Slide 1: Earnings Presentation Q2 2024
Earnings Q2 2024 Presentation
Slide 2: Presenters: Pedro Arnt, Mark Ortiz, Maria Oldham
Pedro Arnt Mark Ortiz Maria Oldham Chief Executive Officer Chief Financial Officer SVP - Corp. Development, Strategy and Investor Relations
Slide 3: Safe Harbor
EARNINGS PRESENTATION Q2 2024 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: Unlocking the potential of Emerging Markets
Unlocking the potential of Emerging Markets Bogota, Colombia. 4
Slide 5: Record-high TPV in Q2; QoQ profitability resumed
Record-high TPV in Q2; QoQ profitability resumed amid impact of currency devaluation, merchant repricing, and continuing OPEX investments for future growth Total Payment Volume Revenue Gross Profit Adjusted EBITDA1 $6.0B $171M $70M $43M +38% YoY | +14% QoQ +6% YoY | -7% QoQ -1%YoY | +11% QoQ -18% YoY
Slide 6: Strong TPV performance across diverse verticals
Strong TPV performance Other2 -9% across diverse verticals Travel -3% Remittances 82% Advertising 17% Continued strong growth On-demand 43% in the commerce, on- delivery demand delivery, and SaaS 72% remittances verticals; Streaming 15% accelerating growth from Ride-hailing 51% SaaS, and ride-hailin
Slide 7: Latin America and Africa & Asia revenue
LatAm: QoQ growth mostly attributed Africa & Asia: QoQ decrease affected to positive performance in Argentina by the devaluation in Egypt and Nigeria. and Other LatAm. YoY comparison YoY comparison also impacted by supported by the growth in Mexico Nigerian Naira devaluation and Other LatAm Latin Am
Slide 8: Latin America and Africa & Asia gross profit
LatAm: QoQ increase driven Africa & Asia: QoQ increase mostly primarily by growth in Argentina and driven by temporary FX dynamics in Other LatAm. YoY comparison still Nigeria and growth of Other Africa & impacted mainly by FX in Argentina Asia. Strong YoY growth mainly supported by Nigeria and Egyp
Slide 9: Detailed country gross profit contribution QoQ
Detailed country gross profit contribution QoQ Gross profit QoQ ● Improved processing cost from renegotiation with processors and change in payment mix, both of Brazil +7% which were partially offset by 19m | +1.3m vs. LQ ● Key merchant repricing (full impact in 2Q24 vs 2 months in 1Q24) México -11% ●
Slide 10: Building the global team to meet long-term growth ambitions
Building the global team to meet Technology & Product our long-term growth ambitions. FTE by 43% Focus on areas of differentiation: function (%): technology, product, and local operations. Corporate central functions 993 +187 FTEs or 23% Employee Growth YoY 17% Sales & Marketing AFRICA & ASIA AMERIC
Slide 11: Financial Highlights
Financial Highlights 11
Slide 12: Cross-border and local-to-local TPV growth
Cross-border and local-to-local growing YoY and QoQ; Cross-border performance QoQ driven mainly by the increase in ride-hailing vertical Cross-border1 TPV evolution ($B) Local-to-Local2 TPV evolution ($B) +11 % QoQ +16 % QoQ +22 % YoY +55 % YoY % share 51% 49% 44% 46% 45% % share 49% 51% 56% 54% 55%
Slide 13: Pay-ins and pay-outs TPV growth
YoY robust growth rates; QoQ pay-ins increasing primarily by commerce, on-demand delivery, and ride-hailing verticals, pay-outs growing driven by financial services, ride-hailing, and SaaS verticals Pay-ins1 TPV evolution ($B) Pay-outs2 TPV evolution ($B) +17 % QoQ +7 % QoQ +34 % YoY +49 % YoY % shar
Slide 14: Revenue and gross profit evolution
YoY revenue increased by 6%, while QoQ decline mostly driven by devaluation in Egypt and Nigeria. Gross profit YoY impacted mainly by Argentina Revenue evolution ($M) Gross Profit evolution ($M) -7 % QoQ +11 % QoQ +6 % YoY -1 % YoY 14
Slide 15: Gross profit margin and net take rate
Sequential improvement in gross profit margin and flat net take rate, despite the headwinds of merchant repricing, devaluations in Nigeria and Egypt, and weakening across most emerging markets currencies Gross Profit margin (%) QoQ bridge Gross Profit over TPV (%) QoQ bridge Increase in Increase in Prim
Slide 16: Adjusted EBITDA and operating profit improvement
QoQ improvement on Adjusted EBITDA and Operating Profit mainly driven by higher gross profit and a disciplined OPEX investment Adjusted EBITDA1 evolution ($M) Operating Profit evolution ($M) +16 % QoQ +12 % QoQ -18 % YoY -37 % YoY Adj. EBITDA / 32.3% 33.9% 26.2% 19.9% 24.9% Revenue Adj. EBITDA / 73.5%
Slide 17: Adjusted EBITDA over gross profit margin bridge
QoQ Adjusted EBITDA over gross profit margin improvement driven by higher gross profit and balanced approach to expense management balancing short-term and long-term opportunity Adjusted EBITDA1 over Gross Profit margin QoQ bridge (%) Note: 1dLocal has only one operating segment. Although Adjusted EBIT
Slide 18: Net income increase driven by finance income
Increase in net income primarily driven by higher finance income, given the non-cash mark to market effect related to Argentine bonds investments used to hedge our local currency position in that market Net income evolution ($M) Net income bridge QoQ ($M) +161 % QoQ +3 % YoY 2 3 Diluted 0.15 0.13 0.1
Slide 19: Balance sheet position remains solid; share buyback
Balance sheet position remains solid; $82M of own funds used for share buyback program Consolidated cash reconciliation ($M) Robust own liquidity of $306M, including $186M own cash + $120M short-term investments. In -$41M addition, we have $66M within merchants funds pending to be transferred to own
Slide 20: Updated 2024 guidance
Updated 2024 guidance Prior 2024 Updated 2024 Key considerations Guidance Guidance ● Downward probability of volume ramp-ups; ● Pipeline volume mix skewed towards Tier 0 TPV $25-27B $24.5-26.5B merchants that have lower take rates; ● General expectation of weakening emerging markets currencies. ● Gr
Slide 21: Thanks
Thanks d-local
Slide 22: Highlights
Highlights We power a massive and expanding emerging markets ecosystem accepting more than 900 local payment methods across 40+ countries We are directly integrated with some of the world’s largest online merchants, driving very strong NRR and cohort performance We have built a scalable, single API
Slide 23: Appendix
APPENDIX
Slide 24: TPV breakdown
TPV breakdown by type of product1 TPV In millions of US$ 2Q23 3Q23 4Q23 1Q24 2Q24 Pay-ins 3,190 3,429 3,701 3,657 4,273 As % of total 73% 74% 72% 69% 71% Pay-outs 1,184 1,189 1,410 1,653 1,763 As % of total 27% 26% 28% 31% 29% Total TPV 4,373 4,618 5,111 5,310 6,035 TPV breakdown by type of flow2 In
Slide 25: Revenue by geography
Revenue Revenue breakdown by geography In millions of US$ 2Q23 3Q23 4Q23 1Q24 2Q24 Brazil 41.2 44.7 50.2 43.1 42.3 Argentina 20.7 23.9 10.5 13.8 20.5 Mexico 28.3 30.2 35.6 34.0 35.8 Chile 14.2 12.4 14.9 12.4 12.3 Other LatAm 22.5 24.8 20.3 22.1 27.8 Latin America 126.9 136.0 131.5 125.4 138.7 Nigeri
Slide 26: Gross profit by geography
Gross profit Gross profit breakdown by geography In millions of US$ 2Q23 3Q23 4Q23 1Q24 2Q24 Brazil 19.6 22.7 25.5 17.9 19.2 Argentina 13.8 13.1 4.0 5.2 7.6 Mexico 10.6 7.9 9.3 9.9 8.8 Chile 8.9 6.9 9.1 7.5 8.3 Other LatAm 8.7 8.9 7.0 8.1 9.6 Latin America 61.7 59.4 54.7 48.6 53.5 Nigeria 0.2 1.7 1.5
Slide 27: Revenue: top merchants and composition
Revenue Top 10 merchant revenue1($M) and concentration (%) Revenue composition ($M) 100% NRR2 % Share of total 59% 60% 68% 65% 62% 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 28: Adjusted EBITDA bridge
Adjusted Adjusted EBITDA bridge ($M) EBITDA Note: Adjusted EBITDA excludes one-off expenses and non-cash items. Unaudited quarterly results. See detailed methodology for Adjusted EBITDA in slide 29. 28
Slide 29: Reconciliation of Profit to Adjusted EBITDA
Adjusted Reconciliation of Profit to Adjusted EBITDA EBITDA $ in thousands 2Q23 1Q24 2Q24 Profit for the period 44,791 17,718 46,239 Income tax expense 8,774 7,114 10,060 Depreciation and amortization 2,869 3,762 4,089 1 Finance income and costs, net (7,459) (299) (28,045) Share-based payment non-cash
Slide 30: Reconciliation of Profit to Adjusted Net Income
Adjusted Reconciliation of Profit to Adjusted Net Income Net $ in thousands 2Q23 1Q24 2Q24 Net income as reported 44,791 17,718 46,239 Income Inflation adjustment 1,661 2,368 1,941 Loan - exchange difference 1,815 6,729 5,831 Fair value (loss) / gains of financial assets at FVTPL (bonds) (3,565) (10,81
Slide 31: Robust global network of trusted financial partners
2Q24 cross-border expatriation Robust global volumes by partner mix: network of trusted 0.3% financial partners 3% In Q2 2024, we expatriated 85% of the pay-ins cross-border TPV through banks (global, continental or national partner banks) 31