Can DLocal’s (DLO) Accelerating Profits Reveal the Limits of Its Scale Advantage?

• DLocal Limited recently reported its third quarter 2025 results, showing sales of US$282.48 million and net income of US$51.83 million, both higher than the same period last year.
• Year-to-date performance also strengthened, with the company achieving significant gains in both revenue and earnings per share compared to the first nine months of 2024.
• Given the sharp rise in sales and net income, we'll explore how this robust financial performance informs DLocal's investment narrative around scale and profitability.

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DLocal Investment Narrative Recap

To be a DLocal shareholder is to believe in the company's ability to scale rapidly and maintain strong profitability as it expands across emerging markets, benefiting from growing digital payments adoption. While the recent surge in sales and net income reinforces confidence in DLocal’s revenue momentum, it does not materially change the biggest near-term risk: the company’s heavy reliance on a small set of key merchants, which could expose it to volatility if major customers depart.

Amid these results, the August partnership announcement with Western Union stands out as most relevant, given its potential to diversify revenue sources and strengthen DLocal's position in Latin America, directly supporting a critical catalyst of geographic and merchant diversification. The implications of this partnership tie into DLocal's broader strategy of reducing concentration risk and building resilience against competitive and regulatory shifts.

Yet, despite these positive headlines, investors should keep an eye on the risk that arises if any major merchant chooses to exit, as...

Read the full narrative on DLocal (it's free!)

DLocal's narrative projects $1.7 billion in revenue and $346.3 million in earnings by 2028. This requires 25.7% yearly revenue growth and a $200.4 million earnings increase from $145.9 million today.

Uncover how DLocal's forecasts yield a $16.94 fair value, a 34% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 23 Simply Wall St Community members cover a broad US$10 to US$195.39 range. Despite this wide spectrum of investor views, merchant concentration remains a pressing issue that could significantly impact DLocal’s future earnings stability, make sure you consider a range of perspectives before making decisions.

Explore 23 other fair value estimates on DLocal - why the stock might be worth 21% less than the current price!

Build Your Own DLocal Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your DLocal research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free DLocal research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate DLocal's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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