- MercadoLibre's (NASDAQ:MELI) Q2 operating expenses ($69.4M) equaled 44.9% of revenue, up from 41.6% in Q1 and 39.4% a year ago after backing out one-time charges, and a key reason EPS missed estimates in spite of a revenue beat. 404 bps of the annual increase is attributed to currency swings, and the rest to higher salaries/wages and investments in Mercado's Buyer Protection Program.
- Also hurting EPS: Gross margin fell to 67.4% from Q1's 69.8% and Q2 2014's 72.4%. The Y/Y drop is attributed to a revenue mix shift towards the MercadoPago payments platform (has lower margins), as well as higher sales taxes.
- Top-line numbers were generally strong, though forex remains a major headwind. Revenue rose 17% in dollars, and 88% in local currencies. GMV fell 8.4% in dollars to $1.65B (similar to Q1's 8.2% drop), while rising 84.6% in local currencies. Items sold rose 27.8% Y/Y to 30.2M, and MercadoPago payment volume rose 53.5% in dollars (108.3% in local currencies) to $1.21B on the back of a 75.8% increase in transactions to 18.1M.
- MercadoPago's penetration rate on MercadoLibre's marketplaces rose to 57% from 50% in Q1 and 34% a year ago. 52% of Brazilian GMV and 21% of Mexican GMV involved a financing option.
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Q2 results, PR