DLO · DLocal Limited

dLocal delivered exceptional Q1 2026 top-line growth with TPV surging 73% YoY to a record US$14.1 billion, driven by six consecutive quarters of 50%+ growth, strong volume expansion in Argentina, Africa (Nigeria, Mozambique), and Asia (Vietnam), despite Brazil normalization post an exceptional Q4 2025. Revenues rose 55% YoY to US$335.9 million, though flat QoQ due to less favorable payment mix and narrower FX spreads. Gross profit hit a new record at US$118.7 million (+40% YoY), with margin contracting to 35% from 39% YoY amid scaling dynamics with established merchants and new products/countries; gross profit over TPV fell to 0.84% from 1.05%. Operating expenses rose 58% YoY to US$65.9 million (US$61.5 million normalized), reflecting 2025 investment cycle carryover, yielding operating profit of US$52.8 million (44% of gross profit) or US$57.2 million normalized (+25% YoY). A one-off US$9.7 million prior-period tax adjustment elevated the effective tax rate to 26% (16% normalized), resulting in reported net income of US$41.9 million (down 10% YoY) versus US$51.6 million adjusted (+11% YoY). Adjusted Free Cash Flow of US$14.7 million was pressured by temporary working capital swings in tax credits and receivables, expected to normalize. Corporate cash grew to US$451.8 million. Management affirmed guidance unchanged, highlighted operating leverage improvement in 2H26 despite higher OPEX carryover, and expressed confidence in secular tailwinds from merchants shifting to local processing. CEO Pedro Arnt emphasized the intact thesis with compounding infrastructure value.