-- Fourth quarter revenue increases 73.9 percent to $26.9 million -- Fourth quarter operating income margin increases to 27.1 percent on Income from Operations of $7.3 million -- Fourth quarter net income increases 188.5 percent to $5.3 million
BUENOS AIRES, Argentina, March 5, 2008 (PRIME NEWSWIRE) -- MercadoLibre, Inc. (Nasdaq:MELI) (http://www.mercadolibre.com), host of the largest online trading and payments platform in Latin America, today reported financial results for the fourth quarter and full year ended December 31, 2007.
Marcos Galperin, President and Chief Executive Officer of MercadoLibre, Inc. commented, "2007 was a year of significant achievements and milestones for MercadoLibre, the highlight of which was our successful transition to a publicly-traded company listed on The Nasdaq Stock Market in the United States. Throughout the year, we further strengthened our leadership position in e-commerce delivering strong operational and financial performance. Our robust performance continued into the fourth quarter as we delivered revenue growth of 73.9% and operating income margins of 27.1%. Growth rates were strong across all of our business units as well as all of our key geographies. Clearly, we are continuing to benefit from the positive growth trends influencing internet, broadband and PC penetration rates in Latin America, and we believe this course will persist for many years to come."
Financial Results
Fourth Quarter Results
MercadoLibre reported consolidated net revenues for the three months ended December 31, 2007 of $26.9 million, representing a quarterly year over year growth rate of 73.9%. Revenue growth was driven by strong results in both the marketplace and payments businesses. Marketplace revenues grew 61.5% to $21.1 million while Payments revenues grew 141.1% to $5.8 million.
Gross profit grew 75.6% over fourth quarter 2006 to $20.7 million, representing gross profit margins, defined as gross profits as a percentage of revenues, of 77.1%. Income from operations grew 260.0% for the same period to $7.3 million. Operating income margin, defined as income from operations as a percentage of revenues, for the fourth quarter was 27.1%.
Net income for the three-month period was $5.3 million, an increase of 188.5% over the $1.8 million of net income for same period of 2006.
Full Year Results
Revenue for the full year ended December 31, 2007 increased 63.5% to $85.1 million compared with $52.1 million for the full year ended December 31, 2006. Marketplace revenues for the full year 2007 grew 55.4% to $69.5 million over 2006 while Payments revenues grew 112.9% to $15.6 million.
Gross profit increased 65.4% to $66.1 million from $40.0 million from the prior year, representing a gross profit margin of 77.7% for 2007. Income from operations increased 287.8% to $20.9 million from $5.4 million for the year ended December 31, 2006. Operating income margin for the full year was up to 24.6% from 10.4% for the previous year.
Net income for the full year ended December 31, 2007 was $9.7 million, compared to $1.1 million during 2006, an increase of 804.1%.
Mr. Galperin concluded, "As we look forward to 2008, we expect to build on the momentum generated over the past year. Our progress in adapting to web 2.0, as well as our other efforts in enhancing our users' overall experience, positions us well for the long-term. Additionally, we intend to leverage our leadership position and the industry dynamics in Latin America to further drive top-line growth and sustain margins throughout the year. Our focus will remain on providing our users with a superior and highly-innovative e-commerce experience, while delivering value to our shareholders."
Key Performance Metrics
The following are highlights on certain key performance metrics for the quarter ended December 31, 2007.
Registered Users -- New confirmed registered users for the three-month period ended December 31, 2007 were 1.6 million. Total confirmed registered users increased to 24.9 million as of December 31, 2007, an increase of 37.1% over the 18.2 million users registered as of December 31, 2006.
Transaction volume -- Gross merchandise volume was $461.0 million for the fourth quarter of 2007, a 40.2% increase from gross merchandise volume of $328.8 million for the same period during 2006. Successful items sold through MercadoLibre totaled 4.8 million during the fourth quarter of 2007, up 17.9% from the 4.1 million successful items sold during the same quarter of 2006. Total payment volume was $56.8 million during the three-month period ending December 31, 2007, a growth of 86.8% over total payment volume of $30.4 million for the same period of 2006.
Conference Call and Webcast
MercadoLibre will host a conference call to discuss results for the quarter and year ending December 31, 2007 on Wednesday, March 5, 2008 at 4:30 p.m. Eastern Time. The conference call may be accessed by dialing (719) 325-4891. A live webcast of the conference call can be accessed at the company's investor relations website at http://investor.mercadolibre.com/. An archive will be available for one week following the conclusion of the conference call.
Definition of Selected Operational Metrics
New confirmed registered users -- Measure of the number of new users who have registered on the MercadoLibre marketplace and confirmed their registration.
Total confirmed registered users -- Measure of the cumulative number of users who have registered on the MercadoLibre marketplace and confirmed their registration.
Gross merchandise volume -- Measure of the total U.S. dollar sum of all transactions completed through the MercadoLibre marketplace, excluding motor vehicles, vessels, aircraft, real estate, and services.
Successful items -- Measure of the number of items sold/purchased through the MercadoLibre marketplace.
Total payment volume -- Measure of total U.S. dollar sum of all transactions paid for using MercadoPago.
Take rate -- Total net revenues as a percentage of gross merchandise volume.
About MercadoLibre
MercadoLibre is the largest online trading platform in Latin America. We are market leaders in e-commerce in each of Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay and Venezuela, based on unique visitors and page views during 2006. Additionally, we have recently launched online trading platforms in Costa Rica, the Dominican Republic and Panama. With a market of over 550 million people and a region with one of the world's fastest-growing Internet penetration rates, we provide buyers and sellers a robust online trading environment that fosters the development of a large and growing e-commerce community. We offer a technological and commercial solution that addresses the distinctive cultural and geographic challenges of operating an online trading platform in Latin America.
The MercadoLibre, Inc. logo is available athttp://www.primenewswire.com/newsroom/prs/?pkgid=4193
Forward-Looking Statements
Any statements contained in this press release that are not statements of historical fact, including statements about the company's beliefs and expectations, are forward-looking statements and should be evaluated as such. Such forward-looking statements reflect, among other things, the company's current expectations, plans, projections and strategies, anticipated financial results, future events and financial trends affecting the company's business, all of which are subject to known or unknown risk and uncertainties that may cause the company's actual results to differ materially from those expressed or implied by these forward-looking statements, including general market conditions, adverse changes in the company's markets and other risks disclosed in the company filings with the Securities and Exchange Commission. Because of the risks, uncertainties and assumptions, investors should not place undue reliance on any forward-looking statements.
MELI_F
Financial Tables
All dollar amounts in this release are approximate after giving effect to rounding.
December 31, December 31, 2007 2006 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 15,677,407 $ 7,143,027 Short-term investments 52,300,007 6,320,656 Accounts receivable 3,211,252 1,983,003 Funds receivable from customers 29,162,763 10,188,712 Prepaid expenses 283,477 333,570 Deferred tax assets 3,445,101 2,904,558 Other assets 894,163 246,352 ------------- ------------- Total current assets 104,974,170 29,119,878 Non-current assets: Long-term investments 1,323,789 -- Property and equipment, net 4,143,204 2,931,470 Goodwill and intangible assets, net 23,428,646 21,342,315 Deferred tax assets 269,596 390,820 Other assets 353,395 28,089 ------------- ------------- Total non-current assets 29,518,630 24,692,694 Total assets $134,492,800 $ 53,812,572 ============= ============= Liabilities and Shareholders' Equity (Deficit) Current liabilities: Accounts payable and accrued expenses $ 9,278,138 $ 5,708,682 Funds payable to customers 16,418,177 9,085,013 Social security payable 3,778,236 2,722,874 Taxes payable 2,493,749 1,735,975 Loans payable 9,713,227 97,527 Deferred tax liabilities -- -- Other liabilities -- -- Provisions 69,979 310,848 ------------- ------------- Total current liabilities 41,751,506 19,660,919 Non-current liabilities: Loans payable -- 9,000,000 Deferred tax liabilities -- -- Other liabilities 1,068,155 1,803,315 ------------- ------------- Total non-current liabilities 1,068,155 10,803,315 Total liabilities 42,819,661 30,464,234 ------------- ------------- Commitments and contingencies Mandatorily redeemable convertible preferred stock, $0.001 par value, 40,000,000 shares authorized at December 31, 2007 and $0.01, par value 45,600,000 shares authorized, 27,187,838 shares issued and outstanding at December 31, 2006; liquidation amount: $78,334,161 at December 31, 2006. -- 64,076,545 ------------- ------------- Shareholders' equity (deficit): Common stock, $0.001 par value, 110,000,000 shares authorized, 44,226,563 shares issued and outstanding at December 31, 2007 and $0.01 par value, 108,800,000 shares authorized, 13,166,982 shares issued and outstanding at December 31, 2006 44,227 131,670 Additional paid-in capital 121,890,138 2,694,404 Preferred stock warrants -- -- Unearned stock-based compensation -- -- Accumulated deficit (34,363,917) (44,054,817) Accumulated other comprehensive income 4,102,691 500,536 ------------- ------------- Total shareholders' equity (deficit) 91,673,139 (40,728,207) ------------- ------------- Total liabilities, mandatorily redeemable convertible preferred stock and shareholders' equity (deficit) $134,492,800 $ 53,812,572 ============= ============= Year Ended Three Months Ended December 31, December 31, ------------- ------------- ------------- ------------- 2007 2006 2007 2006 ------------- ------------- ------------- ------------- Net revenues $ 85,126,341 $ 52,058,890 $ 26,893,585 $ 15,462,398 Cost of net revenues (19,001,060) (12,085,648) (6,161,044) (3,653,165) ------------- ------------- ------------- ------------- Gross profit 66,125,281 39,973,242 20,732,542 11,809,232 Operating expenses: Product and technology development (4,369,376) (3,066,304) (1,212,344) (814,537) Sales and marketing (27,598,683) (23,358,510) (7,969,681) (6,711,368) General and admini- strative (13,223,522) (8,150,499) (4,253,290) (2,256,045) ------------- ------------- ------------- ------------- Total operating expenses (45,191,581) (34,575,313) (13,435,315) (9,781,949) ------------- ------------- ------------- ------------- Income from operations 20,933,700 5,397,929 7,297,227 2,027,283 ------------- ------------- ------------- ------------- Other income (expenses): Interest income 1,609,403 520,508 737,196 342,690 Interest expense and other financial charges (2,009,781) (1,743,315) (792,212) (465,986) Foreign currency loss (3,106,515) (391,981) (1,299,995) (273,501) Other expenses, net (3,006,416) (1,468,220) -- (126,173) ------------- ------------- ------------- ------------- Net income before income / asset tax expense and cumulative effect of change in accounting principle 14,420,391 2,314,921 5,942,216 1,504,314 ------------- ------------- ------------- ------------- Income / asset tax (expense) benefit (4,727,451) (1,242,838) (619,824) 340,773 ------------- ------------- ------------- ------------- Net income $ 9,692,940 $ 1,072,083 $ 5,322,392 $ 1,845,086 ============= ============= ============= ============= Accretion of preferred stock (309,299) (494,878) -- (123,720) ------------- ------------- ------------- ------------- Net income available to common shareholders $ 9,383,641 $ 577,205 $ 5,322,392 $ 1,721,366 ------------- ------------- ------------- ------------- Year Ended December 31, --------------------------- 2007 2006 ------------- ------------- Basic EPS Basic net income available to common shareholder before cumulative effect of change in accounting principle per common share $ 0.22 $ 0.01 Cumulative effect of change in accounting principle -- -- ------------- ------------- Basic net income available to common shareholder per common share $ 0.22 $ 0.01 ============= ============= Weighted average shares 25,149,405 13,149,139 ============= ============= Diluted EPS Diluted net income available to common shareholder before cumulative effect of change in accounting principle per common share $ 0.22 Cumulative effect of change in accounting principle per common share -- ------------- Diluted net income available to common shareholder per common share $ 0.22 ============= Weighted average shares 25,478,336 ============= Year Ended December 31, 2007 2006 ------------ ------------ Cash flows from operations: Net income $ 9,692,940 $ 1,072,083 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,307,649 2,016,939 Interest expense -- 96,833 Realized gains on investments (845,398) (184,094) Unrealized gains on investments (228,877) (46,926) Stock-based compensation expense - stock options 15,477 33,223 Stock-based compensation expense - restricted shares 15,966 -- Cumulative effect of change in accounting principle -- -- Change in fair value of warrants 3,045,992 1,269,377 Deferred income taxes (198,368) (1,291,549) Changes in assets and liabilities: Accounts receivable (736,431) 403,075 Funds receivable from customers (15,517,486) (6,026,226) Prepaid expenses 56,399 (207,130) Other assets (967,264) 167,593 Accounts payable and accrued expenses 4,282,955 4,651,264 Funds payable to customers 5,423,976 4,704,108 Provisions (274,101) (559,734) Other liabilities 689,154 59,518 ------------ ------------ Net cash provided by operating activities 6,762,583 6,158,354 ------------ ------------ Cash flows from investing activities: Purchase of investments (75,267,070) (4,944,956) Proceeds from sale of investments 29,765,780 2,184,822 Payment for purchase of DeRemate, net of cash acquired -- -- Purchase of intangible assets (28,748) (346,365) Purchases of property and equipment (3,058,813) (2,097,555) ------------ ------------ Net cash used in investing activities (48,588,851) (5,204,054) ------------ ------------ Cash flows from financing activities: Increase in short term debt 8,883,104 -- Decrease in short term debt -- (2,058) Loans received -- -- Loans paid (9,000,000) (3,000,000) Stock options exercised 38,576 7,107 Exercise of Warrants 749,991 -- Issuance of common stock 49,573,239 -- ------------ ------------ Net cash provided by (used in) financing activities 50,244,910 (2,994,951) ------------ ------------ Effect of exchange rate changes on cash and cash equivalents 115,738 203,840 ------------ ------------ Net increase (decrease) in cash and cash equivalents 8,534,380 (1,836,811) Cash and cash equivalents, beginning of year 7,143,027 8,979,838 ------------ ------------ Cash and cash equivalents, end of year $ 15,677,407 $ 7,143,027 ------------ ------------
The following tables summarize the financial results of our reporting segments
Year Ended December 31, 2007 ----------------------------------------------------- Marketplaces ----------------------------------------------------- Other Brazil Argentina Mexico Countries ------------ ------------ ----------- ------------ Net revenues $ 37,560,419 $ 11,342,792 $ 9,628,121 $ 10,986,185 Direct costs (24,079,798) (5,657,006) (6,339,762) (6,147,572) ------------ ------------ ----------- ------------ Direct contribution 13,480,621 5,685,786 3,288,359 4,838,613 Total Payments Consolidated ------------ ------------ ------------ Net revenues $ 69,517,517 $ 15,608,824 $ 85,126,341 Direct costs (42,224,138) (11,237,121) (53,461,260) ------------ ------------ ------------ Direct contribution 27,293,379 4,371,703 31,665,081 Operating expenses and indirect costs of net revenues (10,731,381) ------------ Income from operations 20,933,700 ------------ Other income (expenses): Interest income 1,609,403 Interest expense and other financial results (2,009,781) Foreign exchange (3,106,515) Other expenses, net (3,006,416) ------------ Net income before income / asset tax expense $ 14,420,391 ============ Year Ended December 31, 2006 ----------------------------------------------------- Marketplaces ----------------------------------------------------- Other Brazil Argentina Mexico Countries ------------ ------------ ----------- ------------ Net revenues $ 25,571,405 $ 7,027,681 $ 6,199,110 $ 5,930,873 Direct costs (18,193,271) (4,553,777) (5,040,322) (4,448,878) ------------ ------------ ----------- ------------ Direct contribution 7,378,134 2,473,904 1,158,788 1,481,995 Total Payments Consolidated ------------ ------------ ------------ Net revenues $ 44,729,069 $ 7,329,821 $ 52,058,890 Direct costs (32,236,248) (6,561,532) (38,797,780) ------------ ------------ ------------ Direct contribution 12,492,821 768,289 13,261,110 Operating expenses and indirect costs of net revenues (7,863,181) ------------ Income from operations 5,397,929 ------------ Other income (expenses): Interest income 520,508 Interest expense and other financial results (1,743,315) Foreign exchange (391,981) Other expenses, net (1,468,220) ------------ Net income before income / asset tax expense $ 2,314,921 ============