dLocal continues growth run as it expands to more markets

dLocal continues growth run as it expands to more markets

Emerging markets ecommerce player dLocal remains one of the highest-valued companies in cross-border payments in terms of revenue multiples, so expectations were high for the company’s Q4 and FY 2021 results. dLocal investors gave the stock a nice uptick post the earnings release but maintained consistency with the sector-wide downgrade and the stock is still around two thirds down from its 2021 peak.

dLocal continues revenue growth in FY 2021 results

Key takeaways from dLocal’s Q4 and FY results:

  • Total payment volume was the company’s headline success, rising 193% for the year to $2.1bn, and 145% for Q4 to $757m. As part of this, it saw triple-digit growth in both pay-ins and pay-outs.
  • Revenue was also strong, with 134% growth year-on-year to $244m for FY 21 and 120% growth in Q4 to $76m. 22% of revenue for the year came from new merchants.
  • The company also managed to increase its adjusted EBITDA margin, which rose to 41%, compared to 2020’s 40%. However, the take rate was around 20% down on 2020 levels but still far above industry peers. The take rate reduction was driven by a shift in customer mix toward larger global merchants and a higher share of local-to-local payments.
  • dLocal also grew its presence to 35 countries (up from 20 in 2020), with connections to 700+ payment methods, and increased its headcount by 73% to 535.

Looking to 2022, the company continues to focus on growing globally, and expects to maintain a net customer retention rate of 150%+ over the course of the year and an EBITDA margin “north of 35%”. It does not anticipate being impacted by changes related to the Covid-19 pandemic or the Russia-Ukraine conflict.

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