DLocal's Q4 2024 Earnings Call: Unpacking Contradictions in FX Assumptions, Take Rates, and Merchant Strategies

These are the key contradictions discussed in DLocal's latest 2024Q4 earnings call, specifically including: FX Assumptions for Guidance, Take Rate Expectations, Currency Exchange Rates and FX Impact, and Merchant Retention and Pricing Strategy:



Strong Fiscal Year 2024 Performance:
- dLocal achieved record TPV of $26 billion for fiscal year 2024, with accelerating growth to 45% year-over-year.
- The company reported record revenue of $746 million and gross profit of $295 million.
- Adjusted EBITDA to gross profit margins closed at 64%.
- The growth was supported by a strong focus on expanding into emerging markets and capturing market share among global merchants.

Investment Thesis and Market Expansion:
- dLocal continued to expand its license portfolio, adding 9 registrations in 2024, including an authorized payment institution license from the UK's FCA.
- This strategy allows for greater regulatory confidence, enhancing its competitive advantage and supporting its commitment to compliant practices.

Q4 2024 Financial Results:
- In Q4 2024, dLocal achieved a 50% year-over-year increase in TPV, with a 20% quarter-over-quarter acceleration.
- Gross profit reached a record $84 million, reflecting a 1.1% net take rate.
- The company reported strong contributions from Argentina, Egypt, and other frontier markets, supporting both cross-border and local-to-local payment volumes.

TPV Growth and Market Diversification:
- dLocal's total operating expenses increased by 12% quarter-over-quarter and 44% year-over-year, primarily driven by investments in product development and IT capabilities.
- Despite challenges from take rate compression, the company maintained an adjusted EBITDA to gross profit margin improvement to 68%.

Guidance and Strategy for 2025:
- dLocal guides to sustained high TPV and revenue growth, driven by increasing wallet share and strategic focus on market share gains and new vertical opportunities.
- The company expects continued investment in product development and license portfolio expansion, supporting operational leverage and improved adjusted EBITDA margins over time.