Ladies and gentlemen, thank you for standing by, and welcome to the dLocal first quarter 2022 results call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to turn the call over to turn the call over to your host, Soledad Nager. You may begin. Thank you. Good morning, everyone, and welcome to dLocal's first quarter 2022 earnings call. On the call today, I'm joined by Sebastián Kanovich, our Chief Executive Officer, Sumita Pandit, our Chief Operating Officer, and Diego Cabrera Canay, our Chief Financial Officer. We are providing a slide presentation to accompany our prepared remarks. This event is being broadcast live via webcast, and both the webcast and presentation may be accessed through dLocal's website at investor.dlocal.com. The replay will be available shortly after the event is concluded. Before proceeding, let me mention that any forward-looking statements included in the presentation or mentioned in this conference call are based on currently available information and dLocal's current assumptions, expectations, and projections about future events. While the company believes that our assumptions, expectations, and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on those forward-looking statements. Actual results may differ materially from those included in dLocal's presentation or discussed in this conference call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of dLocal's filings with the Securities and Exchange Commission, which are available on dLocal's Investor Relations website. Now, I will turn the conference over to Seba. Hello, everyone. Thanks for joining us today. I'm pleased to share that we are off to a strong start to the year, delivering record Q1 results. Our business continues to show strong growth trends, and we continue to execute our business plan with both our existing and new merchants across our various markets. Our business continues to show resilience to specific factors impacting the global economy, such as challenges in logistics in specific geographies, the Russia-Ukraine conflict, or changes in consumption from the return to work, high inflation in some developed markets, as well as a higher interest rate environment. As discussed in our annual 2021 results, our business benefits from the inherent diversification across geographies, sectors, and products, and has no exposure to Russia or Ukraine. Therefore, and despite the challenging global macro context, our total process volume surpassed the $2 billion threshold for the first time. We more than doubled our TPV, increasing by 127% year-over-year. For the 5th consecutive quarter, we grew our revenue triple digits, reaching $87 million for the quarter and a 117% increase over prior Q1 2021. We continue to retain our clients with a strong NRR of 190% in Q1 2022, as we grew wallet share with our existing merchants and had minimal churn. Adjusted EBITDA for the quarter grew 84% year-over-year to $33 million with a strong adjusted EBITDA margin of 38%, in line with our margin levels in the second half of 2021. This was achieved while we continued to make disciplined investments in our infrastructure and people to support our long-term expansion strategy. Our performance this quarter reinforces our strong growth momentum, and we expect to continue delivering growth supported by the performance of our existing and new merchants using our platforms. On slide four, we have always operated with the philosophy of delivering disciplined, profitable growth. Our adjusted EBITDA for the first quarter of 2022 reached $33 million, increasing by 84% year over year. If we look at our adjusted EBITDA for the last 12 months of 2022, it has more than doubled compared to the last twelve months of 2021, reaching $114 million. That's a 118% increase. In the last few quarters, given our strong profitability, we have continued to strengthen our cash position and our balance sheet. We believe this gives us continued flexibility to execute our long-term growth strategy. On slide five, as I have mentioned, in the first quarter of the year, our TPV has more than doubled year over year. This significant increase has been supported by the fast growth of our global merchants. Our business model is not dependent on the performance and outlook of any single industry vertical. We have merchants from more than 10 different verticals, and every vertical is well-balanced in our portfolio. No single vertical accounted for more than 20% of our TPV in Q1 2022. Although Q1 2022 has been marked by a challenging global macro environment due to the specific factors I have mentioned, our business continues to benefit from the diversity of our merchants across industry verticals, geographies, products, and consumer behavior patterns. We have seen different verticals go through specific cycles, but our overall business benefits from verticals showing strong growth, while another vertical may go through a short-term down cycle, balancing each other out. While individual merchants may have idiosyncratic exposure to these factors, when we look at our overall volume, it remains quite stable. As you can see on the right-hand side of the slide, I'm on slide five, all of our verticals show strong year-over-year growth in Q1 2022. With consumption experiencing the highest growth, increasing by more than 5x year-over-year, driven by both on-demand delivery and commerce. On-demand delivery experienced high growth as we've onboarded a leading Latin American on-demand delivery platform last year, and we have also grew existing customers by taking them to new geographies. Regarding commerce, we have seen our merchants scale their volume quickly, and we have continued to gain wallet share with these customers by adding new geographies and payment methods with them. Mobility increased by more than 2x year-over-year, especially as travel picked up pace around the world. Entertainment and services also experienced high growth, increasing by more than 1.5x year-over-year. I will now hand it over to Sumita to discuss our expansion strategy. Thank you, Seba. On slide six, our merchants are not only well diversified across diverse verticals but also on a geographical basis. An important strategic priority for us is to continue to grow our business outside Latin America. We believe, in the long run, this will further strengthen our business as merchants look for a single API and a single integration to access multiple emerging markets, including markets in Africa and Asia. We have continued to grow our presence outside Latin America, adding Ivory Coast and Rwanda to our infrastructure network during Q1 2022, bringing the total number of countries in which we make our services available to 37. We continue to add new countries based on where our merchants want us to serve them, as well as our internal view of the prospects for a new country across our merchant base and the wider industry. We typically have a merchant in waiting when we add a new country, and this enables us to generate a high ROI on our expansion into a new country. We believe that the infrastructure we are building across geographies makes us an important partner for our merchants to achieve their own growth objectives. We are focused on growing with our merchants as they grow organically. Adding new countries and establishing multiple local connections is complex, and merchants value the infrastructure network we are creating. Slide seven. Our focus on building a global footprint has continued to yield results. We continue to see strong revenue growth across all geographies. Dollar revenues in LATAM increased triple digits by 116% year-over-year to $78 million. Dollar revenues in Africa and Asia also increased triple-digit by 127% year-over-year and represented 11% of our total revenues in this quarter. Our revenues from Asia and Africa was $10 million in the quarter. As a comparison, for the full year 2021, our revenues from Africa and Asia were $21 million. We are pleased with our run rate expectations for our business in Asia and Africa. We expect our share of Asia and Africa revenue to gradually increase over time as we continue to cross-sell to merchants that originally started their relationship with us in Latin America to countries such as Nigeria, South Africa, India, and Indonesia. We are also increasingly starting to see merchants initiate their relationship with us through markets in Asia and Africa and then expanding to Latin America. Slide eight. We continue to invest in our business, responding to the incremental opportunities we face. We are fully committed to further diversify our geographic footprint, especially in Africa and Asia. To accelerate this growth, Jacobo Singer, president of dLocal, is making South Africa his base for the near future to build the team, develop the dLocal culture, and enhance our infrastructure and network, setting the foundations for our long-term growth in the region. In early 2022, we also moved senior leaders to become general managers of our business in Asia and Africa. They have moved to Nigeria and Singapore, respectively, in the last few months. Having senior executive members in these new regions also helps us emphasize and retain our dLocal culture. At the end of the first quarter 2022, we had 562 employees, increasing by 54% or by 197 FTEs year-over-year. During the quarter, we grew significantly in all areas, with particular focus on technology and product and sales and marketing. Our headcount has significantly expanded outside the Americas as we focus on hiring locally to grow faster, reaching about 100 FTEs outside the Americas by the end of March 2022, increasing by 104% year-over-year. We are also proud to share that during the quarter, we've added more than 50+ new payment methods in Asia and Africa. We continue to evaluate, select M&A opportunities to accelerate our growth in those regions. Moving to slide nine. During the quarter, we continued to onboard new merchants with strong prospects. We've added 10+ new significant merchants to our portfolio, out of which five have started to process with us in Africa or Asia. We have been able to not only add new countries but also to deepen our presence in the countries where we currently operate by bringing new merchants and upselling and cross-selling to our existing merchants. We've included a few examples in EMEA and Asia to show our successful land and expand strategy. The increase in the total number of merchants in India, Indonesia, Nigeria, and South Africa shows our continued success in scaling our business in new geographies. For example, in India, we started our operations back in 2018, and during the first year, we provided our services to 5+ merchants. Today, we are processing payments to 55+ merchants in India. Our operations in Indonesia, Nigeria, and South Africa are more recent, but we have more than doubled the number of merchants in these three countries since we opened up these markets. Given our broad offering in terms of products, payment methods, and geographies, our merchants value the convenience of a one-stop shop, and this gives us an immense opportunity to continue scaling our customers and increase the barriers of entry for our competitors. We remain laser-focused on monetizing our existing client base and gaining share of wallet. Diego will now review our financial highlights with you. Thanks, Sumita. Let's start with slide 10. We have seen strong TPV growth during the quarter. In Q1 2022, our TPV surpassed the $2 billion threshold, increasing by 127% year-over-year and 13% compared to the fourth quarter of 2021. As mentioned in slide four, the growth is attributable to the performance and continued growth of our merchants across most verticals, particularly in on-demand delivery, travel, commerce, advertising, and software-as-a-service. I would also like to highlight that we have experienced growth both in pay-ins and payouts during the quarter. For pay-ins, we have seen a steady increase in TPV quarter after quarter. Specifically, in Q1 2022, pay-ins have tripled year-over-year. As we commented during our last earnings presentation, payouts TPV has seen short-term fluctuations in Q4 2021. We are already starting to see improvement in our payouts volume with double-digit growth year-over-year and mid-single digit growth quarter-over-quarter. Revenues also reached a new record high of $87 million during Q1 2022, having grown 117% year-over-year and 15% over the fourth quarter of 2021. As we add new merchants and scale existing ones, our revenue share from our top 10 merchants has continued to decrease from 62% in Q1 2021 to 52% in this quarter. Our revenue over TPV or take rate was 4.2% during the quarter, slightly better than our fourth quarter 2021 take rate of 4.1% and fairly in line with the level seen in Q1 2021 of 4.3%. In this quarter, we saw a slight increase in the local-to-local share of TPV compared to Q1 2021. The local-to-local and cross-border split for this quarter was in line with what we processed in Q4 2021. Let's move to slide 11. Zooming in on our revenues, we continue delivering strong revenue growth both from our existing and from our new customers. Revenues from existing merchants are those revenues that are driven by merchants that were already processing in the same period of last year. Revenues from new merchants are those revenues that are driven by merchants that started operating with us after the same period of last year. As our merchants typically have a 3-6 quarters ramp-up period, we believe that revenues from new merchants are just an indication of the potential of our new customers. During Q1 2022, of the 117% year-over-year revenue growth, 90% or $36 million came from existing merchants. Our revenue from existing merchants continues to grow from quarter to quarter, reaching $77 million in Q1 2022, more than doubling the $33 million that we achieved in the same period of last year. Our net revenue retention for the first quarter of 2022 was a strong 190%. We calculate net revenue retention as the revenues from existing merchants over the total revenues of the same period of last year. As we commented in previous earnings presentations, we do not expect to maintain the same net revenue retention levels in 2022. 2021 represented an all-time high in terms of revenue and TPV growth, and therefore, we expect the comparison to get tougher starting from the second quarter of 2022. We reaffirm our expectations that we provided during our previous earnings in March 2022 that we expect to maintain a healthy net revenue retention north of 150% in the full year 2022. The remaining 27% year-over-year revenue growth or $11 million came from new merchants. This compares to the $7 million recorded in the same period of 2021 and $8 million in the fourth quarter of 2021, increasing by 61% year-over-year and 43% quarter-over-quarter. Moving to slide 12, we continue to expand our gross profit and EBITDA. Starting with our gross profit, as we have mentioned in the past, our commercial focus is to increase our gross profit dollars per merchant. As a result, our gross profit continues to grow at a healthy rate. We were able to scale our gross profit to $44 million in Q1 2022, up 87% year-over-year and 12% quarter-over-quarter. Gross margin came at 50%, in line with the margin levels seen during the second half of 2021. Our cost of processing for the quarter represented 2% of our TPV compared to 1.9% in the fourth quarter of 2021 and 1.7% in the first quarter of 2021. These increases were mainly driven by a change in business mix. Pay-ins, which have higher processing costs, increased their relative contribution, particularly year-over-year. Moving to adjusted EBITDA, it was $33 million for the first quarter of 2022, increasing by 84% year-over-year and 13% quarter-over-quarter. We are pleased that our adjusted EBITDA margin was 38%, in line with our margin in the second half of 2021. For 2022, we affirm our expectations that we provided during the last earnings that we expect our EBITDA margin to remain north of 35%. If we look at operating expenses for the quarter, excluding one-time and non-cash items, we see that they have grown 95% year-over-year as we expanded our team and other more senior members. In addition, we increased our travel and in-person marketing events as things went back to normal, and we also increased third-party professional services as part of becoming a public company. With that, I will turn the call back to Seba to conclude. Thanks, Diego. Before moving to the Q&A section of today's earnings call, let me say that we are excited about the opportunities that we foresee for the rest of 2022 to continue expanding our payments infrastructure across emerging markets. We remain committed to agile decision making and providing tailored solutions for our merchants to help them achieve their growth plans in emerging markets where we operate. As shown throughout the presentation, our business truly benefits from the diversity of our merchants, geographies, and consumer behavior patterns. Therefore, we reaffirm our expectation of our net retention rate to be at a 150+ level in 2022, and we expect a healthy new client revenue based on the current pipeline we see despite the global and macro uncertainties. Disciplined growth will continue to rule our business. We focus on making every merchant dollar accretive. Our strong performance of the quarter has led us to a combined revenue growth rate plus EBITDA margin of 115%. We continue to expect our EBITDA margin for the full year 2022 to be north of 35%. We continue to expect operating leverage in the medium term and therefore the ability to expand our margins. Our business is stronger than ever before, but our aspirations are even greater. We are just getting started. Thank you to our merchants, employees, and investors for their continued support. With this, I turn it back to the operator to open it up for questions. Thank you very much. From the queue, please press star one, and Sebastián will be hosting the Q&A. Our first question comes from Jorge Echevarria with Morgan Stanley. Hi, Sebastián, Diego, and Sumita. Thank you for taking the time to answer questions. Can you hear me? Yes, Jorge. How are you? Good morning. Oh, great. Perfect. I have two quick questions. First, could you share some color on TPV mix dynamics this quarter? I understand you don't provide guidance, but TPV has shown no correlation with e-commerce volumes in the region. Could you explain how should we think about TPV growth going forward? My second question is regarding the EBITDA margins and investments in technology. You said that you are reiterating the guidance above 35% this year. You reported 38% this quarter. Could we expect, you know, lower margins in the coming quarters and a material increase in technology expenses going forward? I ask because, you know, $1.4 million in technology expenses looks, you know, somewhat low relative to the growth opportunity and the scaling costs required to capture this growth. Also considering, you're starting to ramp up other products like issuance as a service, dLocal Go, so shouldn't tech expenses ramp up? Thank you. Jorge, thanks very much for the question. Let me just add that Jacobo, our president, is also joining the Q&A today. In terms of TPV mix, I'll let Diego give the dynamics in terms of growth. Fundamentally we are seeing both products with very healthy growth. We've shared in Q4 the split and the evolution of those two products. The reality is that we don't see the business that way. We're always thinking as from a merchant standpoint. At times they'll choose more payouts over pay-ins. We are very bullish on both and we think that they're both highly complementary. In terms of your question around tech expenses, it's a fair point. We continue to invest really heavily on tech. If anything, that's a place where we've added the most headcount. Keep in mind, many of our hires are coming, or all of our hires in the tech side are coming in emerging markets. So that's why you probably expect a slightly different cost structure than what you would expect from other companies hiring in the U.S. or even in Europe. We are not shying away from any expenses on the tech side. We want to make sure we continue to compound on our growth. The way to do that is continue to add more geographies, more products, and make our infrastructure more valuable. Diego, I don't know if you want to add something on the TPV mix. Yes, we are very happy that as we commented in Q4, we are already seeing payouts picking up. As we mentioned in the script, both pay-ins and payouts grew quarter-over-quarter in the period. In the case of pay-ins, mid-teens, and in case of payouts, mid-single digits. We see huge opportunities in both fronts. I mean, in terms of take rate, as Seba mentioned, we are mainly focused on growing revenue, and TPV is more like an output. Conceptually, typically TPV grows in line with revenues or somewhat higher. We don't guide specifically on TPV. Jorge, just to complement on your point, our guidance is not 35%, it's 35%+ in terms of TPV. Oh, yeah. Yeah. Perfect. Thank you so much. Thanks for the question. Our next question comes from Tito Labarta with Goldman Sachs. Hi, good morning, Seba, Sumita, and Diego. Thanks for the call and taking my questions. First question on the net revenue retention rates, you know, you're still well above the guidance at 190%. You're guiding for 150%+. I think, Diego, you mentioned that should come down, particularly because of tougher comps next quarter. That's right, you know, you should be much closer to that 150% in Q2. Also, just to complement that, I think, you know, we've seen e-commerce in general globally kind of suffering a bit. Streaming services showed, you know, subscribers falling, yet you continue to deliver. Just can you give some color on sort of like the health of your merchants, particularly, you know, with what we're seeing happening globally and how that could impact, you know, growth and then net revenue retention rate? Thank you. Sure. Tito, I'll take the second part of the question, and Sumita will cover the first part. We are very proud of the quarter we just posted. It's been our best quarter ever. I think it's a function of our business being extremely diversified in terms of products, geographies, and most importantly, vertical. No single vertical accounted for more than 20% of our revenue in the last quarter. We do expect to see different verticals going through ups and downs. We've seen it again and again in our history. We've seen it last year with COVID. Even through crises like those, we managed to grow. The reality is that having a very diverse business with no concentration whatsoever, we believe acts as a very strong hedge. The other thing is that emerging markets continue to be a focus for the companies we serve. Many of our merchants are having harder time to find growth in their core markets, and they continue to double down in the emerging markets where we operate. Genuine diversification, making sure we are serving them with more products across more geographies, we think it's gonna be a great predictor of our growth in the future. That's our core focus. Sumita, I'll let you cover on the NRR side. Thanks, Seba. I think, Tito, the point I would also emphasize is that this is our 5th consecutive quarter of triple-digit growth. As you saw, we've grown 117% year-over-year as far as our revenues are concerned. I think it's coming from both existing and new merchants. On existing merchants, I think we've been pretty consistent about where we think our NRR will mature. We've always said it is around the 150%+ NRR region. As you've seen last quarter, our NRR was 198%. This quarter, we are at 190%. Our expectation for the full year is 150% +. I think there'll be some, I would say, changes, quarter-over-quarter over the next few quarters. Keep in mind also that last quarter, the second quarter of last year was a very high benchmark, meaning that we had an excellent performance last year. You expect the NRR for the next few quarters to reflect that. We are still extremely bullish, and we believe that we will stick to our 150%+ NRR expectation for the full year. Great. Thank you, Seba and Sumita. A second question, just to follow up on the EBITDA margin and kind of margins in general. You know, you stayed above that 35% plus margin that you're guiding for. Expenses, they grow a little bit less than revenues. Just in terms of how that kind of may evolve through the year, I think, you know, previously you mentioned maybe the first half of the year you see a bit more pressure on margins. I don't know if how you tailor investments throughout the year, if there'll be any seasonality effect in terms of the margins outlook. Also just specifically on the gross margin, which was a little bit lower this quarter. Can you talk about the just the different dynamics or different margins between, I think, pay-ins versus pay-outs? Which one has better gross margins or which of the products impacted the margins specifically? Yeah. Tito, I'll take the second part, and I'll let Sumita cover the first part. In terms of gross margin, we are extremely proud to have added $5 million in gross margin quarter-over-quarter. We think that's an extremely healthy metric, and that's a function of our NRR kicking at the levels that it has. We are never optimizing for a gross margin percentage. I think we've discussed this in the past. We'll always trade lower gross margin percentage for more dollar amounts. That's how we optimize. That's how we are running our business. When we ask our commercial teams and the way we incentivize them, it's purely on gross profit dollars to make sure that we are adding more dollars to our P&L. All those dollars are very accretive, and we make sure that every dollar that comes into our platform contributes to that margin. Different businesses and different products will have different margin profiles and that's a function of how big those partnerships are, in which geography we are operating. It's very hard for us to predict exactly where is that gonna land in terms of percentage. We think it's a very stable situation where we are today. Again, I wanna emphasize the fact that we are entirely focusing on the dollar amount that we are optimizing for, and that's the way we incentivize our teams. Sumita, I'll let you take the first part of the question. Thanks. I think, if you look at our gross margin, our gross profit has actually increased 87% year-over-year and 12% quarter-over-quarter to $44 million this quarter. Our gross margin depends not only on our pricing and on our cost structure, but also on the product mix and the relative growth of each cohort. If you think about our cost of services as a percentage of TPV for the first quarter, it's about 2.1% compared to about 2% a quarter ago. This increase is mainly driven by a change in business mix. Pay-ins have a slightly higher processing cost, and they did increase their relative contribution this quarter. Again, keep in mind, when we are selling, when our sales team is out there in the field getting the merchant to give us more volume. We are quite indifferent between payments and payouts. We are not optimizing for that mix. We are optimizing for wallet share, and we are always optimizing for gross profit dollars. Yes, payments, the relative contribution went up a little bit, and payments have a higher processing cost for the payment methods that increased this quarter. Okay, great. Thank you. Sorry, and the first part of the question also in terms of just any seasonality in terms of like the EBITDA margin and like your hiring and other investments? I can take that, Seba. I think that- Yeah. We don't have a typical seasonality that you would expect in other businesses. I think we have a lot of discretion in how we can ramp up our cost base, especially related to hiring. I would emphasize that a market like today's is excellent for our business. I think everything that you're seeing outside makes us stronger. As you know, we are profitable, and that gives us a huge strategic advantage in a market like today, where we can go out and get really good talent to come and join us. This is actually a great opportunity for us. Okay, great. Thank you, Sumita. Our next question comes from Jason Kupferberg with Bank of America. Hi, guys. I wanted to ask a follow-up on the NRR. I know you're maintaining the full year guidance. Obviously, you started the year really strong. I mean, I guess I'm curious the 190% in Q1, how did that come in versus your expectations? You know, do you now have a higher degree of confidence in potential upside to the 150%+ target for the year just given the strong start that we've observed? Thanks for the question. I'll Sorry, go ahead. Go ahead, Sumita. Thanks for the question. I think on the NRR, as I said, we continue to emphasize that we will be 150%+ NRR. I think we are not changing our outlook yet. I think that was our expectation at the beginning of the year, and the management team stands behind those numbers. I think that, you know, we've had a really good quarter again this quarter, and we feel bullish. As I said that for the next few quarters, you will see some quarter-over-quarter changes because the comparison quarters of last year were very high. For the full year, we stay pretty focused on delivering a 150%+ NRR. Okay. It sounds like you just wanna be conservative, which is obviously understandable. I was curious also just on top line metrics in general, how those have trended through the first half of the second quarter and just, you know, any seasonal considerations you want us to keep in mind from a modeling perspective as it relates to volume growth, revenue growth? Jason, we continue to see strong underlying trends. Obviously, we are here discussing Q1 results and it's very early in Q2. I think fundamentally, we've never been a better business. That's what we as management are optimizing for. We wanna make sure we have more touch points with our merchants. That means more products, more tools for our sales people to go out there. NRR continues to drive a lot of our growth. Nothing has significantly changed as of now. We continue to be very bullish about the prospects for our business. Okay. Well, nice to see these results. Thank you for the comments. Thanks. Our next question comes from Neha Agarwala with HSBC. Hi, thank you for taking my question. Can I just clarify first on your revenue concentration? Did you mention that it has in the top 10 merchants, has it declined to 52% in the quarter? Diego? Yes, that is right. We were in 62% last year. We are in 52% now. I think we guided for 50% in Q4. We have that. We are around those numbers. Okay. In terms of TPV growth in the coming quarters, are you cautious in terms of a general global slowdown could impact the overall TPV growth in some of your key merchants? Do you have any kind of sensitivity as to what kind of exposure would you have to a general slowdown in the economy? Sure, Neha. Thanks for the question. Many of the reasons you've seen for others to slow down, particularly in Europe, we have zero exposure to. We've discussed this in Q4. We have no exposure to Russia or to Ukraine whatsoever. Our business is entirely focused in emerging markets, which continues to be some of the fastest-growing regions in the world. We are very diversified, so no particular. We don't have any concentration by country and by vertical, and that's a very important edge in our business. We've been through crises before in Latin America, in Africa, in APAC, and we've been able to continue to grow and post really high levels of growth. We might see verticals going through lower growth cycles, and that's perfectly normal. That's why we care so much of having a very diverse customer base. We'll see winners and losers in the future. Definitely, we continue to expect so. Our businesses have shown resilience to those exposures in the past. That's great, Seba. My last question is on gross take rate. Throughout last year, we've seen compression in the gross take rate, except for the fourth quarter. This quarter, again, there was some pickup in the gross take rate. I think from your comments, it seems that it's almost entirely explained by higher share of payments versus payouts, which led to the increase in gross take rate. How do you see this evolving in the coming quarters? Do you think, as payouts maybe gather more traction in second half of the year, you could see some more pressure on the gross take rate? Neha, thanks for the question. We are not optimizing for take rate. We've been able and that was important for us to be able to show that take rate goes up and go down. You've seen that effect last year. We might continue to see the same evolution. It's a function of our business mix. Who are the merchants that are growing the fastest? What are the regions that are growing the fastest, and what are the products? We don't optimize for our gross take rates. We don't think that's the right way of building our business. We are optimizing for gross profit, making sure that every dollar in our platform contributes to our margins. That's again the way we incentivize our commercial team. We'll happily take deals at lower take rates, provided that they contribute to our gross profit margins. Ours is a business that benefits from scale, and we've always thought of the business that way, and we intend to continue to do so. The fact that we've always had this approach of disciplined, profitable growth, I think it's very much baked in in our DNA as a company. We never optimize for just top line. We always make sure that top line contributed to our margin, and that hasn't changed today. Perfect. Thank you, Seba, Sumita, Diego, for your comments, and congratulations on the earnings. Thanks, Neha. Our next question comes from Kaio Prato with UBS. Hi, Seba and team. Thank you for the opportunity to ask questions. I have two on my side, please. The first one is on the financial losses that you posted this quarter. As per my understanding, and please correct me if I'm wrong, you are not directly exposed to higher policy rates in Brazil and Mexico, as all the prepayment is done with your acquired partners, and you just charge a fee for this. As you have a net cash position today in this environment of higher policy rates, it would be likely to have a positive impact into your financial results. If you could please detail a little bit what drove these financial losses this quarter, and what can we expect going forward? Then I will ask my second question, please. Sure. Diego, do you wanna take it? Sure, Seba. This quarter was very particular for financial results. You know, as you know, there were appreciation of several emerging market currencies of the Brazilian real, Chilean peso, Colombian peso, and so on. We are very conservative whenever we have excess of funds, and we keep them. If we keep them in emerging markets, we keep it in U.S. dollars. An example of this could be any earnings pending distribution, we keep that in U.S. dollars. As the functional currency, and this is more an accounting thing, as the functional currency of these countries are the local currencies. Whenever you have U.S. dollars, it's considered a foreign exchange. If a currency, a local currency revalues, you would have a loss for having U.S. dollars, right? At the end of the day, we have the same U.S. dollars, but because of having those U.S. dollars in this emerging market, from an accounting perspective, we have to record an FX loss that typically in all quarters happens the opposite, and we have slight financial results as a gain. That is the main reason of that. If you look, well, eventually you will see it in the financial statements. If you look at the equity, you will see that we have an opposite effect of roughly $1 million in translation adjustment. That's because that is typically reversed whenever we consolidate the local entities. Kaio, if I may just comment on that. Our business is thought and accounted for in dollar amounts. FX fluctuations are gonna be marginal in regards to that dollar expected amount. What you discussed on the financial losses, it's a pure accounting treatment question in terms of how we hold our own funds and how we need to account for that. You'll see that our business continues to perform very closely to the expected dollar amount. Why? Because there are natural hedges in terms of what are the products we serve. Payments, payouts act as a natural hedge to currency exposure. Also, whenever we have exposure to local currency, we make sure we hedge our positions. Ours is a transactional business. We are not in the business of taking FX positions. If anything, you've seen that we probably benefited marginally during this quarter. We have marginal losses in the past, but you should expect our dollar to be very constant in dollar amounts. The other important thing is that our net income continues to grow. We posted $26.3 million of net income in this quarter. That's a really important metric for us as well. Okay, great. Thank you. Just on my second question here is that the company launched, I think, in the recent weeks, a new initiative called dLocal Go, which I understood is targeting SMBs. It's a new platform focused mainly on startups and SMBs, which is differently from the focus of the global merchants that you already have. If you could please detail a little bit about this opportunity and why would you focus on this at this moment, given the huge opportunity that you still have on the global merchants, please? Sure. Kaio, thanks for the question. We've launched dLocal Go a few days ago, it's extremely early. We'd always been consistent that we are believers in volumes in emerging markets coming either through Tier 1 merchants or global enterprises or through smaller companies selling through marketplaces. dLocal Go is our effort to make sure we are covering smaller merchants that have their ecosystem tied to marketplaces. We wanna make to make sure that merchants have the ability of onboarding into us better and faster and have an easier experience to navigate. That's the reasoning behind. We continue to be very bullish about our existing core business. None of dLocal Go is baked into our forecast, so this is, if anything, a potential upside to everything we do. At the same time, we see an opportunity, and we wanna make sure we are serving more smaller merchants that have participation through marketplace. Okay, great. Thank you, Seba. Thank you very much. Thanks, Kaio. Our next question comes from Andrew Bauch with SMBC Nikko Securities. Hey, team. Thank you for taking my question. Wanted to follow up on your comments around M&A in Asia and Africa. We haven't seen you really do anything super transformational thus far on that front. If you could give us a little bit of color on what types of capabilities you'd be looking at. Is it something horizontal or maybe something to help build out the tech stack even further? Sumit, do you wanna take it? Yes. Thanks, Seba. Thanks for the question. I think we've always been consistent about how we think we may use M&A as a strategic priority for us going forward, which is we will make sure that the M&A that we are going to do is additive to what we are building internally. As you are aware, the entire tech stack at dLocal has been built in-house, and we want to be careful about what kind of an M&A we do. Last year, we did a small deal called PrimeiroPay in Brazil for about $40 million. That's been really, really accretive to our business. In that case, we went after a platform that had some merchants where we felt there was going to be acceleration in our ability to onboard those merchants, which is why we acquired PrimeiroPay. That's the kind of deal we are looking for, which is either it needs to add to a commercial footprint for us or gives us more access to a certain geography where we think building organically could take us longer. We remain focused. Yes, we've not announced anything transformational, but we are very carefully following the current market environment today. In fact, the current revaluations of assets presents us with an amazing opportunity, and we remain focused on seeing if there was an M&A transaction that we could execute that would be accretive to us. Having said that, nothing is imminent as of today. Got it. Makes sense. Hoping you could walk us through kind of the conversations you're having with your existing enterprise merchants when you start to expand into these new geos. Is there competitive dynamics that you face when you move into those new geos in regards to taking the share of wallet for your existing merchants in a new location? Just wanna better understand, you know, the conversations you're having there. Sure. Andrew, thanks for the question. We build the whole platform in dLocal on the premise that it's one API, one contract and one platform for everything we do. It's extremely simple for merchants to expand with us. That's the key driver behind our NRR. Merchants start with us in one geography, and they continue to move into other products and geographies without any friction. That's why you see us continue expanding geographically. We wanna make sure we have more touch points. Typically what you'll see is that a customer, a merchant of ours starts in one, two, three geographies and very quickly decides to expand into more places. Obviously, we need to reflect the dynamics in the new places where we are gonna be expanding. What is it gonna be the cost structure? What's the right pricing? It's always about expansion. Keep in mind, we exist as a revenue enabler. We go to our merchants and we allow them to collect more dollars or disperse more dollars. And that's the type of discussion we have with them. We also try to listen to their needs and reflect that in our own strategy. We are lucky enough to have some of the biggest and most savvy companies on Earth. Whenever they point us into an opportunity, we typically know that, number one, there's gonna be a merchant in waiting before we expand. Number two is that opportunity is huge. That continues to be our key focus. Our existing merchant base, it's growing fast, and it's some of the most savvy companies on Earth. That's the way our discussions work. We start somewhere, where do we go next? What is the next product? What's the next pain point, and how can we solve for that? All that goes into our gross profits. Every time we integrate once, and there's no additional integration effort whatsoever. For many of our companies, tech resources are scarce, so having those integration, it's a huge distribution advantage. Someone that started with us in India can then easily move to Mexico or to Brazil. Someone that started with us in Brazil can easily move to Nigeria. That's the beauty of our platform. Very clear. Thank you. Our next question comes from Chris Donat with Piper Sandler. Good morning. Thanks for taking my questions. Wanted to ask another one about your merchant conversations. Given the challenges globally around higher interest rates, higher inflation, the logistics, is anything changing with conversations with merchants, or is it still very much they're focused on the things they were focused on a year or two ago with their plans for moving into emerging markets? Like, has anything changed from their perspective? Thanks for the question. No. We have seen no changes in plans. If anything, again, emerging markets continue to be a very promising land, if you will, and the areas where we operate are very fast growth. Our merchants are saying, "How do we make sure we navigate these countries? How do we make sure we have the right offerings?" That's the sorts of conversations we're having. We haven't seen merchants deciding to retreat from emerging markets. Quite the opposite. Many of them are finding a hard time growing in China, in Europe, and the U.S., and most of their growth is coming from LATAM, from APAC, from Asia, and we benefit from that. That's a way. That's what we are seeing today on the ground. Okay. That's very helpful. As we think about the revenue from new merchants, and, you know, the comparisons from 2021, the new merchant revenue was so strong. Is it reasonable to expect that 2022 in general should be down? I think you said that last quarter in terms of revenue from new merchants, and I know you don't specifically guide, but just ballpark, it is a challenging year, right, from how much revenue from new merchants you pick relative to 2021. Is that fair to say? Sure. Sumit, do you wanna take it? Yeah. I think we've always delivered solid numbers for our customer additions. I think this quarter we've indicated that we've added 10+ significant customers during this quarter. I'll highlight that these are significant customers. We've actually added many more than 10, but we always like to look at our new customer additions and look at what is the prospect of increasing those customer relationships. We think we have several opportunities on the way, and we remain extremely bullish on our new client opportunities. As you would have noted, when we gave our guidance for the full year, we gave you a net retention rate guidance of 150%+, but we did not give you a new client revenue guidance. The reason is that when we add merchants to our platform, we have a lot of visibility on when those merchants will onboard with us, but we do not have as much control over how quickly the volumes exactly ramp up. Sometimes that happens in two quarters, sometimes that happens in three quarters, and there is variation in the ramp-up of the volume. As you saw, our new merchant revenue in this quarter was $11 million. That compares extremely well with the $8 million last quarter and the $7 million if you do it on a year-over-year basis. We believe that our new customer wins these quarters are extremely strong, and we are extremely bullish, but we are not giving a specific guidance on what our new client revenue would be. Understood. Thank you for the context there. I'm not showing any further questions at this time. I'd like to turn the call back to management for any closing remarks. Once again, thanks everyone for your time and for the questions. We continue to be extremely bullish about our business. Thanks to our team for all the support. This is entirely because of them. Thank you very much. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.