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$MELI Results vs. What I Was Looking For
MercadoLibre continues to just be an absolute powerhouse. It's my #1 position in terms of cost basis and current percentage of my overall portfolio, and I continue to have no regrets.

Here's what I wrote yesterday along with my notes (in italics) of how they did.

MercadoLibre, Inc. ($MELI) - Reporting earnings tomorrow (5/5) afternoon
One of my highest conviction positions. They do it all and they do it incredibly well.

Here's what I'm looking for:

  • Can they sustain the revenue growth they've seen since COVID began (73% in 2020 and 78% in 2021)?

63% here in Q1, roughly matching Q3 and Q4 2021.

  • Can they bring margins back up (59% in 2017 vs 42.5% in 2021)?

Q1 jumped to 47.7%, 480bps above Q1 2020 and their highest quarterly GPM since Q2 2020.

  • FCF plummeted as capex more than doubled in 2021. I'm not against it. Fulfillment services is a key cog in the wheel. Just curious to see if that trend continues in 2022. I would imagine it does.

Q1 FCF of (370MM) vs Q1'21 (378MM). Q1 is always red so it's good to see this Q1 a little less red.

  • In terms of specific KPIs, I'd like to see growth of unique active users by >50%, gross merchandise volume by >33%, and total payment volume by >45%.

Ok, I was a bit ambitious here. UAUs came in at a healthy 16%. GMS at 27%, and TPV at 72%. A couple other KPIs worth noting: Their Commerce take rate was up 170bps to 16.7%, their Fintech take rate was up 60bps to 3.8%, their logistics network penetration broke 90% for the first time ever (90.55), their credit card portfolio has gone from non-existent in 2020 to 468MM in Q1'22, and their overall credit portfolio hit $2.4B (up 319%).

  • Watching total payment transactions via MercadoPago closely as well.

Up 73%.

  • Will management comment on Shopee (Sea Limited $SE) becoming authorized to operate as payment institution in Brazil?

TBD. I haven't listened to the call/read the transcript yet.

All in all, they continue to impress me.

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