DLO - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the dLocal First Quarter 2020 Results Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. to call like host. to now would turn over the your I you begin. Sir, may

Soledad Nager

Good welcome Thank Quarter everyone, morning, you. and Call. XXXX to Earnings First dLocal’s

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

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

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

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

turn Seba. will the to I conference over Now

Sebastian Kanovich

to Thanks everyone. start strong a to off share for QX the are results. Hello, joining delivering we us to today. pleased that year, record I'm

trends, strong across to markets. with continues business our continue merchants growth our show we new both our to and Our plan and execute existing business various

rate the in markets to in from global to logistics impacting work, changes in return interest challenges consumption economy, environment. as a as to high Russia-Ukraine continues resilience or show the business factors higher as developed inflation conflict Our and well some specific geographies, the such specific

global the geographies, Ukraine. and first doubled our exposure and time. the We increasing in billion surpassed TPV the despite Russia than results, inherent process year-over-year. total XXX% but or to XXXX context, the Therefore, sectors our more has macro products, discussed volume by diversification from challenging business $X annual our for benefit across no our threshold As

quarter, grew reaching $XX the increase QX digits, fifth over XXXX. million our we revenue prior the XXX% and For consecutive quarter for triple

in clients for We to investments and continue NRR levels XX% to a we strong the This XXXX, strong half of grew our in wallet $XX adjusted disciplined while long-term retain our of the achieved merchants margin expansion minimal in with share infrastructure of quarter a to in XX%, churn. make continue and million, as our XXX% we with EBITDA strategy. Adjusted had year-over-year grew existing line EBITDA second our with margin our people XXXX. to with was support QX

the new performance growth, continue by our always we and this operated have quarter with strong using growth expect to supported Our of momentum. existing On philosophy delivering platforms. disciplined, merchants profitable our of we delivering reinforces growth. And our performance X, a Slide

long-term months position $XXX by continued the compared flexibility quarters, profitability, of Slide we has us to execute X. for gives reaching growth balance EBITDA few than months year-over-year. our adjusted strong we XXX% XX for this On last the look and increase. believe have of million, XXXX last our adjusted EBITDA our the strategy. at of We That's XXXX, given XX% increasing strengthen doubled million. $XX the Our quarter continued sheet. cash to XX In our If our XXXX, to last reached first it more

growth merchants. the TPV the quarter first been in global of by has supported doubled As has more of I mentioned year, significant This than fast year-over-year. have our increase the our

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

more our more merchants is portfolio. XX% than vertical our in every of different QX accounted balanced well for XXXX. and from verticals, in TPV vertical than XX have No We single

QX mentioned, verticals, environment across to macro I business due has the to consumer and benefit challenging continues specific been geographies, have products partners. factors global merchants a of our industry our Although behavior XXXX from by marked the diversity

seen our overall but verticals different short business growth, showing a go out. go term other cycle, vertical verticals to specific may benefits another have each down We balancing to cycles, strong from while

So when remains while at these idiosyncratic volume, exposure factors, look overall it individual merchants stable. to may have quite we our

you the side of I'm X. Slide the right on hand see As can slide, on

demand with also growth Latin On year-over-year delivery experiencing year, and than grew demand strong commerce. more onboarded have by highest delivery geographies. XXXX, on-demand the experienced we taking existing and All America increasing times both growth in of we've X customers new year-over-year them high our as by on growth, consumption verticals platform leading to delivery by show QX driven a last

it Regarding by commerce, quickly, times more pace Sumita by these also than picked X with customers to and our our a will gain than high increased year-over-year, them. discuss seen more up times experienced by volume now strategy. the their struggle to geographies scale I continued increased we we year-over-year. payment hand and have over have around with methods growth, merchants share wallet Entertainment Mobility and especially services world. to new X.X adding expansion

Sumita Pandit

geographical single only to a believe business across including in to also for priority Seba. access but Africa markets, well the a An you, outside On X, on continue single strategic We our merchants to merchants Thank business diverse Slide diversified our emerging Asia. long a our basis. for important Latin integration and as run, this will is not markets grow multiple us America. API are strengthen look verticals, and in further

We Ivory which infrastructure to the Latin of number during QX our have total Coast America, network outside we countries our XXXX, to to adding services our in Rwanda bringing available presence and make grow continued XX.

want based We a country us an new a typically this the them, add for our important us to generate into their base to prospects and building where that new merchants merchant on growth merchant our well and expansion makes to a in geographies wider industry. the the view are across when continue We enables internal our high achieve have We a serve we us objectives. as our partner countries new country. for as own on infrastructure across a of merchants new our to ROI believe we add waiting country,

focused the on our growing they are Slide adding We merchants is as establishing are network with X. and and connections grow value organically, creating. we local multiple merchants countries new complex infrastructure

building a to has focus yield Our on results. footprint global continued

in growth year-over-year total increased geographies. revenue strong triple in see our digit XXX% revenues of and Asia LatAm triple to in to revenues represented quarter. continue digits XX% year-over-year this all Dollar revenues Dollar increased across $XX Africa also million. XXX% and by by We

Our revenues million and in Africa from $XX Asia was the quarter.

for revenues XXXX, full comparison, the were a our Asia Africa and As $XX year million. from

for business in expectations Africa. run-rate our with pleased Asia are our and We

in We their that Africa and us expect relationship of Indonesia. with countries gradually originally Nigeria, share America to revenue and such increase to to merchants our we India South as started overtime to Asia as cross-sell Latin continue Africa,

to We initiate also Africa us to with Asia increasingly are relationship in Slide and through merchants their and starting X. markets see expanding Latin America. then

continue opportunities responding the incremental invest to We in business, we face. to our

base and the President our enhance our our the Asia. network To of committed the geographic fully and and we senior his and by for team, future XX% months. footprint, senior this Singer, business in infrastructure develop the long-term Having leaders setting in year-over-year. near build South moved we Singapore, dLocal Africa Africa In FTEs also and our are general region. Jacobo by to accelerate XXX foundations XXXX, culture. these last regions dLocal, growth, or growth of diversify dLocal moved in few to is culture for early XXXX, first become They our to employees the of making especially retain We have further and Africa. emphasize managers At new also in executive end the us respectively XXX Asia the in Nigeria helps had quarter increasing to members the

in all focus During the we technology and product on with and marketing. grew quarter, sales particular and areas significantly

XXX% locally about the grow Our faster, by headcount focus significantly FTEs has XXXX, we by increasing Americas of XXX year-over-year. the outside hiring to end on reaching the outside March Americas expanded as

during to than new we’ve also share added quarter, are proud methods payment the and We Africa. that in Asia XX-plus more

those to growth evaluate to M&A in select continue We opportunities regions. accelerate our

Slide X. Moving to

We've continued onboard our During to or out XX-plus Asia. five the of have portfolio, in which to quarter, strong new added to started merchants new significant prospects. with merchants Africa process we with us

to we to our few merchants. examples in South been where in We've able Nigeria success increase the in expand show Africa geographies. land Indonesia, business number in to and new and new EMEA and our deepen merchants countries, and a We continued only strategy. scaling currently operate add countries our existing India, total The not in and of but our successful upselling to included shows Asia have bringing cross-selling also our in the new merchants by presence

operations five plus year, back the payments India, to in our And merchants. we India. are in we in example, processing XX-plus For merchants Today, during XXXX. we services provided to started our first

these South these in since in operations three of opened Nigeria countries the more Our more are Africa Indonesia, we number merchants recent, but markets. and than doubled we have up

products, you. and opportunity this now of the one-stop highlights on an the offering base shop, a laser convenience gives review Given broad share of for client remain our We our barriers our and and gaining and of financial us entry will our increase payment Diego in monetizing to terms customers scaling immense with our existing methods continue competitors. focused of wallet. geographies, our value merchants

Diego Canay

Sumita. Thanks,

start Slide Let's XX. with

We TPV XXXX, quarter XX% the have surpassed $X the seen billion the year-over-year compared quarter. by our and threshold, to strong XXXX. In fourth TPV growth QX of XXX% during increasing

the delivery, of to we Software-as-a-Service. merchants also in growth and would is payins payouts As commerce, verticals, the experienced during I advertising quarter. and attributable the across most performance mentioned to on-demand growth in particularly X, that in highlight and have Slide like continued both travel, growth our

specifically have a TPV tripled payins we XXXX, in payins, year-over-year. in increase after QX quarter, For seen quarter have steady

TPV commented last earnings QX our during seen we presentation, in fluctuations short-term Payouts has XXXX. As

see XXX% over high and having improvement new fourth quarter quarter-over-quarter. of $XX We million XX% are payouts volume in reached starting grown QX growth record to XXXX. also year-over-year already double-digit the XXXX, of mid-single-digit a growth with Revenues during and year-over-year our

QX have this top we new merchants quarter. decrease revenue our in XX scale XX% in to continued share As XX% our to XXXX from ones, from has and merchants existing

QX increase in a to of share in take rate local rate, in XQ line slight TPV, ´XX revenues fairly border X.X% better X.X%. split over in quarter, for Our with of levels was XXXX. to and saw to TPV with quarter processed this quarter the line was in slightly local Xth seen XXXX In the local what we X.X% compared XXXX. than of or our quarter, The QX during take this local we the cross and

from and our already in are move strong were period those last with that existing customers. delivering XX. operating same are that on revenues are Slide revenue year. by that Revenues continued merchants Let's growth from that new revenues period and to merchants last driven existing by those processing we of driven revenue, from both new started in of are after year, Zooming our merchants same merchants us the our the from revenues

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

the During of QX existing XX from XX% XXX% year-over-year or merchants. revenue million growth, XXXX came

Our $XX the grow of the QX in million to last $XX to year. XXXX, doubling than achieved revenue from period continues in quarter, we from million merchants existing that same quarter more reaching

strong of revenue period existing the a revenue was net net as from for of calculate the revenues first We total year. over quarter retention last Our same revenues XXX%. XXXX retention merchants the the of

XXXX. commented XX% compares our terms year-over-year an of revenue and to to tougher full net represented we maintain million XXXX. same levels all-times maintain a period starting provided new or we in growth, we we in XXXX XXXX retention recorded expect revenue in from of revenue The that XXXX not of comparison $XX $X remaining fourth in by the and XX% net that quarter million the As reaffirmed get and of healthy XX% increasing quarter the to the of same expectations merchants. second previous previous XXXX, do $X we presentations, XXX% revenue expect the TPV in year million expect the came growth to year-over-year our and March retention the earnings from quarter-over-quarter. during in This high in earnings XXXX. therefore, We north

XX. to Slide Moving

profit, commercial We profit as continue merchant. dollars to our our our have focus in the Starting to gross our mentioned EBITDA. is increase gross gross and expand with profit past, we per

million to during a As XX% a gross in-line to margin were of with the second to result, in half year-over-year gross rate. margin and quarter-over-quarter. able the $XX at XX%, We profit continues came levels grow seen QX XXXX. Gross XXXX, our scale XX% profit at our healthy up

of and in of higher quarter particularly cost X% change the quarter in XXXX. X.X% processing fourth represented X.X% relative mix. increased a to quarter Our the business have mainly in first were TPV These for increases our year-over-year. the compared costs, of the driven processing of XXXX contribution, Payins which by

$XX by year-over-year it of XX% million to for XX% first XXXX, Moving EBITDA, quarter quarter-over-quarter. increasing was adjusted and the

that our pleased was with in are the margin We EBITDA half of XX%, our adjusted second margin in-line XXXX.

expanded have during excluding If year-over-year we team we members. our to at senior we see XX% look and onetime expect our of more the the margin affirm expenses XXXX, remain we but provided last our For items, non-cash that other earnings, as that they XX%. expectations we for we grown quarter, and operating north EBITDA

increased back to public part things of will events and that, also company. addition, Seba services to travel back With third-party in-person In and we the conclude. professional went we call as to becoming I normal, increased our marketing as a turn

Sebastian Kanovich

Diego. Thanks,

their the rest of today's operate. markets. emerging markets are we that Before We infrastructure for about our that foresee them to merchants continue payments help moving decision-making let the me across excited providing growth Q&A and solutions where say opportunities XXXX agile section earnings achieve committed we expanding remain for to call, the we to do emerging in our plans to tailored of

and and our of consumer merchants, level patterns. global be of XXXX, business we current business. on to the will our focus net new reaffirmed diversity benefits our expect the As from we Therefore, geographies at client in shown every on making revenue and uncertainties. expectation Disciplined throughout accretive. behavior retention rate our a healthy XXX presentation, the to despite plus truly dollar the based roll we merchant growth pipeline macro continue We see our

combined margin Our strong performance growth revenue plus led has the rate of quarter EBITDA to XXX%. us a of

to to expect XX%. expand to year the continue term of ability therefore, margins. for our north our operating in the full leverage expect EBITDA continue to we margin We be medium XXXX the and, And

ever greater. but is are our business Our than stronger aspirations even before,

much. for questions. Thank getting up operator you to investors continued Thank you We With the it are to started. merchant, this, support. our to just employees turn for and I back their it very open

Operator

Stanley. [Operator Morgan question A comes from Instructions] Jorge And our with first Kuri

Jorge Kuri

me? time Hi, Sebastian, Diego and Can questions. to Sumita. Thank you for answer the taking hear you the

Sebastian Kanovich

Yes, are How you? Good okay. morning.

Jorge Kuri

perfect. Yes,

So two I quick have questions.

shown on you could you First, dynamics share mix guidance, some color provide it e-commerce don't region. TPV this understand has quarter. the volumes correlation with but no in I

in So could EBITDA my forward? growth think and question second investments you TPV explain regarding And how the going should about technology. margins is we

XX% you about XX% that said the look You this year, guidance quarter. this are you for reiterating

costs expenses I opportunity to products growth? required And up and considering margins lower technology to expect the in a also scaling million we low coming could $X.X in starting are material this the like quarters the dLocal ramp Issuance-as-a-Service, technology going So expenses Go. forward? in increase other growth to you and looks because ask relative somewhat capture

So ramp expenses you. shouldn't tech up? Thank it

Sebastian Kanovich

Thanks Okay. for much the very question.

also that, President, Let our me today. add just the joining Jacobo Q&A is

is that we don't times, we merchant of way. I'll that So choose and reality -- of of in give of The in growth. products. a at two thinking with growth, see split payins. TPV standpoint products more the terms QX seeing from but in the don't and dynamics over both risk those shared are Diego very the We've let payouts don't always they'll the we evolution fundamentally, healthy terms we mix, We're

think both, complementary. are We bullish both we are that they highly on and very

point. it's your fair a of terms tax expenses, question In around

continue a in invest heavily most anything, We of emerging on place or we've all If many are in tech tech. Keep headcount. where in side that's markets. hires mind, the coming really are of added hires to the coming our our

hiring from in So that's even cost different other why or structure expect Europe. companies you would probably expect you what a than the in U.S. slightly

from do want if continue valuable. products the to to way side. sure to want you shying growth. on don't geographies, compound expenses infrastructure know I are is mix? our we the that on something away and on the not add add tech our more make continue to TPV any We more And more We to make Diego,

Diego Canay

happy QX. we are that Yes, we very as in commented

picking We seeing up. payouts are already

on in in mentioned payins, of the script, quarter-over-quarter is mentioned, we in case but output. are we in huge on we the -- somewhat the I see payouts and in higher, terms focused typical with growing take the in-line As both sorry, payouts on digits. Seba guide of we rate, like Conceptually, And payins grew TPV mid-teens. mean And revenue fronts. specifically the TPV. case opportunities mid-single in In of revenues mainly growth an of both TPV period. payins, and more are the payouts, mid-single In don't of case as case digits.

Sebastian Kanovich

on point, not terms just Jorge, XX% your is And our of-- XX%. It's in plus to guidance complement

Diego Canay

Yeah.

Jorge Kuri

Thank so Perfect. much. you

Sebastian Kanovich

your Thanks for question.

Operator

Tito Our Labarta question comes with Goldman Sachs. from next

Tito Labarta

Thanks the morning, and Good Hi. Seba, for taking my Sumita Diego. questions. call,

the above on you're rate. the at guidance revenue still question, And yeah, well First XXX%. net retention

You're guiding plus. for XXX%

I tougher think, come that of particularly comps Diego, quarter. you because mentioned down should next

suffering that complement general think should the that, -- just that we've And e-commerce streaming closer yet seen be services you showed just continue to XQ? deliver. following, I is So much a to XXX% you subscribers also bit globally in kind right to on of in

and impact retention you health the of you. we're Just on merchants, revenue sort color happening and give what seeing the net with like how Thank could globally growth rate? can your some particularly of that

Sebastian Kanovich

I'll cover take first of and the part second the question, Tito, part. Sure. the will Sumita

been It's being I extremely terms importantly, posted. and ever. just our in single function our of last we No vertical. in quarter the of vertical proud geographies quarter. more products, diversified it's of a accounted most very for best business of than XX% think are the revenues we And our -- quarter So

We've have through the again So expect as we such reality and through to with seen to again last in is we having business whatsoever, And verticals like no managed those, our with COVID. year very We've believe ups downs. going it we strong it diverse even grow. we do concentration But a crisis and seen see different history. hedge. a that very

core find in is time to the we thing serve. we continue our where having dial they the that focus in growth and emerging their markets other companies for continue are to to down markets emerging be Many operate. of The merchants a harder markets

are diversification, I'll more across more genuine on So making the a our going geographies. sure we to be with of that's them Sumita, serving you cover let in side. our future, focus. core think NRR products We the predictor and it's growth

Sumita Pandit

Thanks, Seba.

is emphasize I think the triple-digit would this point our I quarter is that consecutive of growth. also fifth

As merchants. NRR as far where NRR about consistent is have saw, from merchants, our the are revenues around I it XXX% and grown new coming On existing think region. year-over-year think pretty you we said will XXX% as always been We've we've think I mature. both and existing plus we it's concerned, our

As XXX%. was NRR you've our seen last quarter,

are we XXX%. at quarter, This

year expectation is plus. full Our XXX% the for

I very that think second there last will be a the few quarter performance over last in excellent also high next quarters. year an benchmark, some, I had meaning was that last would quarter say, year. of changes mind we the quarter-over-quarter Keep --

the still to stick believe So NRR XX% we we and expectation the that reflect extremely next that. year. for full bullish, you NRR are we our quarters the But expect to for will few plus

Tito Labarta

you, margin in the And general. a then Great. EBITDA follow-up Seba and a kind second of margins question, Thank Sumita. and just on

to a guiding than plus that XX% that less grow above said bit revenues. you're little You expenses for margin

specifically? a that if there year, I I first will may know throughout pressure of the which this the see just think, I margins the about investments Can of margin, which different any year, bit you seasonality mentioned also year? impacted And one half products just or different effect the margins. the the the margins don't more terms you you kind talk has through quarter. gross think bit was better little outlook? between, previously, tailor in a dynamics on how payouts, you of terms margin of Just in the margins of how gross payins be which or the lower evolve on versus maybe if specifically

Sebastian Kanovich

first Sumita the take part, I'll let second and the cover part. I'll

a of have extremely margin So margin, and NRR gross function kicking levels million extremely terms our in gross proud at quarter-over-quarter. that of an added $X it are We in in healthy to that's think the we has. metric, that's

optimizing gross never are for We margin a percentage.

we percentage for will that's part of that's incentivize optimize are it's for emphasize exactly us I hard the how think incentivize discussed we take those different and business. we our past, That's terms ask on where we'll are a the team. When always we them, our today. think our operating. are geography to every commercial the I where teams We into we and dollar that we more All and gross a predict the for, very of profiles. that have are situation this create way going profit let businesses big it's dollar amount. land way that's we very margin that are in how -- lower we But our to how first in running adding function is question. to amount more we it's that dollars you we percentage. in purely very to the stable on of that sorry, we Different partnerships products to sure margin contributes our dollars optimizing -- which P&L. our and And the dollars to margin. that Sumita, entirely focusing fact accretive, dot make are are platform that want are to different we the sure I'll again, those make And comes gross

Sumita Pandit

Thanks.

and margin, our depends at year-over-year and our look our and but each has structure, this $XX our profit So of product actually pricing gross on on cohort. only our XX% relative not gross million cost to the on think also quarter-over-quarter I XX% margin growth mix And increased gross you the if quarter.

a did percentage first is to the of have of Payins increase compared ago. you a X% And it's as higher this services about a if relative mix. is there getting payins out quarter, volume, TPV they indifferent the mainly quarter. our we again, in think quite when we processing by So mind, in and between us about payouts. slightly quarter our are contribution change costs, driven more about increase merchant and when to this sales X.X% keep business selling, are team for cost their the field, But in a give

optimizing are for We not mix. that

are and profit always optimizing cost quarter. share, We for that for yes, bit, optimizing for methods the little gross But a increased the payins we're processing dollars. and wallet a relative contribution higher up went have this payment payins

Tito Labarta

Thank Okay. Great. you.

EBITDA And sorry, and in in just any part your other the terms terms also in just the first of hiring of and like of investments? the like seasonality question margin

Sumita Pandit

I that, can take Seba.

typical have in would I seasonality don't other that that we you businesses. think expect a

today business. a I is up for how market discretion think lot excellent like that would especially have a our I can we ramp of we emphasize hiring. base, in to our cost related

I think you're us seeing that everything outside makes stronger.

that are join a really good we profitable. a to huge today, go we market where and come get gives and As out us know, talent you can us. in And like advantage strategic

So for great is a this us. opportunity actually

Tito Labarta

great. you, Okay, Sumita. Thank

Operator

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

Jason Kupferberg

now year really you I Hi, the guess XXX QX. How NRR. for we've wanted given curious XXX to do just to the degree target on potential And know of a follow-up I started full you confidence a I observed? did guidance. year, the ask higher strong plus I versus the your year mean, Obviously, the you're guys, strong. in start have to I'm expectations? in that the maintaining in that upside come

Sumita Pandit

for Thanks the question.

So -- sorry, ahead. go

Sebastian Kanovich

Sumita. Go ahead,

Sumita Pandit

question. for Thanks the

I will the continue think said, as that XXX% we be plus emphasize NRR. to I we NRR, on

changing not are we think yet. outlook I our

at our team that expectation behind the management stands those the the and I beginning of think was year numbers.

that this think quarter feel we've and we again had quarter, bullish. a I good really

delivering quarters few that focused stay pretty high. will for because we year NRR. comparison changes you last the year, XXX%-plus for very on were see quarter-over-quarter some As of But the said I next full a the quarters,

Jason Kupferberg

Okay.

how you considerations the like And to half sounds curious first modeling just you obviously volume it trended second conservative, quarter? to revenue in perspective understandable. be in as the relates metrics it us So on seasonal mind those want from I is want growth, any of through also which general, have growth? a top-line just just to keep was

Sebastian Kanovich

to Jason, trends. we we results, it's strong see early QX are Obviously, and underlying in QX. very discussing continue here

we've our never a what a been are to as lot continues out we merchants. want means that's and with have for we for. there management make fundamentally, more That products, drive optimizing and think tools to better to business our points We I more sure touch growth. go salespeople our more of

nothing of So as has significantly changed now.

We continue prospects very everything. to be bullish for about the

Jason Kupferberg

Okay. see for you results. the Thank these Well, nice to comments.

Sebastian Kanovich

Thanks.

Operator

from Our HSBC. Neha next question comes with Agarwala

Neha Agarwala

to the XX% the I concentration, for merchants it just top thank you in has first your in Hi, questions. Can quarter? mention on declined my clarify taking -- revenue did you that XX has it

Sebastian Kanovich

Diego?

Diego Canay

right. We were Yeah, in year. last is that XX

now. We are in XX

we I think QX. XX in for guided

-- we that have numbers. are so We on those

Neha Agarwala

could what have do towards terms you of a key of economy? sensitivity And of you in terms you some kind in merchants? growth in cautious have impact TPV of TPV slowdown as would kind to general slowdown growth quarters, any of And your the Okay. are the in coming overall in the the exposure global

Sebastian Kanovich

Sure, Neha. Thanks for the question.

So many have particularly discussed in We slow reasons to of it of the you've or whatsoever. Ukraine, or others to. to things many for exposure QX, in we exposure have no seen Russia Europe, to the down, we

some the fastest regions the to entirely emerging continues Our markets, world. in growing be which focused is in business of

very We are diversified.

we we've crisis don't post been continue in particular APAC, in to through -- no vertical. before we We levels growth. Latin customer That's hedge diverse and past. so been by and any to care We'll our business base. see cycles, America, future. really in and So business. by concentration country have We've a might of in able and Africa, to in very high grow and resilience important shown so. that's But growth winners through see has those very a much why our continue perfectly verticals to going exposures in losers of normal. lower that's the we having the expect But Definitely,

Neha Agarwala

question in last pickup again, And seen fair, year, rate That's gross there some the we the have except quarter, is And my the on was this rate. Throughout Seba. gross fourth quarter. compression take in take last decrease. for gross

So versus I of the in you do gross explained it's how your share see it increase led by which think take rate. from to But entirely payouts, that almost higher payins seems comments, Do pressure take more evolving could the as year, some traction more this you on maybe gather gross the payouts second in coming the quarters? you half in the think of see rate?

Sebastian Kanovich

thanks question. Neha, the for

for optimizing We are rate. take not

and able able that been take to go goes we've show was be us and up important that to down. So -- for rate

that seen effect year. You've last

might continue function We our same growing optimize rate. the mix, to our our the fastest So are merchants what business. that's don't building the evolution. the that who for are don't what business the fastest, We growing the the products. regions and are of are see think gross way right of It's that we are a take

incentivize are again, team. platform We optimizing we that's, the profit, making contributes commercial for to margins. every way gross sure our in dollar our that our And

happily profit margin. provided we'll take contribute they that deals So rates, to take at lower gross our

of so. intend start way, that scale. had to the up business profitable Ours always fact continue that business do is approach The and that growth. benefits always we've we've this to a we And from disciplined

in I in think our company. a as it's very baked much DNA

changed that and make our we sure today. optimized just never hasn't -- are top-line. that to that, contributed We for top-line We margin, always

Neha Agarwala

Perfect. congratulations Seba, comments. Sumita, And Diego earnings. Thank you, your on your for

Sebastian Kanovich

Neha. Thanks,

Operator

comes Our UBS. question Kaio Prato from with next

Kaio Prato

have team. the on you opportunity and questions. Hi, I my for to Seba side, Thank please. two ask

quarter. the The financial is you posted that first one losses this on

for rates me a per and policy charge position environment net And my please just your partners, as this to cash into is correct in a have the your today So not Brazil would directly results. to likely with are as you higher have positive exposed it this? fee impact you acquirer financial I'm all be rates, and Mexico done understanding, higher prepayment as you if in a policy of wrong, and

a ask please we financial drove expect question, you second if these So could then I can will what And bit this please. losses quarter? my forward? going what detail And little

Sebastian Kanovich

it? take to want you do Diego, Sure.

Diego Canay

Seba. Sure,

very financial results. was quarter for this particular So

there Chilean so Brazilian currencies As and appreciation Colombian peso, you at of know, the real, on. emerging were peso several market

we have in keep could be very them keep them are we of in earnings An keep markets, keep we dollars. distribution We emerging them and it U.S. we conservative we any in example U.S. excess of in if spend funds, this whenever -- dollars.

in the will the see but reason dollars, quarters, FX we this accounting to considered we the U.S. happens you local a all currencies. in as an U.S. the U.S. a the currency But the accounting currency, And So have thing, main end the of is to at evaluates, dollars, As because an that. and for in having U.S. financial -- the have have perspective, that But what having you record functional from again, financial right? dollars these is opposite, local eventually as if we functional foreign it if statements. Whenever of exchange? at markets, and of dollars, a these currency emerging you currency loss results have those loss. you have that typically, more are slight of day, an countries same look will is a

typically entities. you look translation we at If equity, the is $X adjustment. an see That that roughly have will consolidate the we of local million in you reversed effect whenever opposite

Sebastian Kanovich

if just may Kaio, that. comment I on

fluctuations to to pure dollar that financial hold to What and business in be going how own products treatment regards we amount. serve. dollar to losses, that. we closely are But Why, accounting accounted terms our our the the and what dollar business products need very marginal see we funds of are question Our is in are expected bought in continues there expected because on discussed for account in how you'll natural terms for the you hedges amount. our it's amount. a of own FX perform that to

payins, we But local So exposure whenever to we exposure. currency sure act position. make payouts a currency, hedge natural have our hedge to as also, we

Ours is a business. transactional

have probably -- in of anything, this during we benefited marginally you've not business are We And seen we the might if FX quarter. taking that positions.

We constant net of past, other amount. our is quarter, the posted continues be grow. important this well. you $XX.X as in We in important metric And but a thing that's have very losses net should to marginal for income and really in that dollar to the income the us expect million our

Kaio Prato

called understood second company which new my question initiative the on SMBs. just think recent And you. the here Thank weeks, that Great. Go, in a is Okay. dLocal I is I targeting launched,

platform, a it's the and from is differently global new the which So SMBs, merchants that focused on had. startups mainly focus of you already

that little would you huge please? this So you merchants, focus at if you used on to the about why moment have this given global the detail and opportunity? bit opportunity could a And on this please

Sebastian Kanovich

the Sure, question. for Kaio. Thanks

or effort coming a So merchants X sure that faster we've of better consistent want our global ecosystem have into been markets we Go companies and so an in have selling that's have merchants are smaller to to is days the the us to in We've extremely by ability marketplaces. to of sure onboarding volumes marketplaces. launched always through catering enterprises Go the believers navigate, that ago, merchants emerging behind. dLocal dLocal are through make smaller to and We and easy early. we it's that few experience reason either Tier make

be to our of dLocal bullish continue our forecast. business. existing core is We about None baked into very Go

serving if potential we opportunity, But So see a that time, we we to and same sure through an to the space. have at market upside smaller is, make do. anything, want are we participation more merchants everything this

Kaio Prato

Okay, great. Thank you, very Seba. Thank you much.

Sebastian Kanovich

Kaio. Thanks,

Operator

from comes SMBC with Securities. Andrew Nikko question Next Bauch

Andrew Bauch

follow your up for in taking on and Asia to Africa. wanted M&A Hey, I question. team. you around the comments Thank

on really that far you do super seen haven't at front. anything We thus transformational

to if us it at? maybe you'd out something the further? capabilities Is And you of what stack so of horizontal something looking a could be or even bit color help give on tech little types build

Sebastian Kanovich

to take want it? Sumita, you

Sumita Pandit

the Yes. Thanks, Seba. for Thanks question.

been us we I may going we M&A do consistent about building a that to think going as we strategic are sure we've for additive M&A make we are priority to is is think use the what that internally. will we always which forward,

called PrimeiroPay we platform case, had built In That's in business. As about and a careful to year, our that more stack ability small could been remain commercial want a that us there is us after deal be to went we $XX longer. million. focused. why the was felt to organically about really, dLocal where really to we some it Last do. merchants M&A or And us those a been the certain did is building add of geography PrimeiroPay. kind going we onboard deal entire we to we footprint we our you for to think in-house, access has tech aware, acquired Brazil merchants, be acceleration are in a needs are we gives take what that where kind which That's looking an we for, to for of accretive which either

yes, current So are current focused and presents us we but the remain assets very accretive anything revaluations imminent as be that is that, on transformational, amazing impact with was today. us. we there we of environment not Having following that of market transaction we've the execute M&A announced opportunity, would nothing seeing carefully an could if said an to today.

Andrew Bauch

geos when your in dynamics expand competitive you're the kind better face you a merchants new of us you hoping conversations when new walk new location? of it. there. sense. that could for then having these your I start through conversations those there taking in existing Got into Is to share to into to merchants wallet the regards having geos. enterprise you're understand the And existing just move Makes you want with you

Sebastian Kanovich

thanks the for Andrew, Sure. question.

platform and So premise one that API, on we one local do. it's for we contract in built platform the whole everything one the

to extremely geographically. see any you it's sure start key us. why us they That's move want into other us driver That's more the in simple with to and to expand make products attachment. continue have We Merchants geographies and for with expanding geography, one behind So our we merchants NRR. friction. without continue

you'll customer of we merchant going one, reflect see new be and very is our to that what to into dynamics where geographies Obviously, decided quickly the starts places more two, the expand in typically, places. to our three need So are funding. we in

to what's go to more them a exist our it with going it's the is always mind, disburse what right dollars and enabler. And merchants, collect type to of allow cost the or our have as So pricing? be the Keep we revenue that's discussion more We dollars. them. expansion. we But in we structure,

their We listen try our also strategy. to needs reflect in that and own to

earth. to companies are most have biggest of on and some We savvy the lucky enough

But that one, that, waiting is they two that, know merchant whenever into there's opportunity, number is be an point going So huge. a us number to expand. we we opportunity in typically before

be key to So focus. our that continues

base and it's merchant existing earth. the companies most of is Our growing savvy some on fast,

Where we What discussions goes that? our is start go And What's way somewhere. the next? solve product? that's next into can point? We we So that the gross All work. profit. for next how our do your

So effort every time integrate we no integration one, there's and additional whatsoever.

of companies, resources are our many tech scared. For

advantage. So having those integrations, distribution it's a huge

Someone that in can moved then to easily Mexico started Brazil. with us India or to

with beautiful that's Someone in move And us can that platform. started a Nigeria. to Brazil easily

Andrew Bauch

you. Very clear. Thank

Operator

Chris question Sandler. Piper from with comes next Our Donat

Chris Donat

given the merchants? changing my Thanks conversations challenges morning. taking the logistics. one anything ask focused with has Us wanted year questions. plans with merchant Like very were Good I into changed emerging still with interest focused or higher markets? to conversations, about your they're they globally their inflation, another from for perspective? is around rates, it things their Or much the a ago for on moving on two anything higher

Sebastian Kanovich

Thanks for No. the questions.

anything, We emerging have be you seen operate continue promising will, very a growth. again, are fast and markets no where changes land, to areas very If in we the plans. if

merchants we that's conversations are how having. we're of we make the make So sort saying sure do these And sure right have our navigate how the we countries, we do offering.

them growing most a Asia, deciding are emerging and benefit from is from of time merchants and the markets, hard U.S. growth And that. quite Many coming Europe their seen from haven't finding the from APAC, we retreat opposite. in LatAm, China, to of from We

today the the So that's way that's on seeing what are we ground. --

Chris Donat

helpful. right, challenging I that it pick merchant expect from guide, merchants it revenue very from comparisons we new last said so a think to XXXX you quarter and merchants. XXXX. know merchants you but from you year, strong. then how relative just from be And That's to in is new that the the Okay. Is ballpark, much from revenue And terms fair reasonable don't to new down? revenue XXXX, new Is was as I of specifically say? revenue should that in general, think about the

Sebastian Kanovich

to it? want Sure. Sumita, take do you

Sumita Pandit

Yeah.

we've always for our delivered customer I So solid numbers think additions.

way, prospect our we additions I we've remain we that I'll indicated customers. added customer more new than client customers this increasing many during XX-plus opportunities. look We actually on and like the customer are think significant added significant our this opportunities at quarter, look of always the we on have relationships. new We've these what to highlight several is quarter. at but and we've that those think XX, bullish extremely

retention year, As we And revenue you guidance. gave we the gave over we new up. have how is that guidance a client quickly platform, will not the full exactly have we have our visibility plus, you merchants our you noted, rate guidance net for to reason lot not a would but much when of did us, XXX% ramp on when merchants the do a onboard add we we those but when control of as with volumes give

volume. in quarters, in happens two variation ramp-up and there of happens that is the three that the in quarters, Sometimes sometimes

our not million last million, As quarter guidance these year-over-year with this our on was are our quarters in with well the And but if a revenue do basis. on it quarter be? bullish, we are strong, revenue merchant $XX what and customers $X extremely giving new million we would client we extremely extremely new you $X are and believe new saw, the compares that a that you specific

Chris Donat

there. Understood. Thank context for the you

Operator

for And at to management remarks. like time. I'm not the any call showing back any closing I'd to further this questions turn

Sebastian Kanovich

questions. for the Once for time everyone, again, and thanks, your

to them. team for of This all be our much. entirely Thank is very because We our about the support. to business. continue bullish And thanks extremely you

Operator

today's conclude does this gentlemen, and presentation. Ladies

day. You may have wonderful and now disconnect a

DLocal Limited (DLO) 18 May 222022 Q1 Earnings call transcript