Summary
MercadoLibre, Inc. (MELI) reported its third-quarter 2018 financial results, showing continued revenue growth despite significant currency devaluation and operational cost pressures. For the nine months ended September 30, 2018, net revenues increased by 17.8% year-over-year, reaching $1.01 billion, driven by strong performance in its Non-Marketplace segment, particularly payment services, and solid growth in Brazil. The company experienced a net loss of $34.2 million for the nine-month period, a significant shift from the $81.5 million net income in the prior year, largely due to increased operating expenses, particularly in sales and marketing and cost of net revenues, impacted by free shipping initiatives and currency devaluations in key markets like Argentina and Brazil. Despite these challenges, MELI continues to invest in its technology and expand its service offerings, including acquisitions in machine learning and software development, signaling a focus on long-term growth and competitive positioning.
Financial Highlights
54 data points| Revenue | $355.28M |
| Cost of Revenue | $185.56M |
| Gross Profit | $169.72M |
| R&D Expenses | $35.48M |
| Operating Expenses | $180.72M |
| Operating Income | -$11.00M |
| Net Income | -$10.08M |
| EPS (Basic) | $-0.23 |
| EPS (Diluted) | $-0.23 |
| Shares Outstanding (Basic) | 44.59M |
| Shares Outstanding (Diluted) | 44.59M |
Key Highlights
- 1Net revenues grew 17.8% to $1.01 billion for the nine months ended September 30, 2018, compared to the same period in 2017.
- 2The company reported a net loss of $34.2 million for the nine-month period, a reversal from a net income of $81.5 million in the prior year.
- 3Sales and marketing expenses increased significantly by 64.7% for the nine months ended September 30, 2018, primarily due to higher marketing spend and buyer protection program costs.
- 4Cost of net revenues rose 51.8% for the nine-month period, driven by increased collection fees, sales taxes, and shipping operating costs.
- 5MercadoLibre issued $880 million in 2.00% Convertible Senior Notes due 2028 and used a portion to repurchase $263.7 million of its 2019 Notes.
- 6The company adopted ASC 606 (Revenue from Contracts with Customers) effective January 1, 2018, impacting revenue recognition, particularly for shipping subsidies.
- 7Argentina's operations were transitioned to a highly inflationary status as of July 1, 2018, changing its functional currency to USD and impacting financial reporting.