Hello, everyone, and welcome to the MercadoLibre Earnings Conference Call for the Quarter Ended September 30, 2018. I am Federico Sandler, Head of Investor Relations for MercadoLibre. Our senior manager presenting today is Pedro Arnt, Chief Financial Officer. Additionally, Marcos Galperin, Chief Executive Officer; and Osvaldo Giménez, Executive VP of Payment, will be available during today's Q&A session. This conference call is also being broadcasted over the Internet, and is available through the Investor Relations section of our website. I remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, industry trends, and product and technology initiatives. These statements are based on currently available information and our current assumptions, expectations and projections about future events. While we believe that our assumptions, expectations and projections are reasonable in view of the currently available information, you are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the Forward-Looking Statements and Risk Factors sections of our 10-K and other filings with the Securities and Exchange Commission, which are available on our Investor Relations website. Finally, I would like to remind you that during this conference call we may discuss some non-GAAP measures. A reconciliation of those measures to the nearest comparable GAAP measures can be found in our third quarter 2018 earnings press release available on our Investor Relations website. Now, let me turn the call over to Pedro.

Hi, everyone, and thank you for joining the call. I'm pleased to report another quarter of solid performance in our business. From a top line perspective, gross billings ascended to $463 million, growing 25% in U.S. dollars and 48% on an FX neutral basis. On a country-by-country basis, gross billings were even stronger in our main countries. 69% growth for Brazil, 83% for Argentina, and 84% for Mexico. From a bottom line perspective, operating losses showed a 61% reduction versus last quarter, coming in at $11 million, and with a breakeven EBITDA as we've continued to make progress over the last three months in adjusting our operational and financial model for sustainable profitable growth despite strong currency headwinds and additional adverse policy changes from our carriers in Brazil. Before I walk you through the highlights for the quarter, one comment on disclosure. You'll notice that many of the metrics we had been sequentially updating in the past will not be covered in my prepared remarks today as we've now included them in an accompanying presentation to the third quarter 2018 earnings script available on our website. So let's begin this time with a fintech progress report as it has become a growing area of focus for our organization. Quarterly TPV reached $4.5 billion, a growth of 74% year-on-year on an FX neutral basis, excluding Venezuela. During the quarter, off-platform TPV explained 80% of the total incremental total payment volume as we increasingly focus our efforts on our growing online to offline payments offerings, successfully expanding the financial services we offer our merchants and growing the markets we are currently in. During the month of September, for the first time ever, not only MercadoPago processed more total payment transactions off-platform than it did on MercadoLibre marketplaces, but total payment transactions surpassed…

Our first question comes from Mike Olson with Piper Jaffray. Mike J. Olson - Piper Jaffray & Co.: Hey, good afternoon. You focused a lot on payments in your prepared remarks. Just wondering what you're seeing from a competitive standpoint for payments in the region? And is this a case where multiple players can win in the midst of a huge market opportunity, or is it more of a winner-take-all market in your view? Thanks.

Hi, Mike. So this is obviously a very, very large TAM. This is a combination of both our aspiration to gradually move consumers away from cash payments to digital payments, combined with having a very strong value proposition or consumers in the region that today are non-banked or under-banked in addition to whatever opportunities exist to gain bank, consumers and existing plastic or digital transactions. So the size of the opportunity really is enormous. And given the size of the opportunity, obviously competitors will arise. But as always, if we continue to focus on ourselves in the long-term, we think there's a chance to build a very, very healthy and sizable business there.

Thank you. Our next question comes from Stephen Ju with Credit Suisse. Stephen Ju - Credit Suisse Securities (USA) LLC: Okay. Thanks. Pedro, I wanted to talk about your efforts to take down friction (21:33) in Brazil and decrease your dependency on Correios. Wondering, as of this quarter, like what percentage of the units in the country are now off-Correios and how much you think you can pull off on either a quarterly or on an annual basis? Thanks.

So we disclosed the consolidated number of shipments that go through our prop network. We're not disclosing that by country. Suffice to say that we continue to make some positive moves in terms of building all the necessary building blocks for our proprietary network in Brazil. We now have a fulfillment center that's operational and very, very rapidly expanding its square meter footprint. We have multiple cross-docking stations. We're beginning to aggressively do zone skipping and optimizing on that network. So I think a lot of the heavy lifting that we've been doing over the last three or four quarters should begin to give us better and better returns as we move into the fourth quarter and 2019. We still have a significant reliance on Correios for this holiday season and probably moving into the beginning of next year. I think, fortunately, Correios' efficiency and their performance has also dramatically improved over the past few months, which is one of the reasons we've seen the improvement in delivery times that were mentioned in the prepared remarks. So I think things are moving along very well on that front, but building out a logistics network is something that will take multiple quarters, and we'll continue to give you progress reports on that as we move forward. Stephen Ju - Credit Suisse Securities (USA) LLC: Okay. Thank you.

Thank you. Our next question comes from Ravi Jain with HSBC.

Hi, Pedro. Just following up on the payments question here. Given all the competitive landscape you're going to see, especially in Brazil, can you just conceptually give your views on three different streams? One is payments on platform, one is off-platform online, and off-platform offline. As to where is the biggest growth opportunity and how will the profitability of these three different streams in the longer term differ from each other? That would be really helpful. Thank you. Osvaldo Giménez - MercadoLibre, Inc.: Hi, Ravi. This is Osvaldo. So what we've seen today is we are very pleased with how we have been evolving, first on platform and then online, but what we see today is that e-commerce (24:32) in Latin America is between 4% and 5%. For the addressable market, it's significantly higher offline than online, and that is what we are seeing in terms of growth rates, growth with our mPos and wallet, and where we are seeing most of the growth over the last year. And we expect that trajectory to continue, and so we will leave that eventually. Offline will be larger than online. Still, it's a long way to go there because majority of our volumes comes from MercadoLibre and that already the mPos piece and the wallet piece are significantly adding more growth than the traditional online merchant services.

Thank you. Our next question comes from Franco Abelardo with Morgan Stanley.

Hi, everyone. So, my question is about the seller's base, especially in Brazil. Did you see any churn in the seller's base after the flat fee rate and maybe because of competition arising in the marketplace environment in Brazil you continue to see new sellers entering the off-platform? Thank you.

Great. So you look at the results in Brazil, right, growth in GMV above 30% coming in at 33%, that's significantly above everyone who's reported so far. And I think that it's a confirmation that business in Brazil, despite the strong headwinds from cost pressures and all the tinkering that we've been undertaking, continues to perform very well. There has been a decrease in overall number of new sellers as we, by design, began to remove the sale of very low ASP items. But if you look at gross merchandise volume, essentially what we've done is we've increased the ASP and we've removed a lot of very low value items that were also very difficult to conciliate with our very aggressive and very well received by our consumers free shipping offering. I think seller churn from competitive pressures or from the modifications we've made don't seem to be something that's excessively negatively or materially negatively impacting the results in Brazil.

Thank you. Our next question comes from Marcelo Cantos (sic) [Marcelo Santos] (27:22) with JPMorgan.

Hi. Good afternoon. It's Marcelo here. I had a question about the changes, the fine-tuning you're making in Brazil, tweaking the prices. So that is – is that mostly over, I understand it's never over, but is it mostly over the bulk of the changes? And do you think now you have more stability on that front? Or you are still looking to make some more tweaks and maybe to improve profitability?

So, as you can see from the evolution in the profitability or the reduction in EBIT losses, we've obviously gone in the right trajectory over the last three quarters. I think a lot of the significant modifications were carried out over the last two quarters. Now, going forward, we need to continue to monitor what happens with pricing and continue to adjust if prices have similar levels of changes as they did in the past, which we don't anticipate. But the reality is that especially the state-owned carrier has continued to change their commercial conditions over time. And also as we continue to improve in terms of more fulfilled delivery, more delivery on our proprietary network, that also could potentially open either the need or the possibility to continue to change pricing and costs. So I do think it's going to be an ever-evolving situation, but the big impact like the introduction of the flat fee or the reduction of key routes, which were the most significant drivers of changes in costs but also changes in demand, I think were carried out in the prior quarters.

Great. Thanks a lot.

Thank you. Our next question comes from Thiago Bortoluci with Goldman Sachs.

Yes. Hi. Good morning – good afternoon, everyone, and thanks for taking the question. My question is on Brazil GMV growth. We saw a change in the growth drivers this quarter with growth being much more driven essentially by price and not by volumes. Is it fair to assume that this trend should continue during the next three quarters until we see normalized comps for the flat fee? Or was there any specific issue impacting only this quarter? Thank you very much.

So just to clarify terminology. Yes, you're correct, what we did is eliminate, literally you can no longer list items on the platform for less than BRL 6. So that has eliminated a lot of transactions that we no longer wanted on the platform, which has slowed down unit growth significantly. But when you look at volume growth, because the average selling prices are now higher as we have removed that very cheap long tail stuff, has actually held above market rates of growth of 33%. And that's something that, as you anticipate, we should expect to remain in place until we comp this quarter next year because we don't have any current plans to reintroduce listings for less than BRL 6. So growth over the next year will be focused on gross merchandise volume and not so much units because of this change in policy.

That's clear. Pedro, thank you very much.

Thank you. Our next question comes from Deepak Mathivanan with Barclays.

Hey, guys. Thanks for taking the questions. So, first, can you talk about potential operational constraints that you would see that shift into more 1p (31:20) managed logistics solutions? In other words, do you think there are sufficient partners out there that can support the volumes to achieve your goals on this program? And then secondly, when should we expect some kind of monetization initiatives to kick in and cover some of the costs associated with warehousing and cross-docking that you're incurring for this?

Great. So our answer on operational constraints, I think, continues to be consistent with the prior quarters. We continue to add a growing number of carriers to our proprietary network that are doing increasing percentages of last mile delivery, that are doing zone skipping efforts for us. And so far we have not come up against availability of carrier capacity on our prop network. Now, our prop network is still in the early stages and will continue to grow at a very rapid pace, and we'll see what happens in the future. But so far we haven't come up against capacity constraints nor do we anticipate that going forward. In terms of the management of profitability and costs, we have carried out the corrections over the last few quarters. What we said is we'll continue to tinker. We believe that as we begin to offer more and more fulfillment service for our merchants and continue to improve delivery times in Brazil, which should sustain above market levels of growth in our business if we are able to deliver on all that. There continues to be room for pricing on the platform, especially for the sellers who we will be fulfilling for and taking care of their deliveries on our proprietary network. So we do think that there still are possibilities and drivers for margin improvement. That's not where the focus is right now. The focus continues to be on rapidly rolling out the proprietary network.

Thank you. Our next question comes from John Coffey with Susquehanna.

Hi, Pedro. Thanks for taking my call. My question is on mPos. In Brazil there's a number of competitors trying to sign up SMBs for credit acceptance. How does Mercado differentiate itself such that a new merchant signs up with you instead of (33:58) or another competitor? Osvaldo Giménez - MercadoLibre, Inc.: What we're doing is two-fold. First is we are leveraging our (34:19) that is driving most of our sales in terms of mPos. And then in terms of – the other thing we're doing is offering a comprehensive financial solution. So we started offering merchant grades a long time ago, a couple of years ago in Argentina then Brazil and Mexico. And then we had extended that to our mPos machine. In that way, we have gained a lot of volume over the last year, and we're very excited with the growth we're seeing.

Great. Thank you.

Thank you. And our final question comes from Richard Cathcart with Bradesco.

Hi, guys. Good evening. I just wanted to ask a question about the merchant credit in Brazil. Just wondered what you're seeing relatively early on in the product's life, what you're seeing in terms of demand from the sellers, and what you're learning about risks. And then also, if you could just kind of give a bit of a view whether you're looking at this product mainly as a way to drive your own revenue growth or whether it's also where you can kind of try and help the sellers to drive their own GMV growth on the platform, which in turn will also help your GMV growth. Thank you.

So let me take the financial question, and then Osvaldo can give you some color on the demand we're seeing in how that business is performing. The credit business, not just in Brazil but overall, is one that we're very enthused about. We're seeing very good results there. We see it as both. We see it as a business that will be one of our drivers of monetization and high margins, but at the same time it also is an extremely important driver of our sellers being able to sell more, as it's becoming for many sellers a prime source of working capital to grow their businesses. So I don't think necessarily there's a trade up there. Credit spreads in the region are very, very interesting and attractive. And even with a very compelling value props for our sellers, probably better for them than what they would get from traditional banks or financial institutions, so it drive their businesses and it still delivers a profitable high-margin revenue stream for us. Osvaldo Giménez - MercadoLibre, Inc.: Then in terms of originations in the last few quarters, we have not increased there the volume of originations in the aggregate (36:55) for the market. I'd say that is related to two things. First one is, during the third quarter this year in Brazil, we extended the number of (37:05) loan money to (37:07) usually lasts 12 months, but many of our target we have reached in just first quarter, and we have increased loans in the second and third quarter, but not as many as during the third one. Second factor has been the macro in Argentina. In Argentina given – on one hand, increase in interest rates; on the other hand, devaluation. When you look at amount of originations in U.S. dollars, those numbers have decreased over the last two quarters, but it's something that we believe is sensible given that (37:42) in the last quarter.

Ladies and gentlemen, thank you for participating in today's question-and-answer portion of the call. I would now like to turn the call back over to Mr. Pedro Arnt for any closing remarks.

Great. Thank you, everyone, for listening in. We are fully focused on the Q4 quarter here. Many of the countries have already started with their big commercial dates, Cyber Mondays and whatnot, so a lot of exciting work being done in the company that we will update you on in February. Thanks a lot.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect, and have a wonderful day.