Mercado Libre posts strong third quarter earnings result

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Mercado Libre is still performing strong, despite economic downturn.

Mercado Libre is still performing strong, despite economic downturn.

Latin America's leading e-commerce technology company Mercado Libre has announced a third quarter revenue of $230.8 million.

This follows on from a successful second quarter, which Mercado Libre's CFO Pedro Arnt said was one of the company's strongest ever.

Third Quarter 2016 Financial Highlights

  • Net revenues for the third quarter were $230.8 million, a year-over-year increase of 36.9% and 66.3% in local currencies. Marketplace revenues grew 70.7% in local currencies and 36.3% in USD, while non-marketplace revenues grew 60.1% in local currencies and 37.7% in USD, explained mainly by the growth of MercadoPago -financing and merchant services-, Shipping and Advertising.
  • Gross profit for the third quarter of 2016 was $145.6 million. Gross profit margin was 63.1%, compared to 66.3% in the third quarter of 2015. Most of the margin compression is explained by investments in hosting and customer service, higher sales taxes due to the increased adoption of payments, credit and shipping services, as well as costs related to the sales of our Mobile POS payment devices.
  • Total operating expenses increased to $91.9 million, up 38.2% as compared to last year’s third quarter on an as reported basis. As a percentage of revenues, operating expenses were 39.8%, vs 39.5% in the third quarter of 2015.
  • Income from operations was $53.7 million, up 18.6% year-over-year on an as reported basis. As a percentage of revenues, income from operations was 23.3%, down from 26.8% during the same period in 2015.
  • Interest income grew 71.2% year-over-year to $9.9 million, attributable to higher interest rates particularly in Argentina and Brazil, and larger invested amounts.
  • The company incurred a $6.4 million Financial Expense, mainly as a consequence of interest accruals on the Convertible Bond issued in June of 2014.

Arnt said he was pleased with the company's third quarter, commenting:

“We continue to make progress in expanding our enhanced marketplace vision across all our geographies, as we grow the adoption of our payments, credit and shipping solutions in our marketplaces. More importantly, as a consequence of this, we have been able to sustain high growth rates in our trading volume, revenue, and customer satisfaction metrics.”

Read the full press release here

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