking outside globally, and

growth retention in is organic a increase countries as this wallet of per shown increase of and merchant our payment slide function rate per in merchants, products merchant. net Our merchant, increase of in methods of our per our merchants, increase on share in

$XXX revenues under with with including content KPI. of a merchants versus new measure of dollar revenues $XX global plus this the U.S. QX XXXX. QX us. launched in We that from key set $XXX rate was in measured We we a efforts clients, the relationships. provider new we social indicates comparison. this existing calculate sharing from launched QX by improving our our KPI QX a us year-over-year change.org, This product from continued video XXXX, on in million merchants merchant it that NRR onboarded merchant new lip-syncing million last had merchants We've short four XXX% a considered onboarded is merchants to XXXX, in a video XXXX became existing and that vector. a Therefore, countries QX XX, Revenues same improve develops of in obsessively the rolling for retention platform predictability year-over-year on coming strength countries Slide and a is network as our a our merchants. by platform months a is that XX clients Revenues This an in the for commercial $X net app basis. our are in with quarter, from a XX XXXX. in measuring XX

we bring this Our static. to fund journey we always credit, new or we payment remain transfer, my added competitive dynamic solution as Emerging in to both card new never our it and to advantage. allow debit markets our we is changing with enabling to in existing we continued new enhancements product as quarter, payment innovation methods, is such processing our In improved methods. the agile we add to features, pay-in FlexibleScheduler tax and TaxManager need biggest, believe handling markets redundancy are integrations our added

banks, live profiling app solution, expanding mobile with fraud enhanced countries. tailored and We with in pay-outs partners other added with We in learning added and device We through and KYC APK. pay-out improved with and data direct new also our capabilities tools our went machine for ID verticals. improvements. went more Brazil fingerprinting our live and connections gaming We we retail instancy our new models among and own fixed

lines and XXXX. merchants in in added local in consumers easily create solution countries issue reach of network emerging of Slide of millions new enables vector. issuance-as-a-service We’ve currencies XX, to cards to our Our geography the half prepaid four revenue to first markets.

not the to growth is is merchant open to strategy extent innovate disciplined strategy. Our a possible country. in waiting we This of our a new example a and have in vacuum when an

know expansion both is Our we go for ask as strategy demand. the will as there markets local-led is is be that that a merchants where where merchant-led solution that we our us well

We are performance. not any single dependent country on for our

by forecast country. don’t performance also our We

our as see benefits on growth measuring by across are strong a verticals diversification. focused We solely from performance year-over-year XX. Slide merchants. growth We with XXX% our business TPV our

on vertical. and outlook of the growth as verticals ride seeing started continued that XXXX. travel and not see volumes in quarter Our in in the performance single business dependent We any is strong return healing industry first of such model

are multiple verticals going and growth We financial highlights. our accelerated to now advertising seeing such review financial hand Diego also it streaming, to to I’m over in as services. retail,

Diego Cabrera Canay

Sumita. Thanks,

the as second QX benefits XX% see Let’s operations ride growth verticals on fiscal have started were in We to XXX% we we start five in ago, in an with quarter that average affected our TPV and such travel XXXX. almost TPV years XX. our Since growth double XXXX. compared the This with acceleration our in Slide hailing from XXXX year-after-year. of year specific

all growth such financial advertising tremendous other and as seeing verticals in the also retail, are streaming, We services.

QX pandemic we year-over-year. XXXX XX% me the highlight in still had that of during even Let heart the grown

the half growth. had growth maybe significant While seen as the strength of we expect XXXX year, our in second to of see in the remainder continued normalized comparable percentage quarters business the the already in

Let’s move to XX. Slide

growth XXX% and Our of year-over-year million, XXXX second growth revenues QX quarter from the quarter-over-quarter in reached XXXX XX% $XX XXXX. QX from

volumes ratio XXXX. ratio merchants, changes it in our TPV versus price is TPV of This swung underlying ratio over of X%. or XXXX in also as take with some increase, the over business mix. portion we the take set QX equal we largest ratio X.X% agreements. our volumes business pay-in This great business with X.X% to rate bring resulting our in was higher rate revenue decreases merchant revenue had XXXX. a on Our larger our for in that to in tiers volumes In overall This decreases the QX is had merchants the XXXX by based of but given largest as typically in Higher they ratio EBITDA. our incremental a

Slide to switch XX. Let’s

adjusted pleased are XXXX in improvement quarter-over-quarter million We EBITDA QX $XX.X XXX% with grew year-over-year EBITDA. very and growth growth. adjusted our continued our In XX% to

quarter remains margin points stable XX% and Our since adjusted basis improved last EBITDA year-over-year. at XXX

in wages stock-based of of public and the process. with X.X% therefore $X million, TPV as mix. of to may of our compensation by discipline that technology. Operating million coming initial second million driven decrease offering quarter double the in additional of talent have We services drive growth headcount and dropped year-over-year expenses $X.X portion brought growth Cost board. have result margin mainly that to achieved people, secondary platform and as million mainly in key every XXXX salaries $X.X expenses on the the to XXXX, a maintaining TPV for grew continue investing and related business our profitable we dollar we $XX.X and X.X% quarter for to grew while invest the this we our of We second to of continued in our in to intend quarters

in merchants revenues year-over-year are million Slide that $XX of existing us same merchants growth from are revenue respectively. operating those merchants from year. year. started with million were driven XXXX, with of that quarter that existing QX processing the came that the $XX comparable continue are after And revenues the XXX% and and already are merchants came by $XX merchants. driven The last XX. Revenues million revenues were those merchants in new XXXX new million from by same last from numbers QX quarter Let’s $X Of for

see revenue mentioned, compared to in they XXXX quarter. with Switching six quarter merchant XXX% The first quarter. our net per rate KPI second to in compared our of per XX. the we the that reached second to Slide sequentially have seven look retention countries improve. continued first number to continues of of at improve XXX% the merchant average in an already As the When outstanding in quarter XXXX to we

capability payments we more bring we operate. the countries reach to With same significant methods while built to Given to quarter, continue first XX merchant the is And than countries I will our payment offer XXX that more back per already we compared that, applies our to Seba to network turn to the XX in have we there in XX merchants in it methods that payment the to geographies. conclude.

Sebastián Kanovich

Thanks, our Slide are conclusion as strengths five follow. In On XX. Diego.

large a First, emerging market addressable expanding we and have ecosystem.

with direct have online we Second, integration a merchants world. of the in the some largest

our makes single the clients. scalable Fourth, complex this is for diversified our and beginning. disciplined API are Third, just with And our a across infrastructure growth combined is simple our verticals profitability. rapid technology fifth, And we merchants.

operator joining of strategy. Thank focused, merchants and our users remain as execute up emerging questions. to agile market enable we to our it for continue with you to on the now humble will We today. I open global and billions us connect for growth request

Operator

from Jorge Instructions] Our Kuri first question [Operator Stanley. comes Morgan with

your with proceed may You question.

Jorge Kuri

and two the I I have numbers. on everyone afternoon, congrats questions, may. Good if Hi.

Could Can what one Xx any a are? you sense little those first merchants? pretty merchant give uptake more did potentially $XX new How of the growth is your new growth. on of was be? That’s your top of a quarter. than us evidently of previous them large one new they of be who you a spectacular very The big XX bit million merchants merchant in can

So of then net what around XXX%, provided you of in see you assuming there. the retention this XXX% I’m large ahead there’s trending had the did clients well is How year? the on of well you of this rate And XXX%. number some your half revenue last of soft second guidance second question really is year, Thanks. ahead evidently do

Sebastián Kanovich

Thanks, for joining for us. thanks Jorge. Thanks much very

is an make that question So think metric. that to clarification on your first trailing a this I is important

customer there on taking merchants So ago. year as in a account that are we into we’re new every

So onboard. to a than was trigger a you'll value onboarding By important said U.S. see that's content that, the believe on revenue customers able in sharing been talked we the her compound. are some them need new strong into starting that number Having been yes, point. sure including remarks are adding we app. our social excited a having network, us, Sumita new retention where these short to more trajectory the want, if geographies, is it's net and continues And starts extremely what we able products then it's where to win, ability to for this provider quarter make of they evolve. rather Yes, merchants we've we and continuing, of to of we've the starts Jorge, very video to

want And the we've see been question next around come. quarters to it? So current to we their be in growth you revenue excited many are retention, your the second to Sumita onboard, able take to definitely net hopefully but we'll ones able with

Sumita Pandit

sure. Yes. here. I outside, the we that methodology carefully step sure to want Happy and question, understand Jorge make Yes, the

$XX months. from quarter in see in second used that that revenues $X that's any you revenue And clients we from XXXX, in reason million the be when the see XX XXXX. quarter number and clients last second to that new So increases the was number new million

number would On I could million. And number. of that in into QX versus that this so quarter what that big looks million QX, added us. is last of fantastic or that last $XX be a of the million $X has year been guidance, to for QX comparison we that that QX $XX your year, in it say And on a of all client question why or year that's this aggregates

at the the reason the middle in rate so right XXXX high of in pandemic. was you lower we the And slightly quarter. If are are look the numbers, benefit getting year-over-year year that the base of growth also percentages a the last is second QX

the we've than the quarters not look in quarters, we I expect out numbers growth predict able quarter, were QX would our what that to achieve of been dollar QX of good, year. look last year because to but think, QX next two and as similar are we over second last rates a stronger I percentage to

Jorge Kuri

Thanks.

a type to their are not you of what and backward. amount Sorry are first or be adding up question could merchants And so again, push they're ramping But, large much of so this my whether there so rapidly? that new bringing revenues stands, bigger. revenue such

do, how even can get help ramp XX try sense from up top can think of sort very helpful revenues – from like to what are to your really Thank they useful up trying revenues, it can So go if what how names you revenues on these we're understand you. the be And would better be how big us are to would here. understand, clients, I who are here? a they’re

Sebastián Kanovich

Sure.

Okay.

worth it's discussing first on. conceptually I think all, we focused who So of

we've some there. more last been the we the during announced only not out those the ambitions but quarter, you companies But leader partnerships discuss to with can many on one see than those read areas. of of that some companies in would our of that during their Obviously, the serving – are we with some together in country are respective tried we've of names We to able we are world these operate to largest the names them. make to in that those and state are website. And And world's year. sure the the have would – get you disclose

extremely was a as will out standpoint. we our Sumita Well, are have much, on impressive be believe there. for them much We and we So those numbers very touching to them. a of are become customers obviously proud the lot of bigger, expectations

in the We of serve, we those are ahead. going are ocean clearly which to burden driven still we And companies in in are have a emerging volumes drop largest the be idea type the of the opportunity that the the by are markets world. of we

we're would it, give names, those I are. but you it of I the who further that's love – So to that's hope – merchants some how that's clarification

Jorge Kuri

That's Thanks. Congrats again, fine. numbers. great

all So the thank you. best,

Operator

Thank you.

comes question Labarta next Our Tito Sachs. from Goldman with

with You question. may proceed your

Tito Labarta

on Good a strong the kind results. – Two questions strong the very afternoon, most Jorge's on also merchants, the merchants. on given questions growth didn't coming of to congratulations at of growth growth a you new piggybacking from expected a existing the more of bit little you first but had the IPO, be mentioned bit,

upside there even above can too that going here do that you're XXX%, you you to it XXX% initially think well conservative, was post are expected? XXX% I here, Is Thank soft something where that, last from had IPO question on should that year, more from to out accelerate you XXX%, you XXX%, you more You I which you. it, capture to have than assume? to like new on looks above you the merchants, right, I that merchants looking fair boost well, net that that new guidance more XXX% growth. forward And up the has So that the than be for that maybe get at merchants understand XXX% rate, you is mean, can and XXX% back, right? guess, revenue changed also boost to it should I had given growth from guided just before, like maybe rephrase on the comps XXX% following to Jorge's question, a to IPO. second that but there can sense, you the then new think guess retention

Sumita Pandit

I is question merchant with, back to come can on which rate, retention new the and can your I on question. net then let's question Tito, start own

time, the net reason, by of retention about was number that the rate, as way, time, longer the you our the retention XXXX, number at see trends. cohorts of when We over stable. spoken period period is we look also at over at look if slightly XXX%, a actually a XXX% rate XXX% look year quite to cohorts net for our we've the full On remember our we the may we and that

to the I merchant that term, in think In the that as initial those rate we've stabilizes net is we it as past. the consider think our in years, a high, mature. be really when with could So medium retention NRR but cohorts you the right add still we really, discussed

So the still therefore retention net are XXX% term right to the that medium still we've XXX% And we think it's rate. what modeled.

because In terms question, we first down the I added actually was of it's some your months, part rolling related large we've that measure. merchants, as in new your which to will XX come that number of the very think mentioned, actually merchants the last

new these QX our These were we’ve in are added mind, in not are any only XXXX. local merchants this not of in in merchants keep that So quarter. business

months. last So new in motions XX it's measure a rolling the any of

last client the And that new to so we've contributing that in added XX some are number. merchants months

the that quarters two rolling number that next We changes. measure come in down to as expect

Sebastián Kanovich

These is that, growth having compliment on for ability just the on new the sorry, – are to new geography. sorry, other products, merchant of on driver new new both products having –

at not the yes, of ahead expect do there's platform. a additional in believe quarter. did we the mid able new you plenty necessarily But additional customers this long merchants, more term, around, to bring what we to that through terms continue capabilities, be products, we be pace of is into opportunity adding logos to to won? through are So on the geographies, additional we'll question And there had through

Tito Labarta

year, That's Sumita. So just Thank is like looks in upside rate, midterm to seems there guess three again. be midterm, that on in to it Seba But that the term, I midterm, guess like the running helpful. higher, it in should trend to yes, Thanks, bit. little shorter XXX. in two, and the then try that XXX, and maybe and term, the to quantify I one right? midterm retention net Great. I a years, the should or next Maybe the be to understand quantify you. revenue lower shorter the some midterm is the in follow-up,

Sumita Pandit

that think I a it's on years two from Yes, of about merchant the comes board. start when

cohort-based those So Tito, some to with last you cohorts this IPO think a months. we as I the added measure, how large merchants it's trend pretty XX out. We've and discussed in during

We expect the from stabilize months come in our when to they XX beginning on platform. them about of

months stable XXX% in be say a the So place. it's I XX to next is XXX% XX we to the to would where see

Tito Labarta

you, Perfect. That's very helpful. Sumita. Thank

Operator

you. Thank

comes Our next Agarwala from Neha with HSBC. question

You proceed may your question. with

Neha Agarwala

mostly Hi, strong on I the from also some the had that the of merger that a acquisition new to very year? revenues clarification the assume? revenues acquisition earnings, driven in impact include right of Is that be believe of does might this of the and TPV, April on closed you the results. I PrimeiroPay. congratulations PrimeiroPay

Sumita Pandit

includes this Yes, PrimeiroPay.

Neha Agarwala

the look you Could would like without TPV revenues and without what tell – us of the quarter? this PrimeiroPay PrimeiroPay inclusion

Sumita Pandit

PrimeiroPay. was as disclosing We But is the as not the PrimeiroPay you say that we're But of information of a – numbers. we are assets we make it – would don't deal not know, significant the I enough acquired much the separately, think to because disclosing it it's an I asset Neha. numbers to difference

Neha Agarwala

Yes.

Sumita Pandit

We will numbers. significant not either. be broken to breaking enough But those not out out it's be

Neha Agarwala

bit we so very some on costs? margins. the expect have we plan bit quarter you And mentioned, was any coming geographical pickup forward, perfect. some you you terms coming of the expansion high going What a extraordinaries. should some expectations is But – a elevated? that revenues to again, to you are costs pressure then a As expect be cost? color pressure on operating expenses, the on strong see because Okay, the that? could far, Given stronger see Do in in in of should so quarters, this already

Diego Cabrera Canay

Neha. Hi, Diego. This is

to So, related if have at IPO one-off you expenses were million $X the roughly around mainly expenses and XXXX, that expenses PrimeiroPay main M&A for some $XXX,XXX. the look we QX

expect and forward grow. continue organic is a else everything increase we going to to as So continue sequential

forward. those exclude the should rest to the trend you and continue So is numbers that going

Neha Agarwala

How the has can program. think for so formally when launch you response issuer-as-a-service on program, clients? launched service far? been lastly, And this And Okay. a you your new do pilot you the

Sebastián Kanovich

much very thanks the question. and hi, Neha, for

it. is launched product to we've wish use a our pilot. customers we have who enterprise The So to available Obviously, readily merchants.

long. sales aware the were you as So all cycles

seen we same see expect in this day, and byproduct, revenue – this for always profit by products up take is is going complementary to we've the merchants. time. again, down the as intend don't each So offer idea more because highly more one to payouts way to break we ramp pay-in with product back Having we're of product want to other. We said readily driven who the our merchants on-boarded. be solutions that, The having forward, available

Neha Agarwala

full that It's is package. included can you a you And service. monetize up That as and separate basis, separately on can monetize service that the a that. not merchants take

Sebastián Kanovich

Exactly.

our So, exactly product. issuing the pay-in there's same somebody pay-out where fee fee way transaction. be of for There's else paying transactions. for work fee for our There'll issuing a a a for

a – new you'll be but be it to from So will product. for see yes, revenue revenue it a source going new will line bundled, of if our it's you

Neha Agarwala

Diego. Thank much and you Sumita so very clear. Seba, That's Perfect.

Sebastián Kanovich

Thanks, Neha.

Operator

Thank you.

question comes next from Our Shirvaikar Citi. Ashwin with

may your with You proceed questions.

Ashwin Shirvaikar

congratulations and from well. you, Good quarter. Thank me as

had might benefit get you economic to indicate if recover the back your you of clients and emphasize pandemic. get of XXXX much You say hailing you just as ride the benefit Could from this recovery? maybe or from travel how levels impact the purely mentioned maybe more

Sebastián Kanovich

what XXXX. you back we Ashwin. for very than the Sure, are we question. business in Hi thank and Obviously, different much were very

that a normalization much So wouldn't change. of make

not any are the on dependent or vertical We industry. particular

well really diversified. are We

So us. We're it agnostic. counting If performance recovery be not we the forecast that we pre-pandemic them. But counting travel indices any been move us. of it the our to going together is back Yes, with run, There in needle have lag. But we trajectory, sustainable accelerated. bounce But of have a very been those for have are not and will counting we are But of any news hailing happens, numbers. the We way. lag some have good at for happen. sort seen space. to going yes, don't And to on on the not long therefore, to are losers. that other like been industries COVID in off on on that we losers which will are we've any been the that ride believe that believe we've to end day, some there's

Ashwin Shirvaikar

separate in clients. these you're quarters? the that? a then And bit what that signing some ramp margins PrimeiroPay from impact regards softer that you nearer-term question of you including say as a maybe many you're over new of with the expect we that Understood. transition clients indicating perhaps Is What a should when to margin

Sumita Pandit

think question. Yes, I for thanks Ashwin, the

our reason over quarters. we you QX. next some efforts. that margin be levels I QX invest I the as in will really by stayed the quarters. And coming XX% margin there the think look driven compression think really question, that stable our plans, for And product we see, could on to commercial margins And and expansion our that plans, our has think think few from we between can and is the the

It this, margin where is I also The that our in keep in [ph] in his quarter. the tremendous we growth be number contracts. prepared it's X.X% see TPV could volume Diego we've other have continue And this over you one I mentioned there merchants. we from peers some is. at was remarks QX. revenue through X.X% mind think in think think, to as to we that volume mentioned reason large our reasons, compression thing The he in of And what walked this the

dollar our to down, actually get for volume more dollar that it comes the the progression to two We we that to From business. factors, as expect we those next given on think some while because actually perspective which up, the and we're a tiers few So go a see up think is will that grow. we goes pricing good going the in basis, liked means quarters. I margin But volume. continue

Ashwin Shirvaikar

you to here low-XXs mean, would than able I not level to which, be am lower I What talking that? the size

Sumita Pandit

Yes.

low-XXs. think I are tanking we

about for a place that's think we good margin, think think XXXX that net the numbers, for if and year retention both I you us to for. plan

Ashwin Shirvaikar

helpful. Thank you. all. Thank Great. Very you

Sumita Pandit

Ashwin. you, Thank

Operator

Thank Street question from comes Datta Instructions] New Soomit next you. [Operator Research. Our with

with proceed may your You question.

Soomit Datta

Thanks guys. good on very very numbers. much, Hi congratulations and

me Just two quick ones please. for

between which kind of broadly historic your Are First of like pay-in shaping I degree. to we ratios we've guess a pay-out, back take pay-in and rate the pay-out. seen is on and if all, just to you

one bit of pretty one, forward, please, just looking anything banks income, and to across final was little this issuance response sounds talk thoughts just is on then we as And Latin a prepayment normalized bit which And Thanks as in particular. being And think the think which a incumbents of a of interested a that large about post-COVID anything service, try could in on America, a was place? much. I bit reset or level things kind way about card in more the maybe just take flagging? such a interesting. you likely what does little can which revenue forward? Secondly, is going or pursue and competition so profit revenue of we Any been a of do a source you buying whether very of seeing on front, mentioned. the some from which happening or Are is hasn't either by still competitive

Sebastián Kanovich

Sumit. you, Thank

question seen the evolve to continue something around going between split to years, evolve. two the we we've So paying those else, the and along it's believe on

We macro world. a are a and still in micro

gaining share. which than we speed, to So what at able see, you'll on different customers depending more are a pay-in, pay-outs

stage depending of that's our point you really probably the who see between platform that merchants evolve. the to mature think we continues don't I split on to and can you'll use So are those two, how any

the very are some the very opportunity the there's companies having emerging operate, we On also years sustainable idea many in deep look we we this the also worldwide direct competitive of believe understanding the lot question, having opportunity capture; advantages. huge. and believe we many them cultural the, in technology a great we that competition payments in we And of of markets, positioned advantage great well is We that build But are believe companies, space. idea of public. the where are many we for – market a that believe competitive of some are hopefully to that of connections, the of idea the

your compliment. on there, are free we answer counting competition Sumit to to into are fourth confident I'll on platform. question, be The the the start of So on built the in prepayment, but are – same question you to third advantages time efforts aggressive, our we is the at feel

companies Brazil. you particularly included in It's As not we don't yes. in Probably, revenues internal the in that of an of our prepayments other make from now, Is for way any forecasts. would see opportunity?

And with to with continue win be a are or down if on our that would line. continue focused an We roadmap. the further roadmap product or, more easy geographic today our anything, weak pursue

Soomit Datta

Thanks. Okay.

Operator

you. Thank

Our JPMorgan. from next question comes Falavina with Domingos

You proceed with may your question.

Domingos Falavina

you. Thank everyone. Hi, good evening,

I here, congratulations well; having amazing I'm song think, figures. the question. As to repetitive of first a bit, Jorge's as little

of of quantitative pipeline this funnel You it's is you so or little a lot process or a XX understand XX stage converted I you you and of give or I much just five kind anyone, kind this looks, long, guys and companies in brought to of funnel, how like of how you're that want them guys of last can of this new fund moving the like had evolving? in in really could qualitative to had the maybe pipeline have either if if this example, we how on grasp clients, said, how clients a you new additional bit kind remember at it's comments

Sebastián Kanovich

the Hi, Dom, question. thanks and for

were authorities do drive we've into extent. to decided to raise that the new leads on in to of our manage probably quarter, discussing. we an the doesn't merchants means much to it our to bilingual we the So help this want last anything, that's believe we've become current certain onboard we XX But story. will and more it has a us in quarter. and we that why so no by stands impact of market awareness does but reason that Part funnel merchants, tell If

are based The other and by geographies that, opportunities on fed funnel is is that products. thing that

you. to any a offer So a the service the until then a more have we we the able geographies we more are products with more conversation have, have to have, we customer have

IPO, opportunities full pipeline a different us. two a there's we discussed stages. that It's that remember also see what healthy, is funnel. for extremely we all So across sales it's if funnels of you new key at But

we healthier. time, management And an most, that's is the there's with after the funnel, more one account going the the But the ever opportunities are drives at there's revenue these We on-boarded, that are of customers been that sure new the net same focus retention. it’s which making merchants. one each one

Domingos Falavina

basically, things shrink? the funnel, are or stage, the that So of new in months? six And basically same next as Did it you the far grow? this clear. were as you expecting did in stable that Very you most it did like opportunities company last absorb

Sebastián Kanovich

to is not That's we nature very were in cyclical. much. hired be world management what new because grow. will delivering are want why doing slower. the enterprise are There's be is business, about Making we and funds. they $X time we our be platform we Having value them, with to to care merchants. the with much, with going have know also What were we us, grow current new times continue that's expecting. focused. that our sure know line There's our more merchants going we by enough to opportunity us, to them going grow Again, our account It's we to most to much where to enable and in in we so going have a where but success know drive is continue were volume tied to where at customer merchants those we that come merchants as and to be with going we with customers

Domingos Falavina

Thank you, guys.

Sumita Pandit

home one I of is to outside may. for one us countries. say I if points sorry merchants their want Maybe, big a grow – that opportunity the of the would

see China. remarks, we merchants think we countries, demand tremendous from that is outside there their up our go I including that to from prepared pent mentioned in looking home

significant and work we highlighting, keep process we also we volume China, to in payment don't merchants China, actually as So beneficial but outside us. that's with Chinese do been

Domingos Falavina

you Thank congrats. Okay. and again

Operator

I any over for further back you. turn call to Sebastián would like the not remarks. to Thank

Sebastián Kanovich

for joining everyone today. Thanks

and questions. are for glad, thanks your We

much. spend We you touch very are to future. in Thank happy the

Operator

call. today's concludes Thank you This you. conference Thank for participating.

You may disconnect. now

DLocal Limited (DLO) 19 Aug 212021 Q2 Earnings call transcript