DLocal reports Q4 EPS 10c, consensus 16c

Reports Q4 revenue $204.5M, consensus $206.31M. “As we walk through a review of our performance over the past quarter and year, and as we have repeatedly mentioned, we think of five pillars underpinning dLocal’s (DLO) investment thesis:A massive addressable market, given the untapped potential of emerging and frontier markets as they digitize payments and merchants go to market throughout the Global South. 85% of the world’s population resides in emerging markets1, and two thirds of global growth by 2035 will come from there2. Consistent high top line growth, driven by a proven track record of delivering value to the world’s most sophisticated global digital merchants that has allowed us to capture a market leading share of this expanding TAM. Attractive margin business with potential to deliver operational leverage once we have laid the foundational blocks and further scale benefits kick in. Strong cash generating financial model as Net Income converts well into FCF. Investment in product development capabilities to drive growth through new categories, products, feature innovations, and potential M&A activity. Our FY 2024 results affirm the investment thesis, highlighted by a record TPV of $26 billion, a strong TPV growth of 45% year-over-year, driven by a shift towards newer, more attractive markets, while core markets rebounded from Q3 softness. Additionally, revenue and gross profits reached record highs of $746 million and $295 million, respectively, with an adjusted EBITDA to GP margins closing the year at 64%, showing consistent improvement throughout the year. Furthermore, Net Income to FCF of Own funds3 conversion exited the year at a rate above 100%. These strong 2024 results should be seen in the context of a weak first quarter followed by progressively stronger quarter-over-quarter performance, and the continuation of an investment cycle aimed at achieving greater scalability for our business. Building on last quarter’s positive trend, our TPV grew over 50% year-over-year, despite a strong Q4 2023 comparison. Quarter-over-quarter, TPV growth accelerated to nearly 20%, driven by commerce seasonality, and strength in remittances and ride-hailing. In constant currency3, given general weakness in Emerging Markets currencies, those growth rates are even more impressive, about 30 points higher year-over-year.”