DLocal Limited

Good day and thank you for standing by. Welcome to the DLOCAL fourth quarter 2023 results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to the company. Please go ahead.

Good morning, everyone, and thank you for joining the fourth quarter 2023 earnings call today. If you have not seen the earnings release, a copy is posted in the financial section of the Investor Relations website. On the call today, you have Pedro Arndt, Co-Chief Executive Officer, Sebastian Canovic, Co-Chief Executive Officer, Sergio Fogel, Co-President and Chief Strategy Officer, Diego Cabrera Cane, Chief Financial Officer, Maria Oldham, SVP of Corporate Development, Investor Relations and Strategic Finance, and Soledad Negar, Head of Investors Relations. A slide presentation has been provided to accompany the prepared remarks. This event has been broadcast for live webcast and both the webcast and presentation may be accessed through D-Local's website at investor.dlocal.com. The recording will be available shortly after the event is concluded. Before proceeding, let me mention that any forward-looking statements included in the presentation or mentioned in this conference call are based on currently available information and DLocal's current assumptions, expectations and projections about future events. While the company believes that our assumptions, expectations and projections are reasonable given currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those included in DLocal's 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 DLocal's filings with the Securities and Exchange Commission, which are available on DLocal's Investor Relations website. Now, I will turn the conference over to DLocal. Thank you.

Looking back on 2023, dLocal is celebrating remarkable achievements. Within a span of five years, our company experienced an extraordinary 14-fold expansion, achieving a record TPV of $18 billion, increasing by 67% year-over-year. This is a testament to the trust of our merchants among the most demanding and sophisticated companies in the world placed in our solution. Most of the growth has been fueled by our existing merchants as we continue to gain wallet share. The trust our merchants place in our solution is also evidenced in our stellar NRR of 150%. We are committed to unlocking the power of emerging markets. In 2023, we enabled 154 million people in emerging markets to access global products and services. This is a 62% increase compared to 2022. In 2023, we proudly met the needs of over 600 merchants across 40 markets and consistently onboarded new merchants to our platform. Among the world's leading technology companies by market cap, we serve five out of the six major ones. Revenue witnessed significant growth in Brazil and Mexico , our most mature and highly competitive markets. Africa and Asia delivered an impressive 114% year-over-year increase. We over-delivered on our revenue guidance reaching $650 million, over 55% year-over-year. we remain focused on achieving gross profit growth, our key metric. Gross profit grew 37% year over year to $277 million. Our continued disciplined investment approach, coupled with a focus on sustainable growth, has delivered another outstanding year with a rule of 40 and an impressive 110%. Our adjusted EBITDA surpassed $200 million in line with our guidance. Furthermore, we've maintained a best-in-class adjusted EBITDA over a gross profit margin of 73%, even amidst ongoing investments to support our long-term ambitions. How did we achieve these remarkable results? Of course, through our people and culture. We efficiently grew our global team from 726 to 901 people, located across 49 countries. Very importantly, by continuing to be obsessed about our merchants and having them in the center of everything we do. We delivered innovative solutions and products against highly demanding merchant needs. In 2023, our platform solution gained traction, especially in marketplaces, expanding into five key markets in just one year. We have onboarded more than 230,000 sellers on behalf of our merchants in our marketplaces with automated KYC capabilities and flexible settlements for complex platform configurations. Last and certainly not least, we are building upon our existing strengths by making investments in key capabilities, including growing our licensed portfolio, deepening our relationships with global banking partners, and ramping up our operations and back-office effectiveness. In 2023 alone, we were granted licenses in strategic markets such as Brazil, Nigeria, Kenya and Rwanda, and registries in South Africa, Philippines, Chile, Costa Rica, Panama and Peru. And we are carrying this momentum forward. In 2024, we are relentlessly focusing on serving our customers and solidifying our position as a preferred infrastructure solution for global merchants across emerging markets. We are committed to making 2024 our most remarkable chapter yet. The Local, built for success in emerging markets.