MONTEVIDEO - DLocal Limited (NASDAQ:DLO), a technology-first payments platform, reported a miss in its fourth-quarter earnings, with a per-share profit of $0.10, which was below the analyst consensus estimate of $0.15. Despite the earnings shortfall, the company's revenue for the quarter was $188 million, surpassing the expected $173.85 million.
The company's fourth quarter saw significant year-over-year (YoY) growth, with Total Payment Volume (TPV) increasing by 55% to $5.1 billion and revenue up by 59%. However, the stock price fell by 14.47% following the announcement, indicating investor concerns over the earnings miss.
DLocal's adjusted EBITDA for the quarter was $49 million, a 22% increase YoY but an 11% decrease from the previous quarter. Gross profit for the quarter stood at $70 million, marking a 27% rise YoY but a decline of 6% from the third quarter.
For the full year 2023, DLocal achieved a record TPV of $17.7 billion, a 67% increase YoY, and revenue of $650 million, up 55% YoY. The company's net revenue retention rate remained strong at 150%, reflecting the trust and wallet share gained from existing merchants.
Looking ahead to 2024, DLocal expects TPV growth of 40% to 50%, targeting over $26 billion at the midpoint. The company anticipates gross profit to be between $320 million and $360 million and adjusted EBITDA to range from $220 million to $260 million. These projections suggest a growth in gross profit of 15% to 30% and a 10% to 30% increase in adjusted EBITDA compared to the full year 2023.
CEO Pedro Arnt commented on the company's resilience and strategic execution amidst market challenges, emphasizing the company's focus on driving gross profit growth and maintaining profitability. He also highlighted the expansion into key markets and the addition of licenses and banking partnerships as part of their investment in capabilities.
The market's reaction to the earnings report and forward guidance reflects sensitivity to the earnings miss, despite the revenue beat and optimistic growth projections for the coming year. DLocal's strategy to invest in long-term growth and its robust liquidity position, with $326 million in funds, including cash balances and short-term investments, positions the company to navigate the dynamic payments landscape in emerging markets.
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