We came across a bullish thesis on DLocal Limited on MVC Investing’s Substack by M. V. Cunha. In this article, we will summarize the bulls’ thesis on DLO. DLocal Limited’s share was trading at $11.97 as of February 16th. DLO’s trailing and forward P/E were 21.38 and 14.24 respectively according to Yahoo Finance.
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DLocal Limited, together with its subsidiaries, operates a payment processing platform worldwide. DLO continues to demonstrate exceptional growth across its global emerging markets payments business, processing a record $10.4B in total payment volume (TPV), up 59% YoY and 13% QoQ, marking the fourth consecutive quarter of >50% YoY growth. Revenue reached $282.5M, beating consensus by $20M, driven by strong performance in commerce and remittances, with Latin America, particularly Brazil and Colombia, showing notable acceleration.
The company’s gross margin of 37% and adjusted EBITDA of $71.7M reflect temporary regional headwinds in Egypt, Argentina, and Mexico, but management emphasizes these are non-structural. TPV retention remains impressive at 157%, and net revenue retention reached 149%, highlighting DLocal’s ability to grow revenue even without new merchants. Free cash flow of $37.6M and a healthy cash balance of $333M, combined with essentially no debt, underscore the company’s financial strength.
DLocal’s long-term strategy focuses on expanding merchant value through innovative products such as BNPL Fuse, supporting 27 alternative payment methods across 16 countries, stablecoin on/off-ramps, and selective POS capabilities, positioning the firm as the single financial infrastructure partner across 40+ emerging markets. Strategic partnerships with Western Union, Bolt, Fireblocks, Grey, Google, and Capitec further reinforce DLocal’s ecosystem and global reach.
While short-term margin fluctuations and declining take rates attract attention, these are offset by scaling TPV, expanding merchant penetration, and secular digitization trends. With a massive and growing total addressable market, strong operating leverage, robust FCF generation, and a diverse product roadmap, DLocal remains exceptionally well-positioned for multi-year value creation, making the current valuation highly compelling for long-term investors.
Previously, we covered a bullish thesis on DLocal Limited (DLO) by Oliver | MMMT Wealth in March 2025, which highlighted the company’s positioning in emerging markets, long-term growth potential, improving TPV, and attractive valuation. DLO’s stock price has appreciated by 22.89% since our coverage. M. V. Cunha shares a similar view but emphasizes DLocal’s record $10.4B TPV, expanding merchant base, innovative product rollout, and robust financial strength, providing a more detailed operational update.