Dlocal Limited DLO Moat

Key data

The moat

A global software company that wants to collect from customers in Nigeria, Egypt and Argentina faces a different payment system, a different regulator and a different set of local methods in each. dLocal has the licences, the local bank accounts and the connections to those methods already built, and offers them through one integration.

That is a regulatory and connection footprint rather than a technology advantage, and it is genuinely hard to replicate because it must be built country by country over years.

What it produces should be pricing power in markets nobody else wants to enter, because the alternative for the merchant is not a cheaper provider but no revenue from that country at all.

Widening or narrowing

Volume nearly doubled and the economics per dollar fell throughout.

The take rate fell in every single quarter, by 53 basis points in total, a fifth of where it started. The company's own gross profit measure fell further in proportional terms, from 1.07% to 0.72%, meaning it now keeps roughly two thirds as much of each processed dollar as a year ago.

The company attributes this to a higher share of local-to-local payments, which carry thinner economics, to large merchants ramping onto volume-based pricing, and to the natural margin dynamics of scale. All three are plausible and all three describe the same thing: the mix is shifting toward business that pays less.

The overrated case, and it is concentration. The ten largest merchants supplied 61% of revenue in 2025, 62% in 2024 and 60% in 2023. That is not a moat serving a market; it is a service supplied to a handful of very large customers who are also the ones ramping onto lower pricing. A company with sixty percent of revenue in ten accounts is negotiating from the weaker side of the table, which is what the take rate series shows. The concentration has held steady across three years, so it is the structure of the business rather than a phase it is passing through.

On profit pool, dLocal takes just over two percent of a payment it routes into a country the merchant could not reach alone. A meaningful slice, falling by a fifth in a year.

The moat is narrowing.