dLocal Reports Third Quarter 2026 Financial Results

dLocal posts 77% TPV growth and record profitability in Q3 2026.

What the company is saying

dLocal Limited (NASDAQ:DLO) presents its Q3 2026 as another period of robust execution, highlighting a Total Payment Volume (TPV) of $18.3 billion, up 77% year-over-year, and marking its eighth consecutive quarter of over 50% growth. The company emphasizes a net revenue retention rate of 140%, attributing this to deepening merchant relationships and operational leverage. CEO Pedro Arnt frames the quarter as a demonstration of improving operating leverage and strong cash generation, with gross profit reaching a record $132.0 million and operating profit up 37% to $76.2 million. The narrative acknowledges regional dynamics, citing lower advancement costs in Argentina, broad-based growth in Africa and Asia, and one-off cost recovery in Nigeria, while also noting margin pressure from payment mix shifts in Brazil, higher processing costs in Mexico, and lower volumes in Bolivia. The company underscores disciplined cost management, reflected in an 11% sequential drop in operating expenses, and points to a $150 million loan in August as a driver of increased corporate cash. dLocal also draws attention to its $120.1 million share repurchase under a $300 million program, and reiterates 2026 guidance for 60%-70% TPV growth, 25%-30% gross profit growth, and 27.5%-32.5% operating profit growth, while warning of ongoing macroeconomic and FX risks in key emerging markets.

What the data suggests

The disclosed figures show dLocal’s Q3 2026 TPV at $18.3 billion, up 77% year-over-year and 4% sequentially, with revenue of $398.0 million, up 41% year-over-year and nearly flat quarter-over-quarter. Gross profit hit a record $132.0 million, up 28% year-over-year and 4% sequentially, while operating profit rose 37% year-over-year to $76.2 million, with a 19% sequential increase. Net income reached $68.0 million ($0.23 per diluted share), up 31% year-over-year and 24% sequentially. Adjusted free cash flow surged 163% year-over-year to $99.1 million. Gross profit margin declined to 33% from 37% a year ago but improved from 32% in Q2 2026. Operating expenses were $55.9 million, up 17% year-over-year but down 11% sequentially, reflecting cost discipline. The company ended the quarter with $1,033.9 million in cash and equivalents, including $536.9 million in corporate cash, boosted by a $150 million loan. Share repurchases totaled $120.1 million for 9.1 million Class A shares. Management’s explanations for margin and volume shifts are supported by regional data: lower advancement costs in Argentina, cost recovery in Nigeria, and margin pressure from Brazil, Mexico, and Bolivia. The company’s 2026 guidance for TPV, gross profit, and operating profit growth remains unchanged, but management flags macro and FX volatility as ongoing risks.

Analysis

The announcement is highly factual, with nearly all key claims supported by realised, audited financial results for Q3 2026. The only forward-looking element is the 2026 guidance, which is clearly separated from the realised results and does not dominate the narrative. The company discloses comprehensive profitability metrics (operating profit, net income, gross profit, free cash flow), satisfying the Disclosure Completeness Rule for a strong_positive signal. There is no evidence of narrative inflation: the tone is positive but proportionate to the magnitude of the reported growth. Capital outlays (loan, share buyback) are disclosed transparently and are not paired with speculative, long-dated returns. The benefits of operational and financial performance are immediate and quantifiable.

Risk flags

• ●Exposure to macroeconomic and FX volatility in key markets such as Brazil, Argentina, and Mexico could materially impact revenue and gross profit, as highlighted by management. These risks are structural to dLocal’s emerging-market focus and have already affected recent results.
• ●Margin pressure from shifts in payment method mix, particularly in Brazil, and higher processing costs in Mexico, could persist or intensify, limiting future profitability even as volumes grow. This dynamic is evident in the year-over-year decline in gross profit margin from 37% to 33%.
• ●The company’s rapid growth is partly fueled by capital-intensive actions, including a $150 million loan and a $120.1 million share buyback. While these moves strengthen cash and support shareholder returns, they increase leverage and reduce financial flexibility if growth slows or margins compress.
• ●Softer volumes in certain geographies, such as Bolivia, and reliance on one-off cost recoveries (e.g., Nigeria) introduce variability to quarterly results, making sustained outperformance less predictable.
• ●Continued strong performance is contingent on disciplined cost management and automation initiatives, which may face diminishing returns or implementation challenges as the company scales.

Bottom line

dLocal’s Q3 2026 results show exceptional growth in TPV, revenue, and profitability, with realised cash flow and a strengthened balance sheet. The company’s operational narrative is credible, with management providing clear explanations for both positive drivers and margin headwinds across regions. Investors should recognize that while growth is strong and capital allocation (loan, buyback) is transparent, the business remains exposed to macroeconomic and FX risks in emerging markets, and margin compression is a real concern. The share repurchase and cash accumulation provide near-term support, but future results will depend on the company’s ability to sustain volume growth and manage costs as competitive and regulatory pressures evolve. The most important takeaway is that dLocal is delivering on its growth and profitability claims, but the path forward is not risk-free given the volatility inherent in its core markets.

Announcement summary

(NASDAQ:DLO) dLocal Limited announced its financial results for the third quarter ended September 30, 2026. Total Payment Volume (TPV) reached $18.3 billion in Q3 2026, up 77% year-over-year from $10.4 billion in Q3 2025 and up 4% from $17.7 billion in Q2 2026. Revenues were $398.0 million, a 41% increase year-over-year from $282.5 million in Q3 2025 and nearly flat compared to $399.7 million in Q2 2026. Gross profit was $132.0 million, up 28% from $103.2 million in Q3 2025 and up 4% from $127.2 million in Q2 2026. Operating profit reached $76.2 million, a 37% increase year-over-year and a 19% increase quarter-over-quarter. Net income for Q3 2026 was $68.0 million, or $0.23 per diluted share, up 31% from $51.8 million, or $0.17 per diluted share, in Q3 2025, and up 24% from $54.8 million, or $0.18 per diluted share, in Q2 2026. Adjusted free cash flow for Q3 2026 was $99.1 million, up 163% year-over-year from $37.6 million in Q3 2025 and up 44% from $68.5 million in Q2 2026. As of September 30, 2026, dLocal had $1,033.9 million in total cash and cash equivalents, including $536.9 million of Corporate cash and cash equivalents, which increased by $203.8 million from $333.1 million as of September 30, 2025, and by $167.8 million from $369.1 million as of June 30, 2026, mainly due to a $150 million loan signed in August. The company repurchased approximately 9.1 million Class A shares for $120.1 million under a $300 million program authorized in March 2026. Gross profit margin was 33% in Q3 2026, compared to 37% in Q3 2025 and 32% in Q2 2026. Gross profit over TPV was 0.72%, down from 0.99% in Q3 2025 and flat compared to Q2 2026. Operating expenses were $55.9 million, up 17% year-over-year and down 11% quarter-over-quarter. The effective income tax rate for the period was approximately 15%. Net financial result was a $5.3 million gain, compared to $6.4 million in Q3 2025 and $2.3 million in Q2 2026. The company’s net revenue retention was 140%. The quarterly performance was influenced by lower advancement costs in Argentina, broad-based volume growth in Africa and Asia, one-off cost recovery in Nigeria, FX hedge gains, and was partly offset by a shift in payment method mix in Brazil, higher processing costs in Mexico, and lower volumes in Bolivia. Guidance for 2026 indicates TPV growth of 60%-70% year-over-year, gross profit growth of 25%-30% year-over-year, and operating profit growth of 27.5%-32.5% year-over-year. As of September 30, 2026, total assets were $2,370.3 million and total equity was $577.2 million. Pedro Arnt is CEO of dLocal.

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