DLocal Stock Surges 43% After Earnings Beat and Raised Guidance, Setting Stage for Re-Rating as Payments Giant Exceeds Expectations and Shows Strong Growth Momentum

DLocal Limited's latest earnings report saw a 43% surge in stock price, with total payment volume reaching a record $9.2 billion, up 53% YoY, and revenue hitting $256.5 million, exceeding estimates by 12%. Adjusted EBITDA reached $70.1 million, a 64% increase from last year, and free cash flow surged 156% YoY to $48 million. The company raised full-year guidance, expecting revenue of $1.01 billion and adjusted EBITDA of $274 million. Management attributed growth to three structural tailwinds: a massive underpenetrated digital payments market, expansion of share-of-wallet with existing merchants, and early-stage adoption of new clients.

Title: DLocal Limited Reports Strong Q2 2025 Results, Surges in Stock Price

July 02, 2025 - DLocal Limited (NASDAQ: DLO) reported a strong performance for the second quarter of 2025, with the company's stock price surging by 43% following the announcement. The company's total payment volume (TPV) reached a record $9.2 billion, marking a 53% year-over-year (YoY) increase, and revenue climbed to $256.5 million, surpassing estimates by 12% [1].

Adjusted EBITDA for the quarter reached $70.1 million, a 64% increase from the same period last year. Free cash flow surged 156% YoY to $48 million, demonstrating robust cash generation. The company also raised its full-year guidance, expecting revenue of $1.01 billion and adjusted EBITDA of $274 million.

Management attributed the strong performance to three key structural tailwinds:

1. Massive Underpenetrated Digital Payments Market: DLocal operates in markets with trillions of dollars in total payment volume, yet low digital adoption rates present significant growth opportunities.

2. Expansion of Share-of-Wallet with Existing Merchants: By expanding with existing merchants into new countries and integrating additional alternative payment methods (APMs), DLocal aims to grow its share of wallet.

3. Early-Stage Adoption of New Clients: As merchants expand into emerging markets, DLocal accompanies them through the digital payment localization journey, building a more diversified and stickier business.

The company's geographic diversification is also evident, with the top 3 markets now representing less than 50% of revenues, down 8 percentage points since 2023. Revenue in the rest of the markets grew almost three times faster over the last four quarters.

During the quarter, DLocal added three new licenses: UAE, Turkey, and the Philippines, further expanding its global presence. The company also launched SmartPix in Brazil and multiple Buy Now Pay Later (BNPL) integrations in several markets, demonstrating its commitment to product innovation and staying ahead in the alternative payment method space.

Despite the positive results, DLocal's net income was negatively impacted by the Argentine peso devaluation on its bond portfolio. However, the company took steps to expatriate funds more efficiently, reducing its position by over 80% and reallocating to U.S. treasuries, which reduces expected volatility and increases funds available for general corporate purposes.

References:
[1] https://www.insidermonkey.com/blog/dlocal-limited-nasdaqdlo-q2-2025-earnings-call-transcript-1590574/