DLocal Limited (DLO) Earnings Call Transcript & Summary

Good afternoon, everyone, and thanks for being with us on today's call covering second quarter 2024 results. Should you have missed the earnings release, it can be found in the Financial section of the Investor Relations website. Joining us on this call are Pedro Arnt, our Chief Executive Officer; Mark Ortiz, our Chief Financial Officer; Maria Oldham, SVP of Corporate Development, Strategy, and Investor Relations; and Mirele Aragao, Head of Investor Relations. We've made a slide presentation available to go along with the prepared remarks; this event is streaming live via webcast, and you can access both the webcast and the presentations through dLocal's website at investor.dlocal.com. A recording will be made available soon after the event wraps up. Before we move on, I'd like to note that any forward-looking statements contained in the presentation or referenced on this conference call rest on information currently available as well as dLocal's present assumptions, expectations, and projections regarding future events. Although the company considers its assumptions, expectations, and projections reasonable in light of information currently available, we caution you against placing undue reliance on those forward-looking statements. Actual results could differ materially from those contained in dLocal's presentation or discussed on this conference call for numerous reasons, including those outlined in the Forward-Looking Statements and Risk Factors sections of dLocal's filings with the Securities and Exchange Commission, which you can find on dLocal's Investor Relations website. With that, I'll hand the conference over to dLocal. Thank you.

Hello, and thank you all for being here today. I'd like to open with a quick overview of our position now that we've reached the midpoint of 2024. Our business keeps expanding at a healthy pace, and in Q2 2024 we set yet another quarterly record with $6 billion in TPV. That figure's trajectory shows how we keep growing by capturing a larger share of wallet from merchants around the globe and by bringing additional merchants on board. It also highlights the distinctive value we deliver as a dependable partner to some of the biggest and most sophisticated multinationals operating in emerging markets. The momentum behind us is firm, and our pipeline stays strong — both among merchants we already serve and with new logos coming in — which is an encouraging forward-looking signal of our capacity to grow over the long run. This quarter we began processing for several additional high-profile global brands, including a top Chinese fintech company and one of the biggest events and ticketing marketplaces anywhere in the world. We also helped a number of our current merchants — themselves among the largest e-commerce companies globally — with their first moves into Africa, as they kicked off operations in South Africa over the past quarter, which shows how well we're doing across that highly promising continent. One more thing worth mentioning: we keep fueling cross-border payment expansion in Brazil, having taken part in the recent debut of a major global marketplace player there. That $6 billion of TPV amounts to 38% growth versus a year earlier, even against the difficult comparison of 80% year-on-year growth in last year's outstanding quarter. We performed well across numerous verticals, among them ongoing robust expansion in commerce, on-demand delivery, and remittance, plus faster growth among Software as a Service and ride-hailing merchants, which rose 72% and 51%, respectively, compared with a year ago. Growth in TPV that's this resilient and spread across the board, combined with a tight discipline around lower-risk, highly reputable verticals, puts us in a powerful long-term position. From where we sit, the gains we've posted year over year show a mix of expansion and reputable-vertical concentration that leads the class — nobody in the comparable peer group can claim the same, because their growth is slower, their reliance on high-risk verticals is excessive, or both apply. Sequentially, net take rates held steady, despite headwinds including the repricing our largest merchant undertook early in the year, the notable devaluations of currency in Nigeria and Egypt that came later, and the continuing slide in most emerging market currencies. So with pricing holding firm from one quarter to the next while TPV climbed, we ended up delivering an 11% increase in gross profit compared with the previous quarter. On the OpEx side, if you strip out non-cash share-based compensation, the sequential increase was only $1 million — a big change from earlier periods when that sequential growth was north of $4 million. What drove that? We trimmed our cash spending after seeing gross profit soften in our P&L. As I mentioned earlier, there's a limit to how much we're willing to do to defend margins in the short run, because we're truly committed to certain investments that are critical to our long-term success — particularly those in engineering headcount, back-office functions, and supporting our license portfolio. On the other side of the ledger, we keep adjusting other areas of discretionary spend so that they track our revenue performance and reflect the frugal way we run the business. As a result, Adjusted EBITDA landed at $43 million, which reflects a cost structure that stays lean and a disciplined stance on expenses, and our cash generation accelerated versus the previous quarter. Those positives come alongside a few hurdles we intend to address quickly. The biggest one: gross profit was unchanged from a year earlier, weighed down by Latin America, where it dropped 13%, driven by Argentine FX devaluation along with repricing from our largest merchant in Brazil and Mexico. Even though we achieved an impressive 79% increase in gross profit compared to last year in Africa and Asia, that still could not offset the impact of the two incidents in Latin America, which remains our biggest region. To wrap up this section, I want to emphasize that beyond finding more positives than negatives in the reported quarter, if you look past the short-term quarterly view, dLocal is a remarkably robust business with a vast TAM, an appealing operating model, and a highly promising trajectory that eventually will show up in how the capital markets value us. So, to keep the right perspective, we continue to see solid validation in the product market, demonstrated by TPV expansion of almost 40% versus the prior year and 14% compared with the previous quarter. Our business continues to operate on a financial model with strong margins, where adjusted EBITDA relative to gross profit sits above 60%, and we have room to grow back toward prior peaks moving forward. Cash conversion is still quite robust and keeps improving as EBITDA rises quarter over quarter, and our cash conversion cycle has remained around 100% across the trailing twelve months. Looking at how all of this could build on itself over the long run, it's difficult to feel anything but positive about what lies ahead, even with the difficulties and ups and downs that come with operating across the Global South. We hold a strong conviction that brighter days are ahead over the long term, and the most critical variable in whether we seize that opportunity is our own execution. You're hearing that confidence from me directly, and you can also see it in how we're deploying capital. We produce cash at an appealing rate, and we believe our shares have room to rise as the company expands and scales up. Because of that, we repurchased shares aggressively over the quarter; we believe that move will look like a wise use of capital down the road. Having said that, I'll now turn things over to Maria and Mark, who will walk you through a fuller picture of what we delivered in Q2.

Thanks, Pedro. Hello, everyone, and good afternoon. Pedro noted a moment ago that in Q2 we again posted robust TPV expansion — 38% higher than a year earlier and up 14% versus the prior quarter — hitting $6 billion. Our cross-border operation, which sits at the heart of what we offer, rose 11% from the previous quarter and 22% compared with the same period last year, setting a fresh record of $2.7 billion in TPV. This quarterly gain comes mainly from the ride-hailing vertical. The local-to-local processing arm keeps demonstrating its considerable worth via domestic flows, registering a 16% sequential rise and a 55% year-over-year jump, which confirms the better proposition we give global merchants relative to plugging directly into local acquirers. Growth in commerce across Mexico and Argentina was the principal driver behind the quarterly uptick. Our payments segment expanded a solid 70% quarter-over-quarter and 34% year-over-year, powered by standout results in commerce, on-demand delivery, and ride-hailing verticals. Payouts climbed 7% versus the prior quarter and nearly 50% versus a year ago. That sustained expansion stems chiefly from the financial services, ride-hailing, and SaaS verticals. Turning further down to the P&L, we see contrasting trends at the revenue and profitability lines. On revenue, we brought in $171 million, a 6% year-over-year gain, largely attributable to Egypt, which saw over 100% year-over-year growth across the advertising and streaming vertical, plus commerce and streaming in Mexico, along with solid results elsewhere in LatAm, Africa, and Asia across various verticals. Those favorable outcomes offset reduced revenues in Nigeria stemming from the Naira devaluation in February 2024. Sequentially, notwithstanding the solid TPV growth, revenues fell 7%, pulled down by currency devaluation in Nigeria and Egypt. The further we scale and diversify geographically, the more we anticipate top-line volatility will dilute over time as dependence on a handful of markets shrinks. Now to gross profit trends. Slides 8 and 9 in the earnings materials show that, beginning last quarter, we added a regional breakdown of gross profit. Gross profit for the quarter came to $70 million, slipping 1% year-over-year. Beginning with LatAm, gross profit reached $54 million, a 13% year-over-year drop. Argentina accounted for most of that decrease, owing to narrower FX spreads after the December 2023 currency devaluation. Mexico likewise weighed on LatAm gross profit, falling 17% year-over-year because of merchant repricing and the local-to-local increase. In Chile, gross profit shrank 7% year-over-year on lower cross-border volumes. Other LatAm markets delivered a 10% year-over-year gross profit rise, propelled by Tier Zero merchants growth. Across Africa and Asia, gross profit was up 79% year-over-year, aided by overall growth in Egypt, the ramp-up of our merchants in South Africa — mainly within the commerce vertical — and the temporary FX dynamics in Nigeria; sequentially, gross profit rose 11%; within LatAm, gross profit was up 10% quarter-over-quarter. Growth in Argentina alongside other LatAm markets—chiefly Colombia and Costa Rica—plus Brazil drove the results, helped by reduced processing costs after we renegotiated with processors, combined with a shift in payment mix; those two things partly counterbalanced the effect of the key merchant repricing, which hit fully in the second quarter versus 2 months in the prior one. Gross profit across Africa and Asia rose 13% quarter-over-quarter. Temporary FX dynamics in Nigeria and expansion elsewhere in Africa and Asia were the primary factors. Even with the quarter-over-quarter gain, we recognize these results remain difficult; still, we want to stress that no structural shifts in our business have appeared. I'll now turn things over to Mark, who will keep walking us through our financials.

Thank you, Maria. Hi, everybody. Just like Pedro mentioned earlier, throughout this quarter we've stayed committed and continued directing funds toward our team's capabilities and innovation, while at the same time pursuing efficiencies across numerous areas of our operations. With the opportunities we see ahead, we're confident that this type of cost-conscious investment will deliver returns across the medium to long term. Turning to the numbers, our total operating expenses for the quarter reached $40 million, marking a 72% rise compared with the same period last year. When we strip out share-based compensation and certain other non-cash items, OpEx was up 46%. The way this OpEx growth is allocated clearly leans toward investment focused on product development and IT capabilities. When you look at product and IT operating expenses, those rose 143% compared with the same period a year earlier, whereas every other category of expense was up 55%. At the same time, we're still in a cycle of investing to make our back-office capabilities stronger so we can grow down the road. Our commitment to a balanced stance on managing expenses hasn't changed — we weigh near-term and longer-term opportunities against each other. As a result, operating profit for the quarter came in at $30 million, a 12% increase from the prior quarter, and adjusted EBITDA reached $43 million, which was 16% higher than the previous quarter and works out to an adjusted EBITDA margin of 25%. That performance reflects a larger gross profit along with disciplined spending on operating expenses. During the quarter, adjusted EBITDA as a share of gross profit climbed to 61%, which is a 3 percentage point gain compared with the prior quarter. Looking at it year over year, operating profit declined 37%, while adjusted EBITDA fell 18%, reflecting the gross profit trends Maria walked through as well as our choice to keep funding many of the long-term investments I mentioned earlier. For the quarter, net income reached $46 million, representing a 161% increase quarter-over-quarter and a 3% rise year-over-year. In the earnings presentation, you can see the detailed breakdown of how net income moved from the previous quarter, which was largely driven by greater finance income, primarily from a $23 million non-cash mark-to-market impact tied to the Argentine bond investments we use to hedge our local currency exposure in that market. On taxes, our effective rate came in at 18%, down from 29% in the prior quarter and nearer where we've landed in earlier periods. Turning to cash flow, we brought in $35 million of free cash flow from our own funds this quarter, which works out to a 77% conversion rate — that's $23 million more and seven percentage points higher than Q1. If you set aside the unusual gain from the Argentine bond, conversion would have exceeded 100%, which matches what we've typically seen historically. We closed the quarter in a solid liquidity spot at $306 million, made up of $186 million in cash available for general corporate purposes plus $120 million in short-term investments. Ahead of handing things over to Pedro, I want to provide a fuller update regarding our share repurchase initiative. To recap, when we reported first quarter results, we shared that our board had approved a program allowing up to $200 million for buying back Class A common shares, which fits within our approach to allocating capital. In the second quarter, we bought $82 million worth, equal to 9.2 million shares, funded from our own resources. With that said, I'll hand the floor back to Pedro now so he can close us out.

So, to wrap things up. Emerging markets, as everyone knows, tend to be volatile by nature, and that volatility can frequently affect how we perform over the near term. That said, as I said before, we stay optimistic when we look further out. Each quarter we conduct a bottom-up assessment of our pipeline and the contracts we already hold, estimating share of wallet, likely market expansion, and fresh commercial possibilities merchant by merchant, and from that work we arrive at this updated 2024 outlook. The revised TPV figure we now expect stems from a reduced likelihood that volumes will ramp up with particular merchants, a pipeline increasingly weighted toward Tier Zero merchants that carry lower take rates, and softer projections for emerging market currencies down the road. On gross profit, our projection accounts for those same TPV effects I just described, and it also builds in an assumption that volumes grow in our local-to-local flows as our local businesses keep flourishing. What we currently anticipate for Adjusted EBITDA mirrors our unwillingness to decelerate several important investments in long-term projects, which is why we chose not to protect our near-term margin structure as forcefully as we otherwise might, since we can keep tight reins on costs and benefit from a flexible cost base; we must keep bringing on additional IT and product talent, reinforce our internal controls for the increasingly complicated operations we run, and put money into control functions that safeguard our merchants' business and reputations throughout the Global South. Let me be sure to remind everyone that we still anticipate meaningful operational leverage in the business over the midterm, once those investments are complete. To close, we keep prospering throughout emerging markets in spite of their complications, which we welcome as we provide straightforward, workable solutions to our merchants. We stay concentrated on execution and growth over the long haul, and our dedication to our merchants plus our knowledge of the areas where we do business let us regularly take business away from those global players. As we grow larger, that growth will assist in softening near-term volatility and cushioning market swings. So it matters greatly that we keep our attention on TPV growth, on raising our share of wallet, and on bringing in new clients, all of which we have reliably achieved from the company's very beginning, while we keep pushing operational leverage in the business once we move past the present stretch of disciplined investment we find ourselves in. With all that said, we're happy to take your questions, and thank you for your interest.

Hello, and good evening. I appreciate you taking my question on this call. My query concerns the guidance, and I'd like to grasp the underlying dynamics a bit better. Pedro, thank you for clarifying things—that was quite useful. However, to step back for a moment: during your call for the first quarter, you were already roughly midway into the second quarter, and you expressed confidence about hitting the guidance's lower end. I fully grasp how much instability exists in emerging markets, so what I'd like to determine is whether anything shifted between that prior call and right now. Regarding gross profit, you had noted that March came in quite robust. It appears performance since then has been trailing that March level. Looking ahead, it sounds as though you anticipate a slight uptick in gross profit from this point. Still, I just want to clarify whether anything differed in the second quarter—comparing when you held the first quarter call against today—that makes you somewhat more guarded about achieving that guidance. After this, I have one more question. Thanks.

Alright, thank you, Tito. I have to admit, looking at how our guidance has moved across the past several quarters, it's clear things shifted as we worked through the exercise of estimating how current volumes from the 706 merchants we have live will shake out for the rest of the year, and then what we assume about fresh volume from those same merchants plus new ones. And on top of that, there's a piece where we try to layer in some macro assumptions around currency. Sadly, as we go through that disciplined exercise, the changes in the last two reviews have leaned negative, but that's just how it has gone. So we're talking 40+ markets, 700+ merchants. These aren't software-as-a-service agreements. Every single day we genuinely have to win that business back, and we put in our best effort to forecast how we believe the year will land. On the cost side, we believe we have total command over our spending; when it comes to TPV and gross profit levels, it's evident we give it our best shot. Where we stand is this: we keep witnessing robust uptake of our products and services, and I believe the TPV guidance and the TPV growth capture that. Moving to gross profit, we are observing a bigger proportion going to existing Tier Zero merchants. We're seeing ongoing outperformance in the local-to-local segment, which on one side lacks FX monetization, and that pushes take rate down slightly, but down; on the other side, you could make the case that those local-to-local operations both demonstrate the durability of what we provide and consist purely of transactional revenues. So in some sense, they're less volatile, and one might say lower margin, higher quality volume that we expect the mix to lean toward more than was true a quarter ago. Then regarding EBITDA, like I mentioned, we completely govern our spending. We simply want to ensure we keep building for the long haul; and therefore the tweaks we're making aren't entirely aggressive in chasing the margin target, but rather ensuring that when there are investments we believe are necessary, we go ahead and make them regardless. As we've stated a few times, and as the trajectory of our OpEx demonstrates, those lean heavily toward product development and technology, and then bolstering certain mid-office and back-office functions.

All right. No, Pedro, that really helps a lot. I appreciate the detail you gave us there. So I suppose I'll ask something that builds on it — you brought up, as you know, that local-to-local is where you're seeing more growth. We noticed the gross take rate fell quite a bit, while the net take rate, I'd say, maybe held up pretty decently, if you look at it positively. So my question is, do you think this move toward more local-to-local will keep going? Is that potentially going to add even more strain on the gross take rate? But also, do you think — and I realize again this is tough to forecast — that the net take rate might be leveling off somewhat compared with what we saw in earlier quarters?

Yes. So, one thing—I'd really encourage everyone to zero in on net take rate when trying to gauge how much monetization capability our business has moving forward. Gross take rate gets pushed around a lot by revenue that swings significantly, particularly because of markets with dual exchange rates. So I actually think the net take rate question you're posing is the correct one. When you look at the midpoints in the guidance, our view is that with the shift toward local-to-local and more weight from Tier Zero merchants, take rates will keep declining over the near term, though these are modest decreases. I think if somebody anticipated a total collapse or merchants lining up to reprice, the way our biggest merchant did back at the start of the year, that simply hasn't happened, and the Q-on-Q movement in net take rate shows it—it's down a few single basis points, single digit basis points. So once more, looking at the midpoints, we expect a downward direction, but very much under control. Taking a somewhat more midterm perspective on take rates, what we're focused on, and I think the aim here is, as some of our newer offerings, such as the invoicing product or the platform products and, and ideally new products we bring to market, start to grow and scale, we can attempt to counterbalance some of the structural take rate declines occurring throughout all of fintech, particularly on the payments side, attempt to counterbalance that through more value-added services. But that's more of a midterm strategic response. To your specific question, looking at the midpoints, we anticipate a somewhat downward path for take rates, caused by more local-to-local and more Tier Zero merchants, meaning the very large merchants within the mix, but reasonably controlled when it comes to how big that take rate decline is.

Yeah. Okay. That, that's super helpful. Thanks a lot, Pedro.

Hello. I appreciate the chance to pose a few questions. To start, let's return to the topic of merchant repricing. You mentioned that there isn't exactly a lengthy line of parties waiting to push prices down. Yet what degree of visibility do you possess regarding that matter as we look ahead over the next several months? I suppose all of us were somewhat taken aback by what unfolded at the start of the year. What kind of visibility can you claim over that process, especially since merchant concentration is still quite elevated? That's my first question, if you don't mind. And if I may quickly fit in one more, something a bit more granular concerning Egypt, where the devaluation impact was clearly felt. Even so, gross profit appeared to hold up rather well compared with my own expectations and compared with the pattern seen in Argentina. So some additional detail on how all of that played out in Egypt would be quite useful. Many thanks.

Thanks. Now, regarding visibility. As we said during the previous quarter's call, our pricing isn't set through long-term agreements or contracts with fixed dates. The contract does specify it, but a merchant can come to us and talk about pricing whenever they want, so there aren't any set points in time for renegotiating prices. That cuts both ways, doesn't it? So how much visibility we have really depends on the ongoing dialogue our commercial team maintains with various merchants and whether the topic of pricing gets raised. To keep this from turning into a nonstop discussion, we've made most of our contracts tier based, meaning a merchant understands that when they reach higher volumes, an automatic, previously agreed repricing kicks in. That isn't what occurred early in the year, when everyone sat down and said let's rework every tier past what the initial tiering had set out; so when we say we don't see other merchants queuing up to push on price, we mean that quite literally — the majority of our contracts keep operating in line with the original tier structures established when they were signed. And that, based on what we currently know, is what gives us confidence that the situation with the biggest merchant — which we've consistently described as twice the size of number two, so the scale involved was considerable — isn't repeating itself across the remainder of our merchant base. Turning to Egypt, I'd say Egypt has performed better than we might have expected. The macro conditions have unfolded the way we thought they would, with the gap narrowing between the market rate and the official rate, and that kind of dynamic squeezes our gross profit in that market. Even so, it's been offset by very robust TPV growth of about 30%+. That keeps us among the most dependable sources of liquidity in that market, enabling our global merchants to carry out cross-border transactions; and because of that, plus our strong combination of pay in and payout in that market that produces that liquidity, we've recorded substantial growth in payments volumes there, cross-border, which has compensated for the squeeze in unit gross profit, so to speak.

Okay, that's clear. Thank you.

Hi, and thanks, Pedro, for taking the call. I've got two questions. First, Pedro, if you could give us a brief update on how remittances are trending — I believe that's one of the opportunities you see ahead of us. Just a quick highlight of how that's developing, and whether you could say a bit specifically about which countries those remittances, with their different flows, can be used in to offset the cross-border business. Then my second question — not sure if this is a technicality — but I just want to understand, Nigeria's gross profit came in above revenue. I'd like to understand exactly what caused that mismatch. Thank you.

Sure. The remittance vertical keeps performing very strongly. It was up more than 80% year-on-year, as we keep bringing on board additional global remittance, consumer-facing remittance companies. Keep in mind that in this vertical, like in most of them, we're an enterprise solutions provider, meaning we act as infrastructure for the companies that hold the consumer-facing remittance relationships. So this is a newer vertical for us that we truly started leaning into roughly 18 months to 2 years back, but which has really started gaining momentum across the last few quarters; it's an interesting business on its own, but as we've also mentioned, it additionally gives us very efficient liquidity in certain markets where netting is allowed. The roster of markets where netting is allowed is in fact quite a long one. Some markets don't permit it. In the past, Brazil was one where it wasn't possible; that may be changing, but we don't actually net in Brazil; and then there are a handful of others. In most of the remaining markets we can net, and we net wherever payout flows come into those markets as our remittance business expands.

Understood completely. Now, about Nigeria — is there any particular cause for the gross profit coming in higher?

Yes, absolutely; regarding that, hello, Grespan. When it comes to Nigeria, the situation involves FX movements, in which the official rate is trading above the parallel market; as a result, those movements produce the P&L you are observing, in which the gross profit appears above the revenue. In our view, this is a short-term dynamic.

Alright, thanks.

Hi there, good afternoon. Carlos Gomez-Lopez here, calling in from HSBC. Two things I'd like to ask. First, on the assumptions you laid out: you said you're attempting to project, at least partly, what's happening with foreign exchange as well. So which markets worry you most? Where do you expect we might witness yet another meaningful FX correction? Would that be Egypt, Argentina, or some other places we aren't currently focused on? Then second, when it comes to this investment phase and the investments you need to make at present, could you put a number on it, or tell us how many quarters or years you figure this investment phase is going to last? Thanks.

Yeah, absolutely. So here's the thing — when it comes to currency assumptions, I can't give you a market-by-market breakdown from memory. What I do remember is the Real, the Mexican Peso, a few of the larger ones being part of it. But broadly speaking, I believe for most of that EM currency basket, we relied on bank and market data to revisit our forecasts for the rest of the year, and those revised figures reflect weaker emerging market currencies compared to what we'd assumed the quarter before. So I'd frame it as a general statement about a stronger dollar against the broader currency mix across the 40+ markets we operate in. Now, on the investment cycle — and I want to tread carefully here, because this topic can sometimes draw scrutiny. The company had issued a midterm target of 75% of EBITDA to gross profit, and my understanding is that it actually hit that level last year in Q3; after that, we lowered it in Q1, and the cause was gross profit arriving softer than expected, settling in the high 50s; at this point it's returned to the low 60s. So if you assume compounding from sequential gross profit growth that outpaces OpEx growth, and you take a somewhat midterm perspective, we think we can return to where we stood historically, and that this isn't some structural long-term shift in how the business's market structure works. As for what that specific timeframe looks like, I don't think we've pinned that down yet. There are still investments being made in product and technology. I said earlier that speeding up how quickly we launch new products is one of the long-term levers for offsetting take rate declines. Over the past two to three years, dLocal has significantly broadened the set of markets it operates in, I believe. That means we've developed processing capabilities and a processing network spanning a large number of those markets. At this point, we're working on reinforcing those capabilities and rolling out additional features to all of these partners, which calls for putting money into technology and product. Would this take several years? Probably not. My sense is we view it as spanning a number of quarters instead. So for sure, this year's margins will land under the midterm guidance figure. Sure, if we’re talking about H1, then yes—but as things improve step by step each quarter, we ought to finish this year positioned to hit margins next year that are a lot nearer to the midterm target; and after that, in a best-case scenario, as we move into the latter part of next year and past it, we’ll already be nearer to those past levels in the low to mid-70s.

I appreciate the thorough response. Regarding foreign exchange, I hear you saying that overall you anticipate emerging market currencies weakening against the U.S. dollar, yet as you've observed, specific markets can affect the company. Once more, Argentina, Egypt, Turkey — are there any additional currencies we ought to monitor closely?

Okay, so when we think about the 2024 business, Argentina in particular has kind of settled down. There's been an uptick in our Argentine operations; during Q2, it was among the top performers. Keep in mind, that's not due to spreads widening sharply there, even though they did widen, but rather because our Argentine business genuinely sped up. So the currencies that have historically been more unstable and have had a larger effect on operations are the Argentine peso and the Egyptian pound. I'd keep an eye on those, but the risk is much lower now, particularly Argentina, compared to where things stood a year ago. The Egyptian pound, as I just said, spreads have narrowed, but volumes in that market rose over 30% quarter over quarter; so I'm not sure how much further tightening can go. Turkey presents an interesting chance for us, though it remains a very, very tiny business; we're starting to see greater interest and are providing increasingly more services there as some other global processors exit, yet it's still a minor one for us. So I'd suggest focusing on the gross profit disclosures we provide, and those are the currencies worth monitoring more closely. Brazilian Real, Mexican Peso, Chilean Peso, Argentine Peso, Egyptian Pound, Nigerian Naira.

Much appreciated. And once more, I appreciate you providing that extra disclosure. That helps a great deal. Thanks.