DLocal(DLO 6.61%) reported second-quarter 2025 results on August 13, 2025, with total payment volume (TPV) up 53% year over year to $9.2 billion, revenue up 50% year over year to $256 million, and gross profit up 42% year over year to $99 million. Management raised full-year guidance for both revenue and adjusted EBITDA, citing accelerated expansion, new product launches, and key executive and board changes. The following highlights focus on business diversification, margin management, and fintech innovation, as well as notable risk factors.
DLocal expands merchant base and diversification
The company’s merchant base reached 760 as of the second quarter of 2025, with the top 50 clients now operating in an average of 11 countries and using 48 payment methods. The top three markets now account for less than 50% of total revenue, down eight percentage points since 2023, reflecting a significant shift in geographic concentration.
"Our geographic diversification has increased as a consequence, with our top three markets now representing less than 50% of revenues, down eight percentage points since 2023, as of Q2 2025. The revenue in the rest of our markets is growing almost three times faster if we look at the last four quarters. And so as we increase our merchant base and move up the S-curve with them, we expect merchant diversification to increase as well going forward."
-- Pedro Arnt, Chief Executive Officer
This broadening of both merchant and geographic exposure reduces the company’s vulnerability to country-specific shocks and supports more stable, multi-year organic growth.
Margin expansion drives DLocal profitability
Adjusted EBITDA rose 64% year over year and 21% quarter over quarter to $70 million, with the adjusted EBITDA-to-gross profit ratio improving for the fifth consecutive quarter to 71%. Despite ongoing investment in technology, operations, and compliance, DLocal continues to outperform peers on revenue per employee, highlighting operational efficiency.
"This reflects that despite smaller scale, we have a very lean and efficient culture. Furthermore, we believe there are scalability gains ahead of us from our ongoing AI and automation initiatives, which are a core part of where the technology resources from our investment cycle are being allocated."
-- Pedro Arnt, Chief Executive Officer
Disciplined cost management and technology-driven scalability position DLocal to absorb future operating expense growth while maintaining strong profitability ratios.
Fintech innovation and stablecoin solutions boost addressable market
Recent product launches include SmartPix in Brazil, which brings card-like convenience to Pix instant payments, as well as buy now, pay later (BNPL) integrations and stablecoin settlement solutions through partnerships with Circle and BVNK. Management emphasized that DLocal does not assume direct BNPL credit risk but participates in revenue sharing on BNPL provider yields.
"A couple of reasons for that. I think, first of all, we have been involved in the space for a few years now. I think in the past, that was a bit of a no-no, but that knowledge and that experience, I think, is an advantage now. When you think about how stablecoins are increasingly being adopted, there is still enormous need for the on-ramps and the off-ramps and really on-ramps and off-ramps from fiat to stable and from stable to fiat. We are uniquely positioned to offer that service. They are about local liquidity and attractive FX rates, both of which are strengths of DLocal. Because of our pay-ins and payouts businesses across multiple, multiple emerging markets. We also already offer our merchants the ability to settle to us or from us in stablecoin so as to accelerate settlement times of cross-border flows. And so if you think about it that way, our belief is that some of the hardest parts to build within the stablecoin value chain, which is the shift from fiat to stable and then back from stable to fiat, and also where a lot of the margin in stablecoin lies, because of FX is exactly where DLocal plays and participates. So very specifically, we have a vertical sales force and a vertical product team focusing on this, and we actually think that there's an opportunity for us to capture."
-- Pedro Arnt, Chief Executive Officer
Expanding into stablecoin and BNPL solutions enables DLocal to capture new revenue streams and address evolving merchant needs in emerging markets, reinforcing its competitive positioning.
Looking Ahead
Management expects 2025 TPV and revenue at the higher end of prior guidance, with gross profit and adjusted EBITDA now forecast to exceed previous upper limits for the year. Key risks include emerging market macroeconomic volatility, increasing tariffs on cross-border e-commerce (notably in Mexico), changes to the fiscal regime in Brazil, and ongoing currency fluctuations. Recent governance enhancements include the appointment of a new CFO, a transition to a majority independent board, and the cancellation of treasury shares to return capital and align with best practices.
