MercadoLibre(MELI) - 2024 Q3 - Quarterly Report

Financial Performance - Net revenues and financial income for the nine months ended September 30, 2024, reached $14,718 million, a 37.6$10,698 million in the same period of 2023[11]. - Gross profit for the nine months ended September 30, 2024, was $6,828 million, compared to$5,540 million in 2023, reflecting a growth of 23.2%[11]. - Net income for the nine months ended September 30, 2024, was $1,272 million, up 55.0$822 million in the same period of 2023[14]. - Basic net income available to shareholders per common share increased to $25.09 for the nine months ended September 30, 2024, compared to$16.40 in 2023, marking a rise of 52.0%[12]. - Operating expenses for the nine months ended September 30, 2024, totaled $5,017 million, compared to$3,668 million in 2023, indicating a 36.8% increase[11]. - The company reported a net cash provided by operating activities of $4,994 million for the nine months ended September 30, 2024, compared to$3,212 million in 2023, indicating a 55% increase[20]. - The company reported a net income before income tax expense of $1,669 million for the nine months ended September 30, 2024, compared to$1,323 million for the same period in 2023, reflecting a year-over-year increase of approximately 26%[120]. Assets and Liabilities - Total assets increased to $22,623 million as of September 30, 2024, up from$17,646 million at December 31, 2023, representing a growth of 28.1%[9]. - Total current liabilities rose to $14,313 million as of September 30, 2024, from$11,297 million at December 31, 2023, an increase of 26.8%[9]. - Total equity increased to $4,002 million as of September 30, 2024, from$3,071 million at December 31, 2023, representing a growth of 30.2%[9]. - The company’s total liabilities as of September 30, 2024, were $16,685 million, compared to$12,905 million at the end of 2023[140]. - The company’s total short-term investments rose to $4,511 million as of September 30, 2024, compared to$3,480 million at the end of 2023, marking an increase of 29.6%[100]. Investments and Financial Activities - Long-term investments surged to $1,226 million as of September 30, 2024, compared to$162 million at December 31, 2023, reflecting a significant increase of 658.5%[9]. - The company’s net cash used in investing activities was $6,159 million for the nine months ended September 30, 2024, compared to$2,536 million in 2023, indicating a significant increase in investment activity[20]. - The company has committed to purchase cloud platform services totaling $1,000 million, with payments scheduled between August 2024 and February 2030[154]. - The company entered into a$400 million amended and restated revolving credit agreement on September 27, 2024, with interest rates based on Term SOFR plus an interest margin[169][170]. Market Presence and Operations - The company operates e-commerce platforms across 18 countries in Latin America, enhancing its market presence and user base[24]. - The company expects continued growth in both commerce and fintech segments, with a focus on expanding its market presence in Latin America[39]. - MercadoPago S.A. Compañía de Financiamiento began operations in Colombia on April 22, 2024, offering the "Ordinary Deposit" product, subject to regulatory requirements[87]. Regulatory and Compliance - The company has transitioned from a non-regulated to a regulated business, which has influenced its financial operations and reporting[29]. - The company plans to continue adapting to regulatory trends, which may impact future financial performance and operational strategies[32]. - The Central Bank of Brazil's new capital requirements will gradually increase from 6.75% in July 2023 to 10.50% by January 2025 for the company's regulated Brazilian subsidiaries[77]. Credit and Risk Management - The company’s provision for doubtful accounts increased to $1,331 million in the nine months ended September 30, 2024, from$751 million in the same period of 2023, a rise of 77%[20]. - The allowance for doubtful accounts for loans receivable was $1,612 million as of September 30, 2024, compared to$1,084 million at the end of 2023, reflecting a rise of 48.5%[107]. - The total past due loans as of September 30, 2024, amounted to $1,723 million, up from$1,116 million as of December 31, 2023, representing a 54.5% increase[106]. Currency and Foreign Operations - The average exchange rate for the nine-month period ended September 30, 2024, increased by 261.1% compared to the previous year, reflecting significant currency fluctuations[59]. - The company’s total assets located in foreign jurisdictions amounted to $2,405 million as of September 30, 2024, compared to$2,321 million as of December 31, 2023[26]. - The Argentine inflation rate for the nine-month period ended September 30, 2024, was 101.6%, significantly impacting the company's operations in the region[58]. Taxation and Benefits - The company recorded an income tax benefit of $6 million and$1 million for the nine and three-month periods ended September 30, 2024, compared to $35 million and$14 million for the same periods in 2023, respectively[69]. - The estimated effective tax rate decreased from 38.1% to 23.8% for the nine-month period ended September 30, 2024, primarily due to lower taxable foreign exchange gains[66]. - The company recorded $17 million of PIS and COFINS tax benefits arising from ICMS tax incentives as of September 30, 2024[148]. Shareholder Information - The weighted average number of common shares outstanding for earnings per share was 50,697,442 for the nine-month period ended September 30, 2023[92]. - The net income available to common stock for the nine-month period ended September 30, 2024, was$1,272 million, compared to $822 million for the same period in 2023[91]. - Net income per share for the nine months ended September 30, 2024, was$25.09, a 53% increase from $16.40 in the same period of 2023[96].