DLocal Limited (DLO) Earnings Call Transcript & Summary

Good afternoon, everyone, and thanks for being with us today for the fourth quarter 2024 earnings call. Should you have missed the earnings release, you can find a copy in the financial section on the Investor Relations website. Joining us on today's call are Pedro Arnt, our Chief Executive Officer, Mark Ortiz, our Chief Financial Officer, and Mirele Aragão, our Head of Investor Relations. We've provided a slide presentation to go along with the prepared remarks; this event is being streamed live over webcast, and you can access both the webcast and the presentation through dLocal's website at investor.dlocal.com. A recording will be made available shortly after the event ends. Before we go further, I'd like to note that any forward-looking statements contained in the presentation or made during this conference call rely on information currently available along with dLocal's present assumptions, expectations, and projections regarding future events. While the company considers our assumptions, expectations, and projections reasonable in light of currently available information, you should be cautioned against placing undue reliance on those forward-looking statements. Actual results could differ materially from those contained in dLocal's presentation or discussed during this conference call for numerous reasons, including those outlined in the forward-looking statements and risk factors section of dLocal's filing with the Securities and Exchange Commission, which can be found on dLocal's Investor Relations website. I'll now hand the conference over to dLocal. Thank you. < > Here at dLocal, we're unlocking the power of emerging markets, allowing businesses to transact and thrive where tremendous growth potential is only starting to unfold. The year 2024 stands as proof of the strength and resilience of our business model. We saw extraordinary growth. Our TPV rose 45% year-over-year, hitting a record of $26 billion. This result came from robust performance across a range of verticals, countries and products, showcasing how our business has become more diversified. Beyond that impressive volume growth, we also posted a gross profit of $295 million and adjusted EBITDA of $189 million. Even with continued investments meant to support growth opportunities. Our adjusted EBITDA over gross profit margin stayed at a solid 64%. All of these figures demonstrate the strength of our financial model, which delivers a rare mix of growth and high margin profitability as we build the foundations for scalable and profitable growth in the years ahead. Our investments during the past year centered on several key initiatives. None of these accomplishments would have been achievable without our committed team, whose local expertise and presence in emerging markets have become vital to our merchants. During 2024, we brought on 194 new talents, growing to 1,095 team members spanning 49 countries. A significant portion of that increase came from our technology and product team, who work intensively to innovate our product portfolio, build new features that enhance performance for our merchants, and broaden payment methods, all while keeping cost and operational efficiency a priority on both the cost and OpEx fronts. In 2024, we rolled out 20 fresh pay-in options and 7 for payouts, plus we brought in nearly 100 additional partner integrations. That gives us redundancy, keeps costs efficient, and lets us unlock the newest and best payment features. Our new payment orchestration product for merchants went live and scaled up, running with a completely localized operation. We kept looking for ways to push transaction approval rates higher and bring processing costs down. To start, network tokenization went live with 7 processors spanning 10 countries. Next, we introduced and then kept refining our Smart Request feature — a new AI engine that adjusts the card authorization message on the fly for acquirers, which lifts conversion rates. Last, we built a fresh cost optimization engine for our Smart Router, and it has lowered what we pay to process transactions while keeping approval rates as high as possible. We also collaborated closely to upgrade the customer experience, cutting our support response time by 88% in nine months and bringing issue resolution time down by 45% thanks to AI implementation. On top of that, our product suite keeps getting rebuilt from scratch, which opens up a long list of use cases and setups, and we keep making our merchant dashboard easier to use. Everything our various teams have done together shows up in our competitive pricing, better conversion rates, and customer experience. Because of this, we deepened ties with merchants already on board, hitting a TPV retention rate above 140% for 2024. We widened our footprint by bringing new merchants onto the platform — the 2024 cohort hit a record level of first year TPV — and our NPS rose by 8 points versus the first half of 2024, landing at high levels for the industry. All of that let us finish the year with over 700 merchants served across more than 40 markets, even as we stick to a disciplined approach to expense management. We've achieved substantial efficiencies through a methodical approach to renegotiating with processors and brokers on cost, strengthening hedging strategies to minimize currency losses and reduce costs, and optimizing structures and flows for tax efficiencies. We've also obtained nine new licenses globally, which lets us broaden product offerings, reach new growth opportunities, and link merchants with emerging markets. Looking back at 2024, we take pride in what we've done; these results show how we can adapt and thrive in a dynamic market, thanks to our team's dedication to commercial efforts, technological innovation, and execution capabilities. In 2025, we stay committed to delivering sustained growth and value to our stakeholders as we keep exploring the growing total addressable market of cross border payments, driven by shifts towards payment digitalization, the growing importance of emerging and frontier markets, and the surging demand for cross border and instant payment methods. dLocal, Unlocking the Power of Emerging Markets.

I appreciate everyone being here today. As we go through a look back at how we performed during the quarter and the year just completed, I want to begin by revisiting the investment thesis that sits behind dLocal. Just as that earlier video showed and just as we've said many times, we see five pillars supporting this thesis. To begin with, an enormous addressable market, thanks to the unrealized opportunity in emerging and frontier markets as payments there become digital and as international merchants bring their offerings to the global south — worth recalling that emerging markets hold 85% of the people on earth, and that 2/3 of worldwide growth through 2035 will originate there. Next, steady and substantial top line expansion, powered by a demonstrated history of creating value for the most advanced global digital merchants on the planet, which has let us take a market leading portion of the growing TAM I just described. Third, a business with appealing margins that holds the potential for operational leverage once the foundational blocks are in place and additional scale benefits start to materialize. Fourth, a financial model producing robust cash, since net income that translates efficiently into free cash flow yields ever greater available cash. And last, a robust pipeline of innovation. We're putting money behind our product development capabilities to create further growth vectors for dLocal; these vectors will emerge from new categories, including stable coins and APMs, among others. We're already concentrating on new products set to launch this year and in years to come, which will produce additional midterm revenue streams. Ongoing feature innovations that assist us in maintaining high recurring business from our merchants, plus possible MA activity, since we view the cross border fintech space as ready for consolidation at appealing valuations down the road. Our fiscal year 24 results demonstrate how that investment thesis is still intact. Turning to the size of the market: we hit a record $26 billion in TPV, and growth sped up to 45% versus a year earlier. Our mix keeps moving toward newer markets that are more attractive, even as the core ones bounced back after being soft in Q3. To give you a sense of that, TPV retention for 2024 landed north of 140% — proof that constantly rolling out new things for our merchants' businesses earns us strong loyalty and repeat business. Revenue and gross profit set records too, at $746 million and $295 million. Adjusted EBITDA as a share of gross profit margins closed the year at 64%, though it climbed steadily over the course of the year, and net income to free cash flow of own funds conversion finished the year past a 100% rate. The solid numbers we delivered in 2024 need to be put in context of two factors: a first quarter that we freely acknowledge came in soft, after which we posted three straight quarters of increasingly better performance, plus the investment cycle we're still in, which is meant to make our business far more scalable down the road. The annual video you just watched highlights a number of those investments, along with the early results we're starting to see from them. Heading into year-end with genuine momentum, it's encouraging that across the important metrics we've delivered consistent gains since Q1 — I'll flag those shortly as I walk through a quick summary of how Q4 24 turned out. The positive momentum we saw in the previous quarter continued into Q4, and despite a tough comparison against Q4 2023, our TPV increased by more than 50% year-over-year during that stretch. When we look at it quarter-over-quarter, TPV growth accelerated to nearly 20% Q-on-Q, driven by seasonality in the e-Commerce vertical along with strong performance in remittances and ride hailing categories. We remain confident that this growth continues to reinforce our position as a trusted partner for global companies looking to conduct business throughout emerging markets. Our results were spread across a well-diversified set of countries, with meaningful contributions coming from Argentina, Egypt, the other Latin American market segment, and other Africa and Asia. Our continued push into additional frontier markets is fueling consistent increases in both cross-border and domestic-to-domestic payment activity. On the profitability side, this quarter set a new high for gross profit at $84 million. The net take rate came in at 1.1%, which mirrors a market pattern in which greater volume leads to reduced take rates, alongside a larger portion of payouts that carry lower take rates, and lastly the weakening of currencies in emerging markets. To counterbalance this, we keep pursuing cost efficiencies via renegotiating with processors and brokers as well as refining our hedging approach. We are also steadily advancing into markets and verticals with higher take rates, which over time ought to partly counteract the pressure on take rates. Even as we keep ramping up what we spend on our engineering organization, our operational abilities, and our licensed portfolio—all to back our longer-term growth goals—adjusted EBITDA for the quarter still reached a fresh high of $57 million, and our adjusted EBITDA over gross profit margin climbed sequentially to 68%. Another area where the financial model shines is cash generation, which remained strong as the free cash we can put toward our capital allocation strategy keeps growing. Because that cash generation is sustained, we have more room to maneuver when we weigh MA buybacks or putting money back into the business in a disciplined way. One thing worth flagging before I wrap up my comments on how our license portfolio has progressed. During 2024, we kept adding licenses and registrations, as we said we would, and that included nine more of them. That reinforces our view that a wider portfolio of licenses will, over time, turn out to be a competitive edge. The standout among them, and one worth calling out, is the Authorized Payment Institution License that the United Kingdom's FCA gave us. With this portfolio expanding overall, we can give our merchants more regulatory confidence, and even more significantly, it shows we are dedicated to compliant practices and to being subject to regulatory oversight. So, to wrap up: in terms of steady TPV growth control, a declining take rate, and balancing investment for future growth against a healthy margin and free cash profile, Q4 was a successful finish to 2024. We're still intensely committed to what we set out to do — making it possible for emerging markets to realize their potential — and we do that by always earning our clients' confidence and deepening the ties we have with partners, which lets us grow digital products and services across the Global South; having said that, I'll now pass things to Mark, who will walk you through a fuller picture of how the quarter's results came together.

Thank you, Pedro. Good afternoon, everyone. As Pedro said, the results for our fourth quarter represent a solid finish to the year, showing healthy expansion and underscoring how robust our business model is. We close out 2024 following three quarters of increasingly better outcomes, supported by ongoing diversification of our operations across different regions; that broader global footprint comes through clearly in what we delivered in Q4. Brazil and Mexico, which are our two biggest markets, saw sequential reacceleration in TPV growth, yet gross profit fell in those markets despite that. Our consolidated revenues, gross profit and adjusted EBITDA all hit record highs, powered by expansion and strength in our remaining geographies. Consequently, we posted TPV of $7.7 billion, which is up 51% year-over-year and 18% quarter-over-quarter. On a constant currency basis, because emerging market currencies were broadly weak, those growth rates look even better — roughly 30 points greater year-over-year. Looking at it by business line, cross border flows rose 23% quarter-over-quarter and 67% year-over-year, largely fueled by the Commerce, Financial Services on-demand delivery and SaaS verticals. Local-to-local TPV climbed 14% quarter-over-quarter and 38% year-over-year, with robust results in Brazil, Mexico and Argentina. Our pay-ins business expanded 15% quarter-over-quarter and 44% year-over-year, performing well in the seasonal commerce category and in ride hailing across multiple countries. Payouts grew 26% quarter-over-quarter and almost 70% year-over-year, propelled by financial services and remittances merchants. Turning to revenue, we crossed a milestone above $200 million in Q4, which represents 9% growth year-over-year. Argentina and Egypt drive this outcome, since revenue in both rose substantially. Other markets, especially Colombia and South Africa, saw strong growth in commerce, ride hailing and SATS < > verticals. Mexico expanded sequentially, both annually and quarterly, at 14% and 4% respectively, albeit more slowly than in earlier quarters, decelerating because of higher growth among tier 0 merchants combined with a change in the payment mix. These favorable year-over-year figures offset reduced revenues caused by currency devaluations, chiefly in Nigeria from the Nairo devaluation in February of 2024. Had currencies stayed constant, revenue growth for the period would have come in near 40% year-over-year. Revenue also took a hit from lower take rates tied to the standalone payment orchestration option we rolled out at the end of Q3, which, on a brighter note, enabled volume recovery in Brazil compared with the preceding quarter; beyond that, Brazil was affected too by a change in the payment mix; on a quarter-over-quarter basis, revenue rose 10%, lifted by higher volume in Egypt and by favorable results in other LATAM and other African Asia, with standout performance in South Africa, Turkey, Colombia and Ecuador; now shifting to gross profit dynamics. In the quarter, gross profit hit a record $84 million, up 20% year-over-year. Let's begin with LATAM, where gross profit came in at $56 million, a 3% rise compared with the same period a year earlier. That was primarily fueled by higher volumes in Argentina, Mexico, and other LATAM markets, though these gains were largely canceled out by Brazil, for the reasons just covered, along with currency devaluations. Turning to Africa and Asia, gross profit delivered exceptional growth of 82% versus a year ago, powered by our TPV expansion in Egypt, the TPV ramp up of our commerce merchants in South Africa, and solid results in other Africa and Asia markets, Turkey and Vietnam among them. As discussed earlier, this geographic diversification sits at the heart of our strategy, since it lets the company keep growing at a rapid clip even when a handful of our countries face near-term headwinds. Looking quarter-over-quarter, gross profit rose by 7%. Within LATAM, gross profit was up 1% from the prior quarter, lifted by Argentina's positive performance. That outcome was offset by drivers in Mexico and Brazil, as laid out in the earlier section. Worth noting is that other LATAM markets, which keep expanding TPV, were hurt on a quarter-over-quarter basis by the strong growth in Q3 stemming from widening FX spreads in certain smaller markets, as disclosed in the previous quarterly results, which narrowed this quarter. In Africa and Asia, gross profit climbed 21% quarter-over-quarter, with the standout items being positive performance in Egypt, Nigeria, and Turkey across categories including remittances, financial services, ads, and streaming. As Pedro already noted, during Q4 we chose to pick up the pace of certain investments aimed at building out our capabilities. It bears emphasizing that these investments target core areas so we can drive efficiency in our business and secure future growth, all while keeping our lean and disciplined structure. Given that, for Q4 our total operating expenses hit $41 million, which is a 12% sequential increase and a 44% increase versus a year ago. On an annual basis, the bulk of the OPEC’s growth remains concentrated in product development and IT capabilities, with those expenses up 70% year-over-year, whereas combined sales and marketing and G&A expenses rose by 29%. We anticipate this tilt in allocation toward product and IT will persist going forward. On a quarterly basis, tech and development expenses edged slightly lower, as higher headcount was offset by cutbacks in other IT expenditures. Combined sales and marketing and G&A expenses were up 11%, fueled by our ongoing investment in operating capabilities along with marketing investments. Consequently, we posted an operating profit of $42 million for the quarter, 3% higher quarter-over-quarter, and adjusted EBITDA of $57 million, up 9% quarter-over-quarter, which works out to an adjusted EBITDA margin of 28%, matching last quarter. The ratio of adjusted EBITDA to gross profit came to 68% for the quarter, one percentage point above the prior quarter, marking the third straight quarter of improvements. Shifting to net income: net income totaled $30 million for the quarter, an 11% increase quarter-on-quarter and 4% higher year-over-year. Relative to the quarter before, the outcome took a hit from a favorable non-cash mark-to-market impact tied to our Argentine bond holdings, along with reduced finance costs, though that was partly counterbalanced by greater taxes. For the quarter, our effective income tax rate came in at 27%, and for the year it was 20%, shaped by an income tax settlement tied to earlier periods. If you set aside that tax settlement, our effective income tax rate was 16% in the fourth quarter and 17% for the year, versus 16% in 2023, driven by a somewhat larger local to local portion of pretax income. Finally, and this matters a great deal, free cash flow in the quarter — meaning net cash from operating activities, excluding merchant funds less CapEx — reached $33 million, an increase from $26 million in Q3, which works out to a 25% rise. Thanks to this ongoing cash generation, we were able to make our liquidity position even stronger. With that, I'll turn things back to Pedro for closing remarks.

Thank you, Mark. Before we wrap up what we have to say, I want to address the guidance for 2025. To start, the robust TPV growth outlook mostly reflects our strategic emphasis on emerging as a scale leader across the medium term. That pushes us to place priority on avoiding price-based contract losses, particularly in bigger markets, alongside higher share of wallet and the ongoing ramp of our major global Tier zero merchants — notably the key ones brought on board during the 2023 and 2024 cohorts — plus fresh opportunities moving through the pipeline, both in regions where we remain nascent and in verticals we are moving into, where sizable volume potential exists. We are guiding toward revenue growth that demonstrates this continuing top-line momentum and also underscores that our blend of revenue expansion, margin profile, and free cash generation is fairly uncommon. Not many businesses today combine our level of profitability with the rate at which we are expanding revenues and our consistent free cash production. Our projected gross profit guidance — a metric we weight more heavily than revenues when running the business — indicates a growth range built on these assumptions: we expect a greater share of transactions from those Tier zero merchants, who usually carry a reduced take rate, as we keep raising share of wallet and pursue global expansion of these relationships, alongside steady growth in local-to-local transactions that also carry a reduced take rate. Meanwhile, our cross-border segment ought to keep delivering faster growth, as it showed across 2024, along with competitive pricing in major markets like Brazil and Mexico, following our emphasis on gaining market share and TPV growth, as I noted earlier. Then, lastly, there is the ramp of the new standalone orchestration model introduced at the close of Q3 2024, which likewise carries a reduced take rate. Furthermore, on guidance, because of our footprint in emerging markets and the typical currency swings in those areas, we expect possible narrowing of FX spreads in some geographies. Taking all of those assumptions together, a net take rate compression should be anticipated even while we deliver elevated TPV growth, including at the scale we have already reached. Across the medium term, we will strive hard to sustain that robust TPV growth, while acknowledging that, because of the exceptionally high retention levels we achieve, our bigger merchants will keep qualifying for lower pricing tiers and contracts. Our aim will be to counter this take rate compression via expansion in the higher take rate new verticals we are chasing, a natural mix shift toward higher take rate frontier markets and away from Brazil and Mexico — even though we continue growing well in those large markets — and additional revenue streams from new product rollouts and ongoing innovation. Lastly, concerning the adjusted EBITDA growth range, we assume our disciplined investment cycle continues, preserving, as in 2024, a balance between top-line growth and profitability. When it comes to where we're putting our money, it's still all about product and development, and growth in that area is actually rising faster than gross profit growth. We're also continuing to invest in our license portfolio, which brings its own benefits, though there's also the added cost of regulation to consider, plus ongoing spending to build out our local operations teams in markets that are just starting to ramp up. Even with all of this spending, we expect to see operational leverage come through, with our adjusted EBITDA to gross profit ratio getting better year over year, and we're still on track to reach the levels we've achieved before once this investment cycle wraps up. As you're aware, we operate in some of the world's fastest growing and most dynamic markets. The digital payments opportunity throughout emerging markets is enormous, and we keep seeing robust demand, rising penetration, and long-term structural tailwinds that underpin our growth. That said, the very character of our markets, which works in our favor, also brings volatility, whether from macroeconomic shifts, regulatory changes, or currency fluctuations. And although we have a great deal of confidence in our capacity to deliver sustained high growth results over the long-term, we think that giving midterm guidance sends a signal of predictability that isn't really accurate over a multiyear timeframe. That's why we've decided to stop providing midterm guidance for now. We'll keep focusing on strong operational execution so we can meet the annual targets we disclose, and we'll stay as always transparent in how we communicate, sharing the key drivers, both good and bad, of our performance against those annual targets. Last, some thoughts looking ahead to 2025. We're still confident in our ability to execute and maintain the momentum we had exiting 2024. The investments we've made over the past year in technology, product innovation, and market expansion put us in a good position for the next phase of growth. While we've just acknowledged the inherent volatility of emerging markets, we believe our disciplined approach to scaling the business, our deep local expertise, and our dedication to delivering value to merchants will keep setting us apart in the industry. Our strategy stayed focused on capturing the vast potential of digital payments across high growth regions, driving operational efficiencies, and reinforcing our market leadership. We're excited about the opportunities ahead and are committed to executing with the same rigor and discipline that have defined our success so far; we thank you for your continued trust and support. And with that, we're glad to take any questions you may have.

Evening, Pedro and Mark. Thanks for hosting the call and letting me ask something. If it's alright, I have two things to raise. First, when you put the guidance together, what's your approach to FX? It acted as a headwind during 2024, after all. On an FX neutral basis, I believe you said growth was around 80%, and I think that figure was for the quarter. So the outlook for this year does suggest a deceleration. Still, are you assuming possibly additional currency depreciation? At the start of the year, we've seen some appreciation. I'd just like to grasp your thinking on FX. I realize many countries are in the mix, but could you walk us through your approach when the guidance gets set? Then for my second one — I understand you're dropping the mid-term guidance, which seems reasonable, but to help us frame the long-term growth picture, could you explain where you believe you stand regarding wallet share with your merchants? Broadly speaking, I think the industry is expanding. How do you view overall payments growth across the market you operate in, plus your wallet share, so we can at least try to gauge what that long-term growth might look like? Thanks.

Appreciate that, Tito. Now regarding the FX component — as we construct that bottom-up view merchant by merchant, our aim has been to avoid loading in excessive assumptions about foreign exchange. In effect, it largely takes it that FX rates stay broadly level from where they closed out the prior year.

So in a way, and I apologize for cutting in, but basically you're describing it as if it were on an FX-neutral basis, is that right?

I'd say that's reasonable. So my view is that if we keep seeing the currency weaken, that's going to work against us. But should the patterns from Q1 persist, then there could be a benefit on our side.

Okay, perfect. Great. Thanks, David. Sorry to cut you

Regarding how big the addressable market is and what the payments opportunity looks like, that is likely the single most important element of the investment thesis. Whenever you talk with merchants around the world, it quickly becomes obvious that apart from the biggest, most sophisticated players, a meaningful share of their international cross border activity is still handled via international acquiring. A lot of them have only just started to genuinely take advantage of local payment methods and alternative payment methods, and all of that will only drive greater adoption and usage throughout the global South; so our optimism about the potential for TPV growth at sustained high levels is extremely strong, since we believe the market will keep producing tailwinds across a long stretch of time purely because consumers in emerging markets are becoming more digital. If you consider how our business mix is shifting, gradually tilting toward countries that are newer in our portfolio while slowly receding from the larger markets, that strikes me as a very strong signal of just how much opportunity remains. The portion of our merchants' overall wallet coming from those smaller markets is still very low and will keep expanding; and on top of that, our capacity to take share from international acquiring across a growing number of markets remains very, very large.

Okay, great; that’s helpful. Thank you, Pedro.

Hello Pedro, hello Mark. Thanks for the presentation and for taking questions. I have two. The first concerns cash. We saw a significant drop in cash during the quarter. You included a note in the release about a temporary settlement delay and also some changes in settlement with merchants. Could you give us a bit more detail on what those settlement changes actually are, so we can understand how cash moved? My second question is about gross profit in the guidance. The guidance is essentially 20% to 25%, correct? Yet we saw a large ramp up in gross profit during the second half of 2024. I did the math here: 25% midpoint versus the second half works out to just a 10% increase, which looks like a major slowdown ahead at the midpoint. You mentioned some of the factors behind the guidance, but could you give us a bit more detail on where you see pressure, because when we benchmark against the momentum from the second half, it does look like a major slowdown? Thank you.

Guillermo, I'll address the cash flow question first. To start, a reminder that like most payment companies here, we consider free cash flow net of merchant funds, since working capital changes mostly sit in safeguarded accounts or settle very quickly. So our total working capital this quarter was heavily impacted by shifts in merchant funds working capital in two situations. The first was growth in trade receivables from some temporary settlement delays; we had higher volume at year end and saw some delays in those funds reaching us. I'm glad to report that all of those funds arrived early this year in our business. The second is the declining trade payables, and we discussed the shortening of some settlement periods. As Pedro said, we've moved into a new modality with the new orchestration model here in Brazil, and those tend to shorten settlement periods for our merchants considerably. So a mix of those factors, plus we had some accumulated funds on hand that we needed to settle with merchants. Together, all of this drove the reduction in working capital for the merchants and in our working capital and cash flow overall.

And one more thing, if I could. That shift in the settlement window driven by the orchestration product — does it mean you're fronting the merchant an extra 4 days? Basically, what I'm trying to get at is whether this affects net financial results. Did the number of days you funded the motion go up? Is there some mismatch, like you're dipping into our own cash to prepay the motion somehow?

No. What the orchestration product essentially does is that instead of money flowing through dLocal and then onward to the merchant, which creates that float for us, settlement goes straight to the merchants; so I'd call it the opposite. Nothing is being financed by us; it just cuts down the day of merchant funds sitting on balance sheet.

Understood. Alright.

Regarding gross profit, a few points come to mind. To start, like we mentioned, the growth algorithm underlying our guidance still looks quite solid, with TPV expanding really strongly and revenue rising very strongly, which lands us at the midpoint near $1 billion in revenue; after that, it comes from merchants reaching higher contract tiers, along with take rate contraction — which I think is genuinely what produces the calculation running through your mind — yet adjusted EBITDA margins are expanding more quickly than gross profit, even though 2025 remains an investment year, and we think additional operational leverage becomes visible beyond that. Keep in mind as well that seasonality affects the fourth quarter. Therefore, annualizing Q4 alone, or Q3 together with Q4, likely leads you toward a full year projection that is more aggressive than you'd otherwise reach. That said, when you examine growth at the midpoint, what we're basically indicating is our belief that TPV growth can be maintained at a level comparable to full year 2023, even though we're starting from a far, far greater base — reflecting our confidence in keeping merchants as well as bringing on new merchants at a faster pace than in earlier years.