meli-20201104x8k
falseAR000109959000010995902020-11-042020-11-04

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): November 4, 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 November 4, 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 November 4, 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: November 4, 2020

By:

/s/ Pedro Arnt

Pedro Arnt

Chief Financial Officer

Exhibit 991



Imagen 2

MercadoLibre, Inc. Reports Third Quarter 2020 Financial Results



Net Revenues of $1,115.7 million, up 148.5% year-over-year on an FX neutral basis

$14.5 billion Total Payment Volume, up 161.2% year-over-year on an FX neutral basis

$5.9 billion Gross Merchandise Volume, up 117.1% year-over-year on an FX neutral basis



BUENOS AIRES, Argentina, November 4th, 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 September 30, 2020.

 

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “We are proud to announce MercadoLibre’s third quarter results, recording another strong quarter, driven by high demand for e-commerce and fintech services. During these last three months we’ve begun to consolidate our leadership position both for mid and long tail segments and started to strive for the higher segments of the merchant pyramid. Once again, we want to reinforce our commitment to the democratization of commerce and payments in a region in urgent need. The opportunity ahead of us is sizable, and we feel increasingly confident that we can capitalize on it.”



Third Quarter 2020 Business Highlights

·

Unique active users grew 92.2% reaching 76.1 million.

·

Gross merchandise volume (“GMV”) reached $5.9 billion, representing an increase of 62.1% in USD and 117.1% on an FX neutral basis.

·

Items sold reached 205.7 million, growing 109.9% year-over-year.

·

Live listings offered on Mercado Libre’s marketplace reached 303.9 million, a 22.3% year-over-year growth.

·

Mobile gross merchandise volume grew 283.8% year-over-year on an FX neutral basis, reaching 70.0% of GMV.

·

Even through these trying times and challenging increases in managed volumes, Mercado Envios was able to ship 187.6 million items during the quarter without any significant disruptions, representing a 131.1% year-over-year increase.

·

Total payment volume (“TPV”) through Mercado Pago reached $14.5 billion, a year-over-year increase of 91.7% in USD and 161.2% on an FX neutral basis. Total payment transactions increased 146.6% year-over-year, totaling 559.7 million transactions for the quarter.

·

Off-platform TPV grew 114.3% in USD and 196.5% year-over-year on a FX neutral basis reaching $8.4 billion in transactions and 416.8 million in payments, a 163.3% year-over-year growth.

·

Online Payments had a strong performance, aided by the shift to e-commerce consumption, accelerating sequentially to 204.3% on an FX neutral basis.

·

Mobile wallet delivered $3.2 billion in transactions on a consolidated basis, leading to 380.5% year-over-year growth on an FX neutral basis. Our mobile wallet consumer base grew by 125.2% compared to the third quarter of 2019, reaching 13.7 million unique payers. TPV from mobile wallet in Argentina, Brazil and Mexico continues to grow by triple digits year-over-year.

·

Our asset management product, Mercado Fondo already has more than $540 million under management and over 13.6 million users across Latin America.

·

On a consolidated basis MPOS TPV grew 85.0% on an FX neutral basis, accelerating sequentially around 5%, mainly due to higher foot traffic as a consequence of more flexible lockdowns throughout the region. The pace of sales of devices continued to pick up, surpassing the 1.3 million sales in Latin America.

1

 


 



Third Quarter 2020 Financial Highlights

·

Net revenues for the third quarter were $1,115.7 million, a year-over-year increase of 85.0% in USD and 148.5% on an FX neutral basis, mainly attributable to commerce net revenues that continued accelerating and reached the highest historical growth rate.

·

Commerce revenues increased 109.3% year-over-year in USD reaching $724.5 million, while Fintech revenues increased 52.3% year-over-year in USD reaching $391.2 million.

·

Gross profit was $480.2 million with a margin of 43.0%, compared to 47.2% in the third quarter of 2019.

·

Total operating expenses were $397.1 million, an increase of 8.4% year-over-year in USD. As a percentage of revenues, operating expenses were 35.6%, compared to 60.7% during the third quarter of 2019.

·

Income from operations was $83.1 million, compared to a loss of $81.9 million during the third quarter of 2019. As a percentage of revenues, income from operations reached 7.4%.

·

Interest income was $24.6 million, a 13.7% decreased year-over-year, as a result of lower interest rates in our investment as a consequence of the pandemic, mainly offset by higher interest income in Argentina due to higher float.

·

The Company incurred $24.5 million in financial expenses this quarter, mainly attributable to financial loans entered into during the third quarter of 2020, mainly in Brazil and Argentina and interest expenses from our trusts related to the factoring credit card receivables in Argentina.

·

This quarter we had a foreign exchange loss of $30.4 million mainly related to the difference of the Argentina’s official exchange rate and the blue chip swap rate at which we effectively carry out stock repurchases in Argentine Pesos. We also believe this presents the added benefit of generating greater transparency around FX rate distortions that arise as a consequence of Argentina’s multiple exchange rates.

·

Net income before taxes was $52.7 million, up from a loss of $66.9 million during the third quarter of 2019.

·

Income tax expense was $37.6 million, a decrease of 52.5% year-over-year, mainly as a result of valuation allowances accounted for on certain deferred tax assets in Mexico and Colombia during the third quarter of 2019. This decrease was offset by: i) 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, and a  higher income tax expense as a consequence of higher pre-tax gain in our Argentine segment in 2020; ii) higher income tax expense in Brazil, as a consequence of higher pre-tax gain in our Brazilian segment during 2020; and iii) higher income tax expense due to withholding tax on dividends.

·

Net income was $15.0 million, resulting in net earnings per share of $0.28.



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







 

 

 

 

 

 

 

 

 

 

 

 



  

Nine-month Periods Ended
September 30,

  

 

Three-month Periods Ended
September 30,

(in millions) (*)

  

2020

 

2019

 

 

2020

2019



  

 

 

  

 

 

  

 

 

  

 

 

Unique active users

  

 

112.5 

  

 

61.1 

  

 

76.1 

  

 

39.6 

Number of confirmed new registered users during period

  

 

46.8 

  

 

38.6 

  

 

16.8 

  

 

13.8 

Gross merchandise volume

  

$

14,361.4 

  

$

10,126.1 

  

$

5,902.4 

  

$

3,640.7 

Number of successful items sold

  

 

489.9 

  

 

269.4 

  

 

205.7 

  

 

98.0 

Number of successful items shipped

 

 

435.2 

 

 

214.3 

 

 

187.6 

 

 

81.2 

Total payment volume

  

$

33,814.8 

  

$

19,721.7 

  

$

14,506.0 

  

$

7,565.2 

Total volume of payments on marketplace

  

$

13,615.4 

  

$

9,393.7 

  

$

5,648.9 

  

$

3,377.6 

Total payment transactions

 

 

1,255.2 

 

 

552.5 

 

 

559.7 

 

 

227.0 

Capital expenditures

  

$

166.8 

  

$

100.8 

  

$

65.0 

  

$

29.4 

Depreciation and amortization

  

$

72.4 

  

$

52.5 

  

$

28.2 

  

$

19.5 



(*) 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

 

Q3’19

 

 

Q4’19

 

Q1’20

 

Q2’20

 

Q3’20

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

77

%

 

61

%

31

%

37

%

57

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

39

%

 

46

%

42

%

110

%

145

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

146

%

 

86

%

74

%

96

%

111

%



 

 

 

 

 

 

 

 

 

 

 

 





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







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Revenues

 

Q3’19

 

 

Q4’19

 

Q1’20

 

Q2’20

 

Q3’20

 



 

 

 

 

 

 

 

 

 

 

 

 

Brazil

 

77

%

 

74

%

55

%

87

%

112 

%



 

 

 

 

 

 

 

 

 

 

 

 

Argentina

 

119

%

 

133

%

123

%

224

%

260 

%



 

 

 

 

 

 

 

 

 

 

 

 

Mexico

 

153

%

 

80

%

81

%

138

%

140 

%



 

 

 

 

 

 

 

 

 

 

 

 















Conference Call and Webcast

The Company will host a conference call and audio webcast on November 4h, 2020 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID –7335777–) 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.

MPOS  Mobile point-of-sale is a dedicated wireless device that performs the functions of a cash register or electronic point-of-sale terminal wirelessly.

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 September 30, 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)



 

 

 



September 30,

 

December 31,



2020

 

2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                       1,139,703

 

$                    1,384,740

Restricted cash and cash equivalents

484,426 

 

66,684 

Short-term investments (663,646 and 522,798 held in guarantee)

2,187,479 

 

1,597,241 

Accounts receivable, net

40,891 

 

35,446 

Credit cards receivable and other means of payments, net

660,402 

 

379,969 

Loans receivable, net

239,135 

 

182,105 

Prepaid expenses

28,387 

 

45,309 

Inventory

46,644 

 

8,626 

Other assets

96,824 

 

88,736 

Total current assets

4,923,891 

 

3,788,856 

Non-current assets:

 

 

 

Long-term investments

6,890 

 

263,983 

Loans receivable, net

15,073 

 

6,439 

Property and equipment, net

302,489 

 

244,257 

Operating lease right-of-use assets

225,345 

 

200,449 

Goodwill

79,064 

 

87,609 

Intangible assets, net

14,230 

 

14,275 

Deferred tax assets

125,012 

 

117,582 

Other assets

45,725 

 

58,241 

Total non-current assets

813,828 

 

992,835 

Total assets

$                       5,737,719

 

$                    4,781,691

Liabilities

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$                          509,095

 

$                       372,309

Funds payable to customers

1,421,825 

 

894,057 

Salaries and social security payable

157,127 

 

101,841 

Taxes payable

212,729 

 

60,247 

Loans payable and other financial liabilities

618,164 

 

186,138 

Operating lease liabilities

39,620 

 

23,259 

Other liabilities

48,700 

 

114,469 

Total current liabilities

3,007,260 

 

1,752,320 

Non-current liabilities:

 

 

 

Salaries and social security payable

29,200 

 

26,803 

Loans payable and other financial liabilities

618,337 

 

631,353 

Operating lease liabilities

189,098 

 

176,673 

Deferred tax liabilities

72,061 

 

99,952 

Other liabilities

26,237 

 

12,627 

Total non-current liabilities

934,933 

 

947,408 

Total liabilities

$                       3,942,193

 

$                    2,699,728



 

 

 

Commitments and Contingencies

 

 

 



 

 

 

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

 

 

 

50,000 and 100,000 shares issued and outstanding at September 30, 2020 and December 31, 2019

$                            49,427

 

$                         98,843



 

 

 

Equity

 

 

 



 

 

 

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

 

 

 

49,776,613 and 49,709,955 shares issued and outstanding at September 30,

 

 

 

2020 and December 31, 2019

$                                   50

 

$                                50

Additional paid-in capital

1,930,984 

 

2,067,869 

Treasury stock

(40,391)

 

(720)

Retained earnings

364,967 

 

322,592 

Accumulated other comprehensive loss

(509,511)

 

(406,671)

Total Equity

1,746,099 

 

1,983,120 

Total Liabilities, Redeemable convertible preferred stock and Equity

$                       5,737,719

 

$                    4,781,691







6

 


 

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the nine and three month periods ended September 30, 2020 and 2019

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





 

 

 

 

 

 

 

 



 

Nine Months Ended September 30,

 

Three Months Ended September 30,



 

2020

 

2019

 

2020

 

2019

Net revenues

 

$               2,646,161

 

$               1,622,043

 

$               1,115,701

 

$                  603,031

Cost of net revenues

 

(1,425,985)

 

(828,267)

 

(635,511)

 

(318,689)

Gross profit

 

1,220,176 

 

793,776 

 

480,190 

 

284,342 

Operating expenses:

 

 

 

 

 

 

 

 

Product and technology development

 

(235,485)

 

(165,787)

 

(88,796)

 

(59,495)

Sales and marketing

 

(620,204)

 

(564,271)

 

(229,621)

 

(252,903)

General and administrative

 

(211,669)

 

(147,992)

 

(78,699)

 

(53,869)

Total operating expenses

 

(1,067,358)

 

(878,050)

 

(397,116)

 

(366,267)

Income (loss) from operations

 

152,818 

 

(84,274)

 

83,074 

 

(81,925)



 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

Interest income and other financial gains

 

80,119 

 

86,590 

 

24,553 

 

28,462 

Interest expense and other financial losses

 

(75,083)

 

(44,689)

 

(24,522)

 

(14,451)

Foreign currency (losses) gains

 

(32,524)

 

(1,899)

 

(30,435)

 

987 

Net income (loss) before income tax expense

 

125,330 

 

(44,272)

 

52,670 

 

(66,927)



 

 

 

 

 

 

 

 

Income tax expense

 

(75,457)

 

(73,729)

 

(37,635)

 

(79,155)

Net income (loss)

 

$                    49,873

 

$                (118,001)

 

$                    15,035

 

$                (146,082)









 

 

 

 

 

 

 

 



 

Nine Months Ended September 30,

 

Three Months Ended September 30,



 

2020

 

2019

 

2020

 

2019

Basic EPS

 

 

 

 

 

 

 

 

Basic net income (loss)

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                      0.94

 

$                     (2.60)

 

$                      0.28

 

$                     (2.96)

Weighted average of outstanding common shares

 

49,713,621 

 

48,350,165 

 

49,720,854 

 

49,710,723 

Diluted EPS

 

 

 

 

 

 

 

 

Diluted net income (loss)

 

 

 

 

 

 

 

 

Available to shareholders per common share

 

$                      0.94

 

$                     (2.60)

 

$                      0.28

 

$                     (2.96)

Weighted average of outstanding common shares

 

49,713,621 

 

48,350,165 

 

49,720,854 

 

49,710,723 



 

 

 

 

 

 

 

 











7

 


 

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Cash Flows

For the nine months period ended September 30, 2020 and 2019





 

 

 

 



 

Nine Months Ended September 30,



 

2020

 

2019



 

 

Cash flows from operations:

 

 

 

 

Net income (loss)

 

$                   49,873

 

$                (118,001)

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

 

 

 

 

Unrealized devaluation loss, net

 

59,471 

 

45,857 

Depreciation and amortization

 

72,436 

 

52,518 

Accrued interest

 

(37,550)

 

(39,550)

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

 

94,492 

 

73,077 

Financial results on derivative instruments

 

(26,535)

 

(3,308)

Stock-based compensation expense — restricted shares

 

548 

 

214 

LTRP accrued compensation

 

75,142 

 

48,313 

Sale of fixed assets and intangible assets

 

3,814 

 

 —

Deferred income taxes

 

(58,485)

 

29,640 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable 

 

51,250 

 

1,464 

Credit cards receivables and other means of payments

 

(351,397)

 

65,968 

Prepaid expenses

 

15,627 

 

9,338 

Inventory

 

(40,322)

 

(5,939)

Other assets

 

(18,240)

 

(24,259)

Payables and accrued expenses

 

357,804 

 

88,918 

Funds payable to customers

 

711,987 

 

95,079 

Other liabilities

 

(69,829)

 

18,113 

Interest received from investments

 

35,909 

 

35,375 

Net cash provided by operating activities

 

925,995 

 

372,817 

Cash flows from investing activities:

 

 

 

 

Purchase of investments

 

(3,600,715)

 

(3,262,637)

Proceeds from sale and maturity of investments

 

3,081,643 

 

2,240,468 

Receipts from settlements of derivative instruments

 

17,779 

 

 —

Payment for acquired businesses, net of cash acquired

 

(6,937)

 

 —

Receipts from the sale of fixed assets and intangible assets

 

274 

 

 —

Purchases of intangible assets

 

(93)

 

(50)

Changes in principal of loans receivable, net

 

(170,284)

 

(150,442)

Purchases of property and equipment

 

(159,797)

 

(100,732)

Net cash used in investing activities

 

(838,130)

 

(1,273,393)

Cash flows from financing activities:

 

 

 

 

Proceeds from loans payable and other financial liabilities

 

1,890,156 

 

171,603 

Payments on loans payable and other financing liabilities

 

(1,415,845)

 

(104,062)

Payment of finance lease obligations

 

(2,499)

 

(1,416)

Purchase of convertible note capped call

 

(186,777)

 

(88,362)

Dividends paid of preferred stock

 

(3,000)

 

(1,844)

Common Stock repurchased

 

(39,671)

 

(720)

Payments on convertible notes

 

 —

 

(25)

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

 

242,364 

 

1,941,077 

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

 

(157,524)

 

(48,231)

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

 

172,705 

 

992,270 

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

 

$              1,624,129

 

$              1,456,965

8

 


 

Financial results of reporting segments





 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three Months Ended September 30, 2020



 

 

Brazil

 

Argentina

 

Mexico

 

 

Other Countries

 

Total



 

 

(In thousands)

Net revenues

 

$                           610,721 

 

$                        284,746 

 

$                          150,382 

 

 

$                           69,852 

 

$                        1,115,701 

Direct costs

 

(501,544)

 

(193,373)

 

(144,914)

 

 

(53,212)

 

(893,043)

Direct contribution

 

109,177 

 

91,373 

 

5,468 

 

 

16,640 

 

222,658 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses and indirect costs of net revenues

 

 

 

 

 

 

 

 

 

 

(139,584)

Income from operations

 

 

 

 

 

 

 

 

 

 

83,074 



 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 



Interest income and other financial gains

 

 

 

 

 

 

 

 

 

 

24,553 



Interest expense and other financial losses

 

 

 

 

 

 

 

 

 

 

(24,522)



Foreign currency losses

 

 

 

 

 

 

 

 

 

 

(30,435)

Net income before income tax expense

 

 

 

 

 

 

 

 

 

 

$                             52,670 



 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

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 expense

 

 

 

 

 

 

 

 

 

 

$                          (66,927)







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 September 30, 2020:





 

 

 

 

 

 

 

 

 

 

 

 



 

Three-month Periods Ended
September 30, (*)



 

As reported

 

FX Neutral Measures

 

As reported

 

 

(In millions, except percentages)

 

2020

 

2019

 

Percentage Change

 

2020

 

2019

 

Percentage Change



 

(Unaudited)

 

 

 

(Unaudited)

 

 

Net revenues

 

$                               1,115.7

 

$                        603.0

 

85.0% 

 

$                        1,498.4

 

$                        603.0

 

148.5% 

Cost of net revenues

 

(635.5)

 

(318.7)

 

99.4% 

 

(839.8)

 

(318.7)

 

163.5% 

Gross profit

 

480.2 

 

284.3 

 

68.9% 

 

658.6 

 

284.3 

 

131.6% 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(397.1)

 

(366.3)

 

8.4% 

 

(532.4)

 

(366.3)

 

45.4% 

Income (loss) from operations

 

83.1 

 

(81.9)

 

201.4% 

 

126.2 

 

(81.9)

 

253.9% 



(*) 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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