Cautionary Statement Regarding Forward-Looking Statements



Any statements made or implied in this report that are not statements of
historical fact, including statements about our beliefs and expectations, are
forward-looking statements within the meaning of Section 27 A of the Securities
Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and should be evaluated as such. The words "anticipate,"
"believe," "expect," "intend," "plan," "estimate," "target," "project,"
"should," "may," "could," "will" and similar words and expressions are intended
to identify forward-looking statements. Forward-looking statements generally
relate to information concerning our possible or assumed future results of
operations, business strategies, financing plans, competitive position, industry
environment, potential growth opportunities, future economic, political and
social conditions in the countries in which we operate and their possible impact
on our business, and the effects of future regulation and the effects of
competition. Such forward-looking statements reflect, among other things, our
current expectations, plans, projections and strategies, anticipated financial
results, future events and financial trends affecting our business, all of which
are subject to known and unknown risks, uncertainties and other important
factors (in addition to those discussed elsewhere in this report) that may cause
our actual results to differ materially from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, among other
things:

?our expectations regarding the continued growth of online commerce and Internet usage in Latin America;

?our ability to expand our operations and adapt to rapidly changing technologies;

?our ability to attract new customers, retain existing customers and increase revenues;

?the impact of government and central bank regulations on our business;

?litigation and legal liability;

?systems interruptions or failures;

?our ability to attract and retain qualified personnel;

?consumer trends;

?security breaches and illegal uses of our services;

?competition;

?reliance on third-party service providers;

?enforcement of intellectual property rights;

?seasonal fluctuations;

?political, social and economic conditions in Latin America; and



?the current and potential impact of COVID-19 on our net revenues, gross profit
margins, operating margins and liquidity due to future disruptions in operations
as well as the macroeconomic instability caused by the pandemic.

Many of these risks are beyond our ability to control or predict. New risk
factors emerge from time to time and it is not possible for Management to
predict all such risk factors, nor can it assess the impact of all such risk
factors on our company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

These statements are based on currently available information and our current
assumptions, expectations and projections about future events. While we believe
that our assumptions, expectations and projections are reasonable in view of the
currently available information, you are cautioned not to place undue reliance
on our forward-looking statements. These statements are not guarantees of future
performance. They are subject to future events, risks and uncertainties-many of
which are beyond our control- as well as potentially inaccurate assumptions that
could cause actual results to differ materially from our expectations and
projections. Some of the material risks and uncertainties that could cause
actual results to differ materially from our expectations and projections are
described in "Item 1A - Risk Factors" in Part I of our Annual Report on Form
10-K for the fiscal year ended December 31, 2019 filed with the Securities and
Exchange Commission ("SEC") on February 14, 2020, as updated by those described
in "Item 1A - Risk Factors" in Part II of our report on Form10-Q for the quarter
ended March 31, 2020 and in other reports we file from time to time with the
SEC.

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You should read that information in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in Item 2 of
Part I of this report, our unaudited interim condensed consolidated financial
statements and related notes in Item 1 of Part I of this report and our audited
consolidated financial statements and related notes in Item 8 of Part II of our
Annual Report on Form 10-K for the year ended December 31, 2019. We note such
information for investors as permitted by the Private Securities Litigation
Reform Act of 1995. There also may be other factors that we cannot anticipate or
that are not described in this report, generally because they are unknown to us
or we do not perceive them to be material that could cause results to differ
materially from our expectations.

Forward-looking statements speak only as of the date they are made, and we do
not undertake to update these forward-looking statements except as may be
required by law. You are advised, however, to review any further disclosures we
make on related subjects in our periodic filings with the SEC.

The discussion and analysis of our financial condition and results of operations has been organized to present the following:

?a brief overview of our company;

?a review of our financial presentation and accounting policies, including our critical accounting policies;

?a discussion of our principal trends and results of operations for the six and three-month periods ended June 30, 2020 and 2019;

?a discussion of the principal factors that influence our results of operations, financial condition and liquidity;

?a discussion of our liquidity and capital resources and a discussion of our capital expenditures; and

?a description of our non-GAAP financial measures.

Other Information



We routinely post important information for investors on our Investor Relations
website, http://investor.mercadolibre.com. We use this website as a means of
disclosing material, non-public information and for complying with our
disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly,
investors should monitor our Investor Relations website, in addition to
following our press releases, SEC filings, public conference calls and webcasts.
The information contained on, or that may be accessed through, our website is
not incorporated by reference into, and is not a part of, this report.

Business Overview

MercadoLibre, Inc. (together with its subsidiaries "us", "we", "our" or the
"Company") is the largest online commerce ecosystem in Latin America. Our
platform is designed to provide users with a complete portfolio of services to
facilitate commercial transactions. We are a market leader in e-commerce in each
of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru,
Uruguay and Venezuela, based on the number of unique visitors and page views. We
also operate online commerce platforms in the Dominican Republic, Honduras,
Nicaragua, El Salvador, Panama, Bolivia, Guatemala and Paraguay.

Through our platform, we provide buyers and sellers with a robust environment
that fosters the development of a large e-commerce community in Latin America, a
region with a population of over 644 million people and with one of the
fastest-growing Internet penetration rates in the world. We believe that we
offer technological and commercial solutions that address the distinctive
cultural and geographic challenges of operating an online commerce platform in
Latin America.

We offer our users an ecosystem of six integrated e-commerce services: the Mercado Libre Marketplace, the Mercado Pago FinTech platform, the Mercado Envios logistics service, the MercadoLibre Classifieds service, the MercadoLibre advertising solution and the Mercado Shops online webstores solution.

The Mercado Libre Marketplace, which we sometimes refer to as our marketplace,
is a fully-automated, topically-arranged and user-friendly online commerce
platform, which can be accessed through our website and mobile app. This
platform enables both businesses and individuals to list merchandise and conduct
sales and purchases online.

Mercado Pago is our financial technology (FinTech) solution, designed to
facilitate transactions both on and off our marketplaces by providing a
mechanism that allows our users to securely, easily and promptly send and
receive payments online. Outside of our marketplaces, Mercado Pago allows
merchants to process transactions via their websites and mobile apps, as well as
in their brick-and-mortar stores through QR codes and mobile points of sale
("MPOS") devices. It also enables users to easily transfer money to each other.
Through Mercado Fondo, our asset management product, our users are able to
invest the outstanding balance on their Mercado Pago account at competitive
rates and in a simple way. Mercado Credito, our lending solution, allows us to
finance merchants' working capital needs and consumers' purchases.

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To further enhance our suite of e-commerce services, we launched the Mercado
Envios shipping program in Brazil, Argentina, Mexico, Colombia, Chile and
Uruguay. Through Mercado Envios, we offer a cost-efficient way to utilize our
existing distribution chain to fulfill sales on our platform. Sellers that opt
into the program are able to offer a uniform and seamlessly integrated shipping
experience to their buyers at competitive prices. As of June 30, 2020, we also
offer free shipping to buyers in Brazil, Argentina, Mexico, Chile and Colombia.

Through MercadoLibre Classifieds, our online classified listing service, our
users can also list and purchase vehicles, real estate and services in the
countries where we operate. Classifieds listings differ from Marketplace
listings as they only charge optional placement fees and not final value fees.
Our classifieds pages are also a major source of traffic to our platform.

Furthermore, we developed our MercadoLibre advertising platform to enable
businesses to promote their products and services on the Internet. Through this
platform, MercadoLibre's sellers and large advertisers are able to display ads
on our webpages.

Additionally, through Mercado Shops, our online store solution, users can
set-up, manage and promote their own online store. These stores are hosted by
MercadoLibre and offer integration with the marketplace, and payment and
advertising services we offer. Users can pay monthly subscriptions for enhanced
functionality and value added services on their store.

Reporting Segments and Geographic Information



Our segment reporting is based on geography, which is the criterion our
Management currently uses to evaluate our segment performance. Our geographic
segments are Brazil, Argentina, Mexico and Other Countries (including Chile,
Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Bolivia,
Honduras, Nicaragua, El Salvador, Guatemala, Paraguay, Uruguay and the United
States of America). Although we discuss long-term trends in our business, it is
our policy not to provide earnings guidance in the traditional sense. We believe
that uncertain conditions make the forecasting of near-term results difficult.
Further, we seek to make decisions focused primarily on the long-term welfare of
our company and believe focusing on short-term earnings does not best serve the
interests of our stockholders. We believe that execution of key strategic
initiatives as well as our expectations for long-term growth in our markets will
best create stockholder value. A long-term focus may make it more difficult for
industry analysts and the market to evaluate the value of our Company, which
could reduce the value of our common stock or permit competitors with short-term
tactics to grow more rapidly than us. We, therefore, encourage potential
investors to consider this strategy before making an investment in our common
stock.

The following table sets forth the percentage of our consolidated net revenues
by segment for the six and three-month periods ended June 30, 2020 and 2019:

                                     Six-month Periods Ended      Three-month Periods Ended
                                            June 30,                      June 30,
(% of total consolidated net
revenues) (*)                           2020           2019           2020           2019
Brazil                                   56.4   %       63.1 %         53.0  %        62.5 %
Argentina                                24.3           20.4           27.2           20.9
Mexico                                   14.4           11.7           14.3           11.8
Other Countries                           4.9            4.8            5.5            4.8


(*) Percentages have been calculated using whole-dollar amounts rather than the
rounded amounts that appear in the table. The table above may not total due to
rounding.


?

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The following table summarizes the changes in our net revenues by segment for the six and three-month periods ended June 30, 2020 and 2019:

Three-month Periods


                 Six-month Periods Ended       Change from 2019                   Ended                Change from 2019
                         June 30,                 to 2020 (*)                   June 30,                 to 2020 (*)
                      2020          2019        in Dollars    in %           2020          2019    in Dollars       in %
                         (in millions, except percentages)                      (in millions, except percentages)
Net
Revenues:
Brazil          $        862.7   $   643.2   $       219.5   34.1 %    $        465.3   $  340.9   $     124.4       36.5 %
Argentina                372.1       207.7           164.4   79.2               239.2      113.9         125.3      110.0
Mexico                   220.7       118.9           101.8   85.6               125.9       64.4          61.6       95.6
Other
Countries                 74.9        49.1            25.8   52.5                47.9       26.1          21.8       83.7
Total Net
Revenues        $      1,530.5   $ 1,019.0   $       511.4   50.2 %    $        878.4   $  545.2   $     333.1       61.1 %


(*) Percentages have been calculated using whole-dollar amounts rather than the
rounded amounts that appear in the table. The table above may not total due to
rounding.

Recent Developments

Loss from transaction with an agent



We have arrangements with some unaffiliated entities under which our users are
able to fund their Mercado Pago accounts by depositing an equivalent amount with
the unaffiliated entity. In some of these arrangements, we credit the Mercado
Pago account before the unaffiliated entity transfers the funds to us to settle
the transaction. The amounts pending settlement are recognized in our balance
sheet as credit cards receivable and other means of payment. In June 2020, we
became aware that $26.7 million dollars of receivables had accumulated from one
such unaffiliated entity in Argentina. The aging of these receivables exceeded
the expected aging for transactions of this kind. Consequently, we conducted,
with the assistance of an outside independent accounting advisor, an internal
review. Our internal review on this matter did not identify any material errors
in the consolidated financial statements for the year ended December 31, 2019 or
the quarter ended March 31, 2020. However, based on the review, management has
determined that there were deficiencies in the timely operation of certain
internal controls. See Item 4 of Part I, "Controls and Procedures-Changes in
Internal Controls Over Financial Reporting."

As of June 30, 2020, we recorded a $26.7 million allowance for doubtful accounts
on receivables due to us by this entity, and are attempting to collect the full
outstanding balance from said unaffiliated entity.

Capped call transactions related to the 2.00% Convertible Senior Notes 2028



In connection with the issuance of the 2028 Notes, we paid $104.1 million
(including transaction expenses) in June 2020 to enter into the 2028 Notes
Capped Call Transactions with certain financial institutions. The 2028 Notes
Capped Call Transactions are expected generally to reduce the potential dilution
upon conversion of the 2028 Notes in the event that the market price of our
common stock is greater than the strike price of the 2028 Notes Capped Call
Transactions. Please see note 11 to our unaudited condensed consolidated
financial statements for further detail on the 2028 Notes Capped Call
Transactions.

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Criminal complaint against our chief executive officer and others



On February 4, 2020, an Argentine federal prosecutor submitted to an Argentine
judge a complaint alleging that certain sales of Argentine government
securities, made by a common investment fund that holds balances for Mercado
Pago customers, were based on non-public information about the government's
plans to extend the maturities of the securities. The complaint named our chief
executive officer, as well as others who are not specifically identified, as
having committed criminal fraud against the Argentine federal government. The
judge appointed another prosecutor to investigate the allegations described in
the complaint. At the conclusion of the investigation, the prosecutor
recommended dismissing the complaint, finding that there was no criminal
conduct, which recommendation was accepted by the judge.

Description of Line Items

Net revenues

We recognize revenues in each of our four geographical reporting segments. Within each of our segments, the services we provide generally fall into two distinct revenue streams: "Commerce" and "Fintech."



We have re-named and grouped by nature our Revenue streams breakdown, given the
increasing importance of our financial business in current and expected future
revenue composition, which our management considers shows more meaningful
information about the business. As such, the breakdown by revenue stream
previously labeled as "Enhanced Marketplace" and "Non-marketplace", is now
presented under the titles of "Commerce" and "Fintech", respectively. Also, as a
result, a group of other services, including classifieds fees, ad sales and
other ancillary services, which had historically been included in the
"Non-marketplace" line, have as of January 1, 2020, been included as a part of
the "Commerce" Revenue stream. Prior-period corresponding figures have been
changed accordingly for comparative purposes.

The following table summarizes our consolidated net revenues by revenue stream for the six and three-month periods ended June 30, 2020 and 2019:

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