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MercadoLibre, Inc. (MELI - Free Report) reported first-quarter 2020 loss of 44 cents per share, wider than the Zacks Consensus Estimate of a loss of 43 cents. Notably, the company had reported earnings of 13 cents per share in the year-ago quarter.
Revenues improved 37.6% on a year-over-year basis (70.5% on an FX neutral basis) to $652.1 million. Further, the figure surpassed the Zacks Consensus Estimate of $644 million.
The top line was driven by accelerating commerce and fintech revenues, which grew 32.7% and 45.2% year over year, respectively.
Further, increasing total payments volume (TPV) on the back of robust Mercado Pago and mobile-point-of-sale (MPOS) business remained a major positive. Moreover, solid TPV growth via Mobile Wallet contributed to the results.
Additionally, expanding international footprints of Mercado Fondo drove the results.
Further, the company’s rising gross merchandise volume (GMV), courtesy of accelerating mobile GMV remained positive. Also, strong momentum across free shipment program led to robust shipments growth via MercadoEnvios during the reported quarter.
Additionally, the company’s warehouses and managed logistics network remained fully functional during the first quarter despite the coronavirus pandemic.
MercadoLibre, Inc. Price, Consensus and EPS Surprise
Brazil: Net revenues in the first quarter were $397.4 million (60.9% of total revenues), up 31.4% year over year. This can be attributed to GMV in the country, which improved 15% year over year, courtesy of growing number of items sold in this region.
Argentina: This market generated revenues of $132.9 million (20.4% of revenues), which soared 41.6% year over year. The company witnessed solid growth in GMV in this country, which surged 81.5% year over year owing to robust marketing campaigns.
Mexico: Net revenues in the reported quarter were $94.7 million (14.5% of revenues), up 73.7% year over year. This primarily came on the back of robust GMV, which improved 54.5% from the prior-year quarter.
Other countries: These markets generated revenues of $27 million (4.1% of total revenues), climbing 17.2% on a year-over-year basis.
Key Metrics
GMV of $3.4 billion improved 10.6% year over year and 34.2% on FX neutral basis.
New confirmed registered users during the period were 13 million, increasing 5.7% on a year-over-year basis.
Number of successful items sold was 105.7 million, up 27.7% year over year. Moreover, number of successful items shipped surged 44.6% year over year to 90.2 million. This can be attributed to strong performance of MercadoEnvios and optimization strategies for the company’s free shipping program.
Total payment volume (TPV) was up 43.5% on a year-over-year basis to $8.1 billion, driven by strong performance of MercadoPago and off-platform payments volume (online-to-offline), which grew 139.5% from the year-ago quarter.
Additionally, MPOS business witnessed TPV growth of 103.3% year over year. Further, rapid adoption of MercadoLibre’s Mobile Wallet generated $1.3 billion in transactions, up 299.2% year over year. Further, user base of mobile wallet grew 155.1% from the year-ago quarter.
TPV on marketplace was $3.2 billion, up 10.6% year over year. Further, total payments transactions increased 102% year over year to 290.7 million.
Unique active users stood at 43.2 million, up 30.9% year over year.
Operating Details
For the first quarter, gross margin was 48%, contracting 200 basis points (bps) year over year. This can be attributed to rising warehousing costs and fullfilment costs.
Operating expenses as a percentage of total revenues came in 52.5%, expanding significantly by 460 bps year over year.
The company reported a loss from operations of $29.7 million, against the year-ago quarter’s income of $10.1 million.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents were $1.1 billion, declining from $1.4 billion as of Dec 31, 2019.
Short-term investments were $1.56 billion in the first quarter, down from $1.59 billion in the previous quarter.
Accounts receivable amounted to $34.1 million, down from $35.4 million in the fourth quarter. Further, inventory at the end of the first quarter was $12.1 million, up from $8.6 million at the end of prior quarter.
Long-term earnings growth rate for ASE Technology, Twilio and InterDigital is pegged at 26.63%, 26.61% and 15%, respectively.
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MercadoLibre (MELI) Q1 Earnings Miss, Revenues Increase Y/Y
MercadoLibre, Inc. (MELI - Free Report) reported first-quarter 2020 loss of 44 cents per share, wider than the Zacks Consensus Estimate of a loss of 43 cents. Notably, the company had reported earnings of 13 cents per share in the year-ago quarter.
Revenues improved 37.6% on a year-over-year basis (70.5% on an FX neutral basis) to $652.1 million. Further, the figure surpassed the Zacks Consensus Estimate of $644 million.
The top line was driven by accelerating commerce and fintech revenues, which grew 32.7% and 45.2% year over year, respectively.
Further, increasing total payments volume (TPV) on the back of robust Mercado Pago and mobile-point-of-sale (MPOS) business remained a major positive. Moreover, solid TPV growth via Mobile Wallet contributed to the results.
Additionally, expanding international footprints of Mercado Fondo drove the results.
Further, the company’s rising gross merchandise volume (GMV), courtesy of accelerating mobile GMV remained positive. Also, strong momentum across free shipment program led to robust shipments growth via MercadoEnvios during the reported quarter.
Additionally, the company’s warehouses and managed logistics network remained fully functional during the first quarter despite the coronavirus pandemic.
MercadoLibre, Inc. Price, Consensus and EPS Surprise
MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote
Quarter in Detail
Brazil: Net revenues in the first quarter were $397.4 million (60.9% of total revenues), up 31.4% year over year. This can be attributed to GMV in the country, which improved 15% year over year, courtesy of growing number of items sold in this region.
Argentina: This market generated revenues of $132.9 million (20.4% of revenues), which soared 41.6% year over year. The company witnessed solid growth in GMV in this country, which surged 81.5% year over year owing to robust marketing campaigns.
Mexico: Net revenues in the reported quarter were $94.7 million (14.5% of revenues), up 73.7% year over year. This primarily came on the back of robust GMV, which improved 54.5% from the prior-year quarter.
Other countries: These markets generated revenues of $27 million (4.1% of total revenues), climbing 17.2% on a year-over-year basis.
Key Metrics
GMV of $3.4 billion improved 10.6% year over year and 34.2% on FX neutral basis.
New confirmed registered users during the period were 13 million, increasing 5.7% on a year-over-year basis.
Number of successful items sold was 105.7 million, up 27.7% year over year. Moreover, number of successful items shipped surged 44.6% year over year to 90.2 million. This can be attributed to strong performance of MercadoEnvios and optimization strategies for the company’s free shipping program.
Total payment volume (TPV) was up 43.5% on a year-over-year basis to $8.1 billion, driven by strong performance of MercadoPago and off-platform payments volume (online-to-offline), which grew 139.5% from the year-ago quarter.
Additionally, MPOS business witnessed TPV growth of 103.3% year over year. Further, rapid adoption of MercadoLibre’s Mobile Wallet generated $1.3 billion in transactions, up 299.2% year over year. Further, user base of mobile wallet grew 155.1% from the year-ago quarter.
TPV on marketplace was $3.2 billion, up 10.6% year over year. Further, total payments transactions increased 102% year over year to 290.7 million.
Unique active users stood at 43.2 million, up 30.9% year over year.
Operating Details
For the first quarter, gross margin was 48%, contracting 200 basis points (bps) year over year. This can be attributed to rising warehousing costs and fullfilment costs.
Operating expenses as a percentage of total revenues came in 52.5%, expanding significantly by 460 bps year over year.
The company reported a loss from operations of $29.7 million, against the year-ago quarter’s income of $10.1 million.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents were $1.1 billion, declining from $1.4 billion as of Dec 31, 2019.
Short-term investments were $1.56 billion in the first quarter, down from $1.59 billion in the previous quarter.
Accounts receivable amounted to $34.1 million, down from $35.4 million in the fourth quarter. Further, inventory at the end of the first quarter was $12.1 million, up from $8.6 million at the end of prior quarter.
Zacks Rank & Other Key Picks
MercadoLibre currently has a Zacks Rank #2 (Buy).
ASE Technology Holding Co., Ltd. (ASX - Free Report) , Twilio Inc. (TWLO - Free Report) and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for ASE Technology, Twilio and InterDigital is pegged at 26.63%, 26.61% and 15%, respectively.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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