DLocal Shares Plummet 29% Following Earnings Miss

DLocal shares fell 29% after earnings missed expectations. The report highlights both impressive TPV growth yet concerning declines in profit margins and EBITDA, signaling volatility for investors.

Date: 28-02-2025

AI Rating: 4

DLocal's Financial Performance and Future Prospects

DLocal's recent performance indicates that while the company has delivered substantial total payment volume (TPV) growth of 45% in Q4, it has struggled to meet analysts' expectations, particularly regarding revenue and earnings per share. The company's revenue rose by only 15%, and gross profit increased by a mere 6%. Meanwhile, adjusted EBITDA has declined by 7%, which raises concerns about DLocal's profitability and operational efficiency.

Another key concern within the report is the decreasing take rate, which slipped from 1.2% to 1.1%. This suggests that although the volume of transactions is increasing, the profitability from those transactions is not keeping pace.

In terms of overall outlook, the guidance provided by DLocal to grow TPV by 40% in 2025 may seem encouraging, but the declining profit margins presents a potential red flag for investors. While the company continues to generate positive free cash flow, the inconsistency in earnings and the more significant concerns about margins and operating performance in shorter terms could lead to increased market volatility.

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