BUENOS AIRES, Argentina, Aug 08, 2019 (GLOBE NEWSWIRE via COMTEX) -- Net Revenues of $545.2 million, up 102.1% YoY on an FX neutral basis
$6.5 billion Total Payment Volume, up 90.3% YoY on an FX neutral basis
$3.4 billion Gross Merchandise Volume, up 33.0% YoY 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 June 30, 2019.
Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, "We are pleased and optimistic about how 2019 is playing out for us. We delivered another very strong quarter as we continue to grow and scale our leading e-commerce and FinTech ecosystems across Latin America."
Second Quarter 2019 Business Highlights
Percentages have been calculated using whole amounts rather than rounded amounts.
The tables below present our gross billings and amounts paid by us in connection with our free shipping service.
The Company presents 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 June 30, 2019 the Company incurred $60.5 million of shipping subsidies that have been netted from revenues.
In Millions (*) Q2 2019 Q2 2018 Brazil $ 385.1 $ 270.5 Gross Argentina $ 121.6 $ 105.9 Billings Mexico $ 70.7 $ 31.3 Others $ 28.3 $ 24.3 Total $ 605.7 $ 432.0
In Millions (*) Q2 2019 Q2 2018 Brazil $ (44.3 ) $ (74.7 ) Free Shipping Argentina $ (7.7 ) $ (5.7 ) service cost Mexico $ (6.3 ) $ (13.8 ) Others $ (2.2 ) $ (2.4 ) Total $ (60.5 ) $ (96.7 )
In Millions (*) Q2 2019 Q2 2018 Brazil $ 340.9 $ 195.8 Net Argentina $ 113.9 $ 100.1 Revenues Mexico $ 64.4 $ 17.5 Others $ 26.1 $ 21.9 Total $ 545.2 $ 335.4
*The table above may not total due to rounding.
Second Quarter 2019 Financial Highlights
The following table summarizes certain key performance metrics for the six and three months periods ended June 30, 2019 and 2018.
Six-month Periods Ended Three-month Periods Ended June 30, June 30, (in millions) 2019 2018 2019 2018 Number of confirmed registered users at end of period 292.5 234.9 292.5 234.9 Number of confirmed new registered users during period 24.7 23.0 12.4 11.8 Gross merchandise volume $ 6,485.5 $ 6,276.6 $ 3,397.7 $ 3,135.4 Number of successful items sold 171.4 165.6 88.7 85.4 Number of successful items shipped 132.6 105.3 70.2 52.8 Total payment volume $ 12,156.5 $ 8,601.4 $ 6,517.4 $ 4,426.1 Total volume of payments on marketplace $ 6,016.1 $ 5,603.8 $ 3,120.0 $ 2,794.3 Total payment transactions 325.6 159.8 181.6 85.5 Unique buyers 28.6 25.0 20.4 16.9 Unique sellers 6.9 6.8 4.3 4.2 Capital expenditures $ 71.4 $ 46.8 $ 38.4 $ 23.7 Depreciation and amortization $ 33.0 $ 22.6 $ 17.3 $ 11.5
(*) Figures have been expressed using rounding amounts. Growth calculations using this table may not total due to rounding.
Table of Year-over-year USD Revenue Growth Rates by Quarter
Consolidated Net Revenues Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Brazil 25 % 25 % 34 % 64 % 74 % Argentina 14 % (8 )% (16 )% (8 )% 14 % Mexico 62 % 152 % 157 % 220 % 267 %
Table of Year-over-year Local Currency Revenue Growth Rates by Quarter
Consolidated Net Revenues Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Brazil 40 % 56 % 58 % 91 % 89 % Argentina 68 % 68 % 77 % 83 % 115 % Mexico 71 % 168 % 170 % 227 % 261 %
Conference Call and Webcast
The Company will host a conference call and audio webcast on August 7th, 2019 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID -5289808-) 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 2018 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 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.
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.
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, 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.
Consolidated Balance Sheets
(In thousands of U.S. dollars, except par value)
June 30, December 31, 2019 2018 Assets Current assets: Cash and cash equivalents $ 1,118,662 $ 440,332 Restricted cash and cash equivalents 9,660 24,363 Short-term investments (339,299 and 284,317 held in guarantee) 1,789,354 461,541 Accounts receivable, net 40,175 35,153 Credit cards receivable, net 433,046 360,298 Loans receivable, net 192,881 95,778 Prepaid expenses 18,618 27,477 Inventory 5,950 4,612 Other assets 68,086 61,569 Total current assets 3,676,432 1,511,123 Non-current assets: Long-term investments 207,047 276,136 Property and equipment, net 216,005 165,614 Operating lease right-of-use assets 157,843 -- Goodwill 90,375 88,883 Intangible assets, net 16,808 18,581 Deferred tax assets 184,926 141,438 Other assets 46,056 37,744 Total non-current assets 919,060 728,396 Total assets $ 4,595,492 $ 2,239,519 Liabilities Current liabilities: Accounts payable and accrued expenses $ 314,703 $ 266,759 Funds payable to customers 778,128 640,954 Salaries and social security payable 78,007 60,406 Taxes payable 45,672 31,058 Loans payable and other financial liabilities 162,983 132,949 Operating lease liabilities 13,957 -- Other liabilities 56,059 34,098 Total current liabilities 1,449,509 1,166,224 Non-current liabilities: Salaries and social security payable 23,648 23,161 Loans payable and other financial liabilities 619,670 602,228 Operating lease liabilities 147,555 -- Deferred tax liabilities 98,997 91,698 Other liabilities 11,501 19,508 Total non-current liabilities 901,371 736,595 Total liabilities $ 2,350,880 $ 1,902,819 Commitments and Contingencies (Note 7) Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares authorized, 100,000 shares issued and outstanding at June 30, 2019 (Note 10) $ 98,843 $ -- Equity Common stock, $0.001 par value, 110,000,000 shares authorized, 49,318,543 and 45,202,859 shares issued and outstanding at June 30, 2019 and December 31, 2018 $ 49 $ 45 Additional paid-in capital 2,009,497 224,800 Retained earnings 524,672 503,432 Accumulated other comprehensive loss (388,449 ) (391,577 ) Total Equity 2,145,769 336,700 Total Liabilities, Redeemable convertible preferred stock and Equity $ 4,595,492 $ 2,239,519
Consolidated Statements of Income
For the six and three month periods ended June 30, 2019 and 2018
(In thousands of U.S. dollars, except for share data)
Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Net revenues $ 1,019,012 $ 656,353 $ 545,242 $ 335,377 Cost of net revenues (509,578 ) (333,847 ) (272,812 ) (175,629 ) Gross profit 509,434 322,506 272,430 159,748 Operating expenses: Product and technology development (106,292 ) (71,833 ) (53,923 ) (33,437 ) Sales and marketing (311,368 ) (231,939 ) (180,692 ) (121,216 ) General and administrative (94,123 ) (76,395 ) (50,303 ) (33,337 ) Total operating expenses (511,783 ) (380,167 ) (284,918 ) (187,990 ) Loss from operations (2,349 ) (57,661 ) (12,488 ) (28,242 ) Other income (expenses): Interest income and other financial gains 58,128 19,110 33,684 9,915 Interest expense and other financial losses (30,238 ) (23,936 ) (14,679 ) (13,202 ) Foreign currency (losses) gains (2,886 ) 18,178 783 12,577 Net income (loss) before income tax gain 22,655 (44,309 ) 7,300 (18,952 ) Income tax gain 5,426 20,138 8,917 7,700 Net income (loss) $ 28,081 $ (24,171 ) $ 16,217 $ (11,252 )
Six Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 Basic EPS Basic net income (loss) Available to shareholders per common share $ 0.45 $ (0.55 ) $ 0.31 $ (0.25 ) Weighted average of outstanding common shares 47,658,610 44,157,364 49,318,522 44,157,364 Diluted EPS Diluted net income (loss) Available to shareholders per common share $ 0.45 $ (0.55 ) $ 0.31 $ (0.25 ) Weighted average of outstanding common shares 47,658,610 44,157,364 49,318,522 44,157,364
Consolidated Statement of Cash Flows
For the six month periods ended June 30, 2019 and 2018
Six Months Ended June 30, 2019 2018 Cash flows from operations: Net income (loss) $ 28,081 $ (24,171 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Unrealized devaluation loss, net 13,366 6,976 Depreciation and amortization 32,975 22,566 Accrued interest (24,753 ) (7,845 ) Non cash interest and convertible notes amortization of debt discount and amortization of debt issuance costs 11,140 9,684 LTRP accrued compensation 32,208 16,792 Deferred income taxes (34,743 ) (54,818 ) Changes in assets and liabilities: Accounts receivable (6,900 ) (21,807 ) Credit card receivables (61,562 ) 97,097 Prepaid expenses 8,857 (10,143 ) Inventory (1,191 ) (6,299 ) Other assets (12,651 ) (24,441 ) Payables and accrued expenses 41,798 42,771 Funds payable to customers 118,421 32,513 Other liabilities 3,587 20,213 Interest received from investments 17,292 8,066 Net cash provided by operating activities 165,925 107,154 Cash flows from investing activities: Purchase of investments (2,332,544 ) (1,248,452 ) Proceeds from sale and maturity of investments 1,086,461 1,390,713 Purchases of intangible assets (34 ) (242 ) Advance for property and equipment -- (4,426 ) Changes in principal of loans receivable, net (97,468 ) (66,629 ) Purchases of property and equipment (71,361 ) (42,092 ) Net cash (used in) provided by investing activities (1,414,946 ) 28,872 Cash flows from financing activities: Purchase of convertible note capped call (88,362 ) (45,692 ) Proceeds from loans payable and other financial liabilities 95,603 146,666 Payments on loans payable and other financing liabilities (55,236 ) (14,893 ) Payment of finance lease obligations (889 ) -- Dividends paid -- (6,624 ) Dividends paid of preferred stock (844 ) -- Proceeds from issuance of convertible redeemable preferred stock, net 98,688 -- Proceeds from issuance of common stock, net 1,867,215 -- Net cash provided by financing activities 1,916,175 79,457 Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents (3,527 ) (79,732 ) Net increase in cash, cash equivalents, restricted cash and cash equivalents 663,627 135,751 Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period $ 464,695 $ 388,260 Cash, cash equivalents, restricted cash and cash equivalents, end of the period $ 1,128,322 $ 524,011
Financial results of reporting segments
Three Months Ended June 30, 2019 Brazil Argentina Mexico Other Countries Total (In thousands) Net revenues $ 340,858 $ 113,913 $ 64,383 $ 26,088 $ 545,242 Direct costs (275,917 ) (83,909 ) (85,216 ) (24,441 ) (469,483 ) Direct contribution 64,941 30,004 (20,833 ) 1,647 75,759 Operating expenses and indirect costs of net revenues (88,247 ) Loss from operations (12,488 ) Other income (expenses): Interest income and other financial gains 33,684 Interest expense and other financial losses (14,679 ) Foreign currency gains 783 Net income before income tax gain $ 7,300
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 18,852 32,059 (21,994 ) 800 29,717 Operating expenses and indirect costs of net revenues (57,959 ) Loss from operations (28,242 ) 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 $ (18,952 )
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 2018 and applying them to the corresponding months in 2019, 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, 2019:
Three-month Periods Ended June 30, (*) As reported FX Neutral Measures As reported (In millions, except percentages) 2019 2018 Percentage Change 2019 2018 Percentage Change (Unaudited) (Unaudited) Net revenues $ 545.2 $ 335.4 62.6 % $ 677.9 $ 335.4 102.1 % Cost of net revenues (272.8 ) (175.6 ) 55.3 % (345.0 ) (175.6 ) 96.4 % Gross profit 272.4 159.7 70.5 % 332.9 159.7 108.4 % Operating expenses (284.9 ) (188.0 ) 51.6 % (384.9 ) (188.0 ) 104.8 % Loss from operations (12.5 ) (28.2 ) -55.8 % (52.0 ) (28.2 ) 84.3 %
(*) The table above may not total due to rounding.
CONTACT: MercadoLibre, Inc.
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