dLocal reported second-quarter 2026 results on August 13 for the three months ended June 30. Total payment volume reached US$17.694 billion, up 92% year over year, while revenue rose 56% to US$399.7 million and gross profit rose 29% to US$127.2 million. Gross profit as a percentage of TPV fell to 0.72%, from 1.07% a year earlier and 0.84% in the first quarter.
For payments FP&A, the quarter is a warning against carrying TPV growth straight into revenue or profit. Mix, merchant scale, pricing tiers and spread determine how volume monetizes. The figures are company-reported and unaudited. dLocal also defines adjusted free cash flow as a non-IFRS measure, so the cash endpoint needs its own reconciliation rather than a headline conversion assumption.
What changed and what it means
Using TPV growth as a revenue or profit proxy can overstate monetization, while falling unit yield can coexist with rising absolute gross profit, sequential operating leverage and adjusted cash generation.
- Decision affected
- Rebase TPV, revenue, gross-profit-yield, operating-profit and cash assumptions only after separating flow mix, merchant scale and pricing tiers, geography, payment method, processing spread, FX spread and merchant working-capital effects.
- Evidence in brief
- Official Q2 results, the earnings presentation and prepared remarks establish the reported metrics, local-to-local and merchant-mix changes, regional drivers and the sequential monetization bridge.
- What remains unresolved
- dLocal does not provide a complete year-over-year driver waterfall; the detailed bridge is sequential, and merchant-level pricing remains undisclosed.
- Next verification
- Rebase local-to-local, merchant-tier, geography and spread assumptions, then test Q3 gross profit over TPV, operating leverage and the operating-cash-to-adjusted-FCF bridge.
Key takeaways
- TPV grew 92% year over year, compared with 56% revenue growth, 29% gross-profit growth and 15% operating-profit growth.
- Revenue over TPV fell to 2.26%, while gross profit over TPV fell to 0.72%; those ratios answer different questions.
- Local-to-local flows reached 61% of TPV, and large-merchant pricing tiers and lower-spread market mix weighed on unit economics.
- Adjusted free cash flow reached US$68.5 million only after removing merchant working-capital movements and capital expenditure from operating cash flow.
TPV grew 92%, but each downstream measure grew more slowly
The full bridge shows scale growth with weaker monetization per dollar of volume. TPV almost doubled, but revenue added about 56%, gross profit added 29% and operating profit added 15%. Adjusted free cash flow rose 41%, but it is a company-defined measure affected by the treatment of merchant working capital.
| Measure | Q2 2026 | Q2 2025 | Q1 2026 |
|---|---|---|---|
| TPV | US$17.694bn | US$9.212bn | US$14.055bn |
| Revenue | US$399.7m | US$256.5m | US$335.9m |
| Revenue ÷ TPV | 2.26% | 2.78% | 2.39% |
| Gross profit | US$127.2m | US$98.9m | US$118.7m |
| Gross profit ÷ revenue | 31.8% | 38.6% | 35.3% |
| Gross profit ÷ TPV | 0.72% | 1.07% | 0.84% |
| Operating profit | US$64.2m | US$55.8m | US$52.8m |
| Operating profit ÷ gross profit | 50.5% | 56.4% | 44.5% |
| Adjusted free cash flow | US$68.5m | US$48.4m | US$14.7m |
The percentage rows are Finance Circuit calculations from dLocal’s reported amounts. Rounded company ratios are 32% gross profit margin, 0.72% gross profit over TPV and 50% operating profit over gross profit.
Revenue yield and gross-profit yield use different denominators
Revenue divided by TPV fell to 2.26% from 2.78% a year earlier. That ratio captures how much reported revenue dLocal generated for each dollar of payment volume before the costs included above gross profit. Gross profit divided by revenue fell to 31.8% from 38.6%, showing how much revenue remained after those costs.
Gross profit divided by TPV combines both effects. dLocal calls this net take rate in its investor materials. It fell by about 35 basis points year over year and 13 basis points sequentially when calculated from the underlying amounts. A forecast that applies the 92% TPV growth rate to revenue or gross profit would therefore overstate the quarter’s observed conversion.
The sequential bridge: volume added US$32.6 million before mix and spread effects
The Q2 earnings presentation shows that volume added US$32.6 million to gross profit. The reported total sequential increase was only about US$8.5 million after negative effects from cross-border versus local-to-local mix, merchant mix, processing spread, FX spread and other factors. Pay-in versus payout mix, country mix and payment-method mix provided smaller positive offsets.
This is a sequential bridge from Q1 to Q2. It should not be presented as a complete explanation of the year-over-year decline in gross profit over TPV. The company has not published an equivalent full driver waterfall for the 35-basis-point year-over-year change.
Local-to-local flows, large merchants and pricing tiers compressed unit yield
dLocal’s prepared remarks say local-to-local flows reached 61% of TPV, six percentage points above Q1, mainly because ride-hailing and on-demand-delivery volume expanded. In these flows, dLocal collects and settles in the same currency. They can carry different economics from cross-border transactions, so the flow mix needs its own forecast line.
Merchant scale changed the result too. In Mexico, some large merchants reached their final volume-pricing tiers as local-to-local mix increased. Africa and Asia gross profit fell sequentially because higher-FX-spread markets such as Mozambique and Vietnam contributed less, alongside a one-off cost increase in Nigeria. Brazil and Argentina moved the other way, adding gross profit through volume growth, merchant ramp-ups and, in Argentina, lower advancement costs.
The practical model is not “more local-to-local equals lower profit” in every market. It is a matrix of flow type, merchant tier, country, payment method, processing cost and FX spread. Those dimensions overlap, so FP&A should reconcile them to one gross-profit total rather than add every stated mix effect independently.
Operating leverage improved even as gross-profit yield fell
Operating profit reached US$64.2 million, up 22% from Q1. Operating profit as a percentage of gross profit improved to 50.5% from 44.5%. That shows sequential operating leverage below gross profit even while monetization per dollar of TPV weakened.
The comparison still needs a normalization note. dLocal’s first-quarter results included a US$4.4 million non-recurring prior-period tax adjustment in operating expenses. Q2 operating expenses also fell 4% sequentially. FP&A should separate the absence of that item, the timing of marketing expenditure, salary changes and expected automation benefits before carrying the 50.5% ratio into the second half.
Report operating cash flow before adjusted free cash flow
Net cash generated from operating activities was US$140.522 million. dLocal then removed US$62.064 million of merchant working-capital movements and US$9.910 million of capital expenditure to calculate US$68.548 million of adjusted free cash flow. The arithmetic reconciles, but the adjustment reverses a large part of reported operating cash flow.
The company’s adjusted-free-cash-flow definition says the measure is not recognized under IFRS and is not an alternative to cash generated from operating activities or a liquidity measure. A cash forecast should therefore show operating cash flow, merchant working capital, capital expenditure and adjusted free cash flow as separate lines.
What the bridge does not quantify
- a complete year-over-year waterfall from the 1.07% gross-profit yield to 0.72%;
- merchant-level TPV, pricing tiers, processing costs or gross profit;
- a cross-tabulation of merchant, geography, flow, product and payment-method mix;
- the recurring versus temporary portion of each processing-spread and FX-spread movement; and
- the Q3 level of merchant working capital or the amount that will be removed from adjusted free cash flow.
Those gaps prevent an external model from assigning precise basis points to every driver. They do not prevent a controlled forecast. Each assumption can be separated, assigned an owner and updated when new evidence arrives.
What payments FP&A should carry into Q3
- Volume bridge: split TPV by local-to-local and cross-border flow, merchant tier, geography and payment method.
- Monetization bridge: model revenue over TPV, gross profit over revenue and gross profit over TPV separately.
- Comparison control: keep the sequential driver bridge apart from the year-over-year performance bridge.
- Operating leverage: identify one-off expenses, timing effects and recurring cost assumptions before applying the Q2 operating-profit ratio.
- Cash conversion: begin with reported operating cash flow, then show merchant working capital, capital expenditure and every company-defined adjustment.
The forecast question is not whether a lower gross-profit yield is automatically good or bad. It is whether the volume mix, pricing and spread assumptions explain the conversion from TPV to revenue and gross profit, and whether operating discipline and cash conversion offset that unit-economics pressure on a repeatable basis.
