MercadoLibre's (MELI) Q3 Earnings Beat, Revenues Rise Y/Y
MercadoLibre MELI reported third-quarter 2023 earnings of $7.16 per share, which surpassed the Zacks Consensus Estimate by 22.39%. The company reported earnings of $2.56 per share in the year-ago quarter.
Revenues surged 39.8% on a year-over-year basis (69.1% on a FX-neutral basis) to $3.76 billion. The top line surpassed the Zacks Consensus Estimate by 5.22%.
Total revenues were driven by accelerating commerce and fintech revenues, which grew 45% and 33% year over year, respectively.
Revenues from MELI’s advertising services grew more than 70% on an FX-neutral basis and were equivalent to almost 1.7% of gross merchandise volume (GMV) at the end of the third quarter.
Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company. MercadoLibre’s rising GMV remained another positive. Strong shipment growth also contributed well to the reported results.
MercadoLibre, Inc. Price, Consensus and EPS Surprise
MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote
Quarter in Detail
Brazil: Net revenues in the third quarter came in at $2 billion (53.4% of the total revenues), rising 40.2% year over year.
Argentina: The market generated revenues of $825 million (21.9% of the top line), which surged 22.2% year over year.
Mexico: Net revenues in the reported quarter were $772 million (20.5% of the total revenues), which soared 66% year over year.
Other countries: The markets generated revenues of $157 million (4.2% of the total revenues), reflecting an increase of 31.9% on a year-over-year basis.
Key Metrics
GMV of $11.36 billion jumped 59.3% on an FX-neutral basis year over year. The figure surpassed the consensus mark by 3.51%.
The number of successful items sold was 357 million, up 25.7% year over year. The number of successful items shipped rose 26.8% year over year to $350 million.
TPV surged 121% year over year on a FX-neutral basis to $47.3 billion. This was driven by the strong performance of Mercado Pago. The figure beat the Zacks Consensus Estimate by 8.06%.
Off-Marketplace TPV was more than $35.3 billion, up 145% year over year on an FX-neutral basis.
TPV on the marketplace was 11.97 billion, up 31.7% year over year. Total payment transactions increased 74.3% year over year to $2.51 billion.
Unique active users totaled 120 million, up 36.4% year over year and beat the Zacks Consensus Estimate of 104 million.
Operating Details
For the third quarter, the gross margin was 53.1%, expanding 295 basis points (bps) year over year.
Operating expenses were $1.31 billion, which increased 24.5% year over year. As a percentage of revenues, the figure declined 430 bps year over year to 34.8% in the reported quarter.
The operating margin was 18.2%, expanding 724 bps year over year.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents were $2.17 billion, up from $1.86 billion as of Jun 30, 2023.
Short-term investments were $3.32 billion as of Sep 30, 2023, up from $2.8 billion as of Jun 30.
Zacks Rank & Stocks to Consider
Currently, MercadoLibre has a Zacks Rank #4 (Sell).
The Gap GPS, Groupon GRPN, and Walmart WMT are some better-ranked stocks that investors can consider in the broader Retail-Wholesale sector. While The Gap sports a Zacks Rank #1 (Strong Buy), Groupon and Walmart carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of The Gap have gained 19.9% in the year-to-date period. The company is set to report third-quarter 2023 results on Nov 16.
Shares of Groupon have increased 59.9% year to date. The company is slated to report third-quarter 2023 results on Nov 9.
Shares of Walmart have gained 17% in the same time frame. The company is slated to report third-quarter fiscal 2024 results on Nov 16.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Walmart Inc. (WMT) : Free Stock Analysis Report
The Gap, Inc. (GPS) : Free Stock Analysis Report
Groupon, Inc. (GRPN) : Free Stock Analysis Report
MercadoLibre, Inc. (MELI) : Free Stock Analysis Report
