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MercadoLibre, Inc. (MELI - Free Report) reported third-quarter 2022 earnings of $2.56 per share, which beat the Zacks Consensus Estimate by 10.8%. Further, the figure rose 5.3% sequentially and 33.3% from the year-ago quarter’s level.
Revenues surged 44.8% on a year-over-year basis (60.6% on an FX-neutral basis) to $2.690 billion. Further, the top line surpassed the Zacks Consensus Estimate of $2.689 billion.
Revenues were driven by accelerating commerce and fintech revenues, which grew 33% and 115% year over year to $1.47 billion and $1.23 billion, respectively.
Increasing total payments volume (TPV) owing to a strong performance of Mercado Pago aided MELI. Growth in total payment transactions benefited the results.
In the reported quarter, MercadoLibre had more than 40 million unique active fintech users, which remains a positive.
MercadoLibre’s rising gross merchandise volume (GMV), thanks to increasing mobile GMV, remained another positive.
Strong shipment growth owing to a solid performance of Mercado Envios in the reported quarter was a tailwind. Strengthening momentum across Mercado Credito also benefited MELI.
MercadoLibre, Inc. Price, Consensus and EPS Surprise
Net Service revenues of $2.44 billion (91% of total revenues) increased 49.4% on a year-over-year basis. Net Product revenues of $253 million (9% of total revenues) increased 11.5% year over year.
Brazil: Net revenues for the third quarter were $1.43 billion (53% of total revenues), increasing 34.6% year over year.
Argentina: The market generated revenues of $675 million (25% of the top line), which rose 71.8% year over year.
Mexico: Net revenues for the reported quarter were $465 million (17% of revenues), jumping 59.8% year over year.
Other countries: Revenues amounted to $119 million (4% of total revenues), climbing 7.2% on a year-over-year basis.
Key Metrics
GMV of $8.62 billion jumped 31.5% year over year on an FX-neutral basis. MELI’s Ads business increased GMV share from 0.9% to 1.3% year over year.
The number of successful items sold was 284 million, up 9% year over year. The number of successful items shipped rose 11.3% year over year to 276 million. This can be attributed to the sturdy performance of Mercado Envios.
TPV increased 76% year over year on an FX-neutral basis to $32.2 billion. This was driven by a strong performance of Mercado Pago. On an FX-neutral basis, off-platform payment volume (online-to-offline) was 72% of total TPV and up 122% from the year-ago quarter’s figure.
TPV at its marketplace was $8.62 billion, up 22.2% year over year. Total payment transactions jumped 66.2% year over year to 1.44 million.
MercadoLibre further divided TPV into two segments: Acquiring TPV and Digital accounts TPV.
On an FX neutral basis, Acquiring TPV comprising On-Platform, Online Payments, MPoS and QR payments increased 56% year over year to 21.6 billion.
On an FX neutral basis, Digital accounts TPV comprising wallet payments, P2P transfers between Mercado Pago accounts, and Cards transactions increased 138% year over year on an FX-neutral basis to $10.6 billion.
MecadoLibre reported a Credit portfolio of $2.8 billion, with 55% of the gross book under Consumer credit, 25% in Merchant credit and 20% in Credit Cards.
Unique active users totaled 88 million for the reported quarter, up 11.4% year over year.
Operating Details
For the third quarter, gross margin was 50.1%, expanding 667 basis points (bps) year over year.
Total operating expenses of $3.02 billion increased 74.1% from the year-ago quarter’s figure.
Operating margin was 11%, which expanded 240 bps year over year.
Balance Sheet
As of Sep 30, 2022, cash and cash equivalents were $1.46 billion, up from $1.33 billion on Jun 30, 2022.
Short-term investments were $1.94 billion for the third quarter, up from $1.65 billion in the previous quarter.
Accounts receivable amounted to $108 million, up from $102 million in the second quarter.
Image: Bigstock
MercadoLibre (MELI) Q3 Earnings Beat Mark, Revenues Rise Y/Y
MercadoLibre, Inc. (MELI - Free Report) reported third-quarter 2022 earnings of $2.56 per share, which beat the Zacks Consensus Estimate by 10.8%. Further, the figure rose 5.3% sequentially and 33.3% from the year-ago quarter’s level.
Revenues surged 44.8% on a year-over-year basis (60.6% on an FX-neutral basis) to $2.690 billion. Further, the top line surpassed the Zacks Consensus Estimate of $2.689 billion.
Revenues were driven by accelerating commerce and fintech revenues, which grew 33% and 115% year over year to $1.47 billion and $1.23 billion, respectively.
Increasing total payments volume (TPV) owing to a strong performance of Mercado Pago aided MELI. Growth in total payment transactions benefited the results.
In the reported quarter, MercadoLibre had more than 40 million unique active fintech users, which remains a positive.
MercadoLibre’s rising gross merchandise volume (GMV), thanks to increasing mobile GMV, remained another positive.
Strong shipment growth owing to a solid performance of Mercado Envios in the reported quarter was a tailwind. Strengthening momentum across Mercado Credito also benefited MELI.
MercadoLibre, Inc. Price, Consensus and EPS Surprise
MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote
Quarter in Detail
Net Service revenues of $2.44 billion (91% of total revenues) increased 49.4% on a year-over-year basis. Net Product revenues of $253 million (9% of total revenues) increased 11.5% year over year.
Brazil: Net revenues for the third quarter were $1.43 billion (53% of total revenues), increasing 34.6% year over year.
Argentina: The market generated revenues of $675 million (25% of the top line), which rose 71.8% year over year.
Mexico: Net revenues for the reported quarter were $465 million (17% of revenues), jumping 59.8% year over year.
Other countries: Revenues amounted to $119 million (4% of total revenues), climbing 7.2% on a year-over-year basis.
Key Metrics
GMV of $8.62 billion jumped 31.5% year over year on an FX-neutral basis. MELI’s Ads business increased GMV share from 0.9% to 1.3% year over year.
The number of successful items sold was 284 million, up 9% year over year. The number of successful items shipped rose 11.3% year over year to 276 million. This can be attributed to the sturdy performance of Mercado Envios.
TPV increased 76% year over year on an FX-neutral basis to $32.2 billion. This was driven by a strong performance of Mercado Pago. On an FX-neutral basis, off-platform payment volume (online-to-offline) was 72% of total TPV and up 122% from the year-ago quarter’s figure.
TPV at its marketplace was $8.62 billion, up 22.2% year over year. Total payment transactions jumped 66.2% year over year to 1.44 million.
MercadoLibre further divided TPV into two segments: Acquiring TPV and Digital accounts TPV.
On an FX neutral basis, Acquiring TPV comprising On-Platform, Online Payments, MPoS and QR payments increased 56% year over year to 21.6 billion.
On an FX neutral basis, Digital accounts TPV comprising wallet payments, P2P transfers between Mercado Pago accounts, and Cards transactions increased 138% year over year on an FX-neutral basis to $10.6 billion.
MecadoLibre reported a Credit portfolio of $2.8 billion, with 55% of the gross book under Consumer credit, 25% in Merchant credit and 20% in Credit Cards.
Unique active users totaled 88 million for the reported quarter, up 11.4% year over year.
Operating Details
For the third quarter, gross margin was 50.1%, expanding 667 basis points (bps) year over year.
Total operating expenses of $3.02 billion increased 74.1% from the year-ago quarter’s figure.
Operating margin was 11%, which expanded 240 bps year over year.
Balance Sheet
As of Sep 30, 2022, cash and cash equivalents were $1.46 billion, up from $1.33 billion on Jun 30, 2022.
Short-term investments were $1.94 billion for the third quarter, up from $1.65 billion in the previous quarter.
Accounts receivable amounted to $108 million, up from $102 million in the second quarter.
Zacks Rank & Stocks to Consider
Currently, MercadoLibre carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the retail-wholesale sector are Ross Stores (ROST - Free Report) , Arhaus (ARHS - Free Report) and The Kroger (KR - Free Report) , each carryinga Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ross Stores has lost 19.2% on a year-to-date basis. The long-term earnings growth rate for the ROST stock is currently projected at 10.5%.
Arhaus has lost 37.5% on a year-to-date basis. The long-term earnings growth rate for the ARHS stock is currently projected at 14.3%.
Kroger has gained 4.4% on a year-to-date basis. The long-term earnings growth rate for the KR stock is currently projected at 11.67%.