SEC Filing | MercadoLibre, Inc.

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meli-20220930x10q

Table of Contents

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 September 30, 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.

50,294,893 shares of the issuer’s common stock, $0.001 par value, outstanding as of November 3, 2022.

Table of Contents

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 September 30, 2022 and December 31, 2021	1
Interim Condensed Consolidated Statements of Income for the nine and three-month periods ended September 30, 2022 and 2021	2
Interim Condensed Consolidated Statements of Comprehensive Income for the nine and three-month periods ended September 30, 2022 and 2021	3
Interim Condensed Consolidated Statements of Equity for the nine and three-month periods ended September 30, 2022 and 2021	4
Interim Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 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	40
Item 3 — Qualitative and Quantitative Disclosures About Market Risk	64
Item 4 — Controls and Procedures	68
PART II. OTHER INFORMATION	68
Item 1 — Legal Proceedings	68
Item 1A — Risk Factors	68
Item 2 — Issuer Purchases of Equity Securities	68
Item 6 — Exhibits	69
INDEX TO EXHIBITS	69

Table of Contents

MercadoLibre, Inc. - Interim Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

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


	September 30,	December 31,
	2022	2021
Assets
Current assets:
Cash and cash equivalents	$ 1,455	$ 2,585
Restricted cash and cash equivalents	1,073	1,063
Short-term investments ($1,013 and $602 held in guarantee - Note 4)	1,943	810
Accounts receivable, net	108	98
Credit card receivables and other means of payments, net	2,550	1,839
Loans receivable, net of allowances of $974 and $408 (Note 5)	1,724	1,199
Prepaid expenses	62	40
Inventories	160	253
Customer crypto-assets safeguarding assets (Note 2)	15	—
Other assets	261	288
Total current assets	9,351	8,175
Non-current assets:
Long-term investments	375	89
Loans receivable, net of allowances of $34 and $27 (Note 5)	42	61
Property and equipment, net	945	807
Operating lease right-of-use assets	587	461
Goodwill	147	148
Intangible assets, net	29	45
Deferred tax assets	269	181
Other assets	217	134
Total non-current assets	2,611	1,926
Total assets	$ 11,962	$ 10,101
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$ 1,155	$ 1,036
Funds payable to customers	2,558	2,393
Amounts payable due to credit and debit card transactions	418	337
Salaries and social security payable	345	313
Taxes payable	338	291
Loans payable and other financial liabilities	1,946	1,285
Operating lease liabilities	121	92
Customer crypto-assets safeguarding liabilities (Note 2)	15	—
Other liabilities	106	90
Total current liabilities	7,002	5,837
Non-current liabilities:
Amounts payable due to credit and debit card transactions	4	4
Loans payable and other financial liabilities	2,743	2,233
Operating lease liabilities	470	372
Deferred tax liabilities	36	62
Other liabilities	76	62
Total non-current liabilities	3,329	2,733
Total liabilities	$ 10,331	$ 8,570
Commitments and Contingencies (Note 9)
Equity
Common stock, $0.001 par value, 110,000,000 shares authorized,
50,294,893 and 50,418,980 shares issued and outstanding at September 30,
2022 and December 31, 2021	$ —	$ —
Additional paid-in capital	2,308	2,439
Treasury stock	(898)	(790)
Retained earnings	748	397
Accumulated other comprehensive loss	(527)	(515)
Total Equity	1,631	1,531
Total Liabilities and Equity	$ 11,962	$ 10,101

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

Table of Contents

MercadoLibre, Inc.

Interim Condensed Consolidated Statements of Income

For the nine and three-month periods ended September 30, 2022 and 2021

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

(Unaudited)


	Nine Months Ended September 30		Three Months Ended September 30
	2022	2021	2022	2021
Net service revenues	$ 6,766	$ 4,366	$ 2,437	$ 1,631
Net product revenues	769	573	253	227
Net revenues	7,535	4,939	2,690	1,858
Cost of net revenues	(3,830)	(2,787)	(1,342)	(1,051)
Gross profit	3,705	2,152	1,348	807
Operating expenses:
Product and technology development	(774)	(411)	(278)	(138)
Sales and marketing	(916)	(736)	(333)	(281)
Provision for doubtful accounts	(845)	(271)	(288)	(105)
General and administrative	(485)	(317)	(153)	(123)
Total operating expenses	(3,020)	(1,735)	(1,052)	(647)
Income from operations	685	417	296	160

Other income (expenses):
Interest income and other financial gains	142	84	65	35
Interest expense and other financial losses (*)	(221)	(175)	(92)	(44)
Foreign currency losses, net	(134)	(52)	(71)	(25)
Net income before income tax expense	472	274	198	126

Income tax expense	(154)	(145)	(69)	(31)
Equity in earnings of unconsolidated entity	(1)	—	—	—
Net income	$ 317	$ 129	$ 129	$ 95


(*)	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.


	Nine Months Ended September 30		Three Months Ended September 30
	2022	2021	2022	2021
Basic EPS
Basic net income