DLocal Stock Soars 43% After Earnings Beat and Raised Guidance

Key Points

• DLocal’s Q2 results smashed expectations across revenue, profitability, and free cash flow, with TPV up 53% YOY and adjusted EBITDA up 64%.
• Management lifted full-year revenue and profit forecasts, showing momentum is not a one-off but part of accelerating growth.
• With stronger execution under new leadership, structural growth drivers in emerging markets, the stock is moving from overlooked to a potential re-rating story.

DLocal Limited NASDAQ: DLO had spent much of the past year flying under the radar. Despite strong fundamentals, the payments technology company traded with little fanfare, hovering near flat year-to-date before its latest earnings. Many investors had possibly relegated it to the misunderstood category. It was seen as a stock with value-like metrics, but no clear catalyst or momentum existed. 

That changed dramatically following its most recent earnings release, with shares exploding more than 43% in the past week. With growth now accelerating and sentiment shifting, the question is whether the market is finally waking up to this payments giant’s potential.

A Quarter That Exceeded All Expectations

The headline numbers were impressive by any standard. Total Payment Volume (TPV) reached a record $9.2 billion, up 53% year-over-year and 14% sequentially, marking the third consecutive quarter of >50% growth. 

Revenue came in at $256.5 million, smashing estimates of $229.7 million. That represents 50% growth versus last year and 18% versus the previous quarter, a dramatic acceleration from the 18% year-over-year growth seen in the prior quarter. Constant currency revenue growth was an even more striking 63%.

Profitability was equally impressive. Adjusted EBITDA hit $70.1 million, well ahead of expectations of $55.8 million. That’s up 64% from last year, with margins steady at over 27%. Significantly, efficiency improved too, with adjusted EBITDA-to-gross profit climbing to 71% from 61% a year ago.

Free cash flow surged 156% year-over-year to $48 million, even in the middle of the company’s current investment cycle.

Operating expenses grew just 9% year-over-year, far below revenue growth, showing clear operating leverage. And with $254 million in cash on hand, even after paying an extraordinary dividend in June, the balance sheet remains rock-solid.

Raised Guidance Sparks Re-Rating Potential

Management also took the opportunity to raise full-year guidance, now expecting revenue of around $1.01 billion versus $958 million previously estimated, and adjusted EBITDA of $274 million versus $241 million prior. The guidance bump reinforces confidence that this growth momentum is not an isolated quarter but part of a broader acceleration.

For years, some investors have questioned DLocal’s transparency and execution. That narrative appears to be shifting under the leadership of CEO Pedro Arnt, formerly CFO of Mercado Libre.

The company has sharpened its communication, provided clearer updates, and proven its ability to execute at scale while maintaining efficiency.

Growth Vectors and Competitive Positioning

On the earnings call, management framed growth within three structural tailwinds: the massive addressable market of underpenetrated digital payments, expansion of share-of-wallet with existing merchants, and the early-stage adoption curve of new clients.

The top 20 merchants collectively drive results, underscoring both diversification and the opportunity to deepen relationships with major global players.

In a crowded and highly commoditized industry, DLocal continues to differentiate itself by innovating around local payment infrastructure in emerging markets. Its ability to serve global companies in regions with low digital penetration, while maintaining high margins, is a competitive edge not easily replicated.

Analysts Begin to Take Notice

The strong quarter has also caught the attention of Wall Street. HSBC upgraded the stock from Hold to Buy, raising its price target from $11.50 to $15.

HSBC analysts highlighted cost discipline, innovative new products, and improved capital efficiency as reasons for confidence in the company’s long-term trajectory. For a stock that has often been overlooked, this recognition could help drive a long-awaited re-rating.

A New Chapter in DLocal’s Story

DLocal’s latest results were more than just a beat; they were a statement. Revenue growth is accelerating, profitability remains robust, and the company is showing tangible operating leverage even while investing in future growth. With sentiment shifting, improved leadership communication, and raised guidance, this could mark the start of a new chapter for the stock.

For investors, the key question is whether the recent 43% rally has already priced in this optimism, or if the market is only beginning to revalue a payments leader with a massive runway ahead. One thing is for sure: after years of being misunderstood, DLocal is no longer flying under the radar.