Dlocal Ltd (NASDAQ:DLO) stock rose 7.99% (As on August 15, 11:26:50 AM UTC-4, Source: Google Finance) after the company reported second quarter earnings that beat expectations on the bottom line but missed on revenue, as the payment platform provider continues to navigate challenges in emerging markets. Total payment volume (TPV) reached a record $6.0 billion in Q2, up 38% year-over-year and 14% quarter-over-quarter. The TPV performance was good across multiple verticals, including continued strong growth in the commerce, on-demand delivery, and remittance verticals; accelerating growth from SaaS and ride-hailing. The  OPEX, excluding non-cash share-based compensation, grew by only $1 million sequentially, after previous quarters of sequential growth above $4 million.

Further, year-over-year gross profit performance was flat, primarily due to a 13% decline in LatAm. This decline was driven by (i) the Argentine FX devaluation and (ii) the repricing by the largest merchant in Brazil and Mexico. Despite stellar Africa and Asia gross profit growth of 79% year-over-year, it did not suffice to offset those two events. Gross profit was US$69.8 million in the second quarter of 2024, down 1% compared to US$70.8 million in the second quarter of 2023 and up 11% compared to US$63.0 million in the first quarter of 2024. The gross profit margin was 41% in this quarter, compared to 44% in the second quarter of 2023 and 34% in the first quarter of 2024. Operating income was US$30.2 million, down 37% compared to US$47.8 million in the second quarter of 2023 and up 12% compared to US$26.9 million in the first quarter of 2024. Net financial income was US$28.0 million, compared to US$7.5 million in the second quarter of 2023 and US$0.3 million in the first quarter of 2024. Net income for the second quarter of 2024 was US$46.2 million, up 3% compared to a profit of US$44.8 million, for the second quarter of 2023 and up 161% compared to a profit of US$17.7 million, for the first quarter of 2024.

DLO in the second quarter of FY 24 has reported the adjusted earnings per share of 15 cents, beating the analysts’ estimates for the adjusted earnings per share of 10 cents. The company had reported the adjusted revenue growth of 6 percent to $171 million in the second quarter of FY 24, missing the analysts’ estimates for revenue of $203.18 million. It is down 7% compared to US$184.4 million in the first quarter of 2024. This quarter-over-quarter decline was mostly driven by the currency devaluation in Nigeria and Egypt, despite the healthy TPV growth. As of June 30, 2024, dLocal had US$531.6 million in cash and cash equivalents, including US$186.2 million of own funds and US$345.4 million of merchants’ funds.

For full year 2024, DLocal revised its outlook, now expecting TPV of $24.5-26.5 billion, gross profit of $280-300 million, and adjusted EBITDA of $180-200 million.