MercadoLibre, Inc. (NASDAQ:MELI) Q3 2023 Earnings Conference Call November 1, 2023 5:00 PM ET
Company Participants
Richard Cathcart - IR Officer
Marcos Galperin - CEO
Martin de los Santos - CFO
Osvaldo Gimenez - President, Fintech
Ariel Szarfsztejn - Commerce EVP
Conference Call Participants
Andrew Ruben - Morgan Stanley
Irma Sgarz - Goldman Sachs
Marcelo Santos - JPMorgan
Maria Clara Infantozzi - Itau BBA
Kaio Prato - UBS
Scott Devitt - Wedbush
Melissa Byun - Bank of America
Marvin Fong - BTIG
Trevor Young - Barclays
Geoffrey Elliott - Autonomous
Neha Agarwala - HSBC
João Soares - Citi
Deepak Mathivanan - Wolfe Research
Martin de los Santos
Hello, everyone. I am Martin de los Santos, MercadoLibre's CFO. For those of you who haven't met me, I have been at MELI since 2007. First as a Board member and since 2012 as a public management team. For the past seven years, I have led the credit business and the last August when I took the position of CFO. I look forward to meeting as many of you as possible in due course.
I am pleased to report a strong set of results in my first quarter of CFO with a strong successful third quarter across geographies, 2023 continues to show an attractive combination of growth and profitability with a record in income from operations, with strong momentum across geographies in both commerce and fintech MELI’s revenues growth accelerated.
Mexico was particularly strong with revenues growing above 60% year-on-year, while Brazil also posted a greater performance with around 40% growth. These two countries have again increased their contribution to our total revenues.
This strong business growth combined with cost discipline led to OpEx and SG&A dilution as the business continues to scale. Income from operations more than doubled year-on-year for the fourth consecutive quarter with margins expanding once again. Brazil was the largest contributor to our profit growth, representing a significant portion of it.
During Q3, in the commerce business, we saw acceleration in GMV and items sold growth in the three main geographies where we operate with higher items provider. This higher user engagement come from continued experience improvements, especially on the logistics front where we reached 48% of fulfillment penetration and offer better delivery promises, improving conversions and further development of categories to technology.
As a result, we have a record of 50 million buyers and market share gains, especially in Brazil and Mexico. Mercado Pago off-platform TPV accelerated in all main countries. We saw an increased number of users and higher engagement metrics as we position Mercado Pago as a comprehensive financial service provider.