DLocal Limited (DLO) Earnings Call Transcript & Summary

Good afternoon, everybody, and thanks for being with us on the First Quarter 2025 Earnings Call. Should you have missed the earnings release, you can find a copy in the financials section of the investor relations website; joining us today are Pedro Arnt, Chief Executive Officer; Jeffrey Brown, Interim Chief Financial Officer; and Mirele Aragao, Head of Investor Relations. There is a slide presentation that goes along with the prepared remarks. This event is streaming live via webcast, and you can reach both the webcast and the presentation on dLocal's website at investor.dlocal.com. A recording will be made available soon after the event wraps up. Before we move ahead, please note that any forward-looking statements contained in the presentation or brought up on this conference call rest on information currently available together with dLocal's present assumptions, expectations, and projections regarding future events. Although the company believes our assumptions, expectations, and projections are reasonable in light of currently available information, 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 addressed on this conference call for many reasons, including those laid out in the forward-looking statements and risk factors sections of dLocal's filings with the Securities and Exchange Commission, which can be found on dLocal's investor relations website. With that, I'll hand the conference over to dLocal. Thank you.

Thanks, everyone, for being here today. Even with a global macroeconomic environment that grew more volatile in 2025, the year has begun largely as we expected. Building on momentum from prior quarters, dLocal keeps showing strong execution and proving how resilient our business model is, once again hitting record highs on key financial and operational metrics, even though Q1 didn't get a lift from seasonal e-commerce strength. We see consistent sequential growth as confirmation that our company can compound growth over long stretches of time, and in turn deliver shareholder returns. Our TPV net retention rate came in at an impressive 144%; that number shows how defensible our business is with the merchants we serve. Additionally, it's encouraging that total payment volume rose above 50% for a second consecutive quarter, highlighting both the effectiveness of our strategy and steadily growing demand for what we offer; these outcomes demonstrate our ongoing dedication to innovation, customer satisfaction, and broadening our presence across emerging markets. Furthermore, we continue directing strategic investments toward technology and operations that directly drive the quarter's solid performance and establish a strong base for lasting financial results by reinforcing our infrastructure, improving efficiency, widening our service portfolio, and raising our service quality. During this quarter, several key wins stood out. Our total payment volume crossed the $8 billion mark — that's up 53% compared with the same period last year, or 72% when you strip out currency effects, and it rose 5% versus the prior quarter. What's fueling this? Ongoing growth in cross-border payments, with Chile, Pakistan, Nigeria, Turkey, and Brazil providing support, plus strong momentum across a number of verticals. Among those, remittances, commerce, financial services, and streaming made notable contributions. On the top and bottom lines, we posted all-time highs: $217 million in revenue and $85 million in gross profit. Just like in earlier quarters, geographic diversification keeps proving its worth, and this quarter other LATAM markets pitched in meaningfully. We're putting more money into operating expenses to fuel and speed up our growth down the road, but at the same time we're finding ways to run leaner throughout the company. For the quarter, adjusted EBITDA came in at 68% of gross profit, which is a modest gain even against the prior quarter, and that shows we can scale the business well. Even with all the investing we're doing, our revenue per head count has gotten better for four straight quarters. And on top of that, we brought in solid cash, with free cash flow converting from net income at 85%, which underscores how dedicated we are to a model built on rapid growth, widening margins, and strong cash generation. So with that, let me turn to our commercial side and walk through a few of the quarter's key points. More specifics are available in the slides that go with this. What these figures demonstrate is our capacity to preserve and deepen those ties as time goes on, which in the end grows the portion of business we capture from merchants. Our alliance with Temu keeps getting stronger, letting their buyers complete transactions without friction in more than 15 developing markets spread across Africa, Asia, and Latin America. Momentum with Zepz is building in key geographies, with vigorous growth evident across Latin America as well as several countries in Africa and Asia. We remain committed to supporting these merchants as they expand around the globe, launching operations in further African markets — something that bolsters their worldwide footprint even more. Another partnership I want to highlight is Rappi. After we rolled out a set of new features on their behalf recently, they've seen substantial growth in Colombia and Argentina. On the tech side, we concentrated on combining automation with AI to drive operational efficiency and sharpen performance in key areas. As for artificial intelligence, bringing AI in boosted efficiency in both customer experience and compliance monitoring by taking over tasks and decisions that were previously done manually. On process automation, automated systems have enhanced the way chargebacks and refunds are handled, which has notably increased the merchant win rate on chargebacks and accelerated refund flows. As for integration efficiencies, a revamped integration system has sped up setup for new integrations, shrinking the time needed to fully integrate with dLocal from days down to merely a few hours. We have additionally achieved intriguing progress with our MCP server and LLM-friendly API documentation for integrating with dLocal, targeting a near future in which basic prompts let our merchants' engineers finish end-to-end integration with our systems via AI agents. Turning to merchant settlement, rolling out an upgraded settlement system made operations smoother and sharply lowered the requirement for manual intervention in merchant settlements. These automation efforts are starting to produce results. Even more significantly, this is no side project. This is a central strategic priority that will determine our future direction. Over the medium term, those outcomes should produce operating leverage and enhanced capabilities as we steadily integrate these technologies across the entire company in the years ahead. We anticipate that these initiatives will lead to a noticeable slowdown in hiring growth over the medium term, improved operating leverage, and ultimately a more resilient, scalable business. A further significant area of investment focuses on continuously refining performance to optimize conversion rates and TPV while delivering dependable and responsive services to our merchants. During Q1, we continued to improve our smart request strategies. Our machine learning models improve conversion by changing the API message that goes to the acquirer in real time while authorization happens, which adds 1.2 percentage points to conversion. In some African markets, we also introduced smart 3DS, which strengthens security measures for riskier transactions and delivers a 6 percentage point increase in conversion there. Beyond that, we continue to lead efforts on network tokenization readiness and support with networks in Argentina, Colombia, Uruguay, and Peru, which lifts conversion across those countries’ systems—Colombia stands out with a gain of 1.6 percentage points, while Argentina is at nearly 1.5 percentage points. Last but not least, it is worth emphasizing our ongoing work to expand our license portfolio, which strengthens our competitive advantage as our global merchants look to steer through the intricate regulatory landscapes we serve them in. In Q1, our portfolio gained 3 new registrations: a pair in Argentina — one as an aggregator, another as a payment facilitator — plus a single one in Chile, where we operate as a sub-acquirer cross-border system operator. Strong execution across numerous levers of our strategic plan was evident in this first quarter of 2025. Existing merchant relationships were effectively leveraged by our commercial team, and new partnerships were established. Looking at the numbers, we executed our investment strategy in a way that was both disciplined and cost-effective. On top of that, our operations and technology groups drove better outcomes for merchants, and our legal and regulatory people concentrated on growing our license portfolios. With that covered, I'll hand things over to Jeff, who will take you through a closer look at what happened in Q1.

Thank you, Pedro. Good afternoon to all of you. It's a pleasure to join everyone today for my inaugural earnings call in the role of Interim CFO. I'd like to express my gratitude to the board and the leadership team for the confidence and backing they've shown me, and I'm eager to collaborate with each of you going forward. Now let's move on to discussing the quarter's results. As Pedro noted, Q1 has unfolded in line with what we anticipated, extending the patterns we've seen starting from Q2 of 2024; we've steadily carried out our strategy, showcasing robust operational results by yet again achieving unprecedented levels of revenue and gross profit, together with stringent cost control and continued geographic expansion. Consequently, during Q1 of 2025, TPV came in at $8.1 billion, which marks a 53% increase year-over-year and 5% growth quarter-over-quarter. On a constant currency basis, TPV would have risen 72% year-over-year. Looking at it by business line, our cross-border flows expanded 14% quarter-over-quarter and 76% year-over-year, hitting the $4 billion mark for the very first time, largely fueled by remittances, commerce, financial services, and streaming across various markets. Our local-to-local TPV fell 3% quarter-over-quarter while rising 33% year-over-year. The quarter-over-quarter decline stems from commerce results in Mexico, owing to the seasonal pattern in Q4, plus a partial loss of share of wallet involving a major merchant. Our payments segment rose 2% quarter-over-quarter and 49% year-over-year, powered by solid results in on-demand delivery, commerce, and streaming, partly counterbalanced by softness in the advertising vertical. Our payouts segment climbed 12% quarter-over-quarter and 61% year-over-year, propelled by remittances and financial services. Shifting to revenue, it totaled $217 million in Q1, marking an 18% gain year-over-year, or 36% higher on a constant currency basis, fueled by volume expansion in Argentina along with results in other Latin American markets as well as Africa and Asia, with robust growth spanning commerce, remittances, and on-demand delivery verticals. These outcomes were partly counterbalanced by Brazil, which, in spite of achieving volume growth year-over-year, posted a revenue decrease chiefly because of the shift to the payment orchestration model, which carries lower take rates, and a change in the payment mix involving a major merchant. In addition, Egypt showed robust volume growth year-over-year; nevertheless, its revenue results encountered difficult comparisons owing to a broader disparity between the official and market exchange rates throughout the initial 2 months of Q1 2024. On a quarter-over-quarter basis, revenue expanded 6% beyond TPV growth, favorably influenced by a greater cross-border share within the mix. That favorable outcome was partly counterbalanced by Mexico, as I mentioned before. Shifting to gross profit trends, we keep gaining from the growing geographic diversification of our operations. This diversification, as pointed out in prior quarters, allows the company to maintain robust growth momentum, even when confronting near-term difficulties in particular markets. In the quarter, we hit a record gross profit of $85 million. That's a 35% increase compared to the same period last year, or roughly 60% when you strip out currency effects. The drivers were volume growth in Argentina, how we performed in Egypt, and expansion in other markets — Chile and Turkey in particular. Brazil partially offset these gains; besides the revenue impacts I already walked through, it also took a hit from one-off incremental processing costs. Looking at it versus the prior quarter, gross profit rose 1%, led by Argentina, where gross profit tracked revenue trends, along with rising advancement volumes that carry higher take rates, plus a wider spread between official and parallel effects in Q1 2025 compared with Q4 2024, and two additional LATAM markets, with Chile standing out positively. Brazil and Mexico offset this, for the reasons I covered earlier. Beyond that, even with volume growth in a number of countries, other Africa and Asia got dragged down by higher processing costs in South Africa and Nigeria. Net take rate fell four basis points from the previous quarter. The main causes were, first, trouble with a key merchant in advertising, and second, that one-off cost bump in Brazil I mentioned; those drags were partly made up for by stronger effects fees in Argentina, a bigger share of cross-border business, and expansion in frontier markets. Further down our P&L, we stayed disciplined on expenses, which improved operational leverage this quarter. Planned investments in technology and operations should rise over the remainder of the year, but these numbers show our company's frugal culture and the leverage built into our business model; on that basis, total operating expenses for the first quarter came to $39 million — down 6% from the prior quarter and up 8% versus a year ago. Year-over-year, headcount growth accounts for most of the OpEx increase, since we keep investing in our capabilities. Quarter-over-quarter, the OpEx decline comes mainly from lower G&A and technology and development expenses, thanks to reduced third-party services and travel costs, along with the timing of rolling out new initiatives. Partly offsetting that decrease: headcount growth in both technology and operations, especially engineer hiring and expanding our operational footprint in strategically important markets, plus higher sales and marketing expenses tied to key commercial events that usually land in the first half of the year. All told, we posted operating profit of $46 million for the quarter — up 8% quarter-over-quarter and 70% year-over-year. Adjusted EBITDA came in at $58 million, up 2% quarter-over-quarter and 57% year-over-year, which works out to an adjusted EBITDA margin of 27%. Adjusted EBITDA relative to gross profit was 68% for the quarter, a touch above the fourth quarter, and that makes four straight quarters of improvement. Turning to net income: it was $47 million for the quarter, up 57% quarter-over-quarter and 163% year-over-year. Relative to the quarter before, our results took a hit from a favorable non-cash mark-to-market impact tied to investments we hold in Argentine bonds, along with reduced finance costs. For the quarter, our effective income tax rate came in at 10%, versus 27% during the fourth quarter of 2024 — or 16% if you strip out the tax settlement referenced in our previous earnings release — driven by a larger cross-border portion of pre-tax income and smaller pre-tax income in Brazil stemming from elevated costs, as we discussed earlier. And finally, free cash flow this quarter — meaning net cash from operating activities, excluding merchant funds, minus CapEx — reached $40 million, an increase from $33 million during the fourth quarter of 2024, which works out to a 22% gain. We closed out the quarter holding roughly $512 million in cash and cash equivalents, which is $86 million above the prior period, plus $125 million in short-term investments. On the cash topic, you've likely already noticed in our filings that the company issued some announcements about dividends. I'll hand things to Pedro, who can share more.

Appreciate it, Jeff. Turning to how we're deploying capital, we're sharing today that a dividend policy has been given the green light by our board of directors, along with the payout of a special cash dividend. That one-time distribution comes to roughly $0.525 for each common share, amounting to a total cash outlay of $150 million. This move underscores our dedication to delivering value back to shareholders while sticking with a disciplined framework for allocating capital. Having thoroughly reviewed our capital allocation strategy, we determined that adopting a dividend policy fits with our longer-term goals. Over time, our company anticipates producing steady cash flows; that cash generation will be enough to fund our strategic aims, among them potential inorganic expansion via select mergers and acquisitions, CapEx increases whenever needed, and funding for larger business development transactions. Under the dividend policy we're rolling out, an annual payout will be made equivalent to 30% of the company's free cash flow. This method lets us give capital back to shareholders in an orderly way, while keeping the flexibility to reinvest in growth opportunities whenever they emerge. The inaugural dividend under this framework would be paid in 2026, tied to our free cash flow results from the prior year, after audited financials come out and subject to board approval at that point. The 2025 extraordinary dividend is set to go to all shareholders on the record day of May 27th, with June 10th as the payment date. When weighing the most efficient route for returning capital to investors, we closely compared a dividend against share buybacks. Because liquidity in our stock is currently limited, we and our advisors concluded a dividend was the best path. A buyback plan on the order of $150 million, combined with future repurchases on the order of 30% of our free cash flow, would have tightened liquidity further in terms of trading volumes, possibly hurting the stock's performance. Choosing a dividend means we guarantee a direct and fair return of capital to our shareholders, while retaining the flexibility required to carry out our strategic initiatives effectively, and without adding more pressure on the day-to-day liquidity of trading in dLocal shares. Before wrapping up, I want to step back and look at the larger picture as we report how 2025 began. Although near-term macroeconomic headwinds continue throughout emerging markets, we stay profoundly confident about the strength of the secular growth trends molding these regions. A huge and growing addressable market sits at the core of our long-term investment thesis, underpinned by potent demographic and technological shifts. By 2050, close to 90% of the worldwide population below age 20 will live in emerging markets. By 2035, these regions are likewise expected to represent roughly 65% of global economic growth. This young, digitally native population is fueling swift uptake of digital solutions, particularly in fields such as mobile payments, digital wallets, and embedded financial services. These demographic and macroeconomic tailwinds strengthen the case for our investment thesis: an enormous addressable market, rapid top-line expansion, appealing margins, robust cash generation, and a powerful innovation pipeline that lets us lead the market. Meanwhile, worldwide trade dynamics are changing quickly. The continuing debate over tariffs and the breaking apart of traditional trade models are opening doors both for emerging markets and for dLocal. We're witnessing a move toward a more multilateral, diversified global trading landscape, and that move is pushing developed economies to engage with emerging markets in a more strategic way and with greater urgency — conditions that align perfectly with our mission of enabling global merchants to localize and optimize how they handle payments across high-growth emerging regions worldwide. Although global players, including many mega-cap companies, have already adopted localization and alternative payment methods, a substantial share of the market is still, as of now, unserved in this regard. As emerging markets grow more prominent, appetite for seamless, localized payment solutions ought to only speed up, greatly enlarging our total addressable market. Importantly, this shift also highlights how vital flawless execution is. Competition in the sector is anticipated to heat up, yet we keep setting ourselves apart via our capacity to provide dependable, cost-effective, and frictionless payment solutions. Our steady gains in Net Promoter Score — which stem from our emphasis on tackling emerging market-specific payments fragmentation and merchant pain points using bespoke financial infrastructure solutions — demonstrate stronger ties with our partnerships, and the reality that we hold a unique position to capture the incremental volume resulting from these structural shifts I just described. What lies ahead is both enormous and concrete, and we trust in our capacity to grab it. That's why we are reaffirming our full-year guidance and staying entirely devoted to disciplined execution and relentless pursuit of long-term sustainable growth. We appreciate your continued trust and support, and with that, we'd like to take your questions.

Hello there, and good evening. I appreciate you joining the call, and thank you for letting me ask something. There's a single item I have, though I suppose it breaks into two pieces. Pedro, if possible, could you offer some detail regarding how things are growing in Argentina? You brought up that volumes had moved up somewhat. To get a clearer picture of that, I'd like to know how long-lasting this is. Do you see it going higher? Or did seasonality play any role there? Turning to Mexico, I follow why volumes dropped among the commerce players. It's just a partial loss of volume involving the big merchants. Could you share anything further? Would you view that as a possible risk at all, those volumes in that market? I just want to grasp what exactly took place. Thank you.

Okay, Tito. Argentina looks like it can hold up over time. We're seeing more interest there from merchants around the world, and they're looking for additional alternative payment options. As restrictions on capital movement ease step by step in Argentina, we're starting to notice businesses considering that country once more with more positive views and committing further. In Mexico, we have to perform at a higher level and get growth going again. From a structural standpoint, we don't see any reason we can't achieve that through improved execution. Even with the usual seasonal softness, it grew quarter over quarter, so I'd say that's a good sign; regarding the particular reason for losing share, Mexico was, I believe, the top performer for much of 2024, with a handful of merchants accounting for a large portion of that expansion. Even minor volume fluctuations from those merchants can cause a significant deceleration in that country. As we keep expanding and spreading across additional merchants, the effect of any one merchant becomes smaller. There's no merchant attrition. These are minor shifts in share of wallet that could move either way in the coming quarters.

Appreciate that, Pedro. That clears things up. Perhaps we could focus on the take rates over in Argentina, correct? Since you brought up those growing volumes coming with better take rates. How long can that hold up? Especially if Argentina draws more interest, perhaps conditions get somewhat simpler. Do you believe those take rates in Argentina can be sustained?

Okay, so Argentina is among the markets where we offer a full payment suite as one of our products, on a white-label basis. Through that, we're also involved in discounting receivables and providing various financing options to our merchants. No credit risk is attached to this, none of that kind, yet it does create an incremental take rate during times when consumers are purchasing more with installments, which means more receivables are being advanced or factored. This is built into how the business model works. It's built into a specific product, and Argentina has the biggest exposure to that product. My view is that it's sustainable because we enjoy a higher take rate there as a result of periods when consumers buy on longer installments and more factoring takes place.

Okay. That's clear. Thank you, Pedro.

Hi, everyone. Nice work. Solid beginning to the year. I'll pose a pair right at the start so we can clear them. To begin, regarding operating expenses, Pedro, those went up 3%. Adjusted operating expenses rose 3% during the quarter. That appeared to be less than what had been planned for the full year. I'm just attempting to determine, will that return? Was it only short-term? That's the first item. As for that 5 basis point effect from the advertising client, it's on the slide where I already finished the deck. It's that slide where the reconciliation of take rate is shown. I was simply curious, that looks like quite a bit for what appeared to be a single client. Is that assumed to persist under the present guidance, and is there any background on that one? Those are my two questions. Thanks.

Hello, Jamie. It's Jeff here. I appreciate your questions. Regarding OpEx, I'd simply note that there's a modest timing component involved, yet I believe we truly keep ensuring we stay intensely concentrated on the cost structure of the company and simply act very responsibly in that area.

So this is a really big worldwide customer over in the ad sector, and suppose their expansion decelerates compared with everybody else — and that doesn't automatically mean they're shrinking — then what happens is merchant mix shift within TPV, moving away from a merchant that carries a higher take rate and that does substantial business with us in Egypt, and Egypt happens to be among the markets with a really high take rate. When other merchants across other verticals grow faster than that one, the take rate gets pushed lower. What we're looking at here is a mix shift problem. This is a worldwide mega-cap merchant — incredibly, incredibly, incredibly, incredibly large — and that's what accounts for the 5 basis points of impact.

All right, that's clear to me. I'll rejoin the queue later on. Thanks very much.

Thanks, Pedro and Jeff. Congrats on the quarter and on the capital agenda — that was an interesting announcement. I've got two questions. The first concerns other LATAM. Performance there was pretty strong this quarter. I went ahead and worked out the gross profit margin; it came to 40%, so nothing crazy. It looks like it has less to do with take rates and more to do with volumes. I'd just like a bit more color on whether that statement makes sense, and whether you can give a bit more granularity on what happened in other LATAM that made it so strong. The second quarter — well, actually it's a follow-up — has to do with the margins of the business, the EBITDA margins, which were also strong this quarter. I just want to understand how you see the evolution as the quarters go by, whether we should expect these margins to decline for some reason, or whether it's natural to expect them to stay stable or rise somewhat. Thank you.

Sorry — I'm just trying to pull the numbers for you. In the rest of Latin America, total payment volume has been growing impressively in certain emerging-type countries, and those places are expanding as businesses keep internationalizing how they handle payments. One factor is the take rate we usually examine, though you could also evaluate it through gross margin, since you're starting to see a higher take rate in those emerging locations — excuse me, greater volume in those emerging locations that carry higher take rates. That includes certain Central American countries and some South American nations outside the biggest economies. A portion of this comes from better take rates in frontier markets. We've consistently noted that this forms part of our thesis, and it's among the reasons we think that even with a secular decline in take rates, there are significant counterbalancing factors, especially as we keep expanding into additional markets. Within that other Latin America segment, Chile performed especially well. Chile's gross margin profile is higher than Brazil's or Mexico's, and is closer to Argentina's; this stems from the mix of merchants and the mix of payments; that covers the question on other Latam gross profit TPV compared with take rates. I'd say there are two factors reinforcing each other here: TPV is growing robustly, and since these are smaller markets, the take rates they command generally sit above the average. Regarding EBITDA movement, as Jeff noted, part of it comes down to when expenses land across the year on the OpEx side. The pattern isn't linear — we've got more spending scheduled in the quarters ahead. As we've said, this remains an investment year for us. That said, what's attractive about this financial model is its asset-light nature, which leaves considerable room for leverage. If we keep putting money into the business but do it in a smart, disciplined way, then we can still achieve the slight margin improvement we're aiming for in this year. As we come out of this year, the model's inherent leverage ought to start showing up. Now add on top of that all the developments in AI and automation—especially those that assist in making cost structures better, which I attempted to cover in the prepared remarks—I believe that's a good thing for our capacity to get back to the margin levels we enjoyed previously and in time even go beyond them, if you adopt a more medium-term perspective on how we're approaching cost structures and the chance to produce additional EBITDA. But let's not race too far ahead regarding 2025 at this point.

Got it, Pedro. Appreciate the breakdown. Congrats once more.

Thanks. Hey, everybody, and congratulations on the quarter. If I could, two things I'd like to ask. First, Brazil. Could you unpack a bit more the revenue side and the gross profit side there? Revenue has fallen 20% versus a year ago, gross profit is off 27%, and your gross profit margin has slipped 400 basis points. You mentioned a one-off cost hit. What portion of that gross profit drop comes from the one-off? What part of the revenue decline could be recovered? What does the road ahead look like in Brazil, for both revenue and gross profit? Since it remains either your largest or your second-largest market, I think digging deeper into what's happening there matters. Then my second thing: I realize CapEx isn't large for you. You're producing a reasonable amount of cash flow, yet it still seems like sending half the cash back to investors — and, incidentally, since your float is quite small, that goes to the founders. Given these early stages of emerging market growth and e-commerce growth, and everything you mentioned, Pedro, near the close of your presentation about the enthusiasm and the enormous opportunity in emerging markets, wouldn't it make more sense to put that money back into the business? Thanks.

Great. Nice questions, Jorge. Starting with Brazil, where I'd say the glass half full view is that it's starting to level off following several quarters of contraction in volume and in gross profit. At minimum, volumes have started rising once more, though far below where they should be. Similar to what I said about Mexico, there's nothing structural going on. I believe the shift from negative TPV toward at least positive TPV growth is the correct trajectory. As we keep growing and executing, hopefully Brazil can speed up. If it doesn't, that's not about market dynamics. That's strictly execution. To go deeper into what's behind your question, there are two factors. As you may remember, on a year-over-year basis, we had the now notorious repricing from our biggest merchant, which was still in our Q1 2024 figures, so we don't truly lap that until Q2. There was also the shift of part of our Brazilian volume to the gateway product, which, as we noted back then, carries a lower take rate. That's what's causing the gross profit squeeze. Some of it gets lapped beginning in Q2. The gateway product rollout leans more toward the back half of the year. Roughly $2.5 million in one-off costs exist, and those won't recur in later quarters. That's how much these one-off costs affected gross profit in Q1 for Brazil. Brazil remains a massive market with tremendous opportunities for us. We've observed an increase in cross-border activity. A great deal of innovation around picks is showing up, with automated picking solutions emerging, plus digital wallets are appearing more frequently. Once more, provided we deliver on execution, growth should come from Brazil for as long as we can reasonably see ahead, and capturing that opportunity rests on our shoulders. Regarding how we allocate capital, Jorge, I have a few reflections. First, looking back at recent years, the difference isn't especially wide. Specifically, during 2023 the company put more than $100 million toward share buybacks. Then in 2024 it allocated an additional $100 million for buybacks. On your argument about plowing money back into the business to grow, we hear that, yet what makes this business model and financial model so attractive is that capital doesn't have to be poured into it. It's asset-light. Innovation, execution, and differentiation in the service model drive it heavily — not CapEx or margin compression. If anything, as we've stated, this is another year of investment. Whether the market liked hearing that, I can't say, but we're certain it's necessary. We're putting money back into the business, and beyond that there's considerable natural leverage within it. From an ROE standpoint, keeping all that cash sitting on the balance sheet strikes me as illogical. It leaves an unlevered balance sheet holding substantial cash, which from a defensibility angle may not be optimal either. Our execution matches what we've done in recent years: making sure we invest in the places that require it, trusting the business model can produce cash, and returning the share of that cash we judge unnecessary to investors. Doing buybacks when daily float is at this level probably isn't wise, which is why we have the dividend; as for our dry powder, we also hold meaningful short-term investments totaling roughly $120 million; therefore the total cash on hand and the share being returned to investors isn't precisely 50%. Once again, this aligns fairly well with cash return levels seen in earlier years. The business keeps expanding and can invest wherever investment was needed.