Summary
MercadoLibre, Inc. reported strong year-over-year revenue growth for the third quarter and first nine months of 2014, driven by performance across most of its key Latin American markets, particularly Brazil and Argentina. Despite overall revenue increases, the company faced significant challenges in Venezuela, marked by a substantial devaluation of its currency and a large impairment of long-lived assets, negatively impacting profitability. The company also successfully raised capital through a $330 million convertible senior notes issuance in June 2014, strengthening its liquidity position. Key operational highlights include continued user growth and an increasing adoption of its MercadoPago payment solution, which contributed to higher transaction volumes. While the company experienced strong top-line growth, the significant impairment charge related to its Venezuelan operations and ongoing foreign currency volatility in that region represent material risks. Investors should note the company's ongoing investment in technology and marketing to maintain its market leadership in the dynamic e-commerce landscape of Latin America.
Financial Highlights
51 data points| Revenue | $147.94M |
| Cost of Revenue | $43.40M |
| Gross Profit | $104.53M |
| Operating Expenses | $57.39M |
| Operating Income | $47.15M |
| Interest Expense | $4.21M |
| Net Income | $33.77M |
| EPS (Basic) | $0.76 |
| EPS (Diluted) | $0.76 |
| Shares Outstanding (Basic) | 44.15M |
| Shares Outstanding (Diluted) | 44.15M |
Key Highlights
- 1Revenue increased by 16.9% year-over-year for the nine months ended September 30, 2014, and by 20.2% for the third quarter.
- 2The company recorded a significant impairment of long-lived assets of $49.5 million related to its Venezuelan operations due to economic conditions and currency devaluation.
- 3MercadoLibre issued $330 million in 2.25% convertible senior notes due 2019, strengthening its capital position.
- 4Brazil and Argentina showed robust revenue growth, with Brazil up 28.4% and Argentina up 16.4% for the nine-month period.
- 5Venezuela revenue decreased by 18.9% for the nine-month period due to substantial currency devaluation and related operational challenges.
- 6Gross profit increased to $283.9 million for the nine months ended September 30, 2014, up from $244.1 million in the prior year, though operating expenses also rose, partly due to the impairment charge.
- 7Net income attributable to MercadoLibre, Inc. shareholders decreased to $38.4 million for the nine months ended September 30, 2014, from $76.7 million in the same period of 2013, heavily influenced by the Venezuelan impairment.