Slide 1: Earnings Presentation Q3 2023
Earnings Q3 2023 Presentation
Slide 2: Presenters: Co-CEOs, Co-President, CFO and Investor Relations
Pedro Arnt Sebastián Kanovich Sergio Fogel Diego Cabrera Canay Maria Oldham Co-Chief Executive Officer Co-Chief Executive Officer Co-President and Chief Chief Financial Officer SVP - Corp. Development, Strategy Officer Investor Relations and Strategic Finance
Slide 3: Safe Harbor
EARNINGS PRESENTATION Q3 2023 Safe This presentation may contain forward-looking statements. These forward-looking statements convey dLocal’s current Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances Harbor exp
Slide 4: We are building the best financial infrastructure for emerging markets
We are building the best financial infrastructure for emerging markets Mexico D.F, Mexico 4
Slide 5: One stop shop in emerging markets
One stop shop in emerging markets Solving complex payments problems for global merchants 5
Slide 6: Continued sequential growth in Q3 after outstanding Q2
Continued sequential growth in Q3 after outstanding Q2; confirming the strength of our business Total Processed Volume Revenue Gross Profit Adjusted EBITDA1 $4.6B $164M $75M $56M +69% YoY | +6% QoQ +47% YoY | +2% QoQ +38% YoY | +5% QoQ +34% YoY | +7% QoQ 77% 74% 75% Adjusted EBITDA / Gross profit (%) N
Slide 7: We continue to invest thoughtfully in strengthening our global organization
We continue to invest thoughtfully in Technology strengthening our global organization FTE by 39% The hires for the period were evenly allocated, as we intensify ongoing efforts to function (%): strengthen support areas and further upgrade internal processes and tools, while maintaining our prior co
Slide 8: Robust global network of trusted financial partners
3Q23 cross-border expatriation Robust global volumes by partner mix: network of trusted 0.3% financial partners 3% 6% 7% In Q3 2023, we expatriated close to 80% of the pay-ins cross-border TPV through banks (global, pan LatAm or national partner banks) 84% 8
Slide 9: Growth driven by performance in most verticals
Growth driven by $4.6B performance in most $4.4B Other2 45% Travel 17% verticals; showing SaaS 54% both diversification Advertising 11% and performance On-demand delivery 28% across the board $2.7B Streaming 59% Ride-hailing 81% Financial Services1 23% Commerce 273% 3Q22 2Q23 3Q22 2Q23 3Q23 YoY 9 Not
Slide 10: Sustained strong revenue momentum in our largest region
Sustained strong revenue momentum in our largest region, driven by Brazil and Mexico Latin America revenue Africa & Asia revenue ($M) ($M) Excluding Nigeria +7% QoQ -19% QoQ +41% QoQ +56% YoY +14% YoY +79% YoY % share of total % share of total revenue 78% 79% 83% revenue 22% 21% 17% 10
Slide 11: Financial Highlights
Financial Highlights 11
Slide 12: Robust YoY growth rates in Pay-ins and Pay-outs
Pay-ins1 TPV evolution ($B) Pay-outs2 TPV evolution ($B) Robust YoY +8% QoQ +0% QoQ growth rates +68% YoY +73% YoY in Pay-ins and Pay-outs % share 75% 71% 70% 73% 74% % share 25% 29% 30% 27% 26% Cross-border3 TPV evolution ($B) Local-to-Local4 TPV evolution ($B) +2% QoQ +10% QoQ Continuous +46% YoY
Slide 13: Another record in revenue, reaching $164M in 3Q23
Another record in revenue, Continued focus on growing gross reaching $164M in 3Q23 profit dollars Revenue evolution ($M) Gross Profit evolution ($M) +2% QoQ +5% QoQ +47% YoY +38% YoY 13
Slide 14: Stable take rates confirm steady pricing power
Stable take rates confirm steady pricing power Gross Profit margin (%) QoQ bridge Gross Profit over TPV (%) QoQ bridge Lower Increase in Lower cross-border Africa & Asia expatriation Increase in Lower Lower share Merchants TPV share with higher costs in pay-ins TPV cross-border in certain growth than a
Slide 15: Profitable growth remains a top priority, Adjusted EBITDA over gross profit increased to 75%
Profitable growth remains a top priority, Adjusted EBITDA over gross profit increased to 75% Adjusted EBITDA1 evolution ($M) Adjusted EBITDA ratios evolution (%) +7% QoQ +34% YoY Note: 1dLocal has only one operating segment. Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as
Slide 16: Margins positively impacted by lower expatriation costs
Margins positively impacted by lower expatriation costs and growth in countries with higher margins Adjusted EBITDA1 margin QoQ bridge (%) Lower expatriation costs 2 Note: 1dLocal has only one operating segment. Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS m
Slide 17: Net income +25% YoY, QoQ decline driven by net financial results
Net income +25 YoY, QoQ decline driven by net financial results Net income evolution ($M) Net income bridge QoQ ($M) -10% QoQ +25% YoY 3 2 Diluted 0.10 0.06 0.11 0.15 0.13 EPS1 Note: 1Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by t
Slide 18: Adjusted net income would have been $49M excluding non-cash items
Adjusted net income would have been $49M excluding accounting non-cash items, mostly related to the Argentine bonds, and IFRS inflation adjustment Reconciliation from 3Q23 reported net income to adjusted net income ($M)1 +8% QoQ +41% YoY Note: 1Adjusted Net Income is a non-IFRS financial measure. As u
Slide 19: Quarterly cash generation affected by working capital impact
Quarterly cash generation affected by working capital impact on merchants funds fluctuations; own funds cash conversion remains >100% Consolidated cash reconciliation ($M) Strong FCF1 (own-funds) -$51M generation of $45M in 3Q23 +$2M Own funds cash conversion2 prior to purchase of Argentine bond> 100
Slide 20: Highlights
Highlights We power a massive and expanding emerging markets ecosystem accepting more than 900 local payment methods across 40+ countries We are directly integrated with some of the world’s largest online merchants, driving very strong NRR and cohort performance We have built a scalable, single API
Slide 21: Thanks
Thanks d-local
Slide 22: Appendix
APPENDIX
Slide 23: TPV
TPV breakdown by type of product1 TPV In millions of US$ 3Q22 4Q22 1Q23 2Q23 3Q23 LTM3Q22 LTM3Q23 Pay-ins 2,046 2,334 2,503 3,190 3,429 6,988 11,455 As % of total 75% 71% 70% 73% 74% 77% 72% Pay-outs 687 962 1,072 1,184 1,189 2,138 4,406 As % of total 25% 29% 30% 27% 26% 23% 28% Total TPV 2,734 3,29
Slide 24: Revenue
Revenue Revenue breakdown by geography In millions of US$ 3Q22 4Q22 1Q23 2Q23 3Q23 LTM3Q22 LTM3Q23 Brazil 21.8 23.4 22.8 41.2 44.7 76.7 132.2 Argentina 19.1 14.2 20.0 20.7 23.9 78.4 78.8 Mexico 16.6 22.4 22.7 28.3 30.2 56.7 103.7 Chile 13.7 13.9 14.2 14.2 12.4 49.7 54.7 Other LatAm 16.0 18.9 18.5 22
Slide 25: Revenue
Revenue Top 10 merchant revenue1($M) and concentration (%) Revenue composition ($M) 141% NRR2 % Share of total 53% 55% 58% 59% 60% revenue Note: 1Top 10 merchants may vary from period to period. 2“NRR” means Net Revenue Retention rate, which is the U.S. dollar-based measure of retention and growth o
Slide 26: Adjusted EBITDA
Adjusted Adjusted EBITDA bridge ($M) EBITDA Note: Adjusted EBITDA excludes one-off expenses and non-cash items. Unaudited quarterly results. 26
Slide 27: Adjusted EBITDA
Adjusted Reconciliation of Profit to Adjusted EBITDA EBITDA $ in thousands 3Q22 2Q23 3Q23 Profit for the period 32,338 44,791 40,364 Income tax expense 2,287 8,774 8,897 Depreciation and amortization 2,110 2,869 3,237 Finance income and costs, net 2,479 (7,459) (1,548) Share-based payment non-cash cha
Slide 28: Adjusted Net Income
Adjusted Reconciliation of Profit to Adjusted Net Income Net $ in thousands 3Q22 2Q23 3Q23 Profit for the period 32,338 44,791 40,364 Income Share-based payment non-cash charges 1,599 1,421 3,322 Other operating (gain)/loss 706 - - Impairment loss / (gain) on financial assets (24) (21) (2,508) Inflation