MercadoLibre Delivers Exceptional Fourth-Quarter Earnings in 2024
MercadoLibre (MELI) announced impressive fourth-quarter 2024 earnings of $12.61 per share, significantly surpassing the Zacks Consensus Estimate by 73.69%. This figure reflects a remarkable year-over-year increase of 288%. Total revenues for the quarter reached $6.05 billion, rising 24% compared to the previous year (or 75% on an FX-neutral basis), exceeding expectations by 3.7%.
Discover the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenue growth was primarily fueled by a surge in commerce and fintech segments, which grew 44.4% and 28.6% year over year, generating $3.5 billion and $2.5 billion, respectively. Significant momentum was noted in Brazil, where growth reached 32%, and Mexico, at 28%. In Argentina, positive selling trends continued, with items sold increasing by 18% year over year during the fourth quarter.
In the Fintech segment, the Net Promoter Score hit all-time highs in Brazil and Mexico, and the best levels in Argentina seen since 2021. This improvement spurred adoption, with monthly active users rising 34% year over year to 61.2 million, along with a remarkable 129% growth in Assets Under Management, reaching $10.6 billion. Additionally, Insurtech active users surpassed 10 million for the first time.
Advertising services also showed solid growth, increasing 41% compared to the previous year, amounting to nearly 2.1% of the gross merchandise volume (GMV) at the end of the quarter.
Moreover, an increase in total payments volume (TPV), driven by the strong performance of Mercado Pago, contributed positively. Another encouraging sign was MercadoLibre’s growing GMV.
MercadoLibre, Inc. Stock Price, Consensus and EPS Surprise
MercadoLibre, Inc. price-consensus-eps-surprise-chart | MercadoLibre, Inc. Quote
Quarterly Breakdown of MercadoLibre
Brazil: The fourth-quarter revenue came in at $3.31 billion, making up 51.8% of total revenues, representing a 37.7% year-over-year increase.
Argentina: This market generated revenues of $1.3 billion, accounting for 21.6% of the overall revenue, reflecting a 31% increase year-over-year.
Mexico: Revenue in this region reached $1.34 billion, which was 22.2% of total revenues, skyrocketing 43% year-over-year.
Other countries: This segment brought in $269 million, making up 4.4% of total revenues, with a year-over-year increase of 40.1%.
MELI Key Performance Indicators
The GMV for the quarter was $14.5 billion, reflecting an 8% increase year over year and a 56% increase on an FX-neutral basis. However, it fell short of consensus estimates by 1.08%.
Success in sales was evidenced by 525 million items sold, an increase of 27.1% from the previous year.
TPV saw a significant surge of 33% year over year and 49% on an FX-neutral basis, reaching $58.9 billion, primarily due to Mercado Pago’s robust performance. This figure, however, did not meet the Zacks Consensus Estimate by 1.47%.
Total payment transactions also increased, up 43.3% year over year to total 3.32 billion.
Operating Analysis of MercadoLibre
For the fourth quarter, the gross margin contracted by 110 basis points from the previous year’s quarter, settling at 45.4%.
Operating expenses reached $1.92 billion, a rise of 12.5% compared to the last year, with these costs accounting for 31.8% of revenues, a decrease of 710 bps year over year.
The operating margin expanded by 590 bps to 13.5% compared to the same period last year, resulting from strong operational execution and effective cost management strategies throughout its logistics network.
Balance Sheet Overview
As of December 31, 2024, MercadoLibre reported cash and cash equivalents totaling $2.63 billion, up from $2.16 billion on September 30, 2024.
Short-term investments stood at $1.05 billion, while net debt was reported at $2.04 billion at the quarter’s end.
Zacks Rank for MELI & Other Recommendations
Currently, MercadoLibre holds a Zacks Rank of #3 (Hold).
Other well-rated stocks in the broader Zacks Retail-Wholesale sector include Bath and Body Works (BBWI), Beacon Roofing Supply (BECN), and Cars.com (CARS), each holding a Zacks Rank of #2 (Buy) as of now. For a complete list of today’s Zacks #1 Rank stocks, click here.
Bath and Body Works, Beacon Roofing Supply, and Cars.com are all set to announce their fourth-quarter 2024 results on February 27.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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