And we have an excellent quarter in terms of generation of own cash. If you see the cash flow, we basically generated $45 million of free cash flow. And if you add to that, the $20 million recovery of the restricted cash we had with certain banks, that $65 million generations of own cash. Part of that, as you also see there, was invested around $50 million in the bonds that we have in Argentina.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Ashwin Shirvaikar with Citi. Your line is now open.
Ashwin Shirvaikar: Thanks. I had a question, and I guess, my first question is on the TPV evolution charts that you provided on Page 12. As I sort of look at the quarter-over-quarter growth, when we look at the relative growth of cross-border TPV evolution versus local-to-local, are there specific things you’re doing to promote the local-to-local, if you could talk about that? Is that a trend that we should see continue? And then the flat growth on payouts versus the pretty good sequential growth on pay-ins, what is the underlying factor that’s driving that?
Pedro Arnt: Look, we are primarily focused on merchants that operate in three or more geographies that are large and global. And so, purely local merchants are not merchants that we pursue. The local-to-local component you see growing very well is simply because our merchants appreciate our solution and our technology sufficiently to also use us for local processing, which I think is very relevant because at times that came into question, whether we were competitive as merchants matured and markets matured and they had a growing portion of local-to-local business to complement with their cross-border business that they did with us. And if you look at the data, we are consistently being chosen for both local-to-local and cross-border.
But this is not any sort of concerted effort to pursue local merchants. Our merchant focus and segmentation remains multi-geography merchants that will have a component of cross-border and of local transactions. It’s just testament to the strength of our solution. In terms of pay-ins, we do see a very large opportunity — sorry, in terms of payouts, you had asked, we do see a very large opportunity and Seba mentioned this earlier to help global remittance companies with last mile into the markets where we operate. And so, there is an increasing focus on our part in that vertical. And we see the strength there when we look at the year-over-year evolution of that business. On a quarterly basis, that was somewhat impacted by the financial service churn we mentioned previously where one of our financial services partners that had payouts as part of their TV PPV lost one of their customers.
But we still see significant strength and opportunity there. And obviously, a strong payout business in markets where net settlement is possible, also improves our margins on the cross-border component of our business.
Ashwin Shirvaikar: Got it. Got it. And then one question for Pedro. As you looked at sort of the business and the evolution of the business over the last — as you come in over the last three months and looked at it. Are there sort of design principles that you sort of implement that can benefit a couple of points, and these points are, as I sort of look at TPV dollar growth versus revenue dollar growth, gross profit dollar, adjusted EBITDA dollar, there’s always been a higher or often been a higher growth rate for TPV versus revenue versus gross profit versus EBITDA, which is kind of the opposite of what one might generally expect in a payments company with operating leverage. And the other thing, growth is often driven by one or two countries in spurts.
Nigeria or Argentina and then the company gets into some sort of idiosyncratic factors affect you in those countries. Is there a way to avoid these sorts of things just from how you look at the future growth? I know it’s a broad question, but that’s what I’d ask.
Pedro Arnt: Sure. So I think in terms of the financial model, which you allude to in the first question, in large part, this is a consequence of a growing relationship with large merchants. So there is downward pressure on take rates. If you look at a year-on-year evolution, I think if you look at this quarterly, you see that pricing power has actually remained fairly strong Q-on-Q, which is a good sign. But I don’t necessarily think that over the shorter period, we will see a dramatic reversion in the fact that our TPV is growing faster than our gross profit. From a margin perspective, if you look at our adjusted EBITDA to gross profit, we have extremely high margins, and I don’t think we are in a phase over the next multiple quarters where we should be focusing on significant margin expansion.
I think that will come over the long run and the mid-term as we grow out our overall size and scale. But right now, we need to make sure we continue to invest in a very disciplined fashion within the construct of our midterm guidance, but making sure that we continue to invest behind the opportunity we have, which is huge. So, we do not have a design principle for this period of delivering significant margin growth or GP growth above TPV. I think that’s not the phase we’re in. We’re in a phase where we have an extremely attractive margin profile. We generate an extremely healthy net income to cash conversion and what we need to focus is on sustaining growth and then the operational leverage will kick in more aggressively over the mid-term once we have a larger and more diversified business.
Ashwin Shirvaikar: Very, very, helpful. Yes. Thank you.
Operator: Thank you. Thank you for your questions. This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.
