Slide 1: Earnings Presentation Q2 2023
Earnings Q2 2023 Presentation
Slide 2: Presenters
Sebastián Kanovich Pedro Arnt 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 Q2 2023 Safe This presentation may contain forward-looking statements. Unless required by law, dLocal undertakes no obligation to publicly update or revise These forward-looking statements convey dLocal’s current any forward-looking statements to reflect expectations or forecast
Slide 4: Building the best financial infrastructure for emerging markets
We are building the best financial infrastructure for emerging markets Sao Paulo, Brazil 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: Strong performance in 2Q23; delivering highly profitable growth
Strong performance in 2Q23; delivering highly profitable growth Total Processed Volume Revenue Gross Profit Adjusted EBITDA $4.4B $161M $71M $52M +80% YoY | +22% QoQ +59% YoY | +17% QoQ +43% YoY | +14% QoQ +36% YoY | +14% QoQ 77% 74% 74% $71 $4.4 $161 $62 $52 $3.6 $137 $45 $50 $38 $2.4 $101 2Q22 1Q23
Slide 7: Efficiently building capabilities in our global organization
We continue to efficiently Technology build capabilities in our FTE FTE by global organization evolution (#): function (%): 39% AFRICA & ASIA The hires for the period were well balanced across the different teams 202 +71% YoY Corporate central functions 21% 806 AMERICAS 604 +18% YoY Sales & Marketing
Slide 8: 3-fold growth strategy
What fuels our growth engine? 3-fold growth strategy 8
Slide 9: Latin America revenue
GEOGRAPHIES Latin America revenue LATIN AMERICA ($M) +29% QoQ +45% YoY Key updates 127 98 Sustained growth rates in Latin America are a true indicator of the hypergrowth 88 potential that we still have in the region Revenue accelerated in Brazil in 2Q23, doubling YoY 2Q22 1Q23 2Q23 Continuous growth
Slide 10: Africa & Asia revenue
3GEOGRAPHIES GEOGRAPHIES Africa & Asia revenue AFRICA & ASIA ($M) -12% QoQ Key updates +152% YoY 39 Impact of devaluation in Nigeria ~$6M1 Our merchants continue to signal strong 34 demand for our solution in Africa and Asia Revenues in the region continue to show 14 solid growth excluding Nigeria,
Slide 11: Client centric approach drives adoption and revenues per merchant
Our client centric approach continues to drive consistently incremental adoption and revenues per merchant Case Example: Leading global e-commerce Successfully cross-selling geographies, products and services: platform Strong TPV growth, increasing >100x from 2Q21 to 2Q23 2Q21 2Q23 dLocal’s effectiv
Slide 12: Emerging markets are evolving and diverse; agile adaptability is key
Emerging markets are constantly evolving and are highly diverse; agile adaptability is key ARGENTINA - In late April, the Central Bank of Argentina amended certain foreign exchange regulations and established new procedures1 to obtain foreign currency for the settlement of certain services - We cont
Slide 13: Financial Highlights
Financial Highlights 13
Slide 14: Sustained growth rates in Pay-ins and Pay-outs
Sustained growth Pay-ins1 TPV evolution ($B) Pay-outs2 TPV evolution ($B) rates in Pay-ins and Pay-outs +27% QoQ +10% QoQ +70% YoY +114% YoY 3.2 2.0 2.3 2.5 1.9 1.0 1.1 1.2 0.6 0.7 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 % share 77% 75% 71% 70% 73% % share 23% 25% 29% 30% 27% Cross-border3
Slide 15: Strong revenue growth, record $161M in 2Q23
Strong revenue growth, reaching $9M of gross profit addition QoQ, a record of $161M in 2Q23 highest contribution in the past 2 years Revenue evolution ($M) Gross Profit ($M) evolution +14% QoQ +17% QoQ +43% YoY +59% YoY 71 161 137 62 118 55 112 54 101 50 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q
Slide 16: Changes in gross margin and net take rate driven by business mix
Changes in gross margin and net take rate driven by business mix Gross Profit margin (%) QoQ bridge Gross Profit over TPV (%) QoQ bridge 45% -0% -1% -2% 2% 44% 1.7% 0.0% -0.1% -0.1% 0.0% 1.6% +3p.p. +4p.p. increase increase in +4p.p increase Decrease in in local-to-local Decrease in Merchants pay-ins
Slide 17: Strong Adjusted EBITDA and net income growth
Strong Adjusted EBITDA and net income growth, maintained solid Adjusted EBITDA over gross profit stable at 74% Adj. EBITDA1 ($M) and Adj. EBITDA margin (%) evolution Net income evolution ($M) +14% QoQ +26% QoQ +36% YoY +46% YoY 52 45 45 42 40 35 38 32 31 19 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q2
Slide 18: Strong cash generation from operating activities
Strong cash generation from operating activities Consolidated cash reconciliation ($M) +$32M Strong FCF1 (own-funds) generation: +$141M $83M in the first half of 2023 ($41M in 2Q23) Cash conversion2 > 100% in the first half of 2023 Note: 1FCF (own-funds) is calculated as profit before income tax less i
Slide 19: Highlights
Highlights We power a massive and expanding emerging markets ecosystem accepting more than 900 local payment methods across 40+ countries We are directly integrated with some of the world’s largest online merchants, driving very strong NRR and cohort performance We have built a scalable, single API
Slide 20: Thanks
Thanks d-local
Slide 21: Appendix
APPENDIX
Slide 22: TPV
TPV breakdown by type of product1 TPV In millions of US$ 2Q22 3Q22 4Q22 1Q23 2Q23 LTM2Q22 LTM2Q23 Pay-ins 1,881 2,046 2,334 2,503 3,190 6,186 10,073 As % of total 77% 75% 71% 70% 73% 75% 72% Pay-outs 552 687 962 1,072 1,184 2,018 3,904 As % of total 23% 25% 29% 30% 27% 25% 28% Total TPV 2,433 2,734
Slide 23: Revenue
Revenue Revenue breakdown by geography In millions of US$ 2Q22 3Q22 4Q22 1Q23 2Q23 LTM2Q22 LTM2Q23 Brazil 20.7 21.8 23.4 22.8 41.2 72.6 109.3 Argentina 23.2 19.1 14.2 20.0 20.7 72.9 74.1 Mexico 16.0 16.6 22.4 22.7 28.3 48.7 90.1 Chile 12.7 13.7 13.9 14.2 14.2 48.0 56.0 Other Latam 15.0 16.0 18.9 18.
Slide 24: Revenue
Revenue Top 10 merchant revenue1($M) and concentration (%) Revenue composition ($M) 148% NRR2 94 11 161 80 49 65 59 101 52 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 Existing Merchants New Merchants 2Q23 % Share of total 51% 53% 55% 58% 59% revenue Note: 1Top 10 merchants may vary from period to period. 2“NRR” m
Slide 25: Adjusted EBITDA
Adjusted 2Q23 Adjusted EBITDA Bridge ($M) EBITDA 48 3 1 0 0 52 2Q23 Operating Depreciation and Stock-based Impairment Other 2Q23 Adjusted Profit (IFRS) amortization Compensation Gain/Losses on EBITDA Financial Assets Note: Adjusted EBITDA excludes one-off expenses and non-cash items. Unaudited quarte
Slide 26: Reconciliation of Profit to Adjusted EBITDA
Adjusted Reconciliation of Profit to Adjusted EBITDA EBITDA $ in thousands Three months ended 30 of June 2023 2022 Profit for the period 44,791 30,722 Income tax expense 8,774 4,151 Depreciation and amortization 2,869 1,857 Finance income and costs, net (7,459) (253) Share-based payment non-cash charg