Net Revenues of
Income from operations of
To our shareholders
We have been investing relentlessly and consistently in our products and services for many years, and the powerful impact of these investments on our performance was clear to see in the third quarter of 2023 in the form of accelerated growth, customer preference and business profitability. Operational KPIs remained strong and even picked up in Q3’23, with growth in items sold accelerating to 26% year-on-year (from 18% in Q2’23) and off-platform TPV growing at a faster pace than the previous quarter in all of our three largest markets. Our financial performance was equally pleasing. Net revenue of
We have achieved these results whilst continuing to invest on several fronts as we seek to maximize MercadoLibre’s growth opportunities. We reached an important milestone in Q3’23 as we relaunched our loyalty program as MELI+. We now have an improved program in which we will continue to invest to grow the number of members. This process kicked-off in earnest in
Logistics is another area of investment. In Q3’23, we opened our first regional fulfillment center in
We have also been investing in our credit capabilities, specifically in the credit card product in
We continue to execute well in
At the same event, we also launched the MercadoPago credit card for small businesses that use our marketplace or payments processing services, strengthening the suite of credit products available to merchants. Our credit products performed well overall in
Mexico’s performance in Commerce continues to excel, and we believe our Q3’23 results show how well positioned
In September, we reached the milestone of off-platform TPV surpassing on-platform TPV for the first time in
As we mentioned last quarter, the strength of MercadoPago’s value proposition is becoming ever-clearer in this tough environment as consumers in
Consolidated Results
We are pleased with our financial results for Q3’23, which was another quarter of strong growth and profitability. Revenue of
Revenue from our advertising services grew above 70% on an FX-neutral basis for the sixth quarter in succession, and is now equivalent to almost 1.7% of GMV. This high margin revenue had a positive impact on our Q3’23 gross margin, which was 3.0ppts higher YoY. Other positive drivers of gross margin include scale and efficiencies in CX (customer experience) and collection fees, fewer POS device sales and higher first-party product margins. These offset the headwinds from shipping operations (due to the expansion of our fulfillment footprint), higher credits funding costs and a lower mix of high margin credits revenue.
Operating expenses fell by 4.3ppts of net revenue YoY as our continued strong growth and cost discipline enabled us to dilute sales & marketing expenses (despite incremental spend vs. Q2’23) by 0.7ppts and G&A expenses by 0.5ppts, as well as reduce the YoY deleverage from product development expenses to 0.2ppts in Q3’23 from 0.7ppts in Q2’23. Provisions for doubtful accounts fell as a percentage of net revenue YoY due to better asset quality, particularly in
Income from operations reached
Our net income for the quarter reached
Given the ongoing depreciation of the Argentine peso vs. the US dollar, we are providing investors with additional information, including the table below which shows certain P&L items denominated in Argentine pesos. If we were to simulate the effect of a devaluation equivalent to having translated Argentine peso revenues and costs to US dollars at the blue chip swap rate, rather than the official exchange rate, for the nine-month period to
US dollars (in millions) nine months to | Total | ARS denominated | Other currencies | |||
Net revenues | 10,212 | 2,317 | 7,895 | |||
Cost of net revenues and operating expenses | (8,629 | ) | (1,665 | ) | (6,964 | ) |
Income from operations | 1,583 | 652 | 931 |
Our strong P&L performance was reflected in our cash generation, with cash and cash equivalents up by
Looking Ahead
After celebrating another quarter of strong operational KPIs and financial results, our teams are now focused on executing another peak season successfully to further extend our leadership in Commerce and build on our momentum in Fintech. More broadly, we are particularly pleased that the quarter’s results show our ability to deliver operating leverage across our P&L as we scale. This bodes well for the future as we remain focused on taking advantage of the many growth opportunities that are open to us, and we are optimistic about our ability to do this in a profitable and sustainable manner that creates even more scale in the long-term. As such, we continue to invest across the business with confidence that the best is yet to come.
The following table summarizes certain key performance metrics for the nine and three-month periods ended September 30, 2023 and 2022.
Nine Months Ended | Three Months Ended | |||||||||||||||
(IN MILLIONS, except %) (*) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Unique active users | $ | 167 | $ | 127 | $ | 120 | $ | 88 | ||||||||
Gross merchandise volume | 31,299 | 24,834 | 11,360 | 8,618 | ||||||||||||
Number of items sold | 991 | 826 | 357 | 284 | ||||||||||||
Number of items shipped | $ | 970 | $ | 794 | $ | 350 | $ | 276 | ||||||||
Total payment volume | $ | 126,307 | $ | 87,683 | $ | 47,256 | $ | 32,170 | ||||||||
Total volume of payments on marketplace (**) | 32,997 | 26,180 | 11,973 | 9,089 | ||||||||||||
Total payment transactions | $ | 6,515 | $ | 3,792 | $ | 2,508 | $ | 1,439 | ||||||||
NIMAL (***) | 35.1 | % | 29.0 | % | 37.4 | % | 29.7 | % | ||||||||
Capital expenditures | $ | 329 | $ | 343 | $ | 126 | $ | 106 | ||||||||
Depreciation and amortization | $ | 389 | $ | 281 | $ | 135 | $ | 97 |
(*) Figures have been calculated using rounded amounts. Growth calculations based on this table may not total due to rounding. |
(**) As from |
(***) Net interest margins after losses (“NIMAL”) represents the annualized ratio between the total credits revenues less funding costs and provision for doubtful accounts for the period and total average gross loans receivable for the period. Management uses NIMAL to monitor how effectively the Company is pricing and managing the credit products relative to their risk and setting targets. Accordingly, management is of the opinion that NIMAL provides useful information to investors and others related to the Company’s risk appetite through the different periods and shows how the Company effectively prices risk. |
Year-over-year USD Growth Rates by Quarter | ||||||||||
Consolidated Net Revenues | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
35 | % | 36 | % | 26 | % | 23 | % | 40 | % | |
72 | % | 50 | % | 39 | % | 30 | % | 22 | % | |
60 | % | 55 | % | 62 | % | 64 | % | 66 | % | |
Commerce | 20 | % | 22 | % | 31 | % | 38 | % | 45 | % |
Fintech | 94 | % | 73 | % | 40 | % | 24 | % | 33 | % |
Gross Merchandise Volume | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
20 | % | 29 | % | 29 | % | 24 | % | 38 | % | |
35 | % | 13 | % | 15 | % | 12 | % | 8 | % | |
22 | % | 35 | % | 41 | % | 52 | % | 59 | % |
Total Payment Volume | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
On-Platform | 22 | % | 23 | % | 23 | % | 23 | % | 32 | % |
Off-Platform | 71 | % | 58 | % | 57 | % | 46 | % | 53 | % |
Year-over-year Local Currency Growth Rates by Quarter | ||||||||||
Consolidated Net Revenues | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
35 | % | 28 | % | 26 | % | 23 | % | 30 | % | |
140 | % | 143 | % | 151 | % | 156 | % | 180 | % | |
62 | % | 46 | % | 48 | % | 45 | % | 40 | % | |
Commerce | 33 | % | 36 | % | 54 | % | 65 | % | 76 | % |
Fintech | 115 | % | 93 | % | 64 | % | 48 | % | 61 | % |
Gross Merchandise Volume | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
20 | % | 22 | % | 28 | % | 25 | % | 28 | % | |
87 | % | 83 | % | 107 | % | 119 | % | 147 | % | |
23 | % | 28 | % | 28 | % | 34 | % | 34 | % |
Total Payment Volume | Q3’22 | Q4’22 | Q1’23 | Q2’23 | Q3’23 | |||||
On-Platform | 39 | % | 44 | % | 48 | % | 53 | % | 61 | % |
Off-Platform | 122 | % | 121 | % | 121 | % | 129 | % | 145 | % |
Conference Call and Webcast
The Company will host an earnings video as well as a conference call and audio webcast for any questions that investors may have on
In order to access our video webcast and the live audio, investors, analysts and the market in general may access the following link at https://edge.media-server.com/mmc/p/2t4k8a2k and register at the platform to attend the live event.
Also, to participate in our conference call, investors, analysts and the market in general may access the following link at https://register.vevent.com/register/BI3667afe6bac641f8a6e060568126dd6e to be provided with the dial-in number and personal pin code to join the conference call and to be able to pose questions.
Access to our video webcast and the live audio will be available in the investor relations section of the Company’s website, at http://investor.mercadolibre.com. An archive of the webcast will be available for one week following the conclusion of the conference call.
Definition of Selected Operational Metrics
- Unique 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 orClassified Marketplace (2) maintained an active listing onMercadoLibre Marketplace orClassified Marketplace (3) maintained an active account inMercado Shops (4) made a payment, money transfer, collection and/or advance usingMercado Pago (5) maintained an outstanding credit line throughMercado Credito or (6) maintained a balance of more than$5 invested in aMercado Fondo asset management account. - Unique Fintech User – Users who engage in at least one of the following services within the quarter: wallet payments online, in app or in store; transfers; withdrawals; consumer or merchant credit borrowers; card users; fintech sellers; and fintech active products such as asset management and insurtech users.
- Foreign Exchange (“FX”) Neutral – Calculated by using the average monthly exchange rate of each month of 2022 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 (GMV) – Measure of the total
U.S. dollar sum of all transactions completed through theMercado 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 usingMercado Pago . - Total payment volume (TPV) – Measure of total
U.S. dollar sum of all transactions paid for usingMercado 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.
- 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.
- G&A - General and administrative expenses.
- 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.
- Net Interest Margins After Losses (NIMAL) – NIMAL is the spread between credit revenues and the expenses associated with provisions for doubtful accounts and funding costs, and usually expressed as a percentage of the average portfolio for the period.
- Non-performing loan (NPL) ratio – Shows the percentage of the loan portfolio that is not being paid on-time.
About
Founded in 1999,
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
Forward-Looking Statements
Any statements herein regarding
Interim Condensed Consolidated Balance Sheets as of
(In millions of
2023 | 2022 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,171 | $ | 1,910 | |||
Restricted cash and cash equivalents | 1,085 | 1,453 | |||||
Short-term investments | 3,320 | 2,339 | |||||
Accounts receivable, net | 161 | 130 | |||||
Credit card receivables and other means of payments, net | 3,375 | 2,946 | |||||
Loans receivable, net of allowances of | 2,336 | 1,704 | |||||
Prepaid expenses | 43 | 38 | |||||
Inventories | 246 | 152 | |||||
Customer crypto-assets safeguarding assets | 21 | 15 | |||||
Other assets | 292 | 266 | |||||
Total current assets | 13,050 | 10,953 | |||||
Non-current assets: | |||||||
Long-term investments | 149 | 322 | |||||
Loans receivable, net of allowances of $35 and | 42 | 32 | |||||
Property and equipment, net | 1,081 | 993 | |||||
Operating lease right-of-use assets | 796 | 656 | |||||
159 | 153 | ||||||
Intangible assets, net | 21 | 25 | |||||
Deferred tax assets | 489 | 346 | |||||
Other assets | 337 | 256 | |||||
Total non-current assets | 3,074 | 2,783 | |||||
Total assets | $ | 16,124 | $ | 13,736 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 1,910 | $ | 1,393 | |||
Funds payable to customers | 4,016 | 3,454 | |||||
Amounts payable due to credit and debit card transactions | 745 | 483 | |||||
Salaries and social security payable | 519 | 401 | |||||
Taxes payable | 530 | 414 | |||||
Loans payable and other financial liabilities | 2,272 | 2,131 | |||||
Operating lease liabilities | 171 | 142 | |||||
Customer crypto-assets safeguarding liabilities | 21 | 15 | |||||
Other liabilities | 122 | 129 | |||||
Total current liabilities | 10,306 | 8,562 | |||||
Non-current liabilities: | |||||||
Amounts payable due to credit and debit card transactions | 12 | 5 | |||||
Loans payable and other financial liabilities | 2,182 | 2,627 | |||||
Operating lease liabilities | 615 | 514 | |||||
Deferred tax liabilities | 163 | 106 | |||||
Other liabilities | 105 | 95 | |||||
Total non-current liabilities | 3,077 | 3,347 | |||||
Total liabilities | $ | 13,383 | $ | 11,909 | |||
Commitments and contingencies | |||||||
Equity | |||||||
Common stock, | $ | — | $ | — | |||
Additional paid-in capital | 1,959 | 2,309 | |||||
(587 | ) | (931 | ) | ||||
Retained earnings | 1,735 | 913 | |||||
Accumulated other comprehensive loss | (366 | ) | (464 | ) | |||
Total equity | 2,741 | 1,827 | |||||
Total liabilities and equity | $ | 16,124 | $ | 13,736 |
Interim Condensed Consolidated Statements of Income
For the nine and three-month periods ended
(In millions of
Nine Months Ended | Three Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net service revenues | $ | 9,233 | $ | 6,766 | $ | 3,419 | $ | 2,437 | |||||||
Net product revenues | 979 | 769 | 341 | 253 | |||||||||||
Net revenues | 10,212 | 7,535 | 3,760 | 2,690 | |||||||||||
Cost of net revenues | (4,961 | ) | (3,830 | ) | (1,765 | ) | (1,342 | ) | |||||||
Gross profit | 5,251 | 3,705 | 1,995 | 1,348 | |||||||||||
Operating expenses: | |||||||||||||||
Product and technology development | (1,145 | ) | (774 | ) | (396 | ) | (278 | ) | |||||||
Sales and marketing | (1,207 | ) | (916 | ) | (441 | ) | (333 | ) | |||||||
Provision for doubtful accounts | (751 | ) | (845 | ) | (277 | ) | (288 | ) | |||||||
General and administrative | (565 | ) | (485 | ) | (196 | ) | (153 | ) | |||||||
Total operating expenses | (3,668 | ) | (3,020 | ) | (1,310 | ) | (1,052 | ) | |||||||
Income from operations | 1,583 | 685 | 685 | 296 | |||||||||||
Other income (expenses): | |||||||||||||||
Interest income and other financial gains | 545 | 142 | 196 | 65 | |||||||||||
Interest expense and other financial losses | (297 | ) | (221 | ) | (111 | ) | (92 | ) | |||||||
Foreign currency losses, net | (508 | ) | (134 | ) | (239 | ) | (71 | ) | |||||||
Net income before income tax expense and equity in earnings of unconsolidated entity | 1,323 | 472 | 531 | 198 | |||||||||||
Income tax expense | (504 | ) | (154 | ) | (172 | ) | (69 | ) | |||||||
Equity in earnings of unconsolidated entity | 3 | (1 | ) | — | — | ||||||||||
Net income | $ | 822 | $ | 317 | $ | 359 | $ | 129 |
Nine Months Ended | Three Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Basic earning per share | |||||||||||
Basic net income | |||||||||||
Available to shareholders per common share | $ | 16.40 | $ | 6.30 | $ | 7.18 | $ | 2.57 | |||
Weighted average of outstanding common shares | 50,137,826 | 50,365,813 | 50,008,320 | 50,325,075 | |||||||
Diluted earning per share | |||||||||||
Diluted net income | |||||||||||
Available to shareholders per common share | $ | 16.36 | $ | 6.29 | $ | 7.16 | $ | 2.56 | |||
Weighted average of outstanding common shares | 50,338,945 | 51,356,081 | 50,209,439 | 51,315,343 |
Interim Condensed Consolidated Statements of Cash Flows
For the nine-month periods ended
Nine Months Ended | |||||||
2023 | 2022 | ||||||
Cash flows from operations: | |||||||
Net income | $ | 822 | $ | 317 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Equity in earnings of unconsolidated entity | (3 | ) | 1 | ||||
Unrealized foreign currency losses, net | 498 | 265 | |||||
Impairment of digital assets | — | 11 | |||||
Depreciation and amortization | 389 | 281 | |||||
Accrued interest income | (232 | ) | (111 | ) | |||
Non cash interest expense and amortization of debt issuance costs and other charges | 79 | 132 | |||||
Provision for doubtful accounts | 751 | 845 | |||||
Results on derivative instruments | 26 | 28 | |||||
Stock-based compensation expense — restricted shares | — | 1 | |||||
Long term retention program (“LTRP”) accrued compensation | 122 | 59 | |||||
Deferred income taxes | (84 | ) | (96 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (46 | ) | (27 | ) | |||
Credit card receivables and other means of payments | (361 | ) | (768 | ) | |||
Prepaid expenses | (3 | ) | (22 | ) | |||
Inventories | (85 | ) | 102 | ||||
Other assets | (89 | ) | (60 | ) | |||
Payables and accrued expenses | 605 | 150 | |||||
Funds payable to customers | 440 | 216 | |||||
Amounts payable due to credit and debit card transactions | 255 | 77 | |||||
Other liabilities | (85 | ) | (87 | ) | |||
Interest received from investments | 213 | 84 | |||||
Net cash provided by operating activities | 3,212 | 1,398 | |||||
Cash flows from investing activities: | |||||||
Purchases of investments | (15,540 | ) | (9,266 | ) | |||
Proceeds from sale and maturity of investments | 14,847 | 7,861 | |||||
Payments from settlements of derivative instruments | (49 | ) | (7 | ) | |||
Purchases of intangibles assets | — | (1 | ) | ||||
Changes in loans receivable, net | (1,465 | ) | (1,470 | ) | |||
Investments of property and equipment | (329 | ) | (342 | ) | |||
Net cash used in investing activities | (2,536 | ) | (3,225 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from loans payable and other financial liabilities | 19,390 | 12,478 | |||||
Payments on loans payable and other financing liabilities | (19,353 | ) | (11,421 | ) | |||
Payments of finance lease obligations | (21 | ) | (14 | ) | |||
Common Stock repurchased | (356 | ) | (115 | ) | |||
Net cash (used in) provided by financing activities | (340 | ) | 928 | ||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents | (443 | ) | (221 | ) | |||
Net decrease in cash, cash equivalents, restricted cash and cash equivalents | (107 | ) | (1,120 | ) | |||
Cash, cash equivalents, restricted cash and cash equivalents, beginning of the period | $ | 3,363 | $ | 3,648 | |||
Cash, cash equivalents, restricted cash and cash equivalents, end of the period | $ | 3,256 | $ | 2,528 |
Financial results of reporting segments
Three Months Ended | |||||||||||||||||||
Other Countries | Total | ||||||||||||||||||
(In millions) | |||||||||||||||||||
Net revenues | $ | 2,006 | $ | 825 | $ | 772 | $ | 157 | $ | 3,760 | |||||||||
Direct costs | (1,435 | ) | (441 | ) | (605 | ) | (150 | ) | (2,631 | ) | |||||||||
Direct contribution | 571 | 384 | 167 | 7 | 1,129 | ||||||||||||||
Operating expenses and indirect costs of net revenues | (444 | ) | |||||||||||||||||
Income from operations | 685 | ||||||||||||||||||
Other income (expenses): | |||||||||||||||||||
Interest income and other financial gains | 196 | ||||||||||||||||||
Interest expense and other financial losses | (111 | ) | |||||||||||||||||
Foreign currency losses, net | (239 | ) | |||||||||||||||||
Net income before income tax expense and equity in earnings of unconsolidated entity | $ | 531 |
Three Months Ended | |||||||||||||||||||
Other Countries | Total | ||||||||||||||||||
(In millions) | |||||||||||||||||||
Net revenues | $ | 1,431 | $ | 675 | $ | 465 | $ | 119 | $ | 2,690 | |||||||||
Direct costs | (1,209 | ) | (376 | ) | (384 | ) | (121 | ) | (2,090 | ) | |||||||||
Direct contribution | 222 | 299 | 81 | (2 | ) | 600 | |||||||||||||
Operating expenses and indirect costs of net revenues | (304 | ) | |||||||||||||||||
Income from operations | 296 | ||||||||||||||||||
Other income (expenses): | |||||||||||||||||||
Interest income and other financial gains | 65 | ||||||||||||||||||
Interest expense and other financial losses | (92 | ) | |||||||||||||||||
Foreign currency losses, net | (71 | ) | |||||||||||||||||
Net income before income tax expense and equity in earnings of unconsolidated entity | $ | 198 |
Non-GAAP Measures of Financial Performance
To supplement our unaudited interim condensed consolidated financial statements presented in accordance with
These non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with
We believe that reconciliation of these non-GAAP measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that represents our net income, adjusted to eliminate the effect of depreciation and amortization charges, interest income and other financial gains, interest expense and other financial losses, foreign currency losses, net, income tax expense and equity in earnings of an unconsolidated entity. We have included this non-GAAP financial measure because it is used by our Management to evaluate our operating performance and trends, make strategic decisions and the calculation of leverage ratios. Accordingly, we believe this measure provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our Management. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain items.
The following table presents a reconciliation of net income to Adjusted EBITDA for the period indicated (in millions of
Three Months Ended | |||||||
2023 | 2022 | ||||||
Net income | $ | 359 | $ | 129 | |||
Adjustments: | |||||||
Depreciation and amortization | 135 | 97 | |||||
Interest income and other financial gains | (196 | ) | (65 | ) | |||
Interest expense and other financial losses | 111 | 92 | |||||
Foreign currency losses, net | 239 | 71 | |||||
Income tax expense | 172 | 69 | |||||
Adjusted EBITDA | $ | 820 | $ | 393 |
Net debt
We define net debt as total debt which includes current and non-current loans payable and other financial liabilities and current and non-current operating lease liabilities, less cash and cash equivalents, short-term investments and long-term investments, excluding foreign government debt securities restricted and held in guarantee, securitization transactions and equity securities held at cost. We have included this non-GAAP financial measure because it is used by our Management to analyze our current leverage ratios and set targets to be met, which will also impact other components of the Company’s balance sheet, cash flows and income statement. Accordingly, we believe this measure provides useful information to investors and other market participants in showing the evolution of the Company’s indebtedness and its capability of repayment as a means to, alongside other measures, monitor our leverage based on widely-used measures.
The following table presents a reconciliation of net debt for each of the periods indicated (in millions of
Current Loans payable and other financial liabilities | $ | 2,272 | $ | 2,131 | |
Non-current Loans payable and other financial liabilities | 2,182 | 2,627 | |||
Current Operating lease liabilities | 171 | 142 | |||
Non-current Operating lease liabilities | 615 | 514 | |||
Total debt | $ | 5,240 | $ | 5,414 | |
Less: | |||||
Cash and cash equivalents | $ | 2,171 | $ | 1,910 | |
Short-term investments (1) | 1,551 | 1,120 | |||
Long-term investments (2) | 52 | 245 | |||
Net debt | $ | 1,466 | $ | 2,139 |
(1) Excludes foreign government debt securities restricted and held in guarantee and investments held in VIEs as a consequence of securitization transactions.
(2) Excludes foreign government debt securities restricted, investments held in VIEs as a consequence of securitization transactions and equity securities held at cost.
FX neutral
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 2022 and applying them to the corresponding months in 2023, 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-month periods ended
Three Months Ended | ||||||||||||||||||||||
As reported | FX Neutral Measures | As reported | ||||||||||||||||||||
(In millions, except percentages) | 2023 | 2022 | Percentage Change | 2023 | 2022 | Percentage Change | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||
Net revenues | $ | 3,760 | $ | 2,690 | 39.8 | % | $ | 4,549 | $ | 2,690 | 69.1 | % | ||||||||||
Cost of net revenues | (1,765 | ) | (1,342 | ) | 31.5 | % | (2,060 | ) | (1,342 | ) | 53.5 | % | ||||||||||
Gross profit | 1,995 | 1,348 | 48.0 | % | 2,489 | 1,348 | 84.6 | % | ||||||||||||||
Operating expenses | (1,310 | ) | (1,052 | ) | 24.5 | % | (1,620 | ) | (1,052 | ) | 54.0 | % | ||||||||||
Income from operations | $ | 685 | $ | 296 | 131.4 | % | $ | 869 | $ | 296 | 193.6 | % |
> CONTACT:
Investor Relations
investor@mercadolibre.com
http://investor.mercadolibre.com
Source:
2023 GlobeNewswire, Inc., source