DLO - Earnings call transcript Q3 2021

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Operator

Thank you for standing by, and welcome to DLocal Limited Reports Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference may be recorded. [Operator Instructions] I would now like to hand the conference over to the Company.

Sumita Pandit

you. Thank welcome XXXX. conference and third for dLocal’s of quarter to afternoon call earnings the Good

providing slide via is are accessed will event the We be a and through is remarks. our webcast after investor.dlocal.com. being This dLocal’s prepared available website broadcast The may shortly concluded. live presentation webcast, at both presentation and be to replay accompany event the

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

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

our Now, conference to I Chief over will Executive Sebastián turn Kanovich, Officer. the

Sebastián Kanovich

for Hello, joining us everyone, and thanks today.

today, and call joined Diego the Financial I’m our Officer; Pandit, On Cabrera by Chief Chief Operating Sumita Officer. Canay, our

X. company. with slide on market and seamlessly thank we emerging On your enables to update in business, present our consumers. are an our to of We excited you for global billions interest connect dLocal merchants

our to API, One and dLocal contract integration merchants. solution platform, a single single Our present single

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

Now, to results. the

during process when of quarter quarter XXXX. the compared of XXXX, reaching XXX% quarter. slide grew of represents to when been million third growth for billion quarter The volume, year-over-year year-over-year outstanding XXX% $X.X EBITDA grew to Adjusted of the the at for third as Total quarter the compared quarter XXXX. On the third quarter third the has X. third $XX compared to TPV, XXXX quarter. another Revenue XXX% year-over-year

QX Let XXXX vis-à-vis us year briefly compare full performance well as QX our XXXX as XXXX.

growth XX% Our full year-over-year and compares year XXXX QX year-over-year QX revenue of in growth XXX% in XXX% XXXX. to

QX have NRR the achieved manage rate net We previously highlighted full We and XXXX. XXXX year we in XXXX in as retention business in a XXX% KPI on. metric XXX% QX XXX% key versus our

was adjusted we margin the to as a year and in Our our in of growth. XXXX continue people, platform and for XXXX invest XXXX EBITDA technology QX XX% pursue to in to full path XX% in XX% comparison QX

our margin adjusted to EBITDA year EBITDA year XXXX We expect in full line our margin. adjusted full XXXX with be

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

adoption We more methods. and are cash payment digitalization, wider of seeing alternative less

the expansion We in Southeast last We’ve new quarter, growing Asia. two presence continued on in and and Africa efforts launched the countries our have Salvador. Thailand El front, our

six XXXX, our network we new added For the year-to-date infrastructure. have countries to

have quarter third the material We merchants XX-plus XXXX. volumes new added of with in

benefit business verticals. of to the across continue from diversification We our

EBITDA our adjusted maintained margin We people. and continued have our strong in with investment infrastructure even

emerging Merchants to Two, we newly challenge emerging continues under keep while are enabling growing a And without The One, up payment the our are payment and methods functions. markets. by fraud themselves. markets. framework trend changing are by conversion third X. its There breakdown end X. differently. we our three, is complexity merchants. Asia strengthen merchants serve methods. XXXX. regulatory On make available complexity as tax in with XXX% this hire in the consumers solving access for nature to and in control quarter Each the Slide makes and provides On market continued XX our X to our solution primary count in challenges keeping markets year-over-year The powerful. very headcount market grew of in our The to and have in Latin rates slide our local that complex the we diverse rails payment where East keen the dLocal rapidly building merchants the simple are for Africa payment fragmentation doing employee serve. America, that adopt We countries in business key achieving when face of merchants is healthy and evolving X a we in methods of Middle the market. Pacific slide showcase

of the cash transfers delivery proportion in There East, example, Asia mobile is Bank wallet in For Africa in Pacific. of on much differences each by digital more higher one country also to Middle seeking region. market key much the are made study and up the by are serve. with consumer are agility On we have market in and X. AMI we keep Slide markets website, this Merchants continent. a on our the choice end completed preference. available dominant the

for XXXX was third billion, growth. $X.X quarter the a year-over-year TPV Our XXX%

full for TPV last months billion was year at X.Xx XXXX. XX Our our $X.X for the TPV

addressable on portion case next slide to X, merchant On in years. that Our grow of representative expected present small of is few our continue study the market X. platform. is Slide TPV a CAGR at a we XX% very to our a

X we volume. to shown, quarters up X As to ramp take typically

few to our representative XXx flow from nine XX we merchant. growth volume The countries. this our as through go added merchant, We’ve and our I it how of platform. expanded We’ve added to for of organically Sumita payment hand will is, payment of we Every future we merchant vectors grow particular the particular with seen flow. three has of growth. a approximately merchants local-to-local payment over is unique merchant a new years. XXX methods example added provided for went over to this For to now We we’ve then course, grow methods, on and markets. started cross-border countries,

Sumita Pandit

Thanks, Seba.

now of future on are We X, slide growth. vectors

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

focused on Our the commercial efforts strategy. land-and-expand are

by Our and growth to our ability management new our cross-sell the is to ability add merchants, growth organic our of clients. through driven account

NRR, Our comparison an on third QX we impressive rate, year XXX% the with was in for XXXX. merchants quarter Therefore, third year-over-year platform new third clients quarter XXX% net $X in of the basis. million from revenues calculate of we million in XXXX revenues in the our measuring XXXX. dollar in $XXX with from became in a QX retention by and existing We XXXX. had $XXX on NRR set from $X merchants of same $XX million in the XXXX quarter comparison the full XXXX for Revenues earn was

improvements our features with the together and as portfolio development product our enhance to such with for and launch of pay-outs lines continue Issuing-as-a-Service. in pay-ins new We product

where vector, are quarter. and added the presence in our to the our currently El countries we expansion we new geographic deepening adding countries. We’ve third platform in constantly the On operate Thailand and Salvador

plus the of pursue in Our XXX% the was of revenue EBITDA that full XXXX flow our versus XX, cash We Rule margin, of believe generation XXX% XXXX. the strong growth in year quarter third will activate inorganic plan Existing growth drive XX. our growth. time business We our clients supports that to vectors. three inorganic an to our any opportunities Slide of strategy to accelerate market.

closely waiting and their focused This new team sells new solely management new harvesting methods, account our countries and client our needs existing with on relationships. is works to existing Our clients solve payment cross about team product have testing XX-plus use XX-plus about we any On stage XX. our the and At extended cases. time, to pricing proposals given slide live. to in XX over clients, existing go

continued digital that, sales growth have industry-agnostic ramp-up funnels. on geographic and merchant to and no many of cases, growth expand to New experience our users theater of funnel. The place our boundaries. the clients emphasis the rapid The online, continue in growth highest viral sales the of at our merchants feed some expansion of economy, merchant marketing has

trend continue age and this and dominant we back. new is as world. a see few in to new anywhere and online expect across years enable quickly we than The access become growing national company to companies more boundaries, and is regional emerge the even them today much global consumers We

shown and suite. quarters of new in early we Once We’ve X XX, As to onboarded live. take go a at quarter. the have about a up volume slide XX-plus funnel typically merchants to waiting stages time, ramp X Slide to XX-plus on given we solution XX, our merchant. differentiated over live, this XXX-plus and merchants with comprehensive

platform. Our settlement. product our checkout. snapshot solutions. desktop installments routing end smart and with for Slide for alternative security, consumers for reminders or collection, team and merchant support supports optimization provides our at end features our compliance, support front of back Slide is payment The XX. methods, subscriptions, provides refunds, tax mobile constantly The and merchants regulation, XX our for of fraud working a on

countries have to year-to-date. We six added network our

solution, merchant-led, both, well as where that is our we for merchants strategy is ask the go as expansion Our dLocal-led. us

a to We markets have of launch pipeline merchants expanded we more into in recently. have the working new

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

strong country. our forecast business with a as We across XX. see We TPV growth also don’t diversification. year-over-year performance our growth from verticals by XXX% Slide benefits

not is model outlook and of any business industry vertical. single Our on dependent the performance

additional solutions merchants, provide to with in including cryptocurrencies. exploring payment opportunities with We are also connection

framework We provide the to with cryptocurrency risk will around evaluate merchants to solution. appropriate continue the our

Sebastián Kanovich

XX. Slide

this in mentioned to we I’ve of beginning at continue invest call, business. As the our

in had competitive review biggest from of XXX people we nationalities. XX. XX-plus the now advantage. quarter year-over-year headcount our our highlights. end grew dLocal third XXX% are financial XXXX. Our the will Diego At Slide in The employees QX,

Diego Cabrera Canay

Seba. Thanks,

start Let’s with slide XX.

XXXX, grown $XX XX% XXX% with $X.X quarter million. of of record another revenues year-over-year TPV record have of has third billion TPV a and In the We quarter-over-quarter. quarter and

things streaming well the similar continue benefiting of merchants’ bringing travel. e-commerce methods. grown as performance benefiting our as in to XXX% very and and our payment normal specific XX% and what to first in as from countries of ride both more quarter XXXX. Revenues quarter-over-quarter, and secular the in our verticals, merchants growth and to hailing, from recovery advertising success payments the as year-over-year back from sequential We performance This them grew have as is in well digital trends we go of such as

pricing Particularly than ratio better X.X% have as XXXX. quarter bring a in and rate, in Slide our largest revenue-over-TPV important to to XX% in XX. to our incremental or great second is reaching rate the high-potential quarter merchants This of payment merchants our they our tiers merchants large lower grown changes exposure X.X% some revenues It business in Higher with that are methods. also the third Our take note ratio or of versus XX% QX continues a significantly. EBITDA. quarter, with volumes of the this was rate as result for XX XXXX. XXXX decreases from but of typically decreasing business they countries average take products, varies and mix take top

to the $XX for EBITDA the third and commitment third of our the to an in as lower the building XXXX. compares continue growth our long-term merchants with revenues, quarter adjusted was our well foundations for in as of or Our outstanding which decrease of This of XXXX margin XX.X% in result XX.X% rate. large the combination work take million investing quarter of is high-potential

continue was onetime was is XX. X.X%. of This Our for dollar less our XXX%. and cost see cost increase discipline QX operating If coming while in efficiencies we our may items, at in more additional the decreasing business in services services comparison, of year-over-year, We quarter growth XX% look growth, line to of in investing or with with and grown expenses, XXXX the increase that therefore, continue we margins our drive In EBITDA have we year-over-year in excluding quarters profitable that our result in Slide every our of year maintaining calculation, X.X% third the adjusted headcount and of noncash to changes mix. process. they intend TPV. with this line

operating existing customers. And are delivering are already that the merchants revenues of with and of in are revenues those year. by both Revenues that from are we’re merchants that merchants new last new driven continue strong revenue existing quarter last We us our the by from year. same merchants processing driven from started revenues our after that growth those quarter from same

the have merchants typically our our of to indication period, ramp-up of X are that potential an revenues from As new we a X quarters customers. merchants believe just initial

in from double from During quarter, the million our the this $XX was of of than $XX period of times merchants $XX Revenue the revenues third XXXX. in million, period more million million, revenue was X merchants same the new same $X existing XXXX.

the our XXX% and revenue in XX% was merchants the XXXX, high existing fast-growing contribution XXX%, be was new existing some revenue onboarded XX. XXXX, merchants came contributed revenue retention reduced million an to this In or to growth sustained the merchants, XX% they the quarter, which merchants. quarter. moved QX high a range. quarter retention merchants bucket, in this net came from As Of new $XX all-time expect quarter-over-quarter into the Slide of bucket, net last QX XXX% to XXX% medium $XX million we term, from in and or year-over-year which

retention XXX%, in historical net an and And year. Our merchants revenue than XXXX. new XXX% outstanding average also at of remains of significantly performance our above achieved revenue what we have level last our remained higher from

growing the of a As to are levels retention XX% of growth typically less is annually from X%, of XX% recap, of emerging some them of revenue within same countries, minimum e-commerce, and merchants, there I products will than the in in performance net our to driven having our and payment gaining methods. churns our leaders Seba wallet more by share by are the to turn call methods conclude. result markets to of their With bringing that, the payment of and the terms

Sebastián Kanovich

Thanks, Diego. On Slide XX.

We our focused large with of merchants, up very our on the request and a our infrastructure continued questions. to about verticals our ahead exposure focus your our and direct I to of remain We expanding it on for and our merchants, the and and open for TAM, our integrations are profitability. us. investors excited thank growth scalable mix diverse We support. operator employees future

Operator

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

open. is line Your

Jorge Kuri

two the questions. everyone evening, Good well. have numbers. on is Hi. I hope I doing Congrats everyone.

yield, your at reduction in half is roughly to first look previous basis-point take X.X% the on basis. actually gross revenue this fell relative which That The right rate, of quarter. was It versus I the way your think profitability revenue profit which on pretty to steep that. a a X.X% decline is the quarter, XX one was which was

get volumes you -- clients I better your get prices. this you lower large up -- out to need pass XXX% transaction get you’re on and grew, wondered also it aren’t on But, as I volumes? it. and more in able acquirers mean, the that because volumes I offering revenue So, your year-on-year. came that the costs I you said yield offer are to you of very

flattish? and evidently you keep some shouldn’t revenue of these profit gross So, relationship benefits, be hopefully, deteriorating. the the also and yield that yield getting between It’s

the first So, that’s question.

that that why it do right on to the that away duration put the -- mean? Just think or What us carried Thank getting decline. the you it for us think just When down. made will exactly think over margins. will helpful next have the can dimension my back color either If that’s and inflect look any comment, does not understand understand I to you of you. And what we magnitude, I few the can up then, like in up? do it on question to context help super will lower happening you quarters? and be you that mean, second is EBITDA it the comment

Sebastián Kanovich

very Thank the questions. Seba for much here. you Jorge. Hi,

part to first it. of profit, there’s around sides the the on gross So, question two

there’s mix. the First, of fact the business

payment offering keep Our we those geographies, terms business will in take rates mind, with that That’s fact and that insist I we around. the have why methods. acquirers in we And continues don’t for different we multiple take know from rate, of continue across products number you to move will on to rates. do better getting evolve. a are agree because optimize us and multiple

more see because a methods that in be processing again, of can expensive. costs declined. that might it them are transaction or payments you see But up us in function continuously going payment countries You might our have also

for That’s of more you optimize are to a want to are always the that bringing the from continue are part think of margin. dollars contribute methods, additional sure they that’s the We it. we Sumita, that making let coming we our take we And profit. that optimizing for. to from dollars NRR, from margins. and yes, definitely, second sure banks. I’ll acquirers, make we that rates question something around at through better we more are But EBITDA how come getting payment So, constantly

Sumita Pandit

Thanks, Yes. question. the for Jorge,

for if even hasn’t second think, it’s margin to we And margin as It’s XXXX. are our overall our giving our as planning year. at year that Jorge, XXXX quarter look you the full within as for full we the in a very performance what is quarter where our performance we comparable you soft I So range were last guidance I that are team. quarter, to management that guidance call, for What mentioned of in the be this changed. a planning year will earnings towards margin the we think are we same towards

the I not It’s we that because are be in and expect a number. We think Having we the specific that, said in feel that to range to ourselves margin to business. invest continue tying that to around do level. a have we

Jorge Kuri

Just this last a part, Sumita. follow-up on

is So, XXXX the fourth about thinking it’s this guess, guess, XXXX. at I going be to point, is relevant in quarter, I behind, right? that margin more So, what the not

you say throughout you going you mentioned if How when about that What look is see what -- is it like. can lower? much I is are lower? help XXXX? So, that talking you’re mean, to How again, will you’re level margins, lower thinking? And you us lower low much

Sumita Pandit

our won’t Yes. numbers. It’s too not -- XXXX be I away far think from it

from perform look going of say what don’t where our you’ve XXXX. It’s that I number. it’s XX% short-term range. be us a margin, will to you too It want definitely to XXXX be that won’t going in in What expectation if margin. different at to we So is be keep our seen that is

Jorge Kuri

very That’s much. helpful. Thank you Great. very

Sebastián Kanovich

opportunity is we to make opportunity enough the want sure opportunities we make sense. think in ahead the We invest massive. think have to We

So, we to pursue to want opportunities. to those able up not tie don’t be ourselves

think I profitable record doing of scale. we’ve being a and at track built so

capital we -- this to really future. continue want take our That’s why seriously, to we particular a take but to we to So, allocation number. the don’t give want ability into invest we have the

Operator

you. Thank

Jason comes question of next America. from Kupferberg of Our Bank

Your line open. is

Jason Kupferberg

guys. Thanks, line nice here. Good top afternoon. momentum Really

there. third you tough really despite the having in a mid-teens revenue delivered comparison quarter-over-quarter So, quarter, growth,

So, in I’m we merchants, again growth for growth quarter? expectations both wondering, and based can new existing on see quarter-over-quarter double-digit fourth at the your

Sumita Pandit

thanks Jason, I additional can jump that start. Seba, and Diego thoughts. question. with in for

we that long business to the are year-over-year think in build I run. continue focused to We metrics. want the on

not on we of how misleading trends focused be long in as think that are because We our that in quarter-over-quarter run. terms business think about can the we

If you quarter look our grew at our TPV at this current quarter, in XXX%.

because year-over-year If think XXXX, XX%. last growth our about for I helpful you to think QX at QX we XXXX, it’s were look where year, was

we grow this that XX% XXX% quarter. So, to made in

in For to continue the that strong. of mind QX on reasonably versus what already year number was last Keep and like year. strong quarter. A impact focused next QX that QX of away, looking we remain gone quarter, had look of COVID lot was a very last of would the

see but numbers, QX last QX it the same year. of XXXX positive may we not be in We dollar were seeing will versus from our growth that QX increase

Jason Kupferberg

obviously, Okay. Yes, the is large on comp I gets on The revenue similar, merchant I TPV mix. but mean, comp tougher. see that. got the you’ve pretty

the ‘XX. be rate going So, ‘XX lower is take QX than in to QX

little I it. too is got bit ask. a double-digit maybe quarter-over-quarter So, to much growth maybe

just... And great then Still growth. Okay. year-over-year

Sumita Pandit

Yes.

Sorry, on that. just one thing

sense revenue look again, If will of you release. growth numbers, you not have we our which in that continued again, numbers was accelerate of were that where business. how the where our into we in a our at which also the give press and on But take growth in a we can versus insight presentation. some now, little have to last XX% just It go of XXX%, are growth right bit for gives we overall you revenue year, our QX is back was

Jason Kupferberg

Right, right.

Okay. for that. thanks Yes. No,

think as mean, on for bigger move that’s curious the you’re and well follow-up, heard that views a America, your watching a and as competitive you not get potentially some planning landscape. something Just could or wondering have whether into we’ve pricing. implications I I’m latest players about just talking Latin to if

Sebastián Kanovich

Sure. Hi for Jason, question. and the thanks

market, landscape, terms key do few are So, so at is a in expecting and of already players participating huge who more competitive one, think we this scale. here. to to I there’s -- are a aspects Number

expanding be That’s with We continue obsessed you geographically. to differentiating. us why see

at that because adding You’ll sure constantly lines, end enough we the points to we of see want make we touch our with product more day, are have the merchants.

market come replicate. one to and easier or for you If for compete. problems solving it a more the you The only are merchant, is are you tougher someone region, do one to

particular So, we see scale that’s how in to we yes, we’ll emerging trying across were differentiate. And and companies yet to build competitors fraud prevention. to pay-outs, how in payment methods but why that have markets particular in geographies, pay-ins, plan doing are why issuing, -- at

Operator

HSBC. next the [Operator from Instructions] Our line of Neha question comes of Agarwala

question, Your please?

Neha Agarwala

wanted that? up And lot. follow would My just base. XX%. is up The be second whatever happened? level but understand around earlier. of or what expect there’s merchant color actually quarter. in has last was more just volatility, question went a this very a change in Jorge’s is services to a of the Is of quite question bit mix quarters I a on that that revenues helpful. I that it the coming that cost because in It quarter, XX% now, bit more the on the So, should we on in that around was

you area? focus you? on Would is And area not, a merchants, more focus that this added focusing question Are concentrate the for my Chinese in that’s quarter, You’ve Chinese that merchants the I Europe, -- merchants you XX serving last not merchants. plus a competition. few -- around and you have of you or Would why? like then If U.S. few mentioned. on are be most and to a merchants understand more

or point And this a with Do differentiates mentioned moat You believe do is you. mentioned when pricing for the continue and not much. key for merchant. particular work competition? is work presence. a you so of makes more That can thoughts player. a not merchant have the Any a work or two players zero-sum that be to would just you -- you is merchant, game, Thank a what that you two key And players to you very -- this on have with it you. But, that one are sense three they three earlier helpful. geographic merchants not and seeing for that with you you

Diego Cabrera Canay

Neha. I the answer Hi, to leave Seba. will and rest and part first the Sumita

we quarter the as had QX QX quarter basically, as in or mentioned, business yes, was line year. going for we outstanding is And and us have that the more of the third with second -- mentioned that terms expect with in to you do more what profitability last So forward. we before, changes is with in of two mix. line what profitability. of quarters in Part the between And merchants

may So, or numbers fluctuate that that to see, as cost, go ranges again, long sequentially number we up I better that X.X% expect new will the negotiate and believe be you you access is In number the run, will think, to in with payment that that now. but would not down it a prices down. commit of similar we pricing is as to we TPV methods, tiers of

Sebastián Kanovich

thanks questions. Neha, Hi the for

that definitely any and the Europe, that means merchants we of from to business from today terms do want onboard China. your merchants are we question the we target coming of So, U.S., to in first in all, geographies. wants world And that what from across that target, more than company two around

some If really because names been some at this make the it’s disclose, clarification of you think that you’ll leaders. see want customer important look able our to we’ve of to are and I Chinese there a base the one. I

inside payments are processing We not China.

into companies and markets, coming Africa, one American emerging and out of relevant and So, also geographies. same and local more that across for companies for than becoming companies Am, way the Lat the are Chinese we who do of are are helping more through we leaders Asia go European for more

it’s price. a again, process compete And to mind, have of They Keep companies for going be, and the internationally. big biggest don’t earth. is of So we helping continue of serving are power. China us, companies in a bargaining competition, Chinese to so lot in some we focus on on payment terms

wouldn’t we charge much able be be the than wouldn’t more if alternative So, we differentiating. to

price. our don’t higher we compete on conversion rate, better merchants We a on has compete the sure making So, that making get access. who sure

come us the in because Merchants their last to we’ve around around are And they consistent I they to drive emerging been operate. want the business this. where markets super We point redundancy, revenue-enabler. think

depends don’t. in so it almost the never U.S., for It It are to payments We don’t really have we in others and a our have for sole redundancy Europe see and our in merchant. country the expected provider Keep decide going to process Western another they mind, Are depends. we to is -- in merchants sometimes markets? provider. one having redundancy,

and expect we be wouldn’t That we a these evolve. the for any companies. to sole that But global practice don’t believe sustainable, provider So be it’s them don’t that continues either. of best for to

Operator

Our next question Tito of Sachs. Labarta from Goldman comes

is open. line Your

Tito Labarta

rate, up following on just healthy. guess, remains retention I it revenue the pretty net still

to even XX in the thinking, midterm. XXX% like XX think Is terms XXX% you’re but competitive few could to competition, term, terms And long wallet share in clients? that. then question that quarters? to guess, to protect with and can new able sustainable the like you’re help doing like be making? clients? Is investors where you to more for increase I to either then, range? you of of think get to level? bit terms protect second those mentioned or threats that also, Thank longer competition to of you guess, against on any -- some clients that you. and the how how of understand share existing within in a seeing to like be existing to that also, -- may like normalize that -- what the you’re either it in how take still the more that just that Is XXX% the the in months And in clients are the terms that have to guidance, thinking in you indication can Just wallet Do XXX% I evolve against like next you or investments Just be competitors on the clients how you for and

Sumita Pandit

take part. Tito, question. first I’ll thanks for the the

question we think rate more to term, think also, be also to quarter and that’s XX term, we rate results is what as near into we and existing clients mentioned the medium right what for. so to So, the on client that new mentioned achieving your last planning to the why from now is net you retention we that in our XXX% was in NRR bucket. which client moving retention benefiting we in are have bucket reason in the we is that are you of high XXX% on were still achievable, the some XX should the net months, We’ve our

XXX-plus. result, be XXX%. As medium was near absolute it around seeing and high It to the term, a the term, these XXX% XXX% will In you’re quarter. of in NRRs in very this QX in XXX%

the come to it XXX% we difficult you XXX%. long that to believe Regarding your us for more question to that’s more have how will that probably guided question down sustain, term, to in on will long a answer. But

trend Seba, you to achieved be the in we We end would these the next we by growth are BXB-focused think in think to organic of merchants which question? business, close we NRRs take XXX% world. markets. rate that do will very to want enterprise of companies the software that And are a XXX% to level, some our and best also the

Sebastián Kanovich

key best under making Around we things. best Yes, continue sure. operate, our merchants results, where conversion sure the the in our to markets the invest in that we we is for have Tito, one rate, thanks the investments, get best two have the platform question. control. Number keep

We’re the to and working support with that, having team them.

We Whenever are are for on going both discussing important opportunities. the serving We’ve to expect the to a one bring new And customer customers that base. At right those new some expanding. payments. process those we invest And But other method, us reality NRR companies products existing for markets in earth, to some our opportunities we of are we’re our new new those product. to are always our our that on we discuss going demanding newer methods, geographies, announced makes new bucket, to merchants continue a into new we that geography where announced have or open come. payment the allow same time, are those of to Issuing-as-a-Service apply those we then Obviously, new differentiate. the which it the with day the to most customers side. into to starting that and us payment other to have a those new -- go be set We’ve is also all going team of the merchants new current and we will the really platform.

are continue run. things two other. because those on hand. right a to to hand continuing think way thing, we So, They think is that’s the the with And long we for to complement differentiate each invest us

Operator

Morgan. JP of from comes Domingos Falavina question next Our

line open. Your is

Domingos Falavina

Thank you. the Congrats again. on results,

around question in Just funding, cost Brazil. a specifically quick of

I bit around So, days credit that. longer We usually X guys know is cycle you a understand the to pay than all XX.

some funding passing on taking in assuming place I’m We’re the pressures which seeing acquirer, to you. they’re

basically if $XX I’m of million, lines, flows cost service assuming in I’m So, the mistaken. these

of of So, lines? pressure that should Brazil in this impact ongoing assuming be quarters. an question did impact your how is, funds in rising much I’m service cost future cost And

Diego Cabrera Canay

sure. Yes,

pricing -- that keep relevant card. in that it as much discount of is that risk. And So, our a in to that rates discount increase, just volume Everything to merchants, we sell We the sell right? our assume So, think -- not in any merchants one-third we policy. FX build we interest obviously related everything that any And Brazil, is mind country, the that pricing as in is to but that discount -- is cross-border to credit may our have as that roughly we we a Brazil mitigate we installments. installments. we

Sumita Pandit

Keep question. And countries a more for the us. is Brazil bit little mind Dom, one just in if that I Lat complement here, Am for in thanks of five may

of we cost And you, big of in as a the As our factor think of our have concentration that business. Brazil. this therefore, about very country. at we we you’re mentioned context, even small don’t on how very, a don’t within services a necessarily think we big portion to looking in And

Domingos Falavina

anticipation, Yes. XXX applied of related. carve a million, out, Sumita, bps, XX kind financially continue to of the makes if just right? what’s even but XX $XX we to bps not like days trying difference, volumes, So, should XX% and from recurring from increase what’s

Sebastián Kanovich

of in funds. for a past, we’ve I Dom, our And our not discussed that’s We’ve per going it advanced source think us. up. we the dollar revenue of cost seen haven’t all always

the driver them always of many Brazil, their there’s been that’s local-to-local. we’ve So, service. of acquirers their that Again, fees. the but our also a understand do hasn’t this We component of paid margins in where of cost

local-to-local, not it’s it’s have we XX%. of need don’t have -- risk. when advancing because the we don’t funds So, when it’s FX But

a costs, been hasn’t be. expect and to big this it the So, driver we increase don’t in of

Operator

appear Thanks, Sir? further to closing at questions. call your back for there Really a Kanovich the [Operator the Sebastián like queue this turn Have questions Sebastián for in to Kanovich Instructions] great no and attention. everyone, As time, remarks. to for time appreciate taking be one. I’d the over

Operator

this today’s participating. Thank call. And you for concludes conference

disconnect. now may You

DLocal Limited (DLO) 17 Nov 212021 Q3 Earnings call transcript