DLocal Limited (NASDAQ: DLO) experienced a significant 24-hour plunge of 13.19% on Wednesday, despite reporting third-quarter earnings that surpassed analyst expectations. The sharp decline in the stock price reflects investor concerns about the company's profitability and growth trajectory, overshadowing its strong revenue performance.
The Uruguay-based fintech company, which specializes in cross-border payments in emerging markets, announced its Q3 2025 financial results after market close on Wednesday. DLocal reported earnings per share of $0.17, beating the consensus estimate of $0.16 and marking an 88.89% increase from the same period last year. Revenue also exceeded expectations, coming in at $282.483 million, a 52.06% year-over-year growth and above the anticipated $262.006 million. The company's adjusted EBITDA reached $71.7 million, with a margin of 25%.
Despite these seemingly positive results, investors appeared to focus on potential headwinds and profitability concerns. The company reported a gross margin of 37%, which may have raised questions about its ability to maintain profitability amid rapid growth. Additionally, DLocal faced a short-term hit of $13.1 million from Argentina flow restructuring, impacting its quarter-over-quarter net profit. While the company expects to reverse this in coming quarters, it likely contributed to investor unease.
DLocal, which launched in 2016 and became Uruguay's first unicorn, operates across more than 40 emerging markets. The company's market capitalization currently stands at around $4.17 billion, and its stock had climbed approximately 34% year-to-date before this post-earnings decline. The significant sell-off suggests that market participants might be reassessing DLocal's valuation or expressing caution about its future growth trajectory in the competitive fintech landscape.
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