DLocal Limited

Ladies and gentlemen, thank you for standing by and welcome to the D-Local first quarter 2022 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your host, so I'll let you begin.

Thank you. Good morning, everyone, and welcome to the locals first quarter 2022 earnings call. On the call today, I'm joined by Sebastian Canovic, our chief executive officer, Sumita Pandit, our chief operating officer, and Diego Cabrera Canay, our chief financial officer. We are providing a slide presentation to accompany our prepared remarks. This event is being broadcast live via webcast and both the webcast and presentation may be accessed through Delocal's website at investor.delocal.com. The replay will be available shortly after the event is concluded. Before proceeding, let me mention that any forward statements included in the presentation or mentioned in this conference call are based on currently available information and the local's current assumptions, expectations and projections about future events. While the company believes that our assumptions, expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on those forward-looking statements. Actual results may differ materially from those included in the locals' presentation or discussed in this conference call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of the locals' filings with the Securities and Exchange Commission, which are available on the locals' investor relations website. Now, I will turn the conference over to Seba.

Hello, everyone. Thanks for joining us today. I'm pleased to share that we are off to a strong start to the year, delivering record human results. Our business continues to show strong growth trends, and we continue to execute our business plan with both our existing and new merchants across our various markets. Our business continues to show resilience to specific factors impacting the global economy, such as challenges in logistics in specific geographies, the Russia-Ukraine conflict, or changes in consumption from the return to work, high inflation in some developed markets, as well as a high interest rate environment. As discussed in our annual 2021 results, our business benefits from the inherent diversification across geographies, sectors, and products, but has no exposure to Russia or Ukraine. Therefore, and despite the challenging global macro context, our total process volume surpassed the $2 billion threshold for the first time. We more than doubled our TPV, increasing by 127% year over year. For the fifth consecutive quarter, we grew our revenue triple digits, reaching $87 million for the quarter and a 117% increase over prior Q1 2021. We continue to retain our clients with a strong NRR of 190% in Q1 2022, as we grew wallet share with our existing merchants and had minimal churn. Adjusted EVDA for the quarter grew 84% year over year to $33 million, with a strong adjusted EVDA margin of 38%, in line with our margin levels in the second half of 2021. This was achieved while we continue to make disciplined investments in our infrastructure and people to support our long-term expansion strategy. Our performance this quarter reinforces our strong growth momentum, and we expect to continue delivering growth supported by the performance of our existing and new merchants using our platforms. On slide four, we have always operated with the philosophy of delivering disciplined, profitable growth. Our adjusted EVDA for the first quarter of 2022 reached $33 million, increasing by 84% year over year. If we look at our adjusted EVDA for the last 12 months of 2022, it has more than doubled compared to the last 12 months of 2021, reaching $114 million. That's a 118% increase. In the last few quarters, given our strong profitability, we have continued to strengthen our cash position and our balance sheet. We believe this gives us continued flexibility to execute our long-term growth strategy. On slide five, as I have mentioned, in the first quarter of the year, our TPV has more than doubled year over year. This significant increase has been supported by the fast growth of our global merchants. Our business model is not dependent on the performance and outlook of any single industry vertical. We have merchants from more than 10 different verticals and every vertical is well balanced in our portfolio. No single vertical accounted for more than 20% of our TPV in Q1 2022. Although Q1 2022 has been marked by a challenging global macro environment due to the specific factors I have mentioned, our business continues to benefit from the diversity of our merchants across industry verticals, geographies, products, and consumer behavior patterns. We have seen different verticals go through specific cycles, but our overall business benefits from verticals showing strong growth, while another vertical may go through a short-term down cycle, balancing each other out. So while individual merchants may have idiosyncratic exposure to these factors, when we look at our overall volume, it remains quite stable. As you can see on the right-hand side of the slide, I'm on slide five, all of our verticals show strong year-over-year growth in Q1 2022, with consumption experiencing the highest growth, increasing by more than five times year-over-year, driven by both on-demand delivery and commerce. On-demand delivery experienced high growth as we've onboarded the leading Latin America on-demand delivery platform last year, and we have also grew existing customers by taking them to new geographies. Regarding commerce, we have seen our merchants scale their volume quickly, and we have continued to gain wallet share with these customers by adding new geographies and payment methods with them. Mobility increased by more than two times year over year, especially as travel picked up pace around the world. Entertainment and services also experienced high growth, increased by more than 1.5 times year over year. I will now hand it over to Sumita to discuss our expansion strategy.