20190630 Form 8K









 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





 

 



 

 



FORM 8-K



 

 



 

 





CURRENT REPORT





 

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Date of Report (Date of earliest event Reported): August 7, 2019





 

 



 

 

MercadoLibre, Inc.

(Exact name of Registrant as specified in Charter)

Commission file number 001-33647





 

 



 

 







 

 



 

 

Delaware

 

98-0212790

(State or other jurisdiction of

incorporation )

 

(I.R.S. Employer

Identification Number)

Arias 3751, 7th Floor

Buenos Aires, Argentina, C1430CRG

(Address of registrant’s principal executive offices) (ZIP Code)

(+5411) 4640-8000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)





 

 



 

 



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

MELI

Nasdaq Global Select Market



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


 

Item 2.02. Results of Operations and Financial Condition.

On August 7, 2019, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.



Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated August 7, 2019


 

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

MERCADOLIBRE, INC.



 

 

 

Registrant



 

 

 

Date: August 7, 2019

 

 

 

By:

 

/s/ Pedro Arnt



 

 

 

 

 

Pedro Arnt



 

 

 

 

 

Chief Financial Officer






Exhibit 991



Imagen 2

MercadoLibre, Inc. Reports Second Quarter 2019 Financial Results



Net Revenues of $545.2 million, up 102.1% YoY on an FX neutral basis

$6.5 billion Total Payment Volume, up 90.3% YoY on an FX neutral basis

$3.4 billion Gross Merchandise Volume, up 33.0% YoY on an FX neutral basis

BUENOS AIRES, Argentina, August 7th, 2019 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq: MELI) (http://www.mercadolibre.com), Latin America’s leading e-commerce technology company, today reported financial results for the quarter ended June 30, 2019.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “We are pleased and optimistic about how 2019 is playing out for us. We delivered another very strong quarter as we continue to grow and scale our leading e-commerce and FinTech ecosystems across Latin America.”



Second Quarter 2019 Business Highlights1

·

Total payment volume through Mercado Pago surpassed $6.5 billion for the first time, reaching $6.52 billion, a year-over-year increase of 47.2% in USD and 90.3% on an FX neutral basis. Total payment transactions increased 112.5% year-over-year, totaling 181.6 million transactions for the quarter.

·

Mercado Pago delivered successful execution in off-platform payments (online and offline) through merchant services, mobile point-of-sale (“MPOS”) devices and its mobile wallet business. On a consolidated basis, off-platform total payment volume grew 121.5% year-over-year in USD and 197.5% on an FX neutral basis.

·

For the first time ever, off-platform payments processed almost $3.2 billion in transactions, surpassing 120.0 million payment transactions in a single quarter with 120.1 million payments. Off-platform reached an important milestone in June, as it was the first month in our history that off platform TPV surpassed on platform TPV.

·

Our MPOS business continues to be one of the fastest growing non-marketplace business units, representing 41.9% of total off-platform payment volume during the quarter. On a consolidated basis, MPOS total payment volume grew 172.2% year-over-year on an FX neutral basis.

·

Mobile wallet reached 4.5 million active payers during the quarter, while total payment volume from mobile wallet in Argentina, Brazil and Mexico are all growing by triple digits year-over-year.

·

Our asset management product, Mercado Fondo, is available in Argentina and Brazil, where we offer our entire suite of FinTech solutions: MPOS devices, QR code in-store payments, mobile wallet and asset management. Mercado Fondo has invested over 70% and 50% of customer funds in Mercado Pago in Brazil and Argentina, respectively.

·

Gross merchandise volume (“GMV”) increased surpassing again $3 billion mark reaching $3.4 billion, representing an 8.4% and 33.0% increase in USD and on an FX neutral basis, respectively.

·

Items sold reached 88.7 million, growing 3.8% year-over-year versus 38.8% during the same period last year. The decrease in growth rates year-over-year is attributable to Brazil, where in July of last year we launched the R$5 flat listing fee on items below R$120 and removed listings below R$ 6 as we shift towards incentivizing buyers to purchase higher ticket items, as well as the implementation of the same initiative in Argentina during the second quarter of 2019.

·

Unique buyers numbers continue to accelerate versus the prior quarter, growing 20.8% year-over-year versus 10.8% in the first quarter.

·

Live listings offered on MercadoLibre’s marketplace surpassed 200 million for the second time, reaching 224.1 million in the second quarter of 2019, a 50.6% year-over-year increase.

·

Mobile gross merchandise volume grew 23.5% year-over-year on an FX neutral basis reaching 59.6% of GMV.

·

Items shipped through Mercado Envios reached 70.2 million, a 33.0% year-over-year increase, driven primarily by optimizations in our free shipping program. 

 1 Percentages have been calculated using whole amounts rather than rounded amounts.

1

 


 

The tables below present our gross billings and amounts paid by us in connection with our free shipping service.

The Company presents net revenue net of amounts paid in connection with the Company’s free shipping initiative, when the Company acts as an agent, rather than including these amounts in the cost of net sales, as previously recorded. For the three-month period ended June 30, 2019 the Company incurred $60.5 million of shipping subsidies that have been netted from revenues.





 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q2 2019

 

 

Q2 2018



Brazil

$

385.1 

 

$

270.5 

Gross

Argentina

$

121.6 

 

$

105.9 

Billings

Mexico

$

70.7 

 

$

31.3 



Others

$

28.3 

 

$

24.3 



Total

$

605.7 

 

$

432.0 











 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q2 2019

 

 

Q2 2018



Brazil

$

(44.3)

 

$

(74.7)

Free Shipping

Argentina

$

(7.7)

 

$

(5.7)

service cost

Mexico

$

(6.3)

 

$

(13.8)



Others

$

(2.2)

 

$

(2.4)



Total

$

(60.5)

 

$

(96.7)







 

 

 

 

 

 



 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q2 2019

 

 

Q2 2018



Brazil

$

340.9 

 

$

195.8 

Net

Argentina

$

113.9 

 

$

100.1 

Revenues

Mexico

$

64.4 

 

$

17.5 



Others

$

26.1 

 

$

21.9 



Total

$

545.2 

 

$

335.4 


*The table above may not total due to rounding.

Second Quarter 2019 Financial Highlights

·

Net revenues for the second quarter were $545.2 million, a year-over-year increase of 62.6% in USD and 102.1% on an FX neutral basis.

·

Enhanced marketplace revenues increased 84.6% year-over-year in USD and 122.7% on an FX neutral basis, while non-marketplace revenues increased 43.4% year-over-year in USD and 73.0% on an FX neutral basis.

·

Gross profit was $272.4 million with a margin of 50.0%, compared to 47.6% in the second quarter of 2018.

·

Total operating expenses were $284.9 million, an increase of 51.6% year-over-year in USD. As a percentage of revenues, operating expenses were 52.3%, as compared to 56.1% during the second quarter of 2018.

·

Loss from operations was $12.5 million, compared to a loss of $28.2 million during the second quarter of 2018. As a percentage of revenues, the loss from operations reached 2.3%.

·

Interest income was $33.7 million, a 239.7% increase year-over-year, as a result of the proceeds of the 2028 Convertible Notes and equity offering in 2019, which generated more invested volume and interest gain, a higher float in Brazil and a higher interest rates in Argentina.

·

The Company incurred $14.7 million in financial expenses in the second quarter of 2019, mainly attributable to interest expense related to the 2028 Convertible Notes.

·

Foreign exchange gain for the second quarter of 2019 was $0.8 million, primarily as a result of the strengthening of the Brazilian Reais over our U.S. dollar net liability position in Brazil during the second quarter of 2019.

·

Net income before taxes was $7.3 million, up from a loss of $19.0 million during the second quarter 2018.

·

Income tax gain was $8.9 million during the second quarter driven by tax loss carry forward in Mexico partially offset for the income tax in Argentina and Brazil, yielding a negative effective tax rate for the period of 122.1%.

·

Net income was $16.2 million, resulting in basic net income per share of $0.31.

·

Operating cash flow was $27.6 million. Net decrease in cash, cash equivalents, restricted cash and cash equivalents was $177.9 million mostly driven by purchase of investments and a broader credit line offering.

2

 


 

The following table summarizes certain key performance metrics for the six and three months periods ended June 30, 2019 and 2018.





 

 

 

 

 

 

 

 

 

 

 



  

Six-month Periods Ended
June 30, (*)

  

 

Three-month Periods Ended
June 30, (*)

(in millions)

  

2019

2018

 

 

2019

2018



  

 

 

 

 

  

 

 

  

 

 

Number of confirmed registered users at end of period 

  

 

292.5 

 

234.9 

  

 

292.5 

  

 

234.9 

Number of confirmed new registered users during period

  

 

24.7 

 

23.0 

  

 

12.4 

  

 

11.8 

Gross merchandise volume 

  

$

6,485.5 

$

6,276.6 

  

$

3,397.7 

  

$

3,135.4 

Number of successful items sold

  

 

171.4 

 

165.6 

  

 

88.7 

  

 

85.4 

Number of successful items shipped 

 

 

132.6 

 

105.3 

 

 

70.2 

 

 

52.8 

Total payment volume 

  

$

12,156.5 

$

8,601.4 

  

$

6,517.4 

  

$

4,426.1 

Total volume of payments on marketplace

  

$

6,016.1 

$

5,603.8 

  

$

3,120.0 

  

$

2,794.3 

Total payment transactions 

 

 

325.6 

 

159.8 

 

 

181.6 

 

 

85.5 

Unique buyers

 

 

28.6 

 

25.0 

 

 

20.4 

 

 

16.9 

Unique sellers

 

 

6.9 

 

6.8 

 

 

4.3 

 

 

4.2 

Capital expenditures

  

$

71.4 

$

46.8 

  

$

38.4 

  

$

23.7 

Depreciation and amortization

  

$

33.0 

$

22.6 

  

$

17.3 

  

$

11.5 



(*) Figures have been expressed using rounding amounts. Growth calculations using this table may not total due to rounding.

Table of Year-over-year USD Revenue Growth Rates by Quarter





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q2’18

 

 

Q3’18

 

Q4’18

 

Q1’19

 

Q2’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

25

%

 

25

%

34

%

64

%

74

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

14

%

 

(8)

%

(16)

%

(8)

%

14

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

62

%

 

152

%

157

%

220

%

267

%



 

 

 

 

 

 

 

 

 

 

 

 



Table of Year-over-year Local Currency Revenue Growth Rates by Quarter 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q2’18

 

 

Q3’18

 

Q4’18

 

Q1’19

 

Q2’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

40

%

 

56

%

58

%

91

%

89

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

68

%

 

68

%

77

%

83

%

115

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

71

%

 

168

%

170

%

227

%

261

%



 

 

 

 

 

 

 

 

 

 

 

 







Conference Call and Webcast

The Company will host a conference call and audio webcast on August 7th, 2019 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID –5289808–) and requesting inclusion in the call for MercadoLibre. The live conference call can be accessed via audio webcast at the investor relations section of the Company's website, at http://investor.mercadolibre.com. An archive of the webcast will be available for one week following the conclusion of the conference call.

3

 


 

Definition of Selected Operational Metrics

Gross Billings - Total accrued fees, commissions, interest, and other sales received from users.

Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2018 and applying it to the corresponding months in the current year, so as to calculate what the results would have been had exchange rates remained constant. Intercompany allocations are excluded from this calculation. These calculations do not include any other macroeconomic effect such as local currency inflation effects or any price adjustment to compensate local currency inflation or devaluations.

Gross merchandise volume – Measure of the total U.S. dollar sum of all transactions completed through the MercadoLibre Marketplace, excluding Classifieds transactions.

Total payment transactions – Measure of the number of all transactions paid for using Mercado Pago.

Total volume of payments on marketplace - Measure of the total U.S. dollar sum of all marketplace transactions paid for using Mercado Pago, excluding shipping and financing fees.

Total payment volume– Measure of total U.S. dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions. 

Enhanced Marketplace - Revenues from the Enhanced Marketplace service, include the final value fees and shipping fees charged to the Company’s customers.

Items sold – Measure of the number of items that were sold/purchased through the MercadoLibre Marketplace, excluding Classifieds items.

Items shipped – Measure of the number of items that were shipped through our shipping service.

Local Currency Growth Rates – Refer to FX Neutral definition.

Net income margin – Defined as net income as a percentage of net revenues.

New confirmed registered users – Measure of the number of new users who have registered on the MercadoLibre Marketplace and confirmed their registration, excluding Classifieds users.

Operating margin – Defined as income from operations as a percentage of net revenues.

Total confirmed registered users – Measure of the cumulative number of users who have registered on the MercadoLibre Marketplace and confirmed their registration, excluding Classifieds users.

Unique Buyers – New or existing users with at least one purchase made in the period, including Classifieds users.

Unique Sellers – New or existing users with at least one new listing in the period, including Classifieds users.

4

 


 



About MercadoLibre

Founded in 1999, MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of the necessary online and technology- based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America.



The Company is listed on NASDAQ (Nasdaq: MELI) following its initial public offering in 2007.



For more information about the Company visit: http://investor.mercadolibre.com.



The MercadoLibre, Inc. logo is available at https://resource.globenewswire.com/Resource/Download/6ab227b7-693f-4b17-b80c-552ae45c76bf?size=0



Forward-Looking Statements

Any statements herein regarding MercadoLibre, Inc. that are not historical or current facts are forward-looking statements. These forward-looking statements convey MercadoLibre, Inc.’s current expectations or forecasts of future events. Forward-looking statements regarding MercadoLibre, Inc. involve known and unknown risks, uncertainties and other factors that may cause MercadoLibre, Inc.’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Note Regarding Forward-Looking Statements” sections of MercadoLibre, Inc.’s annual report on Form 10-K for the year ended December 31, 2018, and any of MercadoLibre, Inc.’s other applicable filings with the Securities and Exchange Commission. Unless required by law, MercadoLibre, Inc. undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.





5

 


 



MercadoLibre, Inc.

Consolidated Balance Sheets

(In thousands of U.S. dollars, except par value)





 

 

 



June 30,

 

December 31,



2019

 

2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                    1,118,662

 

$                       440,332

Restricted cash and cash equivalents

9,660 

 

24,363 

Short-term investments (339,299 and 284,317 held in guarantee)

1,789,354 

 

461,541 

Accounts receivable, net

40,175 

 

35,153 

Credit cards receivable, net

433,046 

 

360,298 

Loans receivable, net

192,881 

 

95,778 

Prepaid expenses

18,618 

 

27,477 

Inventory

5,950 

 

4,612 

Other assets

68,086 

 

61,569 

Total current assets

3,676,432 

 

1,511,123 

Non-current assets:

 

 

 

Long-term investments

207,047 

 

276,136 

Property and equipment, net

216,005 

 

165,614 

Operating lease right-of-use assets

157,843 

 

 —

Goodwill

90,375 

 

88,883 

Intangible assets, net

16,808 

 

18,581 

Deferred tax assets

184,926 

 

141,438 

Other assets

46,056 

 

37,744 

Total non-current assets

919,060 

 

728,396 

Total assets

$                    4,595,492

 

$                    2,239,519

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                       314,703

 

$                       266,759

Funds payable to customers

778,128 

 

640,954 

Salaries and social security payable

78,007 

 

60,406 

Taxes payable

45,672 

 

31,058 

Loans payable and other financial liabilities

162,983 

 

132,949 

Operating lease liabilities

13,957 

 

 —

Other liabilities

56,059 

 

34,098 

Total current liabilities

1,449,509 

 

1,166,224 

Non-current liabilities:

 

 

 

Salaries and social security payable

23,648 

 

23,161 

Loans payable and other financial liabilities

619,670 

 

602,228 

Operating lease liabilities

147,555 

 

 —

Deferred tax liabilities

98,997 

 

91,698 

Other liabilities

11,501 

 

19,508 

Total non-current liabilities

901,371 

 

736,595 

Total liabilities

$                    2,350,880

 

$                    1,902,819



 

 

 

Commitments and Contingencies (Note 7)

 

 

 



 

 

 

Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares

 

 

 

authorized, 100,000 shares issued and outstanding at June 30, 2019 (Note 10)

$                         98,843

 

$                                —



 

 

 

Equity

 

 

 



 

 

 

Common stock, $0.001 par value, 110,000,000 shares authorized,

 

 

 

49,318,543 and 45,202,859 shares issued and outstanding at June 30,

 

 

 

2019 and December 31, 2018

$                                49

 

$                                45

Additional paid-in capital

2,009,497 

 

224,800 

Retained earnings

524,672 

 

503,432 

Accumulated other comprehensive loss

(388,449)

 

(391,577)

Total Equity

2,145,769 

 

336,700 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                    4,595,492

 

$                    2,239,519









6

 


 

MercadoLibre, Inc.

Consolidated Statements of Income

For the six and three month periods ended June 30, 2019 and 2018

(In thousands of U.S. dollars, except for share data)



 

 

 

 

 

 

 

 



 

Six Months Ended June 30,

 

Three Months Ended June 30,



 

2019

 

2018

 

2019

 

2018

Net revenues

 

$              1,019,012

 

$                 656,353

 

$             545,242

 

$                       335,377

Cost of net revenues

 

(509,578)

 

(333,847)

 

(272,812)

 

(175,629)

Gross profit

 

509,434 

 

322,506 

 

272,430 

 

159,748 

Operating expenses:

 

 

 

 

 

 

 

 

Product and technology development

 

(106,292)

 

(71,833)

 

(53,923)

 

(33,437)

Sales and marketing

 

(311,368)

 

(231,939)

 

(180,692)

 

(121,216)

General and administrative

 

(94,123)

 

(76,395)

 

(50,303)

 

(33,337)

Total operating expenses

 

(511,783)

 

(380,167)

 

(284,918)

 

(187,990)

Loss from operations

 

(2,349)

 

(57,661)

 

(12,488)

 

(28,242)



 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

58,128 

 

19,110 

 

33,684 

 

9,915 

Interest expense and other financial losses

 

(30,238)

 

(23,936)

 

(14,679)

 

(13,202)

Foreign currency (losses) gains

 

(2,886)

 

18,178 

 

783 

 

12,577 

Net income (loss) before income tax gain

 

22,655 

 

(44,309)

 

7,300 

 

(18,952)



 

 

 

 

 

 

 

 

Income tax gain

 

5,426 

 

20,138 

 

8,917 

 

7,700 

Net income (loss)

 

$                   28,081

 

$                 (24,171)

 

$               16,217

 

$                       (11,252)











 

 

 

 

 

 

 

 



 

Six Months Ended June 30,

 

Three Months Ended June 30,



 

2019

 

2018

 

2019

 

2018

Basic EPS

 

 

 

 

 

 

 

 

Basic net income (loss)

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                            0.45

 

$                               (0.55)

 

$                            0.31

 

$                          (0.25)

Weighted average of outstanding common shares

 

47,658,610 

 

44,157,364 

 

49,318,522 

 

44,157,364 

Diluted EPS

 

 

 

 

 

 

 

 

Diluted net income (loss)

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                            0.45

 

$                               (0.55)

 

$                            0.31

 

$                          (0.25)

Weighted average of outstanding common shares

 

47,658,610 

 

44,157,364 

 

49,318,522 

 

44,157,364 



 

 

 

 

 

 

 

 













7

 


 

MercadoLibre, Inc.

Consolidated Statement of Cash Flows

For the six month periods ended June 30, 2019 and 2018







 

 

 

 



 

Six Months Ended June 30,



 

2019

 

2018



 

 

Cash flows from operations:

 

 

 

 

Net income (loss)

 

$                         28,081

 

$                       (24,171)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Unrealized devaluation loss, net

 

13,366 

 

6,976 

Depreciation and amortization

 

32,975 

 

22,566 

Accrued interest

 

(24,753)

 

(7,845)

Non cash interest and convertible notes amortization of debt discount and amortization of debt issuance costs

 

11,140 

 

9,684 

LTRP accrued compensation

 

32,208 

 

16,792 

Deferred income taxes

 

(34,743)

 

(54,818)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

(6,900)

 

(21,807)

Credit card receivables

 

(61,562)

 

97,097 

Prepaid expenses

 

8,857 

 

(10,143)

Inventory

 

(1,191)

 

(6,299)

Other assets

 

(12,651)

 

(24,441)

Payables and accrued expenses

 

41,798 

 

42,771 

Funds payable to customers

 

118,421 

 

32,513 

Other liabilities

 

3,587 

 

20,213 

Interest received from investments

 

17,292 

 

8,066 

Net cash provided by operating activities

 

165,925 

 

107,154 

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(2,332,544)

 

(1,248,452)

Proceeds from sale and maturity of investments

 

1,086,461 

 

1,390,713 

Purchases of intangible assets

 

(34)

 

(242)

Advance for property and equipment

 

 

 

(4,426)

Changes in principal of loans receivable, net

 

(97,468)

 

(66,629)

Purchases of property and equipment

 

(71,361)

 

(42,092)

Net cash (used in) provided by investing activities

 

(1,414,946)

 

28,872 

Cash flows from financing activities:

 

 

 

 

Purchase of convertible note capped call

 

(88,362)

 

(45,692)

Proceeds from loans payable and other financial liabilities

 

95,603 

 

146,666 

Payments on loans payable and other financing liabilities

 

(55,236)

 

(14,893)

Payment of finance lease obligations

 

(889)

 

 —

Dividends paid

 

 —

 

(6,624)

Dividends paid of preferred stock

 

(844)

 

 —

Proceeds from issuance of convertible redeemable preferred stock, net

 

98,688 

 

 —

Proceeds from issuance of common stock, net

 

1,867,215 

 

 —

Net cash provided by financing activities

 

1,916,175 

 

79,457 

Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents

 

(3,527)

 

(79,732)

Net increase in cash, cash equivalents, restricted cash and cash equivalents

 

663,627 

 

135,751 

Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period

 

$                       464,695

 

$                       388,260

Cash, cash equivalents, restricted cash and cash equivalents, end of the period

 

$                    1,128,322

 

$                       524,011













8

 


 

Financial results of reporting segments







 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended June 30, 2019



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           340,858 

 

$                        113,913 

 

$                            64,383 

 

 

$                           26,088 

 

$                           545,242 

Direct costs

 

(275,917)

 

(83,909)

 

(85,216)

 

 

(24,441)

 

(469,483)

Direct contribution

 

64,941 

 

30,004 

 

(20,833)

 

 

1,647 

 

75,759 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(88,247)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(12,488)



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

33,684 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(14,679)



Foreign currency gains

 

 

 

 

 

 

 

 

 

 

783 

Net income before income tax gain

 

 

 

 

 

 

 

 

 

 

$                               7,300 



 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended June 30, 2018



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           195,839 

 

$                        100,110 

 

$                            17,540 

 

 

$                           21,888 

 

$                           335,377 

Direct costs

 

(176,987)

 

(68,051)

 

(39,534)

 

 

(21,088)

 

(305,660)

Direct contribution

 

18,852 

 

32,059 

 

(21,994)

 

 

800 

 

29,717 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(57,959)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(28,242)



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

9,915 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(13,202)



Foreign currency gains

 

 

 

 

 

 

 

 

 

 

12,577 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

$                          (18,952)









9

 


 



Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with U.S. GAAP, we use foreign exchange (“FX”) neutral measures.

This non-GAAP measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. This non-GAAP financial measure should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.

Reconciliation of this non-GAAP financial measure to the most comparable U.S. GAAP financial measures can be found in the tables included in this quarterly report.

The Company believes that reconciliation of FX neutral measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future. Specifically, we believe this non-GAAP measure provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.

The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2018 and applying them to the corresponding months in 2019, so as to calculate what our results would have been had exchange rates remained stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, this measure does not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations or any price adjustment to compensate local currency inflation or devaluations.



The following table sets forth the FX neutral measures related to our reported results of the operations for the three-month period ended June  30, 2019:





 

 

 

 

 

 

 

 

 

 

 

 



 

Three-month Periods Ended
June 30, (*)



 

As reported

 

FX Neutral Measures

 

As reported

 

 

(In millions, except percentages)

 

2019

 

2018

 

Percentage Change

 

2019

 

2018

 

Percentage Change



 

(Unaudited)

 

 

 

(Unaudited)

 

 

Net revenues

 

$                                 545.2

 

$                        335.4

 

62.6% 

 

$                           677.9

 

$                        335.4

 

102.1% 

Cost of net revenues

 

(272.8)

 

(175.6)

 

55.3% 

 

(345.0)

 

(175.6)

 

96.4% 

Gross profit

 

272.4 

 

159.7 

 

70.5% 

 

332.9 

 

159.7 

 

108.4% 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(284.9)

 

(188.0)

 

51.6% 

 

(384.9)

 

(188.0)

 

104.8% 

Loss from operations

 

(12.5)

 

(28.2)

 

-55.8%

 

(52.0)

 

(28.2)

 

84.3% 



(*) The table above may not total due to rounding.





CONTACT: MercadoLibre, Inc.

 Investor Relations

investor@mercadolibre.com


 http://investor.mercadolibre.com 



10