MercadoLibre, Inc. Q4 FY2023 Earnings Call

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MercadoLibre Q4 2023 Earnings Summary

  • Revenue: $4.26 billion, up 42% YoY, with acceleration in both Commerce and Fintech segments due to peak season execution and prior investments.
  • EBIT Margin: 13.4% (excluding one-off tax provision), an improvement from Q4 2022, reflecting scale and operating leverage.
  • Operating Income (FY 2023): Nearly $2 billion, reflecting a 10x revenue growth over six years and significant margin expansion.
  • Commerce Highlights:
    • First-party (1P) business in Brazil grew 81% in 2023; 1P GMB was up 50% QoQ in USD in Q4.
    • Fulfillment penetration reached nearly 50%, improving shipping speed and reducing late deliveries.
    • Advertising revenue grew 72% YoY FX-neutral in Q4, with 53,000 new advertisers onboarded in 2023.
  • Fintech Highlights:
    • Mercado Pago surpassed 50 million active users in Q4.
    • Strong growth in acquiring business and credit products; credit card portfolio reached $1.2 billion (up nearly 100% YoY).
    • Significant adoption of new Fintech products (e.g., tap-to-pay POS, credit and debit cards in Mexico and Brazil).

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Operator: Hello, everyone and welcome to the MercadoLibre's Earnings Conference Call for the quarter ended December 31, 2023. Thank you for joining us. I’m Richard Cathcart, 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 CEO, Marcos Galperin, Chief Financial Officer Martin de los Santos, Fintech President, Osvaldo Gimenez and Commerce EVP Ariel Szarfsztejn. Before we go onto discuss our results for the fourth quarter of 2023, I’ll 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 a summary of our results. Hello everyone. I’m delighted to share that MercadoLibre delivered solid results in Q4 marking a strong conclusion and outstanding year. Overall, 2023 highlighted their strength of our financial model and it’s future potential as well as a powerful impact of compounding of several years of investment in technology. For our commerce business it was a year of accelerated growth and market share gains in most countries. We achieved this but continued to make improvements and the value proposition to buyers and sellers in our marketplace. I would like to highlight three important initiatives that contributed to our success in commerce

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