(Bloomberg) -- Shares of Uruguayan payments fintech Dlocal Ltd posted their worst performance Tuesday since May 2023 after the company missed earnings forecasts and flagged that higher spending on its operations would weigh on margins this year.

Dlocal’s stock price dropped 17.5% to close at $15.00 on Tuesday in New York. The company posted a fourth quarter profit of $28.5 million, well below analysts’ estimates for $45.4 million. 

The company’s 2024 investment plan to hire more engineers will lead to “some margin contraction short-term,” co-CEO Pedro Arnt told reporters earlier Tuesday in a conference call with reporters. 

Dlocal will prioritize spending its hefty cash balances on acquisitions and more share buybacks going forward, co-president Sergio Fogel added. Dlocal had $223 million of its own cash on its balance sheet at the end of December after it completed a $100 million share buyback program in 2023. 

The company’s fourth quarter revenue and gross profit growth was trimmed by the devaluation of the Argentine peso and a drop in cross border payments from that country. Dlocal purchased $103 million in Argentine government dollar-linked bonds as a currency hedge last year.

Dlocal’s exposure to Argentine debt this year will depend on the availability of other hedging options and whether capital controls remain in place when its bond holdings mature in April and May, Arnt said.

“Part of that bond is used for investments in Argentina, but we could have other areas of the world where want to allocate capital,” he said. “If it’s possible we could move those funds elsewhere as well.”

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