Dlocal Ltd Q3 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 : I guess two questions, if I can. I guess, first on Argentina? I know you've been flagging sort of some concern about the FX. But how much of Argentina was impacted just by the uncertainty around the elections in September and then going into October? Do you think now with the market views as a positive outcome to the election, can that subside and can potential growth in Argentina offset some potential FX devaluation from here? And then my second question, I mean you also mentioned changing tax regimes in Brazil. There was some news intra-quarter impacting Netflix and taxes on expecting funds outside of Brazil. If you can give some color on how that could potentially impact your business, if at all, and how

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : Okay. That's clear, Pedro. Just two quick follow-ups, if I may. On the FX in Argentina, I mean, for now, it seems like the government wants to maintain the band that they have. If that band is maintained at least in the short term, is that more positive for you? So they let the currency float, would that potentially be more negative? Just to understand how the band removing of the band and what happens afterwards would impact you? And second question on Brazil, there have been something about taxing fintechs at a higher rate, which was not passed by Congress. But just curious, would you have been potentially one of those fintechs that would have had that higher tax rate if that had been passed or just curious where your Brazilian subsidiary would fit in that tax regime?

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : Okay. I could follow up with you on that separately. Thanks for that, Pedro. And that's a bit on the things that are concerned, but I just want to make sure the questions get answered.

Question: Tito Labarta - Goldman Sachs Group Inc - Analyst : Of course, of course. I'll appreciate that. Thanks a lot, Pedro. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2025 / 10:00PM, DLO.OQ - Q3 2025 Dlocal Ltd Earnings Call

Question: Matthew Coad - Suntrust Robinson Humphrey Capital Markets - Analyst : Pedro, like you mentioned, another really strong quarter of volume growth above 50% year over year. It seems to me like a lot of the strength has come from the remittances and e-commerce verticals. And I was just hoping that you could kind of like opine on that and touch on the outsized drivers of growth there? And then also maybe talk about how you're thinking about those verticals for the next 12 months. Should we be worried at all about a slowdown due to tariffs, due to tax regimes, due to law of large numbers and tougher comps? Just hoping that you could touch on that a bit more.

Question: Matthew Coad - Suntrust Robinson Humphrey Capital Markets - Analyst : That was super helpful. And then just as my quick follow-up, I want to talk about the take rate. So on the positive side, what I was trying to better understand, you guys provide that nice walk in the deck. And you're pointing to a 4 bp headwind from an others category. I was wondering if you could shine some light on what that was? And if there was anything onetime in there that could reverse? And then the other thing I wanted to ask was in -- on the guidance slide, you guys mentioned the potential risk of aggressive discounting by competitors. Is that just a risk to be aware of? Or is that something that you've been seeing in some of your markets?

Question: Guilherme Grespan - JPMorgan Chase & Co - Analyst : Congratulations on the results. My question is on Brazil, trying to get together here the pieces that I have on Brazil, a pretty strong rebound sequentially again. And we have our internal tracking here. We saw a very strong performance since May specifically, at least in our tracking. So my question is basically trying to understand the nature. Is it a specific client? How much concentrated is this additional revenues and gross profit you're getting from Brazil. And if you can provide a little bit more color, I also see that the gross profit margin of the country has been moving up. It made a bottom at 38% in the first quarter, now rebounded to 50%, which tends to hint sometimes that this is more FX cross-border. So in summary, long story short, just trying to understand what is the composition of this Brazilian growth pretty strong rebound.

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : Congratulations on the results. So I wanted to ask you, Pedro, about your comments in your prepared remarks about the relative growth of local-to-local and the expectation of that going forward and the comment about Buy Now, Pay Later in the same context. So first, I want to clarify with those comments. Is that -- were you speaking specifically about Brazil? Or is that more broadly across the platform? And secondly, how could we interpret the take rate conclusions of that? Because it would seem to me like if local-to-local is outgrowing cross-border, that's dilutive to take rate, but local-to-local take rate may be moving higher if there's more about Buy Now, Pay Later, if you know what I mean. So those are two questions in there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2025 / 10:00PM, DLO.OQ - Q3 2025 Dlocal Ltd Earnings Call

Question: James Friedman - Susquehanna Financial Group LLLP - Analyst : Yes, that makes sense. I think we were trained at MDRs overall on Buy Now, Pay Later or higher, so presumably, you participate. I wanted to ask -- I got a lot of questions, but I'll just ask one more and drop it back into the queue. But -- in terms of your comments about alternative payment methods and 25 on-file. I kind of lost the train of thought there. Like my understanding was you had 1,000 or more APMs when I last checked. How is it different that you have 25 on-file, if I heard you right? Like what is that -- what does that mean?

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : First, really exciting new launches and initiatives that you had talked about. Just to clarify, I mean, with these -- the 27 APMs that you just mentioned, if I'm not wrong, the net take rate for APMs would be lower than that for cards. Your gross profit margin might be the same for both products, but in general, the net take rate should be lower for APMs. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2025 / 10:00PM, DLO.OQ - Q3 2025 Dlocal Ltd Earnings Call

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Yes. So it could also be -- act as a differentiator versus your competitors by giving much better conversions on APMs and gaining a higher wallet share for these particular type of volumes?

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Perfect. My second question is on the take rate evolution more in the medium term. So as you mentioned, all of these factors will probably put pressure on the net take rate. And one way to offset is by probably having more embedded finance products and the BNPL aggregator that you launched is one of those products that you could offer. But apart from that, what are the other embedded finance kind of products, which some of your competitors are probably trying to focus on for instance, card issuing or the stablecoin on runoff ramp that you mentioned? What are the products that we can think of in the medium term that would offset some of the pressure on the net take rate?

Question: Neha Agarwala - HSBC Securities (USA) Inc - Analyst : Just to clarify on the card present capability that you mentioned. You're not trying to enter the offline POS business, right? Now your presence is 100% online volumes. You're not trying to go into the offline volumes, right?