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Segment reporting
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment reporting 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 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:
Six Months Ended June 30, 2023
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues$3,359 $1,492 $1,294 $307 $6,452 
Direct costs(2,592)(848)(987)(279)(4,706)
Direct contribution 767 644 307 28 1,746 
Operating expenses and indirect costs of net revenues(848)
Income from operations898 
Other income (expenses):
Interest income and other financial gains349 
Interest expense and other financial losses(186)
Foreign currency losses, net(269)
Net income before income tax expense and equity in earnings of unconsolidated entity$792 
Six Months Ended June 30, 2022
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues$2,703 $1,112 $792 $238 $4,845 
Direct costs(2,263)(692)(691)(227)(3,873)
Direct contribution 440 420 101 11 972 
Operating expenses and indirect costs of net revenues(583)
Income from operations389 
Other income (expenses):
Interest income and other financial gains77 
Interest expense and other financial losses(129)
Foreign currency losses, net(63)
Net income before income tax expense and equity in earnings of unconsolidated entity$274 

Three Months Ended June 30, 2023
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues$1,780 $771 $703 $161 $3,415 
Direct costs(1,331)(436)(524)(148)(2,439)
Direct contribution 449 335 179 13 976 
 
Operating expenses and indirect costs of net revenues(418)
Income from operations558 
 
Other income (expenses):
Interest income and other financial gains188 
Interest expense and other financial losses(92)
Foreign currency losses, net(182)
Net income before income tax expense and equity in earnings of unconsolidated entity$472 
Three Months Ended June 30, 2022
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues$1,451 $594 $428 $124 $2,597 
Direct costs(1,198)(372)(363)(117)(2,050)
Direct contribution253 222 65 7 547 
 
Operating expenses and indirect costs of net revenues(297)
Income from operations250 
 
Other income (expenses):
Interest income and other financial gains46 
Interest expense and other financial losses(73)
Foreign currency losses, net(60)
Net income before income tax expense and equity in earnings of unconsolidated entity$163 

The following table summarizes net revenues per reporting segment, which have been disaggregated by similar products and services for the six and three-month periods ended June 30, 2023 and 2022:
Six Months Ended June 30,
BrazilArgentinaMexicoOther CountriesTotal
2023202220232022202320222023202220232022
(In millions)
Commerce services (a)$1,608 $1,208 $467 $381 $731 $445 $193 $158 $2,999 $2,192 
Commerce products sales (b)348 233 108 129 142 107 15 21 613 490 
Total commerce revenues$1,956 $1,441 $575 $510 $873 $552 $208 $179 $3,612 $2,682 
Fintech services (c)888 702 583 391 123 59 89 54 1,683 1,206 
Credit revenues (d)504 546 331 208 294 176 3 11,132 931 
Fintech products sales (e)11 14 3 3 4 5 7 425 26 
Total fintech revenues$1,403 $1,262 $917 $602 $421 $240 $99 $59 $2,840 $2,163 
Total net revenues$3,359 $2,703 $1,492 $1,112 $1,294 $792 $307 $238 $6,452 $4,845 
Three Months Ended June 30,
BrazilArgentinaMexicoOther CountriesTotal
2023202220232022202320222023202220232022
(In millions)
Commerce services (a)$846 $641 $243 $200 $393 $232 $102 $82 $1,584 $1,155 
Commerce products sales (b)203 111 59 70 82 58 8 10 352 249 
Total commerce revenues$1,049 $752 $302 $270 $475 $290 $110 $92 $1,936 $1,404 
Fintech services (c)462 384 296 202 67 34 46 28 871 648 
Credit revenues (d)263 307 172 120 159 101 2 1596 529 
Fintech products sales (e)6 8 1 2 2 3 3 312 16 
Total fintech revenues$731 $699 $469 $324 $228 $138 $51 $32 $1,479 $1,193 
Total net revenues$1,780 $1,451 $771 $594 $703 $428 $161 $124 $3,415 $2,597 
(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 property and equipment, net based on geography:
June 30, 2023December 31, 2022
(In millions)
US property and equipment, net$3 $1 
Property and equipment, net
Argentina191 188 
Brazil542 514 
Mexico262 206 
Other countries92 84 
$1,087 $992 
Total property and equipment, net$1,090 $993 
The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
June 30, 2023December 31, 2022
(In millions)
Argentina$51$53
Brazil357286
Mexico295245
Other countries7672
Total operating lease right-of-use assets$779$656
The following table summarizes the allocation of the goodwill and intangible assets based on geography:
June 30, 2023December 31, 2022
(In millions)
US intangible assets, net$9 $9 
Goodwill and intangible assets, net  
Argentina1314
Brazil6863
Mexico4440
Other countries5452
$179$169
Total goodwill and intangible assets, net$188$178