GlobeNewswire Inc | Aug 18, 2021 04:01PM EDT

August 18, 2021

US$1.5 billion Total Payment Volume, up 319% year-over-yearRevenues of US$59.0 million, up 186% year-over-year44% Adj EBITDAMargin, up 384bps year-over-year

dLocal reports in US dollars and in accordance with IFRS as issued by the IASB

MONTEVIDEO, Uruguay, Aug. 18, 2021 (GLOBE NEWSWIRE) -- DLocal Limited (dLocal, we, us, and our) (NASDAQ:DLO), a technology-first payments platform today announced strong financial results for the second quarter ended June30, 2021.

Global merchants around the world are choosing dLocal to connect with billions of consumers in emerging markets, said Sebastian Kanovich, dLocals CEO. Our singular focus is on making the complex simple, redefining the online payments experience in emerging markets. Through one direct API, one technology platform, and one contract, which we collectively refer to as the One dLocal model, we enable global enterprise merchants to get paid (pay-in) and to make payments (pay-out) online in a safe and efficient manner.

Second Quarter 2021 Financial Highlights

-- Total Payment Volume (TPV) reached US$1.5 billion in the quarter, representing 319% year-over-year growth compared to TPV of US$ 348 million in the second quarter of 2020 and 57% growth compared to TPV of US$926 million in the first quarter of 2021. -- Revenues in the second quarter of 2021 amounted toUS$59.0 million, representing 186% year-over-year growth compared to revenues of US$ 20.6 million in the second quarter of 2020 and 46% growth compared to revenues of $40.3 million in the first quarter of 2021. -- Adjusted EBITDA was US$25.9 million in the second quarter of 2021 compared to US$8.3 million in the second quarter of 2020 and US$17.8 million in the first quarter of 2021. -- Adjusted EBITDA Margin was 44% in the second quarter of 2021 compared to 40% in the second quarter of 2020 and 44% in the first quarter of 2021. -- Net income for the second quarter of 2021 was US$17.7 million, or US$0.057 per diluted share, compared with net income of US$7.4 million, or US$ 0.026 per diluted share, for the second quarter of 2020 and with net income of US$16.9 million, or US$0.058 per diluted share, for the first quarter of 2021. -- Net income of the second quarter of 2021 includes one-off expenses of US$3.0 million related to dLocals initial public offering (the IPO) and US$0.3 million of expenses related to the asset acquisition of PrimeiroPay. -- As of June 30, 2021, dLocal had US$267.2 million in cash, cash equivalents and marketable securities, compared with US$128.8 million as of March 31, 2021. The increase of US$138.5 reflects an increase of US$114.9 million in our funds (including US$87.1 million of net proceeds from the IPO) and US$23.6 million in funds from our merchants with respect to the first quarter of 2021.

The following table summarizes our key performance metrics:

Three months ended Six months ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 (in millions of US$ except for %)Key Performance Metrics TPV 1,456 348 2,381 736 TPV GROWTH YoY 319% 17% 224% 36% Revenue 59.0 20.6 99.2 38.6 Revenue Growth YoY 186% 48% 157% 78% Adj. EBITDA 25.9 8.3 43.8 15.7 Adj. EBITDA Margin 44% 40% 44% 41%

Second Quarter 2021 Business Highlights

-- The strong growth in the quarter is attributable to the accelerated performance of dLocals enterprise merchants, particularly in the advertising, retail, and streaming industries. In addition, dLocal saw the continued recovery of ride hailing and travel industries, which had been adversely affected during the early stages of the COVID-19 pandemic in the second quarter of 2020. -- Revenue from Existing Merchants increased by US$19.7 million in the second quarter of 2021. The net revenue retention rate, or NRR, in the second quarter of 2021 improved to 196% compared with 159%1 in the fiscal year 2020. -- Revenues from New Merchants increased by US$18.6 million in the second quarter of 2021 compared to US$9.5 million in the whole fiscal year 2020. -- dLocal continued to focus on its expansion efforts and added Vietnam, Malaysia, and Guatemala to its geographic network during the quarter, bringing the total number of countries in which dLocal makes its services available to 30. -- On average, Enterprise Global Merchants used dLocals platform in nearly seven different countries and 62 payment methods in the second quarter of 2021, compared to nearly six different countries and 44 payment methods in 2020 and nearly six different countries and 53 payment methods in the first quarter of 2021. -- dLocal launched a pilot for a Direct Issuing Product, an issuance-as-a-service solution. The Direct Issuing Product enables merchants to create new lines of revenue and easily issue prepaid cards in local currencies to their customers or business partners, potentially reaching millions of consumers in emerging markets. -- On April 1, 2021, dLocal completed the asset acquisition of PrimeiroPay for a purchase price of US$40.0 million, of which US$38.7 million was immediate cash consideration and US$1.3 million was contingent consideration. The transaction provides dLocal with targeted access to certain global merchants.

__________________________________1 Including the effect in 2019 of a warrant with a merchant (valued at US$4.3 million, which was a negative adjustment to revenue for such year), the NRR would have been 171%.

Conference Call and Webcast

dLocals management team will host a conference call and audio webcast on August 18, 2021 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 825-4815 / (602) 563-8526 (Conference ID 4895473 ) and requesting inclusion in the call for dLocal.

The live conference call can be accessed via audio webcast at the investor relations section of dLocal's website, at https://investor.dlocal.com/. An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov.

About dLocal

dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in 30 countries across APAC, the Middle East, Latin America, and Africa. Through the One dLocal platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and payout processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.

Definition of Selected Operational Metrics

API means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, service providers) to facilitate the money transfer process.

Enterprise Global Merchants means merchants with at least US$6 million of annual TPV used in our platform.

Local payment methods refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets.

NRR means net revenue retention rate, which is the U.S. dollar-based measure of retention and growth of our merchants. We calculate the NRR of a period by dividing the current period revenue by the prior period revenue. The prior period revenue is the revenue billed by us to all of our merchant customers in the corresponding period for the prior fiscal year. The current period revenue is the revenue billed by us in the corresponding period for the current fiscal year to the same merchant customers included in the calculation of the prior period revenue. Current period revenue includes any upsells and cross sells of products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, but excludes revenue from new customers on-boarded during the last 12 months.

Pay-in means a payment transaction whereby dLocals merchant customers receive payment from their customers.

Pay-out means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocals merchant customers.

Revenue from New Merchants: means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year.

Revenue from Existing Merchants: means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year.

Special Note Regarding Adjusted EBITDA and Adjusted EBITDA Margin

dLocal has only one operating segment. dLocal measures its operating segments performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources.

Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the changes in fair value of financial assets and derivative instruments carried at fair value through profit or loss, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, secondary offering expenses, transaction expenses and inflation adjustment. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues.

Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (Operating Segments), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocals Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segments performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocals performance measures may not be comparable to those of other entities.

The table below presents a reconciliation of dLocals Adjusted EBITDA and Adjusted EBITDA Margin to net income:

Three months ended Six months ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 (in thousands of US$ except for %) Profit for the period US$17,708 US$7,411 US$34,635 US$7,964 Income tax expense 1,596 481 2,975 1,299 Depreciation and 1,344 336 1,859 462 amortizationSecondary offering 3,042 - 3,747 - expenses (?IPO?)Transaction costs (?Assetacquisition from 341 - 454 - PrimeiroPay?)Share-based payments 2,116 30 2,681 6,933 non-cash chargesOther operating (gain) / - (12) (2,896) 71 lossOther charges, net (222) 38 311 (1,012) Adjusted EBITDA US$25,925 US$8,284 US$43,766 US$15,717 Revenues US$58,961 US$20,645 US$99,217 US$38,640 Adjusted EBITDA Margin 44% 40% 44% 41%

This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" nor a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". The financial information in this press release has not been audited.

Forward Looking Statements

This press release contains certain forward-looking statements. These forward-looking statements convey dLocals current expectations or forecasts of future events. Forward-looking statements regarding dLocal involve known and unknown risks, uncertainties and other factors that may cause dLocals actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the Risk Factors, Forward-Looking Statements and Cautionary Note Regarding Forward-Looking Statements sections of dLocals registration statement on Form F-1 and certain of dLocals other filings with the U.S. Securities and Exchange Commission. Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.

DLocal LimitedCertain interim financial informationConsolidated Condensed Statements of Comprehensive Income for the three monthand six month periods ended June 30, 2021 and 2020.(In thousands of U.S. dollars, except per share amounts, unaudited) Three months ended Six months ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020Continuing operations Revenues 58,961 20,645 99,217 38,640 Cost of services (25,170) (9,122) (42,159) (16,115) Gross profit 33,791 11,523 57,058 22,525 Technology and (596) (381) (1,116) (727) development expensesSales and marketing (1,127) (625) (2,169) (1,283) expensesGeneral and (13,431) (2,658) (19,193) (12,193) administrative expensesNet Impairment (loss)/gain on financial (113) (45) (167) 898 assetsOther operating gain/ 394 12 3,290 (71) (loss)Operating profit 18,918 7,826 37,703 9,149 Finance income 166 100 184 135 Finance costs 227 (43) (236) (46) Inflation adjustment (7) 9 (41) 25 Other results 386 66 (93) 114 Profit before income 19,304 7,892 37,610 9,263 tax Income tax expense (1,596) (481) (2,975) (1,299) Profit for the period 17,708 7,411 34,635 7,964 Profit attributable to: Owners of the Group 17,708 7,411 34,628 7,964 Non-controlling - - 7 - interestProfit for the period 17,708 7,411 34,635 7,964 Earnings per share (in USD)Basic Earnings per 0.061 0.028 0.124 0.030 shareDiluted Earnings per 0.057 0.026 0.114 0.028 share Other comprehensive IncomeItems that may bereclassified to profit or loss:Exchange difference ontranslation on foreign 657 (93) 869 (804) operationsOther comprehensiveincome / (expense) for 657 (93) 869 (804) the period, net of taxTotal comprehensiveincome / (expense) for 18,365 7,318 7,160 the period Total comprehensiveincome for the period is attributable to:Owners of the Group 18,365 7,318 35,488 7,162 Non-controlling - - 16 (2) interest 18,365 7,318 35,504 7,160

DLocal LimitedCertain interim financial informationConsolidated Condensed Statements of Financial Position as of June 30, 2021and December31, 2020(In thousands of U.S. dollars, except per share amounts, unaudited) June 30, December 31, 2021 2020ASSETS Current Assets Cash and cash equivalents 265,954 111,733 Financial assets at fair value through profit or 1,260 8,319 lossTrade and other receivables 173,979 72,785 Other assets 1,758 2,017 Total Current Assets 442,951 194,854 Non-Current Assets Deferred tax assets 76 216 Property, plant and equipment 1,961 913 Right-of-use assets 4,083 188 Intangible assets 44,621 4,153 Other assets - 143 Total Non-Current Assets 50,741 5,613 TOTAL ASSETS 493,692 200,467 LIABILITIES Current Liabilities Trade and other payables 247,056 142,865 Lease liabilities 369 201 Tax liabilities 6,043 7,788 Derivative financial instruments - 2,896 Provisions 2,274 1,393 Contingent consideration liability 665 - Total Current Liabilities 256,407 155,143 Non-Current Liabilities Deferred tax liabilities 644 259 Lease liabilities 3,699 17 Total Non-Current Liabilities 4,343 276 TOTAL LIABILITIES 260,750 155,419 EQUITY Share Capital 586 602 Share Premium 156, 623 - Capital Reserve 8, 365 12,582 Reserves 866 119 Retained earnings 66,490 31,749 Total Equity Attributable to owners of the Group 232,930 45,052 Non-controlling interest 12 (4) TOTAL EQUITY 232,942 45,048

dLocal was incorporated on February 10, 2021, as a Cayman Islands exempted company with limited liability, duly registered with the Cayman Islands Registrar of Companies. The contribution of dLocal Group Limited (a limited liability company incorporated in Malta, the former holding entity or dLocal Malta) shares to dLocal was the Cayman Islands company has been finalized as of April 14, 2021. Until the contribution of dLocal Malta shares to it, dLocal had not commenced operations, consequently the historical information previous to that date presented in here corresponds to dLocal Malta, our predecessor. This reorganization was done, among other things, to facilitate the initial public offering of the Group. dLocal had no prior assets, holdings or operations.

Other disclosures:Pursuant to the terms of certain lock-up agreements entered into by dLocals directors and executive officers, the selling shareholders, and certain other shareholders with the underwriters of dLocals initial public offering, the lock-up restrictions will be released immediately prior the opening of trading on August 20, 2021 with respect to 30% of the common shares owned immediately prior to the initial public offering by each of the selling shareholders and dLocals directors, executive officers, and certain other shareholders. However, these common shares may not be traded in the market pursuant to Securities Act Rule 144 prior to the date that is 90 days from the date of dLocals initial public offering, or September 1, 2021. The conditions required for the release of such shares from the lock-up restrictions occurred automatically as a result of the trading price of dLocals Class A common shares as reported on Nasdaq being at least 25% greater than the IPO offering price for five out of ten consecutive trading days prior to the date of the issuance of dLocals earning release and is effective as of the second trading date following this announcement. The lock-up restrictions will continue to apply with respect to all remaining common shares subject to the lock-up agreements.

Investor Relations Contact:investor@dlocal.com

Media Contact:marketing@dlocal.com