Episode summary
DLocal (DLO): Multibagger Potential with Decade-Long Runway
The Intrinsic Value Podcast
· · 1 hr 23 min · Hosts: Daniel Mahncke, Shawn O’Malley
Summary
DLocal is presented as a B2B payments platform built for emerging markets, where global merchants such as Amazon, Netflix, Spotify, and Uber need a single integration to collect and move money across fragmented local payment systems. The host argues the company sits at the intersection of two long-term trends: the digitalization of emerging markets and the expansion of large global tech companies into those regions. That backdrop, plus a history of rapid revenue growth and profitability, is why the guest thinks the stock’s mid-teens earnings multiple looks attractive.
The discussion centers on why DLocal is different from a typical payments business. Instead of relying on card rails alone, it helps merchants handle local methods like Pix in Brazil, UPI in India, and other domestic systems, while also dealing with licensing, currency conversion, fraud checks, and routing. The guest emphasizes that DLocal’s products improve conversion rates and reduce friction for subscription and cross-border payments, especially through smart routing and recurring-payment tools.
The main bear case is pressure on take rates, customer concentration, and the possibility that large merchants or Western competitors could bypass DLocal over time. The guest pushes back by arguing that scale, regulatory complexity, and fragmentation create a durable moat-like advantage, while operating leverage can still support profit growth even if take rates fall. Stablecoins are flagged as a longer-term risk, but also as a potential area where DLocal could adapt rather than disappear.
Key takeaways
- The host frames DLocal as a B2B emerging-markets payments platform, not a standard card-network business, because it solves local payment fragmentation for global merchants.
- The guest says Latin America still drives about 80% of revenue, with Brazil, Argentina, and Mexico making up about half of total revenue.
- DLocal’s top 10 merchants account for 62% of revenue, so customer concentration is a real risk even though net revenue retention rebounded to 145% in 2025.
- The guest argues falling take rates are not necessarily fatal because operating leverage and higher payment volume can still drive profit growth.
- DLocal’s value proposition is strongest where merchants need higher conversion rates, with local processing reportedly improving conversion by 20 percentage points versus international card transactions.
- The host and guest view stablecoins as a potential threat to cross-border settlement, but not necessarily to the need for DLocal’s local payout and compliance layer.
Notable quotes
“The growth and digitalization of emerging markets and the expansion of global tech leaders like the mag 7 into those markets”
“Dlo exists because the emerging market world doesn't use Visas or Mastercard system at least not to the same extent”
“So in 2023 for example that number was 150%. And that basically means that the existing book grew by half again on its own”
“DLO's take rate did go down from 2.9% at a high in 2020 to just.9% today”
“what matters are the absolute numbers right now. So that means is DLO making more money than a year ago and they are making a lot more money than a year ago”
How the episode opens
Today's company is trading at a mid- teens multiple despite growing the top line by 50% annually being highly profitable and having a pretty strong balance sheet.
And the thing is it's sitting at the intersection of two mega trends over the next two decades. The growth and digitalization of emerging markets and the expansion of global tech leaders like the mag 7 into those markets. The megat trends are so attractive that Peter, the former CFO of Melly where he worked 25 years, actually left that job to join DLo as a CEO.
So, I like the financials. I like the valuation which looks pretty attractive and I couldn't imagine a better CEO for the company.
For those who have followed along with the investors podcast, you might know that Daniel and Kyle alternate on pitching me their favorite new stock idea each week so we can find opportunities for our intrinsic value portfolio of stocks that we manage. Which I should mention, if you want to check out the portfolio, it's linked in the show notes below and updated weekly. You can also get updates on our portfolio for free by signing up for our intrinsic value newsletter and you can find that in the show notes too or just by going to the investorspodcast.com.
We should mention that more often. I got a lot of questions all the time about where to actually find the portfolio that we always talk about. But there's one more thing that we could say.
So maybe you want to complete our little advertising campaign here in the beginning and bring up our New York City conference.
Oh, it's great that you bring it up. Yeah, we'll be hosting our second and much larger Intrinsic Value Conference in Midtown Manhattan this September on Saturday the 19th.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- emerging markets payments
- multibagger potential
- business model take rates
- valuation
- intrinsic value portfolio
Companies and tickers mentioned
- DLO
- AMZN
- UBER
- SPOT
- NFLX
- DLocal
- Amazon
- Uber
- Spotify
- Netflix
Watch the episode
Watch “DLocal (DLO): Multibagger Potential with Decade-Long Runway” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from The Intrinsic Value Podcast
-
Canadian Pacific Kansas City Limited (CP.TO): Irreplaceable Moat, Unproven Compounding -
Reddit (RDDT): Record Cash Flow, Collapsing Share Price -
McDonald's ($MCD): Generational Compounder in Historical Drawdown -
Mercado Libre ($MELI): We Doubled Down on Meli! -
Airbnb (ABNB) The Business Outgrew Its Peak, the Stock Hasn't -
GE Aerospace: The Ultimate Compounder?
The Intrinsic Value Podcast, this episode and its artwork belong to The Investor's Podcast Network. Octagon is not affiliated with the show; this page is an independent summary.
