Latin American e-commerce giant MercadoLibre (NASDAQ:MELI) reported first-quarter results on Tuesday, May 5. The bottom line swung to a loss, but that was always the plan, and the reported results crushed Wall Street's estimates across the board. The COVID-19 health crisis caused a slowdown in mid-March, but MercadoLibre's explosive growth recovered in a hurry.

MercadoLibre's first-quarter results by the numbers

Metric

Q1 2020

Q1 2019

Change

Analyst Consensus

Net revenues

$652 million

$474 million

38%

$634 million

GAAP net income (loss)

($21 million)

$12 million

N/A

N/A

Adjusted earnings (loss) per diluted share

($0.44)

$0.13

N/A

($0.48)

Data source: MercadoLibre. GAAP = generally accepted accounting principles.

The company handled a gross merchandise volume (GMV) of $3.4 billion, 34% above the year-ago result in constant currency terms. A total of 43 million unique active users represented a 31% boost over the year-ago period.

Finding red ink on the bottom line was neither a big surprise nor a cause for concern because MercadoLibre boosted its sales and marketing budget by 58% to a meaty $207 million. Holding back on that growth-promoting effort would generate bottom-line profits right away, but at the cost of slower overall growth. That's not what MercadoLibre is about these days.

A woman looks surprised as she uses her laptop on a grassy, sunny hillside.

Image source: Getty Images.

The high-octane growth engines are back to full power -- and more

It's no surprise to see a major e-commerce company holding up well during the coronavirus crisis. MercadoLibre actually saw its growth trends accelerate as the pandemic arrived in South and Central America.

"Consolidated April growth rates are above pre-COVID levels, driven by Argentina, Chile, Colombia, and Mexico, with Brazil still lagging somewhat," said CFO Pedro Arnt, continuing:

Summing up where we stand, we've seen 3 phases: a strong start to the first quarter that got derailed during the back half of March and rebounded by April. Given these recent trends, we remain optimistic that despite everything that has been occurring, we will still be able to make progress toward our annual objectives without having to delay or materially modify our investments or strategic initiatives.

That, in a nutshell, is why Mr. Market absolutely loved this report. MercadoLibre was able to overcome the initial coronavirus challenge right away, positioning the company to continue chasing top-line growth despite a global health crisis. Keep in mind that the stock traded 16% lower over the last three months, mostly due to worries about COVID-19 disruption. This muscular report erased those losses in a single stroke.