Tariffs, Inflation Hit DLocal Margins; Stock Plunges

DLocal Limited (NASDAQ:DLO) shares fell premarket Thursday after the company reported third-quarter fiscal 2025 earnings results.

Earnings Results

The Uruguayan payments processor reported quarterly earnings of 17 cents per share, beating analyst consensus estimates of 16 cents.

Revenue reached $282.48 million, beating the Street estimate of $262.0 million.

Revenue surged 52% year over year (Y/Y) and 10% quarter-over-quarter (Q/Q) on higher volumes.

Gross profit rose 32% Y/Y to $103.2 million and 4% Q/Q. Quarter-over-quarter results improved primarily due to strong volume growth in frontier markets—especially Colombia, Bolivia, and Nigeria—and solid momentum in Brazil across streaming, e-commerce, and advertising with a higher mix of pay-ins.

These gains were partially offset by weakness in Egypt from earlier share-of-wallet losses, margin pressures in Argentina tied to lower rate spreads, higher processing costs, and an IFRS inflation adjustment, as well as mix-related margin compression in Mexico and slower Total Payment Volume (TPV) growth likely tied to higher import tariffs.

Gross margin stood at 37% in this quarter, which declined from 42% in the third quarter of 2024 and 39% in the second quarter of 2025.

Adjusted EBITDA came in at $71.7 million, up 37% Y/Y and 2% Q/Q, with a margin of 25% in the quarter.

TPV hit a record $10.4 billion in the third quarter, surging 59% Y/Y and climbing 13% Q/Q.

As of September 30, dLocal had cash and cash equivalents of $604.5 million.

Management Optimism and Leadership Changes

CEO Pedro Arnt added, “We delivered another record quarter, the first time with TPV above $10 billion and gross profit that surpassed $100 million, one more example of our strong growth and continued diversification, all of which underscore the potential and resilience of our business model.” 

Outlook

dLocal expects fiscal 2025 revenue to reach the higher end of its 30%–40% year-over-year growth range.

Price Action: DLO shares were trading lower by 11.71% to $13.12 premarket at last check Thursday.

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