Key Takeaways
- DLocal’s 2025 valuation hinges on its ability to sustain high total payment volume (TPV) growth while preserving profitability amid fluctuating take rates and competitive pressures in emerging markets.
- The base case valuation assumes a TPV compound annual growth rate (CAGR) of 30%, a take rate of 1.85%, and a net margin of 20%, projecting a market capitalisation of approximately US$2.4 billion.
- Strong 2024 performance, including 45% year-on-year TPV growth to US$25.6 billion and a 113% net revenue retention rate, provides a solid foundation for future projections.
- Significant risks include currency devaluation in key markets, which can erode profitability, and increased competition from global and local fintechs that could compress take rates.
- A scenario analysis highlights a valuation range from US$2.0 billion (bear case) to US$3.0 billion (bull case), underscoring the sensitivity of the company’s valuation to small changes in core assumptions.
The sharp ascent of DLocal Ltd (DLO), a payment processing firm focused on emerging markets, has drawn considerable attention from investors seeking exposure to high-growth regions. The most critical question for 2025 is whether the company can sustain its impressive total payment volume (TPV) growth while maintaining profitability amidst fluctuating take rates and competitive pressures. Current financials suggest a robust trajectory, with TPV reaching US$25.6 billion in full-year 2024, reflecting a 45% year-on-year increase. Yet, the assumptions underpinning future valuations, such as TPV compound annual growth rate (CAGR), take rates, and net margins, warrant rigorous scrutiny to separate optimism from reality.
Recent Performance as a Valuation Baseline
DLocal’s performance in 2024 provides a solid foundation for forward-looking analysis. Revenue for the full year 2024 stood at US$746 million, up 15% year-on-year, though profitability faced headwinds from currency devaluations in key markets and rising operating expenses in Q2 (Apr–Jun) 2024. The company’s net revenue retention rate of 113% in 2024 indicates strong client stickiness, a critical factor for sustaining growth in emerging markets where payment infrastructure remains fragmented. However, the interplay between TPV growth and take rates, the percentage of transaction value DLocal retains as revenue, will define its ability to convert volume into meaningful earnings over the next few years.
Dissecting Key Valuation Assumptions
Projecting DLocal’s valuation for 2025 and beyond requires careful consideration of several metrics: TPV growth, take rates, net margins, and earnings multiples. Industry sentiment, as reflected in discussions on platforms like X, including perspectives shared by users such as TacticzH, often highlights conservative yet optimistic assumptions around these figures. Let’s unpack each component with data-driven rigour.
First, TPV growth is the engine of DLocal’s story. A historical CAGR of 85.3% since December 2020 is unsustainable long-term due to base effects and market saturation risks. A more realistic CAGR of 25–35% through 2030 aligns with the company’s focus on untapped markets and partnerships with global giants like Amazon and Uber. For 2025, assuming a TPV CAGR of 30% would project volumes close to US$33 billion, a plausible target given the 45% growth achieved in 2024.
Second, take rates are a contentious variable. Historically, DLocal’s take rate has hovered around 1.8–2.0%, but competitive pressures in emerging markets could compress this figure. Assuming a take rate of 1.85% for 2025 seems reasonable, balancing optimism with the risk of margin erosion. This would translate to revenue of approximately US$610 million on a TPV of US$33 billion, though currency volatility in markets like Argentina could skew results.
Third, net margins are a litmus test for operational efficiency. DLocal’s net margin has fluctuated due to high infrastructure costs and regulatory complexities, but a target of 20% for 2025 is defensible if cost discipline improves. This would yield net income of roughly US$122 million, a figure that hinges on stable macroeconomic conditions in key regions.
Finally, the earnings multiple applied to DLocal’s stock will reflect market confidence in its growth story. A forward price-to-earnings (P/E) multiple of 20 for 2025, while not extravagant, assumes sustained investor appetite for fintech exposure. This would imply a market capitalisation of approximately US$2.4 billion, a modest premium to current levels but not unreasonable given projected earnings growth.
Scenario Analysis for 2025 Valuation
To stress-test these assumptions, a scenario analysis provides clarity on potential outcomes. The table below outlines three cases for DLocal’s 2025 performance, focusing on TPV CAGR, take rate, net margin, and earnings multiple.
| Scenario | TPV CAGR | Take Rate | Net Margin | P/E Multiple | Implied Market Cap (US$ billion) |
|---|---|---|---|---|---|
| Base Case | 30% | 1.85% | 20% | 20 | 2.4 |
| Bear Case | 25% | 1.75% | 19% | 18 | 2.0 |
| Bull Case | 35% | 2.00% | 23% | 22 | 3.0 |
Risks and Counterpoints
Despite the promising outlook, several risks loom large. Currency devaluation, as seen in 2024, can erode profitability even if TPV grows. Regulatory changes in markets like Brazil or India could impose unforeseen costs or restrictions. Moreover, competition from global players like Adyen or local fintechs may force DLocal to sacrifice take rates for market share. On the flip side, strategic expansions, as highlighted in the Q4 (Oct–Dec) 2024 earnings call, suggest the company is diversifying its geographic footprint, potentially mitigating single-market risks.
Conclusion: A Measured Optimism
DLocal’s valuation for 2025 hinges on a delicate balance of growth and profitability. A TPV CAGR of 30%, a take rate near 1.85%, and a net margin of 20% form a credible base case, projecting a market capitalisation of US$2.4 billion at a P/E multiple of 20. While risks abound, from currency volatility to competitive pressures, the company’s track record of 45% TPV growth in 2024 and 113% net revenue retention offers a sturdy foundation. Investors would do well to monitor take rate trends and regional stability, as these will ultimately determine whether DLocal’s emerging market bet pays off. With cautious optimism, the numbers suggest a compelling, if not guaranteed, growth story.
References
- DLocal Ltd. (2025, February 27). dLocal Reports 2024 Fourth Quarter Financial Results. GlobeNewswire. Retrieved from https://www.globenewswire.com/news-release/2025/02/27/3034284/0/en/dLocal-Reports-2024-Fourth-Quarter-Financial-Results.html
- GuruFocus. (2024, August 15). DLocal Ltd (DLO) Q2 2024 Earnings Call Transcript Highlights: Record TPV and Strong Liquidity Amid Mixed Profitability. Retrieved from https://www.gurufocus.com/news/2503326/dlocal-ltd-dlo-q2-2024-earnings-call-transcript-highlights-record-tpv-and-strong-liquidity-amid-mixed-profitability
- Morningstar. (2025). DLocal Ltd (DLO). Retrieved from https://www.morningstar.com/stocks/xnas/dlo/quote
- Simply Wall St. (2025, July 10). DLocal Ltd (DLO) Valuation, Forecast & Financials. Retrieved from https://simplywall.st/stocks/us/software/nasdaq-dlo/dlocal/news
- TacticzH. (2024a, November 28). [Post regarding DLocal valuation]. X. Retrieved from https://x.com/TacticzH/status/1936884016549859595
- TacticzH. (2024b, December 1). [Post regarding DLocal valuation]. X. Retrieved from https://x.com/TacticzH/status/1938330187629785143
- TacticzH. (2024c, December 5). [Post regarding DLocal valuation]. X. Retrieved from https://x.com/TacticzH/status/1940876536627818797
- TacticzH. (2024d, December 8). [Post regarding DLocal valuation]. X. Retrieved from https://x.com/TacticzH/status/1943044866935590989
- TacticzH. (2024e, November 25). [Post regarding DLocal valuation]. X. Retrieved from https://x.com/TacticzH/status/1929777016154308744
- Yahoo Finance. (2025, February 28). DLocal Ltd (DLO) Q4 2024 Earnings Call Highlights: Record TPV and Strategic Expansions Amid Currency Devaluations. Retrieved from https://finance.yahoo.com/news/dlocal-ltd-dlo-q4-2024-090030219.html
