20-F: dLocal Reports Strong 2025 Growth Amidst Board Transition

dLocal Limited announced robust financial results for the fiscal year ended December 31, 2025, with significant revenue and TPV growth, alongside a strategic board restructuring and ongoing legal proceedings.

Summary

• Total Payments Volume (TPV) increased by 59.6% to US$40.8 billion in 2025, up from US$25.6 billion in 2024.
• Revenues grew by 46.6% to US$1,093.6 million in 2025, compared to US$746.0 million in 2024.
• Gross profit for 2025 was US$402.8 million, a 36.7% increase from US$294.7 million in 2024.
• Adjusted EBITDA reached US$278.1 million in 2025, with an Adjusted EBITDA Margin of 25.4%, consistent with 25.3% in 2024.
• Profit for the year increased by 63.4% to US$196.9 million in 2025, from US$120.5 million in 2024.
• Net Revenue Retention Rate (NRR) was 145% for 2025, indicating strong growth from existing merchants.
• Net cash generated from operating activities significantly improved to US$415.5 million in 2025, from a US$32.8 million cash outflow in 2024.
• The company completed its transition to a nine-person, majority-independent Board of Directors, with five independent members appointed.
• An acquisition of certain assets and 100% share capital of Mint Code Solutions S.A., Cameroon, was completed on February 27, 2026, following a restructuring of the AZA Finance transaction.
• A US$2.1 million portion of advances and other receivables from a third-party payment processor was fully written off in the second half of 2025, with legal claims initiated in February 2026 for outstanding amounts.
• The Board authorized a new share repurchase program of up to US$300 million on March 13, 2026, and declared a cash dividend of US$57.2 million (US$0.1939 per share) payable on or about June 10, 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong report, driven by exceptional growth in TPV and revenue, coupled with a significant improvement in operating cash flow. While legal challenges and asset write-offs present headwinds, the strategic board changes and commitment to shareholder returns are positive indicators.

Positives

• Strong TPV growth of 59.6% in 2025, demonstrating increased transaction volume through the platform.
• Significant revenue growth of 46.6% in 2025, driven by existing and new merchants.
• High Net Revenue Retention Rate (NRR) of 145% for 2025, indicating successful retention and expansion with existing customers.
• Improved cash flow from operating activities, generating US$415.5 million in 2025 compared to a net outflow in 2024.
• Maintained Adjusted EBITDA Margin at 25.4% in 2025, reflecting efficient operations despite rapid growth.
• Completion of board restructuring to a majority-independent board, enhancing corporate governance.
• Successful acquisition of Mint Code Solutions S.A., Cameroon, expanding the company's footprint in Africa.
• Continued investment in technology and AI, including the establishment of a dedicated AI R&D department and tools like dCoder for software engineering workflows.
• The company's platform is PCI DSS Level 1 certified and obtained ISO 27001 certification in 2025, reinforcing security and compliance.
• Declaration of a cash dividend of US$57.2 million and authorization of a new US$300 million share repurchase program, signaling confidence in financial health and commitment to shareholder returns.

Negatives

• A US$2.1 million write-off of advances and other receivables from a third-party payment processor in 2025, indicating potential credit risk exposure.
• The fair value of a financial asset measured at FVPL related to the same third-party payment processor was reduced to US$5.6 million, reflecting deteriorated recovery prospects.
• Ongoing class action lawsuits alleging material misstatements or omissions in public filings, which could result in significant expenses and reputational harm.
• Adjusted EBITDA margin decreased from 31.1% in 2023 to 25.4% in 2025, indicating some margin compression over the two-year period.
• Finance income decreased by 39.0% in 2025, primarily due to lower fair value gains on financial assets at FVPL and reduced interest income.
• Increased finance costs in 2025 compared to 2023, despite a decrease from 2024, reflecting higher expenses related to derivative financial instruments and foreign exchange losses on intra-group loans.
• Exposure to economic and political instability, currency restrictions, and devaluation in emerging markets, particularly Argentina, Brazil, and Mexico, which could adversely affect operations.

Risks

• Inability to keep pace with rapid technological changes in the payments processing industry, including developments in cryptocurrencies and blockchain, could reduce revenues.
• Substantial and increasingly intense competition from larger companies with greater resources may harm the business and lead to pricing pressures.
• Failure to successfully implement strategies to attract or retain merchants, expand the product portfolio, or increase adoption of the payments processing platform could limit growth.
• Limited operating history with financial results that may not be indicative of future performance, and revenue growth rate is likely to slow as the business matures.
• Failure to manage growth effectively could harm the business, including challenges in financial forecasting, hiring, and adapting internal controls.
• Potential merchant clients may be reluctant to switch or integrate with a new vendor, or integration may take longer than expected, adversely affecting growth.
• A decline in the quality of services offered could adversely affect the ability to attract and retain merchants and partners.
• Reliance on a relatively small number of large merchants for a significant share of revenues (top 10 customers represented 61% in 2025), making the business vulnerable to reduction in their volumes or loss of relationships.
• Interruption or failure of information technology and communications systems could impair operations, damage reputation, and harm results.
• Exposure to cyberattacks and breaches of information technology infrastructure, potentially leading to data breaches, downtime, reputational damage, and financial penalties.
• May not hold, or be able to obtain or maintain, relevant regulatory licenses, permissions, or registrations in all operating jurisdictions, leading to fines, penalties, or discontinuation of operations.
• Subject to complex and evolving tax regimes and foreign exchange regulations, with failure to accurately interpret or changes in these laws potentially having a material adverse effect.
• Business depends on reputation and ability to attract and retain merchant clients, which could be adversely affected by negative market reports, claims, or litigation.
• Exposure to economic and political risk, business cycles, and overall economic activity, particularly in emerging markets, could negatively impact financial results.
• Disproportionate risks relating to political, regulatory, economic, and social conditions in Latin America, where a substantial portion of end users are concentrated.
• Governments in operating countries exercise significant influence over economies, with policy changes potentially harming the business and share price.
• Developments and perceptions of risks in emerging markets, the United States, and Europe may harm economies and share price.
• Inadequate infrastructure and internet connectivity in operating countries may impact economic growth and adversely affect the company.
• Adverse effects from political, economic, regulatory, and social instability, currency restrictions, and devaluation in Latin America, Africa, and Asia.
• The 2026 U.S. military and economic intervention in Venezuela could have unforeseen impacts on the region, potentially affecting political and economic stability.
• Credit rating downgrading of operating countries could reduce the trading price of Class A common shares.
• An active trading market for common shares may not be sustainable, impairing liquidity and future capital raising.
• Fluctuations in the trading price of Class A common shares due to various factors, including competition, political crises, and analyst estimates.
• Techniques employed by short sellers may drive down the market price of common shares, negatively impact business operations, and generate litigation.
• Failure to meet financial performance guidance or other forward-looking statements could result in a decline in stock price.
• Concentration of voting control with Class B common shareholders (79.55% of voting rights as of December 31, 2025) limits the ability of other shareholders to influence corporate matters.
• Preemptive rights granted to Class B common shareholders may impair the ability to raise funds or affect terms of future capital raises.
• Common shares eligible for future sale (including Class A common shares from Class B conversion or warrant exercise) may cause the market price to drop significantly.
• Anti-takeover provisions in Articles of Association may discourage third-party acquisitions.
• Exclusion from certain stock indices due to dual-class capital structure could adversely affect the trading price.
• As a Cayman Islands exempted company, shareholder rights may differ from U.S. jurisdictions, potentially making it difficult to protect interests.
• Potential for being classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, leading to adverse tax consequences for U.S. investors.
• Reliance on third parties (payment networks, banks, acquirers) for certain aspects of the business, creating risks of service disruption, increased costs, or loss of relationships.
• Exposure to credit and liquidity risks from agents and third-party processors, acquirers, collection entities, and merchants, which are largely uninsured.
• Susceptibility to illegal or improper uses of the platform (e.g., illegal gambling, money laundering), exposing the company to liability, fines, and reputational harm.
• Failure to comply with anti-money laundering, anti-terrorism, anti-corruption, and sanctions regulations could lead to administrative sanctions, criminal penalties, and reputational damage.
• Reliance on manual processes in operations, increasing the risk of errors and control deficiencies.
• Factors reducing cross-border trade (e.g., trade wars, foreign currency fluctuations) could harm the business.
• Exchange controls and restrictions on capital movement in certain jurisdictions (e.g., Argentina, Brazil, India) may materially affect results of operations and financial condition.
• Failure of strategic acquisitions or investments to produce anticipated results or integrate fully could harm the business.
• Failure to manage client funds properly could severely diminish client use of services and/or result in penalties and fines.
• Limited ability to protect intellectual property rights, potentially leading to litigation and increased costs.
• Labor liabilities in connection with outsourcing to independent contractors and staffing companies could adversely affect results.
• Unexpected claims and liabilities and reputational risk arising from former operations as a division of AstroPay.

Future Outlook

The company expects to continue investing in profitable growth, balancing capital efficiency with maximizing shareholder returns. It anticipates continued expansion into new countries, development of new products and capabilities, adaptation to evolving regulatory requirements, and attracting new global merchants. The company believes its cloud-based platform, e-commerce-focused solutions, and commitment to customer service will drive future growth and profitability. The current artificial intelligence (AI) revolution is expected to further benefit the business by increasing customer retention and lowering costs.

Management Comments

• "Our mission is to enable global merchants to connect seamlessly with billions of emerging market users."
• "dLocal is focused on simplifying and redefining the online payments experience in emerging markets."
• "We believe the current artificial intelligence (AI) revolution may further benefit our business. We are applying AI to help us develop faster and operate more efficiently, which may increase customer retention and lower our cost to serve."
• "We expect to continue to invest in profitable growth, pursuing opportunities that grow both our revenues and our profit for the year, always in a disciplined manner in an effort to maximize the return on these investments."
• "We firmly believe the global enterprise merchants and partners that have chosen to work with us over the years are our best advocates."
• "Our global expansion strategy is driven by merchant needs, prioritizing markets with the greatest opportunities and the most complex payments, compliance, and regulatory challenges."
• "We believe our continued investment in AI may help speed time to market for the development of new products and their deployment on our platform."
• "We believe we have successfully built a transparent work environment that fosters innovation, teamwork, agile decision making, and collaborative thinking."

Industry Context

StockSavvy.ai notes that dLocal's strong performance in 2025, particularly its TPV and revenue growth, reflects the continued secular shift towards digital payments and e-commerce in emerging markets. The company's focus on a 'One dLocal model' (single API, platform, contract) positions it well against fragmented legacy providers, a key differentiator in complex regulatory and payment landscapes. The increasing adoption of AI for operational efficiency, fraud prevention, and product development aligns with broader fintech industry trends to leverage advanced analytics for competitive advantage. The expansion into new geographies and product offerings, such as BNPL integrations and stablecoin settlements, indicates a proactive approach to capturing emerging market opportunities and adapting to evolving payment preferences, contrasting with traditional financial institutions that may struggle with agility in these dynamic environments.

Comparison to Industry Standards

• dLocal's TPV growth of 59.6% in 2025 significantly outpaces general e-commerce growth rates in many developed markets, highlighting the rapid digitalization in emerging economies where it operates.
• The Net Revenue Retention (NRR) of 145% for 2025 demonstrates strong customer loyalty and expansion, a metric often sought after by investors and comparable to high-performing SaaS companies, indicating effective upselling and cross-selling within its existing merchant base.
• The Adjusted EBITDA Margin of 25.4% in 2025, while slightly lower than 2023's 31.1%, remains competitive within the payments processing industry, especially considering the investments in technology and expansion into complex emerging markets. This compares favorably to some global payment processors that may operate with thinner margins in more mature markets.
• The company's ability to process payments in 44 countries with over 160 pay-in and 939 pay-out methods provides a broader reach in emerging markets than many regional or single-market focused payment providers.
• The rapid deployment of system updates (over 1,000 releases per month) is significantly more agile than the typical few updates per year seen in legacy payments and financial services providers, indicating a strong technological advantage.

Management Changes

Corporate Governance

Legal Proceedings

• Two putative class action lawsuits (Zappia et al. and Hunt et al.) filed in New York Supreme Court in February 2023, alleging material misstatements or omissions in the June 2021 IPO registration statement. The court granted the motion to dismiss on March 20, 2025, but plaintiffs filed a notice of appeal on April 18, 2025. Oral argument on the appeal is scheduled for March 25, 2026.
• A separate putative class action lawsuit (Laurenzi v. dLocal Ltd., et al.) filed in U.S. District Court for the Eastern District of New York on October 6, 2023, alleging misstatements and omissions related to regulatory foreign exchange control risks in Argentina and compliance controls. The company filed a motion to dismiss, which is pending. The court issued an order holding the motion in abeyance until six months after letters rogatory were issued to certain individual defendants (issued August 20, 2025), with an extension for international service of process until April 15, 2026.
• Administrative and judicial inquiries initiated against dLocal Argentina S.A. in 2023 and 2024 concerning foreign exchange regulations. No penalties are sought at this stage, and no new developments emerged in 2025. The company believes its activities comply with applicable laws.
• No provision for contingencies has been recorded for the class action lawsuits or Argentine inquiries due to their preliminary nature and the company's intent to vigorously defend itself.
• As of December 31, 2025, the company was party to 119 legal proceedings, with US$0.4 million provisioned for probable losses related to labor contractor claims (US$0.3 million) and civil claims (US$0.1 million).

Related Party Transactions

• Revenues from related party merchants amounted to US$0.8 million in 2025, US$0.3 million in 2024, and US$1.5 million in 2023.
• Costs with related party collection entities were US$27.9 million in 2025, US$0.9 million in 2024, and US$0.1 million in 2023.
• Financial expenses regarding foreign exchange losses on an intra-group loan between subsidiaries in Argentina and Malta were US$5.0 million in 2025 and US$22.6 million in 2024. This loan was fully settled in September 2025.
• Outstanding accounts payables with related parties were US$1.8 million in 2025 and US$0.4 million in 2024.
• Outstanding accounts receivables with related parties were US$12.0 million in 2025 and US$6.9 million in 2024.
• All related party transactions were made on normal commercial terms and conditions and at market rates, with outstanding balances unsecured and repayable in cash.
• The company's related person transaction policy requires approval or ratification by the Audit Committee, board of directors, or a designated committee, considering commercial reasonableness and the company's best interests.

Stakeholder Impact

• **Shareholders**: Positive impact from strong financial performance (revenue, TPV, profit growth), improved operating cash flow, and commitment to shareholder returns through dividends (US$0.1939 per share declared) and a new US$300 million share repurchase program. However, ongoing class action lawsuits and the concentration of voting power with Class B shareholders (79.55%) could be concerns.
• **Employees**: Continued growth and investment in technology, including AI, suggest ongoing opportunities and development. The company's focus on fostering an entrepreneurial culture and talent development aims to benefit employees. Share-based incentive plans provide direct participation in company performance.
• **Customers (Merchants)**: Benefit from the company's expanding global reach (44 countries), diverse payment methods (160+ pay-in, 939 pay-out), and enhanced technology platform with AI-driven fraud prevention and conversion optimization. The 'One dLocal model' simplifies operations for global enterprise merchants. The acquisition of Mint Code Solutions S.A. expands services in Africa.
• **Suppliers/Partners**: Continued reliance on payment networks, card issuers, acquirers, and local financial institutions for payment processing. The company's growth likely translates to increased business for these partners. However, credit and liquidity risks from third-party processors remain a concern, as evidenced by the write-off and legal action against one such entity.
• **Creditors**: The company's strong cash position (US$719.9 million in cash and cash equivalents) and improved operating cash flow enhance its ability to meet financial obligations. The new share repurchase program and dividend policy indicate a healthy financial position, but the company's exposure to foreign currency risk and credit risk from certain counterparties should be monitored.

Next Steps

• Continue to invest in existing infrastructure, internal controls, and compliance mechanisms to manage growth effectively.
• Attract, recruit, retain, and develop necessary personnel, particularly in technology, sales, legal, finance, accounting, and compliance.
• Further expand into new geographic regions and industry verticals, potentially through strategic acquisitions.
• Continue developing new and complementary payment solutions, including leveraging AI, to enhance the product portfolio.
• Monitor and manage exposure to foreign currency exchange rates through hedging strategies.
• Vigorously defend against ongoing class action lawsuits and assess recoverability of outstanding amounts from third-party payment processors.
• Implement the US$300 million share repurchase program by March 19, 2027.
• Pay the declared cash dividend of US$0.1939 per share on or about June 10, 2026.
• Continue assessing the impact and preparing for the mandatory effective date of IFRS 18 and IFRS 19 on January 1, 2027.

Key Dates

Recommendation

The company demonstrates robust financial health and significant growth potential, evidenced by a 59.6% increase in TPV and a 46.6% rise in revenues in 2025. The strong Net Revenue Retention Rate of 145% highlights effective customer engagement and expansion. A substantial improvement in operating cash flow and a healthy Adjusted EBITDA margin of 25.4% underscore operational efficiency. Strategic enhancements in corporate governance, including a majority-independent board and new committees, along with continued investment in AI and global expansion, position the company for sustained long-term success. While ongoing legal proceedings and some asset write-offs introduce a degree of risk, the company's proactive measures, including a new US$300 million share repurchase program and a declared dividend, signal confidence and a commitment to shareholder value. These factors collectively suggest a 'buy' recommendation for a seasoned investor or institution looking for growth in the fintech emerging markets sector.

Keywords

Payment Processing, Emerging Markets, Fintech, Cross-border Payments, Digital Payments, E-commerce, Financial Technology, API, Fraud Prevention, Regulatory Compliance, Latin America, Africa, Asia, AI, Machine Learning, TPV, Revenue Growth, Adjusted EBITDA, Share Repurchase, Dividends, Corporate Governance, SEC Filing, 20-F