MercadoLibre(MELI)2025-05-07 22:00Financial Data and Key Metrics Changes - The company reported strong growth in net revenue, maintaining the rapid pace achieved in 2024, with income from operations growing faster than revenue, particularly in Argentina [3][4] - Monthly active users reached 64 million, growing over 30% year on year [6] - EBIT margin improved by 70 basis points year on year, from 12.2% to 12.9% [95][96] Business Line Data and Key Metrics Changes - In Argentina, GMV growth was 126% year on year, with items sold increasing by 52% [18][22] - The supermarket category grew 65% year on year, outpacing other categories [30] - The fintech segment, particularly Mercado Pago, is focused on democratizing financial services, with a strong emphasis on user experience and product offerings [6][10] Market Data and Key Metrics Changes - Brand preference metrics for the marketplace reached all-time highs in Brazil, Mexico, Argentina, and Chile [4] - The credit book in Argentina grew significantly, with assets under management increasing by 69% year on year [22][58] - The company is seeing stabilization in Argentina's macroeconomic environment, contributing to improved performance [20][22] Company Strategy and Development Direction - The company aims to become the largest and best digital account in Latin America, with a focus on integrating Mercado Pago into its ecosystem [12][10] - Strategic investments are being made in logistics and credit card offerings in Brazil and Mexico, while maintaining a strong focus on growth opportunities in commerce and fintech [99][44] - The company is adapting its credit models to local markets, with plans to launch credit cards in Argentina in the second half of the year [76][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in Argentina, citing lower inflation and decreasing interest rates as positive factors [20][22] - The company is focused on balancing growth and profitability, emphasizing the importance of long-term growth opportunities in Latin America [99][95] - Management noted that while there may be short-term margin pressures due to investments, the overall growth trajectory remains strong [98][95] Other Important Information - The company launched a new branding for Mercado Pago, aligning it with the overall ecosystem to enhance user confidence [10][11] - The logistics plan remains consistent, with ongoing investments to expand fulfillment centers as needed [44][45] Q&A Session Summary Question: Sustainability of trends in Argentina - Management highlighted strong growth in Argentina, driven by recovery in demand and market share gains, with a focus on enhancing the value proposition [17][19] Question: Drivers behind 1P GMV growth - The growth was attributed to improved selection and price competitiveness across various categories, with supermarket growth being particularly strong [28][30] Question: Contribution margin evolution in Argentina - Management noted that growth allowed for efficient dilution of fixed costs, with improvements in logistics and credit business profitability contributing to margin enhancements [49][50] Question: Asset quality trends - The company reported strong asset quality in Argentina, with low delinquencies and a growing credit card portfolio [55][58] Question: Strategy regarding deposits in Brazil - The focus is on marketing and positioning as a leading digital bank, with competitive rates to enhance customer loyalty [60][61] Question: Update on logistics plan - The logistics plan remains unchanged, with ongoing investments to meet demand projections [43][44] Question: Impact of credit portfolio on marketplace - Management does not expect any negative repercussions on marketplace growth from tightening credit issuance [75] Question: Competition from TikTok Shop and others - Management is monitoring new entrants closely, viewing them as potential opportunities to attract new users to the online marketplace [116][120]