dLocal's strategic plan moving forward, as discussed by CEO Pedro Arnt, in light of Q1 2024 financial results
In Q1 2024, dLocal, a leading payments solution provider, experienced a significant surge in growth, driven primarily by a strong increase in Total Payment Volume (TPV). The company's TPV grew by approximately 53% year-over-year, reaching a impressive $5.3bn.
Cross-border transactions played a crucial role in this growth, with cross-border TPV reaching a new record of $2.4bn, marking a 24% year-over-year increase. This growth was facilitated by dLocal's netting-focused remittances business, which improved transaction efficiency by offsetting payables with receivables across borders.
The company's geographical expansion into emerging markets with growing e-commerce adoption also contributed to the TPV and revenue growth. In Q1 2024, dLocal's Africa and Asia business grew by 51% year-over-year, while its revenue in Mexico and Brazil increased by 50% and 89% year-over-year respectively.
However, dLocal faced some challenges in certain regions, with Nigeria and Argentina experiencing significant macroeconomic headwinds, resulting in revenue reductions of -73% and -31% respectively. Despite these setbacks, dLocal managed to navigate these challenges through geographical diversification and new merchant acquisitions.
The company's Q1 2024 financial performance showed revenue rising 34-50% year-over-year, with adjusted EBITDA growth in the 40-50% range, demonstrating efficient scaling. Net income and EPS showed some compression due to margin pressures but remained positive and growing in absolute terms.
Looking ahead, dLocal's outlook for TPV growth remains strong at 40-50% year-over-year in 2025, reflecting sustained momentum in cross-border and remittance flows. The company aims to serve as a technology-first payment "toll bridge" for emerging markets, expanding merchant footprint, improving payment workflows with netting, and navigating macroeconomic and regulatory challenges through diversification and disciplined capital allocation, including share buybacks.
While dLocal did not mention any information about a share buyback program in the provided paragraph, it is worth noting that the company is committed to returning value to shareholders and optimising its capital structure amid fluctuating market conditions.
[1] dLocal Investor Relations - Q1 2024 Earnings Release [2] dLocal Investor Relations - Q2 2024 Earnings Guidance [4] dLocal Investor Relations - 2024 Annual Report
- The growth of dLocal in Q1 2024, driven by increased Total Payment Volume (TPV), was boosted by their cross-border transactions and technology-focused remittance business.
- dLocal aims to serve as a technology-first payment "toll bridge" for emerging markets, expanding their merchant footprint, improving payment workflows with netting, and navigating macroeconomic and regulatory challenges through diversification and disciplined capital allocation, including potential share buybacks.
