BUENOS AIRES, Argentina, May 05, 2020 (GLOBE NEWSWIRE via COMTEX) -- Net Revenues of $652.1 million, up 70.5% year-over-year on an FX neutral basis
$8.1 billion Total Payment Volume, up 82.2% year-over-year on an FX neutral basis
$3.4 billion Gross Merchandise Volume, up 34.2% year-over-year on an FX neutral basis
MercadoLibre, Inc. (NAS:MELI) ( http://www.mercadolibre.com ), Latin America's leading e-commerce technology company, today reported financial results for the quarter ended March 31, 2020.
Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, "Given the difficult circumstances the world is facing, we are optimistic about the results we've delivered during the first quarter of 2020. Although less affected than others, our business did register this impact, primarily during the first weeks of the imposed lockdowns, with a rebound throughout April. We remain committed to doing our part, by empowering our merchants to continue operating and securing deliveries of goods needed by households. We feel MercadoLibre has the opportunity to emerge from this situation stronger and with an even greater sense of purpose. We trust the dedication and commitment being demonstrated by our entire organization will allow us to continue executing our strategy with no significant interruptions, and in doing so play our part in contributing to making things less difficult to our users during these trying times. Finally, and most importantly, our hearts go out to those individuals and families affected by COVID-19, and our gratitude and appreciation go out to all those brave individuals who are on the front lines working through this unprecedented global health crisis."
Recent COVID-19 related key trends
First Quarter 2020 Business Highlights
First Quarter 2020 Financial Highlights
The following table summarizes certain key performance metrics for the three months periods ended March 31, 2020 and 2019.
Three-month Periods Ended March 31, (in millions) 2020 2019 Unique active users 43.2 33.0 Number of confirmed new registered users during period 13.0 12.3 Gross merchandise volume $ 3,414.1 $ 3,087.8 Number of successful items sold 105.7 82.8 Number of successful items shipped 90.2 62.4 Total payment volume $ 8,094.5 $ 5,639.1 Total volume of payments on marketplace $ 3,203.3 $ 2,896.1 Total payment transactions 290.7 143.9 Capital expenditures $ 53.5 $ 33.0 Depreciation and amortization $ 21.6 $ 15.7
(*) Figures have been calculated using rounded amounts. Growth calculations based on this table may not total due to rounding.
Year-over-year USD Revenue Growth Rates by Quarter
Consolidated Net Revenues Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Brazil 64 % 74 % 77 % 61 % 31 % Argentina (8) % 14 % 39 % 46 % 42 % Mexico 220 % 267 % 146 % 86 % 74 %
Year-over-year Local Currency Revenue Growth Rates by Quarter
Consolidated Net Revenues Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Brazil 91 % 89 % 77 % 74 % 55 % Argentina 83 % 115 % 119 % 133 % 123 % Mexico 227 % 261 % 153 % 80 % 81 %
Conference Call and Webcast
The Company will host a conference call and audio webcast on May 5th, 2020 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID -6697812-) 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
Unique Active User - New or existing user who performed at least one of the following actions during the reported period: (1) made one purchase, or reservation, or asked one question or MercadoLibre Marketplace or Classifieds Marketplace (2) maintained an active listing on MercadoLibre Marketplace or Classifieds Marketplace (3) maintained an active account in Mercado Shops (4) made a payment, money transfer, collection and/or advance using Mercado Pago (5) maintained an outstanding credit line through Mercado Credito or (6) maintained a balance of more than $5 invested in a Mercado Fondo asset management account.
Foreign Exchange ("FX") Neutral - Calculated by using the average monthly exchange rate of each month of 2019 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 Classifieds transactions.
Total payment transactions - Measure of the number of all transactions paid for using Mercado Pago.
Total volume of payments on marketplace - Measure of the total U.S. dollar sum of all marketplace transactions paid for using Mercado Pago, excluding shipping and financing fees.
Total payment volume- Measure of total U.S. dollar sum of all transactions paid for using Mercado Pago, including marketplace and non-marketplace transactions.
Commerce - Revenues from core marketplace fees, shipping fees (net out of shipping subsidies), ad sales, classified fees and other ancillary services.
Fintech - Revenues includes fees from payments revenue stream.
Items sold - Measure of the number of items that were sold/purchased through the Mercado Libre 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 Mercado Libre Marketplace and confirmed their registration, excluding Classifieds users.
Operating margin - Defined as income from operations as a percentage of net revenues.
Founded in 1999, MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of the necessary online and technology- based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America.
The Company is listed on NASDAQ (NAS: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
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, 2019, "Item 1A-Risk Factors" in Part II of our Form 10-Q for the quarter ended March 31, 2020, 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 Balance Sheets
(In thousands of U.S. dollars, except par value)
March 31, December 31, 2020 2019 Assets Current assets: Cash and cash equivalents $ 1,071,217 $ 1,384,740 Restricted cash and cash equivalents 194,166 66,684 Short-term investments (353,162 and 522,798 held in guarantee) 1,558,325 1,597,241 Accounts receivable, net 34,060 35,446 Credit cards receivable, net 366,803 379,969 Loans receivable, net 141,419 182,105 Prepaid expenses 35,294 45,309 Inventory 12,114 8,626 Other assets 96,876 88,736 Total current assets 3,510,274 3,788,856 Non-current assets: Long-term investments 269,955 263,983 Loans receivable, net 6,879 6,439 Property and equipment, net 239,249 244,257 Operating lease right-of-use assets 183,534 200,449 Goodwill 82,283 87,609 Intangible assets, net 17,133 14,275 Deferred tax assets 102,296 117,582 Other assets 46,477 58,241 Total non-current assets 947,806 992,835 Total assets $ 4,458,080 $ 4,781,691 Liabilities Current liabilities: Accounts payable and accrued expenses $ 295,500 $ 372,309 Funds payable to customers 718,454 894,057 Salaries and social security payable 100,059 101,841 Taxes payable 46,394 60,247 Loans payable and other financial liabilities 316,508 186,138 Operating lease liabilities 23,025 23,259 Other liabilities 76,560 114,469 Total current liabilities 1,576,500 1,752,320 Non-current liabilities: Salaries and social security payable 16,165 26,803 Loans payable and other financial liabilities 616,295 631,353 Operating lease liabilities 169,147 176,673 Deferred tax liabilities 98,048 99,952 Other liabilities 16,515 12,627 Total non-current liabilities 916,170 947,408 Total liabilities $ 2,492,670 $ 2,699,728 Commitments and Contingencies Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares authorized, 100,000 shares issued and outstanding at March 31, 2020 and December 31, 2019 $ 98,843 $ 98,843 Equity Common stock, $0.001 par value, 110,000,000 shares authorized, 49,709,955 shares issued and outstanding at March 31, 2020 and December 31, 2019 $ 50 $ 50 Additional paid-in capital 2,068,048 2,067,869 Treasury stock (720 ) (720 ) Retained earnings 295,913 322,592 Accumulated other comprehensive loss (496,724 ) (406,671 ) Total Equity 1,866,567 1,983,120 Total Liabilities, Redeemable convertible preferred stock and Equity $ 4,458,080 $ 4,781,691
Consolidated Statements of Income
For the three-month periods ended March 31, 2020 and 2019
(In thousands of U.S. dollars, except for share data)
Three Months Ended March 31, 2020 2019 Net revenues $ 652,091 $ 473,770 Cost of net revenues (339,277 ) (236,766 ) Gross profit 312,814 237,004 Operating expenses: Product and technology development (73,435 ) (52,369 ) Sales and marketing (206,507 ) (130,676 ) General and administrative (62,566 ) (43,820 ) Total operating expenses (342,508 ) (226,865 ) (Loss) income from operations (29,694 ) 10,139 Other income (expenses): Interest income and other financial gains 36,784 24,444 Interest expense and other financial losses (23,584 ) (15,559 ) Foreign currency losses (186 ) (3,669 ) Net (loss) income before income tax expense (16,680 ) 15,355 Income tax expense (4,429 ) (3,491 ) Net (loss) income $ (21,109 ) $ 11,864
Three Months Ended March 31, 2020 2019 Basic EPS Basic net (loss) income Available to shareholders per common share $ (0.44 ) $ 0.13 Weighted average of outstanding common shares 49,709,955 45,980,255 Diluted EPS Diluted net (loss) income Available to shareholders per common share $ (0.44 ) $ 0.13 Weighted average of outstanding common shares 49,709,955 45,980,255
Consolidated Statement of Cash Flows
For the three months ended March 31, 2020 and 2019
Three Months Ended March 31, 2020 2019 Cash flows from operations: Net (loss) income $ (21,109 ) $ 11,864 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Unrealized devaluation loss, net 18,505 1,886 Depreciation and amortization 21,550 15,694 Accrued interest (22,352 ) (8,699 ) Non cash interest, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges 20,787 3,018 Financial results on derivative instruments (16,767 ) -- Stock-based compensation expense -- restricted shares 179 -- LTRP accrued compensation 15,664 13,441 Deferred income taxes (4,199 ) (14,456 ) Changes in assets and liabilities: Accounts receivable 19,748 337 Credit card receivables (33,303 ) 35,893 Prepaid expenses 8,560 3,316 Inventory (5,272 ) 1,652 Other assets (5,796 ) (5,085 ) Payables and accrued expenses (43,101 ) (491 ) Funds payable to customers (21,344 ) 63,730 Other liabilities (32,206 ) 12,735 Interest received from investments 14,805 3,536 Net cash (used in) provided by operating activities (85,651 ) 138,371 Cash flows from investing activities: Purchase of investments (1,323,631 ) (1,624,226 ) Proceeds from sale and maturity of investments 1,249,960 439,712 Receipts from settlements of derivative instruments 3,668 -- Payment for acquired businesses, net of cash acquired (7,561 ) -- Purchases of intangible assets (93 ) (34 ) Changes in principal of loans receivable, net (27,250 ) (42,609 ) Purchases of property and equipment (45,175 ) (32,928 ) Net cash used in investing activities (150,082 ) (1,260,085 ) Cash flows from financing activities: Proceeds from loans payable and other financial liabilities 749,617 33,977 Payments on loans payable and other financing liabilities (593,497 ) (23,816 ) Payment of finance lease obligations (564 ) (662 ) Dividends paid of preferred stock (1,000 ) -- Proceeds from issuance of convertible redeemable preferred stock, net -- 98,688 Proceeds from issuance of common stock, net -- 1,866,500 Net cash provided by financing activities 154,556 1,974,687 Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents (104,864 ) (11,407 ) Net (decrease) increase in cash, cash equivalents, restricted cash and cash equivalents (186,041 ) 841,566 Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period $ 1,451,424 $ 464,695 Cash, cash equivalents, restricted cash and cash equivalents, end of the period $ 1,265,383 $ 1,306,261
Financial results of reporting segments
Three Months Ended March 31, 2020 Brazil Argentina Mexico Other Countries Total (In thousands) Net revenues $ 397,447 $ 132,875 $ 94,753 $ 27,016 $ 652,091 Direct costs (322,628 ) (101,025 ) (114,762 ) (27,604 ) (566,019 ) Direct contribution 74,819 31,850 (20,009 ) (588 ) 86,072 Operating expenses and indirect costs of net revenues (115,766 ) Loss from operations (29,694 ) Other income (expenses): Interest income and other financial gains 36,784 Interest expense and other financial losses (23,584 ) Foreign currency losses (186 ) Net loss before income tax expense $ (16,680 )
Three Months Ended March 31, 2019 Brazil Argentina Mexico Other Countries Total (In thousands) Net revenues $ 302,384 $ 93,776 $ 54,561 $ 23,049 $ 473,770 Direct costs (225,343 ) (67,492 ) (65,585 ) (20,447 ) (378,867 ) Direct contribution 77,041 26,284 (11,024 ) 2,602 94,903 Operating expenses and indirect costs of net revenues (84,764 ) Income from operations 10,139 Other income (expenses): Interest income and other financial gains 24,444 Interest expense and other financial losses (15,559 ) Foreign currency losses (3,669 ) Net income before income tax expense $ 15,355
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 2019 and applying them to the corresponding months in 2020, 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 March 31, 2020:
Three-month Periods Ended March 31, (*) As reported FX Neutral Measures As reported (In millions, except percentages) 2020 2019 Percentage Change 2020 2019 Percentage Change (Unaudited) (Unaudited) Net revenues $ 652.1 $ 473.8 37.6 % $ 807.7 $ 473.8 70.5 % Cost of net revenues (339.3 ) (236.8 ) 43.3 % (422.4 ) (236.8 ) 78.4 % Gross profit 312.8 237.0 32.0 % 385.3 237.0 62.6 % Operating expenses (342.5 ) (226.9 ) 51.0 % (463.5 ) (226.9 ) 104.3 % (Loss) Income from operations (29.7 ) 10.1 -392.9 % (78.3 ) 10.1 -871.5 %
(*) The table above may not total due to rounding.
CONTACT: MercadoLibre, Inc.
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