Fintech dLocal hikes 2025 guidance after growth beats expectations

Uruguayan fintech dLocal (DLO.O) significantly raised its 2025 guidance for revenue and profit growth after its recent earnings surged past analyst forecasts, driven by strong performance in Brazil and Mexico. For the quarter ended June, the payments provider reported adjusted EBITDA up 64% to $70.1 million and revenue up 50% to $256.5 million, with Total Payment Volume (TPV) increasing 53%. Consequently, dLocal now projects 2025 TPV and adjusted EBITDA to grow 40%-50%, up from prior estimates, signaling robust momentum despite acknowledging emerging market risks such as trade barriers and currency volatility.

Analysis

Uruguayan fintech dLocal has materially upgraded its 2025 outlook, now projecting 40%-50% growth for both Total Payment Volume (TPV) and adjusted EBITDA, a significant increase from prior guidance of 35%-45% and 20%-30% respectively. This enhanced forecast is underpinned by a robust second quarter, where revenue climbed 50% to $256.5 million and adjusted EBITDA surged 64% to $70.1 million, both figures comfortably exceeding LSEG analyst estimates. The acceleration is driven by strong performance in key markets like Brazil and Mexico, with TPV, a critical metric for platform adoption, growing 53%. This positive momentum marks a potential turnaround from 2024, when adjusted EBITDA contracted by 7% to $189 million. Despite the optimistic revision, the company acknowledges significant operational risks, including trade barriers, fiscal regime shifts in Brazil, and currency volatility in Argentina and Egypt. The firm’s current market capitalization of approximately $3.1 billion remains substantially below its initial $9 billion listing valuation, suggesting a notable reset in investor expectations has already occurred.

Key Decisions for Investors

• Given the substantial earnings beat and significantly raised guidance, investors may view this as an inflection point, warranting a reassessment of long positions, especially as the current valuation remains well below its historical peak.
• It is critical to monitor the company-cited emerging market risks, particularly fiscal policy shifts in Brazil and currency devaluations in Argentina and Egypt, as these could materially impact future earnings and challenge the newly optimistic guidance.
• Investors should scrutinize management's execution in the coming quarters to validate that the projected 40%-50% EBITDA growth is sustainable and not just a rebound from the 7% contraction experienced in 2024.