Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MELI | |
Entity Registrant Name | MERCADOLIBRE INC | |
Entity Central Index Key | 1,099,590 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,157,364 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 461,198 | $ 234,140 |
Short-term investments | 175,165 | 253,321 |
Accounts receivable, net | 28,564 | 25,435 |
Credit cards receivable, net | 406,883 | 307,904 |
Loans receivable, net | 51,843 | 6,283 |
Prepaid expenses | 8,199 | 15,060 |
Inventory | 2,309 | 1,103 |
Other assets | 47,995 | 26,215 |
Total current assets | 1,182,156 | 869,461 |
Non-current assets: | ||
Long-term investments | 45,550 | 153,803 |
Property and equipment, net | 136,101 | 124,261 |
Goodwill | 95,249 | 91,797 |
Intangible assets, net | 24,642 | 26,277 |
Deferred tax assets | 66,163 | 45,017 |
Other assets | 68,431 | 56,819 |
Total non-current assets | 436,136 | 497,974 |
Total assets | 1,618,292 | 1,367,435 |
Current liabilities: | ||
Accounts payable and accrued expenses | 181,557 | 105,106 |
Funds payable to customers | 519,420 | 370,693 |
Salaries and social security payable | 61,168 | 48,898 |
Taxes payable | 27,923 | 27,338 |
Loans payable and other financial liabilities | 24,701 | 11,583 |
Other liabilities | 1,400 | 6,359 |
Dividends payable | 6,624 | 6,624 |
Total current liabilities | 822,793 | 576,601 |
Non-current liabilities: | ||
Salaries and social security payable | 22,124 | 16,173 |
Loans payable and other financial liabilities | 309,444 | 301,940 |
Deferred tax liabilities | 40,435 | 34,059 |
Other liabilities | 17,340 | 9,808 |
Total non-current liabilities | 389,343 | 361,980 |
Total liabilities | 1,212,136 | 938,581 |
Equity: | ||
Common stock, $0.001 par value, 110,000,000 shares authorized, 44,157,364 shares issued and outstanding at September 30, 2017 and December 31, 2016 | 44 | 44 |
Additional paid-in capital | 70,674 | 137,982 |
Retained earnings | 612,269 | 550,641 |
Accumulated other comprehensive loss | (276,831) | (259,813) |
Total Equity | 406,156 | 428,854 |
Total Liabilities and Equity | $ 1,618,292 | $ 1,367,435 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Interim Condensed Consolidated Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 110,000,000 | 110,000,000 |
Common stock, shares issued | 44,157,364 | 44,157,364 |
Common stock, shares outstanding | 44,157,364 | 44,157,364 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interim Condensed Consolidated Statements of Income [Abstract] | ||||
Net revenues | $ 370,661 | $ 230,847 | $ 961,117 | $ 588,121 |
Cost of net revenues | (194,834) | (85,199) | (444,879) | (213,993) |
Gross profit | 175,827 | 145,648 | 516,238 | 374,128 |
Operating expenses: | ||||
Product and technology development | (32,380) | (26,066) | (93,019) | (72,223) |
Sales and marketing | (84,139) | (39,723) | (207,925) | (107,743) |
General and administrative | (31,766) | (26,150) | (91,575) | (64,061) |
Impairment of Long-Lived Assets | (2,837) | (13,717) | ||
Total operating expenses | (148,285) | (91,939) | (395,356) | (257,744) |
Income from operations | 27,542 | 53,709 | 120,882 | 116,384 |
Other income (expenses): | ||||
Interest income and other financial gains | 14,200 | 9,892 | 37,020 | 25,192 |
Interest expense and other financial losses | (6,709) | (6,492) | (19,686) | (18,807) |
Foreign currency (loss) / gain | 1,622 | (4,823) | (19,475) | (5,062) |
Net income before income tax expense | 36,655 | 52,286 | 118,741 | 117,707 |
Income tax expense | (8,989) | (13,374) | (37,241) | (32,690) |
Net income | $ 27,666 | $ 38,912 | $ 81,500 | $ 85,017 |
Basic EPS: Basic net income | ||||
Available to shareholders per common share | $ 0.63 | $ 0.88 | $ 1.85 | $ 1.93 |
Weighted average of outstanding common shares | 44,157,364 | 44,157,341 | 44,157,364 | 44,157,215 |
Diluted EPS: Diluted net income | ||||
Available to shareholders per common share | $ 0.63 | $ 0.88 | $ 1.85 | $ 1.93 |
Weighted average of outstanding common shares | 44,157,364 | 44,157,341 | 44,157,364 | 44,157,215 |
Cash Dividends declared (per share) | $ 0.150 | $ 0.150 | $ 0.450 | $ 0.450 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interim Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 27,666 | $ 38,912 | $ 81,500 | $ 85,017 |
Other comprehensive (loss) income, net of income tax: | ||||
Currency translation adjustment | (5,180) | (2,974) | (17,945) | (11,056) |
Unrealized net gain (losses) on available for sale investments | (1,413) | 1,106 | 340 | 712 |
Less: Reclassification adjustment for losses on available for sale investments | (587) | (672) | ||
Net change in accumulated other comprehensive loss, net of income tax | (6,593) | (1,868) | (17,018) | (9,672) |
Total Comprehensive income | $ 21,073 | $ 37,044 | $ 64,482 | $ 75,345 |
Interim Condensed Consolidated6
Interim Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operations: | ||
Net income | $ 81,500 | $ 85,017 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Unrealized Devaluation Loss, net | 28,463 | 5,162 |
Impairment of Long-Lived Assets | 2,837 | 13,717 |
Depreciation and amortization | 29,953 | 20,698 |
Accrued interest | (16,391) | (12,643) |
Non cash interest and convertible bonds amortization of debt discount and amortization of debt issuance costs | 9,234 | 9,122 |
LTRP accrued compensation | 28,734 | 19,251 |
Deferred income taxes | (14,769) | (5,895) |
Changes in assets and liabilities: | ||
Accounts receivable | (13,380) | (2,409) |
Credit Cards Receivables | (113,514) | (92,811) |
Prepaid expenses | 6,800 | (272) |
Inventory | (1,172) | (1,048) |
Other assets | (31,528) | (15,865) |
Accounts payable and accrued expenses | 71,794 | 13,852 |
Funds payable to customers | 151,635 | 100,322 |
Other liabilities | 3,703 | 136 |
Interest received from investments | 18,490 | 11,348 |
Net cash provided by operating activities | 242,389 | 147,682 |
Cash flows from investing activities: | ||
Purchase of investments | (3,180,633) | (2,548,060) |
Proceeds from sale and maturity of investments | 3,371,543 | 2,525,118 |
Payment for acquired businesses, net of cash acquired | (7,284) | |
Purchases of intangible assets | (84) | (49) |
Advance for property and equipment | (12,777) | (6,129) |
Changes in principal of loans receivable, net | (46,951) | |
Purchases of property and equipment | (39,280) | (55,510) |
Net cash provided by (used in) investing activities | 91,818 | (91,914) |
Cash flows from financing activities: | ||
Proceeds from loans payable and other financial liabilities | 13,153 | 3,892 |
Payments on loans payable and other financing liabilities | (4,304) | (6,492) |
Dividends paid | (19,871) | (17,795) |
Purchase of convertible note capped call | (67,308) | |
Net cash used in financing activities | (78,330) | (20,395) |
Effect of exchange rate changes on cash and cash equivalents | (28,819) | (14,259) |
Net increase in cash and cash equivalents | 227,058 | 21,114 |
Cash and cash equivalents, beginning of the period | 234,140 | 166,881 |
Cash and cash equivalents, end of the period | $ 461,198 | $ 187,995 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2017 | |
Nature of Business [Abstract] | |
Nature of Business | 1. Nature of Business MercadoLibre, Inc. (“MercadoLibre” or the “Company”) was incorporated in the state of Delaware, in the United States of America in October 1999. MercadoLibre is the leading e-commerce company in Latin America, serving as an integrated regional platform and as an enabler of the necessary online and technology tools to allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform (including online classifieds for motor vehicles, vessels, aircraft, services and real estate), which allows users to buy and sell in most of Latin America. Through MercadoPago, MercadoLibre enables individuals and businesses to send and receive online payments; through MercadoEnvios, MercadoLibre facilitates the shipping of goods from sel lers to buyers; through our a dvertising products, MercadoLibre facilitates advertising services to large retailers and brands to promote their product and services on the web; through MercadoShops, MercadoLibre facilitates users to set-up, manage, and promote their own on-line web-stores under a subscription-based business m odel; and through MercadoCredito , MercadoLibre extends loans to specific merchants and consumers . In addition, MercadoLibre develops and sells software enterprise solutions to e-commerce business clients in Brazil. As of September 30, 2017, MercadoLibre, through its wholly-owned subsidiaries, operated online ecommerce platforms directed towards Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Peru, Mexico, Panama, Honduras, Nicaragua, Salvador, Portugal, Uruguay, Bolivia, Guatemala, Paraguay and Venezuela. Additionally, MercadoLibre operates an online payments solution directed towards Argentina, Brazil, Mexico, Venezuela, Colombia, Chile, Peru and Uruguay. It also offers a shipping solution directed towards Argentina, Brazil, Mexico, Colombia and Chile. In addition, the Company operates a real estate classified platform that covers some areas of State of Florida, in the United States of America. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies Basis of presentation The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. These interim condensed consolidated financial statements are stated in U.S. dollars, except for amounts otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes. Substantially all net revenues, cost of net revenues and operating expenses, are generated in the Company’s foreign operations. Operating income of foreign operations amounted to 96.7% and 99.9% of the con solidated amounts during the nine -month periods ende d September 30, 2017 and 2016. Long-lived assets, Intangible assets and Goodwill located in the foreign jurisdictions totaled $247,401 thousands and $ 232,314 thousands as of September 30, 2017 and December 31, 2016, respectively. These interim condensed consolidated financial statements reflect the Company’s consolidat ed financial position as of September 30, 2017 and December 31, 2016. These financial statements also show the Company’s consolidated statements of income and comprehensive income for the nine and three-month periods ended September 30, 2017 and 2016; and sta tement of cash flows for the nine-month periods ended September 30, 2017 and 2016. These interim condensed consolidated financial statements include all normal recurring adjustments that management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2016, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, of comprehensive income and of cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see note 2 to the financial statements in the Form 10-K. During the nine-month period ended September 30, 2017, there were no material updates made to the Company’s significant accounting policies. Foreign currency translation All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Venezuela since January 1, 2010, as described below. Accordingly, these foreign operating subsidiaries translate assets and liabilities from their local currencies into U.S. dollars by using period-end exchange rates while income and expense accounts are translated at the average rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Venezuelan currency status Pursuant to U.S. GAAP, the Company has transitioned its Venezuelan operations to highly inflationary status as from January 1, 2010, which requires that transactions and balances are re-measured as if the U.S. dollar was the functional currency for such operation. The cumulative three year inflation rate as from December 31, 2010 exceeded 100% at each period end. Thus, the Company continues to treat the economy of Venezuela as highly-inflationary. On March 9, 2016 the Central Bank of Venezuela (“BCV”) issued the Exchange Agreement No.35. The agreement established a “protected” exchange rate (“DIPRO”) for certain transactions, such as but not limited to: imports of goods of the food and health sectors, as well as supplies associated with the production of said sectors; expenses relating to health treatments, sports, culture, scientific research, and other urgent matters defined by the exchange regulations. All foreign currency transactions not expressly provided in Exchange Agreement No.35 will be processed on the alternate foreign currency markets governed by the exchange regulations, at the floating supplementary market exchange rate (“DICOM”). Additionally, the agreement established that the alternate foreign currency markets referred to in Exchange Agreement No.33 of February 10, 2015 (“SIMADI”) will continue to operate until replaced by others. From March 31, 2016 through June 30, 2016, the SIMADI exchange rate increased from 273 BsF per U.S. dollar to 628 BsF per U.S. dollar, a 130% increase in the exchange rate. As a consequence of the local currency devaluation, the Company recorded a foreign exchange loss of $4.9 million during the second quarter of 2016. Considering the significant devaluation and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed its long-lived assets (including non-current other assets), goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of June 30, 2016 would not be fully recoverable. As a result, on June 30, 2016, the Company recorded an impairment of offices and commercial property under construction included within non-current other assets of $13.7 million. The carrying amount of offices and commercial property under construction was adjusted to its estimated fair value of approximately $12.5 million as of June 30, 2016, by using the market approach, and considering prices for similar assets. On May 19, 2017, the BCV issued the Exchange Agreement No.38, which established a new foreign exchange mechanism under DICOM, replacing SIMADI. The new mechanism consists of auctions, administered by an auction committee, where sellers and buyers from the private sector may offer foreign currency under certain limits determined by the BCV. In light of the disappearance of SIMADI ( which closed at 728.0 per U.S. dollar), and the Company’s inability to gain access to U.S. dollars under SIMADI, it started requesting U.S. dollars through DICOM. As a result, the Company expects to settle its transactions through DICOM going forward and concluded that the DICOM exchange rate should be used as from June 1, 2017 to measure its bolivar-denominated monetary assets and liabilities and to measure the revenues and expenses of the Venezuelan subsidiaries. Therefore, a s of June 30, 2017, monetary assets and liabilities in Bolivares Fuertes (“BsF”) were re-measured to the U.S. dollar using the DICOM closing exchange rate of 2640.0 BsF per U.S. dollar. A s a consequence of the local currency devaluation, the Company recorded a foreign exchange loss of $22.0 million during the second quarter of 2017. Considering the significant devaluation and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed its long-lived assets (including non-current other assets), goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of June 30, 2017 would not be fully recoverable. As a result, on June 30, 2017, the Company recorded an impairment of offices and commercial property under construction included within non-current other assets of $2.8 million. The carrying amount of offices and commercial property under construction was adjusted to its estimated fair value of approximately $9.7 million as of June 30, 2017, by using the market approach and considering prices for similar assets. As of September 30, 2017, the DICOM exchange rate was 3,345.0 BsF per U.S. dollar. Until 2010 the Company was able to obtain U.S. dollars for any purpose, including dividends distribution, using alternative mechanisms other than through the Commission for the Administration of Foreign Exchange Control (CADIVI). Those U.S. dollars, obtained at a higher exchange rate than the one offered by CADIVI, and held at U.S. bank accounts of its Venezuelan subsidiaries, were used until 2011 for dividend distributions from its Venezuelan subsidiaries. The Company has not distributed dividends from the Venezuelan subsidiaries since 2011. The following table sets forth the assets, liabilities and net assets of the Company’s Venezuelan subsidiaries, before intercompany eliminations of a net liability of $29,594 thousands and $ 15,843 thousands, as of September 30, 2017 and December 31, 2016 and net revenues for the nine-month periods ended September 30, 2017 and 2016: September 30, 2017 2016 (In thousands) Venezuelan operations Net Revenues $ 38,329 $ 26,451 September 30, December 31, 2017 2016 (In thousands) Assets 62,648 66,165 Liabilities (37,269) (22,950) Net Assets $ 25,379 $ 43,215 As of September 30, 2017, the net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to 6.2% of consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to 2.2% of our consolidated cash and investments. The Company’s ability to obtain U.S. dollars in Venezuela is negatively affected by the exchange regulations in Venezuela that are described above and elsewhere in these interim condensed consolidated financial statements. In addition, its business and ability to obtain U.S. dollars in Venezuela would be negatively affected by additional material devaluations or the imposition of significant additional and more stringent controls on foreign currency exchange by the Venezuelan government. Despite the current difficult macroeconomic environment in Venezuela, the Company continues to actively manage, through its Venezuelan subsidiaries, its investment in Venezuela. Income and asset taxes The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities. On August 17, 2011, the Argentine government issued a new software development law and on September 9, 2013 the regulatory decree was issued, which established the new requirement to become beneficiary of the new software development law. The decree establishes compliance requirements with annual incremental ratios related to exports of services and research and development expenses that must be achieved to remain within the tax holiday. The Company’s Argentine subsidiary has to achieve certain required ratios annually under the software development law in order to be eligible for the benefits mentioned below. On September 17, 2015, the Argentine Industry Secretary issued Resolution 1041/2015 approving the Company’s application for eligibility under the new software development law for the Company’s Argentinean subsidiary, Mercadolibre S.R.L. Furthermore, on September 18, 2016, the Argentine Industry Secretary issued Resolutions 93/2016 and 97/2016 approving the Company’s application for eligibility under the new software development law for the Company’s Argentinean subsidiaries, Neosur S.RL. and Business Vision S.A. As a result, the Company’s Argentinean subsidiaries have been granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained as beneficiaries of the new law is a relief of 60% of total income tax related to software development activities and a 70% relief in payroll taxes related to software development activities. The benefits to the Company under the software development law will expire on December 31, 2019. As a result of the Company’s eligibility under the new law, it recorded an income tax benefit of $17,672 thousands and $6,367 thousands during the nine and three-month periods ended September 30, 2017, respectively. Aggregate per share effect of the Argentine tax holiday amounted to $0.40 and $0.14 for the nine and three -month periods ended September 30, 2017, respectively. Furthermore, the Company recorded a labor cost benefit of $5,513 thousands and $2,016 thousands during the nine an d three-month periods ended September 30, 2017, respectively. Additionally, $1,623 thousands and $587 thousands were accrued to pay software developme nt law audit fees during the nine an d three-month periods ended September 30, 2017, resp ectively. During the nine months period ended September 30, 2016, the Company recorded an income tax benefit of $16,018 thousands, a labor cost benefit of $4,173 thousands and $1,416 thousands were accrued to pay software development law audit fees. Additionally, during the third quarter of 2016, the Company recorded an income tax benefit of $6,823 thousands, a labor cost benefit of $2,167 thousands and $631 thousands were accrued to pay software development law audit fees. Aggregate per share effect of the Argentine tax holiday amounted to $0.46 and $0.20 for the nine a nd three-month periods ended September 30, 2016, respectively. As of September 30, 2017 and December 31, 2016, the Company had included under non-current deferred tax assets the foreign tax credits related to the dividend distributions received from its subsidiaries for a total amount of $11,588 thousands and $13,515 thousands, respectively. Those foreign tax credits will be used to offset the future domestic income tax payable. Accumulated other comprehensive loss The following table sets forth the Company’s accumulated oth er comprehensive loss as of September 30, 2017 and the year ended December 31, 2016: September 30, December 31, 2017 2016 (In thousands) Accumulated other comprehensive loss: Foreign currency translation $ (277,171) $ (259,226) Unrealized gains (losses) on investments 518 (909) Estimated tax (loss) gain on unrealized gains (losses) on investments (178) 322 $ (276,831) $ (259,813) The following tables summarize the changes in accumulated balances of other comprehensive loss for the nine-month period ended September 30, 2017: Unrealized Foreign Estimated tax (Losses) Gains on Currency (expense) Investments Translation benefit Total (In thousands) Balances as of December 31, 2016 $ (909) $ (259,226) $ 322 $ (259,813) Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments 518 (17,945) (178) (17,605) Amount of gain (loss) reclassified from accumulated other comprehensive loss 909 — (322) 587 Net current period other comprehensive income gain (loss) 1,427 (17,945) (500) (17,018) Ending balance $ 518 $ (277,171) $ (178) $ (276,831) Amount of (Loss) Gain Reclassified from Details about Accumulated Accumulated Other Other Comprehensive Loss Comprehensive Affected Line Item Components Loss in the Statement of Income (In thousands) Unrealized losses on investments $ (909) Interest expense and other financial losses Estimated tax gain on unrealized losses on investments 322 Income tax gain Total reclassifications for the year $ (587) Total, net of income taxes Impairment of long-lived assets The Company reviews its long-lived assets (including non-current other assets) for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As explained in section “Foreign Currency Translation” of the present Note to these interim condensed consolidated financial statements, Venezuelan currency experienced a steep devaluation in the second quarter of 2017 and 2016. Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows expected from the Venezuelan business, and long-lived assets expected use, the Company concluded that certain real estate investments held in Caracas, Venezuela, should be impaired. The fair value of long-lived assets was estimated through market approach using level 3 inputs in the fair value hierarchy. These level 3 inputs included, but are not limited to, executed purchase agreements in similar assets and third party valuations. As a consequence, the Company estimated the fair value of the impaired long-lived assets, and recorded impairment losses of $2.8 million and $13.7 million on June 30, 2017 and June 30, 2016, respectively. Use of estimates The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to accounting for allowance for doubtful accounts and chargeback provisions, recoverability of goodwill and intangible assets with indefinite useful life, useful life of long-lived assets and intangible assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt note, recognition of income taxes and contingencies. Actual results could differ from those estimates. Recently issued accounting pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company has substantially completed the assessment on the adoption of this standard concluding that it is not expected to have a material measurement impact on the Company´s financial statements. However, the Company continues assessing the potential impacts regarding the presentation of certain incentives recorded as an expense under current guidance . The adoption of this standard will also require to expand and include certain additional disclosures. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company continues evaluating the transition method upon adoption. The Company will adopt the new revenue standard in its first quarter of 2018. On February 25, 2016 the FASB issued ASU 2016-02. The amendments in this update create Topic 842, Leases, which supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. Previous GAAP did not require lease assets and lease liabilities to be recognized for most leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. Based on existing leases currently classified as operating leases, the Company expects to recognize on the statements of financial position right-of-use assets and lease liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is assessing the effects that the adoption of this accounting pronouncement may have on the Company’s financial statements. On June 16, 2016 the FASB issued ASU 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of credit losses on financial instruments”. This update amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this update eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this topic will require that credit losses be presented as an allowance rather than as a write-down. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements. On October 24, 2016 the FASB issued “ASU 2016-16—Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory”. This update eliminates the prohibition on recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset or assets have been sold to an outside party. Consequently, this update requires recognition of the current and deferred income tax consequences of an intra-entity asset transfer when the transfer occurs. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company´s financial statements. On September 29, 2017 the FASB issued “ ASU 2017-13—Revenue recognition (Topic 605), Revenue from contracts with customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. This update addresses Transition Related to Accounting Standards Updates No. 2014-09, Revenue from Contracts with Customers (Topic 606) , and No. 2016-02, Leases (Topic 842) . This Update also supersedes SEC paragraphs pursuant the rescission of SEC Staff Announcement, “Accounting for Management Fees Based on a Formula”, effective upon the initial adoption of Topic 606, Revenue from Contracts with Customers, and SEC Staff Announcement, “Lessor Consideration of Third-Party Value Guarantees,” effective upon the initial adoption of Topic 842, Leases. The adoption of this standard is not expected to have a material impact on the Company´s financial statements. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Net Income Per Share [Abstract] | |
Net Income Per Share | 3. Net income per share Basic earnings per share for the Company’s common stock is computed by dividing, net income available to common shareholders attributable to common stock for the period by the weighted average number of common shares outstanding during the period. On June 30, 2014, the Company issued 2.25% Convertible Senior Notes due 2019 (see Note 9 of these interim condensed consolidated financial statements for discussion regarding these debt notes). The conversion of these debt notes are included in the calculation for diluted earnings per share utilizing the “if converted” method. The effect of that conversion is not assumed for purposes of computing diluted earnings per share if the effect is antidilutive. The denominator for diluted net income per share for the nine an d three-month periods ended September 30, 2017 and 2016 does not include any effect from the 2014 and 2017 Capped Call Transactions (as defined below) because it would be antidilutive. In the event of conversion of any or all of the Notes, the shares that would be delivered to the Company under the Capped Call Transactions are designed to partially neutralize the dilutive effect of the shares that the Company would issue under the Notes. S ee Note 9 of these interim condensed consolidated financial statements and Note 17 of the financial statements as of December 31,2016 on Form 10-K for more details. For the nine an d three-month periods ended September 30, 2017 and 2016 , the effects on diluted earnings per share were antidilutive and, as a consequence, they were not computed for diluted earnings per share. Net income per share of common stock is as follows for the nine an d three-month periods ended September 30, 2017 and 2016: Nine Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income per common share $ 1.85 $ 1.85 $ 1.93 $ 1.93 $ 0.63 $ 0.63 $ 0.88 $ 0.88 Numerator: Net income $ 81,500 $ 81,500 $ 85,017 $ 85,017 $ 27,666 $ 27,666 $ 38,912 $38,912 Denominator: Weighted average of common stock outstanding for Basic earnings per share 44,157,364 44,157,215 44,157,364 44,157,341 Adjusted weighted average of common stock outstanding for Diluted earnings per share 44,157,364 44,157,215 44,157,364 44,157,341 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 4. G oodwill and intangible assets Goodwill and intangible assets The composition of goodwill and intangible assets is as follows: September 30, December 31, 2017 2016 (In thousands) Goodwill $ 95,249 $ 91,797 Intangible assets with indefinite lives - Trademarks 13,153 12,490 Amortizable intangible assets - Licenses and others 6,565 8,738 - Non-compete agreement 2,491 1,787 - Customer list 15,215 14,580 - Trademarks 1,854 993 Total intangible assets $ 39,278 $ 38,588 Accumulated amortization (14,636) (12,311) Total intangible assets, net $ 24,642 $ 26,277 Goodwill The changes in the carryin g amount of goodwill for the nine-month period ended September 30, 2017 and the year ended December 31, 2016 are as follows: Period ended September 30, 2017 Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total (In thousands) Balance, beginning of the period $ 27,660 $ 6,587 $ 17,388 $ 29,342 $ 5,989 $ 3,643 $ 1,188 $ 91,797 - Effect of exchange rates changes 245 (809) 783 3,158 — 50 25 3,452 Balance, end of the period $ 27,905 $ 5,778 $ 18,171 $ 32,500 $ 5,989 $ 3,693 $ 1,213 $ 95,249 Year ended December 31, 2016 Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total (In thousands) Balance, beginning of year $ 18,526 $ 7,430 $ 16,438 $ 33,834 $ 5,729 $ 3,437 $ 1,151 $ 86,545 - Business acquisition 5,635 700 — 190 260 57 32 6,874 - Effect of exchange rates changes 3,499 (1,543) 950 (4,682) — 149 5 (1,622) Balance, end of the year $ 27,660 $ 6,587 $ 17,388 $ 29,342 $ 5,989 $ 3,643 $ 1,188 $ 91,797 Intangible assets with definite useful life Intangible assets with definite useful life are comprised of customer lists, non-compete and non-solicitation agreements, acquired software licenses, other acquired intangible assets including developed technologies and trademarks. Aggregate amortization expense for intangible assets totaled $1, 182 thousands and $ 1,144 thousands for th e three-month periods ended September 30, 2017 and 2016, respectively, while for the nine -month periods ended at such dates amounted to $ 3,247 thousands and $ 2,863 thousands, respectively. The following table summarizes the remaining amortization of intangible assets (in thousands of U.S. dollars) with definite useful life as of September 30, 2017 : For year ended 12/31/2017 $ 1,343 For year ended 12/31/2018 4,475 For year ended 12/31/2019 2,201 For year ended 12/31/2020 956 Thereafter 2,514 $ 11,489 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | 5. Segment reporting Reporting segments are based upon the Company’s internal organizational structure, the manner in which the Company’s operations are managed and resources are assigned, the criteria used by management to evaluate the Company’s performance, the availability of separate financial information, and overall materiality considerations. Segment reporting is based on geography as the main basis of segment breakdown to reflect the evaluation of the Company’s performance defined by the management. The Company’s segments include Brazil, Argentina, Mexico, Venezuela and other countries (such as Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Honduras, Nicaragua, Salvador, Bolivia, Guatemala, Paraguay, Peru, Portugal, Uruguay and USA). Direct contribution consists of net revenues from external customers less direct costs. Direct costs include costs of net revenues, product and technology development expenses, sales and marketing expenses, and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, allowances for doubtful accounts, payroll and third party fees. All corporate related costs have been excluded from the Company’s direct contribution. Expenses over which segment managers do not currently have discretionary control, such as certain technology and general and administrative costs are monitored by management through shared cost centers and are not evaluated in the measurement of segment performance. The following tables summarize the financial performance of the Company’s reporting segments: Nine Months Ended September 30, 2017 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 569,320 $ 250,692 $ 58,324 $ 38,329 $ 44,452 $ 961,117 Direct costs (390,008) (150,973) (95,683) (16,841) (37,052) (690,557) Impairment of Long-lived Assets - - - (2,837) - (2,837) Direct contribution 179,312 99,719 (37,359) 18,651 7,400 267,723 Operating expenses and indirect costs of net revenues (146,841) Income from operations 120,882 Other income (expenses): Interest income and other financial gains 37,020 Interest expense and other financial losses (19,686) Foreign currency losses (19,475) Net income before income tax expense $ 118,741 Nine Months Ended September 30, 2016 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 311,427 $ 185,885 $ 34,375 $ 26,451 $ 29,983 $ 588,121 Direct costs (188,772) (105,217) (29,004) (12,691) (21,281) (356,965) Impairment of Long-lived Assets - - - (13,717) - (13,717) Direct contribution 122,655 80,668 5,371 43 8,702 217,439 Operating expenses and indirect costs of net revenues (101,055) Income from operations 116,384 Other income (expenses): Interest income and other financial gains 25,192 Interest expense and other financial losses (18,807) Foreign currency losses (5,062) Net income before income tax expense $ 117,707 Three Months Ended September 30, 2017 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 229,475 $ 91,308 $ 22,604 $ 9,751 $ 17,523 $ 370,661 Direct costs (182,858) (56,210) (36,038) (4,582) (14,409) (294,097) Direct contribution 46,617 35,098 (13,434) 5,169 3,114 76,564 Operating expenses and indirect costs of net revenues (49,022) Income from operations 27,542 Other income (expenses): Interest income and other financial gains 14,200 Interest expense and other financial losses (6,709) Foreign currency gains 1,622 Net income before income tax expense $36,655 Three Months Ended September 30, 2016 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $131,003 $69,983 $11,807 $6,885 $11,169 $230,847 Direct costs (77,012) (39,026) (10,353) (3,462) (7,943) (137,796) Direct contribution 53,991 30,957 1,454 3,423 3,226 93,051 Operating expenses and indirect costs of net revenues (39,342) Income from operations 53,709 Other income (expenses): Interest income and other financial gains 9,892 Interest expense and other financial losses (6,492) Foreign currency losses (4,823) Net income before income tax expense $52,286 The following table summarizes the allocation of property and equipment, net based on geography: September 30, December 31, 2017 2016 (In thousands) US property and equipment, net $ 8,445 $ 9,771 Other countries Argentina 25,842 25,071 Brazil 67,351 55,706 Mexico 3,487 2,307 Venezuela 21,935 21,615 Other countries 9,041 9,791 $ 127,656 $ 114,490 Total property and equipment, net $ 136,101 $ 124,261 The following table summarizes the allocation of the goodwill and intangible assets based on geography: September 30, December 31, 2017 2016 (In thousands) US intangible assets $ 146 $ 250 Other countries goodwill and intangible assets Argentina 6,630 7,717 Brazil 30,400 31,170 Mexico 41,992 38,860 Venezuela 7,168 7,366 Chile 28,164 27,395 Other countries 5,391 5,316 $ 119,745 $ 117,824 Total goodwill and intangible assets $ 119,891 $ 118,074 Consolidated net revenues by similar p roducts and services for the nine and three-month periods ended September 30, 2017 and 2016 were as follows: Nine-months Ended September 30, Three-months Ended September 30, Consolidated Net Revenues 2017 2016 2017 2016 (In thousands) (In thousands) Marketplace $ 582,475 $ 341,749 $ 227,269 $ 134,374 Non-marketplace (*) (**) $ 378,642 $ 246,372 $ 143,392 $ 96,473 Total $ 961,117 $ 588,121 $ 370,661 $ 230,847 (*) Includes, among other things, Ad Sales, Classified Fees , Payment Fees, Shipping Fees and other ancillary services. (**) Includes an amount of $ 232,426 thousands and $139,630 thous ands of Payment Fees for the nine-month periods ended September 30, 2017 and 2016, respectively. Includes an amount of $ 92,254 thousands and $52,444 thousands of Payment Fees for th e three-month periods ended September 30, 2017 and 2016, respectively. |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurement of Assets and Liabilities [Abstract] | |
Fair Value Measurement of Assets and Liabilities | 6. Fair value measurement of assets and liabilities The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016: Quoted Prices in Quoted Prices in Balances as of active markets for Significant other Unobservable Balances as of active markets for Significant other Unobservable September 30, identical Assets observable inputs inputs December 31, identical Assets observable inputs inputs Description 2017 (Level 1) (Level 2) (Level 3) 2016 (Level 1) (Level 2) (Level 3) (In thousands) Assets Cash and Cash Equivalents: Money Market Funds $ 189,574 $ 189,574 $ — $ — $ 111,198 $ 111,198 $ — $ — Investments: Sovereign Debt Securities $ 21,786 $ 21,786 $ — $ — $ 50,703 $ 50,703 $ — $ — Corporate Debt Securities 30,468 28,384 2,084 — 207,633 61,986 145,647 — Certificates of deposit — — — — 35,374 — 35,374 — Total Financial Assets $ 241,828 $ 239,744 $ 2,084 $ — $ 404,908 $ 223,887 $ 181,021 $ — Liabilities: Contingent considerations $ — $ — $ — $ — $ 4,213 $ — $ — $ 4,213 Long-term retention plan 38,503 — 38,503 — 27,135 — 27,135 — Total Financial Liabilities $ 38,503 $ — $ 38,503 $ — $ 31,348 $ — $ 27,135 $ 4,213 As of September 30, 2017 and December 31, 2016, the Company’s financial assets valued at fair value consisted of assets valued using i) Level 1 inputs: unadjusted quoted prices in active markets (Level 1 instrument valuations are obtained from observable inputs that reflect quoted prices (unadjusted) for identical assets in active markets) and; ii) Level 2 inputs: obtained from readily-available pricing sources for comparable instruments as well as instruments with inactive markets at the measurement date. As of September 30, 2017 and December 31, 2016 , the Company´s liabilities were valued at fair value using level 2 inputs and level 3 inputs (valuations based on unobservable inputs reflecting Company assumptions). Fair value of contingent considerations are determined based on the probability of achievement of the performance targets arising from each acquisition, as well as the Company’s historical experience with similar arrangements. For the nine-month period ended September 30, 2017, the Company recognized in earnings a gain of $3,164 thousands and a loss of $166 thousands within other comprehensive income, in relation with contingent considerations. In addition, during the nine-month period ended September 30, 2017, the Company settled contingent considerations for an amount of $1,215 thousands . The unrealized net gains or loss on short term and long term investments are reported as a component of other comprehensive income. The Company does not anticipate any significant realized losses associated with those investments in excess of the Company’s historical cost. As of September 30, 2017 and December 31, 2016, the carrying value of the Company’s financial assets and liabilities measured at amortized cost approximated their fair value mainly because of its short term maturity. These assets and liabilities included cash, cash equivalents and short-term investments (excluding money markets funds and corporate debt security), accounts receivable, credit cards receivable, loans receivable, funds payable to customers, other assets, accounts payable, salaries and social security payable (excluding variable LTRP), taxes payable, provisions and other liabilities (excluding contingent consideration). The convertible senior notes (liability component), the rest of the loans payable and other financial liabilities approximate their fair value because the interest rates are not materially different from market interest rates . The following table summarizes the fair value level for those financial assets and liabilities of the Company measu red at amortized cost as of September 30, 2017 and December 31, 2016: Balances as of Significant other Balances as of Significant other September 30, observable inputs December 31, observable inputs 2017 (Level 2) 2016 (Level 2) (In thousands) Assets Time Deposits $ 167,224 $ 167,224 $ 113,414 $ 113,414 Accounts receivable 28,564 28,564 25,435 25,435 Credit Cards receivable 406,883 406,883 307,904 307,904 Loans receivable, net 51,843 51,843 6,283 6,283 Other assets 89,097 89,097 58,900 58,900 Total Assets $ 743,611 $ 743,611 $ 511,936 $ 511,936 Liabilities Accounts payable and accrued expenses $ 181,557 $ 181,557 $ 105,106 $ 105,106 Funds payable to customers 519,420 519,420 370,693 370,693 Salaries and social security payable 44,789 44,789 37,936 37,936 Taxes payable 27,923 27,923 27,338 27,338 Dividends payable 6,624 6,624 6,624 6,624 Loans payable and other financial liabilities (*) 334,145 334,145 313,523 313,523 Other liabilities 18,740 18,740 11,954 11,954 Total Liabilities $ 1,133,198 $ 1,133,198 $ 873,174 $ 873,174 (*) The fair value of the convertible senior notes (including the equity component) is disclosed in Note 9. As of September 30, 2017 and December 31, 2016 , the Company held no direct investments in auction rate securities, collateralized debt obligations or structured investment vehicles , and does not have any non-financial assets or liabilities measured at fair value. As of September 30, 2017 and December 31, 2016 , the fair value of money market funds, short and long-term investments classified as available for sale securities are as follows: September 30, 2017 Cost Gross Unrealized Gains (1) Gross Unrealized Losses (1) Estimated Fair Value (In thousands) Cash and cash equivalents Money Market Funds $ 189,574 $ — $ — $ 189,574 Total Cash and cash equivalents $ 189,574 $ — $ — $ 189,574 Short-term investments Corporate Debt Securities 7,250 1 (4) 7,247 Sovereign Debt Securities 697 — (3) 694 Total Short-term investments $ 7,947 $ 1 $ (7) $ 7,941 Long-term investments Sovereign Debt Securities $ 21,196 $ — $ (104) $ 21,092 Corporate Debt Securities 23,210 43 (32) 23,221 Total Long-term investments $ 44,406 $ 43 $ (136) $ 44,313 Total $ 241,927 $ 44 $ (143) $ 241,828 December 31, 2016 Cost Gross Unrealized Gains (1) Gross Unrealized Losses (1) Estimated Fair Value (In thousands) Cash and cash equivalents Money Market Funds $ 111,198 $ — $ — $ 111,198 Total Cash and cash equivalents $ 111,198 $ — $ — $ 111,198 Short-term investments Sovereign Debt Securities $ 2,166 $ — $ — $ 2,166 Corporate Debt Securities 102,509 26 (168) 102,367 Certificates of deposit 35,336 40 (2) 35,374 Total Short-term investments $ 140,011 $ 66 $ (170) $ 139,907 Long-term investments Sovereign Debt Securities $ 48,943 $ — $ (406) $ 48,537 Corporate Debt Securities 105,632 90 (456) 105,266 Total Long-term investments $ 154,575 $ 90 $ (862) $ 153,803 Total $ 405,784 $ 156 $ (1,032) $ 404,908 (1) Unrealized gains (losses) from securities are attributable to market price movements, net foreign exchange losses and foreign currency translation. Management does not believe any remaining significant unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of September 30, 2017 and December 31, 2016. The material portion of the Sovereign Debt Securities consists of U.S. Treasury Notes , which carry no significant risk . As of September 30, 2017, the estimated fair values (in thousands of U.S. dollars) of cash equivalents, short-term and long-te rm investments classified by their effective maturities are as follows: One year or less 197,515 One year to two years 20,331 Two years to three years 16,847 Three years to four years 7,135 Total $ 241,828 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Litigation and Other Legal Matters The Company is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it considers probable that future costs will be incurred and such costs can be reasonably estimated. The proceeding-related reserve is based on developments to date and historical information related to actions filed against the Company. As of September 30, 2017, the Company had established reserves for proceeding-related contingencies and other estimated contingencies of $6,208 thousand to cover legal actions ag ainst the Company in which its m anagement has assessed the likelihood of a final adverse outcome as probable. Expected legal costs related to litigations are accrued when the legal service is actually p rovided. In addition, as of September 30, 2017 the Company and its subsidiaries are subject to certain legal actions considered by the Company’s management and its legal counsels to be reasonably possible for an aggregate amount up to $6,506 thousand. No loss amount has been accrued for such reasonably possible legal actions of which most significant (individually or in the aggregate) are described below and in note 15 is to the financial statements in the Form 10-K for the year ended December 31, 2016. As of September 30, 2017, there were 56 lawsuits pending against our Argentine subsidiary in the Argentine ordinary courts and 1,856 pending claims in the Argentine Consumer Protection Agencies, where a lawyer is not required to file or pursue a claim. As of September 30, 2017, there were 10 claims pending against our Mexican subsidiaries in the Mexican ordinary courts and 248 claims pending against our Mexican subsidiaries in the Mexican Consumer Protection Agencies, where a lawyer is not required to file or pursue a claim. As of September 30, 2017, 700 legal actions were pending in the Brazilian ordin ary courts. In addition, as of September 30, 2017, there were 4,016 cases still pending in Brazilian consumer courts. Filing and pursuing of an action before Brazi lian consumer courts do not require the assistance of a lawyer. On July 12, 2017, São Paulo tax authorities assessed taxes and fines against one of our Brazilian subsidiaries (iBazar) relating to “ICMS Publicidade” for the period from July 2012 to December 2013 in an amount of R$ 12.2 million or $ 3.7 million according to the exchange rate in effect at that time. The Company will present administrative defense against the authorities’ claim. The opinion of the Company´s management, based on the opinion of external legal counsel, is that the risk of losing the case is reasonably possible, but not probable. In most of the cases filed against the Company, the plaintiffs asserted that the Company was responsible for fraud committed against them, or responsible for damages suffered when purchasing an item on the Company’s website, when using MercadoPago or MercadoEnvios, or when the Company invoiced them. Other third parties have from time to time claimed, and others may claim in the future, that the Company was responsible for fraud committed against them, or that the Company has infringed their intellectual property rights. The underlying laws with respect to the potential liability of online intermediaries like the Company are unclear in the jurisdictions where the Company operates. Management believes that additional lawsuits alleging that the Company has violated copyright or trademark laws will be filed against the Company in the future. Intellectual property and regulatory claims, whether meritorious or not, are time consuming and costly to resolve, require significant amounts of management time, could require expensive changes in the Company’s methods of doing business, or could require the Company to enter into costly royalty or licensing agreements. The Company may be subject to patent disputes, and be subject to patent infringement claims as the Company’s services expand in scope and complexity. In particular, the Company may face additional patent infringement claims involving various aspects of the payments businesses. From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. The number and significance of these disputes and inquiries are increasing as the Company’s business expands and the Company grows larger. Buyer protection program The Company provides consumers with a buyer protection program (“BPP”) for all transactions completed through the Company’s online payment solution (“MercadoPago”). This program is designed to protect buyers in the Marketplace from losses due primarily to fraud or counterparty non-performance. The Company’s BPP provides protection to consumers by reimbursing them for the total value of the unfulfilled transaction, if a purchased item does not arrive or does not match the seller’s description. The Company is entitled to recover from the third-party carrier companies performing the shipping service certain amounts paid under the BPP. Furthermore, in some specific circumstances (i.e. Black Friday, Hot Sale), the Company enters into insurance contracts with third party insurance companies in order to cover contingencies that may arise from the BPP. The maximum potential exposure under this program is estimated to be the volume of payments on the Marketplace, for which claims may be made under the Company’s existing user agreements. Based on historical losses to date, the Company does not believe that the maximum potential exposure is representative of the actual potential exposure. The Company records a liability with respect to losses under this program when they are probable and the amount can be reasonably estimated. As of September 30, 2017, management's estimate of the maximum potential exposure related to the Company’s buyer protection program is $663,139 thousands, for which the Company recorded a n allowance of $1,212 thousands as of that date. |
Long Term Retention Plan
Long Term Retention Plan | 9 Months Ended |
Sep. 30, 2017 | |
Long Term Retention Plan [Abstract] | |
Long Term Retention Plan | 8. Long term retention plan (“LTRP”) On April 3, 2017, the Board of Directors, upon the recommendation of the Compensation Committee, adopted the 2017 Long-Term Retention Plan (“2017 LTRP”). In addition to the annual salary and bonus of each employee , certain employees (“Eligible Employees”) are eligible to participate in the 2017 LTRP, which provides for the grant to an Eligible E mployee of a cash-settled fixed (a “2017 LTRP Fixed Award”) and a cash-settled variable award, (a “2017 LTRP Variable Award”, and together with any 2017 LTRP Fixed Award, the “2017 LTRP Awards”). In order to receive payment in respect of the 2017 LTRP Awards, each Eligible E mployee must satisfy the performance conditions established by the Board of Directors for such employee. If these co nditions are satisfied, the Eligible E mployee will, subject to his or her continued employment as of each applicable payment date, receive the full amount of his or her 2017 LTRP Awards, payable as follows: · 2017 LTRP Fixed Award: The eligible employee will receive a fixed payment equal to 16.66% of his or her 2017 LTRP Fixed Award once a year for a period of six years starting in March 2018 (the “Annual Fixed Payment”); and · 2017 LTRP Variable Award: On each date the Company pays the Annual Fixed Payment to the eligible employee, he or she will also receive a 2017 LTRP Variable Award payment equal to the product of (i) 16.66% of the applicable 2017 LTRP Variable Award and (ii) the quotient of (a) divided by (b), where (a), the numerator, equals the Applicable Year Stock Price (as defined below) and (b), the denominator, equals the 2016 Stock Price (as defined below). For purposes of the 2017 LTRP, the “2016 Stock Price” shall equal $164.17 (the average closing price of the Company´s common stock on the NASDAQ Global Market during the final 60 -trading days of 2016) and the “Applicable Year Stock Price” shall equal the average closing price of the Company´s common stock on the NASDAQ Global Market during the final 60-trading days of the year preceding the applicable payment date for so long as the Company´s common stock is listed on the NASDAQ. The following table summarizes the 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 long term retention plan accrued compensation expense for the nine and three-month periods ended September 30, 2017 and 2016, which are payable in cash according to the decisions made by the Board of Directors: Nine Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) LTRP 2009 $ 29 $ 648 $ - $ 352 LTRP 2010 891 1,017 147 543 LTRP 2011 1,422 1,275 229 672 LTRP 2012 1,945 1,555 315 813 LTRP 2013 3,809 3,380 711 1,689 LTRP 2014 3,782 3,089 772 1,448 LTRP 2015 4,680 3,846 1,063 1,663 LTRP 2016 6,717 4,441 1,606 1,944 LTRP 2017 5,459 - 1,823 - Total LTRP $ 28,734 $ 19,251 $ 6,666 $ 9,124 |
2.25% Convertible Senior Notes
2.25% Convertible Senior Notes Due 2019 | 9 Months Ended |
Sep. 30, 2017 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | |
2.25% Convertible Senior Notes Due 2019 | 9. 2.25% Convertible Senior Notes Due 2019 On June 30, 2014, the Company issued $330 million of 2.25% convertible senior notes due 2019 (the “Notes”). The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on January 1 and July 1, at a rate of 2.25% per annum. The Notes will mature on July 1, 2019 unless earlier repurchased or converted in accordance with their terms prior to such date. The Notes may be converted, under specific conditions, based on an initial conversion rate of 7.9353 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of $126.02 per share of common stock), subject to adjustment as described in the indenture governing the Notes. Holders may convert their notes at their option at any time prior to January 1, 2019 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after January 1, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. During the period from October 1, 2016 through December 31, 2016, 12 Notes were converted for a total amount of $12 thousands. During the period from April 1, 2017 through September 30, 2017, 16 Notes were converted for a total amount of $16 thousands. Additionally, during the third quarter of 2017, the conversion threshold was met again and the Notes became convertible at the holders’ option beginning on October 1, 2017 and ending on December 31 , 2017. The determination of whether or not the Notes are convertible must continue to be performed on a quarterly basis. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The intention of the Company is to share-settle the total amount due upon conversion of the Notes. From October 1 , 2017 to the date of issuance of these interim condensed consolidated financial statements, no additional conversion requests were made. In connection wi th the issuance of the Notes, the Company paid $19.7 million and $67.3 million (including transaction expenses) in June 2014 and September 2017, respectively, to enter into capped call transactio ns with respect to shares of the common stock (the “Capped Call Transactions”), with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes in the ev ent that the market price of the common stock is greater than the strike price of the Capped Call Transactions. The cost of the Capped Call Transactions is included as a net reduction to additional paid-in capital in the sto ckholders’ equity section of the consolidated balance sheets. The total estimated fair value of the Notes was $687.9 million and $458.8 million as of September 30, 2017 and December 31, 2016, respectively. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. The Company considered the fair value of the Notes as of September 30, 2017 and December 31, 2016 to be a Level 2 measurement. The fair value of the Notes is primarily affected by the trading price of our common stock and market interest rates. Based on the $258.9 closing price of the Company’s common stock on September 30, 2017, the if-converted value of the Notes exceeded their principal amount by $348.0 million. The following table presents the carrying amounts of the liability and equity components related to the 2.25% Convertible Senior Notes Due 2019 as of September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 (In thousands) Amount of the equity component (1) $ 45,808 $ 45,808 2.25% convertible senior notes due 2019 $ 330,000 $ 330,000 Unamortized debt discount (2) (17,909) (25,097) Unamortized transaction costs related to the debt component (2,862) (3,968) Contractual coupon interest accrual 5,569 7,425 Contractual coupon interest payment (3,713) (7,425) Net carrying amount $ 311,085 $ 300,935 (1) Net of $1,177 thousands of transaction costs related to the equity component of the Notes. (2) As of September 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.75 years. The following table presents the interest expense for the contractual interest, the accretion of debt discount and the amortization of debt issuance costs: Nine-months period ended September 30, Three-months period ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) (In thousands) (In thousands) Contractual coupon interest expense $ 5,569 $ 5,569 $ 1,856 $ 1,856 Amortization of debt discount 7,188 6,806 2,440 2,310 Amortization of debt issuance costs 1,106 998 381 344 Total interest expense related to the Notes $ 13,863 $ 13,373 $ 4,677 $ 4,510 |
Cash Dividend Distribution
Cash Dividend Distribution | 9 Months Ended |
Sep. 30, 2017 | |
Cash Dividend Distribution [Abstract] | |
Cash Dividend Distribution | 10. Cash Dividend Distribution In each of February, May, August and November of 2016, the Board of Directors approved a quarterly cash dividend of $6,624 thousands (or $0.150 per share) on the Company’s outstanding shares of common stock. The dividends were paid on April 15 , July 15 , October 14, 2016 and January 16, 2017 to stockholders of record as of the close of business on March 31 , June 30 , September 30 , and December 31, 2016 . On March 2, 2017 , the Board of Directors approved a change to the Company’s dividend policy for providing for a fixed quarterly dividend payment in 2017 of $0.15 0 per share ( $0.60 0 per share annually). The new dividend policy took effect following the payment of the $0.15 0 per share dividend declared by the Board of Directors of the Company, which was paid on April 17, 2017 to shareholders of record as of the close of business on March 31, 2017 . On May 2, 2017 , the Board of Directors approved a quarterly cash dividend of $6,624 thousands (or $0.15 0 per share) on the Company´s outstanding shares of common stock. The second quarterly dividend was paid on July 14, 2017 to stockholders of record as of the close of business on June 30, 2017 . On July 31, 2017 , the Board of Directors approved a quarterly cash dividend of $6,624 thousands (or $0.15 0 per share) on our outstanding shares of common stock. The third quarterly dividend was paid on October 16, 2017 to stockholders of record as of the close of business on September 30, 2017 . On October 31, 2017 , the Board of Directors approved a quarterly cash dividend of $6,624 thousands (or $0.150 per share) on our outstanding shares of common stock. This quarterly dividend is payable on January 16, 201 8 to stockholders of record as of the close of business on December 31, 2017 . |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited interim condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the accounts of the Company and its wholly-owned subsidiaries. These interim condensed consolidated financial statements are stated in U.S. dollars, except for amounts otherwise indicated. Intercompany transactions and balances with subsidiaries have been eliminated for consolidation purposes. Substantially all net revenues, cost of net revenues and operating expenses, are generated in the Company’s foreign operations. Operating income of foreign operations amounted to 96.7% and 99.9% of the con solidated amounts during the nine -month periods ende d September 30, 2017 and 2016. Long-lived assets, Intangible assets and Goodwill located in the foreign jurisdictions totaled $247,401 thousands and $ 232,314 thousands as of September 30, 2017 and December 31, 2016, respectively. These interim condensed consolidated financial statements reflect the Company’s consolidat ed financial position as of September 30, 2017 and December 31, 2016. These financial statements also show the Company’s consolidated statements of income and comprehensive income for the nine and three-month periods ended September 30, 2017 and 2016; and sta tement of cash flows for the nine-month periods ended September 30, 2017 and 2016. These interim condensed consolidated financial statements include all normal recurring adjustments that management believes are necessary to fairly state the Company’s financial position, operating results and cash flows. Because all of the disclosures required by U.S. GAAP for annual consolidated financial statements are not included herein, these unaudited interim condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2016, contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated statements of income, of comprehensive income and of cash flows for the periods presented herein are not necessarily indicative of results expected for any future period. For a more detailed discussion of the Company’s significant accounting policies, see note 2 to the financial statements in the Form 10-K. During the nine-month period ended September 30, 2017, there were no material updates made to the Company’s significant accounting policies. |
Foreign Currency Translation | Foreign currency translation All of the Company’s foreign operations have determined the local currency to be their functional currency, except for Venezuela since January 1, 2010, as described below. Accordingly, these foreign operating subsidiaries translate assets and liabilities from their local currencies into U.S. dollars by using period-end exchange rates while income and expense accounts are translated at the average rates in effect during the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of the transaction are used. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income. Venezuelan currency status Pursuant to U.S. GAAP, the Company has transitioned its Venezuelan operations to highly inflationary status as from January 1, 2010, which requires that transactions and balances are re-measured as if the U.S. dollar was the functional currency for such operation. The cumulative three year inflation rate as from December 31, 2010 exceeded 100% at each period end. Thus, the Company continues to treat the economy of Venezuela as highly-inflationary. On March 9, 2016 the Central Bank of Venezuela (“BCV”) issued the Exchange Agreement No.35. The agreement established a “protected” exchange rate (“DIPRO”) for certain transactions, such as but not limited to: imports of goods of the food and health sectors, as well as supplies associated with the production of said sectors; expenses relating to health treatments, sports, culture, scientific research, and other urgent matters defined by the exchange regulations. All foreign currency transactions not expressly provided in Exchange Agreement No.35 will be processed on the alternate foreign currency markets governed by the exchange regulations, at the floating supplementary market exchange rate (“DICOM”). Additionally, the agreement established that the alternate foreign currency markets referred to in Exchange Agreement No.33 of February 10, 2015 (“SIMADI”) will continue to operate until replaced by others. From March 31, 2016 through June 30, 2016, the SIMADI exchange rate increased from 273 BsF per U.S. dollar to 628 BsF per U.S. dollar, a 130% increase in the exchange rate. As a consequence of the local currency devaluation, the Company recorded a foreign exchange loss of $4.9 million during the second quarter of 2016. Considering the significant devaluation and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed its long-lived assets (including non-current other assets), goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of June 30, 2016 would not be fully recoverable. As a result, on June 30, 2016, the Company recorded an impairment of offices and commercial property under construction included within non-current other assets of $13.7 million. The carrying amount of offices and commercial property under construction was adjusted to its estimated fair value of approximately $12.5 million as of June 30, 2016, by using the market approach, and considering prices for similar assets. On May 19, 2017, the BCV issued the Exchange Agreement No.38, which established a new foreign exchange mechanism under DICOM, replacing SIMADI. The new mechanism consists of auctions, administered by an auction committee, where sellers and buyers from the private sector may offer foreign currency under certain limits determined by the BCV. In light of the disappearance of SIMADI ( which closed at 728.0 per U.S. dollar), and the Company’s inability to gain access to U.S. dollars under SIMADI, it started requesting U.S. dollars through DICOM. As a result, the Company expects to settle its transactions through DICOM going forward and concluded that the DICOM exchange rate should be used as from June 1, 2017 to measure its bolivar-denominated monetary assets and liabilities and to measure the revenues and expenses of the Venezuelan subsidiaries. Therefore, a s of June 30, 2017, monetary assets and liabilities in Bolivares Fuertes (“BsF”) were re-measured to the U.S. dollar using the DICOM closing exchange rate of 2640.0 BsF per U.S. dollar. A s a consequence of the local currency devaluation, the Company recorded a foreign exchange loss of $22.0 million during the second quarter of 2017. Considering the significant devaluation and the lower U.S. dollar-equivalent cash flows then expected from the Venezuelan business, the Company reviewed its long-lived assets (including non-current other assets), goodwill and intangible assets with indefinite useful life for impairment and concluded that the carrying value of certain real estate investments in Venezuela as of June 30, 2017 would not be fully recoverable. As a result, on June 30, 2017, the Company recorded an impairment of offices and commercial property under construction included within non-current other assets of $2.8 million. The carrying amount of offices and commercial property under construction was adjusted to its estimated fair value of approximately $9.7 million as of June 30, 2017, by using the market approach and considering prices for similar assets. As of September 30, 2017, the DICOM exchange rate was 3,345.0 BsF per U.S. dollar. Until 2010 the Company was able to obtain U.S. dollars for any purpose, including dividends distribution, using alternative mechanisms other than through the Commission for the Administration of Foreign Exchange Control (CADIVI). Those U.S. dollars, obtained at a higher exchange rate than the one offered by CADIVI, and held at U.S. bank accounts of its Venezuelan subsidiaries, were used until 2011 for dividend distributions from its Venezuelan subsidiaries. The Company has not distributed dividends from the Venezuelan subsidiaries since 2011. The following table sets forth the assets, liabilities and net assets of the Company’s Venezuelan subsidiaries, before intercompany eliminations of a net liability of $29,594 thousands and $ 15,843 thousands, as of September 30, 2017 and December 31, 2016 and net revenues for the nine-month periods ended September 30, 2017 and 2016: September 30, 2017 2016 (In thousands) Venezuelan operations Net Revenues $ 38,329 $ 26,451 September 30, December 31, 2017 2016 (In thousands) Assets 62,648 66,165 Liabilities (37,269) (22,950) Net Assets $ 25,379 $ 43,215 As of September 30, 2017, the net assets (before intercompany eliminations) of the Venezuelan subsidiaries amounted to 6.2% of consolidated net assets, and cash and investments of the Venezuelan subsidiaries held in local currency in Venezuela amounted to 2.2% of our consolidated cash and investments. The Company’s ability to obtain U.S. dollars in Venezuela is negatively affected by the exchange regulations in Venezuela that are described above and elsewhere in these interim condensed consolidated financial statements. In addition, its business and ability to obtain U.S. dollars in Venezuela would be negatively affected by additional material devaluations or the imposition of significant additional and more stringent controls on foreign currency exchange by the Venezuelan government. Despite the current difficult macroeconomic environment in Venezuela, the Company continues to actively manage, through its Venezuelan subsidiaries, its investment in Venezuela. |
Income and Asset Taxes | Income and asset taxes The Company is subject to U.S. and foreign income taxes. The Company accounts for income taxes following the liability method of accounting which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized. The Company’s income tax expense consists of taxes currently payable, if any, plus the change during the period in the Company’s deferred tax assets and liabilities. On August 17, 2011, the Argentine government issued a new software development law and on September 9, 2013 the regulatory decree was issued, which established the new requirement to become beneficiary of the new software development law. The decree establishes compliance requirements with annual incremental ratios related to exports of services and research and development expenses that must be achieved to remain within the tax holiday. The Company’s Argentine subsidiary has to achieve certain required ratios annually under the software development law in order to be eligible for the benefits mentioned below. On September 17, 2015, the Argentine Industry Secretary issued Resolution 1041/2015 approving the Company’s application for eligibility under the new software development law for the Company’s Argentinean subsidiary, Mercadolibre S.R.L. Furthermore, on September 18, 2016, the Argentine Industry Secretary issued Resolutions 93/2016 and 97/2016 approving the Company’s application for eligibility under the new software development law for the Company’s Argentinean subsidiaries, Neosur S.RL. and Business Vision S.A. As a result, the Company’s Argentinean subsidiaries have been granted a tax holiday retroactive from September 18, 2014. A portion of the benefits obtained as beneficiaries of the new law is a relief of 60% of total income tax related to software development activities and a 70% relief in payroll taxes related to software development activities. The benefits to the Company under the software development law will expire on December 31, 2019. As a result of the Company’s eligibility under the new law, it recorded an income tax benefit of $17,672 thousands and $6,367 thousands during the nine and three-month periods ended September 30, 2017, respectively. Aggregate per share effect of the Argentine tax holiday amounted to $0.40 and $0.14 for the nine and three -month periods ended September 30, 2017, respectively. Furthermore, the Company recorded a labor cost benefit of $5,513 thousands and $2,016 thousands during the nine an d three-month periods ended September 30, 2017, respectively. Additionally, $1,623 thousands and $587 thousands were accrued to pay software developme nt law audit fees during the nine an d three-month periods ended September 30, 2017, resp ectively. During the nine months period ended September 30, 2016, the Company recorded an income tax benefit of $16,018 thousands, a labor cost benefit of $4,173 thousands and $1,416 thousands were accrued to pay software development law audit fees. Additionally, during the third quarter of 2016, the Company recorded an income tax benefit of $6,823 thousands, a labor cost benefit of $2,167 thousands and $631 thousands were accrued to pay software development law audit fees. Aggregate per share effect of the Argentine tax holiday amounted to $0.46 and $0.20 for the nine a nd three-month periods ended September 30, 2016, respectively. As of September 30, 2017 and December 31, 2016, the Company had included under non-current deferred tax assets the foreign tax credits related to the dividend distributions received from its subsidiaries for a total amount of $11,588 thousands and $13,515 thousands, respectively. Those foreign tax credits will be used to offset the future domestic income tax payable. |
Impairment of Long-lived Assets | Impairment of long-lived assets The Company reviews its long-lived assets (including non-current other assets) for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As explained in section “Foreign Currency Translation” of the present Note to these interim condensed consolidated financial statements, Venezuelan currency experienced a steep devaluation in the second quarter of 2017 and 2016. Considering this change in facts and circumstances and the lower U.S. dollar-equivalent cash flows expected from the Venezuelan business, and long-lived assets expected use, the Company concluded that certain real estate investments held in Caracas, Venezuela, should be impaired. The fair value of long-lived assets was estimated through market approach using level 3 inputs in the fair value hierarchy. These level 3 inputs included, but are not limited to, executed purchase agreements in similar assets and third party valuations. As a consequence, the Company estimated the fair value of the impaired long-lived assets, and recorded impairment losses of $2.8 million and $13.7 million on June 30, 2017 and June 30, 2016, respectively. |
Use of Estimates | Use of estimates The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to accounting for allowance for doubtful accounts and chargeback provisions, recoverability of goodwill and intangible assets with indefinite useful life, useful life of long-lived assets and intangible assets, impairment of short-term and long-term investments, impairment of long-lived assets, compensation costs relating to the Company’s long term retention plan, fair value of convertible debt note, recognition of income taxes and contingencies. Actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition guidance provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company has substantially completed the assessment on the adoption of this standard concluding that it is not expected to have a material measurement impact on the Company´s financial statements. However, the Company continues assessing the potential impacts regarding the presentation of certain incentives recorded as an expense under current guidance . The adoption of this standard will also require to expand and include certain additional disclosures. The standard is required to be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company continues evaluating the transition method upon adoption. The Company will adopt the new revenue standard in its first quarter of 2018. On February 25, 2016 the FASB issued ASU 2016-02. The amendments in this update create Topic 842, Leases, which supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. Previous GAAP did not require lease assets and lease liabilities to be recognized for most leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. Based on existing leases currently classified as operating leases, the Company expects to recognize on the statements of financial position right-of-use assets and lease liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is assessing the effects that the adoption of this accounting pronouncement may have on the Company’s financial statements. On June 16, 2016 the FASB issued ASU 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of credit losses on financial instruments”. This update amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this update eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this topic will require that credit losses be presented as an allowance rather than as a write-down. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is assessing the effects that the adoption of this accounting pronouncement may have on its financial statements. On October 24, 2016 the FASB issued “ASU 2016-16—Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory”. This update eliminates the prohibition on recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset or assets have been sold to an outside party. Consequently, this update requires recognition of the current and deferred income tax consequences of an intra-entity asset transfer when the transfer occurs. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company´s financial statements. On September 29, 2017 the FASB issued “ ASU 2017-13—Revenue recognition (Topic 605), Revenue from contracts with customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. This update addresses Transition Related to Accounting Standards Updates No. 2014-09, Revenue from Contracts with Customers (Topic 606) , and No. 2016-02, Leases (Topic 842) . This Update also supersedes SEC paragraphs pursuant the rescission of SEC Staff Announcement, “Accounting for Management Fees Based on a Formula”, effective upon the initial adoption of Topic 606, Revenue from Contracts with Customers, and SEC Staff Announcement, “Lessor Consideration of Third-Party Value Guarantees,” effective upon the initial adoption of Topic 842, Leases. The adoption of this standard is not expected to have a material impact on the Company´s financial statements. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries | September 30, 2017 2016 (In thousands) Venezuelan operations Net Revenues $ 38,329 $ 26,451 September 30, December 31, 2017 2016 (In thousands) Assets 62,648 66,165 Liabilities (37,269) (22,950) Net Assets $ 25,379 $ 43,215 |
Accumulated Other Comprehensive Loss | September 30, December 31, 2017 2016 (In thousands) Accumulated other comprehensive loss: Foreign currency translation $ (277,171) $ (259,226) Unrealized gains (losses) on investments 518 (909) Estimated tax (loss) gain on unrealized gains (losses) on investments (178) 322 $ (276,831) $ (259,813) |
Summary of Changes in Accumulated Balances of Other Comprehensive Loss | Unrealized Foreign Estimated tax (Losses) Gains on Currency (expense) Investments Translation benefit Total (In thousands) Balances as of December 31, 2016 $ (909) $ (259,226) $ 322 $ (259,813) Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments 518 (17,945) (178) (17,605) Amount of gain (loss) reclassified from accumulated other comprehensive loss 909 — (322) 587 Net current period other comprehensive income gain (loss) 1,427 (17,945) (500) (17,018) Ending balance $ 518 $ (277,171) $ (178) $ (276,831) |
Reclassifications Out of Accumulated Other Comprehensive Loss | Amount of (Loss) Gain Reclassified from Details about Accumulated Accumulated Other Other Comprehensive Loss Comprehensive Affected Line Item Components Loss in the Statement of Income (In thousands) Unrealized losses on investments $ (909) Interest expense and other financial losses Estimated tax gain on unrealized losses on investments 322 Income tax gain Total reclassifications for the year $ (587) Total, net of income taxes |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Income Per Share [Abstract] | |
Net Income (Loss) Per Share of Common Stock | Net income per share of common stock is as follows for the nine an d three-month periods ended September 30, 2017 and 2016: Nine Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net income per common share $ 1.85 $ 1.85 $ 1.93 $ 1.93 $ 0.63 $ 0.63 $ 0.88 $ 0.88 Numerator: Net income $ 81,500 $ 81,500 $ 85,017 $ 85,017 $ 27,666 $ 27,666 $ 38,912 $38,912 Denominator: Weighted average of common stock outstanding for Basic earnings per share 44,157,364 44,157,215 44,157,364 44,157,341 Adjusted weighted average of common stock outstanding for Diluted earnings per share 44,157,364 44,157,215 44,157,364 44,157,341 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets [Abstract] | |
Composition of Goodwill and Intangible Assets | September 30, December 31, 2017 2016 (In thousands) Goodwill $ 95,249 $ 91,797 Intangible assets with indefinite lives - Trademarks 13,153 12,490 Amortizable intangible assets - Licenses and others 6,565 8,738 - Non-compete agreement 2,491 1,787 - Customer list 15,215 14,580 - Trademarks 1,854 993 Total intangible assets $ 39,278 $ 38,588 Accumulated amortization (14,636) (12,311) Total intangible assets, net $ 24,642 $ 26,277 |
Table Showing Changes in Carrying Amount of Goodwill | Period ended September 30, 2017 Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total (In thousands) Balance, beginning of the period $ 27,660 $ 6,587 $ 17,388 $ 29,342 $ 5,989 $ 3,643 $ 1,188 $ 91,797 - Effect of exchange rates changes 245 (809) 783 3,158 — 50 25 3,452 Balance, end of the period $ 27,905 $ 5,778 $ 18,171 $ 32,500 $ 5,989 $ 3,693 $ 1,213 $ 95,249 Year ended December 31, 2016 Brazil Argentina Chile Mexico Venezuela Colombia Other Countries Total (In thousands) Balance, beginning of year $ 18,526 $ 7,430 $ 16,438 $ 33,834 $ 5,729 $ 3,437 $ 1,151 $ 86,545 - Business acquisition 5,635 700 — 190 260 57 32 6,874 - Effect of exchange rates changes 3,499 (1,543) 950 (4,682) — 149 5 (1,622) Balance, end of the year $ 27,660 $ 6,587 $ 17,388 $ 29,342 $ 5,989 $ 3,643 $ 1,188 $ 91,797 |
Expected Intangible Asset Amortization Expense | For year ended 12/31/2017 $ 1,343 For year ended 12/31/2018 4,475 For year ended 12/31/2019 2,201 For year ended 12/31/2020 956 Thereafter 2,514 $ 11,489 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Financial Performance of Company's Reporting Segments | Nine Months Ended September 30, 2017 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 569,320 $ 250,692 $ 58,324 $ 38,329 $ 44,452 $ 961,117 Direct costs (390,008) (150,973) (95,683) (16,841) (37,052) (690,557) Impairment of Long-lived Assets - - - (2,837) - (2,837) Direct contribution 179,312 99,719 (37,359) 18,651 7,400 267,723 Operating expenses and indirect costs of net revenues (146,841) Income from operations 120,882 Other income (expenses): Interest income and other financial gains 37,020 Interest expense and other financial losses (19,686) Foreign currency losses (19,475) Net income before income tax expense $ 118,741 Nine Months Ended September 30, 2016 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 311,427 $ 185,885 $ 34,375 $ 26,451 $ 29,983 $ 588,121 Direct costs (188,772) (105,217) (29,004) (12,691) (21,281) (356,965) Impairment of Long-lived Assets - - - (13,717) - (13,717) Direct contribution 122,655 80,668 5,371 43 8,702 217,439 Operating expenses and indirect costs of net revenues (101,055) Income from operations 116,384 Other income (expenses): Interest income and other financial gains 25,192 Interest expense and other financial losses (18,807) Foreign currency losses (5,062) Net income before income tax expense $ 117,707 Three Months Ended September 30, 2017 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $ 229,475 $ 91,308 $ 22,604 $ 9,751 $ 17,523 $ 370,661 Direct costs (182,858) (56,210) (36,038) (4,582) (14,409) (294,097) Direct contribution 46,617 35,098 (13,434) 5,169 3,114 76,564 Operating expenses and indirect costs of net revenues (49,022) Income from operations 27,542 Other income (expenses): Interest income and other financial gains 14,200 Interest expense and other financial losses (6,709) Foreign currency gains 1,622 Net income before income tax expense $36,655 Three Months Ended September 30, 2016 Brazil Argentina Mexico Venezuela Other Countries Total (In thousands) Net revenues $131,003 $69,983 $11,807 $6,885 $11,169 $230,847 Direct costs (77,012) (39,026) (10,353) (3,462) (7,943) (137,796) Direct contribution 53,991 30,957 1,454 3,423 3,226 93,051 Operating expenses and indirect costs of net revenues (39,342) Income from operations 53,709 Other income (expenses): Interest income and other financial gains 9,892 Interest expense and other financial losses (6,492) Foreign currency losses (4,823) Net income before income tax expense $52,286 |
Allocation of Long-Lived Tangible Assets Based on Geography | September 30, December 31, 2017 2016 (In thousands) US property and equipment, net $ 8,445 $ 9,771 Other countries Argentina 25,842 25,071 Brazil 67,351 55,706 Mexico 3,487 2,307 Venezuela 21,935 21,615 Other countries 9,041 9,791 $ 127,656 $ 114,490 Total property and equipment, net $ 136,101 $ 124,261 |
Allocation of Goodwill and Intangible Assets Based on Geography | September 30, December 31, 2017 2016 (In thousands) US intangible assets $ 146 $ 250 Other countries goodwill and intangible assets Argentina 6,630 7,717 Brazil 30,400 31,170 Mexico 41,992 38,860 Venezuela 7,168 7,366 Chile 28,164 27,395 Other countries 5,391 5,316 $ 119,745 $ 117,824 Total goodwill and intangible assets $ 119,891 $ 118,074 |
Consolidated Net Revenues by Similar Products and Services | Nine-months Ended September 30, Three-months Ended September 30, Consolidated Net Revenues 2017 2016 2017 2016 (In thousands) (In thousands) Marketplace $ 582,475 $ 341,749 $ 227,269 $ 134,374 Non-marketplace (*) (**) $ 378,642 $ 246,372 $ 143,392 $ 96,473 Total $ 961,117 $ 588,121 $ 370,661 $ 230,847 (*) Includes, among other things, Ad Sales, Classified Fees , Payment Fees, Shipping Fees and other ancillary services. (**) Includes an amount of $ 232,426 thousands and $139,630 thous ands of Payment Fees for the nine-month periods ended September 30, 2017 and 2016, respectively. Includes an amount of $ 92,254 thousands and $52,444 thousands of Payment Fees for th e three-month periods ended September 30, 2017 and 2016, respectively. |
Fair Value Measurement of Ass22
Fair Value Measurement of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurement of Assets and Liabilities [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Quoted Prices in Quoted Prices in Balances as of active markets for Significant other Unobservable Balances as of active markets for Significant other Unobservable September 30, identical Assets observable inputs inputs December 31, identical Assets observable inputs inputs Description 2017 (Level 1) (Level 2) (Level 3) 2016 (Level 1) (Level 2) (Level 3) (In thousands) Assets Cash and Cash Equivalents: Money Market Funds $ 189,574 $ 189,574 $ — $ — $ 111,198 $ 111,198 $ — $ — Investments: Sovereign Debt Securities $ 21,786 $ 21,786 $ — $ — $ 50,703 $ 50,703 $ — $ — Corporate Debt Securities 30,468 28,384 2,084 — 207,633 61,986 145,647 — Certificates of deposit — — — — 35,374 — 35,374 — Total Financial Assets $ 241,828 $ 239,744 $ 2,084 $ — $ 404,908 $ 223,887 $ 181,021 $ — Liabilities: Contingent considerations $ — $ — $ — $ — $ 4,213 $ — $ — $ 4,213 Long-term retention plan 38,503 — 38,503 — 27,135 — 27,135 — Total Financial Liabilities $ 38,503 $ — $ 38,503 $ — $ 31,348 $ — $ 27,135 $ 4,213 |
Fair Value of Financial Assets and Liabilities Measured at Amortized Cost | Balances as of Significant other Balances as of Significant other September 30, observable inputs December 31, observable inputs 2017 (Level 2) 2016 (Level 2) (In thousands) Assets Time Deposits $ 167,224 $ 167,224 $ 113,414 $ 113,414 Accounts receivable 28,564 28,564 25,435 25,435 Credit Cards receivable 406,883 406,883 307,904 307,904 Loans receivable, net 51,843 51,843 6,283 6,283 Other assets 89,097 89,097 58,900 58,900 Total Assets $ 743,611 $ 743,611 $ 511,936 $ 511,936 Liabilities Accounts payable and accrued expenses $ 181,557 $ 181,557 $ 105,106 $ 105,106 Funds payable to customers 519,420 519,420 370,693 370,693 Salaries and social security payable 44,789 44,789 37,936 37,936 Taxes payable 27,923 27,923 27,338 27,338 Dividends payable 6,624 6,624 6,624 6,624 Loans payable and other financial liabilities (*) 334,145 334,145 313,523 313,523 Other liabilities 18,740 18,740 11,954 11,954 Total Liabilities $ 1,133,198 $ 1,133,198 $ 873,174 $ 873,174 (*) The fair value of the convertible senior notes (including the equity component) is disclosed in Note 9. |
Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities | December 31, 2016 Cost Gross Unrealized Gains (1) Gross Unrealized Losses (1) Estimated Fair Value (In thousands) Cash and cash equivalents Money Market Funds $ 111,198 $ — $ — $ 111,198 Total Cash and cash equivalents $ 111,198 $ — $ — $ 111,198 Short-term investments Sovereign Debt Securities $ 2,166 $ — $ — $ 2,166 Corporate Debt Securities 102,509 26 (168) 102,367 Certificates of deposit 35,336 40 (2) 35,374 Total Short-term investments $ 140,011 $ 66 $ (170) $ 139,907 Long-term investments Sovereign Debt Securities $ 48,943 $ — $ (406) $ 48,537 Corporate Debt Securities 105,632 90 (456) 105,266 Total Long-term investments $ 154,575 $ 90 $ (862) $ 153,803 Total $ 405,784 $ 156 $ (1,032) $ 404,908 (1) Unrealized gains (losses) from securities are attributable to market price movements, net foreign exchange losses and foreign currency translation. Management does not believe any remaining significant unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of September 30, 2017 and December 31, 2016. |
Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments | One year or less 197,515 One year to two years 20,331 Two years to three years 16,847 Three years to four years 7,135 Total $ 241,828 |
Long Term Retention Plan (Table
Long Term Retention Plan (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long Term Retention Plan [Abstract] | |
Long Term Retention Plans Accrued Compensation Expense | Nine Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) LTRP 2009 $ 29 $ 648 $ - $ 352 LTRP 2010 891 1,017 147 543 LTRP 2011 1,422 1,275 229 672 LTRP 2012 1,945 1,555 315 813 LTRP 2013 3,809 3,380 711 1,689 LTRP 2014 3,782 3,089 772 1,448 LTRP 2015 4,680 3,846 1,063 1,663 LTRP 2016 6,717 4,441 1,606 1,944 LTRP 2017 5,459 - 1,823 - Total LTRP $ 28,734 $ 19,251 $ 6,666 $ 9,124 |
2.25% Convertible Senior Note24
2.25% Convertible Senior Notes Due 2019 (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | |
Carrying Amounts of Liability and Equity Components | September 30, 2017 December 31, 2016 (In thousands) Amount of the equity component (1) $ 45,808 $ 45,808 2.25% convertible senior notes due 2019 $ 330,000 $ 330,000 Unamortized debt discount (2) (17,909) (25,097) Unamortized transaction costs related to the debt component (2,862) (3,968) Contractual coupon interest accrual 5,569 7,425 Contractual coupon interest payment (3,713) (7,425) Net carrying amount $ 311,085 $ 300,935 (1) Net of $1,177 thousands of transaction costs related to the equity component of the Notes. (2) As of September 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.75 years. |
Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount | Nine-months period ended September 30, Three-months period ended September 30, 2017 2016 2017 2016 (In thousands) (In thousands) (In thousands) (In thousands) Contractual coupon interest expense $ 5,569 $ 5,569 $ 1,856 $ 1,856 Amortization of debt discount 7,188 6,806 2,440 2,310 Amortization of debt issuance costs 1,106 998 381 344 Total interest expense related to the Notes $ 13,863 $ 13,373 $ 4,677 $ 4,510 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017USD ($)$ / sharesVEF / $ | Jun. 30, 2017USD ($)VEF / $ | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)VEF / $ | Jun. 30, 2017USD ($)VEF / $ | Jun. 30, 2016USD ($)VEF / $ | Sep. 30, 2017USD ($)$ / sharesVEF / $ | Sep. 30, 2016USD ($)$ / shares | Dec. 31, 2016USD ($) | Mar. 31, 2016VEF / $ | |
Significant Accounting Policies [Line Items] | ||||||||||
Percentage of revenues and operating costs generated in foreign operations | 96.70% | 99.90% | ||||||||
Long-lived assets, intangible assets and goodwill located in the foreign operations | $ 247,401 | $ 247,401 | $ 232,314 | |||||||
Foreign currency losses | (1,622) | $ 4,823 | 19,475 | $ 5,062 | ||||||
Impairment of Long lived assets | 2,837 | 13,717 | ||||||||
Long-Lived Assets | 136,101 | 136,101 | 124,261 | |||||||
Liabilities | 1,212,136 | $ 1,212,136 | 938,581 | |||||||
Percentage on relief of total income tax | 60.00% | |||||||||
Percentage on relief of payroll tax | 70.00% | |||||||||
Foreign tax credit | 11,588 | $ 11,588 | 13,515 | |||||||
Payment for capped call transactions | 67,308 | |||||||||
New Software Development Law [Member] | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Income tax gain | 6,367 | 6,823 | 17,672 | 16,018 | ||||||
Labor cost benefit | $ 2,016 | $ 2,167 | $ 5,513 | $ 4,173 | ||||||
Aggregate per share effect of the Argentine tax holiday | $ / shares | $ 0.14 | $ 0.20 | $ 0.40 | $ 0.46 | ||||||
Software development law audit fees | $ 587 | $ 631 | $ 1,623 | $ 1,416 | ||||||
Venezuelan Operations [Member] | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Foreign exchange rate | VEF / $ | 3,345 | 2,640 | 628 | 2,640 | 628 | 3,345 | 273 | |||
Foreign currency losses | $ 22,000 | $ 4,900 | ||||||||
Cumulative Inflation Rate Period | 3 years | |||||||||
Foreign currency inflation rate | 130.00% | 130.00% | ||||||||
Impairment of Long lived assets | $ 2,800 | $ 13,700 | $ 2,800 | $ 13,700 | ||||||
Long-Lived Assets | $ 9,700 | $ 12,500 | $ 9,700 | $ 12,500 | ||||||
Liabilities | $ 37,269 | $ 37,269 | 22,950 | |||||||
Percentage of consolidated net assets | 6.20% | 6.20% | ||||||||
Percentage of consolidated cash and investments | 2.20% | 2.20% | ||||||||
Venezuelan Operations [Member] | Minimum [Member] | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Foreign currency inflation rate | 100.00% | 100.00% | ||||||||
Venezuelan Operations [Member] | Intersegment Eliminations [Member] | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Liabilities | $ 29,594 | $ 29,594 | $ 15,843 | |||||||
Venezuelan Operations [Member] | SIMADI [Member] | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Foreign exchange rate | VEF / $ | 728 | 728 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Assets, Liabilities and Net Assets of Company's Venezuelan Subsidiaries) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||||
Net Revenues | $ 370,661 | $ 230,847 | $ 961,117 | $ 588,121 | |
Assets | 1,618,292 | 1,618,292 | $ 1,367,435 | ||
Liabilities | (1,212,136) | (1,212,136) | (938,581) | ||
Venezuelan Operations [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Net Revenues | 38,329 | $ 26,451 | |||
Assets | 62,648 | 62,648 | 66,165 | ||
Liabilities | (37,269) | (37,269) | (22,950) | ||
Net Assets | $ 25,379 | $ 25,379 | $ 43,215 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Summary of Significant Accounting Policies [Abstract] | ||
Foreign currency translation | $ (277,171) | $ (259,226) |
Unrealized gains (losses) on investments | 518 | (909) |
Estimated tax (loss) gain on unrealized gains (losses) on investments | (178) | 322 |
Accumulated other comprehensive loss | $ (276,831) | $ (259,813) |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Summary of Changes in Accumulated Balances of Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Beginning Balance, Estimated tax (expense) benefit | $ 322 | |
Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments, Estimated tax (expense) benefit | (178) | |
Amount of gain (loss) reclassified from accumulated other comprehensive loss, Estimated tax (expense) benefit | (322) | |
Net current period other comprehensive income gain (loss), Estimated tax (expense) benefit | (500) | |
Ending Balance, Estimated tax (expense) benefit | (178) | |
Beginning Balance | (259,813) | |
Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments, net of tax | (17,605) | |
Amount of gain (loss) reclassified from accumulated other comprehensive loss, net of tax | 587 | $ 672 |
Net current period other comprehensive income gain (loss), net of tax | (17,018) | |
Ending Balance | (276,831) | |
Unrealized (Losses) Gains on Investments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Beginning Balance | (909) | |
Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments, before tax | 518 | |
Amount of gain (loss) reclassified from accumulated other comprehensive loss, before tax | 909 | |
Net current period other comprehensive income gain (loss), before tax | 1,427 | |
Ending Balance | 518 | |
Foreign Currency Translation [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Beginning Balance | (259,226) | |
Other comprehensive loss before reclassifications adjustments for gains (losses) on available for sale investments, before tax | (17,945) | |
Net current period other comprehensive income gain (loss), before tax | (17,945) | |
Ending Balance | $ (277,171) |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Reclassifications Out of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense and other financial losses | $ (6,709) | $ (6,492) | $ (19,686) | $ (18,807) |
Income tax gain | $ (8,989) | $ (13,374) | (37,241) | $ (32,690) |
Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss [Member] | Unrealized (Losses) Gains on Investments [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense and other financial losses | (909) | |||
Income tax gain | 322 | |||
Net income attributable to MercadoLibre, Inc. shareholders | $ (587) |
Net Income Per Share (Narrative
Net Income Per Share (Narrative) (Details) | Sep. 30, 2017 | Jun. 30, 2014 |
2.25% Convertible Senior Notes Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible senior notes, interest rate | 2.25% | 2.25% |
Net Income Per Share (Net Incom
Net Income Per Share (Net Income (Loss) Per Share of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income attributable to MercadoLibre, Inc. per common share | ||||
Net income attributable to MercadoLibre, Inc. Shareholders per common share, Basic | $ 0.63 | $ 0.88 | $ 1.85 | $ 1.93 |
Net income attributable to MercadoLibre, Inc. Shareholders per common share, Diluted | $ 0.63 | $ 0.88 | $ 1.85 | $ 1.93 |
Numerator: | ||||
Net income attributable to MercadoLibre, Inc. Shareholders, Basic | $ 27,666 | $ 38,912 | $ 81,500 | $ 85,017 |
Net income attributable to MercadoLibre, Inc. Shareholders, Diluted | $ 27,666 | $ 38,912 | $ 81,500 | $ 85,017 |
Denominator: | ||||
Weighted average of common stock outstanding for Basic earnings per share | 44,157,364 | 44,157,341 | 44,157,364 | 44,157,215 |
Adjusted weighted average of common stock outstanding for Diluted earnings per share | 44,157,364 | 44,157,341 | 44,157,364 | 44,157,215 |
Goodwill and Intangible Asset32
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||||
Aggregate amortization expense for intangible assets | $ 1,182 | $ 1,144 | $ 3,247 | $ 2,863 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets (Composition of Goodwill and Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill | $ 95,249 | $ 91,797 | $ 91,797 | $ 86,545 |
Total intangible assets | 39,278 | 38,588 | ||
Accumulated amortization | (14,636) | (12,311) | ||
Total intangible assets, net | 24,642 | 26,277 | ||
Licenses And Others [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 6,565 | 8,738 | ||
Non-Compete Agreement [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 2,491 | 1,787 | ||
Customer List [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 15,215 | 14,580 | ||
Trademarks [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortizable intangible assets | 1,854 | 993 | ||
Trademarks [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible assets with indefinite lives | $ 13,153 | $ 12,490 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets (Table Showing Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||
Balance, beginning of the period | $ 91,797 | $ 86,545 |
Business acquisition | 6,874 | |
Effect of exchange rates changes | 3,452 | (1,622) |
Balance, end of the period | 95,249 | 91,797 |
Brazil [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 27,660 | 18,526 |
Business acquisition | 5,635 | |
Effect of exchange rates changes | 245 | 3,499 |
Balance, end of the period | 27,905 | 27,660 |
Argentina [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 6,587 | 7,430 |
Business acquisition | 700 | |
Effect of exchange rates changes | (809) | (1,543) |
Balance, end of the period | 5,778 | 6,587 |
Chile [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 17,388 | 16,438 |
Effect of exchange rates changes | 783 | 950 |
Balance, end of the period | 18,171 | 17,388 |
Mexico [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 29,342 | 33,834 |
Business acquisition | 190 | |
Effect of exchange rates changes | 3,158 | (4,682) |
Balance, end of the period | 32,500 | 29,342 |
Venezuela [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 5,989 | 5,729 |
Business acquisition | 260 | |
Balance, end of the period | 5,989 | 5,989 |
Colombia [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 3,643 | 3,437 |
Business acquisition | 57 | |
Effect of exchange rates changes | 50 | 149 |
Balance, end of the period | 3,693 | 3,643 |
Other Countries [Member] | ||
Goodwill [Line Items] | ||
Balance, beginning of the period | 1,188 | 1,151 |
Business acquisition | 32 | |
Effect of exchange rates changes | 25 | 5 |
Balance, end of the period | $ 1,213 | $ 1,188 |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets (Expected Intangible Asset Amortization Expense) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Goodwill and Intangible Assets [Abstract] | |
For year ended 12/31/2017 | $ 1,343 |
For year ended 12/31/2018 | 4,475 |
For year ended 12/31/2019 | 2,201 |
For year ended 12/31/2020 | 956 |
Thereafter | 2,514 |
Total remaining amortization of intangible assets | $ 11,489 |
Segment Reporting (Financial Pe
Segment Reporting (Financial Performance of Company's Reporting Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 370,661 | $ 230,847 | $ 961,117 | $ 588,121 |
Direct costs | (294,097) | (137,796) | (690,557) | (356,965) |
Impairment of Long-Lived Assets | (2,837) | (13,717) | ||
Direct contribution | 76,564 | 93,051 | 267,723 | 217,439 |
Operating expenses and indirect costs of net revenues | (49,022) | (39,342) | (146,841) | (101,055) |
Income from operations | 27,542 | 53,709 | 120,882 | 116,384 |
Other income (expenses): | ||||
Interest income and other financial gains | 14,200 | 9,892 | 37,020 | 25,192 |
Interest expense and other financial losses | (6,709) | (6,492) | (19,686) | (18,807) |
Foreign currency (loss) / gain | 1,622 | (4,823) | (19,475) | (5,062) |
Net income before income tax expense | 36,655 | 52,286 | 118,741 | 117,707 |
Operating Segments [Member] | Brazil Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 229,475 | 131,003 | 569,320 | 311,427 |
Direct costs | (182,858) | (77,012) | (390,008) | (188,772) |
Direct contribution | 46,617 | 53,991 | 179,312 | 122,655 |
Operating Segments [Member] | Argentina Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 91,308 | 69,983 | 250,692 | 185,885 |
Direct costs | (56,210) | (39,026) | (150,973) | (105,217) |
Direct contribution | 35,098 | 30,957 | 99,719 | 80,668 |
Operating Segments [Member] | Mexico Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 22,604 | 11,807 | 58,324 | 34,375 |
Direct costs | (36,038) | (10,353) | (95,683) | (29,004) |
Direct contribution | (13,434) | 1,454 | (37,359) | 5,371 |
Operating Segments [Member] | Venezuela Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 9,751 | 6,885 | 38,329 | 26,451 |
Direct costs | (4,582) | (3,462) | (16,841) | (12,691) |
Impairment of Long-Lived Assets | (2,837) | (13,717) | ||
Direct contribution | 5,169 | 3,423 | 18,651 | 43 |
Operating Segments [Member] | Other Countries Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 17,523 | 11,169 | 44,452 | 29,983 |
Direct costs | (14,409) | (7,943) | (37,052) | (21,281) |
Direct contribution | $ 3,114 | $ 3,226 | $ 7,400 | $ 8,702 |
Segment Reporting (Allocation o
Segment Reporting (Allocation of Long-Lived Tangible Assets Based on Geography) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 136,101 | $ 124,261 |
US [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 8,445 | 9,771 |
Argentina [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 25,842 | 25,071 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 67,351 | 55,706 |
Mexico [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 3,487 | 2,307 |
Venezuela [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 21,935 | 21,615 |
Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 9,041 | 9,791 |
Total Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 127,656 | $ 114,490 |
Segment Reporting (Allocation38
Segment Reporting (Allocation of Goodwill and Intangible Assets Based on Geography) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | $ 119,891 | $ 118,074 |
US [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 146 | 250 |
Argentina [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 6,630 | 7,717 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 30,400 | 31,170 |
Mexico [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 41,992 | 38,860 |
Venezuela [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 7,168 | 7,366 |
Chile [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 28,164 | 27,395 |
Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | 5,391 | 5,316 |
Total Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total goodwill and intangible assets | $ 119,745 | $ 117,824 |
Segment Reporting (Consolidated
Segment Reporting (Consolidated Net Revenues by Similar Products and Services) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | $ 370,661 | $ 230,847 | $ 961,117 | $ 588,121 | |
Marketplace [Member] | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | 227,269 | 134,374 | 582,475 | 341,749 | |
Non-marketplace [Member] | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Net revenues | [1],[2] | 143,392 | 96,473 | 378,642 | 246,372 |
Payment fees | $ 92,254 | $ 52,444 | $ 232,426 | $ 139,630 | |
[1] | Includes an amount of $232,426 thousands and $139,630 thousands of Payment Fees for the nine-month periods ended September 30, 2017 and 2016, respectively. Includes an amount of $92,254 thousands and $52,444 thousands of Payment Fees for the three-month periods ended September 30, 2017 and 2016, respectively. | ||||
[2] | Includes, among other things, Ad Sales, Classified Fees, Payment Fees, Shipping Fees and other ancillary services. |
Fair Value Measurement of Ass40
Fair Value Measurement of Assets and Liabilities (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Gain (loss) recognized in earnings, contingent consideration | $ 3,164 | |
Other comprehensive (loss) income, gain from contingent considerations | 166 | |
Additional contingent consideration | 1,215 | |
Non-financial assets | 0 | $ 0 |
Non-financial liabilities | 0 | 0 |
Auction Rate Securities [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | 0 | 0 |
Collateralized Debt Obligations [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | 0 | 0 |
Structured Investment Vehicles [Member] | Direct Investment [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value Measurement of Ass41
Fair Value Measurement of Assets and Liabilities (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | $ 241,828 | $ 404,908 |
Contingent considerations | 4,213 | |
Long-term retention plan | 38,503 | 27,135 |
Total Financial Liabilities | 38,503 | 31,348 |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 35,374 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 239,744 | 223,887 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Financial Assets | 2,084 | 181,021 |
Long-term retention plan | 38,503 | 27,135 |
Total Financial Liabilities | 38,503 | 27,135 |
Significant Other Observable Inputs (Level 2) [Member] | Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 35,374 | |
Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent considerations | 4,213 | |
Total Financial Liabilities | 4,213 | |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 189,574 | 111,198 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | 189,574 | 111,198 |
Sovereign Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21,786 | 50,703 |
Sovereign Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21,786 | 50,703 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 30,468 | 207,633 |
Corporate Debt Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 28,384 | 61,986 |
Corporate Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2,084 | $ 145,647 |
Fair Value Measurement of Ass42
Fair Value Measurement of Assets and Liabilities (Fair Value of Financial Assets and Liabilities Measured at Amortized Cost) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 743,611 | $ 511,936 |
Liabilities | 1,133,198 | 873,174 |
Accounts Payable And Accrued Expenses [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 181,557 | 105,106 |
Funds Payable to Customers [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 519,420 | 370,693 |
Salaries and Social Security Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 44,789 | 37,936 |
Taxes Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 27,923 | 27,338 |
Dividends Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 6,624 | 6,624 |
Loans Payable and Other Financial Liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 51,843 | 6,283 |
Liabilities | 334,145 | 313,523 |
Other Liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 18,740 | 11,954 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 743,611 | 511,936 |
Liabilities | 1,133,198 | 873,174 |
Significant Other Observable Inputs (Level 2) [Member] | Accounts Payable And Accrued Expenses [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 181,557 | 105,106 |
Significant Other Observable Inputs (Level 2) [Member] | Funds Payable to Customers [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 519,420 | 370,693 |
Significant Other Observable Inputs (Level 2) [Member] | Salaries and Social Security Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 44,789 | 37,936 |
Significant Other Observable Inputs (Level 2) [Member] | Taxes Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 27,923 | 27,338 |
Significant Other Observable Inputs (Level 2) [Member] | Dividends Payable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 6,624 | 6,624 |
Significant Other Observable Inputs (Level 2) [Member] | Loans Payable and Other Financial Liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 51,843 | 6,283 |
Liabilities | 334,145 | 313,523 |
Significant Other Observable Inputs (Level 2) [Member] | Other Liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 18,740 | 11,954 |
Time Deposits [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 167,224 | 113,414 |
Time Deposits [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 167,224 | 113,414 |
Accounts Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 28,564 | 25,435 |
Accounts Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 28,564 | 25,435 |
Credit Cards Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 406,883 | 307,904 |
Credit Cards Receivable [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 406,883 | 307,904 |
Other Assets [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 89,097 | 58,900 |
Other Assets [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 89,097 | $ 58,900 |
Fair Value Measurement of Ass43
Fair Value Measurement of Assets and Liabilities (Fair Value of Money Market Funds, Short and Long-Term Investments Classified as Available for Sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | $ 241,927 | $ 405,784 | ||
Gross Unrealized Gains | 44 | 156 | [1] | |
Gross Unrealized Losses | (143) | (1,032) | [1] | |
Estimated Fair Value | 241,828 | 404,908 | ||
Cash and Cash Equivalents [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 189,574 | 111,198 | ||
Estimated Fair Value | 189,574 | 111,198 | ||
Cash and Cash Equivalents [Member] | Money Market Funds [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 189,574 | 111,198 | ||
Estimated Fair Value | 189,574 | 111,198 | ||
Short-term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 7,947 | 140,011 | ||
Gross Unrealized Gains | 1 | 66 | [1] | |
Gross Unrealized Losses | (7) | (170) | [1] | |
Estimated Fair Value | 7,941 | 139,907 | ||
Short-term Investments [Member] | Sovereign Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 697 | 2,166 | ||
Gross Unrealized Losses | (3) | |||
Estimated Fair Value | 694 | 2,166 | ||
Short-term Investments [Member] | Corporate Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 7,250 | 102,509 | ||
Gross Unrealized Gains | 1 | 26 | [1] | |
Gross Unrealized Losses | (4) | (168) | [1] | |
Estimated Fair Value | 7,247 | 102,367 | ||
Short-term Investments [Member] | Certificates of Deposit [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 35,336 | |||
Gross Unrealized Gains | [1] | 40 | ||
Gross Unrealized Losses | [1] | (2) | ||
Estimated Fair Value | 35,374 | |||
Long-term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 44,406 | 154,575 | ||
Gross Unrealized Gains | 43 | 90 | [1] | |
Gross Unrealized Losses | (136) | (862) | [1] | |
Estimated Fair Value | 44,313 | 153,803 | ||
Long-term Investments [Member] | Sovereign Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 21,196 | 48,943 | ||
Gross Unrealized Losses | (104) | (406) | [1] | |
Estimated Fair Value | 21,092 | 48,537 | ||
Long-term Investments [Member] | Corporate Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cost | 23,210 | 105,632 | ||
Gross Unrealized Gains | 43 | 90 | [1] | |
Gross Unrealized Losses | (32) | (456) | [1] | |
Estimated Fair Value | $ 23,221 | $ 105,266 | ||
[1] | Unrealized gains (losses) from securities are attributable to market price movements, net foreign exchange losses and foreign currency translation. Management does not believe any remaining significant unrealized losses represent other-than-temporary impairments based on the evaluation of available evidence including the credit rating of the investments, as of September 30, 2017 and December 31, 2016. |
Fair Value Measurement of Ass44
Fair Value Measurement of Assets and Liabilities (Estimated Fair Values of Money Market Funds, Short-Term and Long-Term Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Measurement of Assets and Liabilities [Abstract] | ||
One year or less | $ 197,515 | |
One year to two years | 20,331 | |
Two years to three years | 16,847 | |
Three years to four years | 7,135 | |
Total | $ 241,828 | $ 404,908 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Thousands, BRL in Millions | 9 Months Ended | ||
Sep. 30, 2017USD ($)item | Dec. 31, 2013BRL | Dec. 31, 2013USD ($) | |
Loss Contingencies [Line Items] | |||
Reserves for proceeding-related contingencies | $ | $ 6,208 | ||
Aggregate amount for legal actions for which no loss amount has been accrued | $ | 6,506 | ||
Loss accrued for reasonably possible legal actions | $ | 0 | ||
Maximum potential exposure | $ | 663,139 | ||
Recorded allowance of buyer protection program | $ | $ 1,212 | ||
Argentinean Subsidiaries [Member] | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits pending | 56 | ||
Number of legal actions pending | 1,856 | ||
Mexican Subsidiaries [Member] | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits pending | 10 | ||
Number of legal actions pending | 248 | ||
Brazilian Subsidiaries [Member] | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits pending | 700 | ||
Number of legal actions pending | 4,016 | ||
Fine against company's subsidiaries | BRL 12.2 | $ 3,700 |
Long Term Retention Plan (Narra
Long Term Retention Plan (Narrative) (Details) - LTRP 2017 [Member] | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percent of fixed awards for fixed payments | 16.66% |
Percent of variable awards for variable payments | 16.66% |
Term of fixed payments for eligible employees | 6 years |
Stock price per share, average closing price | $ 164.17 |
Long term retention plan, number of trading days | 60 days |
Long Term Retention Plan (Long
Long Term Retention Plan (Long Term Retention Plans Accrued Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | $ 6,666 | $ 9,124 | $ 28,734 | $ 19,251 |
LTRP 2009 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 352 | 29 | 648 | |
LTRP 2010 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 147 | 543 | 891 | 1,017 |
LTRP 2011 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 229 | 672 | 1,422 | 1,275 |
LTRP 2012 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 315 | 813 | 1,945 | 1,555 |
LTRP 2013 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 711 | 1,689 | 3,809 | 3,380 |
LTRP 2014 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 772 | 1,448 | 3,782 | 3,089 |
LTRP 2015 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 1,063 | 1,663 | 4,680 | 3,846 |
LTRP 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | 1,606 | $ 1,944 | 6,717 | $ 4,441 |
LTRP 2017 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long term retention plan | $ 1,823 | $ 5,459 |
2.25% Convertible Senior Note48
2.25% Convertible Senior Notes Due 2019 (Narrative) (Details) - 2.25% Convertible Senior Notes Due 2019 [Member] | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2014USD ($)$ / sharesshares | Sep. 30, 2017USD ($)item$ / shares$ / item | Dec. 31, 2016USD ($) | ||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 330,000,000 | $ 330,000,000 | $ 330,000,000 | |
Debt instrument, interest rate | 2.25% | 2.25% | ||
Debt instrument, maturity date | Jul. 1, 2019 | |||
Converted instrument rate, number of shares per principal amount | shares | 7.9353 | |||
Converted instrument, principal amount used per conversion | $ 1,000 | |||
Convertible senior notes, conversion price | $ / shares | $ 126.02 | |||
Amount paid to enter into capped call transactions | $ 19,700,000 | $ 67,300,000 | ||
Convertible notes, amount converted | [1] | 45,808,000 | 45,808,000 | |
Estimated fair value | $ 687,900,000 | 458,800,000 | ||
Closing trading amount price per share | $ / item | 100 | |||
Common stock, closing price per share | $ / shares | $ 258.9 | |||
Debt instrument convertible, if-converted value in excess of principal | $ 348,000,000 | |||
30 Day Measurement Period [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible trading days | item | 20 | |||
Debt instrument, convertible consecutive trading days | 30 days | |||
Percentage of debt conversion price | 130.00% | |||
5 Day Measurement Period [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, convertible trading days | item | 5 | |||
Debt instrument, convertible consecutive trading days | 5 days | |||
Percentage of debt conversion price | 98.00% | |||
September 31, 2016 Threshold Met [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible notes, amount converted | $ 16,000 | $ 12,000 | ||
[1] | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. |
2.25% Convertible Senior Note49
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components) (Details) - 2.25% Convertible Senior Notes Due 2019 [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | ||||
Amount of the equity component | [1] | $ 45,808,000 | $ 45,808,000 | |
2.25% convertible senior notes due 2019 | 330,000,000 | 330,000,000 | $ 330,000,000 | |
Unamortized debt discount | [2] | (17,909,000) | (25,097,000) | |
Unamortized transaction costs related to the debt component | (2,862,000) | (3,968,000) | ||
Contractual coupon interest accrual | 5,569,000 | 7,425,000 | ||
Contractual coupon interest payment | (3,713,000) | (7,425,000) | ||
Net carrying amount | $ 311,085,000 | $ 300,935,000 | ||
[1] | Net of $1,177 thousands of transaction costs related to the equity component of the Notes. | |||
[2] | As of September 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.75 years. |
2.25% Convertible Senior Note50
2.25% Convertible Senior Notes Due 2019 (Carrying Amounts of Liability and Equity Components - Additional Information) (Details) - 2.25% Convertible Senior Notes Due 2019 [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.25% | 2.25% | |
Transaction costs related to the equity component | $ 1,177 | $ 1,177 | |
Remaining period over which the unamortized debt discount will be amortized | 1 year 9 months |
2.25% Convertible Senior Note51
2.25% Convertible Senior Notes Due 2019 (Summary of Interest Expense for Contractual Interest and Accretion of Debt Discount) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
2.25% Convertible Senior Notes Due 2019 [Abstract] | ||||
Contractual coupon interest expense | $ 1,856 | $ 1,856 | $ 5,569 | $ 5,569 |
Amortization of debt discount | 2,440 | 2,310 | 7,188 | 6,806 |
Amortization of debt issuance costs | 381 | 344 | 1,106 | 998 |
Total interest expense related to the Notes | $ 4,677 | $ 4,510 | $ 13,863 | $ 13,373 |
Cash Dividend Distribution (Det
Cash Dividend Distribution (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||||
Sep. 30, 2017 | Oct. 31, 2017 | Jul. 31, 2017 | May 02, 2017 | Mar. 02, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | |
Dividends Payable [Line Items] | |||||||||
Cash dividends declared | $ 6,624 | $ 6,624 | $ 6,624 | $ 6,624 | $ 6,624 | $ 6,624 | |||
Cash dividends declared, per share | $ 0.150 | $ 0.150 | $ 0.15 | $ 0.150 | $ 0.150 | $ 0.150 | $ 0.150 | ||
Annual cash dividends declared, per share | $ 0.60 | ||||||||
Subsequent Events [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Cash dividends declared | $ 6,624 | ||||||||
Cash dividends declared, per share | $ 0.150 | ||||||||
First Quarter Previous Year [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividend payable date | Apr. 15, 2016 | ||||||||
Dividends payment, date of record | Mar. 31, 2016 | ||||||||
Second Quarter Previous Year [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividend payable date | Jul. 15, 2016 | ||||||||
Dividends payment, date of record | Jun. 30, 2016 | ||||||||
Third Quarter Previous Year [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividend payable date | Oct. 14, 2016 | ||||||||
Dividends payment, date of record | Sep. 30, 2016 | ||||||||
Fourth Quarter Prior Years [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividend payable date | Jan. 16, 2017 | ||||||||
Dividends payment, date of record | Dec. 31, 2016 | ||||||||
First Quarter [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividends payable, date declared | Mar. 2, 2017 | ||||||||
Dividend payable date | Apr. 17, 2017 | ||||||||
Dividends payment, date of record | Mar. 31, 2017 | ||||||||
Second Quarter [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividends payable, date declared | May 2, 2017 | ||||||||
Dividend payable date | Jul. 14, 2017 | ||||||||
Dividends payment, date of record | Jun. 30, 2017 | ||||||||
Third Quarter [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividends payable, date declared | Jul. 31, 2017 | ||||||||
Dividend payable date | Oct. 16, 2017 | ||||||||
Dividends payment, date of record | Sep. 30, 2017 | ||||||||
Fourth Quarter [Member] | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividends payable, date declared | Oct. 31, 2017 | ||||||||
Dividend payable date | Jan. 16, 2018 | ||||||||
Dividends payment, date of record | Dec. 31, 2017 |