Company: DLO
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0000950170-25-058197
Chunk: 55

Company: dLocal Ltd
Filing Date: 2025-04-24
Form: 20-F
Item: Item 8
Chunk 55
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 contain or prevent their further spread, among others. These and other potential impacts of an epidemic, pandemic or other health crisis, such as the COVID-19 pandemic, including effects due to variants of the novel coronavirus, could have a material adverse effect on our business, financial condition and results of operations, and it may also have the effect of heightening many of the other risks described in this “ Risk Factors” section.

Risks Relating to the Countries in which we Operate

In order to provide payment processing services to merchants, we operate in multiple emerging markets where end users of our merchants execute their payments. A substantial portion of those end users are primarily concentrated in Latin America, exposing the provision of our services to disproportionate risks relating to the political, regulatory, economic and social conditions in this region.

We carry out substantially all of our business for merchants operating in emerging market countries, primarily Brazil, Mexico, Argentina and Chile. Our operations provided to merchants whose end users are concentrated in Latin America account for a substantial portion of our business. The services we provide to such merchants accounted for 75%, 76% and 82% of our revenues for the years ended December 31, 2024, 2023 and 2022, respectively. The concentration of the services we provide to merchants who operate in these countries exposes us to risks related to the political, regulatory, economic and social conditions in these countries.

For example, in Argentina (where revenue based on the country where the end users of our merchant customers executed their payments represented 11%, 12% and 19% of our revenue in 2024, 2023 and 2022, respectively) the economy has historically experienced very high rates of inflation that have undermined the Argentine economy and the Argentine government’s ability to foster conditions for stable growth. High rates of inflation in Argentina have adversely affected economic activity and employment levels, real salaries, consumption and interest rates. In addition, as the Argentine fiscal deficit has increased and Argentine central bank reserves have decreased, the Argentine government has responded by increasing tax rates, and by reinstating foreign exchange controls, to which we may be subject in the emerging markets in which we operate. Moreover, in the past Argentina has experienced social and political turmoil, including civil unrest, riots, strikes and street demonstrations. Although we have generally been able to offset the heightened foreign exchange and exchange control risks in Argentina with higher overall fees on transactions conducted through our Argentine operations, the persistently poor economic conditions in Argentina, in particular the significant foreign exchange rate volatility of