Summary of dLocal Q2 2026 Earnings Call

1Key Financial Results and Metrics

Total Payment Volume (TPV): Reached $17.7 billion, up 92% year-over-year, marking the highest growth rate since Q1 2022.

Net Revenue Retention: Stood at 153%, maintaining above 140% for five consecutive quarters.

Gross Profit: Increased to $127 million, a 29% year-over-year rise, with an annualized rate exceeding $500 million.

Operating Profit: Rose to $64 million, up 15% year-over-year, with operating profit as a percentage of gross profit improving to 50%.

Net Income: Reached $55 million, a 28% year-over-year increase, with diluted EPS at $0.18, supported by a share repurchase program.

Adjusted Free Cash Flow: $69 million, up 41% year-over-year, with a conversion rate of 125% of net income.

2Strategic Updates and Business Highlights

dLocal continues to deepen relationships with over 760 global merchants, including major players in ride-hailing, e-commerce, and video streaming.

The company is focusing on three strategic areas: broadening offerings, embedding AI and automation, and expanding value-added services.

The launch of "dMore," a merchant of record solution, aims to streamline market entry for clients by handling local compliance and tax issues.

The company is prioritizing expansion in the Asia Pacific region, which is seen as a significant growth opportunity.

3Forward Guidance and Outlook

dLocal raised its TPV growth guidance to 60%-70% year-over-year and gross profit growth guidance to 25%-30% year-over-year.

Operating profit growth guidance remains at 27.5%-32.5% year-over-year, despite anticipated headwinds from previous tax adjustments and foreign exchange impacts.

The company expects to see improvements in operating leverage as automation initiatives take effect in the latter half of the year.

4Bad News, Challenges, or Points of Concern

Cost Management: Operating expenses rose 46% year-over-year, with concerns about managing costs effectively in Mexico, where gross profit growth lagged behind revenue growth.

Take Rate Pressure: The take rate declined due to a mix shift towards lower-margin local-to-local transactions and pricing tier impacts from large merchant ramp-ups.

FX Volatility: Fluctuations in foreign exchange rates have created headwinds, particularly affecting operating expenses and profit margins.

Market Comparisons: The company anticipates tougher year-over-year comparisons moving into the second half of 2026.

5Notable Q&A Insights

Management expressed confidence in sustaining high growth due to market opportunities and successful investments in performance and product offerings.

The decline in take rates was attributed to a significant ramp-up from a large ride-hailing merchant, which, while affecting the headline rate, still contributed positively to gross profit.

There is optimism regarding the impact of AI and automation on operational efficiency, with expectations for improved cost structures in the second half of the year.

The effective tax rate is expected to remain volatile, influenced by country-specific regulations and business mix, with potential upward pressure from OECD's Pillar 2 framework starting in 2027. Overall, dLocal demonstrated strong financial performance in Q2 2026, with significant growth in TPV and gross profit, while also navigating challenges related to cost management and take rate pressures. The company remains optimistic about its strategic initiatives and market opportunities moving forward.