85.4 million Items Sold, up 38.8%,
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, 2018.
Pedro Arnt, Chief Financial Officer of
MercadoLibre, Inc., commented, “The outlook for our industry is as
positive as ever, and our investment thesis remains intact. The
internet is rapidly becoming a driving force that is increasing the
pace of modernization in Latin America. This modernization presents
us with the opportunity to turn a history of underdeveloped
infrastructure in the areas of retail and banking from a
disadvantage into an advantage, as it allows for innovation to
flourish unencumbered by existing legacy players.”
Second Quarter 2018 Business
Highlights
- Gross merchandise volume again surpassed $3 billion, reaching
$3.1 billion, a 15.2% year-over-year increase in USD, and a 35.9%
year-over-year increase on an FX neutral basis, representing the
fifth consecutive quarter of growth.
- Items sold increased for the second consecutive quarter to 85.4
million, a 38.8% year-over-year increase, delivering solid
growth.
- Unique buyers grew 16.0% year-over-year versus 28.0% in the
first quarter. This declining growth rate is attributable primarily
to the price increases from our major postal partner, and the May
truckers strike that lasted ten days and had a negative impact on
e-commerce in Brazil. This deceleration in unique buyers growth in
Brazil was partially offset by unique buyer growth rates in Mexico,
Colombia, Chile and Argentina, where growth rates in unique buyers
exceeded 20%.
- Live listings offered on Mercado Libre’s marketplace grew to
154.8 million in the second quarter of 2018, a 56.4% year-over-year
increase, surpassing for the first time ever the 150 million
mark.
- We continue to transition to being a mobile first company, as
mobile gross merchandize volume “GMV” penetration grew 28.1%
year-over-year reaching 55.5% mobile penetration.
- Items shipped through MercadoEnvíos reached 52.8 million, a
58.1% year-over-year increase, driven primarily by increasing our
free shipping options, strong marketing of our loyalty program and
customer acquisition initiatives. Items shipped in Argentina,
Mexico, Chile and Colombia were highlights of the quarter, growing
73%, 135%, 440%, and 166% respectively
year-over-year.
- Total payment volume through MercadoPago reached $4.4 billion,
a year-over-year increase of 40.4% in USD and 66.3% on an FX
neutral basis. Total payment transactions increased 64.1%
year-over-year, totaling 85.5 million for the quarter.
- We continue to successfully execute off-platform payments
efforts (both online and offline) though merchant services, mPos,
and mobile wallet businesses. On a consolidated basis, off-platform
total payment volume grew 96.7% year-over-year in USD and 142.4% on
an FX neutral basis.
- Our mobile-point-of-sale business quickly becoming one of our
fastest growing non-marketplace business units, representing 43.3%
of total off-platform payment volume for the quarter.
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 rather than including these amounts in the cost
of net sales, as previously recorded. For the three-month period
ended June 30, 2018 the Company incurred $97 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 |
Grossbillings |
|
|
H1
2017* |
|
|
H1
2018** |
|
|
Q2
2017* |
|
|
Q2
2018** |
|
$ |
590.5 |
|
$ |
865.5 |
|
$ |
316.5 |
|
$ |
432.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions |
Adjustments(Decrease) |
|
|
H1
2017* |
|
|
H1
2018** |
|
|
Q2
2017* |
|
|
Q2
2018** |
|
$ |
36.9 |
|
$ |
209.2 |
|
$ |
32.6 |
|
$ |
96.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions |
NetRevenues |
|
|
H1
2017* |
|
|
H1
2018** |
|
|
Q2
2017* |
|
|
Q2
2018** |
|
$ |
553.6 |
|
$ |
656.4 |
|
$ |
283.9 |
|
$ |
335.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 |
|
|
|
|
|
H1
2017 |
|
|
|
H1
2018 |
|
|
|
Q2
2017 |
|
|
|
Q2
2018 |
Gross billings |
Brazil |
|
|
$ |
339.8 |
|
|
$ |
546.8 |
|
|
$ |
180.1 |
|
|
$ |
270.5 |
Argentina |
|
|
$ |
159.4 |
|
|
$ |
211.9 |
|
|
$ |
88.0 |
|
|
$ |
105.9 |
Mexico |
|
|
$ |
35.7 |
|
|
$ |
60.7 |
|
|
$ |
20.2 |
|
|
$ |
31.3 |
Venezuela |
|
|
$ |
28.6 |
|
|
$ |
— |
|
|
$ |
14.2 |
|
|
$ |
— |
Others |
|
|
$ |
26.9 |
|
|
$ |
46.1 |
|
|
$ |
14.1 |
|
|
$ |
24.3 |
|
|
|
|
|
|
|
|
|
|
|
In millions |
Adjustments(Decrease) |
|
|
|
|
H1
2017 |
|
|
|
H1
2018 |
|
|
|
Q2
2017 |
|
|
|
Q2
2018 |
Brazil |
|
|
$ |
22.9 |
|
|
$ |
166.8 |
|
|
$ |
22.9 |
|
|
$ |
74.7 |
|
Argentina |
|
|
$ |
— |
|
|
$ |
9.9 |
|
|
$ |
— |
|
|
$ |
5.7 |
|
Mexico |
|
|
$ |
13.6 |
|
|
$ |
26.1 |
|
|
$ |
9.4 |
|
|
$ |
13.8 |
|
Venezuela |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Others |
|
|
$ |
0.4 |
|
|
$ |
6.4 |
|
|
$ |
0.4 |
|
|
$ |
2.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions |
Net Revenues |
|
|
|
|
H1
2017* |
|
|
|
H1
2018** |
|
|
|
Q2
2017* |
|
|
|
Q2
2018** |
Brazil |
|
|
$ |
317.0 |
|
|
$ |
380.0 |
|
|
$ |
157.2 |
|
|
$ |
195.8 |
|
Argentina |
|
|
$ |
159.4 |
|
|
$ |
202.0 |
|
|
$ |
88.0 |
|
|
$ |
100.1 |
|
Mexico |
|
|
$ |
22.1 |
|
|
$ |
34.6 |
|
|
$ |
10.8 |
|
|
$ |
17.5 |
|
Venezuela |
|
|
$ |
28.6 |
|
|
$ |
— |
|
|
$ |
14.2 |
|
|
$ |
— |
|
Others |
|
|
$ |
26.5 |
|
|
$ |
39.7 |
|
|
$ |
13.8 |
|
|
$ |
21.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*As Recast **As
Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The table above may
not total due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter 2018 Financial
Highlights
- Net revenues for the second quarter grew to $335.4 million, a
year-over-year increase of 18.1% in USD and 43.7% on an FX neutral
basis.
- Enhanced marketplace revenues decreased 13.2% year-over-year in
USD, and 0.4% on an FX neutral basis, while non-marketplace
revenues increased 72.5% year-over-year in USD and 107.5% on an FX
neutral basis.
- Gross profit was $159.7 million with a margin of 47.6%,
compared to 60.4% in the second quarter of 2017. Most of the gross
margin compression is attributed to an increase in free shipping
subsidies.
- Total operating expenses were $188.0 million, up 32.8%
year-over-year. As a percentage of revenues, operating expenses
were 56.1%, as compared to 49.9% during the second quarter of
2017.
- Loss from operations was $28.2 million, down 194.1%
year-over-year. As a percentage of revenues, loss from operations
was 8.4%, as compared to a gain of 10.6% during the second quarter
of 2017.
- Interest income was $9.9 million, a 7.0% decrease
year-over-year as a result of lower interest rates in Brazil as
well as a lower float in Brazil and Argentina.
- The company incurred $13.2 million in financial expenses in the
second quarter of 2018 mostly related to working capital funding
for the payments businesses and to interest accrual on our
convertible bond issued in 2014.
- Net loss before taxes was $19.0 million, down 252.6%
year-over-year.
- Income tax gain was $7.7 million during the second quarter,
yielding a blended tax rate for the period of 40.6%.
- Net loss as reported for the second quarter was $11.3 million,
resulting in basic net loss per share of $0.25.
- Operating cash flow was $144.2 million. Net decrease in cash,
restricted cash and cash equivalents was $173.6 million in during
the second quarter of 2018.
The following table summarizes certain
key performance metrics for the three months ended June 30th, 2018
and 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-months Periods Ended June 30, |
|
|
|
Three-month Periods Ended June
30, |
(in millions) |
|
|
2018 (*) |
|
|
|
2017 (*) |
|
|
|
2018 |
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of confirmed
registered users at end of period |
|
|
234.9 |
|
|
|
191.2 |
|
|
|
234.9 |
|
|
|
191.2 |
Number of confirmed new
registered users during period |
|
|
23.0 |
|
|
|
17.0 |
|
|
|
11.8 |
|
|
|
9.0 |
Gross merchandise
volume |
|
$ |
6,276.6 |
|
|
$ |
5,056.3 |
|
|
$ |
3,135.4 |
|
|
$ |
2,722.4 |
Number of successful
items sold |
|
|
165.6 |
|
|
|
114.7 |
|
|
|
85.4 |
|
|
|
61.5 |
Number of successful
items shipped |
|
|
105.3 |
|
|
|
60.7 |
|
|
|
52.8 |
|
|
|
33.4 |
Total payment
volume |
|
$ |
8,601.4 |
|
|
$ |
5,721.8 |
|
|
$ |
4,426.1 |
|
|
$ |
3,152.0 |
Total volume of
payments on marketplace |
|
$ |
5,603.8 |
|
|
$ |
4,027.4 |
|
|
$ |
2,794.3 |
|
|
$ |
2,201.6 |
Total payment
transactions |
|
|
159.8 |
|
|
|
96.4 |
|
|
|
85.5 |
|
|
|
52.1 |
Unique buyers |
|
|
25.0 |
|
|
|
22.2 |
|
|
|
16.9 |
|
|
|
14.6 |
Unique sellers |
|
|
8.6 |
|
|
|
6.5 |
|
|
|
4.2 |
|
|
|
4.2 |
Capital
expenditures |
|
$ |
46.8 |
|
|
$ |
34.6 |
|
|
$ |
23.7 |
|
|
$ |
21.8 |
Depreciation and
amortization |
|
$ |
22.6 |
|
|
$ |
19.1 |
|
|
$ |
11.5 |
|
|
$ |
10.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
Percentages have been calculated using whole-dollar amounts rather
than rounded amounts that appear in the table. The table above may
not total due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table of Year-over-Year USD Revenue
Growth Rates by Quarter
|
|
|
|
YoY Growth rates |
|
|
|
|
|
Consolidated Net Revenues |
|
|
|
Q2’17 |
|
|
Q3’17 |
|
|
Q4’17 |
|
|
Q1’18 |
|
|
Q2’18 |
Brazil |
|
|
|
53% |
|
|
35% |
|
|
37% |
|
|
15% |
|
|
25% |
Argentina |
|
|
|
30% |
|
|
30% |
|
|
42% |
|
|
43% |
|
|
14% |
Mexico |
|
|
|
(6)% |
|
|
(3)% |
|
|
48% |
|
|
51% |
|
|
62% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table of Year-over-Year Local Currency Revenue Growth
Rates by Quarter
|
|
|
|
YoY Growth rates |
|
|
|
|
|
Consolidated Net Revenues |
|
|
|
Q2’17 |
|
|
Q3’17 |
|
|
Q4’17 |
|
|
Q1’18 |
|
|
Q2’18 |
Brazil |
|
|
|
40% |
|
|
31% |
|
|
35% |
|
|
19% |
|
|
40% |
Argentina |
|
|
|
44% |
|
|
51% |
|
|
62% |
|
|
80% |
|
|
68% |
Mexico |
|
|
|
(3)% |
|
|
(7)% |
|
|
41% |
|
|
39% |
|
|
71% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call and Webcast
The Company will host a conference call and
audio webcast on Aug 8th, 2018 at 4:30 p.m. Eastern Time. The
conference call may be accessed by dialing +(970) 315-0420 or
+(877) 303-7209 (Conference ID 2498798) and requesting inclusion in
the call for Mercado Libre. 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 Mercado
Libre Marketplace, excluding motor vehicles, vessels, aircraft,
real estate, and services.
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
sold/purchased through the Mercado Libre Marketplace.
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.
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 Mercado
Libre Marketplace and confirmed their registration.
Unique Buyers – New or existing buyers with at
least one purchase made in the period.
Unique Sellers – New or existing sellers with at
least one listing in the period.
About Mercado Libre
Founded in 1999, Mercado Libre is Latin
America's leading e-commerce technology company. Through its
primary platforms, Mercado Libre.com and Mercado Pago.com, it
provides solutions to individuals and companies buying, selling,
advertising, and paying for goods and services online.
Mercado Libre.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 Mercado Libre, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4193
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, 2017, 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.
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statements of income(In
thousands of U.S. dollars, except for share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
Three Months Ended June 30, |
|
|
|
|
2018 |
|
|
|
|
2017 |
|
|
|
|
2018 |
|
|
|
|
2017 |
|
Net revenues |
|
$ |
|
656,353 |
|
|
|
$ |
553,558 |
|
|
|
$ |
335,377 |
|
|
|
$ |
283,882 |
|
Cost of net
revenues |
|
|
|
(333,847 |
) |
|
|
|
(213,148 |
) |
|
|
|
(175,628 |
) |
|
|
|
(112,328 |
) |
Gross profit |
|
|
|
322,506 |
|
|
|
|
340,410 |
|
|
|
|
159,749 |
|
|
|
|
171,554 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Product
and technology development |
|
|
|
(71,833 |
) |
|
|
|
(60,639 |
) |
|
|
|
(33,437 |
) |
|
|
|
(30,338 |
) |
Sales and
marketing |
|
|
|
(231,939 |
) |
|
|
|
(123,786 |
) |
|
|
|
(121,216 |
) |
|
|
|
(76,856 |
) |
General
and administrative |
|
|
|
(76,395 |
) |
|
|
|
(59,808 |
) |
|
|
|
(33,337 |
) |
|
|
|
(31,498 |
) |
Impairment of Long-Lived Assets |
|
|
|
— |
|
|
|
|
(2,837 |
) |
|
|
|
— |
|
|
|
|
(2,837 |
) |
Total
operating expenses |
|
|
|
(380,167 |
) |
|
|
|
(247,070 |
) |
|
|
|
(187,990 |
) |
|
|
|
(141,529 |
) |
(Loss) income from
operations |
|
|
|
(57,661 |
) |
|
|
|
93,340 |
|
|
|
|
(28,241 |
) |
|
|
|
30,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
Interest
income and other financial gains |
|
|
|
19,110 |
|
|
|
|
22,820 |
|
|
|
|
9,915 |
|
|
|
|
10,663 |
|
Interest
expense and other financial losses |
|
|
|
(23,936 |
) |
|
|
|
(12,977 |
) |
|
|
|
(13,202 |
) |
|
|
|
(6,506 |
) |
Foreign
currency gains (losses) |
|
|
|
18,178 |
|
|
|
|
(21,097 |
) |
|
|
|
12,577 |
|
|
|
|
(21,760 |
) |
Net (loss) income
before income tax gain (expense) |
|
|
|
(44,309 |
) |
|
|
|
82,086 |
|
|
|
|
(18,951 |
) |
|
|
|
12,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax gain
(expense) |
|
|
|
20,138 |
|
|
|
|
(28,252 |
) |
|
|
|
7,700 |
|
|
|
|
(7,106 |
) |
Net (loss) income |
|
$ |
|
(24,171 |
) |
|
|
$ |
53,834 |
|
|
|
$ |
(11,251 |
) |
|
|
$ |
5,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Months Ended June 30, |
|
|
Three-Months Ended June 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Basic
EPS |
|
|
|
|
|
|
|
|
|
Basic net
(loss) income |
|
|
|
|
|
|
|
|
|
Available
to shareholders per common share |
|
$ |
(0.55 |
) |
|
$ |
1.22 |
|
|
$ |
(0.25 |
) |
|
$ |
0.12 |
|
Weighted
average of outstanding common shares |
|
|
44,157,364 |
|
|
|
44,157,364 |
|
|
|
44,157,364 |
|
|
|
44,157,364 |
|
Diluted
EPS |
|
|
|
|
|
|
|
|
|
Diluted
net (loss) income |
|
|
|
|
|
|
|
|
|
Available
to shareholders per common share |
|
$ |
(0.55 |
) |
|
$ |
1.22 |
|
|
$ |
(0.25 |
) |
|
$ |
0.12 |
|
Weighted
average of outstanding common shares |
|
|
44,157,364 |
|
|
|
44,157,364 |
|
|
|
44,157,364 |
|
|
|
44,157,364 |
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends
declared (per share) |
|
|
— |
|
|
|
0.150 |
|
|
|
— |
|
|
|
0.150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
balance sheets(In thousands of U.S. dollars,
except par value) |
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2018 |
|
|
|
2017 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
489,157 |
|
|
$ |
388,260 |
|
Restricted cash and cash equivalents |
|
34,854 |
|
|
|
— |
|
Short-term investments |
|
69,432 |
|
|
|
209,432 |
|
Accounts
receivable, net |
|
27,470 |
|
|
|
28,168 |
|
Credit
cards receivables, net |
|
307,614 |
|
|
|
521,130 |
|
Loans
receivable, net |
|
112,066 |
|
|
|
73,409 |
|
Prepaid
expenses |
|
14,410 |
|
|
|
5,864 |
|
Inventory |
|
7,938 |
|
|
|
2,549 |
|
Other
assets |
|
62,213 |
|
|
|
58,107 |
|
Total
current assets |
|
1,125,154 |
|
|
|
1,286,919 |
|
Non-current
assets: |
|
|
|
Long-term
investments |
|
11,394 |
|
|
|
34,720 |
|
Property
and equipment, net |
|
113,170 |
|
|
|
114,837 |
|
Goodwill |
|
83,637 |
|
|
|
92,279 |
|
Intangible assets, net |
|
19,256 |
|
|
|
23,174 |
|
Deferred
tax assets |
|
106,330 |
|
|
|
57,324 |
|
Other
assets |
|
60,500 |
|
|
|
63,934 |
|
Total
non-current assets |
|
394,287 |
|
|
|
386,268 |
|
Total
assets |
$ |
1,519,441 |
|
|
$ |
1,673,187 |
|
Liabilities and Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
226,101 |
|
|
$ |
221,095 |
|
Funds
payable to customers |
|
498,623 |
|
|
|
583,107 |
|
Salaries
and social security payable |
|
50,043 |
|
|
|
65,053 |
|
Taxes
payable |
|
28,300 |
|
|
|
32,150 |
|
Loans
payable and other financial liabilities |
|
146,655 |
|
|
|
56,325 |
|
Other
liabilities |
|
25,342 |
|
|
|
3,678 |
|
Dividends
payable |
|
— |
|
|
|
6,624 |
|
Total
current liabilities |
|
975,064 |
|
|
|
968,032 |
|
Non-current
liabilities: |
|
|
|
Salaries
and social security payable |
|
19,123 |
|
|
|
25,002 |
|
Loans
payable and other financial liabilities |
|
333,364 |
|
|
|
312,089 |
|
Deferred
tax liabilities |
|
23,166 |
|
|
|
23,819 |
|
Other
liabilities |
|
13,987 |
|
|
|
18,466 |
|
Total
non-current liabilities |
|
389,640 |
|
|
|
379,376 |
|
Total
liabilities |
$ |
1,364,704 |
|
|
$ |
1,347,408 |
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 110,000,000 shares authorized, |
|
|
|
44,157,364 shares issued and outstanding at June 30, |
|
|
|
2018 and
December 31, 2017 |
$ |
44 |
|
|
$ |
44 |
|
Additional paid-in capital |
|
24,969 |
|
|
|
70,661 |
|
Retained
earnings |
|
515,846 |
|
|
|
537,925 |
|
Accumulated other comprehensive loss |
|
(386,122 |
) |
|
|
(282,851 |
) |
Total
Equity |
|
154,737 |
|
|
|
325,779 |
|
Total
Liabilities and Equity |
$ |
1,519,441 |
|
|
$ |
1,673,187 |
|
|
|
|
|
|
|
|
Consolidated statements of cash flows(In
thousands of U.S. dollars, except par value) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
2018 |
|
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operations: |
|
|
|
|
|
|
Net
(loss) income |
|
|
$ |
(24,171 |
) |
|
|
$ |
53,834 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
Unrealized Devaluation Loss, net |
|
|
|
6,976 |
|
|
|
|
25,502 |
|
Impairment of Long-Lived Assets |
|
|
|
— |
|
|
|
|
2,837 |
|
Depreciation and amortization |
|
|
|
22,566 |
|
|
|
|
19,083 |
|
Accrued
interest |
|
|
|
(7,845 |
) |
|
|
|
(10,930 |
) |
Non cash
interest and convertible notes amortization of debt discount and
amortization of debt issuance costs |
|
|
|
9,684 |
|
|
|
|
4,798 |
|
LTRP
accrued compensation |
|
|
|
16,792 |
|
|
|
|
22,068 |
|
Deferred
income taxes |
|
|
|
(54,818 |
) |
|
|
|
(10,451 |
) |
Changes
in assets and liabilities: |
|
|
|
|
|
|
Accounts
receivable |
|
|
|
(21,807 |
) |
|
|
|
(5,165 |
) |
Credit
card receivables |
|
|
|
97,097 |
|
|
|
|
34,161 |
|
Prepaid
expenses |
|
|
|
(10,143 |
) |
|
|
|
5,462 |
|
Inventory |
|
|
|
(6,299 |
) |
|
|
|
102 |
|
Other
assets |
|
|
|
(24,441 |
) |
|
|
|
(22,074 |
) |
Accounts
payable and accrued expenses |
|
|
|
42,771 |
|
|
|
|
33,633 |
|
Funds
payable to customers |
|
|
|
32,513 |
|
|
|
|
63,164 |
|
Other
liabilities |
|
|
|
20,213 |
|
|
|
|
(498 |
) |
Interest
received from investments |
|
|
|
8,066 |
|
|
|
|
10,788 |
|
Net cash
provided by operating activities |
|
|
|
107,154 |
|
|
|
|
226,314 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchase
of investments |
|
|
|
(1,248,452 |
) |
|
|
|
(2,186,528 |
) |
Proceeds
from sale and maturity of investments |
|
|
|
1,390,713 |
|
|
|
|
2,200,172 |
|
Purchases
of intangible assets |
|
|
|
(242 |
) |
|
|
|
(74 |
) |
Advance
for property and equipment |
|
|
|
(4,426 |
) |
|
|
|
(8,351 |
) |
Changes
in principal of loans receivable, net |
|
|
|
(66,629 |
) |
|
|
|
(20,143 |
) |
Purchases
of property and equipment |
|
|
|
(42,092 |
) |
|
|
|
(26,147 |
) |
Net cash
provided by (used in) investing activities |
|
|
|
28,872 |
|
|
|
|
(41,071 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Proceeds
from loans payable and other financial liabilities |
|
|
|
146,666 |
|
|
|
|
7,800 |
|
Payments
on loans payable and other financing liabilities |
|
|
|
(14,893 |
) |
|
|
|
(2,969 |
) |
Dividends
paid |
|
|
|
(6,624 |
) |
|
|
|
(13,247 |
) |
Purchase
of convertible note capped call |
|
|
|
(45,692 |
) |
|
|
|
— |
|
Net cash provided by
(used in) financing activities |
|
|
|
79,457 |
|
|
|
|
(8,416 |
) |
Effect of
exchange rate changes on cash, cash equivalents, restricted cash
and cash equivalents |
|
|
|
(79,732 |
) |
|
|
|
(28,176 |
) |
Net increase in cash,
cash equivalents, restricted cash and cash equivalents |
|
|
|
135,751 |
|
|
|
|
148,651 |
|
Cash, cash equivalents,
restricted cash and cash equivalents, beginning of the period |
|
|
$ |
388,260 |
|
|
|
$ |
234,140 |
|
Cash, cash equivalents,
restricted cash and cash equivalents, end of the period |
|
|
$ |
524,011 |
|
|
|
$ |
382,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
results of reporting segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
Brazil |
|
|
|
|
Argentina |
|
|
|
|
Mexico |
|
|
|
|
Other Countries |
|
|
|
|
Total |
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
Net revenues |
$ |
195,839 |
|
|
|
$ |
100,110 |
|
|
|
$ |
17,540 |
|
|
|
$ |
21,888 |
|
|
|
$ |
335,377 |
|
|
|
|
|
|
Direct costs |
|
(176,987 |
) |
|
|
|
(68,051 |
) |
|
|
|
(39,534 |
) |
|
|
|
(21,088 |
) |
|
|
|
(305,660 |
) |
|
|
|
|
|
Direct contribution
(loss) |
|
18,852 |
|
|
|
|
32,059 |
|
|
|
|
(21,994 |
) |
|
|
|
800 |
|
|
|
|
29,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(57,958 |
) |
|
|
|
|
|
Loss from
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,241 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other financial gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,915 |
|
|
|
|
|
|
Interest expense and
other financial losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,202 |
) |
|
|
|
|
|
Foreign currency
gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,577 |
|
|
|
|
|
|
Net loss before income
tax gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(18,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017 |
|
|
Brazil |
|
|
|
|
Argentina |
|
|
|
|
Mexico |
|
|
|
|
Venezuela |
|
|
|
|
Other Countries |
|
|
|
|
Total |
|
|
|
(In thousands) |
Net revenues |
$ |
157,152 |
|
|
|
$ |
87,992 |
|
|
|
$ |
10,803 |
|
|
|
$ |
14,181 |
|
|
|
$ |
13,754 |
|
|
|
$ |
283,882 |
|
Direct costs |
|
(97,200 |
) |
|
|
|
(49,697 |
) |
|
|
|
(33,420 |
) |
|
|
|
(5,708 |
) |
|
|
|
(12,555 |
) |
|
|
|
(198,580 |
) |
Impairment of
Long-lived Assets |
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
(2,837 |
) |
|
|
|
- |
|
|
|
|
(2,837 |
) |
Direct contribution
(loss) |
|
59,952 |
|
|
|
|
38,295 |
|
|
|
|
(22,617 |
) |
|
|
|
5,636 |
|
|
|
|
1,199 |
|
|
|
|
82,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(52,440 |
) |
Income from
operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other financial gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,663 |
|
Interest expense and
other financial losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,506 |
) |
Foreign currency
losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,760 |
) |
Net income before
income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
12,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement our consolidated financial
statements presented in accordance with U.S. GAAP, we use
foreign exchange (“FX”) neutral measures as non-GAAP
measure.
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 June 30, 2018:
|
|
|
|
|
Three-month Periods Ended June 30,
(*) |
|
|
As reported |
|
FX Neutral Measures |
(In millions, except percentages) |
|
|
2018 |
|
|
|
2017 |
|
|
PercentageChange |
|
|
2018 |
|
|
|
2017 |
|
|
PercentageChange |
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
Net revenues |
|
$ |
335.4 |
|
|
$ |
283.9 |
|
|
18.1 |
% |
|
$ |
407.9 |
|
|
$ |
283.9 |
|
|
43.7 |
% |
Cost of net
revenues |
|
|
(175.6 |
) |
|
|
(112.3 |
) |
|
56.4 |
% |
|
|
(209.3 |
) |
|
|
(112.3 |
) |
|
86.3 |
% |
Gross profit |
|
|
159.7 |
|
|
|
171.6 |
|
|
-6.9 |
% |
|
|
198.6 |
|
|
|
171.6 |
|
|
15.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
(188.0 |
) |
|
|
(138.7 |
) |
|
35.5 |
% |
|
|
(227.9 |
) |
|
|
(138.7 |
) |
|
64.4 |
% |
Impairment of
Long-Lived Assets |
|
|
— |
|
|
|
(2.8 |
) |
|
-100.0 |
% |
|
|
— |
|
|
|
(2.8 |
) |
|
-100.0 |
% |
Total operating
expenses |
|
|
(188.0 |
) |
|
|
(141.5 |
) |
|
32.8 |
% |
|
|
(227.9 |
) |
|
|
(141.5 |
) |
|
61.1 |
% |
Loss / Income from
operations |
|
|
(28.2 |
) |
|
|
30.0 |
|
|
-194.1 |
% |
|
|
(29.3 |
) |
|
|
30.0 |
|
|
-197.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The
table above may not total due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
MercadoLibre, Inc.Investor
Relationsinvestor@mercadolibre.com
http://investor.mercadolibre.com
A pdf accompanying this announcement is available
at http://resource.globenewswire.com/Resource/Download/e22643e1-25ab-469d-b4e1-460da6bfbf25
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