Dlocal Limited
A Uruguayan payments company that lets global firms such as Uber, Shein and Google take payments from, and pay people in, more than 60 emerging markets.
The scores
Growth3/4 →
Gross profit up 37% in 2025 and 34% in H1 2026, all organic, but it leans on a few large merchants at falling prices.
Business quality2/4 ↓
Licences keep merchants, but the buyer sets the price: gross profit per dollar halved, contracts are terminable, and Stripe and Adyen sell the same rails.
Financial position4/4 →
Own cash of $369.1M against $64.6M of borrowings, and free cash flow funds the dividend and buyback without outside money.
Execution record3/4 →
Beat the 2025 guide by wide margins, but withdrew medium-term targets in 2025, and the 2026 profit guide leans on the second half.
Per share capture4/4 ↑
Diluted shares down 1.7% in a year, bought-back shares cancelled, share pay small, and buybacks and dividends paid from cash flow.
Potential2/4 →
Paying online in emerging markets rises about a point a year, but no merchant commits volume, so the upside is expected, not committed.
Risk profile3/4 →
Ten merchants are 61% of revenue on terminable contracts, beside Argentine and Brazilian rules: serious, disclosed and survivable.
Valuation3/4 ↑
12.8 times guided operating profit pays for the 2026 plan and about 30% earnings growth in 2027, but not for more.
Evidence quality3/4 →
Results, cash, licences and contract terms are filed; retention, share of wallet, the take-rate account and the conversion uplift are management's.
The Verdict
We rate dLocal neutral. It moves money for global companies in emerging markets, funds itself and buys back its own shares, so the business is solid. But each dollar it handles earns less every year: volume nearly doubled in the latest quarter while gross profit rose 29%. The price is fair: at about 13 times the operating profit it expects this year, it is right if the plan arrives, with no cushion if it slips. That plan needs costs cut sharply in the second half. The view hinges on whether that cut arrives and the fall in its price per dollar slows. Conviction is medium.
The long caseShoppers in emerging markets are moving from cash to paying online, often by local methods; dLocal must earn enough on each dollar it moves for that growth to pay.
The evidence under this - 8 claims
Management says that excluding one large ride-hailing merchant the rate was about flat on the quarter, and gross profit dollars still rose 29% (C15).
The vendor's company value of $3.31B nets merchants' cash too; on it the multiple would be 11.6 times, which makes the shares look cheaper than they are.
Management names three causes that are already booked: first-half World Cup marketing, a $4.4M prior-year tax item and one-off credit losses (C21).
Two of the three named causes are already booked, the World Cup marketing and the prior-year tax item, so part of the second-half gain needs no new action.
Management says that excluding one merchant the rate was flat on the quarter (C15), and gross profit dollars have still grown 29% to 37% a year.
The company
dLocal sells one thing: a single connection through which a global company can collect money from customers in more than 60 emerging markets, by local cards, bank transfers or wallets such as Brazil's Pix, and pay out to drivers, sellers and contractors there.
Without it, a merchant charges foreign cards from abroad, which fail more often, or sets up entities and licences country by country. dLocal holds 37 licences in 26 markets, and signing a big merchant can take two months to two years.
The evidence under this - 4 claims
The figure comes from the company's internal tests in chosen markets, says results vary by merchant and market, and no outside study was found to check it.
How it makes money
dLocal keeps a small cut of each payment, plus a margin on converting the currency. In 2025 it handled $40.8B and kept $402.8M as gross profit, about 1 cent per dollar.
That cut is shrinking. Payments made and settled inside one country, now most of its volume, carry no currency margin, and the biggest merchants reach cheaper price tiers as they grow.
The evidence under this - 4 claims
Management says that excluding one large ride-hailing merchant the rate was about flat on the quarter, and gross profit dollars still rose 29% (C15).
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| Transaction revenues | 96.5% | A cut of each payment processed, a currency spread on cross-border payments, and fees on instalments, advances, chargebacks and refunds. |
| Other revenues | 3.5% | Fees for transactional taxes, monthly minimums, transfers and merchant set-up. |
Who runs it
Pedro Arnt, for twelve years MercadoLibre's finance chief, has run dLocal since 2023; a new finance chief arrived in late 2025. The founders still control it: their special shares carry about four votes in five, and the chairman, a co-founder, owns about a sixth of the company. The chief executive owns under 1%. Pay is not published person by person, and most share awards vest with time rather than results.
The evidence under this - 4 claims
Why it wins, and who could beat it
Why customers come back
Merchants stay and spend more: existing customers paid 53% more in the latest quarter than a year before. What keeps them is the licences. Brazil's central bank has just limited currency services for foreign merchants to institutions it has authorised, which dLocal is.
But the licences protect the relationship, not the price. Gross profit per dollar handled fell from 1.57% in 2023 to 0.72% in the latest quarter.
The evidence under this - 5 claims
Adyen and EBANX operate as authorised Brazilian payment institutions, so the rule keeps out unlicensed entrants but not the rivals already competing (C13, C14).
Retention is measured on revenue from existing merchants, which a single merchant ramping can lift; it says nothing of price per dollar.
Management says that excluding one large ride-hailing merchant the rate was about flat on the quarter, and gross profit dollars still rose 29% (C15).
Retention above 140% for five quarters and top merchants adding countries each year show merchants are not leaving (C16, C11).
The threat
Stripe now offers Pix to companies outside Brazil through a local partner, EBANX, and Adyen holds its own Brazilian licence. Merchants can use several providers at once: contracts are not exclusive, and one large merchant added a second provider in Brazil and Egypt this year.
The evidence under this - 4 claims
The company frames it as a normalisation inside a growing relationship, and names neither the merchant nor the volume moved.
The rivals: all private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Adyen, through its licensed Brazilian payment institutionPriced against it: Listed abroad | Payment processing (pay-ins and pay-outs, cross-border and local-to-local) | On sale | Listed abroad | |
| Private | Stripe, with EBANX as its Brazilian partnerPriced against it: Private | Payment processing (pay-ins and pay-outs, cross-border and local-to-local) | On sale | Private |
| In-house | The merchants' own multi-provider routingPriced against it: In-house | Payment processing (pay-ins and pay-outs, cross-border and local-to-local) | On sale | In-house |
How big it could get
How big this could get
In 2024 only 29% of adults in poorer and middle-income countries paid a merchant online, up from 25% in 2021, the World Bank says. In Brazil it was 40%.
dLocal handled $40.8B in 2025 and puts its own share of emerging-market digital payments in the low single digits. Nobody measures the market in dollars, so how big it could get is a direction, not a number.
The evidence under this - 3 claims
Both shares are the company's own estimates with no published method, and nobody outside measures emerging-market payments to foreign merchants in dollars.
The results
What growth costs
Growth has been costing profit. Each dollar processed earns dLocal less, while staff and running costs keep rising, so in two of the last three years costs ate a bigger share of what it keeps. This year's plan needs that to reverse in the second half.
The evidence under this - 2 claims
The last report (13 Aug)
Quarter ended June 2026, filed figures.
In the quarter to June 2026 dLocal handled $17.7B, up 92% on a year. Gross profit rose 29% and operating profit 15%, to $64.2M.
The gap is the story. A ride-hailing merchant ramped up at low prices, big Mexican merchants hit cheaper tiers, and costs rose 46% on World Cup marketing and hiring. The company raised its volume and gross profit goals for 2026 but kept its operating profit goal, which the second half now has to carry.
What it did to the thesisIt confirmed the case against: volume growth no longer passes through to profit, because the price per dollar keeps falling. It left open whether that fall is slowing, and moved the weight of the year's profit goal onto costs in the second half.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.18 against $0.18 expected.
The evidence under this - 5 claims
Management says that excluding one large ride-hailing merchant the rate was about flat on the quarter, and gross profit dollars still rose 29% (C15).
First-half operating profit rose 15%, so the full-year figure needs a second half far above the first (C20).
What management did with the money
It returned cash. dLocal bought back 6.9M shares for $86.1M by June and cancelled them, and paid a $57.2M dividend, while keeping $369.1M of its own cash against $64.6M of borrowings.
Insiders in 2026Q3: 2 purchases and 4 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. The price pays for dLocal's 2026 plan and one more good year, but nothing for growth beyond that, and the plan depends on a cost cut not yet made.
Over the past year sales per share rose 62% while the price paid for them fell 40%, so the shares went nowhere. The market has stopped paying for volume.
The next two quarters test the profit promise. To hit its goal dLocal needs operating profit of $82M to $87M a quarter, against $64.2M in June, and its finance chief admitted the goal implies deeper cost cuts than planned. Its largest outside shareholder, General Atlantic, sold 9.8M shares in August.
The evidence under this - 4 claims
Management names three causes that are already booked: first-half World Cup marketing, a $4.4M prior-year tax item and one-off credit losses (C21).
Two of the three named causes are already booked, the World Cup marketing and the prior-year tax item, so part of the second-half gain needs no new action.
How we read the multiple
A buyer pays about 13 times the operating profit dLocal expects in 2026, after setting aside the cash it holds for merchants. For that to be fair:
1. Operating profit grows about 30% this year, as promised. 2. That needs the second half 38% to 47% above last year's. 3. Earnings then grow about 30% again in 2027, as analysts expect.
If all three happen, the price was fair. If costs do not fall, this year's growth is nearer 18%, and it was not cheap.
Against its own history. Far cheaper than its own past, but the past priced a company whose cut of each dollar was twice today's, so the gap reflects a worse price per dollar.
The evidence under this - 4 claims
The vendor's company value of $3.31B nets merchants' cash too; on it the multiple would be 11.6 times, which makes the shares look cheaper than they are.
First-half operating profit rose 15%, so the full-year figure needs a second half far above the first (C20).
Management names three causes that are already booked: first-half World Cup marketing, a $4.4M prior-year tax item and one-off credit losses (C21).
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Also checked and set aside: PagSeguro Digital (a substitute, not the same product); StoneCo (a substitute, not the same product).
Private or foreign rivals that cannot be priced: Adyen N.V. (ADYEN.AS; ADYEY over the counter), Stripe, with EBANX.
Where we disagree with the market
A fast-growing payments company whose shrinking cut per dollar makes its growth worth less than it looks.
Right on the cut, and the price allows for it. The open question is whether this year's profit promise rests on costs that will not fall.
The market already pays far less for each dollar of sales, so it is not ignoring the falling cut. Where we part is on the second half: first-half operating profit rose 15%, and reaching the year's goal rests on cost cuts management itself called demanding.
The evidence against us: management says that, leaving out one ride-hailing merchant, the cut per dollar held steady last quarter. If that holds, profit could catch up with volume faster than we expect.
What analysts say, and the evidence
The evidence under this - 6 claims
Management names three causes that are already booked: first-half World Cup marketing, a $4.4M prior-year tax item and one-off credit losses (C21).
Two of the three named causes are already booked, the World Cup marketing and the prior-year tax item, so part of the second-half gain needs no new action.
The same call says this does not necessarily signal a bottom, and the merchant excluded is the one driving the volume.
Management says that excluding one merchant the rate was flat on the quarter (C15), and gross profit dollars have still grown 29% to 37% a year.
What could go wrong, and how we would know
The risks
- A few merchants. Ten merchants are 61% of revenue, two above 10% each, on contracts they can end on short notice.
- Price keeps falling. Gross profit per dollar has halved in three years, and rivals such as Stripe and Adyen offer the same service.
- Argentina. Revenue there more than doubled to $68.9M in the June quarter, in a currency that can collapse.
- Founders control the votes. Holders of the founders' share class have 79.55% of the votes with under half the shares.
- Higher tax from 2027. A global minimum tax is expected to raise dLocal's tax rate, by an amount it cannot yet say.
The evidence under this - 8 claims
Management says that excluding one large ride-hailing merchant the rate was about flat on the quarter, and gross profit dollars still rose 29% (C15).
Several countries' rules are still under discussion, so the effect may be smaller than a full minimum-tax charge, and 2026 is unaffected.
What we still do not know
- How many dollars emerging-market shoppers pay to foreign merchants. Nobody publishes it, so dLocal's share cannot be checked.
- Which merchant added a second provider this year, and how much volume it moved.
- Whether the fall in the cut per dollar is levelling off, as management suggests, or only paused.
- How much of Adyen's and Stripe's business sits in dLocal's markets.
The evidence under this - 4 claims
Both shares are the company's own estimates with no published method, and nobody outside measures emerging-market payments to foreign merchants in dollars.
The company frames it as a normalisation inside a growing relationship, and names neither the merchant nor the volume moved.
The same call says this does not necessarily signal a bottom, and the merchant excluded is the one driving the volume.
What would change our view
- Neutral→AttractiveThe price falls to pay for today's business alone
It needs:
- ○The company's value falls to 9 times this year's expected operating profit, paying for today's business and almost nothing for growth.about ≈$9.67 today, 30% below the last close
- Neutral→AttractiveThe second-half step-up arrives
It needs all of:
- ○Operating profit reaches $82M in a quarter, from $64.2M in June.checked at the next results, due by 11 Nov
- ○Quarterly operating costs fall to $55M, from $63.0M.checked at the next results, due by 11 Nov
- Neutral→UnattractivePrices keep falling faster than volume grows
It needs any of:
- ○Gross profit per dollar handled falls below 0.60%, from 0.72%.checked at the next results, due by 11 Nov
- ○The company cuts its 2026 operating profit goal.watched as it happens
We would also be wrong if
- A merchant above 10% of revenue moves volume elsewhere or wins a lower price at renewal.
- Brazil or Argentina bars licensed payment firms from converting currency for foreign merchants.
What is coming
- 11 November 2026 Q3 2026 results: Whether operating profit steps toward the $82M to $87M a quarter the guide needs, costs fall toward $55M, and gross profit per dollar holds near 0.72%.
Every dated event ahead
- 11 November 2026 Q3 2026 results: Whether operating profit steps toward the $82M to $87M a quarter the guide needs, costs fall toward $55M, and gross profit per dollar holds near 0.72%.
- March 2027 Full-year 2026 results, the 2027 guide and the 2026 20-F: Whether the 2026 operating profit guide was met, what Pillar 2 does to the tax rate, the dividend under the 30% policy, and whether pay disclosure improves.
- 19 March 2027 The $300M buyback authorisation expires: Whether the plan is used up and renewed, which keeps the share count falling, or lapses with cash held back.
Since we wrote this
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis writtenNeutral, medium convictionWritten as a first thesis after a screen flagged it as cheap on next year's earnings, with the take rate more than halved since 2023.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the 20-F and 6-Ks.
Also checked 1 time with nothing new to act on.
Sources 23
Sources - 23
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-18Item 4 (products, merchants, licences, onboarding, competition), risk factors (concentration, terminable contracts, commoditisation, short sellers), Item 7 ownership, 2023 to 2025 figuresbacksC01C02C04C07C08C09C11C26C43C46C47C48C49C50C51C52C53
- S02primarycompany release2026-03-182025 results, adjusted free cash flow, the original 2026 guide and its warning of structural volume-based discounting
Strong cash generation: adjusted free cash flow reached $191 million, up 110% year-over-year, with a 97% conversion ratio.
backsC02C04C19C22C24 - S03primarycompany release2026-08-13Q2 and H1 2026 figures, take rate, drivers by country, adjusted free cash flow, corporate cash, buyback, the $150M facility, the raised guide
Gross profit over TPV was at 0.72%, decreasing from 1.07% in the second quarter of 2025 and from 0.84% in the first quarter of 2026
backsC03C04C05C19C23C24C25C44 - S04primarycompany filing2026-08-13single segment, revenue by country, concentration, share capital and cancellation, diluted shares, borrowings, litigation, tax adjustmentbacksC01C03C07C23C25C30C35C38C52
- S05primarytranscript2026-08-13Q2 2026 earnings call transcriptretention, share of wallet, local-to-local mix, the take-rate exchange, the cost plan, Pillar 2; questions from Goldman Sachs, Susquehanna, JPMorgan, Itau BBA, Truist, UBS and HSBC
if you take some combinations of our guidance ranges, you can back into an OpEx cut that's bigger than what we have currently planned
backsC15C16C17C18C21C41 - S06primarycompany release2026-05-14the key merchant's redundancy, the conversion uplift claim, Q1 2026 take rate
Share-of-wallet normalization with a key merchant which added redundancies in Brazil and Egypt, impacting multi-year growth view
backsC04C10C42 - S07primarycompany release2024-05-14the Q1 2024 gross profit stall and its cause
one of our largest merchants achieved a new level in our tiered pricing scheme, and also re-negotiated fees, as their contract came up for renewal
backsC06 - S08primarycompany release2025-02-27the 2025 guide and the end of medium-term guidance
We see gross profit growth of 20% - 25% year-over-year, and Adjusted EBITDA growth between 20% and 30% year-over-year.
backsC22 - S09primarycompany filing2026-08-19Schedule 13D amendment, General Atlantic General AtlanticGeneral Atlantic's August sale and remaining holdingbacksC27
- S10secondaryvendor data2026-10-04Research pack (FMP market tier, frozen 2026-10-04)price, consensus estimates and ratings, the consensus series, the price decompositionbacksC30C31
- S11primaryother2026-10-04Stripe selling Pix to businesses outside Brazil through EBANX, with a settlement table showing dollars for US accounts
This is an international purchase and excludes a 3.5% IOF fee. By proceeding, you acknowledge and accept Ebanx’s terms and conditions
backsC14 - S12primaryother2026-10-04Adyen's licensed Brazilian payment institution, processing Pix
“Adyen” significa Adyen do Brasil Instituição de Pagamento Ltda., uma instituição de pagamento brasileira
backsC13 - S13primaryregulator2026-04-30Banco Central do Brasil, Resolução BCB nº 561 (30 April 2026) Banco Central do Brasilwho may provide international payment and currency services (eFX) in Brazil from 1 October 2026
as sociedades corretoras de câmbio e as instituições de pagamento autorizadas a funcionar pelo Banco Central do Brasil
backsC12 - S14primarygovernment data2025-10-06share of adults paying a merchant online, 2021 and 2024, for Brazil, Argentina, Mexico and low and middle income economies
Made a digital online merchant payment for an online purchase (% age 15+)
backsC36 - S15secondaryvendor data2026-10-04FMP daily price history, June 2021 to October 2026daily closes and the one-day moves over 15%backsC33
- S16primarycompany filing2026-08-11insider sales and purchases with the Rule 10b5-1 flagbacksC28
- S17primaryregulator2026-09-15FINRA consolidated short interest, settlement 15 September 2026 FINRAshort interest and days to cover
short interest settlement date 2026-09-15
backsC32 - S18primarycompany release2025-02-21the company's answer to the 2022 and 2025 short-seller reports
The Company has disclosed publicly that the review overseen by the Audit Committee concluded that the prior short-seller allegations were not substantiated.
backsC34 - S19primarycompany release2026-04-20the affirmed dismissal of the New York state class actionsbacksC35
- S20primarycompany release2023-08-15Arnt's appointment as co-CEO and director, effective 15 August 2023, after twelve years as MercadoLibre's CFObacksC49
- S21primarycompany release2025-03-25Mark Ortiz stepping down as CFO; Jeffrey Brown named interim CFObacksC49
- S22primarycompany release2025-08-13the new CFO's appointment, reporting to Pedro Arnt, and his record at Featurespace, Visa and American ExpressbacksC49
- S23primarycompany filing2024-03-19Sebastián Kanovich described as former co-CEO, so Arnt sole chief executive by March 2024backsC49