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Segments | 12 Months Ended
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Dec. 31, 2022
Segment Reporting [Abstract] |
Segments | Segments 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 in accordance with the criteria, as determined by Management, used to evaluate the Company’s performance. The Company’s segments include Brazil, Argentina, Mexico and other countries (which includes Chile, Colombia, Costa Rica, Ecuador, Peru and Uruguay). Direct contribution consists of net revenues from external customers less direct costs, which include costs of net revenues, product and technology development expenses, sales and marketing expenses, provision for doubtful accounts and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, payroll and third-party fees. All corporate related costs have been excluded from the segment’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:
| Year Ended December 31, 2022
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 5,666 |  |  | $ | 2,500 |  |  | $ | 1,864 |  |  | $ | 507 |  |  | $ | 10,537 |
Direct costs | (4,717) |  |  | (1,488) |  |  | (1,579) |  |  | (481) |  |  | (8,265) |
Direct contribution | 949 |  |  | 1,012 |  |  | 285 |  |  | 26 |  |  | 2,272 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (1,238) |
Income from operations |  |  |  |  |  |  |  |  | 1,034 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 265 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (321) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (198) |
Net income before income tax expense |  |  |  |  |  |  |  |  | $ | 780 |
| Year Ended December 31, 2021
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 3,910 |  |  | $ | 1,531 |  |  | $ | 1,172 |  |  | $ | 456 |  |  | $ | 7,069 |
Direct costs | (3,233) |  |  | (998) |  |  | (1,139) |  |  | (380) |  |  | (5,750) |
Direct contribution | 677 |  |  | 533 |  |  | 33 |  |  | 76 |  |  | 1,319 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (878) |
Income from operations |  |  |  |  |  |  |  |  | 441 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 138 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (229) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (109) |
Net income before income tax expense |  |  |  |  |  |  |  |  | $ | 241 |
| Year Ended December 31, 2020
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 2,194 |  |  | $ | 980 |  |  | $ | 575 |  |  | $ | 225 |  |  | $ | 3,974 |
Direct costs | (1,766) |  |  | (709) |  |  | (586) |  |  | (186) |  |  | (3,247) |
Direct contribution | 428 |  |  | 271 |  |  | (11) |  |  | 39 |  |  | 727 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (599) |
Income from operations |  |  |  |  |  |  |  |  | 128 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 103 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (107) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (43) |
Net income before income tax expense |  |  |  |  |  |  |  |  | $ | 81 |
The following tables summarize net revenues per reporting segment, which have been disaggregated by similar products and services for the years ended December 31, 2022, 2021 and 2020:
| Year Ended December 31, 2022
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Commerce services (a) | $ | 2,585 |  |  | $ | 814 |  |  | $ | 1,036 |  |  | $ | 329 |  |  | $ | 4,764 |
Commerce products sales (b) | 487 |  |  | 271 |  |  | 246 |  |  | 40 |  |  | 1,044 |
Total commerce revenues | $ | 3,072 |  |  | $ | 1,085 |  |  | $ | 1,282 |  |  | $ | 369 |  |  | $ | 5,808 |
Fintech services (c) | 1,464 |  |  | 904 |  |  | 152 |  |  | 125 |  |  | 2,645 |
Credit revenues (d) | 1,102 |  |  | 506 |  |  | 421 |  |  | 4 |  |  | 2,033 |
Fintech products sales (e) | 28 |  |  | 5 |  |  | 9 |  |  | 9 |  |  | 51 |
Total fintech revenues | $ | 2,594 |  |  | $ | 1,415 |  |  | $ | 582 |  |  | $ | 138 |  |  | $ | 4,729 |
Total net revenues | $ | 5,666 |  |  | $ | 2,500 |  |  | $ | 1,864 |  |  | $ | 507 |  |  | $ | 10,537 |
| Year Ended December 31, 2021
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Commerce services (a) | $ | 2,076 |  |  | $ | 614 |  |  | $ | 756 |  |  | $ | 304 |  |  | $ | 3,750 |
Commerce products sales (b) | 405 |  |  | 242 |  |  | 168 |  |  | 70 |  |  | 885 |
Total commerce revenues | $ | 2,481 |  |  | $ | 856 |  |  | $ | 924 |  |  | $ | 374 |  |  | $ | 4,635 |
Fintech services (c) | 938 |  |  | 490 |  |  | 80 |  |  | 82 |  |  | 1,590 |
Credit revenues (d) | 468 |  |  | 178 |  |  | 163 |  |  | — |  |  | 809 |
Fintech products sales (e) | 23 |  |  | 7 |  |  | 5 |  |  | — |  |  | 35 |
Total fintech revenues | $ | 1,429 |  |  | $ | 675 |  |  | $ | 248 |  |  | $ | 82 |  |  | $ | 2,434 |
Total net revenues | $ | 3,910 |  |  | $ | 1,531 |  |  | $ | 1,172 |  |  | $ | 456 |  |  | $ | 7,069 |
| Year Ended December 31, 2020
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Commerce services (a) | $ | 1,257 |  |  | $ | 461 |  |  | $ | 428 |  |  | $ | 159 |  |  | $ | 2,305 |
Commerce products sales (b) | 100 |  |  | 100 |  |  | 43 |  |  | 12 |  |  | 255 |
Total commerce revenues | $ | 1,357 |  |  | $ | 561 |  |  | $ | 471 |  |  | $ | 171 |  |  | $ | 2,560 |
Fintech services (c) | 671 |  |  | 350 |  |  | 64 |  |  | 54 |  |  | 1,139 |
Credit revenues (d) | 143 |  |  | 64 |  |  | 39 |  |  | — |  |  | 246 |
Fintech products sales (e) | 23 |  |  | 5 |  |  | 1 |  |  | — |  |  | 29 |
Total fintech revenues | $ | 837 |  |  | $ | 419 |  |  | $ | 104 |  |  | $ | 54 |  |  | $ | 1,414 |
Total net revenues | $ | 2,194 |  |  | $ | 980 |  |  | $ | 575 |  |  | $ | 225 |  |  | $ | 3,974 |
(a) | Includes final value fees paid by sellers derived from intermediation services and related shipping fees, classified fees derived from classified advertising services and ad sales.
(b) | Includes revenues from inventory sales and related shipping fees.
(c) | Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution, revenues as a result of offering installments for the payment to its Mercado Pago users, either when the Company finances the transactions directly or when the Company sells the corresponding financial assets, Mercado Pago credit and debit card fees and insurtech fees.
(d) | Includes interest earned on loans and advances granted to merchants and consumers, and interest earned on Mercado Pago credit card transactions.
(e) | Includes sales of mobile point of sales devices.
The following table summarizes the allocation of the property and equipment based on geography:
| December 31,
| 2022 |  | 2021
| (In millions)
US property and equipment, net | $ | 1 |  |  | $ | 1 |
Other countries |  |  |
Argentina | 188 |  |  | 174 |
Brazil | 514 |  |  | 395 |
Mexico | 206 |  |  | 176 |
Other countries | 84 |  |  | 61 |
| $ | 992 |  |  | $ | 806 |
Total property and equipment, net | $ | 993 |  |  | $ | 807 |
As of December 31, 2022, the Company owned operating lease right-of-use assets of $53 million in Argentina the segment, $286 million in the Brazil segment, $245 million in the Mexico segment and $72 million in the Other countries segment. The following table summarizes the allocation of the goodwill and intangible assets based on geography:
| December 31,
| 2022 |  | 2021
| (In millions)
US intangible assets, net | $ | 9 |  |  | $ | 21 |
Goodwill and intangible assets, net |  |  |
Argentina | 14 |  |  | 16 |
Brazil | 63 |  |  | 60 |
Mexico | 40 |  |  | 41 |
Other countries | 52 |  |  | 55 |
| $ | 169 |  |  | $ | 172 |
Total goodwill and intangible assets, net | $ | 178 |  |  | $ | 193 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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