Mercado Libre, through the roof: reported record profits and its stock jumped up to 14 percent on Wall Street

Free market

E-commerce giant Mercado Libre reported on Wednesday that its profits increased 79.8% year-on-year in the second quarter, to 123 million dollars.as reported by the company in a statement accessed by Infobae. In this framework, the company’s quarterly earnings exceeded the forecast of analysts from the Refinitiv agency of 98.9 million dollars.

Thus, the shares of the company he founded Mark Galperin 23 years ago – yesterday he celebrated it on social networks – jumped up to 14% in the after market the Wall Street.

The net income of Mercado Libre (MELI), with a presence in 18 countries, including Brazil, Mexico and Colombia, they rose 52.5% to about $2.6 billion in the period, though in constant currency they grew 56.5 percent.

Meanwhile, the group’s financial unit, Mercado Pago saw its profits soar 112.5% ​​in dollars, to 1.2 billion dollars, as it expanded its business lines, such as insurance and investment tools.

Meli's stock in the last 5 days.  The formal settlement today was USD 890 per share, but in after market movements it exceeded USD 1,000, with an increase of more than 14%.
Meli’s stock in the last 5 days. The formal settlement today was USD 890 per share, but in after market movements it exceeded USD 1,000, with an increase of more than 14%.

Likewise, Mercado Pago registered an increase of 83.9% in the total volume of payments in constant currency, up to 30,200 million dollars. While its credit portfolio reached 2,700 million dollars in the quarter, which represents an increase of 12.5% ​​compared to the same period of the previous year.

“Buyers maintain their levels of activity on the platform firm, generating growth in the number of items per buyer compared to the previous quarter,” Mercado Libre detailed.

During the second quarter, the firm exceeded 38 million active users, an increase of 26.3%, with growth in all markets in the region, mainly in payment services via QR code, transfers within the ecosystem and users who they applied for credit.

We saw a strong quarter across all businesses, reflecting continued improvement in profitability with record results in net income and gross profit. As a result of this consistent performance, we remain firm in our purpose of expanding access to trade and financial services”, assures pedro arntChief Financial Officer of Mercado Libre.

And he added: “The marketplace operation achieved solid results, with growth in sales and in the buyer base. Mercado Pago, for its part, maintains a strong growth rate, with a growing user base and an increase in the volume of payments through the digital account and acquisition. Our strategy continues to prioritize the balance between profitable growth and cash management, supporting investment in technology for product development, always focusing on long-term differentiation”.

With regard to electronic commerce, the company founded by Galperin highlighted that the total value of the items transacted in the marketplace was USD 8.6 billion in the second quarter, an increase of 21.8% in dollars and 26.2% in constant currency.

In total, 275.2 million items were sold — 6.7 items per buyer —, which represents a growth of 12.3%. The total volume of posts registered on the platform was 300.5 million. Argentina and Mexico achieved an average growth of 30% year-on-year in dollars, registering more items per buyer than the average, including Brazil.

Meanwhile, 264.1 million items were shipped in the region through Mercado Envios during the quarter, a year-on-year increase of 26.9%. The progress in the execution and speed of Mercado Envios was significant, reaching 98.6% of the entire operation, above the 97.3% registered in the same quarter of 2021. Of that total -reported the company- more than 91.1% corresponds to the Mercado Libre managed network.

Likewise, of the general volume of merchandise, almost 80% was delivered in a maximum of 48 hours and approximately 55% the same day or the day after the purchase.

The marketplace operation achieved solid results, with growth in sales and in the buyer base. Mercado Pago, for its part, maintains a strong growth rate, with a growing user base and an increase in the volume of payments through the digital account and acquisition (Arnt)

In another order, the company explained that the marketplace operation maintains its growth and relevant market share in Latin America, from investment in technology, as well as efficient logistics, a diverse base of sellers and a wide offer, improving the user experience. “It is worth noting the expansion of the network of Mercado Libre agencies — shipping, collection and withdrawal points for merchandise, which make up the logistics network — and of the air fleet, which will allow reducing delivery time in the northern regions, northeastern and central-western Brazil. Currently, delivery times in the main capitals of this country are between one and two days”, he remarked.

In addition, Mercado Libre reported that the loyalty program continues to grow year after year, reaching millions of subscribers and playing a fundamental role in the integration and involvement of Mercado Libre and Mercado Pago users. “At level 6, the highest of this program, users have higher frequency, sales volume and retention, and enjoy a series of benefits such as free shipping, discounts and entertainment services,” the company highlighted.

“Among some of the most important aspects reported by the leading e-commerce company in Latin America and that partly explain the positive reading by investors, is the 26% increase in unique active users of the fintech segment. They reached a total of 38.2 million at the end of June. It is worth noting that this situation occurs in a global scenario of economic slowdown, and where several of the most important technology companies have reported declines in terms of active users and average revenue per user,” he assured. Maximilian Donzelli, Head of Research at IOL investonline.

“Secondly, We cannot fail to mention the rapid pace of growth maintained by the Mercado Pago divisionwhich reached a volume of payments that exceeded 30,000 million dollars (record for the company), thus reflecting an increase of approximately 84% compared to the same quarter of the previous year”, added the analyst.

Meanwhile, IOL Investonline highlighted that Argentina remains the second most important market for the company, contributing around 23% of total revenues, thus surpassing Mexico, which contributes 16% of revenues. In addition, Argentina reflected a growth of almost 112% compared to the same period in 2021, which translates into the country that reflected the fastest growth.

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