Dlocal Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : All right. Thank you. Good evening, Jeff and everyone. Thank you for the call and taking my questions. Congratulations on the strong results and the higher guidance. I guess just on the higher guidance, just to understand, what drove the, I guess, the better-than-expected results? I mean you saw volume growth. I mean, Brazil and Mexico were strong. But did anything surprise you from compared to when you gave your initial guidance? And I guess, how do you think about the sustainability of this 50%-ish TPV growth? Just to think about how eventually that could decelerate. I mean, I think the long-term potential is still very strong, but just to think about how that could moderate over time. And yes, what was like better than expected that you're getting more volumes than maybe initially thought?

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : Great. That's helpful. Thank you, Pedro. Maybe just a follow-up to that. When you think about maybe the breadth of this growth relative to your merchants, is it coming from maybe a few particular merchants? Are you seeing it across the board, all of your merchants? Just to think, I mean, given the wallet share you have, there is a lot of room to grow. But how do we think about the breadth of increased volume from all of your merchants across? Or is it concentrated in a few merchants?

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : Yeah. Okay. No. That's super helpful. Thank you and congrats again on the strong results.

Question: Guilherme Grespan - JPMorgan Chase & Co - Analyst : Thank you, Pedro. Thank you for the presentation and good luck to Guillermo, Chris, and Will that joined the Board. Pedro, two questions on my side. The first one is related to Brazil. You mentioned the one-off processing costs as a gain. And just a clarification. I remember you had this one-off cost last quarter. I just want to understand if it was a reversal. So it was a billable positive this quarter that's going to be a one-off and won't repeat next quarter? Or it's simply adjusting for the fact that there was a one-off last quarter that doesn't repeat? So just to be clear, if it was a reversal or only the fact that you didn't have this cost. And then my second question, I'm going to take the opportunity to ask about stablecoins. To be honest, 90% of my discussions on the local has been on this topic. And I think it's not obvious. A lot of people, they have the view that this is a threat to the business, but I think you do have some use cases as an opportunity. So just to share your view, a few minutes sharing your view on how you see stablecoins impacting your business, and if there is anything in the short term that is happening with your clients. Thank you.

Question: Guilherme Grespan - JPMorgan Chase & Co - Analyst : That's clear, Pedro, and congrats for the quarter.

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : I was wondering what your updated messaging might be about take rates, Pedro. So you had an improvement here. It sounds like you're calling out pay-in and payout mix and some processing-related stuff. But when you step back really longer term, how are you structuring your thoughts about the trajectory of take rates?

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : Okay. Thank you for that. And then when you were describing the vectors of growth and the S-curve of adoption, you also talked about new products. And then you referenced them -- introduced the Pix functionality parcel out of the Pix expanded solution. I'm just wondering, what are you excited about in terms of new product introductions? What are the merchants asking you about? And what's your time frame for delivery on those? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2025 / 9:00PM, DLO.OQ - Q2 2025 Dlocal Ltd Earnings Call

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : Okay. Thanks for the color. I'll jump back in the queue.

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Hi. Thank you for taking my question and congratulations on the numbers. First, can I ask about -- you mentioned tariff as a risk and cross-border as well. Can you elaborate a bit on that? How do you see the impact of tariffs? And where do you see the biggest risk for dLocal coming from that? My second question is -- was on the product innovation. And can you double-click on the offline piece that you mentioned that's still upcoming? Previously, dLocal had mentioned that offline is not as fast growing as online, and therefore, you don't want to have capabilities on the offline side. So it seems that, that has changed. If you can please explain what is your thinking on that. And my last question is on costs. I think you did a great job this quarter, better than expected on the cost front. Should we expect to see more controlled cost growth in the second half of this year and you've turned the corner on the cost side? Or were there any one-offs which might not be there in the second half? Thank you so much.

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : So just potentially in terms of GMV slowdown could happen if there's no noise around tariffs. So that could be looked to GMV?

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Not take rate?

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Understood. Thank you so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2025 / 9:00PM, DLO.OQ - Q2 2025 Dlocal Ltd Earnings Call

Question: Matthew Coad - Truist Securities Inc - Analyst : Hey. Good evening, guys. Thanks for taking the question. Pedro, I wanted to go back to the net take rate discussion. Just wanted to make sure we have all the moving pieces right here, particularly on the 18-point headwind from the tighter FX spreads in Argentina, the 15-point tailwind from the processing cost recovery. Could you provide a little bit of color on like what you expect for 3Q, right? Like what impacts here were onetime and we should adjust for them versus like what impacts are ongoing as we look forward?

Question: Matthew Coad - Truist Securities Inc - Analyst : Thanks, Pedro. That's super helpful. I understand that there's a lot of moving pieces. And then for my follow-up, I wanted to go back to the point on the top 10 merchants, right? Revenue growth with these merchants is still really strong, up 49% year over year. I was hoping you could touch -- like break down that growth for us a little bit. I'm curious how much of that growth is coming from these merchants using dLocal in more countries. And then as we think about growth from this growth vector going forward, what does the pipeline look like now in terms of these companies using dLocal in even more countries compared to, say, 12 months ago?

Question: Matthew Coad - Truist Securities Inc - Analyst : Thanks, Pedro.