MercadoLibre, Inc. (Nasdaq: MELI) (http://www.mercadolibre.com),
Latin America’s leading e-commerce technology company, today
reported financial results for the quarter ended March 31, 2022.
To our Shareholders
We kicked off 2022 with a strong first quarter
across all businesses, following a record year in 2021. Mercado
Libre is coming out of the pandemic period stronger than we were
two years ago with a more mature business at scale, a larger team
with complementary capabilities and much better services and
experiences for our users in all of our key geographies. While the
business is stronger than ever before, we are facing a challenging
backdrop with uncertainty surrounding consumer spending, higher
interest rates and higher inflation in addition to coming out of a
period of social mobility restrictions in key markets. Given this
juxtaposition, we have planned the year ahead to draw on our
strengths through innovation and resilience, and will prioritize
opportunities that will impact our entire ecosystem.
Commerce
In the commerce business, we drove sustained
growth during the first quarter. Gross Merchandise Volume was
almost $7.7 billion dollars, growing approximately 27% on a USD
basis and nearly 32% on an FX-neutral basis, the same level of
growth as the fourth quarter of 2021 despite tougher comps.
Notably, the two-year CAGR trend on an FX-neutral basis has
remained above 70% for the last five quarters. Argentina and Brazil
led all markets in the period with respect to GMV growth and
benefitted year-over-year from improvements in engagement and buyer
frequency. In our key markets, unique buyers in the quarter
improved versus last year, and we reached almost 40 million buyers
on a consolidated basis.
We sold almost 267 million items in Q1 alone.
With nearly 330 million live listings in the first quarter, our
marketplace provides a wide range of products through our diverse
seller base, catering to several shopping missions and user
profiles. This unique product mix which is made possible by our
vast array of sellers is a determining factor for the resilience of
our platform in times of possible restraints on consumption or
pressures on discretionary spending. We saw continued positive
trends in our shopping conversion rates, despite the tough
comparison period. The improved platform-wide user experience and
assortment, paired with the quality of service we increasingly
offer, is driving greater stickiness with both buyers and
sellers
On service quality, the advertising service has
been a core area of focus for us to create better offerings for
sellers that want to optimize their buyer conversion rates. The
advertising business has been improving in performance consistently
over the last year, which was a period of investment that enabled
us to enhance the algorithm technology that enables us to deploy
ads effectively based on users’ searches. There are several
opportunities to create more layers of advertising real estate
across our platforms and offer sellers highly effective digital
marketing investment opportunities to drive more conversion and
boost brand awareness. In the first quarter, ad revenues nearly
doubled year-over-year. We are confident that this is only the
beginning for this part of our business.
Shipping through Mercado Envios has already
proven to be a transformational service for our platform, reflected
in higher net promoter scores and adoption rates. Our managed
network takes on over 90% of volumes in our region, but there is
still room to keep investing in the next phase of deployment of
these services. Logistics is as much an operational efficiency
business, through the scaling process, as it is a technology
business. The future waves of improvements in logistics will not
come from the sheer scale of the volume growth. The key to
unlocking faster shipping times at a competitive cost will be the
deployment of more tech product features that integrate our
logistics partners into our network and within our warehouse
operations.
In Q1’22, almost 55% of shipments were delivered
on the same or the next day of purchase, achieving record average
shipping times in Mexico and Chile. Regarding transportation costs,
we have been able to offset cost pressures from rising fuel prices
with the deployment of cost-efficient approaches to inbound
logistics and last-mile deliveries. MELI Places is a significant
contributor to our efficient delivery operation with over 5800
active stores enabled in Latin America. We are focused on
accelerating the deployment of pick-up and return functions to
these locations, offering a convenient and safe alternative for
buyers to handle purchases.
Fulfillment sustained nearly 40% penetration of
volumes in the first quarter, even after the peak shopping season
in the fourth quarter when fulfillment inventory runs high with
first-party volumes. Items fulfilled by Mercado Libre have the
fastest shipping on our network. Sellers on fulfillment typically
enter a virtuous cycle of improving their sales conversion rates
due to the better delivery promises, and over time become better
evaluated and ranked on our platform. As a result, we began
charging merchants for fulfillment storage fees upon inbounding the
inventory, initially testing our pricing power for this service. We
were encouraged by some of our initial readings on inventory
quality and depth, especially in Mexico which is our most mature
market in fulfillment penetration.
Our investments to grow the commerce business
are balanced between developing the current business and scaling
new opportunities for categories we are developing, such as
groceries and our first-party assortment. Structurally, we believe
that our infrastructure for logistics, customer service, fraud
prevention and traffic generation with high-frequency users will be
key in leading the transition of long-tail categories into online
supply. We will continue to invest in these key pieces as we
transform our user experience and merchant tools to keep amplifying
our assortment with a high-quality experience.
Fintech
We had strong results across the board for
payments and credit, generating record levels in revenues for
fintech.
Starting with the Credit business, we kept our
trajectory of profitably growing our portfolio and within the
expected levels of loan defaults. The first quarter closed with a
portfolio of $2.4 billion dollars, of which about 53% were consumer
loans and 19% was the credit card book. The expansion of the total
loan book, up from $1.7 billion dollars at the close of 2021, was
driven mostly by those two products as we are originating more
personal loans on the Mercado Pago app and ramping up the credit
card offering. This quarter, we also launched our first credit
operation in Chile with a merchant loan book.
The non performing loans (NPLs) on each
individual book are generally stable compared to our historical
averages. However, between the accelerated pace of originations in
the fourth quarter and the mix shift into a higher exposure to
consumer credit, total NPLs as a percentage of the outstanding
portfolio is nearly 27.6%, up 330 basis points from the seasonably
low rates in the fourth quarter, and are comparable to levels from
the second and third quarter of 2021. Importantly, while the NPLs
grew on aggregate, they are also reflective of the growth in books
with the higher spreads, and the scaling of our still nascent
credit card business. The increase in NPLs does not change the
course of direction on the profitability of our interest-bearing
loans, which have sustained its profit margins in this fast-growth
scenario. We are operating credit originations diligently to
determine the speed at which we can continue growing without
running into structural adverse selection or higher risk
exposure.
We hold a foundational belief that a healthy
credit book drives growth throughout our entire ecosystem. A
thriving financing business:
-
Boosts on-platform conversion.
-
Facilitates adoption of more payments in the digital wallet.
-
Helps our merchants access more working capital to invest in
expansion.
We aim to keep placing new distribution channels
and loan products to reach our users and facilitate their financial
lives. The most recent service launch was to add an option for
consumers to hire credit loans at the moment of making a PIX
payment through their digital wallets in Brazil. Until now, PIX has
been a payment rail mostly substituting cash transactions in the
market. Moving forward, we imagine that it could be the channel for
overlaying other financing features over a less expensive
transactional rail. With that in mind, in the first quarter, we
launched our first consumer credit product iteration on PIX,
addressing our users' need to make immediate payments when they do
not have cash stored in their wallets. With a few clicks,
pre-scored Mercado Pago users can opt to make that payment by
accessing funds through Mercado Credito and bear the cost of that
interest, while the merchants receive the payment at sight. We
believe that there is room for more innovation in credit and
payments solutions in Latin America, and that we are
well-positioned to be leaders in that transformation.
Our payments processing and acquiring business
also continues to thrive. Acquiring TPV reached $17.4 billion
dollars in the quarter, growing 46% on a USD basis and over 52% on
an FX-neutral basis, driven mostly by off-platform payments. Even
with the tough comps of last year’s first quarter, Online Payments
TPV and MPOS TPV accelerated sequentially, growing 54% and 72%
respectively on an FX-neutral basis. The growth leader is the QR
network, which more than doubled TPV year-over-year, with important
growth coming from both Argentina and Brazil.
After adjusting the financing fees to reflect
higher interest rates for off-platform transactions, we note a
return to similar financing and transactional net take rate levels
from last year, offsetting most of the cost pressure observed up to
now. We have also diversified our funding approach, reducing our
coupon discounting operation in the first quarter and partially
financing the prepayment of credit card receivables to our
merchants through the issuance of bank certificates of deposits in
Brazil. We have not observed signs of merchant churn thus far after
implementing the new pricing. For the installments with interest,
there are some indications of buyers showing lower adoption rates
for paying in installments at these higher rates. All in all, net
take rates for the acquiring business are on the right path of
balancing cost pressures while sustaining strong volume growth.
With respect to Digital Account, we were pleased
to see that volumes and engagement continue to soar. TPV for
Digital Account was $7.9 billion dollars, growing about 178% on a
USD basis and 180% on an FX-neutral basis. Unique fintech active
users reached 35.8 million in the quarter, with higher engagement
on wallet transactions and more users taking on credit lines with
us. There were almost 23 million users with active asset management
accounts in the first quarter, and over one million users buying or
selling cryptocurrencies through our digital wallet. We are excited
about the role we are playing to create a friendly user interface
for crypto in Latin America with this first product launch - nearly
80% of the crypto wallet users are accessing cryptocurrencies for
the first time ever. Our fintech services are expanding well beyond
payments and we are increasingly able to offer a greater breadth of
solutions, paving the way towards the principality of user accounts
as we deepen our relationship with them.
Financial Results
We achieved record net revenues in the quarter,
with $2.2 billion dollars, at a growth rate of 63% on a USD basis
and of over 67% on an FX-neutral basis. Along with the sustained
transaction growth in gross merchandise volume and total payment
volume in the first quarter driving higher revenues, both our
commerce and fintech businesses have improved monetization levels
year-over-year. The additional services we provide throughout the
ecosystem, like advertising, shipping and credit, are boosting
revenue growth beyond the fees charged for sales transactions, and
these services are key to deepening our relationship with merchants
and users on our platform. In Q1, advertising revenues were nearly
1.1% of our GMV, shipping net revenues almost tripled
year-over-year, and revenues from our credit business surpassed the
$400 million-dollar mark.
In the first quarter, we also had a significant
year-over-year improvement in gross profit margins, reaching 47.7%
with a gross profit record of almost $1.1 billion dollars. Our
strong top-line growth creates scale in our business, with
operational leverage on our cost base that sustains commerce and
payments operations. Shipping costs as a percentage of total
revenues continues to decline, even in the first quarter which has
a seasonally higher shipping unit cost due to lower volume compared
to the previous fourth quarter.
Consolidated operating expenses represented
41.5% of revenues, up from 36.3% in the first quarter of 2021. The
main driver of the higher expense rate was an increase in bad debt
provisions related to the high levels of originations from our
credit book and, more importantly, the ramp-up of our credit card
offering. This is the first year of operations for the credit card
and, by accounting rules, will increase our bad debt provision in
this phase of the rollout for this nascent piece of the business.
We track the performance of these early cohorts closely and are
comfortable with their performance for now. Isolating the credit
card effect in the first quarter, the interest-bearing credit books
remain profitable, in line with previous quarters.
Total operating expenses as a percentage of
revenues, excluding bad debt charges, were similar to the first
quarter of 2021, with 30.2% compared to 30.1%. Removing the bad
debt effect, sales and marketing expenses represented 12.8% of
revenues, and we have delivered operational leverage year-over-year
on these expenses as we continue to invest efficiently in customer
acquisition and branding initiatives. Additionally, with our
commitment to constructing leading user experiences through
innovation and technology, we continue to invest in the expansion
of our team. This includes software engineers and product
developers in accordance with our annual hiring plan. As a result,
we are increasing the spend as a percentage of revenues for general
and administrative expenses and product development expenses.
With that, our operating margin for the quarter
reached 6.2%, with $139 million dollars, slightly lower than the
6.6% margin from last year’s first quarter, and up $48 million from
the total $91 million dollars in income from operations in the
first quarter of 2021.
The foreign currency losses in the quarter were
only three million dollars. From time to time, the Company acquires
shares of its own common stock in the Argentine market and pays for
them in Argentine pesos at a price that reflects the additional
cost of accessing US dollars through an indirect mechanism, because
of restrictions imposed by the Argentine government for buying US
dollars at the official exchange rate in Argentina. This loss was
partially offset by Brazilian Real appreciation during the first
quarter of 2022.
Interest expenses were 2.5% of net revenues,
similar to the prior quarters, yet lower than the 6.6% spent in Q1
of last year with the loss on debt extinguishment related to the
convertible 2028 Notes repurchase.
Finally, we delivered a net income of $65
million dollars, at a 2.9% margin, a significant improvement
compared to the net loss incurred last year.
Progressing Our Mission in
2022
Similar to the trend of the last couple of
years, there is macroeconomic and sociopolitical uncertainty in
Latin America as we look to the near future. Given this
uncertainty, we will continue to invest for growth in our core
business as well as in the continuous launches of new features and
services that expand our ecosystem. To develop more products and
accelerate our ability to deploy them, we are also investing in the
growth of our team, and we aim to onboard nearly 14,000 new
employees this year.
We are confident that we are progressing our
mission to democratize access to commerce and financial services
throughout Latin America. We are off to a strong start in terms of
execution and results this year, and we will continue to grow while
remaining focused on our priorities and conscious of our path
towards improvements in operating efficiency.
On behalf of our management team, we appreciate
the continued interest of our investors and stakeholders in
tracking our developments and are looking forward to providing more
updates on our performance in future quarters. The best is yet to
come.
The following table summarizes certain
key performance metrics for the three-month periods ended March 31,
2022 and 2021.
|
|
|
|
|
|
|
|
|
|
Three-month Periods Ended March 31,
(*) |
(in millions) |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Unique active users |
|
|
81 |
|
|
70 |
Gross merchandise volume |
|
$ |
7,665 |
|
$ |
6,057 |
Number of successful items
sold |
|
|
267 |
|
|
222 |
Number of successful items
shipped |
|
|
254 |
|
|
208 |
Total payment volume |
|
$ |
25,319 |
|
$ |
14,718 |
Total volume of payments on
marketplace |
|
$ |
7,452 |
|
$ |
5,840 |
Total payment
transactions |
|
|
1,091 |
|
|
630 |
Capital expenditures |
|
$ |
137 |
|
$ |
113 |
Depreciation and
amortization |
|
$ |
84 |
|
$ |
38 |
(*) 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 |
|
Q1’21 |
|
Q2’21 |
|
Q3’21 |
|
Q4’21 |
|
Q1’22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
93 |
% |
104 |
% |
74 |
% |
51 |
% |
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
124 |
% |
53 |
% |
38 |
% |
47 |
% |
74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Mexico |
|
143 |
% |
105 |
% |
94 |
% |
92 |
% |
58 |
% |
Year-over-year Local Currency Revenue
Growth Rates by Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Revenues |
|
Q1’21 |
|
Q2’21 |
|
Q3’21 |
|
Q4’21 |
|
Q1’22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil |
|
139 |
% |
101 |
% |
69 |
% |
61 |
% |
55 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Argentina |
|
223 |
% |
112 |
% |
83 |
% |
84 |
% |
110 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Mexico |
|
148 |
% |
76 |
% |
76 |
% |
96 |
% |
59 |
% |
Conference Call and Webcast
The Company will host an earnings video as well
as a conference call and audio webcast for any questions that
investors may have on May 5th, 2022, at 4:30 p.m. Eastern Time. The
conference call may be accessed by dialing (877) 303-7209 / (970)
315-0420 (Conference ID – 6788876–) 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 on MercadoLibre Marketplace or Classified Marketplace (2)
maintained an active listing on MercadoLibre Marketplace or
Classified 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.
Unique Fintech User – Users who engage in at
least one of the following services within the quarter: wallet
payments online, in app or in store; transfers; withdrawals;
consumer or merchant credit borrowers; card users; fintech sellers;
and fintech active products such as asset management and insurtech
users.
Foreign Exchange (“FX”) Neutral – Calculated by
using the average monthly exchange rate of each month of 2021 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.
MPOS – Mobile point-of-sale is a dedicated
wireless device that performs the functions of a cash register or
electronic point-of-sale terminal wirelessly.
Commerce – Revenues from core marketplace fees,
shipping fees, first-party sales, ad sales, classified fees and
other ancillary services.
Fintech – Revenues includes fees from
off-platform transactions, financing fees, interest earned from
merchant and consumer credits and sale of MPOS.
Successful items sold – Measure of the number of
items that were sold/purchased through the Mercado Libre
Marketplace, excluding Classifieds items.
Successful 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.
Operating margin – Defined as income from
operations as a percentage of net revenues.
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
digital 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 which
allows users to buy and sell in most of Latin America.
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, 2021, 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.Interim Condensed
Consolidated Balance Sheets(In millions of
U.S. dollars, except par value)
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,573 |
|
|
$ |
2,585 |
|
Restricted cash and cash equivalents |
|
841 |
|
|
|
1,063 |
|
Short-term investments (941 and 602 held in guarantee) |
|
1,412 |
|
|
|
810 |
|
Accounts receivable, net |
|
98 |
|
|
|
98 |
|
Credit cards receivable and other means of payments, net |
|
2,512 |
|
|
|
1,839 |
|
Loans receivable, net |
|
1,657 |
|
|
|
1,199 |
|
Prepaid expenses |
|
79 |
|
|
|
40 |
|
Inventories |
|
239 |
|
|
|
253 |
|
Other assets |
|
294 |
|
|
|
288 |
|
Total current assets |
|
8,705 |
|
|
|
8,175 |
|
Non-current assets: |
|
|
|
Long-term investments |
|
121 |
|
|
|
89 |
|
Loans receivable, net |
|
80 |
|
|
|
61 |
|
Property and equipment, net |
|
967 |
|
|
|
807 |
|
Operating lease right-of-use assets |
|
542 |
|
|
|
461 |
|
Goodwill |
|
162 |
|
|
|
148 |
|
Intangible assets, net |
|
43 |
|
|
|
45 |
|
Deferred tax assets |
|
235 |
|
|
|
181 |
|
Other assets |
|
168 |
|
|
|
134 |
|
Total non-current assets |
|
2,318 |
|
|
|
1,926 |
|
Total assets |
$ |
11,023 |
|
|
$ |
10,101 |
|
Liabilities |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
1,027 |
|
|
$ |
1,036 |
|
Funds payable to customers |
|
2,483 |
|
|
|
2,393 |
|
Amounts payable due to credit and debit card transactions |
|
420 |
|
|
|
337 |
|
Salaries and social security payable |
|
319 |
|
|
|
313 |
|
Taxes payable |
|
277 |
|
|
|
291 |
|
Loans payable and other financial liabilities |
|
1,459 |
|
|
|
1,285 |
|
Operating lease liabilities |
|
109 |
|
|
|
92 |
|
Other liabilities |
|
134 |
|
|
|
90 |
|
Total current liabilities |
|
6,228 |
|
|
|
5,837 |
|
Non-current liabilities: |
|
|
|
Amounts payable due to credit and debit card transactions |
|
4 |
|
|
|
4 |
|
Salaries and social security payable |
|
5 |
|
|
|
20 |
|
Taxes payable |
|
28 |
|
|
|
— |
|
Loans payable and other financial liabilities |
|
2,638 |
|
|
|
2,233 |
|
Operating lease liabilities |
|
434 |
|
|
|
372 |
|
Deferred tax liabilities |
|
42 |
|
|
|
62 |
|
Other liabilities |
|
55 |
|
|
|
42 |
|
Total non-current liabilities |
|
3,206 |
|
|
|
2,733 |
|
Total liabilities |
$ |
9,434 |
|
|
$ |
8,570 |
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common stock, $0.001 par value, 110,000,000 shares authorized, |
|
|
|
50,377,981 and 50,418,980 shares issued and outstanding at March
31, |
|
|
|
2022 and December 31, 2021 |
$ |
— |
|
|
$ |
— |
|
Additional paid-in capital |
|
2,308 |
|
|
|
2,439 |
|
Treasury stock |
|
(829 |
) |
|
|
(790 |
) |
Retained earnings |
|
496 |
|
|
|
397 |
|
Accumulated other comprehensive loss |
|
(386 |
) |
|
|
(515 |
) |
Total Equity |
|
1,589 |
|
|
|
1,531 |
|
Total Liabilities and Equity |
$ |
11,023 |
|
|
$ |
10,101 |
|
|
|
|
|
|
|
|
|
MercadoLibre, Inc.Interim Condensed
Consolidated Statements of IncomeFor
three-month periods ended March 31, 2022 and
2021(In millions of U.S. dollars, except for share
data)
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net service revenues |
|
$ |
1,997 |
|
|
$ |
1,230 |
|
Net product revenues |
|
|
251 |
|
|
|
148 |
|
Net revenues |
|
|
2,248 |
|
|
|
1,378 |
|
Cost of net revenues |
|
|
(1,175 |
) |
|
|
(787 |
) |
Gross profit |
|
|
1,073 |
|
|
|
591 |
|
Operating expenses: |
|
|
|
|
Product and technology development |
|
|
(234 |
) |
|
|
(126 |
) |
Sales and marketing |
|
|
(541 |
) |
|
|
(288 |
) |
General and administrative |
|
|
(159 |
) |
|
|
(86 |
) |
Total operating expenses |
|
|
(934 |
) |
|
|
(500 |
) |
Income from operations |
|
|
139 |
|
|
|
91 |
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
Interest income and other financial gains |
|
|
31 |
|
|
|
25 |
|
Interest expense and other financial losses |
|
|
(56 |
) |
|
|
(91 |
) |
Foreign currency losses |
|
|
(3 |
) |
|
|
(15 |
) |
Net income before income tax
expense |
|
|
111 |
|
|
|
10 |
|
|
|
|
|
|
Income tax expense |
|
|
(46 |
) |
|
|
(44 |
) |
Net income (loss) |
|
$ |
65 |
|
|
$ |
(34 |
) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2022 |
|
|
2021 |
|
Basic
EPS |
|
|
|
|
Basic net income (loss) |
|
|
|
|
Available to shareholders per common share |
|
$ |
1.30 |
|
$ |
(0.68 |
) |
Weighted average of outstanding common shares |
|
|
50,408,754 |
|
|
49,867,625 |
|
Diluted
EPS |
|
|
|
|
Diluted net income (loss) |
|
|
|
|
Available to shareholders per common share |
|
$ |
1.30 |
|
$ |
(0.68 |
) |
Weighted average of outstanding common shares |
|
|
50,408,754 |
|
|
49,867,625 |
|
|
|
|
|
|
MercadoLibre, Inc.Interim Condensed
Consolidated Statements of Cash FlowsFor the
three months ended March 31, 2022 and 2021
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
Cash flows from
operations: |
|
|
|
|
Net income (loss) |
|
$ |
65 |
|
|
$ |
(34 |
) |
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
|
|
|
|
Unrealized devaluation loss, net |
|
|
30 |
|
|
|
25 |
|
Impairment of digital assets |
|
|
2 |
|
|
|
— |
|
Depreciation and amortization |
|
|
84 |
|
|
|
38 |
|
Accrued interest |
|
|
(24 |
) |
|
|
(4 |
) |
Non cash interest, convertible notes amortization of debt discount
and amortization of debt issuance costs and other charges |
|
|
40 |
|
|
|
34 |
|
Bad debt charges |
|
|
255 |
|
|
|
84 |
|
Financial results on derivative instruments |
|
|
37 |
|
|
|
(19 |
) |
LTRP accrued compensation |
|
|
30 |
|
|
|
22 |
|
Deferred income taxes |
|
|
(24 |
) |
|
|
4 |
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(71 |
) |
|
|
21 |
|
Credit cards receivables and other means of payments |
|
|
(447 |
) |
|
|
(62 |
) |
Prepaid expenses |
|
|
(35 |
) |
|
|
(15 |
) |
Inventories |
|
|
38 |
|
|
|
(19 |
) |
Other assets |
|
|
(30 |
) |
|
|
(35 |
) |
Payables and accrued expenses |
|
|
(148 |
) |
|
|
(144 |
) |
Funds payable to customers |
|
|
(89 |
) |
|
|
(110 |
) |
Amounts payable due to credit and debit card transactions |
|
|
28 |
|
|
|
3 |
|
Other liabilities |
|
|
— |
|
|
|
(63 |
) |
Interest received from investments |
|
|
26 |
|
|
|
9 |
|
Net cash used in operating activities |
|
|
(233 |
) |
|
|
(265 |
) |
Cash flows from investing
activities: |
|
|
|
|
Purchase of investments |
|
|
(2,903 |
) |
|
|
(2,415 |
) |
Proceeds from sale and maturity of investments |
|
|
2,425 |
|
|
|
2,589 |
|
Receipts from settlements of derivative instruments |
|
|
— |
|
|
|
2 |
|
Payment for settlements of derivative instruments |
|
|
(2 |
) |
|
|
(4 |
) |
Purchases of intangible assets |
|
|
— |
|
|
|
(8 |
) |
Changes in principal of loans receivable, net |
|
|
(607 |
) |
|
|
(149 |
) |
Purchases of property and equipment |
|
|
(137 |
) |
|
|
(113 |
) |
Net cash used in investing activities |
|
|
(1,224 |
) |
|
|
(98 |
) |
Cash flows from financing
activities: |
|
|
|
|
Proceeds from loans payable and other financial liabilities |
|
|
3,324 |
|
|
|
1,840 |
|
Payments on loans payable and other financial liabilities |
|
|
(3,129 |
) |
|
|
(704 |
) |
Payments on repurchase of the 2028 Notes |
|
|
— |
|
|
|
(1,865 |
) |
Payment of finance lease obligations |
|
|
(4 |
) |
|
|
(4 |
) |
Purchase of convertible note capped call |
|
|
— |
|
|
|
(101 |
) |
Common Stock repurchased |
|
|
(39 |
) |
|
|
(25 |
) |
Net cash provided by (used in) financing activities |
|
|
152 |
|
|
|
(859 |
) |
Effect of exchange rate
changes on cash, cash equivalents, restricted cash and cash
equivalents |
|
|
71 |
|
|
|
(98 |
) |
Net decrease in cash, cash
equivalents, restricted cash and cash equivalents |
|
|
(1,234 |
) |
|
|
(1,320 |
) |
Cash, cash equivalents,
restricted cash and cash equivalents, beginning of the period |
|
$ |
3,648 |
|
|
$ |
2,508 |
|
Cash, cash equivalents,
restricted cash and cash equivalents, end of the period |
|
$ |
2,414 |
|
|
$ |
1,188 |
|
Financial results of reporting
segments
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
Brazil |
|
Argentina |
|
Mexico |
|
Other Countries |
|
Total |
|
|
(In millions) |
Net revenues |
|
$ |
1,252 |
|
|
$ |
518 |
|
|
$ |
364 |
|
|
$ |
114 |
|
|
$ |
2,248 |
|
Direct costs |
|
|
(1,065 |
) |
|
|
(320 |
) |
|
|
(328 |
) |
|
|
(110 |
) |
|
|
(1,823 |
) |
Direct contribution |
|
|
187 |
|
|
|
198 |
|
|
|
36 |
|
|
|
4 |
|
|
|
425 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
(286 |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
|
139 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
Interest income and other financial gains |
|
|
|
|
|
|
|
|
|
|
31 |
|
Interest expense and other financial losses |
|
|
|
|
|
|
|
|
|
|
(56 |
) |
Foreign currency losses |
|
|
|
|
|
|
|
|
|
|
(3 |
) |
Net income before income tax
expense |
|
|
|
|
|
|
|
|
|
$ |
111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021 |
|
|
Brazil |
|
Argentina |
|
Mexico |
|
Other Countries |
|
Total |
|
|
(In millions) |
Net revenues |
|
$ |
769 |
|
|
$ |
297 |
|
|
$ |
230 |
|
|
$ |
82 |
|
|
$ |
1,378 |
|
Direct costs |
|
|
(618 |
) |
|
|
(189 |
) |
|
|
(221 |
) |
|
|
(64 |
) |
|
|
(1,092 |
) |
Direct contribution |
|
|
151 |
|
|
|
108 |
|
|
|
9 |
|
|
|
18 |
|
|
|
286 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
|
(195 |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
|
91 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
Interest income and other financial gains |
|
|
|
|
|
|
|
|
|
|
25 |
|
Interest expense and other financial losses |
|
|
|
|
|
|
|
|
|
|
(91 |
) |
Foreign currency losses |
|
|
|
|
|
|
|
|
|
|
(15 |
) |
Net income before income tax
expense |
|
|
|
|
|
|
|
|
|
$ |
10 |
|
Non-GAAP Financial Measures
To supplement our audited consolidated financial
statements presented in accordance with U.S. GAAP, we present
foreign exchange (“FX”) neutral measures as a non-GAAP measure.
Reconciliation of this non-GAAP financial measure to the most
comparable U.S. GAAP financial measure can be found in the tables
below.
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.
We provide this non-GAAP financial measure to
enhance overall understanding of our current financial performance
and its prospects for the future, and we understand that this
measure provides useful information to both Management and
investors. In particular, we believe that FX neutral measures
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 2021 and
applying them to the corresponding months in 2022, 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, these measures do 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-months period ended March 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month Periods Ended March 31, (*) |
|
|
As reported |
|
|
FX Neutral Measures |
|
As reported |
|
|
(In millions, except percentages) |
|
|
2022 |
|
|
|
2021 |
|
|
Percentage Change |
|
|
2022 |
|
|
|
2021 |
|
|
Percentage Change |
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|
Net revenues |
|
$ |
2,248 |
|
|
$ |
1,378 |
|
|
63.1 |
% |
|
$ |
2,308 |
|
|
$ |
1,378 |
|
|
67.4 |
% |
Cost of net revenues |
|
|
(1,175 |
) |
|
|
(787 |
) |
|
49.3 |
% |
|
|
(1,204 |
) |
|
|
(787 |
) |
|
53.0 |
% |
Gross profit |
|
|
1,073 |
|
|
|
591 |
|
|
81.6 |
% |
|
|
1,104 |
|
|
|
591 |
|
|
86.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
(934 |
) |
|
|
(500 |
) |
|
86.8 |
% |
|
|
(973 |
) |
|
|
(500 |
) |
|
94.5 |
% |
Income from operations |
|
|
139 |
|
|
|
91 |
|
|
52.7 |
% |
|
|
131 |
|
|
|
91 |
|
|
43.5 |
% |
(*) The table above may not total due to rounding.
CONTACT: MercadoLibre, Inc.
Investor Relations
investor@mercadolibre.com
http://investor.mercadolibre.com
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