dLocal's Growth Driven by Volume in FY 2023: CEO Pedro Arnt Discusses Annual Earnings
In a recent discussion, Pedro Arnt, the sole CEO of dLocal, shared the investment priorities for the company in 2024. One of the key highlights was dLocal's projection for Total Payment Volume (TPV) to grow 40-50% to reach $25bn-27bn next year.
During the conversation, Arnt also revealed the key drivers behind dLocal's impressive 55% year-over-year revenue growth in FY 2023. The company's core markets of Brazil and Mexico saw full-year revenue growth of 89% and 72% YoY respectively, while other regions such as Africa and Asia experienced an increase of 86%.
Notably, Latin America as a whole saw a 43% year-over-year growth in revenue for FY 2023. Nigeria, in particular, became dLocal's third largest single-country market, with a 149% increase in revenue.
Arnt highlighted the significance of dLocal's Tier 0 merchants to the company's growth. These top-tier, large or strategic merchants are critical in driving expansion in emerging markets or scaling cross-border payment platforms, aligning with dLocal’s business model as a cross-border payment processor for emerging markets.
However, specific details about the role of Tier 0 merchants in dLocal’s 2024 growth strategy were not provided.
Arnt also addressed the EBITDA and profitability status of dLocal for FY 2023, but did not discuss the revenue growth of specific markets in the conversation. He did, however, explain factors contributing to dLocal's strong net revenue retention rate.
The CEO also discussed the breakdown between domestic and cross-border TPV for FY 2023, with $8.7 billion of the TPV being cross-border. dLocal reported revenue of $650 million for FY 2023, a 55% year-over-year increase.
In the fourth quarter of 2023, dLocal's revenue was $188 million, representing a 59% year-over-year growth. While Arnt did not provide specifics on dLocal's 2024 TPV projections, the company's optimistic outlook for next year is clear.
As dLocal continues to expand its reach and strengthen its position in the cross-border payment market, investors and industry observers will be eagerly awaiting more details on the company's 2024 growth strategy.
In the context of dLocal's 2024 growth strategy, the company is anticipated to focus on securing strategic partnerships with Tier 0 merchants in the finance sector, as they play a crucial role in driving expansion in business and technology sectors, particularly in emerging markets. With the impressive 55% year-over-year revenue growth in FY 2023, it is expected that dLocal will leverage technology to improve cross-border payment volumes and bolster its status as a cross-border payment processor for emerging markets.
