GlobeNewswire Inc | Mar 1, 2021 04:18PM EST

March 01, 2021

Net Revenues of $1.3 billion, up 148.5% year-over-year on an FX neutral basis$15.9 billion Total Payment Volume, up 134.4% year-over-year on an FX neutral basis$6.6 billion Gross Merchandise Volume, up 109.7% year-over-year on an FX neutral basis

BUENOS AIRES, Argentina, March 01, 2021 (GLOBE NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq: MELI) ( http://www.mercadolibre.com), Latin Americas leading e-commerce technology company, today reported financial results for the quarter ended December 31, 2020.

Pedro Arnt, Chief Financial Officer of MercadoLibre, Inc., commented, Our strong performance during the quarter further established our leadership position in Latin America, which is the worlds fastest growing region for e-commerce, according to e-Marketer. These positive market dynamics, combined with our strong execution and focus, are reflected in our quarterly performance, where growth continued accelerating despite the gradual reopening of physical retail during the period.

Fourth Quarter 2020 Business Highlights

-- Unique active users grew by 71.3% year-over-year, reaching 74.0 million. -- Gross merchandise volume (GMV) grew to $6.6 billion, representing an increase of 69.6% in USD and 109.7% on an FX neutral basis. -- Items sold reached 229.4 million, increasing by 109.5% year-over-year. -- Live listings offered on MercadoLibres marketplace reached 275.4 million. -- Mobile gross merchandise volume grew by 271.4% year-over-year on an FX neutral basis, reaching 72.1% of GMV. -- Mercado Envios shipped 214.0 million items during the quarter, representing a 131.2% year-over-year increase, totaling almost 650 million deliveries for the full year 2020. -- Total payment volume (TPV) through Mercado Pago reached $15.9 billion, a year-over-year increase of 83.9% in USD and 134.4% on an FX neutral basis. Total payment transactions increased 131.0% year-over-year, totaling 659.3 million transactions for the quarter. -- Off-platform TPV grew 93.3% year-over-year in USD and 150.4% year-over-year on a FX neutral basis, reaching $9.2 billion, while payment transactions reached 501.7 million, a year-over-year increase of 139.6%. -- Online Payments TPV grew 142.9% year-over-year on an FX neutral basis and continued expanding its merchant base. The sequential deceleration was mostly explained by a higher impact on long tail sellers amidst the easing of COVID-19 restrictions. -- MPOS continued its recovery towards pre-COVID levels, reaching 87.4% year-over-year growth on an FX neutral basis, with record activation rates and device sales leading to an increase in the amount of new active devices. -- Mobile Wallet delivered $3.3 billion in Total Payment Volume on a consolidated basis, leading to a 246.9% year-over-year growth on an FX neutral basis. -- Our asset management product, Mercado Fondo, now has almost $700 million under management and approximately 15.0 million users across Latin America. -- Mercado Creditos portfolio grew to $479 million, more than doubling its size compared to the fourth quarter of 2019.

Fourth Quarter 2020 Financial Highlights

-- Net revenues for the fourth quarter were $1.3 billion, a year-over-year increase of 96.9% in USD and 148.5% on an FX neutral basis. -- Commerce revenues increased 124.2% year-over-year in USD reaching $872.9 million, while Fintech revenues increased 59.5% year-over-year in USD reaching $454.4 million. -- Gross profit was $489.0 million with a margin of 36.8%, compared to 45.7% in the fourth quarter of 2019. -- Total operating expenses were $514.2 million, an increase of 36% year-over-year in USD. As a percentage of revenues, operating expenses were 38.7%, compared to 55.9% during the fourth quarter of 2019. -- Loss from operations was $25.1 million, compared to a loss of $68.9 million during the prior year. As a percentage of revenues, income from operations was (1.9)%. -- Interest income was $22.6 million, a 15.9% decrease year-over-year, as a result of lower interest rates in our investment as a consequence of the pandemic, mainly offset by higher interest income in Argentina due to higher float. -- We incurred $31.6 million in financial expenses this quarter, mostly attributable to financial loans entered into 2020, mainly in Brazil and Argentina. We also incurred interest expenses from our trusts related to the factoring of our credit card receivables in Argentina. -- This quarter we had a foreign currency losses of $9.9 million mainly related to the difference between Argentinas official exchange rate and the blue-chip swap rate at which we effectively carry out stock repurchases in Argentine Pesos. -- Net loss before taxes was $44.0 million, down from a loss of $63.0 million during the fourth quarter of 2019. -- Income tax expense was $6.6 million, driven for pre-tax gains in our Argentine segment offset by the impact of operating losses in Brazil. -- Net loss was $50.6 million, resulting in net loss per share of $1.02.

The following table summarizes certain key performance metrics for the twelve and three months periods ended December 31, 2020 and 2019.

Year ended Three-month Periods Ended December 31, December 31,(inmillions) 2020 2019 2020 2019(*) Unique 132.5 74.2 74.0 43.2active usersNumber ofconfirmednew 57.5 53.2 10.7 14.6registeredusers duringperiodGrossmerchandise $ 20,926.8 $ 13,997.4 $ 6,565.4 $ 3,871.3volumeNumber ofsuccessful 719.3 378.9 229.4 109.5items soldNumber ofsuccessful 649.2 306.9 214.0 92.6itemsshippedTotalpayment $ 49,756.8 $ 28,389.9 $ 15,942.1 $ 8,668.2volumeTotal volumeof payments $ 19,951.4 $ 13,051.7 $ 6,336.0 $ 3,658.0onmarketplaceTotalpayment 1,914.5 838.0 659.3 285.5transactionsCapital $ 254.1 $ 141.4 $ 87.3 $ 40.6expendituresDepreciationand $ 105.0 $ 73.3 $ 32.6 $ 20.8amortization

(*) 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?19 Q1?20 Q2?20 Q3?20 Q4?20 Brazil 61 % 31 % 37 % 57 % 68 % Argentina 46 % 42 % 110 % 145 % 144 % Mexico 86 % 74 % 96 % 111 % 141 %

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

Consolidated Net Revenues Q4?19 Q1?20 Q2?20 Q3?20 Q4?20 Brazil 74 % 55 % 87 % 112 % 120 % Argentina 133 % 123 % 224 % 260 % 229 % Mexico 80 % 81 % 138 % 140 % 155 %

Conference Call and Webcast

The Company will host a conference call and audio webcast on March 1st, 2021 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (877) 303-7209 / (970) 315-0420 (Conference ID 4762658 ) 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 2019 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, sale of goods, 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.

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.

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, 2020, 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 BalanceSheets(In thousands of U.S. dollars, except par value)

December 31, 2020 2019 Assets Current assets:Cash and cash $ 1,856,394 $ 1,384,740 equivalentsRestrictedcash and cash 651,830 66,684 equivalentsShort-terminvestments(636,949 and 1,241,306 1,597,241 522,798 heldin guarantee)Accountsreceivable, 49,691 35,446 netCredit cardsreceivableand other 863,073 379,969 means ofpayments, netLoansreceivable, 385,036 182,105 netPrepaid 28,378 45,309 expensesInventories 118,140 8,626 Other assets 152,959 88,736 Total current 5,346,807 3,788,856 assetsNon-current assets:Long-term 166,111 263,983 investmentsLoansreceivable, 16,619 6,439 netProperty andequipment, 391,684 244,257 netOperatinglease 303,214 200,449 right-of-useassetsGoodwill 85,211 87,609 Intangible 14,155 14,275 assets, netDeferred tax 134,916 117,582 assetsOther assets 67,615 58,241 Totalnon-current 1,179,525 992,835 assetsTotal assets $ 6,526,332 $ 4,781,691 Liabilities Current liabilities:Accountspayable and $ 767,336 $ 372,309 accruedexpensesFunds payableto customersand amounts 1,733,095 894,057 due tomerchantsSalaries andsocial 207,358 101,841 securitypayableTaxes payable 215,918 60,247 Loans payableand other 548,393 186,138 financialliabilitiesOperatinglease 55,246 23,259 liabilitiesOther 108,534 114,469 liabilitiesTotal current 3,635,880 1,752,320 liabilitiesNon-current liabilities:Salaries andsocial 49,852 26,803 securitypayableLoans payableand other 860,876 631,353 financialliabilitiesOperatinglease 243,601 176,673 liabilitiesDeferred tax 64,354 99,952 liabilitiesOther 20,191 12,627 liabilitiesTotalnon-current 1,238,874 947,408 liabilitiesTotal $ 4,874,754 $ 2,699,728 liabilities Commitmentsand contingencies Redeemableconvertiblepreferredstock, $0.001 par value,40,000,000sharesauthorized,100,000shares issuedand $ ? $ 98,843 outstandingat December31, 2019 Equity Common stock,$0.001 parvalue, 110,000,000sharesauthorized,49,869,727and49,709,955shares issued andoutstandingat December31,2020 andDecember 31, $ 50 $ 50 2019Additionalpaid-in 1,860,502 2,067,869 capitalTreasury (54,805 ) (720 )stockRetained 314,115 322,592 earningsAccumulatedother (468,284 ) (406,671 )comprehensivelossTotal Equity 1,651,578 1,983,120 TotalLiabilities,Redeemableconvertible $ 6,526,332 $ 4,781,691 preferredstock andEquity

MercadoLibre, Inc.Consolidated Statements ofIncomeFor the twelve and three-month periods ended December 31, 2020 and 2019(In thousands of U.S. dollars, except for share data)

Year Ended December 31, Three Months Ended December 31, 2020 2019 2020 2019 Net revenues $ 3,973,465 $ 2,296,314 $ 1,327,304 $ 674,271 Cost of net (2,264,255 ) (1,194,191 ) (838,270 ) (365,924 )revenuesGross profit 1,709,210 1,102,123 489,034 308,347 Operating expenses:Product andtechnology (352,474 ) (223,807 ) (116,989 ) (58,020 )developmentSales and (902,554 ) (834,022 ) (282,350 ) (269,751 )marketingGeneral and (326,490 ) (197,455 ) (114,821 ) (49,463 )administrativeTotaloperating (1,581,518 ) (1,255,284 ) (514,160 ) (377,234 )expensesIncome (loss)from 127,692 (153,161 ) (25,126 ) (68,887 )operations Other income (expenses):Interestincome andother 102,767 113,523 22,648 26,933 financialgainsInterestexpense andother (106,690 ) (65,876 ) (31,607 ) (21,187 )financiallossesForeigncurrency (42,454 ) (1,732 ) (9,930 ) 167 (losses) gainsNet income(loss) before 81,315 (107,246 ) (44,015 ) (62,974 )income tax(expense) gain Income tax (82,022 ) (64,753 ) (6,565 ) 8,976 (expense) gainNet loss $ ) $ ) $ ) $ (53,998 ) (707 (171,999 (50,580

Year Ended December 31, Three Months Ended December 31, 2020 2019 2020 2019 Basic EPS Basic net lossAvailable toshareholders $ ) $ ) $ ) $ )per common (0.08 (3.71 (1.02 (1.11shareWeightedaverage ofoutstanding 49,740,407 48,692,906 49,820,185 49,709,955 commonsharesDiluted EPS Diluted net lossAvailable toshareholders $ ) $ ) $ ) $ )per common (0.08 (3.71 (1.02 (1.11shareWeightedaverage ofoutstanding 49,740,407 48,692,906 49,820,185 49,709,955 commonshares

MercadoLibre, Inc.Consolidated Statements ofCash FlowsFor the years ended December 31, 2020 and 2019

Year Ended December 31, 2020 2019 Cash flows from operations:Net loss $ ) $ ) (707 (171,999Adjustments to reconcilenet loss to net cash provided by operatingactivities:Unrealized devaluation 89,329 44,326 loss, netDepreciation and 104,992 73,320 amortizationAccrued interest (45,593 ) (54,309 )Non cash interest,convertible notesamortization of debtdiscount and 147,977 86,995 amortization of debtissuance costs and otherchargesFinancial results on (1,935 ) (301 )derivative instrumentsStock-based compensationexpense - restricted 730 395 sharesSale of fixed assets and 3,814 ? intangible assetsLTRP accrued 129,575 51,662 compensationDeferred income taxes (70,315 ) 16,453 Changes in assets and liabilities:Accounts receivable 12,069 (507 )Credit cards receivableand other means of (521,979 ) (29,315 )paymentsPrepaid expenses 16,204 (17,956 )Inventories (106,981 ) (4,148 )Other assets (113,819 ) (49,390 )Payables and accrued 584,281 143,495 expensesFunds payable tocustomers and amounts 937,639 267,293 due to merchantsOther liabilities (34,586 ) 45,452 Interest received from 51,857 49,625 investmentsNet cash provided by 1,182,552 451,091 operating activitiesCash flows from investing activities:Purchase of investments (5,199,875 ) (4,490,678 )Proceeds from sale and 5,532,463 3,353,606 maturity of investmentsPayment for acquiredbusinesses, net of cash (6,937 ) ? acquiredReceipts fromsettlements of 17,779 ? derivative instrumentsPayment from settlementsof derivative (4,136 ) ? instrumentsReceipts from the saleof fixed assets and 274 ? intangible assetsPurchases of intangible (93 ) (72 )assetsChanges in principal (344,608 ) (173,848 )loans receivable, netPurchases of property (247,048 ) (136,798 )and equipmentNet cash used in (252,181 ) (1,447,790 )investing activitiesCash flows from financing activities:Payments on convertible ? (25 )notePurchase of convertible (306,789 ) (96,367 )note capped callsProceeds from loanspayable and other 2,396,717 629,891 financial liabilitiesPayments on loanspayable and other (1,785,272 ) (472,897 )financing liabilitiesPayment of finance lease (4,949 ) (1,929 )obligationsCommon Stock repurchased (54,085 ) (720 )Dividends paid of (3,356 ) (2,844 )preferred stockProceeds from issuanceof convertible ? 98,688 redeemable preferredstock, netProceeds from issuance ? 1,867,215 of common stock, netNet cash provided by 242,266 2,021,012 financing activitiesEffect of exchange ratechanges on cash, cashequivalents, restricted (115,837 ) (37,584 )cash and cashequivalentsNet increase in cash,cash equivalents, 1,056,800 986,729 restricted cash and cashequivalentsCash, cash equivalents,restricted cash and cash 1,451,424 464,695 equivalents, beginningof the yearCash, cash equivalents,restricted cash and cash $ 2,508,224 $ 1,451,424 equivalents, end of theyear

Financial results of reporting segments

Three Months Ended December 31, 2020 Brazil Argentina Mexico Other Total Countries 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 103,520 80,596 (11,705 ) 8,514 180,925 contribution Operatingexpenses andindirect (206,051 ) costs of netrevenuesLoss from (25,126 ) operations Other income (expenses):Interestincome andother 22,648 financialgainsInterestexpense andother (31,607 ) financiallossesForeigncurrency (9,930 ) lossesNet Lossbefore $ (44,015 ) income taxexpense

Three Months Ended December 31, 2019 Brazil Argentina Mexico Other Total Countries 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 54,910 24,650 (51,015 ) (5,563 ) 22,982 contribution Operatingexpenses andindirect (91,869 ) costs of netrevenuesLoss from (68,887 ) operations Other income (expenses):Interestincome andother 26,933 financialgainsInterestexpense andother (21,187 ) financiallossesForeigncurrency 167 gainsNet lossbefore $ (62,974 ) income taxgain

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 2019 and applying them to the corresponding months in 2020, 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, 2020:

Three-month Periods Ended December 31, (*) As reported FX Neutral Measures As reported (Inmillions, 2020 2019 Percentage 2020 2019 Percentageexcept Change Changepercentages)Net revenues $ 1,327.3 $ 674.3 96.9 % $ 1,675.9 $ 674.3 148.5 %Cost of net (838.3 ) (365.9 ) 129.1 % (1,045.4 ) (365.9 ) 185.7 %revenuesGross profit 489.0 308.3 58.6 % 630.5 308.3 104.5 % Operating (514.2 ) (377.2 ) 36.3 % (633.3 ) (377.2 ) 67.9 %expensesLoss from (25.1 ) (68.9 ) 63.5 % (2.8 ) (68.9 ) 95.9 %operations

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

CONTACT: MercadoLibre, Inc.

Investor Relations

investor@mercadolibre.com

http://investor.mercadolibre.com