• MercadoLibre, Inc. Reports Fourth Quarter 2021 Financial Results

    المصدر: Nasdaq GlobeNewswire / 22 فبراير 2022 16:01:01   America/New_York

    Net Revenues of $2.1 billion, up 73.9% year-over-year on an FX neutral basis
    $24.2 billion Total Payment Volume, up 72.8% year-over-year on an FX neutral basis
    $8.0 billion Gross Merchandise Volume, up 32.2% year-over-year on an FX neutral basis

    MONTEVIDEO, Uruguay, Feb. 22, 2022 (GLOBE NEWSWIRE) -- 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, 2021.

    Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, “Last year presented us with challenges, and with those also came many more opportunities. With our teams’ resilience and focus on delivering on our strategic objectives, we have been able to overcome shifting pandemic lockdown measures, rising inflationary cost pressures and a highly competitive environment in the digital commerce space. The final outcome was a year with record results across the board, sustained strong growth in key business metrics and topline, and improving margins and operating income for a second consecutive year.”

    Fourth Quarter 2021 Business Highlights

    • Considering our entire ecosystem, Unique active users reached 82.2 million.
    • Gross merchandise volume (“GMV”) grew to $8.0 billion, representing an increase of 21.2% in USD and 32.2% on an FX neutral basis.
    • Successful items sold reached 287.9 million, increasing by 25.5% year-over-year.
    • Live listings offered on MercadoLibre’s marketplace reached almost 300 million.
    • Mobile gross merchandise volume reached 75.5% of GMV.
    • Mercado Envios shipped 275.9 million items during the quarter, representing a 29.0% year-over-year increase. Managed network penetration was 89.5% in the fourth quarter.
    • Total payment volume (“TPV”) through Mercado Pago reached $24.2 billion, a year-over-year increase of 52.1% in USD and 72.8% on an FX neutral basis. Total payment transactions increased 56.1% year-over-year, totaling 1,028.9 million transactions for the quarter.
    • Off-platform TPV grew 75.1% year-over-year in USD and 96.5% year-over-year on an FX neutral basis, reaching $16.1 billion, while payment transactions reached 849.9 million, a year-over-year increase of 69.4%.
    • Acquiring TPV, which includes On-Platform, Online Payments, MPoS and QR payments, was $17.2 billion, growing 51.1% on an FX neutral basis.
    • Digital accounts TPV, which includes wallet payments, P2P transfers between Mercado Pago accounts and Cards transactions (debit, prepaid and credit), was $7.1 billion, growing 138.3% on an FX neutral basis.
    • Unique fintech active users reached 34.5 million.
    • Our asset management product, Mercado Fondo, has now over $1.2 billion under management and in the fourth quarter had 22.3 million users across Latin America.
    • Mercado Credito’s portfolio is now almost $1.7 billion, over 3x its size compared to the fourth quarter of 2020.

    Fourth Quarter 2021 Financial Highlights

    • Fourth Quarter 2021 Financial Highlights
    • Net revenues for the fourth quarter were $2.1 billion, a year-over-year increase of 60.5% in USD and 73.9% on an FX neutral basis.
    • Commerce revenues increased 55.6% year-over-year in USD reaching $1,357.8 million, while Fintech revenues increased 70.1% year-over-year in USD reaching $773.0 million.
    • Gross profit was $853.2 million with a margin of 40.0%, compared to 36.8% in the fourth quarter of 2020.
    • Total operating expenses were $829.8 million, an increase of 61.4% year-over-year in USD. As a percentage of revenues, operating expenses were 38.9%, mostly in line with the 38.7% in the fourth quarter of 2020.
    • Income from operations was $23.3 million, compared to a loss of $25.1 million during the same period of the prior year. As a percentage of revenues, income from operations was 1.1%.
    • Interest income and other financial gains was $53.4 million, a 135.7% increase year-over-year. We incurred $53.7 million in interest expense and other financial losses this quarter, an 69.8% increase year-over-year.
    • We had foreign currency losses of $56.9 million, mainly related to higher foreign exchange losses attributable to our own common stock acquisition in the Argentine market at a price that reflects the additional cost of accessing US dollars through an indirect mechanism due to restrictions imposed by the Argentine government for buying US dollars at the official exchange rate.
    • Net loss before income tax expense was $33.9 million, a 22.9% decrease from the $44.0 million net loss during the fourth quarter of 2020.
    • Income tax expense was $3.6 million, mainly as a result of income tax expense as a consequence of pre-tax gains in our Argentine segment offset by income tax benefit in our Brazilian segment related to higher deferred tax assets due to tax loss carry forwards.
    • Net loss was $46.1 million, resulting in net loss per share of $0.92.

    The following table summarizes certain key performance metrics for the twelve- and three-months periods ended December 31, 2021 and 2020.

                 
      Year Ended
    December 31, (*)    		  Three-month Periods Ended
    December 31, (*)
    (in millions) 2021 2020  20212020
                 
    Unique active users  139.5  132.5  82.2  74.0
    Gross merchandise volume $28,350.9 $20,926.8 $7,956.7 $6,565.4
    Number of successful items sold  1,014.3  719.3  287.9  229.4
    Number of successful items shipped  962.3  649.2  275.9  214.0
    Total payment volume $77,371.1 $49,756.8 $24,244.2 $15,942.1
    Total volume of payments on marketplace $27,432.4 $19,951.4 $7,759.3 $6,336.0
    Total payment transactions  3,254.5  1,914.5  1,028.9  659.3
    Capital expenditures $630.1 $254.1 $196.3 $87.3
    Depreciation and amortization $203.9 $105.0 $67.2 $32.6


    (*)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    		Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 
               
    Brazil68%93%104%74%51%
               
    Argentina144%124%53%38%47%
               
    Mexico141%143%105%94%92%
               

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

               
               
    Consolidated
    Net Revenues    		Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 
               
    Brazil120%139%101%69%61%
               
    Argentina229%223%112%83%84%
               
    Mexico155%148%76%76%96%
               

    Conference Call and Webcast

    The Company will host a conference call and audio webcast on February 22nd, 2022, at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID – 2894134 –) 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.

    Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2020 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 the upcoming 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.
    Consolidated Balance Sheets
    (In thousands of U.S. dollars, except par value)

        
     December 31,
      2021   2020 
    Assets   
    Current assets:   
    Cash and cash equivalents$2,584,586  $1,856,394 
    Restricted cash and cash equivalents 1,063,377   651,830 
    Short-term investments (602,193 and 636,949 held in guarantee) 809,522   1,241,306 
    Accounts receivable, net 98,193   49,691 
    Credit cards receivable and other means of payments, net 1,839,389   863,073 
    Loans receivable, net 1,199,059   385,036 
    Prepaid expenses 40,426   28,378 
    Inventories 253,077   118,140 
    Other assets 287,350   152,959 
    Total current assets 8,174,979   5,346,807 
    Non-current assets:   
    Long-term investments 88,598   166,111 
    Loans receivable, net 61,011   16,619 
    Property and equipment, net 807,367   391,684 
    Operating lease right-of-use assets 461,175   303,214 
    Goodwill 148,243   85,211 
    Intangible assets, net 44,974   14,155 
    Deferred tax assets 181,266   134,916 
    Other assets 133,545   67,615 
    Total non-current assets 1,926,179   1,179,525 
    Total assets$10,101,158  $6,526,332 
        
    Liabilities    
    Current liabilities:   
    Accounts payable and accrued expenses$1,035,860  $767,336 
    Funds payable to customers 2,393,179   1,695,424 
    Amounts payable due to credit and debit card transactions 336,863   37,671 
    Salaries and social security payable 313,192   207,358 
    Taxes payable 291,456   215,918 
    Loans payable and other financial liabilities 1,285,416   548,393 
    Operating lease liabilities 92,343   55,246 
    Other liabilities 88,393   108,534 
    Total current liabilities 5,836,702   3,635,880 
    Non-current liabilities:   
    Amounts payable due to credit and debit card transactions 3,893   — 
    Salaries and social security payable 20,215   49,852 
    Loans payable and other financial liabilities 2,233,255   860,876 
    Operating lease liabilities 371,614   243,601 
    Deferred tax liabilities 62,496   64,354 
    Other liabilities 41,292   20,191 
    Total non-current liabilities 2,732,765   1,238,874 
    Total liabilities$8,569,467  $4,874,754 
        
    Commitments and contingencies   
    Equity   
        
    Common stock, $0.001 par value, 110,000,000 shares authorized,   
    50,418,980 and 49,869,727 shares issued and outstanding at December 31,   
    2021 and December 31, 2020$50  $50 
    Additional paid-in capital 2,439,345   1,860,502 
    Treasury stock (789,982)  (54,805)
    Retained earnings 397,419   314,115 
    Accumulated other comprehensive loss (515,141)  (468,284)
    Total Equity 1,531,691   1,651,578 
    Total Liabilities and Equity$10,101,158  $6,526,332 

    MercadoLibre, Inc.
    Consolidated Statements of Income
    For the twelve and three-month periods ended December 31, 2021 and 2020
    (In thousands of U.S. dollars, except for share data)

            
     Year Ended December 31, Three Months Ended December 31,
      2021   2020   2021   2020 
    Net service revenues$6,149,270  $3,690,002  $1,782,732  $1,165,654 
    Net product revenues 920,139   283,463   348,034   161,650 
    Net revenues 7,069,409   3,973,465   2,130,766   1,327,304 
    Cost of net revenues (4,064,357)  (2,264,255)  (1,277,601)  (838,270)
    Gross profit 3,005,052   1,709,210   853,165   489,034 
            
    Operating expenses:       
    Product and technology development (590,328)  (352,474)  (179,637)  (116,989)
    Sales and marketing (1,509,493)  (902,554)  (502,704)  (282,350)
    General and administrative (464,528)  (326,490)  (147,508)  (114,821)
    Total operating expenses (2,564,349)  (1,581,518)  (829,849)  (514,160)
    Income (loss) from operations 440,703   127,692   23,316   (25,126)
            
    Other income (expenses):       
    Interest income and other financial gains 137,962   102,767   53,374   22,648 
    Interest expense and other financial losses (*) (228,704)  (106,690)  (53,678)  (31,607)
    Foreign currency losses (109,333)  (42,454)  (56,951)  (9,930)
    Net income (loss) before income tax expense 240,628   81,315   (33,939)  (44,015)
            
    Income tax expense (148,802)  (82,022)  (3,643)  (6,565)
    Equity in earnings of unconsolidated entity (8,522)  —   (8,522)  — 
    Net income (loss)$83,304  $(707) $(46,104) $(50,580)


    (*)Includes $49,247 thousands 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,
      2021  2020   2021   2020 
    Basic EPS       
    Basic net income (loss)       
    Available to shareholders per common share$1.67 $(0.08) $(0.92) $(1.02)
    Weighted average of outstanding common shares 49,802,993  49,740,407   49,926,533   49,820,185 
    Diluted EPS       
    Diluted net income (loss)       
    Available to shareholders per common share$1.67 $(0.08) $(0.92) $(1.02)
    Weighted average of outstanding common shares 49,802,993  49,740,407   49,926,533   49,820,185 
            

    MercadoLibre, Inc.
    Consolidated Statements of Cash Flows
    For the twelve months ended December 31, 2021 and 2020

        
     Year Ended December 31,
      2021   2020 
    Cash flows from operations:   
    Net income (loss)$83,304  $(707)
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Equity in earnings of unconsolidated entity 8,522   — 
    Unrealized devaluation loss, net 90,629   89,329 
    Impairment of digital assets 8,647   — 
    Depreciation and amortization 203,942   104,992 
    Accrued interest income (35,880)  (45,593)
    Non cash interest, convertible notes amortization of debt discount and amortization of debt issuance costs and other charges 86,038   15,033 
    Bad debt charges 435,314   132,944 
    Financial results on derivative instruments 429   (1,935)
    Settlement of the call option (10,674)  — 
    Stock-based compensation expense - restricted shares 755   730 
    Sale of fixed assets and intangible assets —   3,814 
    LTRP accrued compensation 88,698   129,575 
    Deferred income taxes (29,481)  (70,315)
    Changes in assets and liabilities:   
    Accounts receivable (26,331)  12,069 
    Credit cards receivable and other means of payments (1,062,794)  (521,979)
    Prepaid expenses (12,715)  16,204 
    Inventories (142,382)  (106,981)
    Other assets (174,682)  (113,819)
    Payables and accrued expenses 379,767   584,281 
    Funds payable to customers 808,754   900,513 
    Amounts payable due to credit and debit card transactions 309,078   37,126 
    Other liabilities (79,007)  (34,586)
    Interest received from investments 35,112   51,857 
    Net cash provided by operating activities 965,043   1,182,552 
    Cash flows from investing activities:   
    Purchase of investments (7,370,742)  (5,199,875)
    Proceeds from sale and maturity of investments 7,800,545   5,532,463 
    Payment for acquired businesses, net of cash acquired (50,615)  (6,937)
    Capital contributions in joint ventures (5,113)  — 
    Receipts from settlements of derivative instruments 6,345   17,779 
    Payment from settlements of derivative instruments (19,747)  (4,136)
    Receipts from the sale of fixed assets and intangible assets —   274 
    Purchases of intangible assets (36,567)  (93)
    Changes in principal loans receivable, net (1,347,710)  (344,608)
    Purchases of property and equipment (572,929)  (247,048)
    Net cash used in investing activities (1,596,533)  (252,181)
    Cash flows from financing activities:   
    Purchase of convertible note capped calls (100,769)  (306,789)
    Excercise of Convertible Notes (3,137)  — 
    Payments on repurchase of the 2028 Notes (1,865,076)  — 
    Unwind of convertible note capped calls 396,739   — 
    Proceeds from loans payable and other financial liabilities 9,261,703   2,396,717 
    Payments on loans payable and other financing liabilities (6,781,612)  (1,785,272)
    Payment of finance lease obligations (16,524)  (4,949)
    Common Stock repurchased (485,886)  (54,085)
    Dividends paid of preferred stock —   (3,356)
    Proceeds from issuance of common stock, net 1,519,545   — 
    Net cash provided by financing activities 1,924,983   242,266 
    Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents (153,754)  (115,837)
    Net increase in cash, cash equivalents, restricted cash and cash equivalents 1,139,739   1,056,800 
    Cash, cash equivalents, restricted cash and cash equivalents, beginning of the year 2,508,224   1,451,424 
    Cash, cash equivalents, restricted cash and cash equivalents, end of the year$3,647,963  $2,508,224 

    Financial results of reporting segments

              
              
     Three Months Ended December 31, 2021
              
     Brazil Argentina Mexico Other Countries Total
              
    Net revenues$1,127,152  $474,617  $392,289  $136,708  $2,130,766 
    Direct costs (1,063,045)  (323,591)  (371,770)  (133,072)  (1,891,478)
    Direct contribution 64,107   151,026   20,519   3,636   239,288 
              
    Operating expenses and indirect costs of net revenues         (215,972)
    Income from operations         23,316 
              
    Other income (expenses):         
    Interest income and other financial gains         53,374 
    Interest expense and other financial losses         (53,678)
    Foreign currency losses         (56,951)
    Net Loss before income tax expense        $(33,939)
              


              
              
     Three Months Ended December 31, 2020
              
     Brazil Argentina Mexico Other Countries Total
              
    Net revenues$720,575  $323,451  $204,088  $79,190  $1,327,304 
    Direct costs (617,055)  (242,855)  (215,793)  (70,676)  (1,146,379)
    Direct contribution 103,520   80,596   (11,705)  8,514   180,925 
              
    Operating expenses and indirect costs of net revenues         (206,051)
    Loss from operations         (25,126)
              
    Other income (expenses):         
    Interest income and other financial gains         22,648 
    Interest expense and other financial losses         (31,607)
    Foreign currency losses         (9,930)
    Net loss before income tax expense        $(44,015)
              
              

    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 2020 and applying them to the corresponding months in 2021, 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 December 31, 2021:

                 
      Three-month Periods Ended
    December 31, (*)
      As reported FX Neutral Measures As reported  
    (In millions, except percentages)  2021   2020  Percentage
    Change    		  2021   2020  Percentage
    Change
    Net revenues $2,130.8  $1,327.3  60.5% $2,308.8  $1,327.3  73.9%
    Cost of net revenues  (1,277.6)  (838.3) 52.4%  (1,372.5)  (838.3) 63.7%
    Gross profit  853.2   489.0  74.5%  936.3   489.0  91.5%
                 
    Operating expenses  (829.8)  (514.2) 61.4%  (897.0)  (514.2) 74.5%
    Income (loss) from operations  23.3   (25.1) 192.8%  39.2   (25.1) 256.2%


    (*)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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