The past year has been a challenging one for MercadoLibre (MELI -1.27%). The Latin American e-commerce leader was overwhelmed by a number of challenges simultaneously, which weighed heavily on the company's results. The combination of a truckers' strike, an accounting change that made growth look slower, and an unexpected and significant postal rate hike in its largest market ate into the company's bottom-line results, turning its profit to a loss. Further complicating matters was the fact that MercadoLibre had previously instituted free or low-cost shipping on many items to combat expected competition from

Things seemed to turn the corner last quarter, and the company would have been profitable had it not been for foreign-currency headwinds. Investors were seeking confirmation that MercadoLibre's turnaround continued to gain traction when the company released its first-quarter earnings -- and they got all they were looking for and more. The report sent the stock soaring 20% to a new all-time high last Friday in the wake of its financial report.

Let's look at three things that had investors celebrating the results.

An animated mural depicting  a number of household, clothing, and electronic items along with the MercadoLibre logo.

Image source: MercadoLibre.

Net revenue up 92%

MercadoLibre does all its business in the currencies of the 19 Latin American countries it serves but reports its results in dollars, as required by the Securities and Exchange Commission (SEC) for companies listed on U.S. exchanges. As a consequence, the results tend to be skewed by converting the results into dollars, because exchange rates fluctuate.

The first quarter was a great example of the disparity. Net revenue grew to $474 million, up 48% year over year, the company's fastest growth rate in more than two years. In local currencies, however, the results were even more remarkable, growing 92%.

Payments are soaring

One of the biggest contributors to the massive revenue increase was the company's payments business, as MercadoPago processed a record $5.6 billion in payments, up 82% year over year. MercadoLibre handles payments not only on its own e-commerce platform but as the preferred payment method for a growing number of digital sellers and brick-and-mortar retailers. Off-platform payment transactions grew to 88.2 million, pushing payments volume to $2.5 billion, up 119% in dollars but 194% in local currencies.

The total number of payment transactions, which strips out the effects of currency exchange rates, grew 94% year over year to 144 million transactions during the quarter.

Profitability returns

Given the uncertainty surrounding exchange rates and the results last quarter, investors were understandably cautious in their expectations, which turned out to be unnecessary. MercadoLibre reported net income of $11.9 million, resulting in earnings per share of $0.13, far exceeding analysts' consensus estimates for a $0.13 loss.

The company had endured losses last year when the unexpected postal rate hike in Brazil weighed on its results. MercadoLibre responded by eliminating shipping subsidies on certain products, removing smaller, unprofitable items from its website entirely, and instituting a flat rate for other small products. Those steps helped steer the company back to profit.

Investor takeaway

MercadoLibre is a case in point for seasoned investors. Those that have followed the company for any length of time were well aware that this was a temporary situation, one that would be rectified in due course. Patient shareholders were rewarded by the stock achieving all-time highs and a company that's as strong as it's ever been.

It also serves as a great example of why it pays to dig into the numbers.