Core Insights - MercadoLibre (MELI) reported Q3 2024 earnings of $7.83 per share, missing the Zacks Consensus Estimate by 30.52% but increasing 9.4% year over year [1] - Revenues rose 35% year over year to $5.3 billion, surpassing the Zacks Consensus Estimate by 1.11% [1] - The growth in total revenues was driven by commerce and fintech, which grew 48% and 21% year over year, respectively [1] Revenue Breakdown - Brazil generated net revenues of $2.91 billion, accounting for 54.8% of total revenues, with a year-over-year increase of 41.2% [3] - Argentina's market produced revenues of $1.03 billion, representing 19.4% of total revenues, growing 13.5% year over year [3] - Mexico's net revenues reached $1.14 billion, making up 21.6% of total revenues, soaring 44% year over year [3] - Other countries contributed $221 million, reflecting a 39% year-over-year increase [4] Key Metrics - Gross Merchandise Volume (GMV) was $12.9 billion, up 71.2% year over year on an FX-neutral basis, beating the consensus mark by 0.91% [5] - The number of successful items sold increased by 27.7% year over year to 456 million, while successful items shipped rose 29.4% to 453 million [5] - Total Payments Volume (TPV) surged 72.7% year over year on an FX-neutral basis to $50.6 billion, exceeding the Zacks Consensus Estimate by 2.96% [6] - Total payment transactions increased by 47.5% year over year to 2.93 billion, with fintech monthly active users totaling 56 million, up 33.3% year over year [6] Operating Details - Gross margin for Q3 was 45.9%, down from 53.6% in the previous year [7] - Operating expenses rose 43.7% year over year to $1.88 billion, representing 35.4% of revenues, an increase of 60 basis points year over year [7] - Operating margin decreased to 10.5% from 20.9% in the year-ago period [7] Balance Sheet - As of September 30, 2024, cash and cash equivalents were $2.16 billion, down from $2.82 billion as of June 30, 2024 [8] - Short-term investments stood at $1.1 billion, with net debt at $1.9 billion at the end of the quarter [8]

Core Viewpoint - MercadoLibre's stock price has significantly declined following disappointing Q3 results, presenting a potential investment opportunity due to ongoing business investments in fintech and merchant segments [1][2]. Financial Performance - MercadoLibre reported Q3 revenue of $5.31 billion, reflecting a 35.1% increase year-over-year, surpassing consensus estimates [2]. - The company achieved double-digit growth across all regions and segments, with total payment volume, gross merchandise volume, and unique buyers increasing by 34%, 14%, and 21% respectively [2]. Investment Strategy - The company is investing in six new fulfillment centers to enhance its eCommerce and fintech capabilities while ensuring high user satisfaction [2]. - Despite the recent earnings miss, the company maintains a high double-digit growth trajectory, expected to continue into 2025 [2][3]. Analyst Sentiment - Analysts have shown a positive sentiment towards MercadoLibre, with 88% rating it as a Buy or higher, and a consensus price target suggesting a potential upside of 20% to 25% from current levels [4]. - The stock is currently rated as a "Moderate Buy" with a projected earnings growth of 31.67% [3][4]. Market Position - The recent price drop is viewed as a market signal, with potential for recovery and reaching $2400 by early summer 2025 if support levels hold [6]. - The company is considered a high-quality target for stock split investors, which could enhance accessibility for smaller traders and indicate strong underlying value [5].

Stock Price and Earnings Report - One share of MercadoLibre stock costs close to $2,000 [1] - The video discusses MercadoLibre's third-quarter earnings report [1] - Stock prices used were from the trading day of Nov 6, 2024 [1] - The video was published on Nov 6, 2024 [1]

Core Insights - MercadoLibre reported $5.31 billion in revenue for Q3 2024, a year-over-year increase of 41.3% [1] - The EPS for the same period was $7.83, compared to $7.16 a year ago, but fell short of the consensus estimate of $11.27, resulting in an EPS surprise of -30.52% [1] Revenue and Earnings Performance - The reported revenue exceeded the Zacks Consensus Estimate of $5.25 billion, representing a surprise of +1.11% [1] - Total payment volume reached $50.69 billion, surpassing the average estimate of $49.23 billion [3] - Gross merchandise volume was $12.91 billion, slightly above the average estimate of $12.79 billion [3] - The number of successful items sold was 456, exceeding the average estimate of 430 [3] Geographic Performance - Revenue from Argentina was $1.03 billion, compared to the average estimate of $1.01 billion, reflecting a year-over-year change of +25.2% [3] Stock Performance - MercadoLibre shares returned +3.8% over the past month, outperforming the Zacks S&P 500 composite's +0.7% change [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [4]

Q3'24 Results Investor Presentation MercadoLibre, Inc. > November 6th, 2024 Disclaimers Third Quarter 2024 This presentation may contain forward-looking statements including, but not limited to, statements regarding MercadoLibre, Inc.'s expectations, objectives and progress against strategic priorities; initiatives and strategies related to our products and services; business and market outlook, opportunities, strategies and trends; impacts of foreign exchange; the potential impact of the uncertain macroeco ...

Financial Data and Key Metrics Changes - Revenue growth of 35% year-on-year despite FX headwinds in Mexico and Brazil [14] - Net income rose by 11% year-on-year, reaching $397 million [16] - EBIT was $557 million with a margin of 10.5%, with margin compression primarily due to strategic investments [15] Business Line Data and Key Metrics Changes - GMV growth of 34% year-on-year in Brazil and 27% in Mexico, with market share gains in both countries [6] - In Argentina, items sold grew by 16%, surpassing 60 million items sold, with nearly 7 million new buyers added [7] - Credit card TPV grew by 166% year-on-year, with a credit portfolio growth of 77% [12] Market Data and Key Metrics Changes - E-commerce penetration in Latin America remains low at 15%, indicating significant growth potential [8] - Fulfillment penetration increased by 4.5 percentage points year-on-year due to the opening of six new fulfillment centers [9] Company Strategy and Development Direction - Continued investment in enhancing customer experience and strategic initiatives in logistics and loyalty programs [6][8] - Plans to double the number of fulfillment centers in Brazil by the end of 2025, increasing same-day delivery capabilities [25] - Focus on long-term growth, profitability, and cash flow generation across commerce, fintech, and advertising [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities ahead, particularly in commerce and fintech [16] - Positive trends in Argentina's market environment, with improvements in consumer behavior and macroeconomic conditions [94] Other Important Information - Introduction of the Meli Mas benefits package, enhancing customer loyalty through cash back and fintech benefits [19] - Non-recurring expenses related to customer refunds impacted G&A expenses this quarter [84][86] Q&A Session Summary Question: Credit card portfolio growth and NIMAL spread pressures - Management noted that the credit card business is evolving positively, with a significant increase in portfolio share impacting NIMAL spreads [29][30] Question: Shipping investments and fulfillment center ramp-up - Management highlighted that fulfillment centers lead to higher GMV and improved user experience, with ongoing capacity expansion to meet future demand [36][38] Question: Differences between Brazil and Mexico credit card experiences - Management indicated that the ramp-up in Mexico has been faster due to prior experience, with significant growth potential in both markets [40][41] Question: Margin compression from fulfillment and advertising penetration - Management clarified that most margin compression was due to credit cards, with advertising revenues growing above GMV [43][54] Question: Impact of Meli Mas on user behavior and Blue funding - Management observed positive adoption of Meli Mas, leading to increased engagement and usage across platforms [70][71] Question: Credit environment in Brazil and origination confidence - Management expressed confidence in credit origination despite rising interest rates, attributing it to improved predictive models [74][76] Question: Software business development strategy - Management confirmed that software development will primarily be in-house, focusing on enhancing the acquiring business [65][66]

Core Insights - MercadoLibre reported quarterly earnings of $7.83 per share, missing the Zacks Consensus Estimate of $11.27 per share, but showing an increase from $7.16 per share a year ago [1][2] - The company posted revenues of $5.31 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.11% and increasing from $3.76 billion year-over-year [3] - The stock has gained approximately 33% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [4] Earnings Performance - The earnings surprise for the recent quarter was -30.52%, while the previous quarter saw a positive surprise of 20.18% [2] - Over the last four quarters, MercadoLibre has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2][3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $9.14 on revenues of $5.93 billion, and for the current fiscal year, it is $37.70 on revenues of $20.53 billion [8] - The estimate revisions trend for MercadoLibre is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] Industry Context - The Internet - Commerce industry, to which MercadoLibre belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [9]

Core Insights - Mercado Libre reported Q3 2024 net revenue of $5.3 billion, a 35% year-on-year increase, with operational income at $557 million, reflecting strategic investments for long-term success [2][8] - The company experienced significant growth in both e-commerce and fintech sectors, driven by increased user engagement and technological investments [3][4] E-commerce Performance - Unique buyers increased by 21% year-on-year to nearly 61 million, with Gross Merchandise Value (GMV) reaching $12.9 billion, a 14% increase in dollars [3][8] - Items sold rose nearly 28% to 456 million units, with over 94% of shipments managed by Mercado Libre's network, and 75% of deliveries completed in less than 48 hours [8] - Mercado Ads revenue grew by 37% year-on-year, contributing to the overall growth in the commerce segment [8] Fintech Performance - Mercado Pago's net revenue reached $2.2 billion in Q3, with total payment volume (TPV) increasing by 34% year-on-year to $50.7 billion [9] - Monthly active users for Mercado Pago expanded by 35% to 56 million, with total payment transactions rising by 47% to over 2.9 billion [9] - The credit portfolio for Mercado Pago grew by 77% year-on-year to $6 billion, while the credit card portfolio surged by 172% to $2.3 billion [7][9] Strategic Developments - The company opened five fulfillment centers in Brazil and one in Mexico during Q3, enhancing logistics capabilities and delivery speeds [5][8] - Mercado Libre's sponsorship of the Williams Racing F1 team aligns with its values of innovation and speed, further promoting its brand in the region [8]

Revenue and Financial Performance - Net revenues & financial income reached $5.3 billion, up 35% YoY and 103% FX-neutral[3] - Net income rose 11% YoY to $397 million, with a Net Income margin of 7.5%[26] - Consolidated net revenues in Brazil grew by 60% year-over-year in Q3'24[34] - Net revenues and financial income rose to $14,718 million for the nine months ended September 30, 2024, compared to $10,698 million in the same period of 2023[53] - Net income for the nine months ended September 30, 2024 was $1,272 million, compared to $822 million in the same period of 2023[53] - Net revenues and financial income for Q3 2024 totaled $5,312 million, with Brazil contributing $2,913 million, Mexico $1,145 million, Argentina $1,033 million, and other countries $221 million[57] - Net revenues and financial income increased by 35.3% to $5,312 million in Q3 2024 compared to $3,927 million in Q3 2023[68] - Net income for the nine months ended September 30, 2024, increased to $1,272 million from $822 million in 2023[56] Payment Volume and Transactions - Total Payment Volume (TPV) grew to $50.7 billion, up 34% YoY and 73% FX-neutral[3] - Total payment volume surged to $137.746 billion in the nine months ended September 30, 2024, from $102.278 billion in 2023[31] - Acquiring total payment volume rose to $100.367 billion in the nine months ended September 30, 2024, up from $81.221 billion in 2023[31] - Total payment transactions increased to 8.030 billion in the nine months ended September 30, 2024, from 5.275 billion in 2023[31] - Total payment volume in Mexico rose by 44% year-over-year in Q3'24[32] Gross Merchandise Volume (GMV) - Gross Merchandise Volume (GMV) increased to $12.9 billion, up 14% YoY and 71% FX-neutral[3] - Gross merchandise volume reached $36.919 billion for the nine months ended September 30, 2024, compared to $31.299 billion in 2023[31] - Gross merchandise volume in Argentina increased by 218% year-over-year in Q3'24[34] User Growth and Engagement - Unique buyers across the region reached 61 million, rising 21% YoY[4] - Fintech monthly active users (MAU) rose 35% YoY to 56 million[10] - Fintech monthly active users increased to 56 million in Q3'24 from 42 million in Q3'23[31] - Unique active buyers grew to 87 million in the nine months ended September 30, 2024, up from 74 million in the same period in 2023[31] Credit Portfolio and Assets - The credit card portfolio grew to $2.3 billion, up 172% YoY and 28% QoQ[11] - Total credit portfolio grew 77% YoY to $6.0 billion, with consumer book up 37% YoY[12] - Assets under management (AUM) grew 93% YoY to $8.0 billion[15] - Loans receivable, net of allowances, increased to $4,248 million in Q3 2024 from $2,629 million in December 2023[52] - Total assets increased to $22,623 million in Q3 2024 from $17,646 million in December 2023[52] Advertising Revenue - Advertising revenue grew 37% YoY, reaching a penetration of 2.0% of GMV, up 30 bps YoY[9] Expenses and Investments - Product and technology development expenses increased to $504 million in Q3 2024 from $396 million in Q3 2023[53] - Sales and marketing expenses grew to $566 million in Q3 2024 from $441 million in Q3 2023[53] - Investments in property and equipment and intangible assets totaled $555 million in Q3 2024, compared to $329 million in Q3 2023[71] - Changes in loans receivable, net, amounted to $3,316 million in Q3 2024, up from $1,465 million in Q3 2023[71] - Proceeds from loans payable and other financial liabilities related to Fintech solutions were $989 million in Q3 2024, compared to $94 million in Q3 2023[71] Cash Flow and Liquidity - Cash and cash equivalents decreased to $2,162 million in Q3 2024 from $2,556 million in December 2023[52] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $4,994 million, up from $3,212 million in 2023[56] - Adjusted free cash flow for Q3 2024 was $635 million, down from $1,067 million in the same period last year[71] - Net increase in available cash and investments for Q3 2024 was $589 million, compared to $499 million in Q3 2023[71] - Net cash provided by operating activities in Q3 2024 was $4,994 million, up from $3,212 million in Q3 2023[71] - Available cash and investments at the end of Q3 2024 stood at $4,417 million, up from $3,774 million at the end of Q3 2023[71] Debt and Financial Liabilities - Net debt as of September 30, 2024, was $1,907 million, up from $1,505 million as of December 31, 2023[65] - Total debt as of September 30, 2024, increased to $6,324 million from $5,333 million as of December 31, 2023[65] - Total current liabilities rose to $14,313 million in Q3 2024 from $11,297 million in December 2023[52] Profitability and Margins - Gross profit for Q3 2024 reached $2,439 million, up from $2,095 million in Q3 2023[53] - Basic net income per share for Q3 2024 was $7.83, up from $7.18 in Q3 2023[54] - Gross profit rose by 16.4% to $2,439 million in Q3 2024 from $2,095 million in Q3 2023[68] - Income from operations decreased by 29.0% to $557 million in Q3 2024 from $785 million in Q3 2023[68] - Net interest margin after losses (NIMAL) decreased to 28.3% in the nine months ended September 30, 2024, from 35.1% in 2023[31] Investments and Financial Assets - Short-term investments as of September 30, 2024, were $1,109 million, down from $1,191 million as of December 31, 2023[65] - Long-term investments as of September 30, 2024, increased to $1,146 million from $81 million as of December 31, 2023[65] Direct Contribution and EBITDA - Direct contribution for Q3 2024 was $1,184 million, with Brazil contributing $505 million, Mexico $192 million, Argentina $457 million, and other countries $30 million[57] - Adjusted EBITDA for Q3 2024 was $714 million, compared to $920 million in Q3 2023[63]

Core Insights - MercadoLibre, Inc. reported its financial results for the quarter ending September 30, 2024, and hosted an earnings video conference on November 6, 2024 [1] Company Overview - MercadoLibre is the largest online commerce ecosystem in Latin America, based on unique visitors and processed orders, and is also a leading fintech platform in the region [5] - The company operates in 18 countries, including Argentina, Brazil, Mexico, Colombia, Chile, and Peru [5] E-commerce Platform - MercadoLibre provides a robust and safe environment for buyers and sellers, fostering a large e-commerce community in Latin America, which has a population of over 650 million [6] - The region is experiencing one of the fastest-growing Internet penetration and e-commerce growth rates globally [6] Fintech Services - Through its fintech platform, MercadoPago, the company offers a comprehensive set of financial technology services, including digital accounts, debit cards, online payments, insurance, savings, investments, and credit lines for individuals [7] - For merchants, MercadoPago provides online and physical point-of-sale payment processing services along with digital accounts [7]