meli-20200210x8k
falseAR000109959000010995902020-02-102020-02-10

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): February 10, 2020

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 February 10, 2020, 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 Number

Description

99.1

Press release dated February 10, 2020

104

The cover page from this Current Report on Form 8-K, formatted in Inline XBRL



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: February 10, 2020

By:

/s/ Pedro Arnt

Pedro Arnt

Chief Financial Officer

Exhibit 991



Imagen 2

MercadoLibre, Inc. Reports Fourth Quarter 2019 Financial Results



Net Revenues of $674.3 million, up 84.4% YoY on an FX neutral basis

$8.7 billion Total Payment Volume, up 98.5% YoY on an FX neutral basis

$3.9 billion Gross Merchandise Volume, up 39.7% YoY on an FX neutral basis



BUENOS AIRES, Argentina, February 10th, 2020 (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 December 31, 2019.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “We are proud to announce the fourth quarter 2019 with a sustained momentum that gives us the confidence to move on to a phase of continuing to prioritize growth, but with a greater focus on driving cost efficiencies and scale benefits through the P&Ls of our larger more consolidated businesses. This will be one of our objectives for the upcoming year. We believe we are investing appropriately behind growth, building superior experiences and products for our consumers and merchants, and continuing committed to our long term goal of disrupting both commerce and finance in Latin America. We are also proud to invite you to check our sustainability report, also available for the first time along with the annual report.



Fourth Quarter 2019 Business Highlights

·

Total payment volume (“TPV”) through Mercado Pago reached $8.7 billion, a year-over-year increase of 63.5% in USD and 98.5% on an FX neutral basis. Total payment transactions increased 127.2% year-over-year, totaling 285.5 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 121.3% year-over-year in USD and 175.8% on an FX neutral basis.

·

Off-platform TPV reached $4.7 billion in transactions and 209.4 million payments.

·

Our MPOS business continues to be one of the fastest growing non-marketplace business units. On a consolidated basis, MPOS TPV grew 126.1% on an FX neutral basis.

·

Mobile wallet surpassed for the first time the 1 billion mark, delivering this quarter $1.3 billion in transactions on a consolidated basis. Our mobile wallet consumer base grew by 29.4% compared to the third quarter, reaching 7.9 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 almost 90% and 60% of customer funds in Mercado Pago in Brazil and Argentina, respectively.

·

Gross merchandise volume (“GMV”) increased to $3.9 billion, representing a 19.7% and 39.7% increase in USD and on an FX neutral basis, respectively.

·

Items sold reached 109.5 million, growing 28.0% year-over-year.

·

Unique buyers numbers continue to accelerate, growing 26.7% year-over-year versus 25.7% in the third quarter.

·

Live listings offered on MercadoLibre’s marketplace reached 274.0 million, a 50.5% year-over-year increase.

·

Mobile gross merchandise volume grew 253.2% year-over-year on an FX neutral basis, reaching 68.7% of GMV.

·

Items shipped through Mercado Envios reached 92.6 million, a 47.1% year-over-year increase, driven primarily by optimizations in our free shipping program.

 

1

 


 

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

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. For the three-month period ended December 31st, 2019 the Company incurred $56.8 million of shipping subsidies that have been netted from revenues.





 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q4 2019

 

 

Q4 2018



Brazil

$

463.8 

 

$

358.1 

Gross

Argentina

$

139.5 

 

$

99.0 

Billings

Mexico

$

96.3 

 

$

50.4 



Others

$

31.5 

 

$

28.7 



Total

$

731.1 

 

$

536.2 











 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q4 2019

 

 

Q4 2018



Brazil

$

(35.5)

 

$

(92.7)

Free Shipping

Argentina

$

(7.0)

 

$

(8.2)

service cost

Mexico

$

(11.5)

 

$

(4.9)



Others

$

(2.8)

 

$

(2.3)



Total

$

(56.8)

 

$

(108.1)







 

 

 

 

 

 



 

 

 

 

 

 



 

 

In Millions (*)



 

 

Q4 2019

 

 

Q4 2018



Brazil

$

428.3 

 

$

265.4 

Net

Argentina

$

132.4 

 

$

90.8 

Revenues

Mexico

$

84.8 

 

$

45.5 



Others

$

28.7 

 

$

26.3 



Total

$

674.3 

 

$

428.0 


*The tables above may not total due to rounding.

Fourth Quarter 2019 Financial Highlights

·

Net revenues for the fourth quarter were $674.3 million, a year-over-year increase of 57.5% in USD and 84.4% on an FX neutral basis.

·

Enhanced marketplace revenues increased 55.3% year-over-year in USD and 79.7% on an FX neutral basis, while non-marketplace revenues increased 60.0% year-over-year in USD and 89.7% on an FX neutral basis.

·

Gross profit was $308.3 million with a margin of 45.7%, compared to 47.8% in the fourth quarter of 2018.

·

Total operating expenses were $377.2 million, an increase of 83.5% year-over-year in USD. As a percentage of revenues, operating expenses were 55.9%, compared to 48.0% during the fourth quarter of 2018. On a sequential basis the 479 bps of margin improvement in operating expenses, 222 bps were the result of an improvement in bad debt and 203 bps in a lower investment in Maketing.

·

Our marketing expenses increased $3.2 million quarter-over-quarter, while Bad debt improved by $11.6 million quarter-over-quarter during the quarter.  

·

Loss from operations was $68.9 million, compared to a loss of $81.9 million during the prior quarter. As a percentage of revenues, the loss from operations reached 10.2%.

·

Interest income was $26.9 million, a 88.4% increase year-over-year, as a result of equity offering during 2019, which generated more invested volume and interest gain, and a higher float in Argentina.

·

The Company incurred $21.2 million in financial expenses this quarter, mainly attributable to secured financial loans and interest expenses from our trusts related to our factoring business in Argentina.

·

Net loss before taxes was $63.0 million, up from a loss of $6.8 million during the fourth quarter of 2018.

·

Income tax gain was $9.0 million.

·

Net loss was $54.0 million, resulting in basic net loss per share of $1.11, due to the investment in marketing, which accounted for $146.6 million.



2

 


 

The following table summarizes certain key performance metrics for the twelve and three months periods ended December 31, 2019 and 2018.





 

 

 

 

 

 

 

 

 

 

 

 

 



  

Year ended December 31, (*)

 

 

Three-months period ended December 31, (*)

(in millions)

  

 

2019

  

 

2018

 

 

2019

 

 

2018

Other data:

  

 

 

 

 

 

  

 

 

 

 

 

 

Number of confirmed registered users at end of period

  

 

320.6 

  

 

267.4 

  

 

320.6 

 

 

267.4 

 

Number of confirmed new registered users during period

  

 

53.2 

  

 

55.5 

  

 

14.6 

 

 

18.8 

 

Gross merchandise volume

  

$

13,997.4 

  

$

12,504.9 

  

$

3,871.3 

 

$

3,233.0 

 

Number of successful items sold

  

 

378.9 

  

 

334.7 

  

 

109.5 

 

 

85.6 

 

Number of successful items shipped

  

 

306.9 

  

 

221.7 

 

 

92.6 

 

 

62.1 

 

Total payment volume

 

$

28,389.9 

 

$

18,455.9 

  

$

8,668.2 

 

$

5,302.1 

 

Total volume of payments on marketplace

 

$

13,051.7 

 

$

11,274.5 

 

$

3,658.0 

 

$

2,950.4 

 

Total payment transactions

 

 

838.0 

 

 

389.3 

 

 

285.5 

 

 

125.6 

 

Unique buyers

 

 

44.2 

 

 

37.4 

 

 

24.1 

 

 

19.0 

 

Unique sellers

 

 

11.2 

 

 

10.8 

 

 

4.2 

 

 

4.1 

 

Capital expenditures

  

$

141.4 

  

$

102.0 

  

$

40.6 

 

$

21.5 

 

Depreciation and amortization

  

$

73.3 

  

$

45.8 

  

$

20.8 

 

$

11.9 

 



(*) 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

 

Q4’18

 

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

34

%

 

64

%

74

%

77

%

61

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

(16)

%

 

(8)

%

14

%

39

%

46

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

157

%

 

220

%

267

%

146

%

86

%



 

 

 

 

 

 

 

 

 

 

 

 



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





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q4’18

 

 

Q1’19

 

Q2’19

 

Q3’19

 

Q4’19

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

58

%

 

91

%

89

%

77

%

74

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

77

%

 

83

%

115

%

119

%

133

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

170

%

 

227

%

261

%

153

%

80

%



 

 

 

 

 

 

 

 

 

 

 

 











3

 


 

Conference Call and Webcast

The Company will host a conference call and audio webcast on February 10th, 2020 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID 5176529–) 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 Mercado Libre 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 Mercado Libre 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 Mercado Libre 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 Mercado Libre 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, 2019, 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)









 

 

 



December 31,

 

December 31,



2019

 

2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                    1,384,740

 

$                       440,332

Restricted cash and cash equivalents

66,684 

 

24,363 

Short-term investments (522,798 and 284,317 held in guarantee)

1,597,241 

 

461,541 

Accounts receivable, net

35,446 

 

35,153 

Credit cards receivable, net

379,969 

 

360,298 

Loans receivable, net

182,105 

 

95,778 

Prepaid expenses

45,309 

 

27,477 

Inventory

8,626 

 

4,612 

Other assets

88,736 

 

61,569 

Total current assets

3,788,856 

 

1,511,123 

Non-current assets:

 

 

 

Long-term investments

263,983 

 

276,136 

Loans receivable, net

6,439 

 

 —

Property and equipment, net

244,257 

 

165,614 

Operating lease right-of-use assets

200,449 

 

 —

Goodwill

87,609 

 

88,883 

Intangible assets, net

14,275 

 

18,581 

Deferred tax assets

117,582 

 

141,438 

Other assets

58,241 

 

37,744 

Total non-current assets

992,835 

 

728,396 

Total assets

$                    4,781,691

 

$                    2,239,519



 

 

 

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                       372,309

 

$                       266,759

Funds payable to customers

894,057 

 

640,954 

Salaries and social security payable

101,841 

 

60,406 

Taxes payable

60,247 

 

31,058 

Loans payable and other financial liabilities

186,138 

 

132,949 

Operating lease liabilities

23,259 

 

 —

Other liabilities

114,469 

 

34,098 

Total current liabilities

1,752,320 

 

1,166,224 

Non-current liabilities:

 

 

 

Salaries and social security payable

26,803 

 

23,161 

Loans payable and other financial liabilities

631,353 

 

602,228 

Operating lease liabilities

176,673 

 

 —

Deferred tax liabilities

99,952 

 

91,698 

Other liabilities

12,627 

 

19,508 

Total non-current liabilities

947,408 

 

736,595 

Total liabilities

$                    2,699,728

 

$                    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 December 31, 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 December 31,

 

 

 

2019 and December 31, 2018

$                                50

 

$                                45

Additional paid-in capital

2,067,869 

 

224,800 

Treasury stock

(720)

 

 —

Retained earnings

322,592 

 

503,432 

Accumulated other comprehensive loss

(406,671)

 

(391,577)

Total Equity

1,983,120 

 

336,700 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                    4,682,848

 

$                    2,239,519

7

 


 













MercadoLibre, Inc.

Consolidated Statements of Income

For the twelve and three-month periods ended December 31, 2019 and 2018

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









 

 

 

 

 

 

 

 



 

Year Ended December 31,

 

Three Months Ended December 31,



 

2019

 

2018

 

2019

 

2018

Net revenues

 

$                    2,296,314

 

$                1,439,653

 

$                  674,271

 

$                  428,019

Cost of net revenues

 

(1,194,191)

 

(742,645)

 

(365,924)

 

(223,236)

Gross profit

 

1,102,123 

 

697,008 

 

308,347 

 

204,783 



 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Product and technology development

 

(223,807)

 

(146,273)

 

(58,020)

 

(38,963)

Sales and marketing

 

(834,022)

 

(482,447)

 

(269,751)

 

(140,035)

General and administrative

 

(197,455)

 

(137,770)

 

(49,463)

 

(26,605)

Total operating expenses

 

(1,255,284)

 

(766,490)

 

(377,234)

 

(205,603)

Loss from operations

 

(153,161)

 

(69,482)

 

(68,887)

 

(820)



 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

113,523 

 

42,039 

 

26,933 

 

14,292 

Interest expense and other financial losses

 

(65,876)

 

(56,249)

 

(21,187)

 

(16,443)

Foreign currency (losses) gains

 

(1,732)

 

18,240 

 

167 

 

(3,862)

Net loss before income tax (expense) gain

 

(107,246)

 

(65,452)

 

(62,974)

 

(6,833)



 

 

 

 

 

 

 

 

Income tax (expense) gain

 

(64,753)

 

28,867 

 

8,976 

 

4,496 

Net loss

 

$                      (171,999)

 

$                    (36,585)

 

$                  (53,998)

 

$                    (2,337)











 

 

 

 

 

 

 

 



 

Year Ended December 31,

 

Three Months Ended December 31,



 

2019

 

2018

 

2019

 

2018

Basic EPS

 

 

 

 

 

 

 

 

Basic net loss

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                      (3.71)

 

$                      (0.82)

 

$                       (1.11)

 

$                        (0.05)

Weighted average of outstanding common shares

 

48,692,906 

 

44,529,614 

 

49,709,955 

 

45,202,859 

Diluted EPS

 

 

 

 

 

 

 

 

Diluted net loss

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                      (3.71)

 

$                      (0.82)

 

$                       (1.11)

 

$                        (0.05)

Weighted average of outstanding common shares

 

48,692,906 

 

44,529,614 

 

49,709,955 

 

45,202,859 



 

 

 

 

 

 

 

 





8

 


 

MercadoLibre, Inc.

Consolidated Statement of Cash Flows

For the years ended December 31, 2019 and 2018







 

 

 

 



 

Year Ended December 31,



 

2019

 

2018



 

 

Cash flows from operations:

 

 

 

 

Net loss

 

$                     (171,999)

 

$                       (36,585)

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

 

 

 

 

Unrealized devaluation loss, net

 

44,326 

 

11,131 

Depreciation and amortization

 

73,320 

 

45,792 

Accrued interest

 

(54,309)

 

(17,811)

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

 

86,694 

 

11,408 

Stock-based compensation expense - restricted shares

 

395 

 

 —

LTRP accrued compensation

 

51,662 

 

27,525 

Deferred income taxes

 

16,453 

 

(92,585)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

(507)

 

(27,105)

Credit cards receivable

 

(29,315)

 

42,655 

Prepaid expenses

 

(17,956)

 

(23,342)

Inventory

 

(4,148)

 

(3,015)

Other assets

 

(49,390)

 

(17,617)

Payables and accrued expenses

 

143,495 

 

90,123 

Funds payable to customers

 

267,293 

 

175,398 

Other liabilities

 

45,452 

 

28,202 

Interest received from investments

 

49,625 

 

16,733 

Net cash provided by operating activities

 

451,091 

 

230,907 

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(4,490,678)

 

(3,176,078)

Proceeds from sale and maturity of investments

 

3,353,606 

 

2,662,800 

Payment for acquired businesses, net of cash acquired

 

 

 

(4,195)

Purchases of intangible assets

 

(72)

 

(192)

Changes in principal loans receivable, net

 

(173,848)

 

(57,232)

Advance for property and equipment

 

 

 

(4,426)

Purchases of property and equipment

 

(136,798)

 

(93,136)

Net cash used in investing activities

 

(1,447,790)

 

(672,459)

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)

Payments on convertible note

 

(25)

 

(348,123)

Purchase of convertible note capped calls

 

(96,367)

 

(148,943)

Unwind of convertible note capped calls

 

 

 

136,108 

Proceeds from loans payable and other financial liabilities

 

629,891 

 

236,873 

Payments on loans payable and other financing liabilities

 

(472,897)

 

(123,822)

Dividends paid

 

 —

 

(6,624)

Payment of finance lease obligations

 

(1,929)

 

(323)

Common Stock repurchased

 

(720)

 

 —

Dividends paid of preferred stock

 

(2,844)

 

 —

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

 

2,021,012 

 

608,882 

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

 

(37,584)

 

(90,895)

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

 

986,729 

 

76,435 

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

 

464,695 

 

388,260 

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

 

$1,451,424 

 

$464,695 





















9

 


 

Financial results of reporting segments





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended December 31, 2019

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

Brazil

 

Argentina

 

Mexico

 

Other Countries

 

Total

 



 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

$428,327 

 

$132,440 

 

$84,825 

 

$28,679 

 

$674,271 

 

Direct costs

 

 

(373,417)

 

(107,790)

 

(135,840)

 

(34,242)

 

(651,289)

 

Direct contribution

 

 

54,910 

 

24,650 

 

(51,015)

 

(5,563)

 

22,982 

 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(91,869)

 

Loss from operations

 

 

 

 

 

 

 

 

 

 

(68,887)

 



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

26,933 

 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(21,187)

 

Foreign currency gains

 

 

 

 

 

 

 

 

 

 

167 

 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

$(62,974)

 



 

 

 

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended December 31, 2018

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

Brazil

 

Argentina

 

Mexico

 

Other Countries

 

Total

 



 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

$265,353 

 

$90,800 

 

$45,529 

 

$26,337 

 

$428,019 

 

Direct costs

 

 

(218,497)

 

(68,783)

 

(63,550)

 

(22,397)

 

(373,227)

 

Direct contribution

 

 

46,856 

 

22,017 

 

(18,021)

 

3,940 

 

54,792 

 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(55,612)

 

Loss from operations

 

 

 

 

 

 

 

 

 

 

(820)

 



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

14,292 

 

Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(16,443)

 

Foreign currency losses

 

 

 

 

 

 

 

 

 

 

(3,862)

 

Net loss before income tax gain

 

 

 

 

 

 

 

 

 

 

$(6,833)

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 















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 December 31, 2019:





 

 

 

 

 

 

 

 

 

 

 

 



 

Three-month Periods Ended
December 31, (*)



 

As reported

 

FX Neutral Measures

 

As reported

 

 

(In millions, except percentages)

 

2019

 

2018

 

Percentage Change

 

2019

 

2018

 

Percentage Change



 

(Unaudited)

 

 

 

(Unaudited)

 

 

Net revenues

 

$                                 674.3

 

$                        428.0

 

57.5% 

 

$                           789.4

 

$                        428.0

 

84.4% 

Cost of net revenues

 

(365.9)

 

(223.2)

 

63.9% 

 

(435.0)

 

(223.2)

 

94.9% 

Gross profit

 

308.3 

 

204.8 

 

50.6% 

 

354.4 

 

204.8 

 

73.1% 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(377.2)

 

(205.6)

 

83.5% 

 

(451.9)

 

(205.6)

 

119.8% 

Loss from operations

 

(68.9)

 

(0.8)

 

8311.3% 

 

(97.5)

 

(0.8)

 

11805.7% 



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





CONTACT: MercadoLibre, Inc.

 Investor Relations

investor@mercadolibre.com


 http://investor.mercadolibre.com 

11