dLocal's Stock Fall: Overview of 2024 Results and Guidance

DLocal's "extraordinary" results just weren't enough

Fourth-quarter 2023 revenue grew 59% year over year to $188 million, translating to adjusted (non-IFRS) net income of $40.6 million, or $0.14 per share. Analysts on average were modeling slightly higher adjusted net income of $0.15 per share, but lower revenue of $173.2 million.

Within dLocal's results, fourth-quarter total payment volume (TPV) grew 55% year over year to $5.1 billion, and the company's net revenue retention rate came in at a strong 149%.

What's next for dLocal shareholders?

Looking ahead to 2024, dLocal expects TPV of between $25 billion and $27 billion, or growth of 40% to 50% from 2023. The company also called for 2024 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $220 million to $260 million, up 10% to 30% from last year.

That wide adjusted EBITDA guidance range represents around 70% of StoneCo's expected gross profit for 2024 -- below its "midterm" guidance target of at least 75% for the metric. Management said the temporary deviation from that profitability target is the result of a conscious effort to invest in its tech, operations, and sales teams to "prepare the business for sustainable long-term growth."

That's music to my ears as a long-term investor. Assuming dLocal can translate those investments to superior operating leverage after 2024, I think this pullback could prove to be an excellent buying opportunity.