DLocal Limited

Good day and thank you for standing by. Welcome to the D-Local second quarter 2022 results conference 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 that session, you will need to press star 1 1 on your phone. Please be advised that today's conference is being recorded and I would now like to hand the conference over to your speaker today, Ms. Soledad Neger, Head of Investor Relations. Ms. Neger, please go ahead.

Thank you. Good morning, everyone, and welcome to the local second quarter 2022 earnings call. On the call today, I'm joined by Sebastian Canovic, our Chief Executive Officer Jacobo Singer, our president, 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 D-Local website at investor.dlocal.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 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 and be reliant on those forward-looking statements. Actual results may differ materially from those included in the local presentation or discussed in this conference call for a variety of reasons, including those described in the forward-looking statement and risk factor section of the local filing within the Securities and Exchange Commission, which are available on the local investor relation websites. Now I will turn the conference over to Seba. Thank you.

Hello, everyone. Thanks for joining us today. Second quarter 2022 marked our first anniversary as a public company. During the past year, we have proven that going public was just the beginning of a new chapter for the local. We continue to build the best financial infrastructure to connect the emerging markets to the rest of the world, making our services available in 37 countries and offering more than 700 local payment methods. Our merchants value the convenience of a one-stop shop solution, and this gives us an immense opportunity to continue scaling with our customers and to increase the barriers of entry for our competitors. We remain humble and focused on providing the most comprehensive solution for our merchants in emerging markets. Big thank you to our global team, our customers, and our investors for their continued support. On slide five, moving into our second quarter 2022 results, I'm happy to say that we've had another quarter of strong results, reaching new records during the quarter. Despite the challenging global macro context, including rising interest rates and inflation, our business has shown resilience and sustained growth, supported by the diversity of our merchants across industry verticals, geographies, and products. Our total process volume reached $2.4 billion in Q2, and we've achieved the $100 million revenue milestone in a quarter as we continue to bring new merchants to our platform and monetize our existing ones. We saw robust growth in TPV and revenue, increasing by 67% and 72% year over year, respectively, despite the high comparison base from last year. Both TPV and revenue accelerated by 16% quarter over quarter. We continue to retain our clients with a healthy NRR of 157% in Q2 2022, as we grew wallet share with our existing merchants. We continue to operate with the philosophy of delivering disciplined, profitable growth. Adjusted EVDA was up by 47% year-over-year and 16% quarter-over-quarter to $38 million. And for the fourth consecutive quarter, we maintained our adjusted EVDA margin stable at 38%. Our strong performance of the quarter has led us to a combined year-over-year revenue growth rate plus EVDA margin of 109%. On slide six, we continue to see more merchants joining our platform. Total merchants in our platform have grown to more than 500, and we currently actively manage around 200 key accounts. As we add new merchants and scale existing ones, our revenue share from our top 10 merchants has continued to decrease, from 63% in Q2 2021 to 51% in this quarter. Top 10 merchants in second quarter 2022 were spread across diverse verticals, including right-handing, commerce, streaming, advertising, financial services, and on-demand delivery. Besides that, our top 10 merchants vary from quarter to quarter. For instance, compared to the second quarter of 2021, there are three different merchants among our top 10, which shows the value of our customer diversification and the strength of our commercial teams. We have built trust with our merchants, successfully taking them to new geographies. Their chart on the right shows our continued success in bringing our top 10 merchants to more countries. As of second quarter 2022, our top 10 merchants in terms of revenue on average process payments with us in nine countries, with the maximum being 17 countries per merchant and the minimum four countries per merchant. As we offer our services in 37 countries and we keep adding new geographies, we see an immense opportunity to continue scaling our existing customers. Therefore, we remain laser focused on monetizing our existing client base and gaining share of wallet, which we believe is still low across our most relevant customers. I will now hand it over to Jacob. Thanks, Seba.