Q2 FY2026
Filed Aug 13, 2026TPV reached US$17.7 billion, up 92% year-over-year, while record gross profit reached US$127.2 million, up 29%; dLocal raised TPV and gross-profit guidance and maintained operating-profit guidance.
TPV and revenue growth accelerated strongly and adjusted free cash flow improved, but gross profit grew materially slower than revenue, with gross profit margin declining to 32% from 39% a year earlier and 35% in the prior quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total Payment Volume (TPV)other | US$17.7 billion | 26% | 92% |
| Revenueother | US$399.7 million | 19% | 56% |
| Revenue growth in constant currencyother | 50% year-over-year | – | – |
| Gross profitother | US$127.2 million | 7% | 29% |
| Gross profit growth in constant currencyother | 23% year-over-year | – | – |
| Gross profit marginother | 32% | – | -7p.p |
| Gross profit over TPVother | 0.72% | – | – |
| Operating expensesother | US$63.0 million | down 4% | 46% |
| Technology and development expensesother | US$13.3 million | – | – |
| Sales and marketing expensesother | US$9.9 million | – | – |
| General and administrative expensesother | US$36.5 million | – | – |
| Operating profitother | US$64.2 million | 22% | 15% |
| Operating Profit to Gross Profit ratioother | 50% | up 6 p.p. | down 6 p.p. |
| Net financial resultother | US$2.3 million gain | – | – |
| Effective income tax rateother | approximately 16% | – | – |
| Net incomeother | US$54.8 million | 31% | 28% |
| Net income marginother | 14% | – | -3p.p |
| Basic earnings per shareother | US$0.19 | – | – |
| Diluted earnings per shareother | US$0.18 | – | – |
| Net cash generated from operating activitiesother | US$140.5 million | – | – |
| Capital expendituresother | US$9.9 million | – | – |
| Adjusted Free Cash Flownon-GAAP | US$68.5 million | up substantially | 41% |
| Adjusted FCF/Net income conversionnon-GAAP | 125% | – | – |
| Total cash and cash equivalentsother | US$794.9 million | – | – |
| Corporate cash and cash equivalentsother | US$369.1 million | decreased by US$82.7 million quarter-over-quarter | – |
| Financial liabilitiesother | US$64.6 million | – | – |
2026 outlook
- NoteTPV guidance raised to 60–70% year-over-year
- NoteGross profit guidance raised to 25–30% year-over-year
- NoteOperating profit guidance maintained at 27.5–32.5% year-over-year
Capital returns
- Under the $300 million program authorized in March 2026, the Company repurchased approximately 6.9 million Class A shares for US$86.1 million through the end of the second quarter.
- Repurchase of shares was US$75.9 million during the three months ended June 30, 2026.
- Dividends paid were US$57.2 million during the three months ended June 30, 2026.
What drove it
- Quarter-over-quarter revenue growth was driven by volume growth.
- Gross-profit growth reflected Brazil, supported by ramp-up of ride-hailing and travel merchants alongside sustained e-commerce growth.
- Argentina benefited from broad-based growth across e-commerce, ride-hailing and on-demand delivery, as well as lower advancement costs.
- The operating-expense increase reflected annualization of investments made in the second half of 2025, higher average salaries, senior strategic hires, and marketing spend around the World Cup campaign and large merchant events.
- The adjusted free-cash-flow improvement reflected normalization of temporary working-capital effects, including timing in tax-credit netting and receivables from advancement operations.
Concerns
- Gross profit margin was 32%, compared to 39% in the second quarter of 2025 and 35% in the first quarter of 2026.
- Gross profit over TPV declined to 0.72% from 1.07% in the second quarter of 2025 and 0.84% in the first quarter of 2026.
- Mexico faced large Tier 0 merchants reaching a higher volume pricing tier along with cost pressure.
- Africa and Asia had lower contribution from higher FX spread markets in Mozambique and Vietnam and a one-off cost increase in Nigeria.
- Management stated that growth will face more demanding comparisons in the second half of the year and into 2027.
What to watch
- Delivery against raised TPV guidance of 60–70% year-over-year and gross-profit guidance of 25–30% year-over-year.
- Whether operating leverage improves in the second half of 2026 as management indicated.
- The effect of local-to-local share, large-merchant ramp-up, new payment methods, products and countries on gross profit over TPV.
- Margin and cost trends in Mexico, Mozambique, Vietnam and Nigeria.
- Use of the U.S.$150.0 million senior unsecured credit facility for general corporate purposes.
Balance sheet and cash flow
- Cash and cash equivalents were US$794.9 million as of June 30, 2026.
- Net cash generated from operating activities was US$140.5 million for the three months ended June 30, 2026.
- Net cash used in financing activities was US$173.9 million for the three months ended June 30, 2026.
- On August 12, 2026, dLocal entered into a U.S.$150.0 million senior unsecured credit facility maturing on August 14, 2029.
- The facility is repayable in 11 equal, quarterly installments of US$13.6 million each, plus interest, commencing six months following the borrowing date.
- Interest accrues at Term SOFR plus 2.00% per annum.
Analysis
dLocal reported strong volume and revenue expansion in Q2 2026. TPV reached US$17.7 billion, up 92% year-over-year and 26% sequentially, while revenue rose 56% year-over-year and 19% sequentially to US$399.7 million. Management attributed the sequential revenue comparison to volume growth, and said TPV growth has remained above 50% year-over-year for seven consecutive quarters.
Profit growth did not keep pace with revenue growth. Gross profit increased 29% year-over-year to a record US$127.2 million, but gross profit margin fell to 32% from 39% a year earlier and 35% in Q1. Gross profit over TPV declined to 0.72% from 1.07% and 0.84%, respectively. The company identified higher local-to-local share, large-merchant ramp-up, and expansion into payment methods, products and countries as margin factors. Mexico pricing tiers and cost pressure, reduced contribution from Mozambique and Vietnam, and a one-off cost increase in Nigeria also weighed on the result.
Operating profit rose 15% year-over-year and 22% sequentially to US$64.2 million. The Operating Profit to Gross Profit ratio improved to 50% from 44% in Q1, supported in part by the absence of the US$4.4 million non-recurring prior-year tax item recorded in first-quarter operating expenses. Net income rose 28% year-over-year to US$54.8 million, or US$0.18 per diluted share, supported by higher operating profit and lower tax expense. The effective income tax rate was approximately 16%, versus 26% in Q1.
Cash generation strengthened during the quarter. Net cash generated from operating activities was US$140.5 million, and adjusted free cash flow was US$68.5 million, up 41% year-over-year, as temporary working-capital effects that had weighed on Q1 normalized. Corporate cash and cash equivalents declined sequentially to US$369.1 million following dividends and share repurchases. The company repurchased approximately 6.9 million Class A shares for US$86.1 million through quarter-end under its $300 million authorization, and subsequently entered into a U.S.$150.0 million senior unsecured credit facility.
Management raised 2026 guidance for TPV to 60–70% year-over-year growth and gross profit to 25–30% year-over-year growth, while maintaining operating-profit growth guidance of 27.5–32.5% year-over-year. The central operating issue for the second half is whether volume growth and cost discipline can translate into improved operating leverage while gross-profit yield remains under pressure.
Management, verbatim
TPV growth has remained above 50% year-over-year for seven consecutive quarters, with the last three quarters at or above 70%. Growth has also accelerated over the past five quarters, reaching its highest year-over-year rate in four years. Although the pace and scale of this growth will naturally create more demanding comparisons as we move through the second half of the year and into 2027, what we are seeing today reflects the positive returns on the investments we have made in our platform and portfolio of licenses. It is also a testament to the trust merchants place in us as they build and grow across emerging markets.
Pedro Arnt, CEO of dLocal
Not in the filing
stated, not guessed- Prior-period guidance was not provided, so no comparison of reported results with prior guidance is available.
- Revenue guidance was not provided.
- Gross margin guidance was not provided.
- Operating-expense guidance was not provided.
- Tax-rate guidance was not provided.
- The filing does not report revenue by operating segment or geographic segment.
- A total debt balance as of June 30, 2026 was not separately reported.
- GAAP and non-GAAP classifications are not applicable because dLocal reports under IFRS; adjusted free cash flow is explicitly described as not recognized under IFRS.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.