83.5 million Items Sold, up 12.5%,
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,
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 quarter we have: strengthened our
online-to-offline payments offering, successfully expanded the
financial services portfolio, once again confirmed the great
resiliency of our marketplace business, and made important strides
with the development of our proprietary logistics network. All this
has translated into a strong top line growth, as gross billings
grew 48% on an FX neutral basis year over year. And, from a bottom
line perspective, operating losses showed a 61% reduction versus
last quarter as we delivered break even EBITDA during Q3.”
Third Quarter 2018 Business
Highlights1
- Total payment volume through MercadoPago reached $4.6 billion,
a year-over-year increase of 24.1% in USD and 69.5% on an FX
neutral basis. Total payment transactions increased 66.7%
year-over-year, totaling 103.9 million for the quarter.
- Successful execution in off-platform payments (online and
offline) through merchant services, mobile point-of-sale devices,
and mobile wallet business. On a consolidated basis, off-platform
total payment volume grew 87.8% year-over-year in USD and 152.1% on
an FX neutral basis.
- In September for the first time ever MercadoPago not only
processed more total payment transactions off-platform than on
MELI’s marketplaces, but total payment transactions surpassed the
hundred million mark in a single quarter.
- Mobile-point-of-sale business is quickly becoming one of the
fastest growing non-marketplace business units, representing 46.5%
of total off-platform payment volume for the quarter and
growing total payment volume on a consolidated basis 636%
year-over-year on an FX neutral basis.
- Mobile wallet reached 1 million active payers during the month
of September, while total payment volume from mobile wallet in
Argentina, Brazil and Mexico is growing triple digits
year-over-year.
- Launched asset management in Argentina, the first country where
we have begun to offer the entire suite of fintech solutions:
mobile point-of-sales devices, QR codes in store payments, mobile
wallet, and asset management.
- Gross merchandise volume reached almost $3 billion, a 2.6%
year-over-year decrease in USD, and a 27.9% year-over-year increase
on an FX neutral basis.
- Items sold reached 83.5 million, growing 12.5% year-over-year
versus 55.7% during the same period last year. The decrease
year-over-year deceleration is attributable to Brazil with the
launch of R$ 5 flat fee on items below R$ 120 and the removal of
listings below R$ 6 as we shift incentives for buyers to purchase
higher ticket items.
- Unique buyers grew 9.4% year-over-year versus 16.0% in the
second quarter. This declining growth rate is attributable
primarily to pricing adjustments we have done in our value
proposition, including eliminating low priced ticket items from our
platform and making payments mandatory in Chile and Colombia which
also affects buyer growth temporarily.
- Live listings offered on MercadoLibre’s marketplace grew to
168.1 million in the third quarter of 2018, a 58.8% year-over-year
increase, surpassing for the second time the 150 million mark.
- Mobile gross merchandise volume penetration grew 19.5%
year-over-year reaching 58.1%.
- Items shipped through MercadoEnvíos reached 54.3 million, a
30.2% year-over-year increase, driven primarily by increasing our
free shipping program. Items shipped in Argentina, Mexico, Chile
and Colombia were highlights of the quarter, growing 74.4%, 99.4%,
146.7%, and 83.4% respectively year-over-year.
- MercadoLibre launched its MELI Flex logistics solution,
enabling our sellers to adopt proprietary technology and leverage
their existing logistics relationships with small carriers to
deliver products within hours in large metropolitan areas within
the MercadoEnvíos network.
__________________________________ 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 rather than including these amounts in the cost
of net sales, as previously recorded. For the three-month period
ended September 30, 2018 the Company incurred $107.6 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 |
Gross |
YTD
2017* |
YTD
2018** |
Q3
2017* |
Q3
2018** |
Billings |
$ |
961.1 |
$ |
1,328.3 |
$ |
370.7 |
$ |
462.8 |
|
|
|
|
|
|
In Millions |
Adjustments |
YTD
2017* |
YTD
2018** |
Q3
2017* |
Q3
2018** |
(Decrease) |
$ |
102.6 |
$ |
316.7 |
$ |
65.7 |
$ |
107.6 |
|
|
|
|
|
|
In Millions |
Net |
YTD
2017* |
YTD
2018** |
Q3
2017* |
Q3
2018** |
Revenues |
$ |
858.5 |
$ |
1,011.6 |
$ |
304.9 |
$ |
355.3 |
|
|
|
|
|
*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 |
Q3
2017 |
Q3
2018 |
GrossBillings |
Brazil |
$ |
569.3 |
$ |
855.8 |
$ |
229.5 |
$ |
309.0 |
Argentina |
$ |
250.7 |
$ |
303.1 |
$ |
91.3 |
$ |
91.2 |
Mexico |
$ |
58.3 |
$ |
99.8 |
$ |
22.6 |
$ |
39.1 |
Venezuela |
$ |
38.3 |
$ |
- |
$ |
9.8 |
$ |
- |
Others |
$ |
44.5 |
$ |
69.7 |
$ |
17.5 |
$ |
23.6 |
|
|
|
|
|
|
|
In Millions |
|
|
YTD
2017 |
YTD
2018 |
Q3
2017 |
Q3
2018 |
Adjustments(Decrease) |
Brazil |
$ |
75.8 |
$ |
254.9 |
$ |
52.9 |
$ |
88.2 |
Argentina |
$ |
- |
$ |
17.3 |
$ |
- |
$ |
7.5 |
Mexico |
$ |
24.7 |
$ |
36.3 |
$ |
11.1 |
$ |
10.1 |
Venezuela |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
Others |
$ |
2.1 |
$ |
8.2 |
$ |
1.7 |
$ |
1.8 |
|
|
|
|
|
|
|
In Millions |
|
|
YTD
2017* |
YTD
2018** |
Q3
2017* |
Q3
2018** |
NetRevenues |
Brazil |
$ |
493.5 |
$ |
600.8 |
$ |
176.6 |
$ |
220.8 |
Argentina |
$ |
250.7 |
$ |
285.8 |
$ |
91.3 |
$ |
83.7 |
Mexico |
$ |
33.6 |
$ |
63.6 |
$ |
11.5 |
$ |
29.0 |
Venezuela |
$ |
38.3 |
$ |
- |
$ |
9.8 |
$ |
- |
Others |
$ |
42.3 |
$ |
61.5 |
$ |
15.8 |
$ |
21.8 |
|
|
|
|
|
|
*As Recast **As Reported(*) The table above may
not total due to rounding.
Third Quarter 2018 Financial
Highlights
- Net revenues for the third quarter grew to $355.3 million, a
year-over-year increase of 16.5% in USD and 58.3% on an FX neutral
basis.
- Enhanced marketplace revenues decreased 0.5% year-over-year in
USD, and increased 35.6% on an FX neutral basis, while
non-marketplace revenues increased 41.3% year-over-year in USD and
91.4% on an FX neutral basis.
- Gross profit was $169.7 million with a margin of 47.8%,
compared to 57.7% in the third quarter of 2017. Most of the gross
margin compression is attributed to an increase in free shipping
subsidies.
- Total operating expenses were $180.7 million, up 21.9%
year-over-year. As a percentage of revenues, operating expenses
were 50.9%, as compared to 48.6% during the third quarter of
2017.
- Loss from operations was down 61% versus last quarter to $11.0
million, or 139.9% year-over-year. As a percentage of revenues,
loss from operations was 3.1%, as compared to a gain of 9.0% during
the third quarter of 2017.
- Interest income was $8.6 million, a 39.2% decrease
year-over-year as a, mainly attributable to a $5.6 million decrease
from our financial investments as a result of Argentine Peso
devaluation and lower float in Argentina.
- The company incurred $15.9 million in financial expenses in the
third 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 gains for the third quarter of 2018 were
of $3.9 million, mainly as a consequence of a $5.1 million gain
arising from the U.S. Dollar revaluation over our Argentine Peso
net liability position in Argentina, partially offset by a $1.3
million loss arising from the appreciation of the Mexican Peso over
our U.S. Dollar net asset position in Mexico.
- Net loss before taxes was $14.3 million, down 139.0%
year-over-year.
- Income tax gain was $4.2 million during the third quarter,
yielding a blended tax rate for the period of 29.6%.
- Net loss as reported for the third quarter was $10.1 million,
resulting in basic net loss per share of $0.23.
- Operating cash flow was $96.6 million. Net increase in cash,
restricted cash and cash equivalents was $553.7 million in during
the third quarter of 2018.
The following table summarizes certain
key performance metrics for the three months ended September 30th,
2018 and 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-months Periods Ended |
|
Three-month Periods Ended |
|
|
September
30, |
|
September
30, |
(in
millions)* |
|
2018 |
|
2017
(**) |
|
2018 |
|
2017 (**) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of confirmed
registered users at end of period |
|
|
248.9 |
|
|
201.2 |
|
|
248.9 |
|
|
201.2 |
Number of confirmed new
registered users during period |
|
|
36.7 |
|
|
27.0 |
|
|
14.0 |
|
|
10.0 |
Gross merchandise
volume |
|
$ |
9,271.8 |
|
$ |
8,131.6 |
|
$ |
2,995.2 |
|
$ |
3,075.3 |
Number of successful
items sold |
|
|
249.1 |
|
|
188.9 |
|
|
83.5 |
|
|
74.2 |
Number of successful
items shipped |
|
|
159.6 |
|
|
102.4 |
|
|
54.3 |
|
|
41.7 |
Total payment
volume |
|
$ |
13,153.8 |
|
$ |
9,388.9 |
|
$ |
4,552.4 |
|
$ |
3,667.1 |
Total volume of
payments on marketplace |
|
$ |
8,324.1 |
|
$ |
6,620.3 |
|
$ |
2,720.3 |
|
$ |
2,592.9 |
Total payment
transactions |
|
|
263.7 |
|
|
158.2 |
|
|
103.9 |
|
|
62.3 |
Unique buyers |
|
|
33.1 |
|
|
27.6 |
|
|
17.9 |
|
|
16.3 |
Unique sellers |
|
|
12.9 |
|
|
8.7 |
|
|
4.3 |
|
|
4.6 |
Capital
expenditures |
|
$ |
72.1 |
|
$ |
52.1 |
|
$ |
25.3 |
|
$ |
17.5 |
Depreciation and
amortization |
|
$ |
33.9 |
|
$ |
30.0 |
|
$ |
11.3 |
|
$ |
10.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Figures have been expressed using rounding
amounts. Growth calculations using this table may not total due to
rounding.(**) Data for 2017 includes Venezuelan metrics. Please
refer to Note 2 of our unaudited interim condensed consolidated
financial statements for additional details
Table of Year-over-year USD Revenue
Growth Rates by Quarter
|
|
|
Year-over-year Growth rates |
|
|
|
|
Consolidated Net Revenues |
|
|
Q3’17 |
Q4’17 |
Q1’18 |
Q2’18 |
Q3’18 |
|
|
|
|
|
|
|
|
Brazil |
|
|
35% |
37% |
15% |
25% |
25% |
|
|
|
|
|
|
|
|
Argentina |
|
|
30% |
42% |
43% |
14% |
(8)% |
|
|
|
|
|
|
|
|
Mexico |
|
|
(3)% |
48% |
51% |
62% |
152% |
|
|
|
|
|
|
|
|
Table of Year-over-year Local Currency
Revenue Growth Rates by Quarter
|
|
|
Year-over-year Growth rates |
|
|
|
|
|
|
|
Consolidated Net Revenues |
|
|
Q3’17 |
Q4’17 |
Q1’18 |
Q2’18 |
Q3’18 |
|
|
|
|
|
|
|
|
Brazil |
|
|
31% |
35% |
19% |
40% |
56% |
|
|
|
|
|
|
|
|
Argentina |
|
|
51% |
62% |
80% |
68% |
68% |
|
|
|
|
|
|
|
|
Mexico |
|
|
(7)% |
41% |
39% |
71% |
168% |
|
|
|
|
|
|
|
|
Conference Call and Webcast
The Company will host a conference call and
audio webcast on Nov 1st, 2018 at 4:30 p.m. Eastern Time. The
conference call may be accessed by dialing (877) 303-7209 / (970)
315-0420 (Conference ID 3879789) 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, 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) |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
Three Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net revenues |
|
$ |
1,011,634 |
|
|
$ |
858,479 |
|
|
$ |
355,281 |
|
|
$ |
304,921 |
|
Cost of net
revenues |
|
$ |
(519,410 |
) |
|
$ |
(342,241 |
) |
|
$ |
(185,563 |
) |
|
$ |
(129,094 |
) |
Gross profit |
|
$ |
492,224 |
|
|
$ |
516,238 |
|
|
$ |
169,718 |
|
|
$ |
175,827 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Product
and technology development |
|
$ |
(107,311 |
) |
|
$ |
(93,019 |
) |
|
$ |
(35,478 |
) |
|
$ |
(32,380 |
) |
Sales and
marketing |
|
$ |
(342,382 |
) |
|
$ |
(207,925 |
) |
|
$ |
(110,443 |
) |
|
$ |
(84,139 |
) |
General
and administrative |
|
$ |
(111,195 |
) |
|
$ |
(91,575 |
) |
|
$ |
(34,800 |
) |
|
$ |
(31,766 |
) |
Impairment of Long-Lived Assets |
|
|
— |
|
|
$ |
(2,837 |
) |
|
|
— |
|
|
|
— |
|
Total
operating expenses |
|
$ |
(560,888 |
) |
|
$ |
(395,356 |
) |
|
$ |
(180,721 |
) |
|
$ |
(148,285 |
) |
(Loss) income from
operations |
|
$ |
(68,664 |
) |
|
$ |
120,882 |
|
|
$ |
(11,003 |
) |
|
$ |
27,542 |
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
Interest
income and other financial gains |
|
$ |
27,746 |
|
|
$ |
37,020 |
|
|
$ |
8,636 |
|
|
$ |
14,200 |
|
Interest
expense and other financial losses |
|
$ |
(39,805 |
) |
|
$ |
(19,686 |
) |
|
$ |
(15,869 |
) |
|
$ |
(6,709 |
) |
Foreign
currency gains (losses) |
|
$ |
22,102 |
|
|
$ |
(19,475 |
) |
|
$ |
3,924 |
|
|
$ |
1,622 |
|
Net (loss) income
before income tax gain (expense) |
|
$ |
(58,621 |
) |
|
$ |
118,741 |
|
|
$ |
(14,312 |
) |
|
$ |
36,655 |
|
|
|
|
|
|
|
|
|
|
Income tax gain
(expense) |
|
$ |
24,372 |
|
|
$ |
(37,241 |
) |
|
$ |
4,234 |
|
|
$ |
(8,989 |
) |
Net (loss) income |
|
$ |
(34,249 |
) |
|
$ |
81,500 |
|
|
$ |
(10,078 |
) |
|
$ |
27,666 |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
Three Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Basic
EPS |
|
|
|
|
|
|
|
|
Basic net
(loss) income |
|
|
|
|
|
|
|
|
Available
to shareholders per common share |
|
$ |
(0.77 |
) |
|
$ |
1.85 |
|
|
$ |
( 0.23 |
) |
|
$ |
0.63 |
|
Weighted
average of outstanding common shares |
|
$ |
44,302,724 |
|
|
$ |
44,157,364 |
|
|
$ |
44,588,704 |
|
|
$ |
44,157,364 |
|
Diluted
EPS |
|
|
|
|
|
|
|
|
Diluted
net (loss) income |
|
|
|
|
|
|
|
|
Available
to shareholders per common share |
|
$ |
( 0.77 |
) |
|
$ |
1.85 |
|
|
$ |
( 0.23 |
) |
|
$ |
0.63 |
|
Weighted
average of outstanding common shares |
|
$ |
44,302,724 |
|
|
$ |
44,157,364 |
|
|
$ |
44,588,704 |
|
|
$ |
44,157,364 |
|
|
|
|
|
|
|
|
|
|
Cash Dividends
declared (per share) |
|
|
— |
|
|
$ |
0.45 |
|
|
|
— |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated balance sheets |
(In
thousands of U.S. dollars, except par value) |
|
|
|
|
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
1,028,579 |
|
|
$ |
388,260 |
|
Restricted cash and cash equivalents |
$ |
49,151 |
|
|
|
— |
|
Short-term investments |
$ |
67,041 |
|
|
$ |
209,432 |
|
Accounts
receivable, net |
$ |
27,141 |
|
|
$ |
28,168 |
|
Credit
cards receivables, net |
$ |
266,461 |
|
|
$ |
521,130 |
|
Loans
receivable, net |
$ |
90,827 |
|
|
$ |
73,409 |
|
Prepaid
expenses |
$ |
11,013 |
|
|
$ |
5,864 |
|
Inventory |
$ |
7,395 |
|
|
$ |
2,549 |
|
Other
assets |
$ |
54,071 |
|
|
$ |
58,107 |
|
Total
current assets |
$ |
1,601,679 |
|
|
$ |
1,286,919 |
|
Non-current
assets: |
|
|
|
Long-term
investments |
$ |
2,823 |
|
|
$ |
34,720 |
|
Property
and equipment, net |
$ |
138,417 |
|
|
$ |
114,837 |
|
Goodwill |
$ |
88,650 |
|
|
$ |
92,279 |
|
Intangible assets, net |
$ |
18,719 |
|
|
$ |
23,174 |
|
Deferred
tax assets |
$ |
125,521 |
|
|
$ |
57,324 |
|
Other
assets |
$ |
42,542 |
|
|
$ |
63,934 |
|
Total
non-current assets |
$ |
416,672 |
|
|
$ |
386,268 |
|
Total
assets |
$ |
2,018,351 |
|
|
$ |
1,673,187 |
|
Liabilities and Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
230,999 |
|
|
$ |
221,095 |
|
Funds
payable to customers |
$ |
525,089 |
|
|
$ |
583,107 |
|
Salaries
and social security payable |
$ |
57,372 |
|
|
$ |
65,053 |
|
Taxes
payable |
$ |
22,740 |
|
|
$ |
32,150 |
|
Loans
payable and other financial liabilities |
$ |
141,502 |
|
|
$ |
56,325 |
|
Other
liabilities |
$ |
11,830 |
|
|
$ |
3,678 |
|
Dividends
payable |
|
— |
|
|
$ |
6,624 |
|
Total
current liabilities |
$ |
989,532 |
|
|
$ |
968,032 |
|
Non-current
liabilities: |
|
|
|
Salaries
and social security payable |
$ |
23,389 |
|
|
$ |
25,002 |
|
Loans
payable and other financial liabilities |
$ |
554,830 |
|
|
$ |
312,089 |
|
Deferred
tax liabilities |
$ |
92,322 |
|
|
$ |
23,819 |
|
Other
liabilities |
$ |
16,526 |
|
|
$ |
18,466 |
|
Total
non-current liabilities |
$ |
687,067 |
|
|
$ |
379,376 |
|
Total
liabilities |
$ |
1,676,599 |
|
|
$ |
1,347,408 |
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Common
stock, $0.001 par value, 110,000,000 shares authorized, |
|
|
|
45,201,662 and 44,157,364 shares issued and outstanding at
September 30, |
|
|
|
2018 and
December 31, 2017 |
$ |
45 |
|
|
$ |
44 |
|
Additional paid-in capital |
$ |
221,719 |
|
|
$ |
70,661 |
|
Retained
earnings |
$ |
505,768 |
|
|
$ |
537,925 |
|
Accumulated other comprehensive loss |
$ |
(385,780 |
) |
|
$ |
(282,851 |
) |
Total
Equity |
$ |
341,752 |
|
|
$ |
325,779 |
|
Total
Liabilities and Equity |
$ |
2,018,351 |
|
|
$ |
1,673,187 |
|
|
|
|
|
|
|
|
|
|
Consolidated statements of cash flows |
(In
thousands of U.S. dollars, except par value) |
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Cash flows from
operations: |
|
|
|
|
Net
(loss) income |
|
$ |
( 34,249 |
) |
|
$ |
81,500 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
Unrealized devaluation loss, net |
|
$ |
9,262 |
|
|
$ |
28,463 |
|
Impairment of Long-Lived Assets |
|
|
— |
|
|
$ |
2,837 |
|
Depreciation and amortization |
|
$ |
33,861 |
|
|
$ |
29,953 |
|
Accrued
interest |
|
$ |
( 11,258 |
) |
|
$ |
( 16,391 |
) |
Non cash
interest and convertible notes amortization of debt discount and
amortization of debt issuance costs |
|
$ |
18,386 |
|
|
$ |
9,234 |
|
LTRP
accrued compensation |
|
$ |
27,706 |
|
|
$ |
28,734 |
|
Deferred
income taxes |
|
$ |
( 75,275 |
) |
|
$ |
( 14,769 |
) |
Changes
in assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
$ |
( 14,891 |
) |
|
$ |
( 13,380 |
) |
Credit
card receivables |
|
$ |
121,896 |
|
|
$ |
( 113,514 |
) |
Prepaid
expenses |
|
$ |
( 6,810 |
) |
|
$ |
6,800 |
|
Inventory |
|
$ |
( 6,015 |
) |
|
$ |
( 1,172 |
) |
Other
assets |
|
$ |
( 17,463 |
) |
|
$ |
( 31,528 |
) |
Accounts
payable and accrued expenses |
|
$ |
50,979 |
|
|
$ |
71,794 |
|
Funds
payable to customers |
|
$ |
82,909 |
|
|
$ |
151,635 |
|
Other
liabilities |
|
$ |
6,077 |
|
|
$ |
3,703 |
|
Interest
received from investments |
|
$ |
10,986 |
|
|
$ |
18,490 |
|
Net cash
provided by operating activities |
|
$ |
196,101 |
|
|
$ |
242,389 |
|
Cash flows from
investing activities: |
|
|
|
|
Purchase
of investments |
|
$ |
( 1,814,416 |
) |
|
$ |
( 3,180,633 |
) |
Proceeds
from sale and maturity of investments |
|
$ |
1,964,480 |
|
|
$ |
3,371,543 |
|
Payment
for acquired businesses, net of cash acquired |
|
$ |
( 2,281 |
) |
|
|
— |
|
Purchases
of intangible assets |
|
$ |
( 217 |
) |
|
$ |
( 84 |
) |
Advance
for property and equipment |
|
$ |
( 4,426 |
) |
|
$ |
( 12,777 |
) |
Changes
in principal of loans receivable, net |
|
$ |
( 55,860 |
) |
|
$ |
( 46,951 |
) |
Purchases
of property and equipment |
|
$ |
( 65,133 |
) |
|
$ |
( 39,280 |
) |
Net cash
provided by investing activities |
|
$ |
22,147 |
|
|
$ |
91,818 |
|
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 |
) |
|
|
— |
|
Purchase
of convertible note capped call |
|
$ |
( 137,476 |
) |
|
$ |
( 67,308 |
) |
Unwind of
convertible note capped call |
|
$ |
121,703 |
|
|
|
— |
|
Payments
on convertible notes |
|
$ |
( 348,123 |
) |
|
|
— |
|
Proceeds
from loans payable and other financial liabilities |
|
$ |
156,075 |
|
|
$ |
13,153 |
|
Payments
on loans payable and other financing liabilities |
|
$ |
( 78,705 |
) |
|
$ |
( 4,304 |
) |
Dividends
paid |
|
$ |
( 6,624 |
) |
|
$ |
( 19,871 |
) |
Net cash provided by
(used in) financing activities |
|
$ |
570,586 |
|
|
$ |
( 78,330 |
) |
Effect of exchange rate
changes on cash, cash equivalents, restricted cash and cash
equivalents |
|
$ |
( 99,364 |
) |
|
$ |
( 28,819 |
) |
Net increase in cash,
cash equivalents and restricted cash equivalents |
|
$ |
689,470 |
|
|
$ |
227,058 |
|
Cash, cash equivalents
and restricted cash equivalents, beginning of the period |
|
$ |
388,260 |
|
|
$ |
234,140 |
|
Cash, cash equivalents
and restricted cash equivalents, end of the period |
|
$ |
1,077,730 |
|
|
$ |
461,198 |
|
|
|
|
|
|
|
|
|
|
Financial results of reporting
segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2018 |
|
|
Brazil |
|
Argentina |
|
Mexico |
|
|
Other Countries |
|
Total |
|
|
(In thousands) |
Net revenues |
|
$ |
220,828 |
|
$ |
83,714 |
|
$ |
28,962 |
|
|
$ |
21,777 |
|
$ |
355,281 |
|
Direct costs |
|
|
(190,172 |
) |
|
(60,409 |
) |
|
(35,229 |
) |
|
|
(18,822 |
) |
|
(304,632 |
) |
Direct contribution
(loss) |
|
|
30,656 |
|
|
23,305 |
|
|
(6,267 |
) |
|
|
2,955 |
|
|
50,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
(61,652 |
) |
Loss from
operations |
|
|
|
|
|
|
|
|
|
|
|
(11,003 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other financial gains |
|
|
|
|
|
|
|
|
|
|
|
8,636 |
|
Interest expense and
other financial losses |
|
|
|
|
|
|
|
|
|
|
|
(15,869 |
) |
Foreign currency
gains |
|
|
|
|
|
|
|
|
|
|
|
3,924 |
|
Net loss before income
tax gain |
|
|
|
|
|
|
|
|
|
|
$ |
(14,312 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2017 |
|
|
|
Brazil |
|
Argentina |
|
Mexico |
|
Venezuela |
|
Other Countries |
|
Total |
|
|
|
(In thousands) |
|
Net revenues |
|
$ |
176,575 |
|
$ |
91,308 |
|
$ |
11,489 |
|
$ |
9,751 |
|
$ |
15,798 |
|
$ |
304,921 |
|
Direct costs |
|
|
(129,958 |
) |
|
(56,210 |
) |
|
(24,923 |
) |
|
(4,582 |
) |
|
(12,684 |
) |
|
(228,357 |
) |
Direct contribution
(loss) |
|
|
46,617 |
|
|
35,098 |
|
|
(13,434 |
) |
|
5,169 |
|
|
3,114 |
|
|
76,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
(49,022 |
) |
Income from
operations |
|
|
|
|
|
|
|
|
|
|
|
|
27,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other financial gains |
|
|
|
|
|
|
|
|
|
|
|
|
14,200 |
|
Interest expense and
other financial losses |
|
|
|
|
|
|
|
|
|
|
|
|
(6,709 |
) |
Foreign currency
gains |
|
|
|
|
|
|
|
|
|
|
|
|
1,622 |
|
Net income before
income tax expense |
|
|
|
|
|
|
|
|
|
|
|
$ |
36,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month Periods Ended |
September 30, (*) |
|
|
As reported |
|
FX Neutral Measures |
(In millions, except percentages) |
|
2018 |
|
2017 |
|
PercentageChange |
|
2018 |
|
2017 |
|
PercentageChange |
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
Net revenues |
|
$ |
355.3 |
|
$ |
304.9 |
|
16.5 |
% |
|
$ |
482.6 |
|
$ |
304.9 |
|
58.3 |
% |
Cost of net
revenues |
|
|
(185.6 |
) |
|
(129.1 |
) |
43.7 |
% |
|
|
(254.3 |
) |
|
(129.1 |
) |
97.0 |
% |
Gross profit |
|
|
169.7 |
|
|
175.8 |
|
-3.5 |
% |
|
|
228.3 |
|
|
175.8 |
|
29.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
(180.7 |
) |
|
-148.3 |
|
21.9 |
% |
|
|
(254.0 |
) |
|
(148.3 |
) |
71.3 |
% |
(Loss) / Income from
operations |
|
|
(11.0 |
) |
|
27.5 |
|
-140.0 |
% |
|
|
(25.7 |
) |
|
27.5 |
|
-193.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The table above may not total due to
rounding.
CONTACT:
MercadoLibre, Inc.Investor
Relationsinvestor@mercadolibre.comhttp://investor.mercadolibre.com
A PDF accompanying this announcement is
available
at http://resource.globenewswire.com/Resource/Download/89a2c73c-e351-409e-a9bd-8474b13c6109
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