WS Investor
14 Aug 2026, 10:33
dLocal (DLO) Falls 1% Premarket Despite 92% TPV Growth and Raised 2026 Guidance
dLocal (NASDAQ: DLO) shares are down 1% in premarket trading after the payments company reported strong second-quarter 2026 growth and raised parts of its full-year outlook. The modest decline appears primarily tied to continued margin compression and concerns about tougher growth comparisons ahead.
Total Payment Volume reached $17.7 billion, up 92% year over year and 26% sequentially, marking the seventh consecutive quarter of more than 50% growth. Revenue increased 56% to $399.7 million, while gross profit reached a record $127.2 million, up 29%.
Net income rose 28% to $54.8 million, or $0.18 per diluted share, while adjusted free cash flow increased 41% to $68.5 million.
Why Is DLO Stock Down?
The main pressure point appears to be profitability relative to dLocal's exceptionally rapid volume expansion. Gross profit margin fell to 32% from 39% a year earlier and 35% in the previous quarter. Gross profit as a percentage of TPV also declined sharply to 0.72% from 1.07% a year ago.
Management attributed the compression partly to a higher share of local-to-local transactions, the ramp-up of large merchants at lower pricing tiers and expansion into new products, payment methods and countries. Mexico also faced pricing and cost pressure, while Africa and Asia saw lower contributions from higher-FX-spread markets.
Operating profit increased a more moderate 15% year over year to $64.2 million despite the 56% revenue increase. The operating-profit-to-gross-profit ratio fell to 50% from 56% a year earlier, although it improved significantly from 44% in Q1.
Management also cautioned that the company's rapid recent expansion will create more demanding year-over-year comparisons during the second half of 2026 and into 2027.
Still, dLocal raised its 2026 TPV growth outlook to 60%-70% and gross profit growth guidance to 25%-30%, while maintaining operating profit growth guidance of 27.5%-32.5%.
The relatively small 1% premarket decline therefore looks more like investor caution over declining transaction economics and margins than a negative reaction to the company's underlying growth. Strong TPV expansion, higher guidance and improving sequential operating leverage remain supportive of the broader outlook.
dLocal (NASDAQ: DLO) shares are down 1% in premarket trading after the payments company reported strong second-quarter 2026 growth and raised parts of its full-year outlook. The modest decline appears primarily tied to continued margin compression and concerns about tougher growth comparisons ahead.
Total Payment Volume reached $17.7 billion, up 92% year over year and 26% sequentially, marking the seventh consecutive quarter of more than 50% growth. Revenue increased 56% to $399.7 million, while gross profit reached a record $127.2 million, up 29%.
Net income rose 28% to $54.8 million, or $0.18 per diluted share, while adjusted free cash flow increased 41% to $68.5 million.
Why Is DLO Stock Down?
The main pressure point appears to be profitability relative to dLocal's exceptionally rapid volume expansion. Gross profit margin fell to 32% from 39% a year earlier and 35% in the previous quarter. Gross profit as a percentage of TPV also declined sharply to 0.72% from 1.07% a year ago.
Management attributed the compression partly to a higher share of local-to-local transactions, the ramp-up of large merchants at lower pricing tiers and expansion into new products, payment methods and countries. Mexico also faced pricing and cost pressure, while Africa and Asia saw lower contributions from higher-FX-spread markets.
Operating profit increased a more moderate 15% year over year to $64.2 million despite the 56% revenue increase. The operating-profit-to-gross-profit ratio fell to 50% from 56% a year earlier, although it improved significantly from 44% in Q1.
Management also cautioned that the company's rapid recent expansion will create more demanding year-over-year comparisons during the second half of 2026 and into 2027.
Still, dLocal raised its 2026 TPV growth outlook to 60%-70% and gross profit growth guidance to 25%-30%, while maintaining operating profit growth guidance of 27.5%-32.5%.
The relatively small 1% premarket decline therefore looks more like investor caution over declining transaction economics and margins than a negative reaction to the company's underlying growth. Strong TPV expansion, higher guidance and improving sequential operating leverage remain supportive of the broader outlook.
