DLocal $DLO 3Q21 Earnings ๐
- TPV $1.8b +217% ๐
- TPV ratio/take-rate 3.8% -30bps QoQ โ๏ธ
- Rev $69m +123% ๐
- Adj EBITDA $26m +110% ๐ margin 38% โญ๏ธ -211bps โ๏ธ
- NG Net Income $20m +129% ๐ margin 29% โญ๏ธ +89bps โ๏ธ
- High Net Retention 185% โญ๏ธ
- TPV $1.8b +217% ๐
- TPV ratio/take-rate 3.8% -30bps QoQ โ๏ธ
- Rev $69m +123% ๐
- Adj EBITDA $26m +110% ๐ margin 38% โญ๏ธ -211bps โ๏ธ
- NG Net Income $20m +129% ๐ margin 29% โญ๏ธ +89bps โ๏ธ
- High Net Retention 185% โญ๏ธ
1 | Strong Q3
โWe continue to see strong growth across multiple verticals as we see local economies continue to bounce back and global merchants prioritize their efforts in emerging markets.โ
โWe continue to see strong growth across multiple verticals as we see local economies continue to bounce back and global merchants prioritize their efforts in emerging markets.โ
2 | $DLO solving the problem of EM payments complexity
3 | Dlocal โก๏ธ many clients across increasing multiple countries and payment methods
- 2Q21: 7 countries, 69 pymt methods โ๏ธ
- 2Q21: 7 countries, 62 pymt methods โ๏ธ
- 1Q21: 6 countries, 53 pymt methods โ๏ธ
- 2Q21: 7 countries, 69 pymt methods โ๏ธ
- 2Q21: 7 countries, 62 pymt methods โ๏ธ
- 1Q21: 6 countries, 53 pymt methods โ๏ธ
4 | Existing clients drive growth.
โโฆto solve their existing needs and cross-sell new payment methods, new countries, and new productive cases.
At any given timeโฆhave
- >50 pricing proposals โ
- 40+ agreement โ
- 30+ in testing stage โ
- 20+ waiting to go live โ
โโฆto solve their existing needs and cross-sell new payment methods, new countries, and new productive cases.
At any given timeโฆhave
- >50 pricing proposals โ
- 40+ agreement โ
- 30+ in testing stage โ
- 20+ waiting to go live โ
5 | New clients feed the sales funnel.
At a given time, we have about:
- 175+ in the early stages โ
- 75+ plus waiting to go live โ
โก๏ธ Once live, typically takes 3-6 quarters to ramp up volume with the merchant.
โก๏ธ Onboarded 10 plus new merchants this quarter.โ
At a given time, we have about:
- 175+ in the early stages โ
- 75+ plus waiting to go live โ
โก๏ธ Once live, typically takes 3-6 quarters to ramp up volume with the merchant.
โก๏ธ Onboarded 10 plus new merchants this quarter.โ
6 | Together Existing and New Merchants currently drive high NRR of 185% and low to zero Churn.
โโฆour net revenue retention is driven by having minimal levels of churns of less than 1%โฆโ
โโฆour net revenue retention is driven by having minimal levels of churns of less than 1%โฆโ
7 | Net Retention - 150-160% (ST 12-18mths), 120-130% (LT)
โโฆwe still think that in the near term, which is 12 to 18 months, 150%-160% net retention rate is achievable and that's what we are planning for.
โฆguidedโฆlong term, it will probably come down to 120%-130%.โ
โโฆwe still think that in the near term, which is 12 to 18 months, 150%-160% net retention rate is achievable and that's what we are planning for.
โฆguidedโฆlong term, it will probably come down to 120%-130%.โ
8 | Countries - Adding Thailand & El Salvador
9 | Lower Take Rates
โฆ3.8% versus 4.1%โฆlarge merchants with a take rate lower than average have grown significantly.
โฆgreat for our business as they bring incremental EBITDA.
โก๏ธ Not optimizing for take-rate
โก๏ธ Take rate will fluctuate
โก๏ธ Optimise not margins but profits
โฆ3.8% versus 4.1%โฆlarge merchants with a take rate lower than average have grown significantly.
โฆgreat for our business as they bring incremental EBITDA.
โก๏ธ Not optimizing for take-rate
โก๏ธ Take rate will fluctuate
โก๏ธ Optimise not margins but profits
10 | EBITDA Margins - Range 40%+/- not specific number
โ..expect the margin to be in and around that levelโฆnot tying ourselves to a specific number, it's a rangeโฆ
โฆdon't want to say is that it's definitely going to be a 40% number. It's going to be in that rangeโฆโ
โ..expect the margin to be in and around that levelโฆnot tying ourselves to a specific number, it's a rangeโฆ
โฆdon't want to say is that it's definitely going to be a 40% number. It's going to be in that rangeโฆโ
11 | Declining Customer Concentration Risk to Top 10 โ
โโฆour revenues exposure to our top 10 merchants continuous decreasing from 62% in the 2Q21 to 57% in 3Q21.โ
โโฆour revenues exposure to our top 10 merchants continuous decreasing from 62% in the 2Q21 to 57% in 3Q21.โ
12 | Declining Cost of Services
โ3Q20 was 2.4% of TPVโฆ 3Q21 was 1.9%โฆdecrease is the result of efficiencies & changes in biz mix.โ
ย โฆtransaction costs have continuously declinedโฆmight see them going upโฆ function of processing payments in countries or payment methodsโฆโ
โ3Q20 was 2.4% of TPVโฆ 3Q21 was 1.9%โฆdecrease is the result of efficiencies & changes in biz mix.โ
ย โฆtransaction costs have continuously declinedโฆmight see them going upโฆ function of processing payments in countries or payment methodsโฆโ
12 | Focus is on Net Retention and Absolute Profits
So, we continue to optimize for NRR, making sure that we are bringing more additional dollars that come at a profit. And yes, definitely, we are constantly getting better rate from acquirers, from payment methods, from banks.
So, we continue to optimize for NRR, making sure that we are bringing more additional dollars that come at a profit. And yes, definitely, we are constantly getting better rate from acquirers, from payment methods, from banks.
Final Takeaway on dLocal $DLO:
โก๏ธ Strong results, thesis unchanged. Rare combination of rapid growth & very strong profitability at scale (API), high insider ownership (>40%), well-diversified, deep integration (sticky & high switching cost), solid up+cross-sell.
โก๏ธ Strong results, thesis unchanged. Rare combination of rapid growth & very strong profitability at scale (API), high insider ownership (>40%), well-diversified, deep integration (sticky & high switching cost), solid up+cross-sell.
Attached my earlier update on Dlocalโs $DLO 2Q21 earnings ๐๐ป
https://twitter.com/EugeneNg_VCap/status/1428116840438325248
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