dLocal Reports 2023 Second Quarter Financial Results

About this update from Dlocal Limited

Second Quarter 2023 US$4.4 billion Total Payment Volume, up 80% year-over-year and 22% quarter-over-quarter Revenue of US$161 million , up 59% year-over-year and 17% quarter-over-quarter 148% Net Revenue Retention Rate Gross Profit of US$71 million , up 43% year-over-year and 14% quarter-over-quarter Adjusted EBITDA of US$52 million , up 36% year-over-year and 14% quarter-over-quarter dLocal reports in US dollars and in accordance with IFRS as issued by the IASB MONTEVIDEO, Uruguay , Aug. 15, 2023 (GLOBE NEWSWIRE) -- DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a technology - first payments platform today announced its financial results for the second quarter ended June 30, 2023 .“We delivered another quarter of outstanding results, with double-digit growth across all parameters, compared to last year as well as the previous quarter. Our performance demonstrates the distinctive advantages of our business, from our cutting-edge technology and broad and well-diversified geographic reach to our excellent sales execution and vast market opportunity. We scale focused on long-term profitable growth, and on our unwavering commitment to our customers: building the best payments ecosystem across emerging markets based on our One dLocal model, simplifying complexities for the merchants we serve. Our merchants recognize the value we add to their business, propelling our growth alongside theirs. During the quarter we experienced strong traction with our platform solution, in particular from marketplaces. Local-to-local volume also increased significantly, reflecting the success and robustness of this solution. Geographically, we witnessed strong growth in Brazil . This high growth in a large and competitive geography such as Brazil underscores the quality of our solution as we continue to gain market share. Brazil is our first market back in 2016 and still presents attractive growth opportunities. Africa and Asia also grew strongly, and we are excited to see certain smaller markets growing at triple-digit rates. We are very proud of our half year results and we reaffirm our guidance for the year of revenue between US$620 and US$640 million and Adjusted EBITDA between US$200 and US$220 million . We are clearly trading towards the higher end of that guidance in terms of revenue, but prefer to take a conservative approach given the macro environment. Specific changes of circumstances such as the devaluation of the Nigerian Naira affect our revenue number, but not our gross profit. The annual guidance we have provided accounts for close to 50% year-on-year growth at best in class margins. This would be a great outcome for our 2023 results and testament to the resilience and well-diversified business we are building. We reiterate our mid-term guidance of 25%-35% gross profit CAGR and Adjusted EBITDA over gross profit >75%, which are best in class metrics. In other news, we are delighted to welcome Pedro Arnt as co-CEO. dLocal has a huge opportunity ahead and I am excited about joining forces with Pedro to steer dLocal's next chapter together. The entire dLocal team, and me personally, remain dedicated to scaling the business further, fortifying our position as the emerging markets payments leader, and delivering lasting value for our merchants, consumers, partners and shareholders,” said Sebastian Kanovich , co-CEO of dLocal. Second quarter 2023 Financial Highlights Total Payment Volume (“TPV”) reached a record US$4.4 billion in the second quarter, up 80% year-over-year compared to US$2.4 billion in the second quarter of 2022 and up 22% compared to US$3.6 billion in the first quarter of 2023. Revenues amounted to US$161.1 million , up 59% year-over-year compared to US$101.2 million in the second quarter of 2022 and up 17% compared to US$137.3 million in the first quarter of 2023. Gross profit was US$70.8 million in the second quarter of 2023, up 43% year-over-year compared to US$49.6 million in the second quarter of 2022 and up 14% compared to US$61.8 million in the first quarter of 2023. Gross profit margin was 44% in this quarter, compared to 49% in the second quarter of 2022 and 45% in the first quarter of 2023. Gross profit margin was positively impacted by changes in merchant mix, particularly in Brazil . This was offset by a higher share of pay-ins and local-to-local volume and lower share of revenues in Argentina . Gross profit over TPV remained almost unchanged quarter-over-quarter, slightly decreasing from 1.7% in the first quarter of 2023 to 1.6% in the second quarter of 2023 and decreasing from 2.0% in the second quarter of 2022 mainly due to business mix. Adjusted EBITDA was US$52.0 million in the second quarter of 2023, up 36% year-over-year compared to US$38.2 million in the second quarter of 2022 and up 14% compared to US$45.5 million in the first quarter of 2023. Adjusted EBITDA margin was 32% in the second quarter of 2023, compared to 38% in the second quarter of 2022 and 33% in the first quarter of 2023. EBITDA margin varied in line with gross profit margin. Adjusted EBITDA over gross profit remained best in class at 74% in the second quarter of 2023, compared to 74% in the first quarter of 2023 and compared to 77% a year ago. Net financial income was US$7.5 million , up from US$1.4 million in the first quarter of 2023 and US$0.3 million in the second quarter of 2022. These results were driven by an increase in the funds held in interest bearing accounts and money markets partially offset by the financial cost of hedges across the markets. Effective income tax rate was 16% in the second quarter of 2023 compared to 12% in the second quarter of 2022 and 11% in the first quarter of 2023 driven by a higher share of profits in local markets, as a result of higher local-to-local volume and higher financial gains. Profit for the second quarter of 2023 was US$44.8 million , or US$0.15 per diluted share, up 46% compared to a profit of US$30.7 million , or US$0.10 per diluted share, for the second quarter of 2022 and up 26% compared to a profit of US$35.5 million , or US$0.11 per diluted share for the first quarter of 2023. As of June 30, 2023 , dLocal had US$549.4 million in cash and cash equivalents, including US$176.7 million of own funds and US$372.7 million of merchants’ funds. The consolidated cash position increased by US$95.4 million from US$454.0 million as of June 30, 2022 . When compared to the US$517.9 million cash position as of March 31, 2023 , it increased by US$31.5 million . During the second quarter of 2023, US$61.0 million of own funds were used to buy back the company’s own shares completing the US$100 million Share Buyback Program announced in December 2022 . In addition, during the quarter we invested US$48 million dollars of our own funds in Argentine dollar-linked treasury bonds maturing in 2024. The following table summarizes our key performance metrics: Three months ended 30 of June Six months ended 30 of June 2023 2022 % change 2023 2022 % change Key Performance metrics (In millions of US$ except for %) TPV 4,373 2,433 80 % 7,948 4,537 75 % Revenue 161.1 101.2 59 % 298.4 188.6 58 % Gross Profit 70.8 49.6 43 % 132.6 93.2 42 % Gross Profit margin 44 % 49 % -5p.p 44 % 49 % -5p.p Adjusted EBITDA 52.0 38.2 36 % 97.5 71.0 37 % Adjusted EBITDA margin 32 % 38 % -5p.p 33 % 38 % -5p.p Adjusted EBITDA/Gross Profit 74 % 77 % -3p.p 74 % 76 % -3p.p Profit 44.8 30.7 46 % 80.2 57.0 41 % Profit margin 28 % 30 % -3p.p 27 % 30 % -3p.p Second quarter 2023 Business Highlights During the second quarter of 2023, pay-ins TPV increased by 70% year-over-year and 27% quarter-over-quarter to US$3.2 billion , accounting for 73% of the TPV. Pay-outs TPV increased by 114% year-over-year and 10% quarter-over-quarter to US$1.2 billion , accounting for the remaining 27% of the TPV. Cross-border TPV increased by 49% year-over-year and 13% quarter-over-quarter to US$2.2 billion . Cross-border volume accounted for 51% of the TPV in the second quarter of 2023. Local-to-local TPV increased by 128% year-over-year and 33% quarter-over-quarter to US$2.2 billion . Local-to-local volume accounted for 49% of the TPV in the second quarter of 2023. The increase in local-to-local volume was mainly driven by merchants from commerce, advertising and ride-hailing verticals. Revenue increased across all regions during the quarter. LatAm grew 45% compared to the second quarter of 2022 and 29% quarter-over-quarter to US$126.9 million , accounting for 79% of total revenue. In the second quarter of 2023, we experienced very strong revenue growth in Brazil increasing 99% year-over-year and 81% quarter-over-quarter. Recent growth has been mainly led by merchants in the commerce, advertising and streaming verticals. Africa and Asia revenue grew by 152% year-over-year and decreased 12% quarter-over-quarter to US$34.3 million , accounting for the remaining 21% of total revenue, compared to 13% in the second quarter of 2022. Revenues in the second quarter of 2023 were impacted by the devaluation of the Nigerian Naira. In mid June, the Nigerian government implemented a free-floating policy for its local currency, the Nigerian Naira, leading to the depreciation of the local currency. Nigeria revenues increased by 353% year-over-year while decreasing by 24% quarter-over-quarter. Excluding Nigeria , revenues increased by 52% year-over-year and by 15% quarter-over-quarter in Africa and Asia showing the strength of our geographic diversification and the continued growth across Africa and Asia . During the quarter, dLocal continued delivering strong revenue growth both from existing and from new customers. Revenue from Existing Merchants increased from US$101.2 million in the second quarter of 2022 to US$149.9 million . The net revenue retention rate, or NRR, in the second quarter of 2023 reached 148%. Revenue from New Merchants was US$11.2 million in the second quarter of 2023. The table below presents a breakdown of dLocal’s TPV by product and type of flow: In millions of US$ except for % Three months ended 30 of June Six months ended 30 of June 2023 % share 2022 % share 2023 % share 2022 % share Pay-ins 3,190 73 % 1,881 77 % 5,693 72 % 3,525 78 % Pay-outs 1,184 27 % 552 23 % 2,255 28 % 1,012 22 % Total TPV 4,373 100 % 2,433 100 % 7,948 100 % 4,537 100 % In millions of US$ except for % Three months ended 30 of June Six months ended 30 of June 2023 % share 2022 % share 2023 % share 2022 % share Cross-border 2,219 51 % 1,487 61 % 4,179 53 % 2,788 61 % Local-to-local 2,154 49 % 946 39 % 3,769 47 % 1,749 39 % Total TPV 4,373 100 % 2,433 100 % 7,948 100 % 4,537 100 % The table below presents a breakdown of dLocal’s revenue by geography: In thousands of US$ except for % Three months ended 30 of June Six months ended 30 of June 2023 % share 2022 % share 2023 % share 2022 % share Latin America 126.9 79 % 87.6 87 % 225.1 75 % 165.2 88 % Brazil 41.2 26 % 20.7 20 % 64.0 21 % 38.8 21 % Argentina 20.7 13 % 23.2 23 % 40.7 14 % 44.2 23 % Mexico 28.3 18 % 16.0 16 % 51.0 17 % 28.9 15 % Chile 14.2 9 % 12.7 13 % 28.4 10 % 24.8 13 % Other LatAm 22.5 14 % 15.0 15 % 41.0 14 % 28.4 15 % Africa & Asia 34.3 21 % 13.6 13 % 73.3 25 % 23.5 12 % Nigeria 20.4 13 % 4.5 4 % 47.3 16 % 6.1 3 % Other Africa & Asia 13.9 9 % 9.1 9 % 26.0 9 % 17.3 9 % Total Revenue 161.1 100 % 101.2 100 % 298.4 100 % 188.6 100 % Special note regarding Adjusted EBITDA and Adjusted EBITDA Margin dLocal has only one operating segment. dLocal measures its operating segment’s performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources. Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the changes in fair value of financial assets and derivative instruments carried at fair value through profit or loss, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, and inflation adjustment. dLocal defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by consolidated revenues. Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (“Operating Segments”), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segment’s performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocal’s performance measures may not be comparable to those of other entities The table below presents a reconciliation of dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin to net income: In thousands of US$ Three months ended 30 of June Six months ended 30 of June 2023 2022 2023 2022 Profit for the period 44,791 30,722 80,241 56,995 Income tax expense 8,774 4,151 13,055 5,364 Depreciation and amortization 2,869 1,857 5,384 3,580 Finance income and costs, net (7,459 ) (253 ) (8,850 ) 1,040 Share-based payment non-cash charges 1,421 1,241 3,750 3,275 Secondary offering expenses¹ - - - 89 Impairment loss / (gain) on financial assets (21 ) (7 ) 30 (82 ) Inflation adjustment 1,661 472 2,680 778 Other non-recurring costs² - - 1,229 - Adjusted EBITDA 52,036 38,183 97,519 71,039 Note: Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the changes in fair value of financial assets and derivative instruments carried at fair value through profit or loss, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, transaction expenses and inflation adjustment.1 Corresponds to expenses assumed by dLocal in relation to secondary offerings of its shares which occurred in 2021. 2 It includes non-recurring costs related to an internal review of the allegations made by a short-seller report, including fees from independent counsel, independent global expert services and forensic accounting advisory firm. Earnings per share We calculate basic earnings per share by dividing the profit attributable to owners of the group by the weighted average number of common shares issued and outstanding during the three-months and six-month periods ended June 30, 2023 and 2022. Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all dilutive potential common shares into common shares. The following table presents the information used as a basis for the calculation of our earnings per share: Three months ended 30 of June Six months ended 30 of June 2023 2022 2023 2022 Profit attributable to common shareholders (in thousands of US$) 44,697 30,572 80,141 56,864 Weighted average number of common shares 291,700,873 295,393,168 293,403,907 295,219,928 Adjustments for calculation of diluted earnings per share 16,160,368 17,599,775 16,358,508 17,619,241 Weighted average number of common shares for calculating diluted earnings per share 307,861,241 312,992,943 309,762,415 312,839,169 Basic earnings per share 0.15 0.10 0.27 0.19 Diluted earnings per share 0.15 0.10 0.26 0.18 This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements”. The quarterly financial information in this press release has not been audited. Conference call and webcast dLocal’s management team will host a conference call and audio webcast on August 16th, 2023 at 8:00 a.m. Eastern Time . Please click here to pre-register for the conference call and obtain your dial in number and passcode. The live conference call can be accessed via audio webcast at the investor relations section of dLocal’s website, at https://investor.dlocal.com/ . An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov . About dLocal dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in more than 40 countries across APAC, the Middle East , Latin America , and Africa . Through the “One dLocal” platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and pay-out processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market. Definition of selected operational metrics “API” means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, and service providers) to facilitate the money transfer process. “Cross-border” means a payment transaction whereby dLocal is collecting in one currency and settling into a different currency and/or in a different geography. “Local payment methods” refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets. “Local-to-local” means a payment transaction whereby dLocal is collecting and settling in the same currency. “Net Revenue Retention Rate” or “NRR” is a U.S. dollar-based measure of retention and growth of dLocal’s merchants. NRR is calculated for a period or year by dividing the Current Period/Year Revenue by the Prior Period/Year Revenue. The Prior Period/Year Revenue is the revenue billed by us to all our customers in the prior period. The Current Period/Year Revenue is the revenue billed by us in the current period to the same customers included in the Prior Period/Year Revenue. Current Period/Year Revenue includes revenues from any upselling and cross-selling across products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, in respect of such merchant customers, and excludes revenue from new customers on-boarded in the preceding twelve months. As most of dLocal revenues come from existing merchants, the NRR rate is a key metric used by management, and we believe it is useful for investors in order to assess our retention of existing customers and growth in revenues from our existing customer base. “Pay-in” means a payment transaction whereby dLocal’s merchant customers receive payment from their customers. “Pay-out” means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocal’s merchant customers. “Revenue from New Merchants” means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year. “Revenue from Existing Merchants” means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year. “TPV” dLocal presents total payment volume, or TPV, which is an operating metric of the aggregate value of all payments successfully processed through dLocal’s payments platform. Because revenue depends significantly on the total value of transactions processed through the dLocal platform, management believes that TPV is an indicator of the success of dLocal’s global merchants, the satisfaction of their end users, and the scale and growth of dLocal’s business. Forward-looking statements This press release contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events. Forward-looking statements regarding dLocal involve known and unknown risks, uncertainties and other factors that may cause dLocal’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” sections of dLocal’s filings with the U.S. Securities and Exchange Commission . Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof. dLocal Limited Certain financial information Consolidated Condensed Statements of Comprehensive Income for the for the three-month and six-month period ended June 30, 2023 and 2022 (In thousands of U.S. dollars, except per share amounts, unaudited) Three months ended 30 of June Six months ended 30 of June 2023 2022 2023 2022 Revenues 161,138 101,180 298,425 188,633 Cost of services (90,378 ) (51,541 ) (165,828 ) (95,440 ) Gross profit 70,760 49,639 132,597 93,193 Technology and development expenses (2,640 ) (1,643 ) (4,930 ) (3,049 ) Sales and marketing expenses (3,106 ) (3,128 ) (7,963 ) (5,972 ) General and administrative expenses (17,268 ) (9,095 ) (32,548 ) (19,389 ) Impairment (loss)/gain on financial assets 21 7 (30 ) 82 Other operating (loss)/gain - (688 ) - (688 ) Operating profit 47,767 35,092 87,126 64,177 Finance income 18,878 5,530 25,866 5,536 Finance costs (11,419 ) (5,277 ) (17,016 ) (6,576 ) Inflation adjustment (1,661 ) (472 ) (2,680 ) (778 ) Other results 5,798 (219 ) 6,170 (1,818 ) Profit before income tax 53,565 34,873 93,296 62,359 Income tax expense (8,774 ) (4,151 ) (13,055 ) (5,364 ) Profit for the period 44,791 30,722 80,241 56,995 Profit attributable to: Owners of the Group 44,697 30,572 80,141 56,864 Non-controlling interest 94 150 100 131 Profit for the period 44,791 30,722 80,241 56,995 Earnings per share (in USD) Basic Earnings per share 0.15 0.10 0.27 0.19 Diluted Earnings per share 0.15 0.10 0.26 0.18 Other comprehensive income Items that may be reclassified to profit or loss: Exchange difference on translation on foreign operations 1,675 (1,245 ) 3,163 (83 ) Other comprehensive income for the period 1,675 (1,245 ) 3,163 (83 ) Total comprehensive income for the period 46,466 29,477 83,404 56,912 Total comprehensive income for the period Owners of the Group 46,371 29,327 83,305 56,781 Non-controlling interest 95 150 99 131 Total comprehensive income for the period 46,466 29,477 83,404 56,912 dLocal Limited Certain interim financial information Consolidated Condensed Statements of Financial Position as of June 30, 2023 and December 31, 2022 (In thousands of U.S. dollars, except per share amounts, unaudited) 30 of June, 2023 31 of December, 2022 ASSETS Current Assets Cash and cash equivalents 549,386 468,092 Financial assets at fair value through profit or loss 51,565 1,295 Trade and other receivables 299,802 240,446 Derivative financial instruments 1,200 1,206 Other assets 44,632 56,789 Total Current Assets 946,585 767,828 Non-Current Assets Deferred tax assets 809 362 Property, plant and equipment 2,780 2,734 Right-of-use assets 3,694 3,934 Intangible assets 54,920 51,443 Total Non-Current Assets 62,203 58,473 TOTAL ASSETS 1,008,788 826,301 LIABILITIES Current Liabilities Trade and other payables 598,013 407,874 Lease liabilities 675 686 Tax liabilities 12,856 11,695 Derivative financial instruments 838 544 Provisions 916 1,473 Total Current Liabilities 613,298 422,272 Non-Current Liabilities Deferred tax liabilities 3,200 1,016 Lease liabilities 3,292 3,393 Total Non-Current Liabilities 6,492 4,409 TOTAL LIABILITIES 619,790 426,681 EQUITY Share Capital 578 592 Share Premium 68,550 164,307 Capital Reserve 17,930 16,185 Other Reserves (6 ) (1,448 ) Retained earnings 301,856 219,993 Total Equity Attributable to owners of the Group 388,908 399,629 Non-controlling interest 90 (9 ) TOTAL EQUITY 388,998 399,620 dLocal Limited Certain interim financial information Consolidated Condensed Statements of Cash flows for three-month and six-month period ended June 30, 2023 and 2022 (In thousands of U.S. dollars, except per share amounts, unaudited) Three months ended 30 of June Six months ended 30 of June 2023 2022 2023 2022 Cash flows from operating activities Profit before income tax 53,565 34,873 93,296 62,359 Adjustments: Interest income from financial instruments (15,313 ) (5,530 ) (22,212 ) (5,536 ) Interest charges for lease liabilities 52 15 95 178 Other finance expense 765 967 1,202 937 Finance expense related to derivative financial instruments 4,634 3,607 9,869 4,773 Net exchange differences 3,551 (5,836 ) 4,082 (4,346 ) Fair value loss on financial assets at fair value through profit or loss (3,565 ) - (3,654 ) - Amortization of Intangible assets 2,492 1,594 4,668 3,016 Depreciation of Property, plant and equipment 212 153 407 341 Amortization of Right-of-use asset 165 110 309 223 Revenue reduction related to prepaid assets - 53 - 211 Share-based payment expense, net of forfeitures 1,421 1,241 3,750 3,275 Other operating loss/(gain) - (18 ) - (18 ) Net Impairment loss/(gain) on financial assets (21 ) (7 ) 30 (82 ) 47,958 31,222 91,842 65,331 Changes in working capital Increase in Trade and other receivables (50,312 ) 21,458 (59,386 ) (4,742 ) Decrease/(increase) in Other assets (1,597 ) (552 ) 12,157 (693 ) Increase in Trade and other payables 148,761 (11,200 ) 190,139 58,416 Decrease in Tax Liabilities (2,279 ) (4,521 ) (3,341 ) (4,721 ) (Decrease) / Increase in Provisions (252 ) (186 ) (557 ) (137 ) Cash from operating activities 142,279 36,221 230,854 113,454 Income tax paid (2,774 ) (2,605 ) (6,816 ) (3,928 ) Net cash from operating activities 139,505 33,616 224,038 109,526 Cash flows from investing activities Acquisition of Property, plant and equipment (608 ) (494 ) (657 ) (574 ) Additions of Intangible assets (4,339 ) (2,217 ) (8,145 ) (4,726 ) Acquisitions of financial asset at FVTPL (48,139 ) - (48,139 ) - Net collections of/investments in financial assets at FVTPL 478 (900 ) 1,523 (282 ) Interest collected from financial instruments 15,155 5,530 21,975 5,536 Net cash provided by / (used in) investing activities (37,453 ) 1,919 (33,443 ) (46 ) Cash flows from financing activities Repurchase of shares (61,011 ) - (97,929 ) - Share-options exercise 84 548 153 906 Proceeds from borrowings - 14,656 - 14,656 Repayment of borrowings - (5,364 ) - (5,364 ) Interest payments on lease liability (52 ) (15 ) (95 ) (178 ) Principal payments on lease liability (146 ) (55 ) (276 ) (147 ) Finance expense paid related to derivative financial instruments (9,184 ) - (11,337 ) - Other finance expense paid (768 ) (1,142 ) (1,205 ) (1,179 ) Net cash (used in) / provided by financing activities (71,077 ) 8,628 (110,689 ) 8,694 Net increase in cash flow 30,975 44,163 79,906 118,174 Cash and cash equivalents at the beginning of the period 517,892 410,064 468,092 336,197 Net increase in cash flow 30,975 44,163 79,906 118,174 Effects of exchange rate changes on cash and cash equivalents 519 (242 ) 1,388 (386 ) Cash and cash equivalents at the end of the period 549,386 453,985 549,386 453,985 dLocal was incorporated on February 10, 2021 , as a Cayman Islands exempted company with limited liability, duly registered with the Cayman Islands Registrar of Companies. The contribution of dLocal Group Limited (a limited liability company incorporated in Malta , the former holding entity or “dLocal Malta”) shares to dLocal was finalized as of April 14, 2021 . Until the contribution of dLocal Malta shares to it, dLocal had not commenced operations, consequently the historical information previous to that date presented herein corresponds to dLocal Malta , our predecessor. This reorganization was done, among other reasons, to facilitate the initial public offering of the Group. dLocal had no prior assets, holdings or operations. Investor Relations Contact: [email protected] Media Contact: [email protected] Source: DLocal Limited

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