dLocal Falls Despite Blowout Q3 Results—What Investors Are Missing
Uruguayan-based fintech leader dLocal (NASDAQ: DLO) delivered another strong quarter of growth, posting impressive Q3 2025 results that topped expectations across nearly every metric. The company continues to demonstrate momentum after a stellar Q2, reinforcing its position as one of Latin America’s most dynamic fintechs.
Yet, despite the upbeat report, shares fell more than 7% in after-hours trading as investors reacted to a slight decline in the company’s net take rate. The key question now is whether this pullback reflects short-term or long-term market jitters or a potential buying opportunity for long-term investors.
Earnings Beat Across All Major Metrics
dLocal reported Q3 earnings on Nov. 12, with results once again exceeding Wall Street estimates. Earnings per share came in at 17 cents, a penny ahead of consensus expectations of 16 cents. Revenue rose 52% year over year to $282.5 million, well above the $260.8 million forecast. The company’s Total Payment Volume (TPV) reached a record $10.4 billion, up nearly 60% YOY, marking its fourth consecutive quarter of growth above 50%.
Profitability metrics were equally strong. Net income jumped 93% YOY to $51.8 million, while Adjusted EBITDA climbed 37% to $71.7 million. Free cash flow also improved, rising 28% to $37.6 million. CEO Pedro Arnt, formerly the CFO of MercadoLibre (NASDAQ: MELI), highlighted the company’s continued momentum, noting, “We delivered another record quarter, the first time with TPV above $10 billion and gross profit surpassing $100 million, one more example of our strong growth and diversification.”
Why the Stock Fell Despite Strong Results
The only soft spot in dLocal’s results was a decline in its net take rate, which fell from 1.07% in Q2 to 0.99% in Q3. This metric, which measures gross profit as a percentage of TPV, is closely watched as an indicator of pricing power and margin trends. The drop raised concerns about competitive pressures and regional mix shifts, particularly in Egypt, where gross profit declined sequentially from $16.3 million in Q1 to $7.3 million in Q3.
However, management clarified that the weakness in Egypt reflected the full-quarter effect of wallet-share losses already disclosed last quarter (Q2). Meanwhile, performance across Latin America remained powerful, with revenue from the region rising to $234.3 million, led by robust gains in Argentina, Mexico, and Brazil. Excluding Egypt, other areas across Africa and Asia also experienced sequential growth, with revenue increasing from $36.1 million to $40.2 million.
Taken together, the decline in take rate is an isolated issue rather than a structural concern. The company’s underlying growth, geographic diversification, and expanding scale continue to validate its business model.
Valuation, Technical Setup, and Investor Sentiment
Following the post-earnings pullback, dLocal shares now trade near $13, hovering just above a key support zone that has held multiple times over the past year. Technically, maintaining this level is crucial to preserving the stock’s bullish structure. A decisive break below could invite further short-term pressure, though from a valuation standpoint, such a move would likely make the stock even more compelling.
As of Wednesday’s close, DLO was trading at an attractive forward P/E of about 17.4. It’s a reasonable yet still highly attractive valuation for a fintech with growing earnings and revenue at double-digit rates in emerging markets. The company’s fundamentals remain robust, and its balance sheet continues to strengthen, giving it the flexibility to reinvest in growth while maintaining profitability.
Analysts remain broadly optimistic on the name, with a consensus Moderate Buy rating and a price target of $15.67—still implying meaningful upside from current levels. These targets will likely be revised in the coming days as analysts digest the new data, but sentiment around dLocal’s execution and leadership remains constructive.
The Underlying Story Remains Strong
dLocal continues to post outstanding growth numbers and has now delivered four straight quarters of strong execution. While the decline in take rate briefly dampened sentiment, the underlying story remains one of high-margin, high-growth fintech expansion across emerging markets.
For investors on the sidelines, the post-earnings dip toward support around $13 could potentially offer an attractive entry point into a structurally sound business.
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