MercadoLibre, Inc. (Nasdaq: MELI)
(http://www.mercadolibre.com), Latin America’s leading e-commerce
technology company, today reported financial results for the
quarter ended December 31, 2022.
To our Shareholders
The end of the fourth quarter of 2022 brought a
highly successful year to a close. Over the last 12 months, we have
processed more than $100bn in payments, booked over $10bn of net
revenues, shipped more than 1bn items through Mercado Envios, and
surpassed $1bn of Income from operations, all for the first time in
our history. These major milestones confirm a successful and
transformational multi year period for MercadoLibre.
Over the last three years, we have built a GMV
base that is 2.5x larger than in 2019 and continues to grow, we
have ramped-up a logistics network with world-class delivery speeds
(GMV delivered within 48 hours rose from an average of 44% in 2019
to almost 80% in 2022) and we have strengthened the other key
pillars of our Commerce value proposition: assortment, price and
service. The much-increased scale gained through this three year
period solidifies our position as Latin America’s e-commerce
leader. It also positions us well to continue to capitalize on the
growth opportunity of the offline to online shift in retailing
across the region.
During the same three year period we have also
grown our TPV more than 4x, and our Fintech revenues nearly 5x,
making our Fintech business a major contributor to our top and
bottom line growth. At the same time, we have launched a full suite
of products and services that extends our original payments
offering to cards, credit, insurance and savings, amongst others.
Although we still have more products to build, the launches of the
last 18 months give us - for the first time - the critical mass of
services that would enable our users to have their principal
financial services relationship with Mercado Pago. Of our almost
44mn unique active Fintech users in Q4’22, more than half already
utilize the wallet to make payments. These users are a natural (and
growing) audience for us to cross-sell additional services and
products in a unified and simple manner, and build towards
achieving principality. Our competitive advantages in distribution
and credit underwriting should support these cross-selling
efforts.
Our market share of SMB Financial Services
distribution is still low, with plenty of upside. In Brazil, we
expect that our move “upmarket” to serve larger long tail merchants
and the lower end of the SMB segment will continue to drive growth
and market share gains. Mexico and Chile are both at an early stage
of development, and we expect to be a protagonist in the expansion
of SMB services in those markets.
As a consequence of the building blocks we have
laid over this past period, we believe we are well-positioned to
continue to drive growth and profit expansion in our businesses in
the coming years. Our results in the fourth quarter provide a good
example of how a combination of strong execution, increased scale,
solid competitive advantages and appropriate long-term thinking can
yield high growth and market share gains alongside robust profit
increases.
Commerce
A strong performance in the fourth quarter
rounded-off a great year for our Commerce business. Our FX-neutral
GMV growth accelerated to 35% in Q4’22, with Brazil (22% FX-neutral
GMV growth) and Mexico (28% FX-neutral GMV growth) driving the
acceleration. Our Black Friday campaign in Brazil significantly
outperformed a weak market and this was just one of the highlights
in a year of major market share gains in several categories that
was consistent across most geographies. These gains have been
achieved not with silver bullets, but with consistent investment
and execution around all aspects of our value proposition over an
extended period.
We delivered a record-breaking El Buen Fin
campaign in Mexico, placing the country as our fastest growing
market in volume terms. This growth shows the traction we have
achieved, with unique buyers growing above 20% year-on-year in
2022. These metrics reflect our strong competitive positioning,
which helped us to extend our market leadership in Q4’22 in Mexico,
and across most markets.
Argentina has shown weaker volume trends, with
sold items growth decelerating for a third successive quarter, and
falling into negative territory. Consumers’ budgets are facing
headwinds from rising prices but, despite short-term pressures,
profitability is strong and we remain confident in our long-term
competitive position. Macroeconomic factors also continue to impact
Chile, but we are pleased to see that our GMV growth has improved
on a sequential basis, and our volume growth is back into positive
territory.
Mercado Envios sustained its delivery speed
leadership across the region, helping us to achieve the strong peak
season GMV growth mentioned above. Mercado Envios also reached its
highest ever level of fulfillment penetration of 43% in Q4’22,
surpassing the previous record reached in Q4’21. Brazil saw a
sequential increase in fulfillment, with penetration back to its
peak level of 40%. Mexico and Chile reached new highs in
fulfillment penetration. Our logistics teams have done a good job
of mitigating external cost pressures through efficiencies and
pricing, so even with the costs related to higher fulfillment
penetration, our Q4’22 net shipping cost was broadly stable as a
percentage of GMV, with a notable improvement in Mexico.
Mercado Ads continued to grow at a rapid pace in
2022 in all key geographies, with revenue as a percentage of GMV
reaching 1.4% in Q4’22. This marks another consistent step in the
business’ expansion, making the Ads business more than 5x larger
than it was three years ago. This year has also been an important
year in building-out our capabilities, supported by doubling the
number of engineers allocated to the Ads business. This year’s
technology deployments included our own Ad Server, which enables
the automatic insertion of display advertising, targeting
capabilities and an automated dashboard for real-time reporting for
Display performance, as well as enhancements to the bidding process
and placement logic of product ads. We have also made important
progress in the development of our DSP (demand side platform),
which we expect to launch in 2023 and will significantly upgrade
our capabilities. All of these improvements are aligned with our
strategy to build a complete Ad Tech platform in Latin America.
Fintech
Momentum in our Fintech business remains strong.
Our unique active fintech users reached almost 44mn in Q4’22,
rising 27% year-on-year, whilst TPV grew at 45% in US dollars and
80% on an FX-neutral basis. A strong off-platform performance in
Q4’22, with growth of 58% in US dollars and 121% on an FX-neutral
basis, took our quarterly off-platform TPV over $25bn for the first
time. This is a big accomplishment, placing us on an annualized run
rate of over $100bn, but this is just the latest milestone on a
path that has much further to run.
One of the main ambitions on that path is to
achieve principality amongst the portion of our user base where our
distribution and underwriting capabilities enable us to offer a
strong value proposition. One of the keys to unlocking principality
is being able to offer the products and services that satisfy our
users’ day-to-day needs. After 12 to 18 months of product
development and deployment, we now have the tools in place to shift
Mercado Pago from being mainly a payments wallet to a full-service
digital account for our users. In Q4’22, the average number of
products being used by our Digital Account customers continued to
rise. We are already seeing this fast growth translating to
profitability in Argentina.
In Brazil and Mexico, the Credit Card will have
an important role to play in achieving the aforementioned
principality, given the product’s value to consumers for their
day-to-day needs. Through the second half of 2022, we have seen a
significant improvement in the performance of our Credit Card
business after the slowdown of new card issuance in the first half.
Our underwriting has improved, although the latest cohorts remain
small, so we have further to go before being comfortable to
re-accelerate. That said, we are pleased with our progress, and we
expect to launch in Mexico in 2023.
Mercado Credito as a whole continued to deliver
strong results in Q4’22 with a period-end portfolio of $2.8bn and
IMAL spread of 48%. This was the highest spread achieved in 2022, a
function of adjustments to our APRs, broadly flat originations
(which means slower formation of new provisions than earlier in the
year), a larger mix of lower risk cohorts in all markets, and
better asset quality. The steps that we took in mid-2022 to
mitigate the risks of a weaker lending environment - particularly
in Brazil - have worked as intended and, as a result, our early
<90-day NPL improved sequentially to 10% in Q4’22 and was
broadly stable year-on-year. Brazil made a notable contribution to
this improvement in both the Consumer and Credit Card books.
Looking at the year as a whole, we are pleased to have been able to
strike a good balance between risk management, profitability and
growth at Mercado Credito. Nevertheless, we remain alert to the
short-term headwinds that the business faces, and we will maintain
a cautious posture until we are confident that the cycle has
turned.
Our POS business has played an important role in
our achievement of surpassing $25bn in quarterly off-platform TPV,
with growth of 61% in US dollars and 78% on an FX-neutral basis in
Q4’22. We have seen strong and consistent growth trends in MPOS
throughout the year in our four largest markets. Mexico and Chile
have performed particularly well (albeit from relatively low
bases), and we see significant growth potential in these markets,
which are still at an early stage of development. Brazil has also
performed well in 2022, with our move “upmarket” to serve medium-
and large-sized long tail merchants and the lower end of the SMB
segment, making a major contribution to TPV expansion and strong
growth in TPV per device. This has put some pressure on the take
rate, but given that larger merchants transact much more
frequently, revenue is highly accretive.
Our Online Payments business also delivered
consistent levels of growth in 2022, and in the fourth quarter, FX
neutral TPV growth was stable in Brazil and accelerated in Mexico
and Argentina. Within our Online Payments business, the Big Company
category showed the fastest rate of growth, highlighting our
ability to serve merchants of all sizes with our variety of
services.
Consolidated Results
A strong finish to the year took our full-year
revenue past $10bn and our income from operations past $1bn, both
new records. We are particularly pleased to have been able to
deliver an attractive combination of growth and profitability
throughout the year, alongside strong operational KPIs and market
share gains, all whilst sustaining a high level of investment in
new products and technologies.
In Q4’22, we generated $3.0bn of net revenues,
growing year-on-year at 56.5% on an FX-neutral basis, and 41% in US
dollars. Our Commerce business contributed almost $1.7bn to this
figure, with 36% FX-neutral growth, whilst our Fintech operations
delivered over $1.3bn of net revenues, with 93% FX-neutral growth.
Our Commerce take rate rose by 20bps year-on-year, primarily due to
a higher penetration of advertising. Our Fintech take rate rose
significantly year-on-year, supported by Mercado Credito’s revenue
of $560mn, growing 88% year-on-year, and repricing in the Acquiring
business. On a sequential basis, the Fintech take rate declined
slightly due to a lower level of credit revenue relative to TPV,
but there was a small increase in the take rate of the other
revenue streams within Fintech.
Our Q4’22 income from operations reached $349mn,
rising from $24mn in Q4’21, with a margin of 11.6% over net
revenues. Part of the negative impact on margins from fourth
quarter seasonality in our Commerce business was offset by our
continuous improvement in how to manage the promotional season, and
with more efficiency in logistics and promotional spending. We also
delivered higher margins in most geographies as a result of a
stronger-than-expected performance in Fintech, which was driven by
significant profit growth in our Acquiring business, record results
from Mercado Credito, and a notable reduction of losses in our
Wallet and Digital Account operations. In other words, the
quarter’s major improvement in profitability was driven by a
combination of operating leverage on continued top line growth,
strong execution and a clear focus on cost efficiency across the
business.
We generated $165mn of net income in Q4’22,
including a $64mn net foreign currency loss and an unusually high
tax charge of $144mn. The principal driver of this high tax charge
was the recognition of the deferred tax liabilities of the FIDCs
that fund our credit business. In 2022, our net income reached
$482mn, rising from $83mn in 2021, underlining our commitment to
profitable growth. Cash flow from operations for the year reached
$2,940mn, and total cash and cash equivalents ended the year at
$1,910mn, alongside an improvement in our leverage ratios.
Looking Ahead
After a year of successfully navigating
macroeconomic instability across the region and delivering on our
promise of sustainable and sequential growth in profit dollars, we
are confident in Mercado Libre’s growth potential in the coming
years. We will continue to develop competitive advantages through
technology so that we are best placed to capitalize on the growth
opportunities in Commerce and Fintech across Latin America. Our
technology investment has more than doubled over the last two
years, and this gives us more resources than ever to pursue those
growth opportunities.
In the short-term, we are operating in a
fast-changing competitive landscape in Brazil. Our teams have, as
always, been active in ensuring that Mercado Libre is positioned as
a natural home for consumers and merchants seeking commerce and
fintech solutions for their daily needs.
For the long-term, we remain as optimistic as
ever about the fundamentals of our business, and we are confident
that the best is yet to come.
The following table summarizes certain
key performance metrics for twelve and three-month periods ended
December 31, 2022 and 2021.
|
Year Ended December 31, (*) |
|
Three Months Ended December 31, (*) |
(in millions) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Other
data: |
|
|
|
|
|
|
|
Unique Active Users |
148 |
|
140 |
|
97 |
|
82 |
Gross merchandise volume |
34,449 |
|
28,351 |
|
9,615 |
|
7,957 |
Number of successful items
sold |
1,147 |
|
1,014 |
|
321 |
|
288 |
Number of successful items
shipped |
1,105 |
|
962 |
|
311 |
|
276 |
Total payment volume |
123,633 |
|
77,371 |
|
35,951 |
|
24,244 |
Total volume of payments on
marketplace |
36,281 |
|
29,078 |
|
10,101 |
|
8,187 |
Total payment
transactions |
5,470 |
|
3,255 |
|
1,677 |
|
1,029 |
Capital expenditures |
455 |
|
630 |
|
112 |
|
196 |
Depreciation and
amortization |
403 |
|
204 |
|
122 |
|
67 |
(*) Figures
have been calculated using rounded amounts. Growth calculations
based on this table may not total due to rounding.
Year-over-year USD Growth Rates by
Quarter
Consolidated Net Revenues |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
Brazil |
51 |
% |
63 |
% |
53 |
% |
35 |
% |
36 |
% |
Argentina |
47 |
% |
74 |
% |
62 |
% |
72 |
% |
50 |
% |
Mexico |
92 |
% |
58 |
% |
65 |
% |
60 |
% |
55 |
% |
|
|
|
|
|
|
Commerce |
56 |
% |
40 |
% |
23 |
% |
20 |
% |
22 |
% |
Fintech |
70 |
% |
108 |
% |
113 |
% |
94 |
% |
73 |
% |
|
|
|
|
|
|
Gross Merchandise Volume |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
Brazil |
19 |
% |
29 |
% |
28 |
% |
20 |
% |
29 |
% |
Argentina |
21 |
% |
43 |
% |
33 |
% |
35 |
% |
13 |
% |
Mexico |
31 |
% |
20 |
% |
30 |
% |
22 |
% |
35 |
% |
|
|
|
|
|
|
Total Payment Volume |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
On-Platform |
21 |
% |
26 |
% |
25 |
% |
22 |
% |
23 |
% |
Off-Platform |
79 |
% |
103 |
% |
105 |
% |
71 |
% |
58 |
% |
Year-over-year Local Currency Growth Rates by
Quarter
Consolidated Net Revenues |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
Brazil |
61 |
% |
55 |
% |
42 |
% |
35 |
% |
28 |
% |
Argentina |
84 |
% |
110 |
% |
104 |
% |
140 |
% |
143 |
% |
Mexico |
96 |
% |
59 |
% |
66 |
% |
62 |
% |
46 |
% |
|
|
|
|
|
|
Commerce |
67 |
% |
44 |
% |
23 |
% |
33 |
% |
36 |
% |
Fintech |
81 |
% |
113 |
% |
107 |
% |
115 |
% |
93 |
% |
|
|
|
|
|
|
Gross Merchandise Volume |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
Brazil |
23 |
% |
23 |
% |
19 |
% |
20 |
% |
22 |
% |
Argentina |
53 |
% |
73 |
% |
66 |
% |
87 |
% |
83 |
% |
Mexico |
33 |
% |
21 |
% |
30 |
% |
23 |
% |
28 |
% |
|
|
|
|
|
|
Total Payment Volume |
Q4’21 |
Q1’22 |
Q2’22 |
Q3’22 |
Q4’22 |
On-Platform |
32 |
% |
48 |
% |
42 |
% |
39 |
% |
44 |
% |
Off-Platform |
97 |
% |
139 |
% |
135 |
% |
122 |
% |
121 |
% |
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 February 23, 2023, at 5:00 p.m. Eastern
Time. To participate in our conference call, investors, analysts,
and the market in general may access the following link at
https://register.vevent.com/register/BI8c9c2828ad0f442da9feaf903a3c4106
to be provided with the dial-in number and personal pin code to
join the conference call. Access to our video webcast and the live
audio will be available in 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 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 stable. 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.
IMAL (Interest Margins After Losses) – IMAL
is the spread between credit revenues and the expenses
associated with provisions for doubtful accounts, and expressed as
a percentage of the outstanding portfolio.
About MercadoLibre
Founded in 1999, MercadoLibre is the largest
online commerce ecosystem in Latin America based on unique visitors
and orders processed, 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” and “Special Note
Regarding Forward-Looking Statements” sections of MercadoLibre,
Inc.’s of our upcoming annual report on Form 10-K for the year
ended December 31, 2022, 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 as of December 31, 2022 and
December 31, 2021(In millions of U.S.
dollars, except par value)
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,910 |
|
|
$ |
2,585 |
|
Restricted cash and cash equivalents |
|
1,453 |
|
|
|
1,063 |
|
Short-term investments ($1,219 and $602 held in guarantee) |
|
2,339 |
|
|
|
810 |
|
Accounts receivable, net |
|
130 |
|
|
|
98 |
|
Credit card receivables and other means of payments, net |
|
2,946 |
|
|
|
1,839 |
|
Loans receivable, net of allowances of $1,074 and $408 |
|
1,704 |
|
|
|
1,199 |
|
Prepaid expenses |
|
38 |
|
|
|
40 |
|
Inventories |
|
152 |
|
|
|
253 |
|
Customer crypto-assets safeguarding assets |
|
15 |
|
|
|
— |
|
Other assets |
|
266 |
|
|
|
288 |
|
Total current assets |
|
10,953 |
|
|
|
8,175 |
|
Non-current assets: |
|
|
|
Long-term investments |
|
322 |
|
|
|
89 |
|
Loans receivable, net of allowances of $30 and $27 |
|
32 |
|
|
|
61 |
|
Property and equipment, net |
|
993 |
|
|
|
807 |
|
Operating lease right-of-use assets |
|
656 |
|
|
|
461 |
|
Goodwill |
|
153 |
|
|
|
148 |
|
Intangible assets, net |
|
25 |
|
|
|
45 |
|
Deferred tax assets |
|
346 |
|
|
|
181 |
|
Other assets |
|
256 |
|
|
|
134 |
|
Total non-current assets |
|
2,783 |
|
|
|
1,926 |
|
Total assets |
$ |
13,736 |
|
|
$ |
10,101 |
|
|
|
|
|
Liabilities |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
|
1,393 |
|
|
|
1,036 |
|
Funds payable to customers |
|
3,454 |
|
|
|
2,393 |
|
Amounts payable due to credit and debit card transactions |
|
483 |
|
|
|
337 |
|
Salaries and social security payable |
|
401 |
|
|
|
313 |
|
Taxes payable |
|
414 |
|
|
|
291 |
|
Loans payable and other financial liabilities |
|
2,131 |
|
|
|
1,285 |
|
Operating lease liabilities |
|
142 |
|
|
|
92 |
|
Customer crypto-assets safeguarding liabilities |
|
15 |
|
|
|
— |
|
Other liabilities |
|
129 |
|
|
|
90 |
|
Total current liabilities |
|
8,562 |
|
|
|
5,837 |
|
Non-current liabilities: |
|
|
|
Amounts payable due to credit and debit card transactions |
|
5 |
|
|
|
4 |
|
Loans payable and other financial liabilities |
|
2,627 |
|
|
|
2,233 |
|
Operating lease liabilities |
|
514 |
|
|
|
372 |
|
Deferred tax liabilities |
|
106 |
|
|
|
62 |
|
Other liabilities |
|
95 |
|
|
|
62 |
|
Total non-current liabilities |
|
3,347 |
|
|
|
2,733 |
|
Total liabilities |
$ |
11,909 |
|
|
$ |
8,570 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
Equity |
|
|
|
Common stock, $0.001 par value 110,000,000, shares authorized
50,257,751 and 50,418,980 shares issued and outstanding |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
2,309 |
|
|
|
2,439 |
|
Treasury stock |
|
(931 |
) |
|
|
(790 |
) |
Retained earnings |
|
913 |
|
|
|
397 |
|
Accumulated other comprehensive loss |
|
(464 |
) |
|
|
(515 |
) |
Total Equity |
|
1,827 |
|
|
|
1,531 |
|
Total Liabilities and
Equity |
$ |
13,736 |
|
|
$ |
10,101 |
|
MercadoLibre, Inc.Consolidated
Statements of IncomeFor twelve and
three-month periods
ended December 31,
2022 and
2021(In millions of U.S. dollars,
except for share data)
|
Year Ended December 31, |
|
Three Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net service revenues |
$ |
9,442 |
|
|
$ |
6,149 |
|
|
$ |
2,676 |
|
|
$ |
1,783 |
|
Net product revenues |
|
1,095 |
|
|
|
920 |
|
|
|
326 |
|
|
|
347 |
|
Net revenues |
|
10,537 |
|
|
|
7,069 |
|
|
|
3,002 |
|
|
|
2,130 |
|
Cost of net revenues |
|
(5,374 |
) |
|
|
(4,064 |
) |
|
|
(1,544 |
) |
|
|
(1,277 |
) |
Gross profit |
|
5,163 |
|
|
|
3,005 |
|
|
|
1,458 |
|
|
|
853 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Product and technology development |
|
(1,099 |
) |
|
|
(590 |
) |
|
|
(325 |
) |
|
|
(179 |
) |
Sales and marketing |
|
(1,296 |
) |
|
|
(1,074 |
) |
|
|
(380 |
) |
|
|
(338 |
) |
Provision for doubtful accounts |
|
(1,073 |
) |
|
|
(435 |
) |
|
|
(228 |
) |
|
|
(164 |
) |
General and administrative |
|
(661 |
) |
|
|
(465 |
) |
|
|
(176 |
) |
|
|
(148 |
) |
Total operating expenses |
|
(4,129 |
) |
|
|
(2,564 |
) |
|
|
(1,109 |
) |
|
|
(829 |
) |
Income from operations |
|
1,034 |
|
|
|
441 |
|
|
|
349 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
Interest income and other financial gains |
|
265 |
|
|
|
138 |
|
|
|
123 |
|
|
|
54 |
|
Interest expense and other financial losses (*) |
|
(321 |
) |
|
|
(229 |
) |
|
|
(100 |
) |
|
|
(54 |
) |
Foreign currency losses, net |
|
(198 |
) |
|
|
(109 |
) |
|
|
(64 |
) |
|
|
(57 |
) |
Net income before income tax
expense |
|
780 |
|
|
|
241 |
|
|
|
308 |
|
|
|
(33 |
) |
|
|
|
|
|
|
|
|
Income tax expense |
|
(298 |
) |
|
|
(149 |
) |
|
|
(144 |
) |
|
|
(4 |
) |
Equity in earnings of
unconsolidated entity |
|
— |
|
|
|
(9 |
) |
|
|
1 |
|
|
|
(9 |
) |
Net income (loss) |
$ |
482 |
|
|
$ |
83 |
|
|
$ |
165 |
|
|
$ |
(46 |
) |
(*) Includes $49
million of loss on debt extinguishment and premium related to
the 2028 Notes repurchase recognized in January 2021.
|
Year Ended December 31, |
|
Three Months Ended December 31 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Basic earning per
share |
|
|
|
|
|
|
|
Basic net income (loss) |
|
|
|
|
|
|
|
Available to shareholders per common share |
$ |
9.57 |
|
$ |
1.67 |
|
$ |
3.28 |
|
$ |
(0.92 |
) |
Weighted average of outstanding common shares |
|
50,345,353 |
|
|
49,802,993 |
|
|
50,284,640 |
|
|
49,926,533 |
|
Diluted earning per
share |
|
|
|
|
|
|
|
Diluted net income (loss) |
|
|
|
|
|
|
|
Available to shareholders per common share |
$ |
9.53 |
|
$ |
1.67 |
|
$ |
3.25 |
|
$ |
(0.92 |
) |
Weighted average of outstanding common shares |
|
51,335,621 |
|
|
49,802,993 |
|
|
51,274,909 |
|
|
49,926,533 |
|
MercadoLibre, Inc.Consolidated
Statements of Cash FlowsFor the
twelve months ended December 31,
2022 and 2021
(In millions of U.S. dollars)
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from
operations: |
|
|
|
Net income |
$ |
482 |
|
|
$ |
83 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Equity in earnings of unconsolidated entity |
|
— |
|
|
|
9 |
|
Unrealized foreign currency losses, net |
|
411 |
|
|
|
91 |
|
Impairment of digital assets |
|
12 |
|
|
|
9 |
|
Depreciation and amortization |
|
403 |
|
|
|
204 |
|
Accrued interest income |
|
(166 |
) |
|
|
(36 |
) |
Non cash interest expense, convertible notes amortization of debt
discount and amortization of debt issuance costs and other
charges |
|
137 |
|
|
|
86 |
|
Provision for doubtful accounts |
|
1,073 |
|
|
|
435 |
|
Results on derivative instruments |
|
66 |
|
|
|
— |
|
Settlement of the call option |
|
— |
|
|
|
(11 |
) |
Stock-based compensation expense - restricted shares |
|
1 |
|
|
|
1 |
|
LTRP accrued compensation |
|
84 |
|
|
|
89 |
|
Deferred income taxes |
|
(97 |
) |
|
|
(29 |
) |
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
(71 |
) |
|
|
(26 |
) |
Credit card receivables and other means of payments |
|
(1,084 |
) |
|
|
(1,063 |
) |
Prepaid expenses |
|
3 |
|
|
|
(13 |
) |
Inventories |
|
114 |
|
|
|
(142 |
) |
Other assets |
|
(90 |
) |
|
|
(175 |
) |
Payables and accrued expenses |
|
449 |
|
|
|
380 |
|
Funds payable to customers |
|
1,044 |
|
|
|
808 |
|
Amounts payable due to credit and debit card transactions |
|
128 |
|
|
|
309 |
|
Other liabilities |
|
(82 |
) |
|
|
(79 |
) |
Interest received from investments |
|
123 |
|
|
|
35 |
|
Net cash provided by operating activities |
|
2,940 |
|
|
|
965 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of investments |
|
(12,694 |
) |
|
|
(7,371 |
) |
Proceeds from sale and maturity of investments |
|
11,023 |
|
|
|
7,801 |
|
Payments for acquired businesses, net of cash acquired |
|
— |
|
|
|
(51 |
) |
Capital contributions in joint ventures |
|
— |
|
|
|
(5 |
) |
Receipts from settlements of derivative instruments |
|
1 |
|
|
|
6 |
|
Payments from settlements of derivative instruments |
|
(45 |
) |
|
|
(20 |
) |
Purchases of intangible assets |
|
(1 |
) |
|
|
(36 |
) |
Changes in principal loans receivable, net |
|
(1,701 |
) |
|
|
(1,348 |
) |
Investments of property and equipment |
|
(454 |
) |
|
|
(573 |
) |
Net cash used in investing activities |
|
(3,871 |
) |
|
|
(1,597 |
) |
Cash flows from financing
activities: |
|
|
|
Purchase of convertible note capped calls |
|
— |
|
|
|
(101 |
) |
Exercise of Convertible Notes |
|
— |
|
|
|
(3 |
) |
Payments on repurchase of the 2028 Notes |
|
— |
|
|
|
(1,865 |
) |
Unwind of convertible note capped calls |
|
— |
|
|
|
397 |
|
Proceeds from loans payable and other financial liabilities |
|
17,017 |
|
|
|
9,262 |
|
Payments on loans payable and other financing liabilities |
|
(15,933 |
) |
|
|
(6,782 |
) |
Payments of finance lease obligations |
|
(20 |
) |
|
|
(17 |
) |
Common Stock repurchased |
|
(148 |
) |
|
|
(486 |
) |
Proceeds from issuance of common stock, net |
|
— |
|
|
|
1,520 |
|
Net cash provided by financing activities |
|
916 |
|
|
|
1,925 |
|
Effect of exchange rate
changes on cash, cash equivalents, restricted cash and cash
equivalents |
|
(270 |
) |
|
|
(153 |
) |
Net (decrease) increase in
cash, cash equivalents, restricted cash and cash equivalents |
|
(285 |
) |
|
|
1,140 |
|
Cash, cash equivalents,
restricted cash and cash equivalents, beginning of the year |
|
3,648 |
|
|
|
2,508 |
|
Cash, cash equivalents,
restricted cash and cash equivalents, end of the year |
$ |
3,363 |
|
|
$ |
3,648 |
|
Financial results of reporting
segments
|
Three Months Ended December 31, 2022 |
|
Brazil |
|
Argentina |
|
Mexico |
|
Other Countries |
|
Total |
|
(In millions) |
Net revenues |
$ |
1,532 |
|
|
$ |
713 |
|
|
$ |
607 |
|
|
$ |
150 |
|
|
$ |
3,002 |
|
Direct costs |
|
(1,245 |
) |
|
|
(420 |
) |
|
|
(504 |
) |
|
|
(133 |
) |
|
|
(2,302 |
) |
Direct contribution |
|
287 |
|
|
|
293 |
|
|
|
103 |
|
|
|
17 |
|
|
|
700 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
(351 |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
349 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
Interest income and other financial gains |
|
|
|
|
|
|
|
|
|
123 |
|
Interest expense and other financial losses |
|
|
|
|
|
|
|
|
|
(100 |
) |
Foreign currency losses, net |
|
|
|
|
|
|
|
|
|
(64 |
) |
Net Income before income tax
expense |
|
|
|
|
|
|
|
|
$ |
308 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2021 |
|
Brazil |
|
Argentina |
|
Mexico |
|
Other Countries |
|
Total |
|
(In millions) |
Net revenues |
$ |
1,127 |
|
|
$ |
475 |
|
|
$ |
392 |
|
|
$ |
136 |
|
|
$ |
2,130 |
|
Direct costs |
|
(1,063 |
) |
|
|
(324 |
) |
|
|
(372 |
) |
|
|
(133 |
) |
|
|
(1,892 |
) |
Direct contribution |
|
64 |
|
|
|
151 |
|
|
|
20 |
|
|
|
3 |
|
|
|
238 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses and
indirect costs of net revenues |
|
|
|
|
|
|
|
|
|
(214 |
) |
Income from operations |
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
Interest income and other financial gains |
|
|
|
|
|
|
|
|
|
54 |
|
Interest expense and other financial losses |
|
|
|
|
|
|
|
|
|
(54 |
) |
Foreign currency losses, net |
|
|
|
|
|
|
|
|
|
(57 |
) |
Net loss before income tax
expense |
|
|
|
|
|
|
|
|
$ |
(33 |
) |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures of Financial
Performance
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 FX
neutral 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. FX neutral non-GAAP measure has
limitations in that it does not reflect the impact of foreign
exchange as required by 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. 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 comparative FX
neutral measures were calculated by using the average monthly
exchange rates for each month during 2020 and applying them to the
corresponding months in 2021 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-month period ended December 31,
2022:
|
Three-Month Periods Ended December 31, |
|
As reported |
|
FX Neutral Measures |
|
As reported |
|
|
(In millions, except percentages) |
2022 |
|
2021 |
|
Percentage Change |
|
2022 |
|
2021 |
|
Percentage Change |
Net revenues |
$ |
3,002 |
|
|
$ |
2,131 |
|
|
40.9 |
% |
|
$ |
3,334 |
|
|
$ |
2,131 |
|
|
56.5 |
% |
Cost of net revenues |
|
(1,544 |
) |
|
|
(1,278 |
) |
|
20.8 |
% |
|
|
(1,677 |
) |
|
|
(1,278 |
) |
|
31.2 |
% |
Gross profit |
|
1,458 |
|
|
|
853 |
|
|
70.9 |
% |
|
|
1,657 |
|
|
|
853 |
|
|
94.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
(1,109 |
) |
|
|
(830 |
) |
|
33.6 |
% |
|
|
(1,264 |
) |
|
|
(830 |
) |
|
52.3 |
% |
Income from operations |
$ |
349 |
|
|
$ |
23 |
|
|
1417.4 |
% |
|
$ |
393 |
|
|
$ |
23 |
|
|
1585.3 |
% |
CONTACT: MercadoLibre, Inc.
Investor Relations
investor@mercadolibre.com
http://investor.mercadolibre.com
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