GICS Sector : Technology
DLocal Limited operates a payments platform in the United States, Europe, China, and internationally.Its payments platform enables merchants to get paid and to make payments online.The company serves commerce, streaming, ride-hailing, financial services, advertising, software as a service, travel, e-learning, on-demand delivery, gaming, and crypto industries.
The company reported a robust third quarter 2025, with total payment volume (TPV) growing nearly 60% year-over-year to $10.4 billion, and gross profit reaching $103 million, up 32% year-over-year. The quarter's results were driven by strong volume growth across the business, with particular strength in Brazil, Colombia, and other LatAm and Asia segments. Adjusted EBITDA reached approximately $72 million, up 37% year-over-year. Earnings per share (EPS) came in at $0.17, beating analyst estimates of $0.16.
Publication Date: Nov -15
According to Pedro Arnt, CEO, the growth is broad-based within TPV contributions throughout the S-curve of digital merchants adopting payment localization throughout emerging markets. The company is adding new merchants, deepening its share of wallet with existing merchants, adding payment methods, and accompanying them as they go to market in new countries. "Our product innovation road map also remains a top priority as we look to diversify our revenue base and drive increased average revenue per merchant," Arnt stated.
With a P/E Ratio of 26.76 and an EV/EBITDA of 14.88, the stock appears to be reasonably valued, considering the company's growth prospects. Analysts estimate next year's revenue growth at 28.1%, indicating a strong outlook. The company's return on equity (ROE) stands at 30.1%, and return on invested capital (ROIC) is 34.28%, indicating efficient capital allocation.
The company's performance in Brazil was particularly strong, with broad-based growth driven by long-term global relationships and new additions. Pedro Arnt mentioned that the growth is driven by a higher share of cross-border and take rate composition. The company is also seeing a gradual pickup in total payment volume in Argentina post-elections.
The company reiterated its guidance numbers, expecting TPV to exceed the high end of the range shared during the second quarter '25 earnings call. With a strong track record of execution and a focus on building a leading emerging market financial infrastructure company, the company is well-positioned for future growth.
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DLocal's transaction revenues are driven by increasing e-commerce adoption, growing demand for localized payment solutions, and expansion into new markets, particularly in Latin America and Asia.
DLocal's 'Other' segment is expected to grow driven by increasing interest income from cash reserves, foreign exchange gains from cross-border transactions, and miscellaneous income from diversified revenue streams.
DLocal's payment processing solution enables businesses to accept online payments from customers worldwide, with support for over 300 payment methods.
DLocal's cross-border payment solution enables businesses to send and receive international payments, with competitive exchange rates and low fees.
DLocal's marketplace payment solution enables online marketplaces to facilitate payments between buyers and sellers, with automated payment splitting and escrow services.
DLocal's mass payout solution enables businesses to send large volumes of payments to individuals or businesses worldwide, with automated payment processing and reconciliation.
DLocal's currency exchange solution enables businesses to exchange currencies at competitive rates, with low fees and fast settlement.
DLocal Limited operates in a niche market, providing payment processing solutions for emerging markets. While there are substitutes available, they are not as tailored to the specific needs of emerging markets, reducing the threat of substitutes.
DLocal Limited's customers are primarily large enterprises and merchants, who have limited bargaining power due to the specialized nature of DLocal's services.
DLocal Limited has a diversified supplier base, and its suppliers have limited bargaining power due to the company's scale and negotiating power.
The payment processing industry is attractive, and new entrants may be drawn to the market. However, DLocal Limited's established presence and expertise in emerging markets create barriers to entry.
The payment processing industry is competitive, but DLocal Limited's focus on emerging markets and its specialized services reduce the intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 0.86% |
| Debt Cost | 8.65% |
| Equity Weight | 99.14% |
| Equity Cost | 8.65% |
| WACC | 8.65% |
| Leverage | 0.87% |
Value: 5.9
Growth: 7.9
Quality: 7.4
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Momentum: 7.5
Volatility: 7.7
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