DLocal Q1 Earnings Call Highlights

Key Points

• TPV and gross profit surged in Q1, with payment volume reaching $14.1 billion, up 73% year over year, and gross profit hitting a record $119 million, up 40%. Management said growth was broad-based across emerging markets, led by Mexico, Brazil, Argentina, Africa and Asia.
• Reported earnings were hit by a one-time tax adjustment of $9.7 million, which lowered operating profit and net income. Excluding that item, operating profit and net income would have been higher, and management said it does not expect similar charges in future quarters.
• Guidance stayed unchanged as DLocal continues investing, but management expects operating leverage to improve later in 2026. The company also highlighted ongoing merchant expansion, more than 60-country coverage, and continued focus on local payment infrastructure and high-growth verticals like travel and remittances.

DLocal NASDAQ: DLO reported another quarter of rapid payment volume growth, with management pointing to broad-based merchant expansion across emerging markets while also addressing higher operating expenses and a one-time tax adjustment that weighed on reported earnings.

On the company’s first-quarter 2026 earnings call, Chief Executive Officer Pedro Arnt said DLocal is marking 10 years since its founding and five years since its Nasdaq IPO. He framed the quarter in the context of the company’s longer-term expansion, saying DLocal processed $100 million in total payment volume, or TPV, in one country in 2016 and has now crossed $47 billion in TPV over the last 12 months across the Global South.

“We now process more in a 1 day than we did in our entire first year of operations only a decade ago,” Arnt said.

Payment Volume and Gross Profit Hit New Highs

Chief Financial Officer Guillermo López Pérez said TPV reached $14.1 billion in the first quarter, up 73% from a year earlier and 7% sequentially. He said it was DLocal’s sixth consecutive quarter of TPV growth above 50%.

Gross profit reached a record $119 million, up 40% year over year and 2% quarter over quarter. López Pérez said the sequential gross profit performance was helped by a recovery in Argentina, where volumes grew and funding costs normalized after a weaker fourth quarter, as well as growth in Africa and Asia, particularly Nigeria, Mozambique and Vietnam.

Management said DLocal’s top three markets—Mexico, Brazil and Argentina—continued to grow consistently, while Chile, Nigeria, Colombia and Vietnam also contributed strongly. Africa and Asia represented about 29% of gross profit and grew 16% sequentially, outpacing the company average, López Pérez said.

Brazil moved in the opposite direction sequentially after a strong fourth quarter, which benefited from Black Friday and holiday e-commerce installments. Arnt said Brazil’s year-over-year performance remained strong, with gross profit more than doubling, but the first quarter reflected seasonality and a higher mix of Pix transactions, which have lower monetization than cards.

One-Time Tax Adjustment Weighs on Reported Profit

DLocal reported operating profit of $53 million for the quarter. Excluding a one-time prior-period tax adjustment, operating profit would have been $57 million, representing 25% year-over-year growth and an operating profit-to-gross profit ratio of 48%, according to López Pérez.

The adjustment totaled $9.7 million, with about $5.3 million recorded in the corporate tax line and $4.4 million in operating expenses. López Pérez said the adjustment related to the company’s tax treatment for prior periods of one installment payment product in certain markets. He said DLocal does not expect comparable items in future quarters.

Net income was $42 million as reported. Excluding the one-time item, DLocal would have reported $52 million in net income, or about 11% year-over-year growth, López Pérez said. The reported effective tax rate was approximately 26%, compared with about 16% excluding the adjustment.

Operating expenses were $62 million excluding the adjustment, up 58% year over year and 16% sequentially. Management said the increase reflected the expected carryover of investments made in the second half of 2025.

Guidance Unchanged as Management Targets Operating Leverage

Arnt said DLocal’s full-year guidance remains unchanged. He said costs were expected to be heavier in the first half of 2026, with margins improving in the second half.

During the question-and-answer portion of the call, López Pérez said first-quarter operating expenses were slightly above the company’s expectations due to a number of smaller items, including discretionary categories, third-party spending and somewhat higher average salaries. He said DLocal has started targeted corrective actions and does not expect new net hiring for the rest of the year.

López Pérez said several factors should support a better expense trajectory through 2026, including:

• Fading effects from the late-2025 investment cycle;
• An accelerated automation agenda;
• Targeted cost actions already underway;
• Lower share-based payment expense as graded vesting flows through the year.

Arnt said the investments made in 2024 and 2025, including in engineering and product headcount, supported the company’s current growth in TPV, revenue and gross profit. He said that as the investment cycle ends, “the innate operating leverage of the business model should begin to flow through the P&L.”

Merchant Expansion and Local Payment Infrastructure Remain Central

Arnt emphasized DLocal’s focus on local payment infrastructure, saying the company now operates in more than 60 countries, including Algeria, Qatar, Kuwait and Oman. He said DLocal holds 38 licenses and authorizations across 26 markets, with 16 additional applications in process, and serves more than 760 enterprise merchants through a single API.

Arnt said local payment methods are increasingly central to online commerce in emerging markets. He cited examples including Yape in Peru and Payflex in South Africa, which he said drive significant net-new customers for some DLocal merchants. He also pointed to local card schemes such as Mada in Saudi Arabia, Verve in Nigeria and Meeza in Egypt as important to competing in those markets.

Vertical diversification remained a key theme. Arnt said every vertical in DLocal’s portfolio grew between the first quarter of 2024 and the first quarter of 2026. E-commerce remains the company’s largest vertical, while DLocal also serves four of the five largest ride-hailing players operating across emerging markets. Remittances remain one of the company’s fastest-growing verticals, and management said travel and gaming are areas of focus.

In the first quarter, travel led sequential growth at 38%, driven by a new expansion deal with a key global travel merchant. On-demand delivery grew 24% sequentially. E-commerce and remittances were softer sequentially, which López Pérez said was consistent with seasonality after the fourth-quarter peak.

AZA Deal Closes, Africa and Asia Remain Growth Priorities

Arnt said DLocal closed the AZA transaction during the quarter, but he cautioned that it was not material to the reported results and is not expected to create a near-term revenue impact. He said the transaction ultimately became an asset purchase after legal and regulatory hurdles, and that it added customer relationships, intellectual property, licenses and talent that should support DLocal’s position in Africa.

Management also discussed Asia as a longer-term opportunity. Arnt said DLocal’s strength in Africa and Asia is still driven more by Africa and the Middle East, while Asia remains in earlier stages. However, he said the company’s view has shifted as it sees fragmentation, alternative payment methods and room for improvement in card performance across Asian markets.

Arnt said merchants are increasingly focused on alternative payment methods, real-time networks, digital wallets, local card schemes and localized credit card processing. He said stablecoins are already emerging as a real use case for merchant settlement, but core local payment infrastructure remains the company’s main driver of volume.

About DLocal NASDAQ: DLO

dLocal is a fintech company specializing in cross-border payments and payouts for global merchants operating in emerging markets. Headquartered in Montevideo, Uruguay, the company offers a technology platform that simplifies complex payment flows, enabling businesses to connect with local payment methods through a single integration.

The dLocal platform supports a wide range of local payment options, including credit and debit cards, bank transfers, e-wallets and cash-based methods. It incorporates risk-management tools, compliance services and anti-fraud solutions to help clients navigate regulatory requirements and minimize payment failures across diverse jurisdictions.

dLocal serves merchants in sectors such as e-commerce, online marketplaces, digital content and gig economy platforms.

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