The first unicorn Uruguay, dLocalpublished the financial reports for the fourth quarter of 2022 and the total balance of 2022and although he announced “another exceptional year for the company” after navigating “unprecedented territories” during the last part of the year, after the lapidary report of the financial Muddy Waters Capital; That same incident—and its aftermath—led to their lower profit than projected based on past performance.
The dLocal profits fell by 18% to the last quarter of last year, and although the news was to be expected, the markets did not take it so naturally, causing paytech shares fell as much as 26% in one daylosing in a few hours what was recovered during the year.
While the third quarter had shown exceptional results for the fintech company—nearly quadrupling revenue in just a year—the accusation of “fraud” by Muddy Waters and the subsequent collapse of titles by more than 51%, followed by the costs of the efforts made to restore investor confidence, visibly impacted earnings. But one item particularly stood out in the report: an unexpected loss.
classified as “operating expenses”the 5.6 million dollars trapped in the FTX cryptocurrency platform —which went bankrupt in November 2022— tipped dLocal’s balance sheet toward a negative view. The amount corresponds to operations that the platform did not process at the time and that, once declared bankrupt —and without the support of financial or monetary institutions—, there was no way to recover.
The high figures allocated to legal fees, international expert services and accounting advice that were necessary to carry out the multiple audits and financial actions whose objective was to recover credibility; as well as to face the complaints filed against them also had a negative impact on the final balance.
How did dLocal do at the end of the year?
Beyond the serious problems it had to face at the end of 2022, dLocal achieved a Record Total Payment Volume (TPV) of 3,300 million dollars during the last quarter, which implied an increase of 78% year-on-year and 21% compared to the previous quarter.
Also they revenue from the previous year increased by 55%, which represents 118.4 million dollars —6% compared to the third quarter. In the accumulated annual, the company reported total revenues of 418.9 million dollars, 72% more than in 2021. This is due to the successful expansion by Latin America but, above all, to the income from Asia and Africa, which accounted for 73.6 million dollars, 18% of the total income of 2022.
In addition, dLocal reported that its adjusted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) increased 39% to $40 million.
However, the bad news was the 18% drop in profitsfrom $23.5 million to $19.4 million in one year, comparing the last quarters of 2021 and 2022. Compared to the profit of $32.3 million in the third quarter of last year, the drop was 40%.
This had a direct impact on the price of its shares in nasdaq which, during Wednesday, fell 26.27%, closing at $12.49 after closing at $16.94 on Tuesday. Currently, the shares are recovering some of their value and are around $13.60.
In this sense, the dLocal authorities stressed that they “remain humble and focused on continuing to redefine the online payment experience in emerging markets.”
Source: Ambito
