Is DLO a good stock to buy? 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 $11.49 as of June 8th. DLO’s trailing and forward P/E were 18.39 and 13.53 respectively according to Yahoo Finance.
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DLocal Limited, together with its subsidiaries, provides payment processing services worldwide. DLO delivered a highly compelling Q4 2025 performance, reinforcing its position as a dominant cross-border payments infrastructure provider across emerging markets. Total Payment Volume reached a record $13.1B, up 70% YoY and 26% QoQ, marking the fifth consecutive quarter of >50% YoY growth and highlighting accelerating scale, with full-year TPV of $40.8B, up 60% YoY and representing an 82% CAGR since 2020.
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Growth was broad-based across pay-ins, payouts, local-to-local, and cross-border flows, with standout strength in on-demand delivery, e-commerce, remittances, and advertising, supported by deep expansion across key geographies such as Brazil, Mexico, South Africa, and Egypt. Revenue reached $337.9M, up 65% YoY, crossing the $1B annual milestone, while gross profit rose to $115.8M, reflecting continued monetization of scale despite a lower net take rate of 0.88%, which management emphasized as an output of strategy rather than a constraint on value creation.
Adjusted EBITDA grew 38% YoY to $78.4M, while net income surged 87% YoY to $55.6M, demonstrating strong operating leverage and improving profitability quality. Free cash flow reached $64.9M, up 100% YoY with 117% conversion, underscoring exceptional cash generation. Return on equity expanded to 35%, while NRR reached a remarkable 162%, driven almost entirely by existing merchants, reinforcing strong embedded growth visibility.
Management guided 2026 TPV growth of 50–60%, gross profit growth of 22.5–27.5%, and operating profit growth of 27.5–32.5%, highlighting durable expansion at scale. Capital returns were strengthened through a $300M buyback program and dividend initiation, implying a combined ~9–10% shareholder yield at current levels.
With long-term upside potential driven by continued emerging market digitization, deep merchant expansion, and potential monetization of new products like BNPL, stablecoins, and AI-driven commerce, DLocal is positioned to compound strongly, with the investment case implying substantial upside as scale, profitability, and cash generation continue to converge.
