The following is a summary of the DLocal Limited (DLO) Q3 2024 Earnings Call Transcript:

Financial Performance:

• DLocal reported a record quarter in terms of total payment volume (TPV) and gross profit, with TPV re-accelerating over 40% year-over-year, and gross profit reaching $78 million.

• Operating profit increased to $41 million, with adjusted EBITDA hitting $52 million, up 23% quarter-over-quarter.

• Net income for the quarter was $27 million, highlighting strong cash generation with net cash from operating activities at $26 million.

Business Progress:

• The company expanded operations in new emerging markets, including significant volume increases in South Africa, Colombia, and Peru.

• Launched Smart Requests technology to boost transaction performance and implemented advanced real-time cost calculation models to optimize processing costs.

• New product developments included a standalone payment orchestration option and expansion of alternative payment methods, such as integrating with Nupay in Brazil.

• Enhanced license portfolio with new licenses obtained in Nigeria, Ecuador, and Uganda.

Opportunities:

• Continued expansion in emerging markets, diversification across more countries, and robust pipeline including new and existing merchants promise sustained growth.

• The deployment of new technologies such as Smart Requests and payment orchestration solutions enhance competitive advantage in serving global merchants across complex payment landscapes.

• Secular trends towards payment digitalization and increasing importance of emerging markets.

Risks:

• Currency fluctuations and economic instability in emerging markets could affect operational costs and profit margins as seen with fluctuations in Argentina and Nigeria.

• Regulatory challenges particular to each region, like the direct processing requirement in Brazil which led to a loss of share of wallet with a top commerce merchant.

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