Summary
MercadoLibre Inc. (MELI) reported its third-quarter results for the period ending September 29, 2010. The company demonstrated robust top-line growth, with net revenues increasing by 24.7% year-over-year for the nine-month period to $154.4 million and by 10.6% for the third quarter to $56.0 million. This growth was driven by a significant increase in Gross Merchandise Volume (GMV) across its key markets, particularly in Brazil and Argentina. Net income also saw substantial growth, more than doubling year-over-year for both the nine-month and three-month periods, reflecting improved operational efficiency and a favorable shift in financial expenses. The company continued to invest in product and technology development, with expenses rising by 26.7% and 28.2% for the nine-month and three-month periods, respectively. While sales and marketing expenses increased, they grew at a slower pace than revenue, leading to an improvement in their as-a-percentage-of-revenue metric. Management highlighted strategic shifts, including the elimination of separate fees for its MercadoPago platform in Brazil and Argentina, focusing on geographic segmentation for reporting, and the successful launch of MercadoPago 3.0 in Brazil. The company's balance sheet shows a healthy increase in total assets and a strong growth in shareholders' equity, primarily driven by retained earnings.
Financial Highlights
46 data points| Revenue | $55.95M |
| Cost of Revenue | $11.45M |
| Gross Profit | $44.50M |
| Operating Expenses | $25.19M |
| Operating Income | $19.31M |
| Interest Expense | $568K |
| Net Income | $18.79M |
| EPS (Basic) | $0.43 |
| EPS (Diluted) | $0.43 |
| Shares Outstanding (Basic) | 44.13M |
| Shares Outstanding (Diluted) | 44.15M |
Key Highlights
- 1Net revenues grew by 24.7% year-over-year to $154.4 million for the first nine months of 2010 and by 10.6% to $56.0 million for the third quarter.
- 2Net income significantly increased, more than doubling year-over-year for both the nine-month period ($40.1 million vs. $21.9 million) and the three-month period ($18.8 million vs. $9.9 million).
- 3Gross Merchandise Volume (GMV) increased by 23.1% for the nine months and 12.3% for the third quarter, indicating strong underlying transaction growth.
- 4The company experienced substantial growth in its user base, with confirmed registered users increasing to 50.2 million by the end of the third quarter.
- 5Total assets grew significantly to $240.7 million, up from $182.6 million at the end of 2009, alongside a substantial increase in total shareholders' equity.
- 6Operating expenses, while increasing in absolute terms, grew slower than revenues, leading to an improved operating income margin.
- 7Strategic shift in reporting segments to geographic areas and the launch of MercadoPago 3.0 in Brazil are noted, along with the decision to cease charging separate fees for MercadoPago in Brazil and Argentina to encourage adoption.