MercadoLibre, Inc. Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: Grew 35% YoY despite FX headwinds in Brazil and Mexico.
  • GMV Growth:
    • Brazil: +34% YoY
    • Mexico: +27% YoY
    • Argentina: +16% items sold YoY; record 60M+ items sold and added nearly 7M new buyers.
  • EBIT: $557M, representing a 10.5% margin, with slight compression due to strategic fulfillment and fintech investments.
  • Net Income: $397M, up 11% YoY, helped by reduced FX losses.
  • Fulfillment Investments:
    • 6 new fulfillment centers opened (5 in Brazil, 1 in Mexico).
    • Plans to more than double fulfillment centers in Brazil by end of 2025 (11 new operations).
    • Fulfillment penetration improved by 4.5 percentage points YoY.
  • Fintech (Mercado Pago):
    • 1.5M new credit cards issued in Q3.
    • Credit card TPV grew 166% YoY.
    • Overall credit portfolio grew 77% YoY.
    • Credit card share of total portfolio increased from 25% to 39% YoY.
    • NPLs stable at 7.8% despite fast portfolio expansion.
  • Profitability Impact: NIMAL spread dropped to 15% due to:
    • Shift to lower-spread credit card product.

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Operator: Good evening, and welcome to MercadoLibre's Q3 2024 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Richard Cathcart, Investor Relations Officer. Please go ahead. Richard Cathcart: Hello, everyone, and welcome to the MercadoLibre earnings conference call for the quarter ended September 30, 2024. Thank you for joining us. I'm Richard Cascade, MercadoLibre's Investor Relations Officer. Today, we will share our quarterly highlights on video, after which we will begin our live Q&A session with our management team. Before we go on to discuss our results for the third quarter of 2024, I remind you that management may make or refer to, and this presentation may contain forward-looking statements and non-GAAP measures. So please refer to the disclaimer on screen, which will also be available in our earnings materials on our Investor Relations website. With that, let's begin with the summary of our results. Marcos Galperín: Hello, everyone. I am pleased to share that MercadoLibre had a later quarter of outstanding growth. We had an excellent quarter across all of our businesses and geographies. So the strong performance was really all around. With these results, we reinforced our position as the leading e-commerce and fintech platform in Latin America

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