DLocal Limited (DLO): A Bull Case Theory

We came across a bullish thesis on DLocal Limited on M. V. Cunha’s Substack. In this article, we will summarize the bulls’ thesis on DLO. DLocal Limited’s share was trading at $13.46 as of January 30th. DLO’s trailing and forward P/E were 24.02 and 16.00, respectively according to Yahoo Finance.

DLocal Limited, together with its subsidiaries, operates a payment processing platform worldwide. DLO continues to demonstrate exceptional growth and operational resilience across its emerging-market payments business, driven by both scale and geographic diversification. In Q3, total payment volume (TPV) reached a record $10.4B, up 59% YoY and 13% QoQ, marking the fourth consecutive quarter of >50% YoY growth.

Revenue of $282.5M beat consensus estimates by $20M, representing 52% YoY growth, with strong acceleration in Latin America, particularly Brazil and Colombia, as long-standing global partners reaccelerated, large merchants scaled, and new wins ramped faster than expected.

Africa and Asia were softer due to Egypt, though underlying growth outside Egypt was robust. Gross margins came in at 37%, reflecting temporary regional headwinds in Egypt, Argentina, and Mexico. Still, management emphasized these are not structural and should normalize in coming quarters. Adjusted EBITDA rose 37% YoY to $71.7M, with margins of 25%. At the same time, free cash flow reached $37.6M despite a one-off impact in Argentina.

DLocal’s growth is anchored in deepening merchant relationships, with net revenue retention at 149% and TPV retention at 157%, highlighting the stickiness and scale of its platform. The company continues to expand its product suite with BNPL Fuse, tokenized alternative payment methods (APMs-on-file), stablecoin rails, and selective card-present capabilities, positioning itself as the one-stop financial infrastructure partner across 40+ emerging markets. Strategic partnerships with Western Union, Bolt, Fireblocks, Grey, Google, and Capitec reinforce its ecosystem and strengthen cross-border capabilities.

Despite short-term margin fluctuations and declining take rates—a feature of scale—DLocal’s long-term trajectory is clear: accelerating TPV, expanding product adoption, robust FCF, and a growing total addressable market under secular digitization trends. With a pristine balance sheet, strong operating leverage, and multi-year growth visibility, DLocal offers a compelling risk/reward profile, positioning it as a leading platform in emerging-market digital payments.

Previously, we covered a bullish thesis on DLocal Limited (DLO) by Oliver | MMMT Wealth in March 2025, highlighting its emerging-market focus, growing TPV, and long-term digitalization trends. DLO’s stock has appreciated by 38.19% since due to reaccelerating volumes and market recognition of growth. M. V. Cunha shares a similar thesis but emphasizes record Q3 TPV, strong Latin America performance, and strategic product and partnership expansions.

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Disclosure: None.