MercadoLibre Inc., the Latin American e-commerce and fintech company, reported first-quarter results that surpassed analyst estimates, fueled by a strong rebound in its Argentina business. The performance report, released Tuesday, indicated growth across the company's operations, influencing sentiment around MELI Stock.
Revenue for the three months ending in March reached $5.9 billion, a 37% rise from the same period a year ago. This figure topped the median forecast of $5.5 billion among analysts surveyed by Bloomberg. Net income for the quarter was $494 million, also exceeding expectations.
Operating income came in at $763 million, compared to analysts expecting around $617 million. The company's earnings before interest and taxes (EBIT) margin improved slightly to 12.9% from 12.2% in the prior year. MercadoLibre Inc. has consistently delivered results above market projections in recent periods.
Argentina emerged as a key driver of the first-quarter performance. Gross Merchandise Value (GMV) in the country grew 126% on a foreign-exchange neutral basis. This compared to a total GMV increase of 40% across all the company's markets.
Factors contributing to the resurgence in Argentina included the government's removal of trade barriers and the scrapping of currency controls. Lower inflation and reduced interest rates also helped boost sales and consumer appetite for credit in the nation.
The strong showing pushed Argentina past Mexico to become MercadoLibre's second-largest market by revenue, placing it behind Brazil. Argentina had previously held this position before slipping last year. Reporting results from the company highlighted the segment's contribution.
MercadoLibre's fintech unit, Mercado Pago, also saw growth in its credit portfolio. The portfolio grew 75% year-on-year, reaching $7.8 billion from $6.6 billion in December. This expansion was primarily driven by credit cards.
Regarding the credit portfolio, the 15-to-90 days default ratio stood at 8.2%. This marked an increase of 0.8 percentage points from the previous quarter but was down from 9.3% a year ago. For more perspective on market activities, see recent investing news.
Chief Financial Officer Martin de los Santos said improvements on the company platforms in Argentina had continued into the first quarter.
