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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x

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

For the quarterly period ended March 31, 2022

-OR-

¨

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

For the transition period from _________ to _________

Commission file number 001-33647

MercadoLibre, Inc.

(Exact name of Registrant as specified in its Charter)

Delaware

 

98-0212790

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

WTC Free Zone

Dr. Luis Bonavita 1294, Of. 1733, Tower II

Montevideo, Uruguay, 11300

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

(+598) 2-927-2770

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

MELI

  Nasdaq Global Select Market  

2.375% Sustainability Notes due 2026

MELI26

The Nasdaq Stock Market LLC

3.125% Notes due 2031

MELI31

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   x     No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨  

Smaller reporting company

¨

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

50,377,981 shares of the issuer’s common stock, $0.001 par value, outstanding as of May 2, 2022.

 


MERCADOLIBRE, INC.

INDEX TO FORM 10-Q

 

PART I. FINANCIAL INFORMATION

Item 1 — Unaudited Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

1

Interim Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2022 and 2021

2

Interim Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2022 and 2021

3

Interim Condensed Consolidated Statements of Equity for the three-month periods ended March 31, 2022 and 2021

4

Interim Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2022 and 2021

5

Notes to Interim Condensed Consolidated Financial Statements (unaudited)

6

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

35

Item 3 — Qualitative and Quantitative Disclosures About Market Risk

58

Item 4 — Controls and Procedures

61

PART II. OTHER INFORMATION

62

Item 1 — Legal Proceedings

62

Item 1A — Risk Factors

62

Item 2 — Issuer Purchases of Equity Securities

62

Item 6 — Exhibits

63

INDEX TO EXHIBITS

63

 

 


MercadoLibre, Inc.

Interim Condensed Consolidated Balance Sheets

As of March 31, 2022 and December 31, 2021

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

(Unaudited)

March 31,

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$                             1,573

$                          2,585

Restricted cash and cash equivalents

841

1,063

Short-term investments (941 and 602 held in guarantee - see Note 4)

1,412

810

Accounts receivable, net

98

98

Credit cards receivable and other means of payments, net

2,512

1,839

Loans receivable, net

1,657

1,199

Prepaid expenses

79

40

Inventories

239

253

Other assets

294

288

Total current assets

8,705

8,175

Non-current assets:

Long-term investments

121

89

Loans receivable, net

80

61

Property and equipment, net

967

807

Operating lease right-of-use assets

542

461

Goodwill

162

148

Intangible assets, net

43

45

Deferred tax assets

235

181

Other assets

168

134

Total non-current assets

2,318

1,926

Total assets

$                           11,023

$                        10,101

Liabilities

Current liabilities:

Accounts payable and accrued expenses

$                             1,027

$                          1,036

Funds payable to customers

2,483

2,393

Amounts payable due to credit and debit card transactions

420

337

Salaries and social security payable

319

313

Taxes payable

277

291

Loans payable and other financial liabilities

1,459

1,285

Operating lease liabilities

109

92

Other liabilities

134

90

Total current liabilities

6,228

5,837

Non-current liabilities:

Amounts payable due to credit and debit card transactions

4

4

Salaries and social security payable

5

20

Taxes payable

28

Loans payable and other financial liabilities

2,638

2,233

Operating lease liabilities

434

372

Deferred tax liabilities

42

62

Other liabilities

55

42

Total non-current liabilities

3,206

2,733

Total liabilities

$                             9,434

$                          8,570

Commitments and Contingencies (Note 9)

 

 

Equity

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

50,377,981 and 50,418,980 shares issued and outstanding at March 31,

2022 and December 31, 2021

$                                  

$                               

Additional paid-in capital

2,308

2,439

Treasury stock

(829)

(790)

Retained earnings

496

397

Accumulated other comprehensive loss

(386)

(515)

Total Equity

1,589

1,531

Total Liabilities and Equity

$                           11,023

$                        10,101

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

1


MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the three-month periods ended March 31, 2022 and 2021

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

(Unaudited)

Three Months Ended March 31,

2022

2021

Net service revenues

$                    1,997

$                    1,230

Net product revenues

251

148

Net revenues

2,248

1,378

Cost of net revenues

(1,175)

(787)

Gross profit

1,073

591

Operating expenses:

Product and technology development

(234)

(126)

Sales and marketing

(541)

(288)

General and administrative

(159)

(86)

Total operating expenses

(934)

(500)

Income from operations

139

91

Other income (expenses):

Interest income and other financial gains

31

25

Interest expense and other financial losses (*)

(56)

(91)

Foreign currency losses

(3)

(15)

Net income before income tax expense

111

10

Income tax expense

(46)

(44)

Net income (loss)

$                         65

$                        (34)

(*)

Includes $49 million of loss on debt extinguishment and premium related to the 2028 Notes repurchase recognized in January 2021. See Note 11 to these unaudited interim condensed consolidated financial statements for further detail on 2028 Notes repurchase.

Three Months Ended March 31,

2022

2021

Basic EPS

Basic net income (loss)

Available to shareholders per common share

$                      1.30

$                     (0.68)

Weighted average of outstanding common shares

50,408,754

49,867,625

Diluted EPS

Diluted net income (loss)

Available to shareholders per common share

$                      1.30

$                     (0.68)

Weighted average of outstanding common shares

50,408,754

49,867,625

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

2


MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Comprehensive Income

For the three-month periods ended March 31, 2022 and 2021

(In millions of U.S. dollars)

(Unaudited)

Three Months Ended March 31,

2022

2021

Net income (loss)

$                         65

$                        (34)

Other comprehensive income (loss), net of income tax:

Currency translation adjustment

151

(42)

Unrealized (losses) gains on hedging activities

(24)

4

Less: Reclassification adjustment for (losses) gains from accumulated other comprehensive income (loss)

(2)

Net change in accumulated other comprehensive income (loss), net of income tax

129

(38)

Total Comprehensive income (loss)

$                       194

$                        (72)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 


3


MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Equity

For the three-month periods ended March 31, 2022 and 2021

(In millions of U.S. dollars)

(Unaudited)

Accumulated

Additional

other

Common stock

paid-in

Treasury

Retained

comprehensive

Total

Shares

Amount

capital

Stock

Earnings

loss

Equity

Balance as of December 31, 2021

50

$

$

2,439

$

(790)

$

397

$

(515)

$

1,531

Changes in accounting standards (Note 2)

(131)

34

(97)

Balance as of December 31, 2021 Restated

50

$

$

2,308

$

(790)

$

431

$

(515)

$

1,434

Common Stock repurchased

(39)

(39)

Net income

65

65

Other comprehensive income

129

129

Balance as of March 31, 2022

50

$

$

2,308

$

(829)

$

496

$

(386)

$

1,589

Accumulated

Additional

other

Common stock

paid-in

Treasury

Retained

comprehensive

Total

Shares

Amount

capital

Stock

Earnings

loss

Equity

Balance as of December 31, 2020

50

$

$

1,861

$

(55)

$

314

$

(468)

$

1,652

Capped Call

(101)

(101)

Repurchase of 2028 Notes Conversion Option

(1,484)

(1,484)

Common Stock repurchased