MercadoLibre Inc (NASDAQ:MELI) stock rose 10.75% (As on August 3, 11:12:47 AM UTC-4, Source: Google Finance) after the company reported a 113% rise in its second-quarter net income to $261.9 million, amid higher sales volume and an increase in users. The company, with a presence in over 18 countries across Latin America, saw its net revenue rise 57.3% in constant currency to $3.4 billion. Over the quarter, MercadoLibre said it added 8.1 million new users across its operations, bringing its total active user base to 108.6 million. Operating income rose 123.7% in dollar terms, reaching $558 million, while its operating margin was 16.3% compared to 9.6% a year ago, boosted by its performance in Brazil and Mexico. At its fintech unit, revenues grew 48.4% in local currency to $1.5 billion, fueled by an 18.3% growth of active Mercado Pago users. Total payment volume jumped 96.6% in constant currency to $42 billion. On FX-neutral basis, revenues in Commerce segment rose 65% Y/Y to $1.94 billion on higher marketplace monetization and the step-change in the growth of 1P. Gross margin stood at 50.4% vs. 49.4% a year ago, reflecting cost dilution, efficiency improvement and lower POS device sales. Income from operations reached a new quarterly record of $558 million, up 175.2% Y/Y on FX-neutral basis, with a 16.3% margin (up 6.7 ppt Y/Y).  Operating cash flow stood at $1.41 billion in the quarter.

Moreover, the company’s loan portfolio meanwhile rose over 21% and reached $3.3 billion in the quarter, as the period was marked by good profitability and default rate remained stable in operations with major exposure until 90 days. Gross merchandise volume (GMV), a key metric in the e-commerce industry, was up 47.2% in constant currency to hit $10.5 billion. Citi analysts said in a note that the company had a good quarter, highlighting it continues to gain market share, “especially in Brazil and Mexico,” and deliver consistent margin expansion.

MELI in the second quarter of FY 23 has reported the adjusted earnings per share of $5.16, beating the analysts’ estimates for the adjusted earnings per share of $4.13, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 31.5 percent to $3.42 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue by 4.27%. The strong financial performance has been broad-based across geographies, with Brazil and Mexico making major contributions to the quarter’s profit growth, and further diversifying the profit base.