Alejandro Chavez

$DLO earnings are a bit of a mixed bag short term, but the long term thesis is just fine... • 6th consecutive quarter of 50%+ TPV growth • TPV hit $14.1B for the first time ever (+73% YoY) (now $47B annualized) • Gross profit at $119M (+40% YoY) • NRR at 152% • Net income came in at $42M vs $47M last year, but almost entirely explained by a one-off $10M tax adjustment from prior years, strip that out and you're at +11% YoY • FCF dropped to $15M, but driven by temporary working capital timing effects ($35M) & is expected to normalize in coming quarters Remember $DLO is still coming out of an investment cycle, but that phase now seems to be nearing its end. Management expects OPEX to improve over the next few quarters due to: (i) the end of the investment cycle (ii) increased automation leading to lower headcount needs (iii) corrective OPEX actions (iv) lower share-based compensation expense

I'm updating my assumptions on $DLO post earnings yesterday. My previous basic (and conservative) assumptions give a 3.3x (see quoted post). I think that's too conservative. TPV growth in FY26 is expected to be 55%. I originally said a CAGR of 25% was realistic which would get us to $100B TPV by 2030. I think we should be looking at ~28% CAGR which gets us to $140.5B in TPV by 2030. My original take rate was 2.5% in 2030. I think that remains fair. We can look more into this if I decide to get a lot more specific but there's so much back and forth on this. Likely we see take rates continue to decline a bit...before potentially stabilizing or expanding down the road but what exactly that number is I think is quite hard to gauge. Conservatively, 2.3% is more than fair. If anything, it's probably too low. 2.3% take rate on $140.5B gives $3.23B in revenue in 2030. FCF margins still are at 30% guided... so 30% on $3.23B in revs gives $969M in FCF (my previous assumptions gave $750M). With a fairly conservative 15x FCF multiple on $969M you have a $14.5B valuation compared to a $3.37B valuation today. Conservative? Maybe. Maybe not. Unrealistic? Most definitely not.