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 $15.25 as of August 18th. DLO’s trailing and forward P/E were 31.77 and 25.84 respectively according to Yahoo Finance.
DLocal delivered a blockbuster Q2 2025, with total payment volume (TPV) reaching a record $9.2B, up 53% YoY and 14% QoQ, driven by robust performance in Latin America and accelerating growth across Africa and Asia. Revenue came in at $256.5M, exceeding consensus by 11%, representing 50% YoY growth and a striking acceleration from the previous quarter. Adjusted EBITDA surged 64% YoY to $70.1M, with margins expanding to over 27% as efficiency improved. Free cash flow totaled $48M, up 156% YoY, highlighting strong cash generation despite ongoing investment in AI, automation, and product innovation.
Geographic and merchant diversification continues to strengthen, with top 20 merchants driving growth while average country and payment method coverage among top clients expands, reducing concentration risk. Revenue net retention reached 145%, reflecting deepening share-of-wallet with existing merchants. The quarter also saw new licenses in the UAE, Turkey, and the Philippines, and product launches including SmartPix in Brazil and Buy Now, Pay Later solutions, enhancing both merchant and consumer experiences.
DLocal’s leadership under Pedro Arnt is focused on multi-pronged growth: capturing early-stage adoption in emerging markets, expanding wallet share, and leveraging structural tailwinds in underpenetrated digital payments. The company is well-positioned to benefit from stablecoins, with dedicated infrastructure for fiat-stablecoin conversions. Guidance was raised, with full-year revenue and adjusted EBITDA now expected above consensus. Cash remains robust at ~$254M even after extraordinary dividends, with governance enhancements including a majority-independent board and treasury share cancellations.
With secular growth drivers, strong margins, resilient free cash flow, and multiple initiatives to deepen merchant relationships and broaden addressable markets, DLocal offers a compelling investment case, combining high growth, operational leverage, and a path toward sustained market leadership in cross-border and emerging-market payments.
Previously we covered a bullish thesis on DLocal Limited (DLO) by Ray Myers in May 2025, which highlighted strong cross-border payments, TPV growth, and expanding client base in emerging markets. The stock has appreciated approximately 33% since then as the thesis played out. M. V. Cunha shares a similar view but emphasizes Q2 2025 record results, new products, and governance enhancements.
