dLocal (DLO) Q2 Earnings: TPV Up 92%, Gross Profit Up 29%

TL;DR

• Total payment volume hit $17.7bn, up 92% from $9.2bn. Revenue was $399.7m, up 56%, well ahead of a $364.65m consensus. Gross profit was a record $127.2m, up 29%.
• Those three growth rates are the quarter. Volume grew 92%, revenue 56%, gross profit 29%. Each step down the income statement, less of the growth survives.
• Gross profit per dollar of volume fell to 0.72% from 1.07% a year ago and 0.84% in Q1. Gross margin went 39% to 35% to 32% over the same three quarters.
• dLocal raised full-year TPV guidance to 60-70% growth from 50-60%, and left operating profit guidance where it was at 27.5-32.5%. The gross profit band of 25-30% against a 65% volume midpoint implies the blended take rate falls another 22.7% this year.
• Diluted EPS of $0.18 missed a $0.19 consensus by a cent, on net income up 28%. The stock closed at $14.76, up 3.36% before the release and barely moved after it, at $14.69 as of 7:59pm ET.

What Did dLocal Report?

A large volume beat, a revenue beat, an in-line-ish quarter on profit and a one-cent EPS miss. The Uruguayan cross-border payments processor moved $17.7bn for its merchants in the second quarter, nearly double the year-ago figure, and turned that into record gross profit of $127.2m and operating profit of $64.2m.

The reason the stock did not celebrate a 92% volume number is on the next line down. Gross profit grew 29%.

The Board

Volume nearly doubled. What dLocal keeps from each dollar of it fell by a third.

92, Then 56, Then 29

Line up the growth rates and the shape of the business falls out of them:

• TPV: +92%, $9.2bn to $17.7bn
• Revenue: +56%, $256.5m to $399.7m
• Gross profit: +29%, $98.9m to $127.2m
• Operating profit: +15%, to $64.2m
• Net income: +28%, to $54.8m

The sequential picture is the same story compressed into one quarter. Against Q1, TPV rose 25%, revenue 19% and gross profit 7%.

None of this makes dLocal a bad business. Gross profit is at a record, adjusted free cash flow was $68.5m, up 41%, and corporate cash stands at $369.1m. But a payments company is bought on gross profit dollars, and the volume headline is a much prettier number than the one that pays for anything.

Where the Take Rate Went

dLocal gives a real explanation rather than a shrug, which I appreciate more than most releases this week. Three things moved:

Local-to-local is winning the mix. Domestic payments inside an emerging market earn dLocal less than a cross-border flow does, because the cross-border leg is where the FX spread lives. As merchants scale their local volumes, blended economics fall even when nothing has been repriced.

Mexico's large merchants hit higher volume tiers. dLocal names this directly. Volume pricing tiers are a contract feature, so this is the merchant getting what it negotiated, arriving on schedule.

Africa and Asia contributed less. Specifically the higher-FX-spread markets, with Mozambique and Vietnam named. Those are the fat-margin corridors, and their weight in the mix went down.

Argentina and Brazil, meanwhile, grew on ride-hailing, travel and on-demand delivery. High-volume, low-margin verticals, which is the same force again wearing different clothes.

So the compression is mix, contract structure and geography rather than a price war. That is a better answer than the alternative. It is also not a temporary one: every driver listed points the same way for as long as dLocal keeps scaling with its biggest merchants.

The Guide Assumes It Keeps Happening

Here is the part I have not seen anyone else do the arithmetic on. dLocal now guides 2026 TPV growth of 60-70% and gross profit growth of 25-30%. Take the midpoints, 65% and 27.5%, and the implied change in blended take rate is 1.275 divided by 1.65, or -22.7% for the full year.

The company is telling you it expects to keep more volume and less of each dollar of it, and it has put a number on how much less. That is more disclosure than most payments companies give, and it removes any argument that Q2 was a one-quarter mix accident.

One thing I want explained on the record. Operating profit grew 15% in the quarter, and the full-year operating profit guidance stayed at 27.5-32.5%. Those two figures need a considerably stronger second half to meet in the middle. dLocal raised the volume outlook by ten points and left the profit outlook alone, which is the most honest thing in the release and also the most demanding.

Is dLocal a Buy Here?

Not for me at $14.76, and my reasoning is narrower than the take rate.

The bull case is straightforward and it is not silly. A business compounding gross profit at 29% with $369m of net cash, 41% free cash flow growth and a forward multiple near 16x is not expensive. The market cap is $4.33bn against a 52-week range of $10.64 to $16.78, so this is not a stock that has run away from anyone. dLocal also bought back $86.1m of its own stock covering 6.9m shares, an average near $12.48, below Thursday's close.

The bear case is the one the guide already concedes. If the take rate falls another 22.7% this year and the drivers behind it are structural, then the growth rate of the thing that matters keeps stepping down while the headline TPV number keeps getting louder. dLocal's own math has gross profit growing 27.5% on 65% more volume. Run the same relationship forward a year or two and the volume number has to keep accelerating just to hold the profit growth rate flat. That is a treadmill, and I want to see one quarter where the take rate holds before paying up for the ride.

What would change my mind: a quarter where gross profit over TPV lands at or above the prior quarter, or a full-year operating profit guide raised rather than merely defended. Neither is far-fetched. Neither happened on Thursday.

Nu Holdings reported the same evening and delivered the opposite shape, with risk-adjusted net interest margin rising 290 basis points, which is worth reading next to this. Globant's guidance cut landed the same evening and posed a similar question about which line of the income statement to trust. For what else lands this month, the earnings calendar has the dates, and Coinbase's Q2 revenue miss covered a related version of the volume-versus-economics question.

The One-Line Read

dLocal is moving twice the money and keeping a third less of each dollar, and its own 2026 guide budgets for another 22.7% of that. Record gross profit, on a treadmill that is speeding up.