MercadoLibre (MELI) Misses Q4 EPS by 45c, Revenues Beat

MercadoLibre (NASDAQ: MELI) reported Q4 EPS of ($1.11), $0.45 worse than the analyst estimate of ($0.66). Revenue for the quarter came in at $674.3 million versus the consensus estimate of $646.82 million.

Fourth Quarter 2019 Financial Highlights

• Net revenues for the fourth quarter were $674.3 million, a year-over-year increase of 57.5% in USD and 84.4% on an FX neutral basis.
• Enhanced marketplace revenues increased 55.3% year-over-year in USD and 79.7% on an FX neutral basis, while non-marketplace revenues increased 60.0% year-over-year in USD and 89.7% on an FX neutral basis.
• Gross profit was $308.3 million with a margin of 45.7%, compared to 47.8% in the fourth quarter of 2018.
• Total operating expenses were $377.2 million, an increase of 83.5% year-over-year in USD. As a percentage of revenues, operating expenses were 55.9%, compared to 48.0% during the fourth quarter of 2018. On a sequential basis the 479 bps of margin improvement in operating expenses, 222 bps were the result of an improvement in bad debt and 203 bps in a lower investment in Maketing.
• Our marketing expenses increased $3.2 million quarter-over-quarter, while Bad debt improved by $11.6 million quarter-over-quarter during the quarter.
• Loss from operations was $68.9 million, compared to a loss of $81.9 million during the prior quarter. As a percentage of revenues, the loss from operations reached 10.2%.
• Interest income was $26.9 million, a 88.4% increase year-over-year, as a result of equity offering during 2019, which generated more invested volume and interest gain, and a higher float in Argentina.
• The Company incurred $21.2 million in financial expenses this quarter, mainly attributable to secured financial loans and interest expenses from our trusts related to our factoring business in Argentina.
• Net loss before taxes was $63.0 million, up from a loss of $6.8 million during the fourth quarter of 2018.
• Income tax gain was $9.0 million.
• Net loss was $54.0 million, resulting in basic net loss per share of $1.11, due to the investment in marketing, which accounted for $146.6 million.

For earnings history and earnings-related data on MercadoLibre (MELI) click here.

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