Shares of dLocal (DLO -1.12%) plunged 17.5% on Tuesday after the Uruguay-based fintech announced weaker-than-expected quarterly results.
DLocal's "extraordinary" results just weren't enough
Fourth-quarter 2023 revenue grew 59% year over year to $188 million, translating to adjusted (non-IFRS) net income of $40.6 million, or $0.14 per share. Analysts on average were modeling slightly higher adjusted net income of $0.15 per share, but lower revenue of $173.2 million.
Within dLocal's results, fourth-quarter total payment volume (TPV) grew 55% year over year to $5.1 billion, and the company's net revenue retention rate came in at a strong 149%.
CEO Pedro Arnt said: "I am proud to share the extraordinary results we delivered during 2023. Despite facing market tests and macro challenges, our team continued to execute our strategy, investing with discipline, and putting our merchants at the center of everything we do."
What's next for dLocal shareholders?
Looking ahead to 2024, dLocal expects TPV of between $25 billion and $27 billion, or growth of 40% to 50% from 2023. The company also called for 2024 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $220 million to $260 million, up 10% to 30% from last year.
That wide adjusted EBITDA guidance range represents around 70% of StoneCo's expected gross profit for 2024 -- below its "mid-term" guidance target of at least 75% for the metric. Management said the temporary deviation from that profitability target is the result of a conscious effort to invest in its tech, operations, and sales teams to "prepare the business for sustainable long-term growth."
That's music to my ears as a long-term investor. Assuming dLocal can translate those investments to superior operating leverage after 2024, I think this pullback could prove to be an excellent buying opportunity.
