MercadoLibre Q2 2022 Results

MercadoLibre announced Q2 results yesterday which was yet another beat and certainly the best eCommerce performance announced so far this reporting season…

GAAP EPS of $2.43 beats by $0.79.
Revenue of $2.59B (+52.4% Y/Y) beats by $80M, (up 56.5% year on year on an FX neutral basis).
$30.2 billion Total Payment Volume, up 83.9% year-over-year on an FX neutral basis $8.6 billion
Gross Merchandise Volume, up 26.2% year-over-year on an FX neutral basis
Gross Margin reached 49.4% vs 44.3% a year ago.
Net Inc was $123m or 4.7% margin
Take rates increased for both Commerce to 16.7% from 16.3% and for Fintech 3.84% from 3.2%.

The highlights of their core business have been:

  1. Reaching a new high in customer #s for the quarter at 40.8m unique buyers
  2. Continuing to grow core ecommerce GMV and volumes
  3. Introduction of 2 day shipping that is proving its worth
  4. Continued penetration of its total GMV with transaction payment value (up 84% on an FX neutral basis)
  5. Astonishing growth of off platform transaction payment value (up 135% on an FX neutral basis)

Their current growth levers have been highly successful, with:

  • Fintech solutions and Digital Wallet uptake immensely strong
  • Credit portfolio growing 232%

Interestingly we are seeing the crossover in the next 2 quarters of Fintech ($1.2bn in Q2 growing at 107%) overtaking commerce ($1.4bn in Q2 growing at 23%). At which point growth could even reaccelerate.

Future growth levers that they are going after include:

  • Advertising
  • Remittance

Another very impressive report on the whole. The vision of becoming both the ecommerce powerhouse as well as the digital banking and finance provider to Latin America appears to be coming together - do not mistake their incredible success in “payments” on their ecommerce platform as the end of their fintech story, they are now genuinely much more than that with digital wallets, digital account services and credit solutions.


Quarterly Report:-…

…and Investor Center:-…

Call Transcript:-…

Results Presentation:-…


I am still holding MELI long term but lightened up my position last month due to expected FX headwinds. Big time inflation in the S. American economies. They cannot stop spending and unemployment rates are absurd. And I thought Sea Ltd was taking a bite out of MELI’s butt. Guess I was wrong. It is really incredible Q2 revenue they grew over 54% in dollars. They must have some currency hedges in place as the FX impact was marginal. Still keeping a long term modest holding in MELI.



Zane - MercadoLibre are one of the best managed businesses around. They are ultra consistent in smashing it every quarter whilst operating in one of the hardest places to do business.

We are looking at a LatAm-wide digital banking and finance fintech star in the making.

The board often debates the durability of hyper growth looking for the next $1bn or reaching $10bn in x many years out. These guys are still in hyper growth whilst at a $10bn run rate and ADDING $5bn in revenues a year, with every likelihood of accelerating their growth rate within a year as triple digit growing Fintech over takes double digit growing Commerce.

MercadoLibre is hiding in plain sight.



Thanks, Ant. Good writeup.

Quick question on the fintech and credit portion. Exactly how much debt exposure does MELI have on for this? Taking a look at the slides, it appears the allowance for bad debt this quarter was a new high at 11% though the 3.95% take rate was a little higher as well. Could this possibly put a drag on fintech growth if the economies worsen in these countries and more debt goes into default? I’m curious if management has given any details on how they handle this balance.


Hi Stocknovice - good question. They seem to be using all the right metrics to monitor their credit business. Not sure what disclosure they have made about how they manage the non performance of their loan book but I don’t think “credit” is so large a part of their business at this point to worry them if the economy worsens and credit risk deteriorates.


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Think 9% Inflation Is Bad? Try 90%.

With the world grappling with rising prices, a tour through Argentina reveals that years of inflation can give rise to a truly bizarre economy.

NY Times article yesterday (Aug 6th)

Ant, you say “We are looking at a LatAm-wide digital banking and finance fintech star [Meli] in the making,” but do you really want to get involved in the risks of Latin American finance, when there are so many great companies without those risks?

This is an economy where any major purchase is made with US $100 bills rather than the country’s actual currency, where 21 economic ministers have now lasted two months or less, where last year’s 64% inflation is expected to hit 90% this year, etc. And consider that Argentina is one of Latin America’s major economies.



As a long time Mercado Libre shareholder, I’ll take a shot at your question. My two main reasons for staying invested: They have navigated the waters of Latin America’s troubled economy very well for many years, and still managed hyper-growth. Also, much of Latin America (I can’t remember the figure, perhaps Ant has it) is unbanked or under banked, and this is a huge opportunity for Mercado Libre’s fintech which is just getting started.

An area where I lack understanding is their credit arm, and interest margins after losses, take rates etc. So this is an area of concern (or lack of knowledge.)

Thanks for all you do~


Hi Saul - completely understand your view point on this. I guess having lived in Asia for 13 years and spent plenty of time in LatAm (both professionally for work and outside of work) and having only worked for multinationals ex US, I guess I have a different risk appetite but I agree with the risks identified and that is why it isn’t a major holding for me.

Having said that - I think that these risks also offer Mercadolibre a moat in the sense that anything less than an excellently managed business would fail and this probably puts off businesses from outside the region either entering or doing what it takes to make a success of it.

To Jille’s point - 40-60% of LatAm is unbanked which represents a massive opportunity that doesn’t exist in the developed regions.

The fact that Warren Buffett’s Berkshire Hathaway was prepared to take an 5% stake in StoneCo - the Brazilian fintech player serves to highlight the risk/reward on offer and that it could be taken seriously.

Mercadolibre is a $50bn company having grown 10x in 10 years and 30x in 15 years. They are a solid blue chip US listed play and have an outstanding track record.



Argentina is a mess. I was down there two years ago, and the street price for a dollar was 40% higher than the official price. Many wealthy Argentinians buy condos in Uruguay to hide their money from the tax man. Many roads half completed. But you can buy a great steak dinner in Buenos Aires with a good bottle of red wine for $ 30 a couple.


I would like to second Saul’s point re credit risk. Upstart should have taught us that once companies get into the business of lending money, they not only start taking on credit risk but also taking on risks associated with the funding markets. As genius as AI model masters may be, their genius may not translate well into understanding of credit risk or how financial markets operate (as UPST demonstrated by first claiming they are not dependent on wholesale funding markets and now admitting that those markets are their main constraint). I’m not saying that MELI is another UPST (its business is obviously very different) but please do not underestimate the complexities, risk and balance sheet requirements associated with lending money. Heck even the almighty vampire of finance, Goldman Sachs, can’t figure out how to make money with their consumer business. There is a reason why Amazon’s credit cards are issued by … Chase. And I haven’t even talked about complexities of lending money in markets with 50% plus inflation and questionable legal systems.


hello all,
from all i have read - i have one (IMO - important) question - anybody does have exact info - $MELI is crediting (IF crediting) by local currencies - or by USD? i suppose, that should be connected with their sellers lots - if they are selling by USD - that also might/should be credited by USD (in case of buy is by credit).
does anybody here have knowledge about this? personally i do not, but i would be very interested to know this
what i do know - i used to live in very high inflation country (post soviet union), so in our country these times ALL PRIVATE buys/sell were only by USD (or germany marks, there were no EUR that time). so - yes - we used to be in very high inflation - but most of these risks personally in our family were protected by ONLY USING USD, instead of local currency. and almost EVERYBODY on our country used the same scheme. local currency was like one-day resource, just to convert to USD end-of-day.

how is that in lat-am?

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I’m from Venezuela. When I tried to open an account with MercadoLibre (5 or more years ago?) thinking I’d be able to sell outside Venezuela what I found is that I could only sell in the country I opened an account and only in the local currency. No ForEx. At the time it was illegal to trade in US$ and at times even illegal to possess US$.

I was impressed with their customer service even when they were of no use to me.

Denny Schlesinger