DLocal (NASDAQ:DLO) highlighted what it called a year of “exceptional execution” during its fourth-quarter 2025 earnings call, pointing to accelerating total payment volume growth, its first $1 billion revenue year, expanding profitability, and a stepped-up capital return program.
Full-year 2025: TPV reached $41 billion and revenue surpassed $1 billion
Chief Executive Officer Pedro Arnt said dLocal’s total payment volume (TPV) reached $41 billion in 2025, up 60% year-over-year, with growth accelerating as the year progressed. He noted revenue crossed $1 billion for the first time.
On profitability and cash generation, management said gross profit grew 37% year-over-year in 2025, while adjusted free cash flow was $191 million, up 110% year-over-year, with a 97% conversion rate cited. Net income reached $197 million, up 63% year-over-year. Arnt added that adjusted EBITDA as a percentage of gross profit expanded by five percentage points, which he attributed to operating leverage even during an “active investment year.”
Fourth-quarter results: record TPV and revenue, operating leverage maintained
New Chief Financial Officer Guillermo López Pérez, in his first earnings call in the role, detailed fourth-quarter momentum. TPV surpassed $13 billion, up 70% year-over-year and 26% sequentially, marking the company’s highest quarterly volume and its fifth consecutive quarter of more than 50% TPV growth.
Revenue in Q4 reached $338 million, up 65% year-over-year and 20% quarter-over-quarter. Gross profit was $116 million, up 38% year-over-year and 12% sequentially. López Pérez said gross profit reflected “natural margin pressure” from scaling volumes with established merchants and expanding into new payment methods, products, and countries, but added that the company still delivered a $32 million year-over-year increase in gross profit during the quarter.
Operating expenses totaled $53 million in Q4, up 28% year-over-year, which management tied primarily to headcount growth during its investment cycle and higher salaries following the annual merit cycle. Adjusted EBITDA was $78 million, up 38% year-over-year and 9% sequentially, while net income totaled $56 million, up 87% year-over-year. Management attributed the year-over-year net income increase in part to a lower effective tax rate, driven by a more favorable jurisdictional mix and the absence of a one-time tax settlement recorded in Q4 of the prior year.
Adjusted free cash flow in the quarter was $65 million, doubling year-over-year, with a conversion ratio of 117% versus net income. López Pérez said quarterly conversion can fluctuate due to timing items such as tax payments, while reiterating that full-year conversion was close to 100%.
Market and product commentary: stablecoins, BNPL, APMs, and card-present plans
Arnt described dLocal’s footprint as spanning 44 markets and said the company held 37 licenses across 26 markets, adding four in 2025 (Argentina, Chile, the UAE, and the Philippines) with 16 additional applications in process, including for the United States.
On product initiatives, management highlighted several developments:
- Buy Now, Pay Later: dLocal’s “Fuse” products are live across six countries. Arnt said BNPL grew 88% quarter-over-quarter in Q4, but cautioned it is still coming from a small base. In response to analyst questions, he said 2026 is expected to be more about confirming product-market fit and growth, with BNPL unlikely to “move the needle” in 2026; he suggested it could become more material by 2027 if growth compounds.
- Stablecoins: The company said it has launched a “full-service stablecoin suite” enabling merchants to on- and off-ramp fiat, settle in stablecoins, and collect stablecoins at checkout, with partners including Circle, BVNK, Fireblocks, and Félix. However, Arnt said the company is not seeing significant stablecoin volumes at checkout yet. He said most stablecoin-related volume currently comes from servicing digital asset marketplaces and exchanges on the fiat “pay-ins and payouts,” while interest is growing among corporate treasuries for use cases such as cost, speed, and 24/7 settlement benefits.
- Alternative payment methods (APMs): Management said APMs account for a significant portion of quarterly TPV, and it is expanding capabilities including tokenization, biometrics, and instant payment rails. Arnt cited DHL Express and Open English as among the latest merchants to go live with these capabilities.
- Card-present: Arnt said the company is preparing to launch a card-present offering, driven by inbound interest from merchants seeking dLocal’s technology stack in hardware and POS. He characterized it as an extension of its “one integration” model for global merchants, and said the company typically builds products alongside committed merchant demand rather than investing heavily ahead of revenue.
Regional performance drivers and specific country updates
López Pérez said Q4 growth was broad-based across key markets and verticals, with particularly strong performance in Brazil, Mexico, South Africa, and Colombia. He said on-demand delivery stood out, driven by existing merchants ramping expansion deals across Argentina, South Africa, Mexico, and Colombia. E-commerce delivered a seasonally strong quarter, particularly in Mexico, Brazil, and South Africa. Advertising recovered quarter-over-quarter, supported by a partial return of volumes in Egypt.
Brazil was cited as a key contributor to gross profit growth in Q4, supported by seasonal e-commerce and trends across streaming, advertising, financial services, and remittances. In Q&A, Arnt said Brazil also benefited from strong monetization, including contributions from mid-tier merchants and vertical mix such as advertising, while cautioning investors against extrapolating Q4’s dispersion between TPV and gross profit growth into the future.
Egypt also contributed sequentially as a large merchant returned and other merchants ramped. Arnt said the company had previously held 100% share of wallet with that merchant, but lost share as the customer introduced redundancy; dLocal has been regaining share through performance, though Arnt said it is not expected to return to 100% because the merchant will maintain redundancy.
Argentina was described as the primary drag to gross profit growth in Q4 despite strong underlying volume growth. López Pérez attributed the impact to higher costs amid election-related effects and FX volatility, particularly affecting the cost of funding sources used for acquiring. He said Argentina remains highly attractive and “high growth, high return” despite volatility, noting returns on deployed capital were said to be above the company’s cost of capital. Arnt declined to make forward-looking statements on the country’s gross margin trajectory, emphasizing Argentina’s volatility.
2026 outlook and capital allocation: buybacks added to dividend policy
For 2026, dLocal guided for TPV growth of 50% to 60% year-over-year. Management also guided for gross profit growth of 22.5% to 27.5%, noting that as large clients scale, volume-based discounting embedded in long-term relationships is expected to continue. At the midpoint, Arnt said this implies roughly $0.5 billion of gross profit dollars for the year.
On profitability, management guided for operating profit growth of 27.5% to 32.5% year-over-year, and said operating leverage should become more evident toward the second half of 2026 as 2025’s backloaded hiring costs annualize early in the year and then moderate. López Pérez added the company is not planning significant additional headcount in 2026 beyond a few hires already in motion at the end of 2025, and expects full-year OpEx growth to be below gross profit growth.
Starting in 2026, the company said it will introduce operating profit as a new metric to provide greater transparency, noting that adjustments represent a declining share of revenue as the business scales.
On capital allocation, Arnt outlined four priorities—investing for growth, maintaining liquidity buffers, selective M&A, and returning excess capital to shareholders. He said that through the end of 2025, dLocal has returned 64% of adjusted free cash flow generated since 2022 to shareholders. The company confirmed its dividend policy of 30% of the prior year’s free cash flow, which management said translates to $57 million this year. In addition, the board approved a new share repurchase program of up to $300 million of Class A common shares, which Arnt framed as an initial step toward a multi-year model combining dividends with incremental buybacks.
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.
