MercadoLibre (MELI) Tops Q3 EPS by 1c, Beats on Revenues

MercadoLibre (NASDAQ: MELI) reported Q3 EPS of $0.63, $0.01 better than the analyst estimate of $0.62. Revenue for the quarter came in at $370.7 million versus the consensus estimate of $347.74 million.

Third Quarter 2017 Business Highlights

• Gross Merchandise Volume surpassed the $3 billion mark for the first time reaching $3,075.3 million dollars, and accelerating by almost 40 percentage points year on year to 50.7% in USD, while on an FX neutral basis GMV accelerated for the fourth consecutive quarter to 93.8% year on year.
• Items sold accelerated for the second consecutive quarter to 55.8% year on year to 74.2 million, delivering the fastest pace of unit volume growth in over five years.
• Unique buyers accelerated to 31.1% year-over-year driven by Brazil and Mexico. Colombia and Chile also delivering excellent performance, both accelerating unique buyers sequentially and year-over-year.
• Live listings being offered on Mercado Libre’s marketplace accelerated to 51% year on year during the third quarter of 2017 reaching 106 million listings, also being the first time the Company exceeded the 100 million mark.
• Mobile GMV penetration grew 1100 bps year-over-year to 47%, and is well on its way to represent 50% of total GMV.
• Items shipped through MercadoEnvíos reached 41.7 million, an 80.4% year-over-year growth driven by the most part by investments in free shipping, our loyalty program, Mercado Puntos, and customer acquisition. Mexico was one of the highlights of the quarter with items shipped growing 285% year-over-year.
• Total Payment Volume through MercadoPago increased 73.5% in USD and 86.0% on an FX neutral, basis reaching $3,667.1 million. Total Payment Transactions increased 69.4% year-over-year, ending the quarter with 62.3 million.
• Merchant Service business continues to go from strength to strength as one of the fastest growing non-marketplace business units. On a consolidated basis, off platform Total Payment Volume on an FX neutral basis grew 107.6% year-on-year.
• Mobile-point-of-sale devices sold in Brazil grew 447% and its TPV already represents 28% of the off platform total payment volume.

Third Quarter 2017 Financial Highlights

• Net revenues for the third quarter ascended to $370.7 million, a year-over-year increase of 60.6% in USD and 79.4% on an FX neutral basis.
• Marketplace revenues grew 69.1% in USD, and 97.5% on an FX neutral basis, while non-marketplace revenues grew 48.6% in USD and 54.0% on an FX neutral basis.
• Gross profit for the third quarter of 2017 was $175.8 million with a margin of 47.4%, compared to 63.1% in the third quarter of 2016. Most of the gross margin compression is attributed to increase in costs of providing free shipping.
• Total operating expenses were $148.3 million, up 61.3% year-over-year. As a percentage of revenues, operating expenses were 40.0% versus 39.8% during the same quarter last year.
• Income from operations was $27.5 million, down 48.7% year-over-year. As a percentage of revenues, it was 7.4%, versus 23.3% during the third quarter of 2016.
• Interest income grew to $14.2 million a 43.6% increase year-over-year.
• The company incurred $6.7 million dollars in financial expenses in the third quarter of 2017.
• Net income before taxes was $36.7 million, down 29.9% year-over-year.
• Income tax expense was $9.0 million during the third quarter, yielding a blended tax rate for the period of 24.5%.
• Net income as reported for the third quarter was $27.7 million dollars, resulting in basic net income per share of $63 cents.
• Net cash provided by operating activities was $16.1 million. Net increase in cash and cash equivalents was $78.4 million dollars for the three months ended September 30th (*).

For earnings history and earnings-related data on MercadoLibre (MELI) click here.

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