Bulletin
Investor Alert

Aug. 8, 2019, 2:18 p.m. EDT

MercadoLibre, Inc. Reports Second Quarter 2019 Financial Results

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.

About MercadoLibre

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

Forward-Looking Statements

Any statements herein regarding MercadoLibre, Inc. that are not historical or current facts are forward-looking statements. These forward-looking statements convey MercadoLibre, Inc.'s current expectations or forecasts of future events. Forward-looking statements regarding MercadoLibre, Inc. involve known and unknown risks, uncertainties and other factors that may cause MercadoLibre, Inc.'s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the "Risk Factors," "Forward-Looking Statements" and "Cautionary Note Regarding Forward-Looking Statements" sections of MercadoLibre, Inc.'s annual report on Form 10-K for the year ended December 31, 2018, and any of MercadoLibre, Inc.'s other applicable filings with the Securities and Exchange Commission. Unless required by law, MercadoLibre, Inc. undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof.

MercadoLibre, Inc.

Consolidated Balance 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
        


MercadoLibre, Inc.

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
        


MercadoLibre, Inc.

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.

Investor Relations

investor@mercadolibre.com

http://investor.mercadolibre.com

https://ml.globenewswire.com/media/6ab227b7-693f-4b17-b80c-552ae45c76bf/small/mercadolibre-inc-logo.jpg

(C) Copyright 2019 GlobeNewswire, Inc. All rights reserved.

Link to MarketWatch's Slice.