Net Revenues of $428.0 million, up 61.8% on an FX
neutral basis
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, 2018.
Pedro Arnt, Chief Financial Officer of
MercadoLibre, Inc., commented, “I am pleased to report another
quarter of solid performance in our business, across our key
business units. During the 4Q’18 we have continued our efforts to
re-calibrate our P&L with initiatives such as continued changes
to our discounted shipping initiatives, and free listing caps,
which allowed us to improved enhanced marketplace monetization. As
a consequence our Net Revenues accelerated for the 3rd consecutive
quarter, reaching 61.8% YoY on an FX neutral basis.”
Fourth Quarter 2018
Business Highlights1
- Total payment volume through
MercadoPago surpassed the $5 billion mark for the first time,
reaching $5.3 billion, a year-over-year increase of 22.1% in USD
and 68.5% on an FX neutral basis. Total payment transactions
increased 71.7% year-over-year, totaling 125.6 million transactions
for the quarter.
- MercadoPago experienced continued
success in execution of off-platform payments (online and offline)
through merchant services, mobile point-of-sale (“MPOS”) devices,
and mobile wallet business. On a consolidated basis, off-platform
total payment volume grew 90.1% year-over-year in USD and 172.2% on
an FX neutral basis.
- For the first time ever,
off-platform payments processed more than $2 billion in
transactions, reaching almost 70 million payment transactions in a
single quarter.
- MPOS business is still one of the
fastest growing non-marketplace business units, representing 46.6%
of total off-platform payment volume for the quarter. On a
consolidated basis, total payment volume grew 365.3% year-over-year
on an FX neutral basis.
- Our mobile wallet reached 4x more
active payers during the fourth quarter than the same period of
last year, while total payment volume from mobile wallet in
Argentina, Brazil and Mexico is growing by triple digits
year-over-year.
- We launched our asset management
product, MercadoFondo, in Brazil, the second country in which we
have begun to offer our entire suite of FinTech solutions: MPOS
devices, QR code in-store payments, mobile wallet and asset
management.
- Gross merchandise volume again
surpassed the $3 billion mark, reaching $3.2 billion, a 10.6%
year-over-year decrease in USD, and a 17.6% year-over-year increase
on an FX neutral basis.
- Items sold reached 85.6 million,
growing 5.4% year-over-year versus 57.5% during the same period
last year. The decrease year-over-year is attributable to Brazil,
where last quarter we launched a R$5 flat listing fee on items
below R$ 120 and removed listings below R$ 6 as we shift towards
incentivizing buyers to purchase higher ticket items.
- Unique buyers grew 7.5%
year-over-year versus 9.4% in the third quarter. This declining
growth rate is attributable primarily to pricing adjustments,
including eliminating low-priced ticket items from our platform and
making payments mandatory in Chile and Colombia, which also
temporarily affected buyer growth.
- Live listings offered on
MercadoLibre’s marketplace grew to 182.1 million in the fourth
quarter of 2018, a 59.7% year-over-year increase, surpassing the
150 million mark for the third time.
- Mobile gross merchandise volume
grew 42.5% on an FX neutral basis year-over-year reaching 60.9% of
GMV.
- Items shipped through MercadoEnvíos
reached 62.1 million, a 28.5% year-over-year increase, driven
primarily by increases in our free shipping program. The number of
items shipped in Argentina, Mexico, Chile and Colombia were
highlights of the quarter, growing 84.0%, 88.3%, 72.0%, and 54.7%
respectively year-over-year.
1 Percentages have been calculated using whole amounts rather
than rounded amounts.
Adoption of ASC 606
Effective January 1, 2018, the Company adopted
ASC 606, Revenue from Contracts with Customers related to revenue
recognition (“ASC 606”) issued by the Financial Accounting
Standards Board (“FASB”). The Company has adopted ASC 606 using the
full retrospective transition method and has accordingly revised
its consolidated financial statements for the year ended December
31, 2017, and applicable interim periods within the year ended
December 31, 2017, as if ASC 606 had been effective for those
periods. Because the Company did not offer free shipping in 2016,
net revenue for that year does not need to be recast.
As a result of adopting ASC 606, the Company
must present net revenue net of amounts paid in connection with the
Company’s free shipping initiative, when the Company acts as an
agent, rather than including these amounts in the cost of net
sales, as previously recorded. For the three-month period ended
December 31, 2018 the Company incurred $108.1 million of shipping
subsidies that have been netted from revenues.
As a result of adopting ASC 606, our net
revenues for the periods indicated below have been recast as
presented below. Our adoption of 606 does not affect our operating
or net income/loss.
| |
|
In Millions*** |
| |
|
YTD 2017* |
|
YTD 2018** |
|
Q4 2017* |
|
Q4 2018** |
| Gross Billings |
$ |
1,398.1 |
|
$ |
1,864.5 |
|
$ |
437.0 |
|
$ |
536.2 |
|
| |
|
|
|
|
|
|
|
|
| |
|
In Millions*** |
| |
|
YTD 2017* |
|
YTD 2018** |
|
Q4 2017* |
|
Q4 2018** |
| Adjustments (Decrease) |
$ |
(181.6 |
) |
$ |
(424.8 |
) |
$ |
(78.9 |
) |
$ |
(108.1 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
In Millions*** |
| |
|
YTD 2017* |
|
YTD 2018** |
|
Q4 2017* |
|
Q4 2018** |
| Net Revenues |
$ |
1,216.5 |
|
$ |
1,439.7 |
|
$ |
358.1 |
|
$ |
428.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
*As Recast **As Reported ***The table above may not total due to
rounding.
The tables below present our gross
billing and amounts paid by us in connection with our free shipping
service.
| |
|
|
In Millions*** |
| |
|
|
YTD 2017 |
|
YTD 2018 |
|
Q4 2017 |
|
Q4 2018 |
| |
Brazil |
$ |
831.4 |
$ |
1,213.8 |
$ |
262.1 |
$ |
358.1 |
| Gross |
Argentina |
$ |
359.4 |
$ |
402.1 |
$ |
108.7 |
$ |
99.0 |
| Billings |
Mexico |
$ |
86.5 |
$ |
150.3 |
$ |
28.2 |
$ |
50.4 |
| |
Venezuela |
$ |
54.3 |
$ |
0.0 |
$ |
16.0 |
$ |
0.0 |
| |
Others |
$ |
66.5 |
$ |
98.3 |
$ |
22.1 |
$ |
28.7 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
In Millions*** |
| |
|
|
YTD 2017 |
|
YTD 2018 |
|
Q4 2017 |
|
Q4 2018 |
| |
Brazil |
$ |
(140.6 |
) |
$ |
(347.7 |
) |
$ |
(64.8 |
) |
$ |
(92.7 |
) |
| Adjustments |
Argentina |
$ |
- |
|
$ |
(25.5 |
) |
$ |
- |
|
$ |
(8.2 |
) |
| (Decrease) |
Mexico |
$ |
(35.2 |
) |
$ |
(41.2 |
) |
$ |
(10.4 |
) |
$ |
(4.9 |
) |
| |
Venezuela |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
| |
Others |
$ |
(5.8 |
) |
$ |
(10.5 |
) |
$ |
(3.7 |
) |
$ |
(2.3 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
In Millions*** |
| |
|
|
YTD 2017* |
|
YTD 2018** |
|
Q4 2017* |
|
Q4 2018** |
| |
Brazil |
$ |
690.8 |
|
866.2 |
|
197.3 |
|
265.4 |
| Net |
Argentina |
$ |
359.4 |
|
376.6 |
|
108.7 |
|
90.8 |
| Revenues |
Mexico |
$ |
51.3 |
|
109.1 |
|
17.7 |
|
45.5 |
| |
Venezuela |
$ |
54.3 |
|
0.0 |
|
16.0 |
|
0.0 |
| |
Others |
$ |
60.7 |
|
87.8 |
|
18.4 |
|
26.3 |
| |
|
|
|
|
|
|
|
|
|
*As Recast **As Reported ***The table above may not total due to
rounding.
Fourth Quarter 2018 Financial
Highlights
- Net revenues for the fourth quarter
grew to $428.0 million, a year-over-year increase of 19.5% in USD
and 61.8% on an FX neutral basis.
- Enhanced marketplace revenues
increased 13.5% year-over-year in USD, and increased 51.9% on an FX
neutral basis, while non-marketplace revenues increased 27.0%
year-over-year in USD and 74.2% on an FX neutral basis.
- Gross profit was $204.8 million
with a margin of 47.8%, compared to 56.8% in the fourth quarter of
2017. Most of the gross margin compression is attributed to an
increase in free shipping subsidies.
- Total operating expenses were
$205.6 million, down 23.3% year-over-year. As a percentage of
revenues, operating expenses were 48.0%, as compared to 74.8%
during the fourth quarter of 2017.
- Loss from operations was $0.8
million, down 92.6% from last quarter and 98.8% year-over-year in
USD. As a percentage of revenues, loss from operations was 0.2%,
compared to a loss of 18.0% during the fourth quarter of 2017.
- Interest income was $14.3 million,
a 60.9% increase year-over-year, mainly attributable to the effect
of a stable FX in Argentina, a significant rise in interest rates,
an increase in volume managed in Brazil and the proceeds of the
convertible note issued in August 2018, which generated more
invested volume and interest gains.
- The company incurred $16.4 million
in financial expenses in the fourth quarter of 2018, mainly
attributable to financial interest related to the 2028 Convertible
Notes and financial loans in Argentina, Uruguay and Chile.
- The foreign exchange loss for the
fourth quarter of 2018 was $3.9 million, mainly as a consequence of
a $4.7 million loss from the U.S. Dollar revaluation over our
Argentine Peso net asset position in Argentina, which was partially
offset by a $0.9 million gain arising from the appreciation of the
Mexican Peso over our U.S. Dollar net liability position in
Mexico.
- Net loss before taxes was $6.8
million, up 89.5% year-over-year.
- Income tax gain was $4.5 million
during the fourth quarter, yielding a blended tax rate for the
period of 65.8%.
- Net loss as reported for the fourth
quarter was $2.3 million, resulting in basic net loss per share of
$0.05.
- Operating cash flow was $34.8
million. Net decrease in cash, restricted cash and cash equivalents
was $613.0 million during the fourth quarter of 2018.
The following table summarizes certain
key performance metrics for the twelve and three months ended
December 31, 2018 and 2017.
| |
|
Years Ended December 31, |
|
|
Three months Ended December 31, |
| (in millions)
(*) |
|
|
2018 |
|
2017 (**) |
|
|
2018 |
2017 (**) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Number of confirmed registered users at end of
period |
|
|
267.4 |
|
211.9 |
|
|
267.4 |
|
|
211.9 |
| Number of confirmed new registered users during
period |
|
|
55.5 |
|
37.7 |
|
|
18.8 |
|
|
10.7 |
| Gross merchandise volume |
|
$ |
12,504.9 |
$ |
11,749.3 |
|
$ |
3,233.0 |
|
$ |
3,617.7 |
| Number of successful items sold |
|
|
334.7 |
|
270.1 |
|
|
85.6 |
|
|
81.2 |
| Number of successful items shipped |
|
|
221.7 |
|
150.7 |
|
|
62.1 |
|
|
48.3 |
| Total payment volume |
|
$ |
18,455.9 |
$ |
13,731.7 |
|
$ |
5,302.1 |
|
$ |
4,342.8 |
| Total volume of payments on marketplace |
|
$ |
11,274.5 |
$ |
9,627.6 |
|
$ |
2,950.4 |
|
$ |
2,947.4 |
| Total payment transactions |
|
|
389.3 |
|
231.4 |
|
|
125.6 |
|
|
73.2 |
| Unique buyers |
|
|
37.4 |
|
33.7 |
|
|
19.0 |
|
|
17.7 |
| Unique sellers |
|
|
10.8 |
|
10.1 |
|
|
4.1 |
|
|
4.6 |
| Capital expenditures |
|
$ |
102.0 |
$ |
83.5 |
|
$ |
21.5 |
|
$ |
31.4 |
| Depreciation and amortization |
|
$ |
45.8 |
$ |
40.9 |
|
$ |
11.9 |
|
$ |
11.0 |
| |
|
|
|
|
|
|
|
|
|
|
|
(*) Figures have been expressed using rounding
amounts. Growth calculations using this table may not total due to
rounding. (**) Data for 2017 includes Venezuelan metrics up to
November 30, 2017 due to deconsolidation. Please refer to Note 2 of
our audited consolidated financial statements for additional
detail.
Table of Year-over-year USD Revenue
Growth Rates by Quarter
| |
Year-over-year Growth rates |
| |
|
|
|
|
|
Consolidated Net Revenues |
Q4’17 |
|
Q1’18 |
|
Q2’18 |
|
Q3’18 |
|
Q4’18 |
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
37 |
% |
15 |
% |
25 |
% |
25 |
% |
34 |
% |
|
|
|
|
|
|
|
|
|
|
|
Argentina |
42 |
% |
43 |
% |
14 |
% |
(8 |
)% |
(16 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Mexico |
48 |
% |
51 |
% |
62 |
% |
152 |
% |
157 |
% |
| |
|
|
|
|
|
|
|
|
Table of Year-over-year Local Currency
Revenue Growth Rates by Quarter
| |
Year-over-year Growth rates |
| |
|
|
|
|
|
|
|
Consolidated Net Revenues |
Q4’17 |
|
Q1’18 |
|
Q2’18 |
|
Q3’18 |
|
Q4’18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
35 |
% |
19 |
% |
40 |
% |
56 |
% |
58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
62 |
% |
80 |
% |
68 |
% |
68 |
% |
77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mexico |
41 |
% |
39 |
% |
71 |
% |
168 |
% |
170 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Conference Call and Webcast
The Company will host a conference call and
audio webcast on Feb 26th, 2019 at 4:30 p.m. Eastern Time. The
conference call may be accessed by dialing (877) 303-7209 / (970)
315-0420 (Conference ID 3497822) 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.
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 2017 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
MercadoLibre Marketplace, excluding Classifieds transactions.
Total payment transactions – Measure of the
number of all transactions paid for using MercadoPago.
Total volume of payments on marketplace -
Measure of the total U.S. dollar sum of all marketplace
transactions paid for using MercadoPago, excluding shipping and
financing fees.
Total payment volume – Measure of total U.S.
dollar sum of all transactions paid for using MercadoPago,
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 MercadoLibre 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 MercadoLibre
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
MercadoLibre 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.
About MercadoLibre
Founded in 1999, MercadoLibre is Latin America’s
leading e-commerce technology company. Through its primary
platforms, MercadoLibre.com and MercadoPago.com, it provides
solutions to individuals and companies buying, selling,
advertising, and paying for goods and services online.
MercadoLibre.com serves millions of users and
creates a market for a wide variety of goods and services in an
easy, safe and efficient way. The site is among the top 50 in the
world in terms of page views and is the leading retail platform in
unique visitors in the major countries in which it operates
according to metrics provided by comScore Networks. 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, 2018, 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.
MercadoLibre, Inc.Consolidated
Balance SheetsAs of December 31, 2018
and 2017(In thousands of U.S. dollars, except par
value)
|
|
|
|
|
| |
December 31, |
|
December 31, |
| |
2018 |
|
2017 |
|
Assets |
|
|
|
| Current assets: |
|
|
|
| Cash and cash
equivalents |
$ |
440,332 |
|
|
$ |
388,260 |
|
|
Restricted cash and cash equivalents |
|
24,363 |
|
|
|
— |
|
|
Short-term investments (284,317 held in guarantee - see Note
4) |
|
461,541 |
|
|
|
209,432 |
|
| Accounts
receivable, net |
|
35,153 |
|
|
|
28,168 |
|
| Credit
cards receivable, net |
|
360,298 |
|
|
|
521,130 |
|
| Loans
receivable, net |
|
95,778 |
|
|
|
73,409 |
|
| Prepaid
expenses |
|
27,477 |
|
|
|
5,864 |
|
|
Inventory |
|
4,612 |
|
|
|
2,549 |
|
| Other
assets |
|
61,569 |
|
|
|
58,107 |
|
| Total
current assets |
|
1,511,123 |
|
|
|
1,286,919 |
|
| Non-current
assets: |
|
|
|
| Long-term
investments |
|
276,136 |
|
|
|
34,720 |
|
| Property
and equipment, net |
|
165,614 |
|
|
|
114,837 |
|
|
Goodwill |
|
88,883 |
|
|
|
92,279 |
|
|
Intangible assets, net |
|
18,581 |
|
|
|
23,174 |
|
| Deferred
tax assets |
|
141,438 |
|
|
|
57,324 |
|
| Other
assets |
|
37,744 |
|
|
|
63,934 |
|
| Total
non-current assets |
|
728,396 |
|
|
|
386,268 |
|
| Total
assets |
$ |
2,239,519 |
|
|
$ |
1,673,187 |
|
| |
|
|
|
|
Liabilities and Equity |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts
payable and accrued expenses |
$ |
266,759 |
|
|
$ |
221,095 |
|
| Funds
payable to customers |
|
640,954 |
|
|
|
583,107 |
|
| Salaries
and social security payable |
|
60,406 |
|
|
|
65,053 |
|
| Taxes
payable |
|
31,058 |
|
|
|
32,150 |
|
| Loans
payable and other financial liabilities |
|
132,949 |
|
|
|
56,325 |
|
| Other
liabilities |
|
34,098 |
|
|
|
3,678 |
|
| Dividends
payable |
|
— |
|
|
|
6,624 |
|
| Total
current liabilities |
|
1,166,224 |
|
|
|
968,032 |
|
| Non-current
liabilities: |
|
|
|
| Salaries
and social security payable |
|
23,161 |
|
|
|
25,002 |
|
| Loans
payable and other financial liabilities |
|
602,228 |
|
|
|
312,089 |
|
| Deferred
tax liabilities |
|
91,698 |
|
|
|
23,819 |
|
| Other
liabilities |
|
19,508 |
|
|
|
18,466 |
|
| Total
non-current liabilities |
|
736,595 |
|
|
|
379,376 |
|
| Total
liabilities |
$ |
1,902,819 |
|
|
$ |
1,347,408 |
|
| |
|
|
|
| Equity: |
|
|
|
| |
|
|
|
| Common
stock, $0.001 par value, 110,000,000 shares authorized, 45,202,859
and 44,157,364 shares issued and outstanding at December 31, 2018
and December 31, 2017 |
$ |
45 |
|
|
$ |
44 |
|
|
Additional paid-in capital |
|
224,800 |
|
|
|
70,661 |
|
| Retained
earnings |
|
503,432 |
|
|
|
537,925 |
|
|
Accumulated other comprehensive loss |
|
(391,577 |
) |
|
|
(282,851 |
) |
| Total
Equity |
|
336,700 |
|
|
|
325,779 |
|
| Total
Liabilities and Equity |
$ |
2,239,519 |
|
|
$ |
1,673,187 |
|
|
|
|
|
|
|
|
|
|
MercadoLibre, Inc.Consolidated
Statements of IncomeFor the years ended
December 31, 2018, 2017 and 2016(In thousands
of U.S. dollars, except for share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
Three Months Ended December 31, |
| |
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2018 |
|
|
|
2017 |
|
| Net revenues |
$ |
1,439,653 |
|
|
$ |
1,216,542 |
|
|
$ |
844,396 |
|
|
$ |
428,019 |
|
|
$ |
358,064 |
|
| Cost of net
revenues |
|
(742,645 |
) |
|
|
(496,942 |
) |
|
|
(307,538 |
) |
|
|
(223,235 |
) |
|
|
(154,701 |
) |
| Gross profit |
|
697,008 |
|
|
|
719,600 |
|
|
|
536,858 |
|
|
|
204,784 |
|
|
|
203,363 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
| Product
and technology development |
|
(146,273 |
) |
|
|
(127,160 |
) |
|
|
(98,479 |
) |
|
|
(38,963 |
) |
|
|
(34,161 |
) |
| Sales and
marketing |
|
(482,447 |
) |
|
|
(325,375 |
) |
|
|
(156,296 |
) |
|
|
(140,035 |
) |
|
|
(117,433 |
) |
| General
and administrative |
|
(137,770 |
) |
|
|
(122,194 |
) |
|
|
(87,310 |
) |
|
|
(26,605 |
) |
|
|
(30,621 |
) |
|
Impairment of Long-Lived Assets |
|
— |
|
|
|
(2,837 |
) |
|
|
(13,717 |
) |
|
|
— |
|
|
|
— |
|
| Loss on
deconsolidation of Venezuelan subsidiaries |
|
— |
|
|
|
(85,761 |
) |
|
|
— |
|
|
|
— |
|
|
|
(85,761 |
) |
| Total
operating expenses |
|
(766,490 |
) |
|
|
(663,327 |
) |
|
|
(355,802 |
) |
|
|
(205,603 |
) |
|
|
(267,976 |
) |
| (Loss) income from
operations |
|
(69,482 |
) |
|
|
56,273 |
|
|
|
181,056 |
|
|
|
(819 |
) |
|
|
(64,613 |
) |
| |
|
|
|
|
|
|
|
|
|
| Other income
(expenses): |
|
|
|
|
|
|
|
|
|
| Interest
income and other financial gains |
|
42,039 |
|
|
|
45,901 |
|
|
|
35,442 |
|
|
|
14,292 |
|
|
|
8,881 |
|
| Interest
expense and other financial losses |
|
(56,249 |
) |
|
|
(26,469 |
) |
|
|
(25,605 |
) |
|
|
(16,443 |
) |
|
|
(6,783 |
) |
| Foreign
currency gains (losses) |
|
18,240 |
|
|
|
(21,635 |
) |
|
|
(5,565 |
) |
|
|
(3,862 |
) |
|
|
(2,157 |
) |
| Net (loss) income
before income tax gain (expense) |
|
(65,452 |
) |
|
|
54,070 |
|
|
|
185,328 |
|
|
|
(6,832 |
) |
|
|
(64,672 |
) |
| |
|
|
|
|
|
|
|
|
|
| Income tax gain
(expense) |
|
28,867 |
|
|
|
(40,290 |
) |
|
|
(48,962 |
) |
|
|
4,496 |
|
|
|
(3,048 |
) |
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) income |
$ |
(36,585 |
) |
|
$ |
13,780 |
|
|
$ |
136,366 |
|
|
$ |
(2,336 |
) |
|
$ |
(67,720 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
Three Months Ended December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2018 |
|
|
|
2017 |
|
| Basic
EPS |
|
|
|
|
|
|
|
|
|
| Basic net
(loss) income |
|
|
|
|
|
|
|
|
|
|
Available to shareholders per common share |
$ |
(0.82 |
) |
|
$ |
0.31 |
|
|
$ |
3.09 |
|
|
$ |
(0.05 |
) |
|
$ |
(1.53 |
) |
| Weighted
average of outstanding common shares |
|
44,529,614 |
|
|
|
44,157,364 |
|
|
|
44,157,251 |
|
|
|
45,202,859 |
|
|
|
44,157,364 |
|
| Diluted
EPS |
|
|
|
|
|
|
|
|
|
| Diluted
net (loss) income |
|
|
|
|
|
|
|
|
|
| Available
to shareholders per common share |
$ |
(0.82 |
) |
|
$ |
0.31 |
|
|
$ |
3.09 |
|
|
$ |
(0.05 |
) |
|
$ |
(1.53 |
) |
| Weighted
average of outstanding common shares |
|
44,529,614 |
|
|
|
44,157,364 |
|
|
|
44,157,251 |
|
|
|
45,202,859 |
|
|
|
44,157,364 |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Dividends
declared (per share) |
|
— |
|
|
|
0.600 |
|
|
|
0.600 |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MercadoLibre, Inc.Consolidated
Statement of Cash FlowsFor the years
ended December 31, 2018, 2017 and
2016(In thousands of U.S. dollars)
|
|
|
|
|
|
|
| |
Year Ended December 31, |
| |
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
| |
|
| Cash flows from
operations: |
|
|
|
|
|
| Net
(loss) income |
$ |
(36,585 |
) |
|
$ |
13,780 |
|
|
$ |
136,366 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
Unrealized devaluation loss, net |
|
11,131 |
|
|
|
28,463 |
|
|
|
4,967 |
|
|
Impairment of Long-Lived Assets |
|
— |
|
|
|
2,837 |
|
|
|
13,717 |
|
| Loss on
deconsolidation of Venezuelan subsidiaries |
|
— |
|
|
|
85,761 |
|
|
|
— |
|
|
Depreciation and amortization |
|
45,792 |
|
|
|
40,921 |
|
|
|
29,022 |
|
| Accrued
interest |
|
(17,811 |
) |
|
|
(20,192 |
) |
|
|
(17,794 |
) |
| Non cash interest and convertible
bonds amortization of debt discount and amortization of debt
issuance costs |
|
11,408 |
|
|
|
10,855 |
|
|
|
9,837 |
|
| LTRP
accrued compensation |
|
27,525 |
|
|
|
35,719 |
|
|
|
22,983 |
|
| Deferred
income taxes |
|
(92,585 |
) |
|
|
(24,575 |
) |
|
|
(6,188 |
) |
| Changes
in assets and liabilities: |
|
|
|
|
|
| Accounts
receivable |
|
(27,105 |
) |
|
|
(21,817 |
) |
|
|
(15,428 |
) |
| Credit
cards receivable |
|
42,655 |
|
|
|
(257,563 |
) |
|
|
(180,592 |
) |
| Prepaid
expenses |
|
(23,342 |
) |
|
|
8,670 |
|
|
|
(9,133 |
) |
|
Inventory |
|
(3,015 |
) |
|
|
(1,549 |
) |
|
|
(787 |
) |
| Other
assets |
|
(17,617 |
) |
|
|
(54,780 |
) |
|
|
(24,425 |
) |
| Accounts
payable and accrued expenses |
|
90,123 |
|
|
|
150,215 |
|
|
|
47,980 |
|
| Funds
payable to customers |
|
175,398 |
|
|
|
242,037 |
|
|
|
164,060 |
|
| Other
liabilities |
|
28,202 |
|
|
|
7,680 |
|
|
|
(45 |
) |
| Interest
received from investments |
|
16,733 |
|
|
|
22,548 |
|
|
|
15,719 |
|
| Net cash
provided by operating activities |
|
230,907 |
|
|
|
269,010 |
|
|
|
190,259 |
|
| Cash flows from
investing activities: |
|
|
|
|
|
| Purchase
of investments |
|
(3,176,078 |
) |
|
|
(4,553,649 |
) |
|
|
(3,501,283 |
) |
| Proceeds
from sale and maturity of investments |
|
2,662,800 |
|
|
|
4,713,934 |
|
|
|
3,508,293 |
|
| Payment
for acquired businesses, net of cash acquired |
|
(4,195 |
) |
|
|
(8,568 |
) |
|
|
(7,284 |
) |
| Reduction
of cash due to Venezuela deconsolidation |
|
— |
|
|
|
(27,230 |
) |
|
|
— |
|
| Purchases
of intangible assets |
|
(192 |
) |
|
|
(33 |
) |
|
|
(431 |
) |
| Changes
in principal loans receivable, net |
|
(57,232 |
) |
|
|
(72,244 |
) |
|
|
(6,599 |
) |
| Advance
for property and equipment |
|
(4,426 |
) |
|
|
(19,695 |
) |
|
|
(8,412 |
) |
| Purchases
of property and equipment |
|
(93,136 |
) |
|
|
(55,156 |
) |
|
|
(68,527 |
) |
| Net cash
used in investing activities |
|
(672,459 |
) |
|
|
(22,641 |
) |
|
|
(84,243 |
) |
| 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 |
|
(348,123 |
) |
|
|
— |
|
|
|
— |
|
| Purchase
of convertible note capped calls |
|
(148,943 |
) |
|
|
(67,308 |
) |
|
|
— |
|
| Unwind of
convertible note capped calls |
|
136,108 |
|
|
|
— |
|
|
|
— |
|
| Proceeds
from loans payable and other financial liabilities |
|
236,873 |
|
|
|
47,905 |
|
|
|
11,435 |
|
| Payments
on loans payable and other financing |
|
(123,822 |
) |
|
|
(5,004 |
) |
|
|
(6,684 |
) |
| Dividends
paid |
|
(6,624 |
) |
|
|
(26,496 |
) |
|
|
(24,419 |
) |
| Payment
of finance lease obligations |
|
(323 |
) |
|
|
— |
|
|
|
— |
|
| Net cash provided by
(used in) financing activities |
|
608,882 |
|
|
|
(50,903 |
) |
|
|
(19,668 |
) |
| Effect of exchange rate
changes on cash, cash equivalents, restricted cash and cash
equivalents |
|
(90,895 |
) |
|
|
(41,346 |
) |
|
|
(19,089 |
) |
| Net increase in cash,
cash equivalents, restricted cash and cash equivalents |
|
76,435 |
|
|
|
154,120 |
|
|
|
67,259 |
|
| Cash, cash equivalents,
restricted cash and cash equivalents, beginning of the year |
|
388,260 |
|
|
|
234,140 |
|
|
|
166,881 |
|
| Cash, cash equivalents,
restricted cash and cash equivalents, end of the year |
$ |
464,695 |
|
|
$ |
388,260 |
|
|
$ |
234,140 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Financial results of reporting
segments
| |
|
Year Ended December 31, 2018 |
| |
|
Brazil |
|
Argentina |
|
Mexico |
|
|
Other Countries |
|
Total |
| |
|
(In thousands) |
| Net revenues |
|
$ |
866,175 |
|
|
$ |
376,563 |
|
|
$ |
109,096 |
|
|
|
$ |
87,819 |
|
|
$ |
1,439,653 |
|
| Direct costs |
|
|
(762,636 |
) |
|
|
(254,539 |
) |
|
|
(164,637 |
) |
|
|
|
(79,581 |
) |
|
|
(1,261,393 |
) |
| Direct
contribution |
|
|
103,539 |
|
|
|
122,024 |
|
|
|
(55,541 |
) |
|
|
|
8,238 |
|
|
|
178,260 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
(247,742 |
) |
| Loss from
operations |
|
|
|
|
|
|
|
|
|
|
|
(69,482 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
| Interest
income and other financial gains |
|
|
|
|
|
|
|
|
|
|
|
42,039 |
|
| Interest
expense and other financial losses |
|
|
|
|
|
|
|
|
|
|
|
(56,249 |
) |
| Foreign
currency gains |
|
|
|
|
|
|
|
|
|
|
|
18,240 |
|
| Net loss before income
tax gain |
|
|
|
|
|
|
|
|
|
|
$ |
(65,452 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year Ended December 31, 2017 (*) |
| |
Brazil |
|
Argentina |
|
Mexico |
|
Venezuela |
|
Other Countries |
|
Total |
| |
(In thousands) |
| Net revenues |
$ |
690,808 |
|
|
$ |
359,357 |
|
|
$ |
51,335 |
|
|
$ |
54,327 |
|
|
$ |
60,715 |
|
|
$ |
1,216,542 |
|
| Direct costs |
|
(471,588 |
) |
|
|
(215,831 |
) |
|
|
(107,408 |
) |
|
|
(22,101 |
) |
|
|
(53,201 |
) |
|
$ |
(870,129 |
) |
| Impairment of
Long-lived Assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,837 |
) |
|
|
- |
|
|
$ |
(2,837 |
) |
| Loss on deconsolidation
of Venezuelan subsidiary |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(76,617 |
) |
|
|
- |
|
|
$ |
(76,617 |
) |
| Direct
contribution |
|
219,220 |
|
|
|
143,526 |
|
|
|
(56,073 |
) |
|
|
(47,228 |
) |
|
|
7,514 |
|
|
|
266,959 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
(201,542 |
) |
| Loss on Deconsolidation
of Venezuelan's Intercompany balances |
|
|
|
|
|
|
|
|
|
|
|
(9,144 |
) |
| Income from
operations |
|
|
|
|
|
|
|
|
|
|
|
56,273 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
| Interest
income and other financial gains |
|
|
|
|
|
|
|
|
|
|
|
45,901 |
|
| Interest
expense and other financial losses |
|
|
|
|
|
|
|
|
|
|
|
(26,469 |
) |
| Foreign
currency losses |
|
|
|
|
|
|
|
|
|
|
|
(21,635 |
) |
| Net income before
income tax expense |
|
|
|
|
|
|
|
|
|
|
$ |
54,070 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)Excludes results of operations for Venezuela for the month of
December 2017.
| |
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 |
|
|
|
|
|
|
|
|
|
|
(55,611 |
) |
| Income from
operations |
|
|
|
|
|
|
|
|
|
|
(819 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
|
|
|
|
|
|
|
$ |
(6,832 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended December 31, 2017
(*) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Brazil |
|
Argentina |
|
Mexico |
|
Venezuela |
|
Other Countries |
|
Total |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
$ |
197,300 |
|
|
$ |
108,666 |
|
|
$ |
17,717 |
|
|
$ |
15,999 |
|
|
$ |
18,381 |
|
|
$ |
358,063 |
|
| Direct costs |
|
(157,391 |
) |
|
|
(65,215 |
) |
|
|
(36,434 |
) |
|
|
(5,260 |
) |
|
|
(18,269 |
) |
|
|
(282,569 |
) |
| Loss on deconsolidation
of Venezuelan subsidiary |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(76,617 |
) |
|
|
- |
|
|
|
(76,617 |
) |
| Direct
contribution |
|
39,909 |
|
|
|
43,451 |
|
|
|
(18,717 |
) |
|
|
(65,878 |
) |
|
|
112 |
|
|
|
(1,123 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
(54,346 |
) |
| Loss on Deconsolidation
of Venezuelan's Intercompany balances |
|
|
|
|
|
|
|
|
|
|
|
(9,144 |
) |
| Income from
operations |
|
|
|
|
|
|
|
|
|
|
|
(64,613 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
| Interest
income and other financial gains |
|
|
|
|
|
|
|
|
|
|
|
8,881 |
|
| Interest
expense and other financial losses |
|
|
|
|
|
|
|
|
|
|
|
(6,783 |
) |
| Foreign
currency losses |
|
|
|
|
|
|
|
|
|
|
|
(2,157 |
) |
| Net loss before income
tax gain |
|
|
|
|
|
|
|
|
|
|
$ |
(64,672 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
(*)Excludes results of operations for Venezuela for the month of
December 2017.
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 2017 and
applying them to the corresponding months in 2018, 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, 2018:
| |
Three-months Period Ended December 31,
(*) |
| |
As reported |
|
FX Neutral Measures |
|
(In millions, except percentages) |
|
2018 |
|
|
|
2017 |
|
|
Percentage Change |
|
|
2018 |
|
|
|
2017 |
|
|
Percentage Change |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
$ |
428.0 |
|
|
$ |
358.1 |
|
|
19.5 |
% |
|
$ |
579.5 |
|
|
$ |
358.1 |
|
|
61.8 |
% |
| Cost of net
revenues |
|
(223.2 |
) |
|
|
(154.7 |
) |
|
44.3 |
% |
|
|
(309.3 |
) |
|
|
(154.7 |
) |
|
100.0 |
% |
| Gross profit |
|
204.8 |
|
|
|
203.4 |
|
|
0.7 |
% |
|
|
270.2 |
|
|
|
203.4 |
|
|
32.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
(205.6 |
) |
|
|
(182.2 |
) |
|
12.8 |
% |
|
|
(289.4 |
) |
|
|
(182.2 |
) |
|
58.8 |
% |
| Loss on Deconsolidation
of Venezuelan Subsidiaries |
|
— |
|
|
|
(85.8 |
) |
|
-100.0 |
% |
|
|
— |
|
|
|
(85.8 |
) |
|
-100.0 |
% |
| Total operating
expenses |
|
(205.6 |
) |
|
|
(268.0 |
) |
|
-23.3 |
% |
|
|
(289.4 |
) |
|
|
(268.0 |
) |
|
8.0 |
% |
| Loss from
operations |
|
(0.8 |
) |
|
|
(64.6 |
) |
|
-98.8 |
% |
|
|
(19.2 |
) |
|
|
(64.6 |
) |
|
-70.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
(*) The table above may not total due to rounding.
CONTACT: MercadoLibre, Inc.Investor
Relationsinvestor@mercadolibre.com
http://investor.mercadolibre.com
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