MercadoLibre, Inc. Reports Fourth Quarter 2019 Financial Results

Date : 02/10/2020 @ 9:01PM
Source : GlobeNewswire Inc.
Stock : MercadoLibre Inc (MELI)
Quote : 454.0  -34.58 (-7.08%) @ 4:30PM
MercadoLibre share price Chart

MercadoLibre, Inc. Reports Fourth Quarter 2019 Financial Results

MercadoLibre (NASDAQ:MELI)
Historical Stock Chart

2 Months : From Feb 2020 to Apr 2020

Click Here for more MercadoLibre Charts.

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, 2019.

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “We are proud to announce the fourth quarter 2019 with a sustained momentum that gives us the confidence to move on to a phase of continuing to prioritize growth, but with a greater focus on driving cost efficiencies and scale benefits through the P&Ls of our larger more consolidated businesses. This will be one of our objectives for the upcoming year. We believe we are investing appropriately behind growth, building superior experiences and products for our consumers and merchants, and continuing committed to our long term goal of disrupting both commerce and finance in Latin America. We are also proud to invite you to check our sustainability report, also available for the first time along with the annual report.”

Fourth Quarter 2019 Business Highlights

  • Total payment volume (“TPV”) through Mercado Pago reached $8.7 billion, a year-over-year increase of 63.5% in USD and 98.5% on an FX neutral basis. Total payment transactions increased 127.2% year-over-year, totaling 285.5 million transactions for the quarter.
  • Mercado Pago delivered successful execution in off-platform payments (online and offline) through merchant services, mobile point-of-sale (“MPOS”) devices and its mobile wallet business. On a consolidated basis, off-platform TPV grew 121.3% year-over-year in USD and 175.8% on an FX neutral basis.
  • Off-platform TPV reached $4.7 billion in transactions and 209.4 million payments.
  • Our MPOS business continues to be one of the fastest growing non-marketplace business units. On a consolidated basis, MPOS TPV grew 126.1% on an FX neutral basis.
  • Mobile wallet surpassed for the first time the 1 billion mark, delivering this quarter $1.3 billion in transactions on a consolidated basis. Our mobile wallet consumer base grew by 29.4% compared to the third quarter, reaching 7.9 million active payers during the quarter. TPV from mobile wallet in Argentina, Brazil and Mexico continues to grow by triple digits year-over-year.
  • Our asset management product, Mercado Fondo, is available in Argentina and Brazil, where we offer our entire suite of FinTech solutions: MPOS devices, QR code in-store payments, mobile wallet and asset management. Mercado Fondo has invested almost 90% and 60% of customer funds in Mercado Pago in Brazil and Argentina, respectively.
  • Gross merchandise volume (“GMV”) increased to $3.9 billion, representing a 19.7% and 39.7% increase in USD and on an FX neutral basis, respectively.
  • Items sold reached 109.5 million, growing 28.0% year-over-year.
  • Unique buyers numbers continue to accelerate, growing 26.7% year-over-year versus 25.7% in the third quarter.
  • Live listings offered on MercadoLibre’s marketplace reached 274.0 million, a 50.5% year-over-year increase.
  • Mobile gross merchandise volume grew 253.2% year-over-year on an FX neutral basis, reaching 68.7% of GMV.
  • Items shipped through Mercado Envios reached 92.6 million, a 47.1% year-over-year increase, driven primarily by optimizations in our free shipping program.          

The tables below present our gross billings, amounts paid by us in connection with our free shipping service and net revenues.

The Company presents net revenues net of amounts paid in connection with the Company’s free shipping initiative, when the Company acts as an agent. For the three-month period ended December 31st, 2019 the Company incurred $56.8 million of shipping subsidies that have been netted from revenues.

       
   In Millions (*)
    Q4 2019   Q4 2018
 Brazil$463.8 $358.1
GrossArgentina$139.5 $99.0
BillingsMexico$96.3 $50.4
 Others$31.5 $28.7
 Total$731.1 $536.2

   In Millions (*)
    Q4 2019   Q4 2018
 Brazil$ (35.5) $ (92.7)
Free ShippingArgentina$ (7.0) $ (8.2)
service costMexico$ (11.5) $ (4.9)
 Others$ (2.8) $ (2.3)
 Total$ (56.8) $ (108.1)

   In Millions (*)
    Q4 2019   Q4 2018
 Brazil$428.3 $265.4
NetArgentina$132.4 $90.8
RevenuesMexico$84.8 $45.5
 Others$28.7 $26.3
 Total$674.3 $428.0

*The tables above may not total due to rounding.

Fourth Quarter 2019 Financial Highlights

  • Net revenues for the fourth quarter were $674.3 million, a year-over-year increase of 57.5% in USD and 84.4% on an FX neutral basis.
  • Enhanced marketplace revenues increased 55.3% year-over-year in USD and 79.7% on an FX neutral basis, while non-marketplace revenues increased 60.0% year-over-year in USD and 89.7% on an FX neutral basis.
  • Gross profit was $308.3 million with a margin of 45.7%, compared to 47.8% in the fourth quarter of 2018.
  • Total operating expenses were $377.2 million, an increase of 83.5% year-over-year in USD. As a percentage of revenues, operating expenses were 55.9%, compared to 48.0% during the fourth quarter of 2018. On a sequential basis the 479 bps of margin improvement in operating expenses, 222 bps were the result of an improvement in bad debt and 203 bps in a lower investment in Maketing.
  • Our marketing expenses increased $3.2 million quarter-over-quarter, while Bad debt improved by $11.6 million quarter-over-quarter during the quarter.
  • Loss from operations was $68.9 million, compared to a loss of $81.9 million during the prior quarter. As a percentage of revenues, the loss from operations reached 10.2%.
  • Interest income was $26.9 million, a 88.4% increase year-over-year, as a result of equity offering during 2019, which generated more invested volume and interest gain, and a higher float in Argentina.
  • The Company incurred $21.2 million in financial expenses this quarter, mainly attributable to secured financial loans and interest expenses from our trusts related to our factoring business in Argentina.
  • Net loss before taxes was $63.0 million, up from a loss of $6.8 million during the fourth quarter of 2018.
  • Income tax gain was $9.0 million.
  • Net loss was $54.0 million, resulting in basic net loss per share of $1.11, due to the investment in marketing, which accounted for $146.6 million.

       The following table summarizes certain key performance metrics for the twelve and three months periods ended December 31, 2019 and 2018.

             
 Year ended December 31, (*)  Three-months period ended December 31, (*)
(in millions) 2019  2018  2019  2018
Other data:            
Number of confirmed registered users at end of period  320.6    267.4    320.6    267.4  
Number of confirmed new registered users during period  53.2    55.5    14.6    18.8  
Gross merchandise volume$ 13,997.4  $ 12,504.9  $ 3,871.3  $ 3,233.0  
Number of successful items sold  378.9    334.7    109.5    85.6  
Number of successful items shipped  306.9    221.7    92.6    62.1  
Total payment volume$ 28,389.9  $ 18,455.9  $ 8,668.2  $ 5,302.1  
Total volume of payments on marketplace$ 13,051.7  $ 11,274.5  $ 3,658.0  $ 2,950.4  
Total payment transactions  838.0    389.3    285.5    125.6  
Unique buyers  44.2    37.4    24.1    19.0  
Unique sellers  11.2    10.8    4.2    4.1  
Capital expenditures$ 141.4  $ 102.0  $ 40.6  $ 21.5  
Depreciation and amortization$ 73.3  $ 45.8  $ 20.8  $ 11.9  

(*) 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 RevenuesQ4’18  Q1’19 Q2’19 Q3’19 Q4’19 
            
Brazil34 % 64 %74%77%61%
            
Argentina(16)% (8)%14%39%46%
            
Mexico157 % 220 %267%146%86%
            

Year-over-year Local Currency Revenue Growth Rates by Quarter

            
            
Consolidated Net RevenuesQ4’18  Q1’19 Q2’19 Q3’19 Q4’19 
            
Brazil58% 91%89%77%74%
            
Argentina77% 83%115%119%133%
            
Mexico170% 227%261%153%80%
            

Conference Call and Webcast

The Company will host a conference call and audio webcast on February 10th, 2020 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID –5176529–) 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 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.

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 Mercado Libre Marketplace, excluding Classifieds items.

Items shipped – Measure of the number of items that were shipped through our shipping service.

Local Currency Growth Rates – Refer to FX Neutral definition.

Net income margin – Defined as net income as a percentage of net revenues.

New confirmed registered users – Measure of the number of new users who have registered on the Mercado Libre Marketplace and confirmed their registration, excluding Classifieds users.

Operating margin – Defined as income from operations as a percentage of net revenues.

Total confirmed registered users – Measure of the cumulative number of users who have registered on the Mercado Libre 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 (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, 2019, 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)

    
 December 31, December 31,
  2019   2018 
Assets   
Current assets:   
Cash and cash equivalents$ 1,384,740  $ 440,332 
Restricted cash and cash equivalents  66,684    24,363 
Short-term investments (522,798 and 284,317 held in guarantee)  1,597,241    461,541 
Accounts receivable, net  35,446    35,153 
Credit cards receivable, net  379,969    360,298 
Loans receivable, net  182,105    95,778 
Prepaid expenses  45,309    27,477 
Inventory  8,626    4,612 
Other assets  88,736    61,569 
Total current assets  3,788,856    1,511,123 
Non-current assets:   
Long-term investments  263,983    276,136 
Loans receivable, net  6,439    — 
Property and equipment, net  244,257    165,614 
Operating lease right-of-use assets  200,449    — 
Goodwill  87,609    88,883 
Intangible assets, net  14,275    18,581 
Deferred tax assets  117,582    141,438 
Other assets  58,241    37,744 
Total non-current assets  992,835    728,396 
Total assets$ 4,781,691  $ 2,239,519 
    
Liabilities    
Current liabilities:   
Accounts payable and accrued expenses$ 372,309  $ 266,759 
Funds payable to customers  894,057    640,954 
Salaries and social security payable  101,841    60,406 
Taxes payable  60,247    31,058 
Loans payable and other financial liabilities  186,138    132,949 
Operating lease liabilities  23,259    — 
Other liabilities  114,469    34,098 
Total current liabilities  1,752,320    1,166,224 
Non-current liabilities:   
Salaries and social security payable  26,803    23,161 
Loans payable and other financial liabilities  631,353    602,228 
Operating lease liabilities  176,673    — 
Deferred tax liabilities  99,952    91,698 
Other liabilities  12,627    19,508 
Total non-current liabilities  947,408    736,595 
Total liabilities$ 2,699,728  $ 1,902,819 
    
Commitments and contingencies   
    
Redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares   
authorized, 100,000 shares issued and outstanding at December 31, 2019$ 98,843  $ — 
    
Equity   
    
Common stock, $0.001 par value, 110,000,000 shares authorized,   
49,709,955 and 45,202,859 shares issued and outstanding at December 31,   
2019 and December 31, 2018$ 50  $ 45 
Additional paid-in capital  2,067,869    224,800 
Treasury stock  (720)   — 
Retained earnings  322,592    503,432 
Accumulated other comprehensive loss  (406,671)   (391,577)
Total Equity  1,983,120    336,700 
Total Liabilities, Redeemable convertible preferred stock and Equity$ 4,682,848  $ 2,239,519 

MercadoLibre, Inc.Consolidated Statements of IncomeFor the twelve and three-month periods ended December 31, 2019 and 2018(In thousands of U.S. dollars, except for share data)

        
 Year Ended December 31, Three Months Ended December 31,
  2019   2018   2019   2018 
Net revenues$ 2,296,314  $ 1,439,653  $ 674,271  $ 428,019 
Cost of net revenues  (1,194,191)   (742,645)   (365,924)   (223,236)
Gross profit  1,102,123    697,008    308,347    204,783 
        
Operating expenses:       
Product and technology development  (223,807)   (146,273)   (58,020)   (38,963)
Sales and marketing  (834,022)   (482,447)   (269,751)   (140,035)
General and administrative  (197,455)   (137,770)   (49,463)   (26,605)
Total operating expenses  (1,255,284)   (766,490)   (377,234)   (205,603)
Loss from operations  (153,161)   (69,482)   (68,887)   (820)
        
Other income (expenses):       
Interest income and other financial gains  113,523    42,039    26,933    14,292 
Interest expense and other financial losses  (65,876)   (56,249)   (21,187)   (16,443)
Foreign currency (losses) gains  (1,732)   18,240    167    (3,862)
Net loss before income tax (expense) gain  (107,246)   (65,452)   (62,974)   (6,833)
        
Income tax (expense) gain  (64,753)   28,867    8,976    4,496 
Net loss$ (171,999) $ (36,585) $ (53,998) $ (2,337)

        
 Year Ended December 31, Three Months Ended December 31,
  2019   2018   2019   2018 
Basic EPS       
Basic net loss       
 Available to shareholders per common share$ (3.71) $ (0.82) $ (1.11) $ (0.05)
Weighted average of outstanding common shares  48,692,906    44,529,614    49,709,955    45,202,859 
Diluted EPS       
Diluted net loss       
Available to shareholders per common share$ (3.71) $ (0.82) $ (1.11) $ (0.05)
Weighted average of outstanding common shares  48,692,906    44,529,614    49,709,955    45,202,859 
        

MercadoLibre, Inc.Consolidated Statement of Cash FlowsFor the years ended December 31, 2019 and 2018

    
 Year Ended December 31,
  2019   2018 
  
Cash flows from operations:   
Net loss$ (171,999) $ (36,585)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Unrealized devaluation loss, net  44,326    11,131 
Depreciation and amortization  73,320    45,792 
Accrued interest  (54,309)   (17,811)
Non cash interest, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges  86,694    11,408 
Stock-based compensation expense - restricted shares  395    — 
LTRP accrued compensation  51,662    27,525 
Deferred income taxes  16,453    (92,585)
Changes in assets and liabilities:   
Accounts receivable   (507)   (27,105)
Credit cards receivable  (29,315)   42,655 
Prepaid expenses  (17,956)   (23,342)
Inventory  (4,148)   (3,015)
Other assets  (49,390)   (17,617)
Payables and accrued expenses  143,495    90,123 
Funds payable to customers  267,293    175,398 
Other liabilities  45,452    28,202 
Interest received from investments  49,625    16,733 
Net cash provided by operating activities  451,091    230,907 
Cash flows from investing activities:   
Purchase of investments  (4,490,678)   (3,176,078)
Proceeds from sale and maturity of investments  3,353,606    2,662,800 
Payment for acquired businesses, net of cash acquired  —    (4,195)
Purchases of intangible assets  (72)   (192)
Changes in principal loans receivable, net  (173,848)   (57,232)
Advance for property and equipment  —    (4,426)
Purchases of property and equipment  (136,798)   (93,136)
Net cash used in investing activities  (1,447,790)   (672,459)
Cash flows from financing activities:   
Funds received from the issuance of convertible notes  —    880,000 
Transaction costs from the issuance of convertible notes  —    (16,264)
Payments on convertible note  (25)   (348,123)
Purchase of convertible note capped calls  (96,367)   (148,943)
Unwind of convertible note capped calls  —    136,108 
Proceeds from loans payable and other financial liabilities  629,891    236,873 
Payments on loans payable and other financing liabilities  (472,897)   (123,822)
Dividends paid  —    (6,624)
Payment of finance lease obligations  (1,929)   (323)
Common Stock repurchased  (720)   — 
Dividends paid of preferred stock  (2,844)   — 
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  2,021,012    608,882 
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents  (37,584)   (90,895)
Net increase in cash, cash equivalents, restricted cash and cash equivalents  986,729    76,435 
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the year  464,695    388,260 
Cash, cash equivalents, restricted cash and cash equivalents, end of the year$1,451,424  $464,695 

Financial results of reporting segments

           
 Three Months Ended December 31, 2019 
           
 Brazil Argentina Mexico Other Countries Total 
           
Net revenues$428,327  $132,440  $84,825  $28,679  $674,271  
Direct costs (373,417)  (107,790)  (135,840)  (34,242)  (651,289) 
Direct contribution 54,910   24,650   (51,015)  (5,563)  22,982  
           
Operating expenses and indirect costs of net revenues         (91,869) 
Loss from operations         (68,887) 
           
Other income (expenses):          
Interest income and other financial gains         26,933  
Interest expense and other financial losses         (21,187) 
Foreign currency gains         167  
Net loss before income tax gain        $(62,974) 
           

 Three Months Ended December 31, 2018 
           
 Brazil Argentina Mexico Other Countries Total 
           
Net revenues$265,353  $90,800  $45,529  $26,337  $428,019  
Direct costs (218,497)  (68,783)  (63,550)  (22,397)  (373,227) 
Direct contribution 46,856   22,017   (18,021)  3,940   54,792  
           
Operating expenses and indirect costs of net revenues         (55,612) 
Loss from operations         (820) 
           
Other income (expenses):          
Interest income and other financial gains         14,292  
Interest expense and other financial losses         (16,443) 
Foreign currency losses         (3,862) 
Net loss before income tax gain        $(6,833) 
           
           

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 December 31, 2019:

            
 Three-month Periods Ended December 31, (*)
 As reported FX Neutral Measures As reported  
(In millions, except percentages) 2019   2018  Percentage Change  2019   2018  Percentage Change
 (Unaudited)   (Unaudited)  
Net revenues$ 674.3  $ 428.0  57.5% $ 789.4  $ 428.0  84.4%
Cost of net revenues  (365.9)   (223.2) 63.9%   (435.0)   (223.2) 94.9%
Gross profit  308.3    204.8  50.6%   354.4    204.8  73.1%
            
Operating expenses  (377.2)   (205.6) 83.5%   (451.9)   (205.6) 119.8%
Loss from operations  (68.9)   (0.8) 8311.3%   (97.5)   (0.8) 11805.7%

(*) The table above may not total due to rounding.

CONTACT: MercadoLibre, Inc.

Investor Relations

investor@mercadolibre.com 

http://investor.mercadolibre.com

Latest MELI Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts
$
Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:us D:20200401 15:45:07