MercadoLibre’s net income falls in Q2
05 Aug 2016
MercadoLibre (Nasdaq:MELI), a Latin American e-commerce and classifieds player operating in 19 countries, saw its net income drop by 18.4 percent to $15.9 million U.S. in Q2 of FY2016 from Q2 of FY2015, with Brazil and Argentina contributing most of the company’s revenue in the period.
Net revenue rose 29.4 percent to $199.6 million in Q2 of FY2016 from Q2 in FY2015, and grew 72.5 percent in terms of local currencies.
Brazil, MercadoLibre’s largest market, generated $102.8 million, of the revenue, which was 61.4 percent more than in Q2 of FY2015 in local currency terms.
Non-marketplace revenue, which includes the company’s real estate and auto classified operations, increased 81.9 percent in local currency terms, and by 41.3 percent in U.S. dollar, in Q2 of FY2016 from Q2 of FY2015.
“Non-marketplace revenue grew [nearly] 82 percent – the eight quarter of year-on-year growth above 70 percent,” Pedro Arnt, MercadoLibre’s CFO told analysts in an Q2 earnings conference call.
Mobile paying off for Meli
As the mobile reach of classifieds and e-commerce widened, MercadoLibre managed to generate solid revenue from the mobile channel. The Nasdaq-listed company said advertising revenue grew 124 percent in local currencies, as the product ad format “consolidated across devices.”
“Fifty percent of [our] total advertising revenue (comes from) product ads on mobile devices,” the company said in a press release.
“We remain enthusiastic and encouraged by the progress we have made on this [advertising] front. Our product ads solution, with formats that seamlessly integrate advertising into our mobile and web properties, continues to deliver a superior advertising performance,” Arnt said.
“These new ad formats continue to provide improved click-through rates to our advertisers without negatively affecting conversion rates of our core marketplace.
“In addition, during this quarter, we received confirmation that we are successfully transitioning these new formats onto mobile,” he noted.