meli-20191031x8k
falseAR000109959000010995902019-10-312019-10-31

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): October 31, 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 October 31, 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 October 31, 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: October 31, 2019

By:

/s/ Pedro Arnt

Pedro Arnt

Chief Financial Officer

Exhibit 99.1



Imagen 2

MercadoLibre, Inc. Reports Third Quarter 2019 Financial Results



Net Revenues of $603.0 million, up 90.5% YoY on an FX neutral basis

$7.6 billion Total Payment Volume, up 94.5% YoY on an FX neutral basis

$3.6 billion Gross Merchandise Volume, up 36.8% YoY on an FX neutral basis



BUENOS AIRES, Argentina, October 31st, 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 September 30, 2019.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “We continue to make significant inroads in our key strategic initiatives and reached important milestones this quarter both in FinTech and logistics. As we move into the fourth quarter and 2020, we will continue to focus on delivering an ever-improving user experience, adding functionalities to our user base and leveraging our ecosystem’s unique competitive advantages.”



Third Quarter 2019 Business Highlights1

·

Total payment volume (“TPV”) through Mercado Pago reached $7.6 billion, a year-over-year increase of 66.2% in USD and 94.5% on an FX neutral basis. Total payment transactions increased 118.5% year-over-year, totaling 227.0 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 TPV grew 140.4% year-over-year in USD and 189.6% on an FX neutral basis.

·

For the first time ever, quarterly off-platform TPV surpassed on-platform TPV, reaching almost $4.0 billion in transactions and 158.3 million payments.

·

Our MPOS business continues to be one of the fastest growing non-marketplace business units. On a consolidated basis, MPOS TPV grew 141.2% year-over-year on an FX neutral basis.

·

Mobile wallet reached almost $1.0 billion in transactions on a consolidated basis. Our mobile wallet consumer base grew by 34.9% compared to the second quarter, reaching 6.1 million active payers during the quarter. TPV from mobile wallet in Argentina, Brazil and Mexico continues to grow 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 80% and 50% of customer funds in Mercado Pago in Brazil and Argentina, respectively.

·

Gross merchandise volume (“GMV”) increased, again surpassing the $3 billion mark and reaching $3.6 billion, representing a 21.6% and 36.8% increase in USD and on an FX neutral basis, respectively.

·

Items sold reached 98.0 million, growing 17.3% year-over-year.

·

Unique buyers numbers continue to accelerate, growing 25.7% year-over-year versus 20.8% in the second quarter.

·

Live listings offered on MercadoLibre’s marketplace reached 243.0 million, a 44.5% year-over-year increase.

·

Mobile gross merchandise volume grew 32.4% year-over-year on an FX neutral basis, reaching 65.4% of GMV.

·

Items shipped through Mercado Envios reached 81.2 million, a 47.5% 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 revenues 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 September 30, 2019 the Company incurred $69.9 million of shipping subsidies that have been netted from revenues.





 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q3 2019

 

 

Q3 2018



Brazil

$

441.9 

 

$

309.0 

Gross

Argentina

$

125.2 

 

$

91.2 

Billings

Mexico

$

77.9 

 

$

39.1 



Others

$

27.9 

 

$

23.6 



Total

$

672.9 

 

$

462.8 











 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q3 2019

 

 

Q3 2018



Brazil

$

(51.9)

 

$

(88.2)

Free Shipping

Argentina

$

(9.0)

 

$

(7.5)

service cost

Mexico

$

(6.6)

 

$

(10.1)



Others

$

(2.4)

 

$

(1.8)



Total

$

(69.9)

 

$

(107.6)







 

 

 

 

 

 



 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q3 2019

 

 

Q3 2018



Brazil

$

389.9 

 

$

220.8 

Net

Argentina

$

116.2 

 

$

83.7 

Revenues

Mexico

$

71.4 

 

$

29.0 



Others

$

25.5 

 

$

21.8 



Total

$

603.0 

 

$

355.3 


*The tables above may not total due to rounding.

Third Quarter 2019 Financial Highlights

·

Net revenues for the third quarter were $603.0 million, a year-over-year increase of 69.7% in USD and 90.5% on an FX neutral basis.

·

Enhanced marketplace revenues increased 70.9% year-over-year in USD and 123.9% on an FX neutral basis, while non-marketplace revenues increased 68.6% year-over-year in USD and 120.8% on an FX neutral basis.

·

Gross profit was $284.3 million with a margin of 47.2%, compared to 47.8% in the third quarter of 2018.

·

Total operating expenses were $366.3 million, an increase of 102.7% year-over-year in USD. As a percentage of revenues, operating expenses were 60.7%, compared to 50.9% during the third quarter of 2018. Of the 848 bps of margin compression in operating expenses, 689 bps were the result of an increase in marketing and branding investments and 194 bps were the result of an increase in bad debt from our credits business in Brazil.

·

Our marketing expenses alone increased $51.3 million QoQ during the quarter. The vast majority, $46.2M incremental dollars QoQ were deployed to branding initiatives allocating 60% behind Marketplace and 39% behind Payments. 

·

Loss from operations was $81.9 million, compared to a loss of $11.0 million during the third quarter of 2018. As a percentage of revenues, the loss from operations reached 13.6%.

·

Interest income was $28.5 million, a 229.5% 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, and higher float in Brazil and Argentina.

·

The Company incurred $14.5 million in financial expenses this quarter, mainly attributable to interest expense related to the 2028 Convertible Notes and financial guarantees in Argentina.

·

Foreign exchange gain this quarter was $1.0 million, as a result of the strengthening of the U.S. dollar over our Argentine Peso net liability position in Argentina during the third quarter of 2019.

·

Net loss before taxes was $66.9 million, up from a loss of $14.3 million during the third quarter of 2018.

·

Income tax loss was $79.2 million, mainly as a result of valuation allowances accounted for on certain deferred tax assets in Mexico and Colombia.

2

 


 

·

Net loss was $146.1 million, resulting in basic net loss per share of $2.96, due not only to the increased investment in marketing, but also a valuation allowance on deferred tax assets in Mexico and Colombia which accounted for $91.5 million and $7.2 million, respectively.

·

Operating cash flow was $206.9 million. Net increase in cash, cash equivalents, restricted cash and cash equivalents was $328.6 million, driven by higher proceeds from operating activities and lower proceeds used in investing activities.



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





 

 

 

 

 

 

 

 

 

 

 



  

Nine-month Periods Ended
September 30,(*) 

  

 

Three-month Periods Ended
September 30,(*)

(in millions)

  

2019

2018

 

 

2019

2018



  

 

 

 

 

  

 

 

  

 

 

Number of confirmed registered users at end of period

  

 

306.0 

 

248.9 

  

 

306.0 

  

 

248.9 

Number of confirmed new registered users during period

  

 

38.6 

 

36.7 

  

 

13.8 

  

 

14.0 

Gross merchandise volume

  

$

10,126.1 

$

9,271.8 

  

$

3,640.7 

  

$

2,995.2 

Number of successful items sold

  

 

269.4 

 

249.1 

  

 

98.0 

  

 

83.5 

Number of successful items shipped

 

 

214.3 

 

159.6 

 

 

81.2 

 

 

54.3 

Total payment volume

  

$

19,721.7 

$

13,153.8 

  

$

7,565.2 

  

$

4,552.4 

Total volume of payments on marketplace

  

$

9,393.7 

$

8,324.1 

  

$

3,377.6 

  

$

2,720.3 

Total payment transactions

 

 

552.5 

 

263.7 

 

 

227.0 

 

 

103.9 

Unique buyers

 

 

36.9 

 

31.5 

 

 

22.4 

 

 

17.9 

Unique sellers

 

 

9.2 

 

8.9 

 

 

4.4 

 

 

4.3 

Capital expenditures

  

$

100.8 

$

72.1 

  

$

29.4 

  

$

25.3 

Depreciation and amortization

  

$

52.5 

$

33.9 

  

$

19.5 

  

$

11.3 



(*) Figures have been calculated using rounded amounts. Growth calculations based on this table may not total due to rounding.



Year-over-year USD Revenue Growth Rates by Quarter





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q3’18

 

 

Q4’18

 

Q1’19

 

Q2’19

 

Q3’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

25

%

 

34

%

64

%

74

%

77

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

(8)

%

 

(16)

%

(8)

%

14

%

39

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

152

%

 

157

%

220

%

267

%

146

%



 

 

 

 

 

 

 

 

 

 

 

 



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





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q3’18

 

 

Q4’18

 

Q1’19

 

Q2’19

 

Q3’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

56

%

 

58

%

91

%

89

%

77

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

68

%

 

77

%

83

%

115

%

119

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

168

%

 

170

%

227

%

261

%

153

%



 

 

 

 

 

 

 

 

 

 

 

 









3

 


 

Conference Call and Webcast

The Company will host a conference call and audio webcast on October 31st, 2019 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID 1183947–) 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.

4

 


 

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.

5

 


 



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.





6

 


 



MercadoLibre, Inc.

Consolidated Balance Sheets

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





 

 

 



September 30,

 

December 31,



2019

 

2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                    1,419,934

 

$                       440,332

Restricted cash and cash equivalents

37,031 

 

24,363 

Short-term investments (371,572 and 284,317 held in guarantee)

1,726,189 

 

461,541 

Accounts receivable, net

35,791 

 

35,153 

Credit cards receivable, net

288,588 

 

360,298 

Loans receivable, net

176,074 

 

95,778 

Prepaid expenses

17,898 

 

27,477 

Inventory

10,132 

 

4,612 

Other assets

68,993 

 

61,569 

Total current assets

3,780,630 

 

1,511,123 

Non-current assets:

 

 

 

Long-term investments

3,595 

 

276,136 

Property and equipment, net

220,854 

 

165,614 

Operating lease right-of-use assets

175,022 

 

 —

Goodwill

86,114 

 

88,883 

Intangible assets, net

15,114 

 

18,581 

Deferred tax assets

108,551 

 

141,438 

Other assets

49,461 

 

37,744 

Total non-current assets

658,711 

 

728,396 

Total assets

$                    4,439,341

 

$                    2,239,519

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                       342,433

 

$                       266,759

Funds payable to customers

708,716 

 

640,954 

Salaries and social security payable

92,452 

 

60,406 

Taxes payable

39,230 

 

31,058 

Loans payable and other financial liabilities

108,908 

 

132,949 

Operating lease liabilities

17,441 

 

 —

Other liabilities

75,630 

 

34,098 

Total current liabilities

1,384,810 

 

1,166,224 

Non-current liabilities:

 

 

 

Salaries and social security payable

27,393 

 

23,161 

Loans payable and other financial liabilities

623,114 

 

602,228 

Operating lease liabilities

159,001 

 

 —

Deferred tax liabilities

96,925 

 

91,698 

Other liabilities

11,081 

 

19,508 

Total non-current liabilities

917,514 

 

736,595 

Total liabilities

$                    2,302,324

 

$                    1,902,819



 

 

 

Commitments and Contingencies

 

 

 



 

 

 

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

 

 

 

authorized, 100,000 shares issued and outstanding at September 30, 2019

$                         98,843

 

$                                —



 

 

 

Equity

 

 

 



 

 

 

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

 

 

 

49,709,955 and 45,202,859 shares issued and outstanding at September 30,

 

 

 

2019 and December 31, 2018

$                                50

 

$                                45

Additional paid-in capital

2,075,693 

 

224,800 

Treasury stock

(720)

 

 —

Retained earnings

377,590 

 

503,432 

Accumulated other comprehensive loss

(414,439)

 

(391,577)

Total Equity

2,038,174 

 

336,700 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                    4,439,341

 

$                    2,239,519









7

 


 

MercadoLibre, Inc.

Consolidated Statements of Income

For the nine and three-month periods ended September 30, 2019 and 2018

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



 

 

 

 

 

 

 

 



 

Nine Months Ended September 30,

 

Three Months Ended September 30,



 

2019

 

2018

 

2019

 

2018

Net revenues

 

$               1,622,043

 

$               1,011,634

 

$                  603,031

 

$                  355,281

Cost of net revenues

 

(828,267)

 

(519,410)

 

(318,689)

 

(185,563)

Gross profit

 

793,776 

 

492,224 

 

284,342 

 

169,718 

Operating expenses:

 

 

 

 

 

 

 

 

Product and technology development

 

(165,787)

 

(107,311)

 

(59,495)

 

(35,478)

Sales and marketing

 

(564,271)

 

(342,382)

 

(252,903)

 

(110,443)

General and administrative

 

(147,992)

 

(111,195)

 

(53,869)

 

(34,800)

Total operating expenses

 

(878,050)

 

(560,888)

 

(366,267)

 

(180,721)

Loss from operations

 

(84,274)

 

(68,664)

 

(81,925)

 

(11,003)



 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

86,590 

 

27,746 

 

28,462 

 

8,636 

Interest expense and other financial losses

 

(44,689)

 

(39,805)

 

(14,451)

 

(15,869)

Foreign currency (losses) gains

 

(1,899)

 

22,102 

 

987 

 

3,924 

Net loss before income tax (loss) gain

 

(44,272)

 

(58,621)

 

(66,927)

 

(14,312)



 

 

 

 

 

 

 

 

Income tax (loss) gain

 

(73,729)

 

24,372 

 

(79,155)

 

4,234 

Net loss

 

$                (118,001)

 

$                  (34,249)

 

$                (146,082)

 

$                  (10,078)











 

 

 

 

 

 

 

 



 

Nine Months Ended September 30,

 

Three Months Ended September 30,



 

2019

 

2018

 

2019

 

2018

Basic EPS

 

 

 

 

 

 

 

 

Basic net loss

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                     (2.60)

 

$                     (0.77)

 

$                     (2.96)

 

$                     (0.23)

Weighted average of outstanding common shares

 

48,350,165 

 

44,302,724 

 

49,710,723 

 

44,588,704 

Diluted EPS

 

 

 

 

 

 

 

 

Diluted net loss

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                     (2.60)

 

$                     (0.77)

 

$                     (2.96)

 

$                     (0.23)

Weighted average of outstanding common shares

 

48,350,165 

 

44,302,724 

 

49,710,723 

 

44,588,704 



 

 

 

 

 

 

 

 















8

 


 

MercadoLibre, Inc.

Consolidated Statement of Cash Flows

For the nine-month periods ended September 30, 2019 and 2018













 

 

 

 



 

Nine Months Ended September 30,



 

2019

 

2018



 

 

Cash flows from operations:

 

 

 

 

Net loss

 

$                (118,001)

 

$                  (34,249)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Unrealized devaluation loss, net

 

45,857 

 

9,262 

Depreciation and amortization

 

52,518 

 

33,861 

Accrued interest

 

(39,550)

 

(11,258)

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

 

69,769 

 

18,386 

Stock-based compensation expense — restricted shares

 

214 

 

 —

LTRP accrued compensation

 

48,313 

 

27,706 

Deferred income taxes

 

29,640 

 

(75,275)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

1,464 

 

(14,891)

Credit card receivables

 

65,968 

 

121,896 

Prepaid expenses

 

9,338 

 

(6,810)

Inventory

 

(5,939)

 

(6,015)

Other assets

 

(24,259)

 

(17,463)

Payables and accrued expenses

 

88,918 

 

50,979 

Funds payable to customers

 

95,079 

 

82,909 

Other liabilities

 

18,113 

 

6,077 

Interest received from investments

 

35,375 

 

10,986 

Net cash provided by operating activities

 

372,817 

 

196,101 

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(3,262,637)

 

(1,814,416)

Proceeds from sale and maturity of investments

 

2,240,468 

 

1,964,480 

Payment for acquired businesses, net of cash acquired

 

 

 

(2,281)

Purchases of intangible assets

 

(50)

 

(217)

Advance for property and equipment

 

 

 

(4,426)

Changes in principal of loans receivable, net

 

(150,442)

 

(55,860)

Purchases of property and equipment

 

(100,732)

 

(65,133)

Net cash (used in) provided by investing activities

 

(1,273,393)

 

22,147 

Cash flows from financing activities:

 

 

 

 

Funds received from the issuance of convertible notes

 

 

 

880,000 

Transaction costs from the issuance of convertible notes

 

 

 

(16,264)

Purchase of convertible note capped call

 

(88,362)

 

(137,476)

Unwind of convertible note capped call

 

 

 

121,703 

Payments on convertible notes

 

(25)

 

(348,123)

Proceeds from loans payable and other financial liabilities

 

171,603 

 

156,075 

Payments on loans payable and other financing liabilities

 

(104,062)

 

(78,705)

Payment of finance lease obligations

 

(1,416)

 

 —

Dividends paid

 

 —

 

(6,624)

Common Stock repurchased

 

(720)

 

 —

Dividends paid of preferred stock

 

(1,844)

 

 —

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

 

1,941,077 

 

570,586 

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

 

(48,231)

 

(99,364)

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

 

992,270 

 

689,470 

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

 

$               1,456,965

 

$               1,077,730

9

 


 















Financial results of reporting segments







 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended September 30, 2019



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           389,941 

 

$                        116,203 

 

$                            71,364 

 

 

$                           25,523 

 

$                           603,031 

Direct costs

 

(370,704)

 

(88,542)

 

(103,517)

 

 

(25,845)

 

(588,608)

Direct contribution

 

19,237 

 

27,661 

 

(32,153)

 

 

(322)

 

14,423 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(96,348)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(81,925)



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

28,462 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(14,451)



Foreign currency gains

 

 

 

 

 

 

 

 

 

 

987 

Net loss before income tax loss

 

 

 

 

 

 

 

 

 

 

$                          (66,927)



 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended September 30, 2018



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           220,828 

 

$                         83,714 

 

$                            28,962 

 

 

$                           21,777 

 

$                           355,281 

Direct costs

 

(190,172)

 

(60,409)

 

(35,229)

 

 

(18,822)

 

(304,632)

Direct contribution

 

30,656 

 

23,305 

 

(6,267)

 

 

2,955 

 

50,649 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(61,652)

Loss from operations

 

 

 

 

 

 

 

 

 

 

(11,003)



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

8,636 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(15,869)



Foreign currency gains

 

 

 

 

 

 

 

 

 

 

3,924 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

$                          (14,312)











10

 


 



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 September  30, 2019:





 

 

 

 

 

 

 

 

 

 

 

 



 

Three-month Periods Ended
September 30, (*)



 

As reported

 

FX Neutral Measures

 

As reported

 

 

(In millions, except percentages)

 

2019

 

2018

 

Percentage Change

 

2019

 

2018

 

Percentage Change



 

(Unaudited)

 

 

 

(Unaudited)

 

 

Net revenues

 

$                                 603.0

 

$                        355.3

 

69.7% 

 

$                           676.9

 

$                        355.3

 

90.5% 

Cost of net revenues

 

(318.7)

 

(185.6)

 

71.7% 

 

(364.7)

 

(185.6)

 

96.5% 

Gross profit

 

284.3 

 

169.7 

 

67.5% 

 

312.2 

 

169.7 

 

83.9% 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(366.3)

 

(180.7)

 

102.7% 

 

(432.6)

 

(180.7)

 

139.4% 

Loss from operations

 

(81.9)

 

(11.0)

 

644.5% 

 

(120.5)

 

(11.0)

 

994.7% 



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





CONTACT: MercadoLibre, Inc.

 Investor Relations

investor@mercadolibre.com


 http://investor.mercadolibre.com 



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