DLocal Limited

At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. I will now hand the call over to the company.

Good afternoon, everyone, and thank you for joining the third quarter 2025 earnings call. If you have not seen the earnings release, a copy is posted in the financials section of the Investor Relations website. On the call today, you have Pedro Arndt, Chief Executive Officer, Jeffrey Brown, Interim Chief Financial Officer, Chris Strohmeyer, SVP of Corporate Development, and Mirele Aragal, Head of Investor Relations. A slide presentation has been provided to accompany the prepared remarks. This event is being broadcast live via webcast and both the webcast and presentation may be accessed through the D-Local 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. Whilst the company believes that our assumptions, expectations and projections are reasonable, given 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 D-Local presentation or discussed in this conference call for a variety of reasons, including those described in the forward-looking statements and risk factors section of D-Local's filing 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 hello everyone and thanks for joining us today we delivered another record quarter for the first time with tpv above 10 billion dollars and gross profit that surpassed a hundred million Yet another example of our strong growth and continued diversification, all of which underscore the potential and resilience of our business model. TPV, and I'd like to remind you that it's the key metric we continue to manage the business to, trusting that long-term scale and market share are the critical elements behind our investment thesis. So TPV grew nearly 60% year over year in dollars and 66% on a constant currency basis. This marks the fourth consecutive quarter of TPV growth above 50% compared to the prior year, a testament to the favorable secular trends in emerging markets and to our track record of execution with our merchants as they grow into new markets and new payment methods. Gross profit reached 103 million. up roughly 32% year-over-year and 36% for the first nine months of 2025. The quarter's results was driven by strong volume growth across the business with particular strength in Brazil, Colombia and other LATAM and other Africa and Asia segments, partially offset by a volatile macro situation in Argentina, temporary cost pressure in Mexico, potentially also headwinds from tariffs in that market, and a full quarter's effect of the share of wallet losses in Egypt that we had already referenced in the second quarter. As anticipated, our investment cycle increased headcount expenses. However, our disciplined expense management sustained healthy operating leverage, with adjusted EBITDA reaching $72 million, representing 70% of gross profit. We delivered a robust net income growth, primarily due to lower finance costs, following a significant reduction of our exposure to Argentine peso-denominated bonds during the second quarter of 2025. And finally, adjusted free cash flow to net income conversion remains at healthy levels, reinforcing the cash generative nature of our business model. These strong results reflect our continued ability to navigate the fragmentation and complexity that's inherent in emerging markets' financial infrastructure so that we can deliver value to our shareholders and growth to our investors. This complexity and fragmentation across the Global South is not waning, but rather, we would argue, increasing. In Brazil, local payment methods, driven by PIX, already account for more than half of e-commerce volume. We see these trends across all emerging markets. Local payments methods represent the majority of e-commerce volumes and are expected to reach nearly 60% by 2027. Buy now, pay later solutions, one of our newer focus areas, although smaller today, are growing faster than the overall market and we believe have enormous potential. Crypto corridors through stablecoins are also rapidly emerging as relevant in the payment infrastructure mix, opening up new business opportunities and positioning DeLocal as a key provider of on- and off-ramps between stablecoins and fiat across the over 40 markets where we operate. In the face of this ever-increasing complexity and fragmentation, our core value proposition, one delocal, does nothing but increase in value to our merchants. Being able to abstract all the complexity away to a single partner who has the widest and deepest coverage And by that I mean the most emerging market countries and the largest number of payment methods per country is fundamental. That is why our value proposition for merchants is to be the one-stop shop for their emerging market financial infrastructure needs, offering all card-based, local payment, and alternative financial infrastructure in any given country. Last quarter, you may recall, we shared our view on the S-curve of digital merchants adopting payment localization throughout EM. As you can see here, our growth is broad-based within TPV contributions throughout that S-curve. We add new merchants, deepen our share of wallet with existing merchants, add payment methods and accompany them as they go to market in new countries. And throughout, we benefit from secular trends of digitalization and economic growth in our markets and the desire of the world's preeminent brands to expand where growth is, which is across emerging markets. Most of these results... are coming from existing merchants, a testament to the strength and size of our current merchant base. For example, our clients include six of the Mag7. The strong volume growth with our key merchants coupled with our value proposition results in customer loyalty that we are very proud of. We have leading net retention of revenue when compared to most peers in the payments and software industry, reflecting durable upsell and cross-sell geographies, payment methods, and flows. Since 2020, our NRR has always been above 100% and this past quarter increased to 149%. During the quarter, we continue to partner with best-in-class players from a commercial and capabilities perspective to help them solve financial infrastructure challenges in our markets. Let me share with you some examples of high-profile, recent integrations. Our work supporting Western Union's pay-ins across Latin America as they digitize their business. The expansion of checkout options for the ride-hailing service Bolt across Africa, Asia, and Latin America. leveraging our unique position to offer on and off ramps for stablecoins with fireblocks for their global payments network. And finally, partnering with Google on their agent payments protocol, AP2, as we jointly explore the opportunities AI bring to commerce. And as we continue to deliver great work on behalf of our merchants and therefore scale and increase breadth, depth, and quality of service, our business becomes stickier, as we saw in the NRR data I just shared, and more importantly, ever more diversified. Last quarter, we highlighted how our country market concentration has been decreasing. our top three markets continue to grow very healthily, but at a slower pace than the rest, creating diversification and thus, very importantly, reducing the impact of the inherited volatility of any individual emerging market on overall quarterly and annual results. And top merchant concentration, defined simply as the top 10 merchants on any given quarter, remains broadly in line with historical levels. But as we deepen our share with existing merchants and onboard new large ones, the composition of the top 10 merchants rotates from quarter to quarter. Therefore, when we look at this on a cohort basis of the top 10 merchants of any given quarter, we see that they lose concentration as time goes on. And not because they shrink, but because other newer merchants grow more in most cases. The importance of looking at this in a cohort level is that it shows that actual merchant diversification is actually increasing on a name-by-name basis and our dependence on single merchants decreases over time. Our product innovation roadmap also remains a top priority as we look to diversify our revenue base and drive increased average revenue per merchant. We wanted to provide two updates this quarter. First, our APM on file capabilities now cover 27 of these local payment methods across 16 countries and is quickly growing. replicating card-on-file convenience to reduce checkout friction and lift conversion, while allowing merchants to benefit from cost, speed, and adoption of these leading local payment methods. For example, after rolling out tokenization of YAPE, a top APM in Peru, conversion rates on that payment method rose by a whopping 34 percentage points. Second, two weeks ago we launched Buy Now Pay Later FUSE, our proprietary aggregator for Buy Now Pay Later solutions. It's now live in six countries, with two more to follow shortly across Latin America, Africa, the Middle East and Asia. This is an important step towards enabling our merchants to benefit from the massive demand for credit in our markets. Although still in its infancy, we are seeing initial signs of product market fit with 2.5x growth in volumes quarter over quarter. It's also important to note that we deploy it via a revenue share model with local partners, taking no credit risk and generating a higher take rate payment volume on these transactions. To wrap up this section, the quarter clearly consolidates the positive trends we have seen over the last nine months. sustained growth, an improving business mix, disciplined cost posture, and continued strong cash generation. And with that, let me pass the call on to Jeff, who will walk you through a detailed analysis of this third quarter performance.