DLocal reported a robust Q2 2025 performance, with revenue soaring 50% year-over-year to $256.5 million and adjusted EBITDA increasing 64% to $70.1 million, driven by strategic focus on AI, automation, and high-margin digital payment services.

The company's EBITDA margin improved to 27%, up from 25% in 2024, thanks to cost discipline and automation initiatives that optimize payment routing, compliance, and chargeback processes, boosting efficiency and profitability.

Despite macroeconomic headwinds like currency devaluations, DLocal's free cash flow surged 156% to $48.4 million, demonstrating resilience supported by disciplined cost management and operational agility enabled by AI systems.

DLocal's merchant base expanded to 760 clients operating across an average of 11 countries with 48 payment methods, reflecting increased geographic and merchant diversification as the top three markets now contribute less than half of revenue.

Geographically, the company has diversified beyond its top markets, with emerging contributions from Nigeria, Pakistan, and Turkey, and total payment volume up 53% year-over-year to $9.2 billion.

DLocal is positioning itself in the stablecoin ecosystem by focusing on local liquidity, FX rates, and cross-border settlement acceleration, aiming to capture new revenue streams in emerging markets.

Investors are optimistic about DLocal’s growth potential in emerging markets, supported by its scalable AI-driven infrastructure, a strong earnings track record, and valuation metrics at a discount compared to peers, making it an attractive long-term play.

The company launched innovative products such as SmartPix in Brazil, BNPL integrations, and stablecoin settlement solutions through partnerships with Circle and BVNK, expanding its addressable market.

Operational improvements include AI-powered real-time payments, automated merchant onboarding, and fraud detection, which have significantly enhanced efficiency, customer experience, and gross profit margins.

DLocal's growth is driven by expanding digital commerce in emerging markets, with Latin America's real-time payments expected to grow at a 30% CAGR and increasing adoption of alternative payment methods across Africa and South Asia.

Management forecasts high-end TPV and revenue growth for 2025, with gross profit and EBITDA exceeding previous estimates, despite risks from macroeconomic volatility, tariffs, regulatory shifts, and currency fluctuations.

The company's strategic initiatives include enabling fiat-to-stablecoin on-ramps, expanding BNPL offerings, and deploying AI automation to reduce costs and enhance compliance, positioning it for continued growth.

Recent governance improvements, such as appointing a new CFO, transitioning to a majority independent board, and share buybacks, support the company's focus on sustainable growth and shareholder value.