meli-20200810x8k
falseAR000109959000010995902020-08-102020-08-10

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): August 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 August 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 August 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: August 10, 2020

By:

/s/ Pedro Arnt

Pedro Arnt

Chief Financial Officer

Exhibit 991



Imagen 2

MercadoLibre, Inc. Reports Second Quarter 2020 Financial Results



Net Revenues of $878.4 million, up 123.4% year-over-year on an FX neutral basis

$11.2 billion Total Payment Volume, up 142.1% year-over-year on an FX neutral basis

$5.0 billion Gross Merchandise Volume, up 101.5% year-over-year on an FX neutral basis



BUENOS AIRES, Argentina, August 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 June 30, 2020.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “The pandemic generated significant changes in consumer behavior, which translated into a new milestone in the penetration of e-commerce and online payments in the region. We continue to focus on the wellbeing of our teams, and we are proud to report that we’ve been able to provide an uninterrupted operation of our commerce and fintech solutions throughout the second quarter, helping millions of merchants and buyers to safely transact.



Second Quarter 2020 Business Highlights

·

Unique active users grew 45.2% reaching 51.5 million.

·

Gross merchandise volume (“GMV”) reached $5.0 billion, representing an increase of 48.5% in USD and 101.5% on an FX neutral basis.

·

Items sold reached 178.5 million, growing 101.4% year-over-year.

·

Live listings offered on MercadoLibre’s marketplace reached 289.0 million, a 26.2% year-over-year growth.

·

Mobile gross merchandise volume grew 272.8% year-over-year on an FX neutral basis, reaching 69.4% of GMV.

·

Even through these trying times and surge in managed volumes, Mercado Envios was able to ship 157.5 million items during the quarter without any significant disruptions, representing a 124.2% year-over-year increase.

·

Total payment volume (“TPV”) through Mercado Pago reached $11.2 billion, a year-over-year increase of 72.1% in USD and 142.1% on an FX neutral basis. Total payment transactions increased 122.9% year-over-year, totaling 404.8 million transactions for the quarter.

·

Off-platform TPV grew 92.1% in USD and 174.7% year-over-year on a FX neutral basis reaching $6.1 billion in transactions and 280.7 million payments, a 133.7% year-over-year growth.

·

Merchant Services had a strong performance, aided by the shift to e-commerce consumption, accelerating sequentially to 163.9% on an FX neutral basis.

·

Mobile wallet delivered $2.1 billion in transactions on a consolidated basis, leading to also 373.2% year-over-year growth on an FX neutral basis. Our mobile wallet consumer base grew by 109.3% compared to the second quarter of 2019, reaching 9.5 million unique payers. TPV from mobile wallet in Argentina, Brazil and Mexico continues to grow by triple digits year-over-year.

·

On a consolidated basis MPOS TPV grew 80.1% on an FX neutral basis, decelerating sequentially around 20%, mainly due to lower foot traffic as a consequence of partial or total lockdowns throughout the region. The resilience that our MPOS  business showed during the quarter is a result of the long tail base of merchants we cater to plus a relevant share of merchants who continued to operate their business with lesser disruptions throughout the lockdowns.

·

The pace of sales of devices reached a milestone this quarter, surpassing the 1 million mark of new MPOS sold throughout Latin America.

·

PayPal is now available for cross-border transactions on Mercado Libre in Brazil and Mexico and is also available as a payment option within Mercado Pago’s online checkout for foreign shoppers. 

1

 


 



Second Quarter 2020 Financial Highlights

·

Net revenues for the second quarter were $878.4 million, a year-over-year increase of 61.1% in USD and 123.4% on an FX neutral basis.

·

Commerce revenues increased 79.5% year-over-year in USD reaching $581.7 million, while Fintech revenues increased 34.1% year-over-year in USD reaching $296.7 million.  

·

Gross profit was $427.2 million with a margin of 48.6%, compared to 50.0% in the second quarter of 2019.

·

Total operating expenses were $327.7 million, an increase of 15.0% year-over-year in USD. As a percentage of revenues, operating expenses were 37.3%, compared to 52.3% during the second quarter of 2019. The $14.8 million improvement in operating expenses quarter-over-quarter was mostly driven by marketing expenditure efficiencies.

·

During the quarter we recorded an allowance for doubtful accounts on receivables from a Mercado Pago collection agent, for $26.7 million. Upon review we realized that collection efforts for these receivables had not been carried out effectively, and that the ageing of these receivables exceeded what our internal control policies allow. We assessed the impact of this matter on the effectiveness of our internal controls, and have included the results of that assessment in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.

·

Income from operations was $99.4 million, compared to a loss of $29.7 million during the prior quarter. As a percentage of revenues, income from operations reached 11.3%.

·

Interest income was $18.8 million, a 44.2% decreased year-over-year, as a result of lower interest rates in our investment as a consequence of the pandemic.

·

The Company incurred $27.0 million in financial expenses this quarter, mainly attributable to financial loans entered into during the second quarter of 2020, mainly in Brazil and Argentina and interest expenses from our trusts related to our factoring business and the 2028 Convertible Note.

·

Net income before taxes was $89.3 million, up from a loss of $16.7 million during last quarter.

·

Income tax expense was $33.4 million, mainly as a result of higher income tax expense in Brazil, as a consequence of higher pre-tax gain in our Brazilian segment during 2020; valuation allowances on certain deferred tax assets in Mexico accounted for in the first half of 2020 and higher income tax expense in Argentina as a consequence of the temporary suspension of the knowledge-based economy promotional regime in 2020, which had a direct impact on the income tax rate for our Argentine business.

·

Net income was $55.9 million, resulting in net earnings per share of $1.11.



The following table summarizes certain key performance metrics for the six and three-months periods ended June  30, 2020 and 2019.







 

 

 

 

 

 

 

 

 

 

 

 



  

Six-month Periods Ended
June 30,

  

 

Three-month Periods Ended
June 30,

(in millions)

  

2020

 

2019

 

 

2020

2019



  

 

 

  

 

 

  

 

 

  

 

 

Unique active users

  

 

65.5 

  

 

47.6 

  

 

51.5 

  

 

35.5 

Number of confirmed new registered users during period

  

 

29.9 

  

 

24.7 

  

 

16.9 

  

 

12.4 

Gross merchandise volume

  

$

8,459.0 

  

$

6,485.5 

  

$

5,044.8 

  

$

3,397.7 

Number of successful items sold

  

 

284.2 

  

 

171.4 

  

 

178.5 

  

 

88.7 

Number of successful items shipped

 

 

247.7 

 

 

132.6 

 

 

157.5 

 

 

70.2 

Total payment volume

  

$

19,308.8 

  

$

12,156.5 

  

$

11,214.3 

  

$

6,517.4 

Total volume of payments on marketplace

  

$

7,966.5 

  

$

6,016.1 

  

$

4,763.2 

  

$

3,120.0 

Total payment transactions

 

 

695.5 

 

 

325.6 

 

 

404.8 

 

 

181.6 

Capital expenditures

  

$

101.9 

  

$

71.4 

  

$

48.4 

  

$

38.4 

Depreciation and amortization

  

$

44.2 

  

$

33.0 

  

$

22.7 

  

$

17.3 



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

2

 


 



Year-over-year USD Revenue Growth Rates by Quarter





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q2’19

 

 

Q3’19

 

Q4’19

 

Q1’20

 

Q2’20

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

74

%

 

77

%

61

%

31

%

37

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

14

%

 

39

%

46

%

42

%

110

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

267

%

 

146

%

86

%

74

%

96

%



 

 

 

 

 

 

 

 

 

 

 

 





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







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q2’19

 

 

Q3’19

 

Q4’19

 

Q1’20

 

Q2’20

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

89

%

 

77

%

74

%

55

%

87

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

115

%

 

119

%

133

%

123

%

224

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

261

%

 

153

%

80

%

81

%

138

%



 

 

 

 

 

 

 

 

 

 

 

 













Conference Call and Webcast

The Company will host a conference call and audio webcast on August 10th, 2020 at 9:00 a.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID –2688761–) 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

Unique Active User – New or existing user who performed at least one of the following actions during the reported period: (1) made one purchase, or reservation, or asked one question on MercadoLibre Marketplace or Classified Marketplace (2) maintained an active listing on MercadoLibre Marketplace or Classified Marketplace (3) maintained an active account in Mercado Shops (4) made a payment, money transfer, collection and/or advance using Mercado Pago (5) maintained an outstanding credit line through Mercado Credito or (6) maintained a balance of more than $5 invested in a Mercado Fondo asset management account.

Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2019 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.

Commerce - Revenues from core marketplace fees, shipping fees (net out of shipping subsidies), ad sales, classified fees and other ancillary services

Fintech - Revenues includes fees from payments revenue stream

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.

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, 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, “Item 1A-Risk Factors” in Part II of our Form 10-Q for the quarter ended March  31, 2020, 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.

Interim Condensed Consolidated Balance Sheets

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



 

 

 



June 30,

 

December 31,



2020

 

2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                       1,169,550

 

$                    1,384,740

Restricted cash and cash equivalents

493,808 

 

66,684 

Short-term investments (530,660 and 522,798 held in guarantee)

2,124,872 

 

1,597,241 

Accounts receivable, net

42,423 

 

35,446 

Credit cards receivable and other means of payment, net

646,739 

 

379,969 

Loans receivable, net

139,148 

 

182,105 

Prepaid expenses

23,141 

 

45,309 

Inventory

20,831 

 

8,626 

Other assets

94,042 

 

88,736 

Total current assets

4,754,554 

 

3,788,856 

Non-current assets:

 

 

 

Long-term investments

5,790 

 

263,983 

Loans receivable, net

5,055 

 

6,439 

Property and equipment, net

263,041 

 

244,257 

Operating lease right-of-use assets

186,851 

 

200,449 

Goodwill

81,799 

 

87,609 

Intangible assets, net

15,942 

 

14,275 

Deferred tax assets

93,897 

 

117,582 

Other assets

45,807 

 

58,241 

Total non-current assets

698,182 

 

992,835 

Total assets

$                       5,452,736

 

$                    4,781,691

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                          417,759

 

$                       372,309

Funds payable to customers

1,324,605 

 

894,057 

Salaries and social security payable

114,944 

 

101,841 

Taxes payable

141,226 

 

60,247 

Loans payable and other financial liabilities

591,683 

 

186,138 

Operating lease liabilities

25,113 

 

23,259 

Other liabilities

44,449 

 

114,469 

Total current liabilities

2,659,779 

 

1,752,320 

Non-current liabilities:

 

 

 

Salaries and social security payable

25,279 

 

26,803 

Loans payable and other financial liabilities

610,899 

 

631,353 

Operating lease liabilities

168,589 

 

176,673 

Deferred tax liabilities

65,273 

 

99,952 

Other liabilities

15,825 

 

12,627 

Total non-current liabilities

885,865 

 

947,408 

Total liabilities

$                       3,545,644

 

$                    2,699,728



 

 

 

Commitments and Contingencies

 

 

 



 

 

 

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

 

 

 

100,000 shares issued and outstanding at June 30, 2020 and December 31, 2019

$                            98,843

 

$                         98,843



 

 

 

Equity

 

 

 



 

 

 

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

 

 

 

49,709,955 shares issued and outstanding at June 30,

 

 

 

2020 and December 31, 2019

$                                   50

 

$                                50

Additional paid-in capital

1,964,140 

 

2,067,869 

Treasury stock

(1,440)

 

(720)

Retained earnings

350,860 

 

322,592 

Accumulated other comprehensive loss

(505,361)

 

(406,671)

Total Equity

1,808,249 

 

1,983,120 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                       5,452,736

 

$                    4,781,691





6

 


 

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the six and three month periods ended June 30, 2020 and 2019

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





 

 

 

 

 

 

 

 



 

Six Months Ended June 30,

 

Three Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

Net revenues

 

$    1,530,460

 

$    1,019,012

 

$       878,369

 

$       545,242

Cost of net revenues

 

(790,474)

 

(509,578)

 

(451,197)

 

(272,812)

Gross profit

 

739,986 

 

509,434 

 

427,172 

 

272,430 

Operating expenses:

 

 

 

 

 

 

 

 

Product and technology development

 

(146,689)

 

(106,292)

 

(73,254)

 

(53,923)

Sales and marketing

 

(390,583)

 

(311,368)

 

(184,076)

 

(180,692)

General and administrative

 

(132,970)

 

(94,123)

 

(70,404)

 

(50,303)

Total operating expenses

 

(670,242)

 

(511,783)

 

(327,734)

 

(284,918)

Income (loss) from operations

 

69,744 

 

(2,349)

 

99,438 

 

(12,488)



 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

55,566 

 

58,128 

 

18,782 

 

33,684 

Interest expense and other financial losses

 

(50,561)

 

(30,238)

 

(26,977)

 

(14,679)

Foreign currency (losses) gains

 

(2,089)

 

(2,886)

 

(1,903)

 

783 

Net income before income tax (expense) gain

 

72,660 

 

22,655 

 

89,340 

 

7,300 



 

 

 

 

 

 

 

 

Income tax (expense) gain

 

(37,822)

 

5,426 

 

(33,393)

 

8,917 

Net income

 

$         34,838

 

$         28,081

 

$         55,947

 

$         16,217







 

 

 

 

 

 

 

 



 

Six Months Ended June 30,

 

Three Months Ended June 30,



 

2020

 

2019

 

2020

 

2019

Basic EPS

 

 

 

 

 

 

 

 

Basic net income

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                       0.66

 

$                       0.45

 

$                       1.11

 

$                       0.31

Weighted average of outstanding common shares

 

49,709,964 

 

47,658,610 

 

49,709,973 

 

49,318,522 

Diluted EPS

 

 

 

 

 

 

 

 

Diluted net income

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                       0.66

 

$                       0.45

 

$                       1.11

 

$                       0.31

Weighted average of outstanding common shares

 

49,709,964 

 

47,658,610 

 

49,709,973 

 

49,318,522 



 

 

 

 

 

 

 

 









7

 


 

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the six months period ended June 30, 2020 and 2019





 

 

 

 



 

Six Months Ended June 30,



 

2020

 

2019



 

 

Cash flows from operations:

 

 

 

 

Net income

 

$                   34,838

 

$                   28,081

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

 

 

 

 

Unrealized devaluation loss, net

 

29,348 

 

13,366 

Depreciation and amortization

 

44,202 

 

32,975 

Accrued interest

 

(28,933)

 

(24,684)

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

 

75,568 

 

11,140 

Financial results on derivative instruments

 

(21,826)

 

(69)

Stock-based compensation expense — restricted shares

 

366 

 

 —

LTRP accrued compensation

 

51,907 

 

32,208 

Deferred income taxes

 

(31,145)

 

(34,743)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

23,147 

 

(6,900)

Credit cards receivable and other means of payment

 

(343,229)

 

(61,562)

Prepaid expenses

 

20,807 

 

8,857 

Inventory

 

(14,270)

 

(1,191)

Other assets

 

(6,965)

 

(12,651)

Payables and accrued expenses

 

170,100 

 

41,798 

Funds payable to customers

 

606,307 

 

118,421 

Other liabilities

 

(73,134)

 

3,587 

Interest received from investments

 

27,597 

 

17,292 

Net cash provided by operating activities

 

564,685 

 

165,925 

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(2,326,013)

 

(2,332,544)

Proceeds from sale and maturity of investments

 

1,910,311 

 

1,086,461 

Receipts from settlements of derivative instruments

 

8,624 

 

 —

Payment for acquired businesses, net of cash acquired

 

(6,937)

 

 —

Purchases of intangible assets

 

(87)

 

(34)

Changes in principal of loans receivable, net

 

(39,092)

 

(97,468)

Purchases of property and equipment

 

(94,834)

 

(71,361)

Net cash used in investing activities

 

(548,028)

 

(1,414,946)

Cash flows from financing activities:

 

 

 

 

Proceeds from loans payable and other financial liabilities

 

1,781,040 

 

95,603 

Payments on loans payable and other financing liabilities

 

(1,353,658)

 

(55,236)

Payment of finance lease obligations

 

(1,064)

 

(889)

Purchase of convertible note capped call

 

(104,095)

 

(88,362)

Dividends paid of preferred stock

 

(2,000)

 

(844)

Common Stock repurchased

 

(720)

 

 —

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

 

319,503 

 

1,916,175 

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

 

(124,226)

 

(3,527)

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

 

211,934 

 

663,627 

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

 

$              1,451,424

 

$                 464,695

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

 

$              1,663,358

 

$              1,128,322



8

 


 

Financial results of reporting segments





 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended June 30, 2020



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           465,298 

 

$                        239,204 

 

$                          125,950 

 

 

$                           47,917 

 

$                           878,369 

Direct costs

 

(324,754)

 

(171,408)

 

(110,553)

 

 

(34,943)

 

(641,658)

Direct contribution

 

140,544 

 

67,796 

 

15,397 

 

 

12,974 

 

236,711 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(137,273)

Income from operations

 

 

 

 

 

 

 

 

 

 

99,438 



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

18,782 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(26,977)



Foreign currency losses

 

 

 

 

 

 

 

 

 

 

(1,903)

Net income before income tax expense

 

 

 

 

 

 

 

 

 

 

$                            89,340 



 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

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 expense

 

 

 

 

 

 

 

 

 

 

$                               7,300 







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 2019 and applying them to the corresponding months in 2020, 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-months period ended June 30, 2020:





 

 

 

 

 

 

 

 

 

 

 

 



 

Three-month Periods Ended
June 30, (*)



 

As reported

 

FX Neutral Measures

 

As reported

 

 

(In millions, except percentages)

 

2020

 

2019

 

Percentage Change

 

2020

 

2019

 

Percentage Change



 

(Unaudited)

 

 

 

(Unaudited)

 

 

Net revenues

 

$                                 878.4

 

$                        545.2

 

61.1% 

 

$                        1,218.3

 

$                        545.2

 

123.4% 

Cost of net revenues

 

(451.2)

 

(272.8)

 

65.4% 

 

(613.4)

 

(272.8)

 

124.9% 

Gross profit

 

427.2 

 

272.4 

 

56.8% 

 

604.9 

 

272.4 

 

122.0% 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(327.7)

 

(284.9)

 

15.0% 

 

(446.5)

 

(284.9)

 

56.7% 

Income (loss) from operations

 

99.4 

 

(12.5)

 

896.4% 

 

158.4 

 

(12.5)

 

1368.5% 



(*) 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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