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v3.23.3

Segment reporting (Tables) | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Financial Performance of Company's Reporting Segments | The following tables summarize the financial performance of the Company’s reporting segments:
| Nine Months Ended September 30, 2023
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 5,365 |  |  | $ | 2,317 |  |  | $ | 2,066 |  |  | $ | 464 |  |  | $ | 10,212 |
Direct costs | (4,027) |  |  | (1,289) |  |  | (1,593) |  |  | (429) |  |  | (7,338) |
Direct contribution | 1,338 |  |  | 1,028 |  |  | 473 |  |  | 35 |  |  | 2,874 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (1,291) |
Income from operations |  |  |  |  |  |  |  |  | 1,583 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 545 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (297) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (508) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 1,323 |
| Nine Months Ended September 30, 2022
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 4,134 |  |  | $ | 1,787 |  |  | $ | 1,257 |  |  | $ | 357 |  |  | $ | 7,535 |
Direct costs | (3,472) |  |  | (1,068) |  |  | (1,075) |  |  | (348) |  |  | (5,963) |
Direct contribution | 662 |  |  | 719 |  |  | 182 |  |  | 9 |  |  | 1,572 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (887) |
Income from operations |  |  |  |  |  |  |  |  | 685 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 142 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (221) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (134) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 472 |
| Three Months Ended September 30, 2023
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 2,006 |  |  | $ | 825 |  |  | $ | 772 |  |  | $ | 157 |  |  | $ | 3,760 |
Direct costs | (1,435) |  |  | (441) |  |  | (605) |  |  | (150) |  |  | (2,631) |
Direct contribution | 571 |  |  | 384 |  |  | 167 |  |  | 7 |  |  | 1,129 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (444) |
Income from operations |  |  |  |  |  |  |  |  | 685 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 196 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (111) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (239) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 531 |
| Three Months Ended September 30, 2022
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues | $ | 1,431 |  |  | $ | 675 |  |  | $ | 465 |  |  | $ | 119 |  |  | $ | 2,690 |
Direct costs | (1,209) |  |  | (376) |  |  | (384) |  |  | (121) |  |  | (2,090) |
Direct contribution | 222 |  |  | 299 |  |  | 81 |  |  | (2) |  |  | 600 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  | (304) |
Income from operations |  |  |  |  |  |  |  |  | 296 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 65 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (92) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (71) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 198 |
Consolidated Net Revenues by Similar Products and Services | The following tables summarize net revenues per reporting segment, which have been disaggregated by similar products and services for the nine and three-month periods ended September 30, 2023 and 2022:
| Nine Months Ended September 30,
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022
| (In millions)
Commerce services (a) | $ | 2,615 |  | $ | 1,877 |  |  | $ | 727 |  | $ | 602 |  |  | $ | 1,160 |  | $ | 702 |  |  | $ | 293 |  | $ | 234 |  |  | $ | 4,795 |  | $ | 3,415 |
Commerce products sales (b) | 552 |  | 344 |  |  | 158 |  | 198 |  |  | 212 |  | 161 |  |  | 23 |  | 29 |  |  | 945 |  | 732 |
Total commerce revenues | $ | 3,167 |  | $ | 2,221 |  |  | $ | 885 |  | $ | 800 |  |  | $ | 1,372 |  | $ | 863 |  |  | $ | 316 |  | $ | 263 |  |  | $ | 5,740 |  | $ | 4,147 |
Fintech services (c) | 1,375 |  | 1,059 |  |  | 927 |  | 636 |  |  | 198 |  | 97 |  |  | 134 |  | 86 |  |  | 2,634 |  | 1,878 |
Credit revenues (d) | 808 |  | 833 |  |  | 502 |  | 347 |  |  | 489 |  | 291 |  |  | 5 |  | 2 |  |  | 1,804 |  | 1,473 |
Fintech products sales (e) | 15 |  | 21 |  |  | 3 |  | 4 |  |  | 7 |  | 6 |  |  | 9 |  | 6 |  |  | 34 |  | 37 |
Total fintech revenues | $ | 2,198 |  | $ | 1,913 |  |  | $ | 1,432 |  | $ | 987 |  |  | $ | 694 |  | $ | 394 |  |  | $ | 148 |  | $ | 94 |  |  | $ | 4,472 |  | $ | 3,388 |
Total net revenues | $ | 5,365 |  | $ | 4,134 |  |  | $ | 2,317 |  | $ | 1,787 |  |  | $ | 2,066 |  | $ | 1,257 |  |  | $ | 464 |  | $ | 357 |  |  | $ | 10,212 |  | $ | 7,535 |
| Three Months Ended September 30,
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022 |  | 2023 | 2022
| (In millions)
Commerce services (a) | $ | 1,007 |  | $ | 669 |  |  | $ | 260 |  | $ | 221 |  |  | $ | 429 |  | $ | 257 |  |  | $ | 100 |  | $ | 76 |  |  | $ | 1,796 |  | $ | 1,223 |
Commerce products sales (b) | 204 |  | 111 |  |  | 50 |  | 69 |  |  | 70 |  | 54 |  |  | 8 |  | 8 |  |  | 332 |  | 242 |
Total commerce revenues | $ | 1,211 |  | $ | 780 |  |  | $ | 310 |  | $ | 290 |  |  | $ | 499 |  | $ | 311 |  |  | $ | 108 |  | $ | 84 |  |  | $ | 2,128 |  | $ | 1,465 |
Fintech services (c) | 487 |  | 357 |  |  | 344 |  | 245 |  |  | 75 |  | 38 |  |  | 45 |  | 32 |  |  | 951 |  | 672 |
Credit revenues (d) | 304 |  | 287 |  |  | 171 |  | 139 |  |  | 195 |  | 115 |  |  | 2 |  | 1 |  |  | 672 |  | 542 |
Fintech products sales (e) | 4 |  | 7 |  |  | — |  | 1 |  |  | 3 |  | 1 |  |  | 2 |  | 2 |  |  | 9 |  | 11 |
Total fintech revenues | $ | 795 |  | $ | 651 |  |  | $ | 515 |  | $ | 385 |  |  | $ | 273 |  | $ | 154 |  |  | $ | 49 |  | $ | 35 |  |  | $ | 1,632 |  | $ | 1,225 |
Total net revenues | $ | 2,006 |  | $ | 1,431 |  |  | $ | 825 |  | $ | 675 |  |  | $ | 772 |  | $ | 465 |  |  | $ | 157 |  | $ | 119 |  |  | $ | 3,760 |  | $ | 2,690 |
(a)Includes final value fees paid by sellers derived from intermediation services and related shipping and storage 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.
Allocation of Property and Equipment Based on Geography | The following table summarizes the allocation of property and equipment, net based on geography:
| September 30, 2023 |  | December 31, 2022
| (In millions)
US property and equipment, net | $ | 2 |  |  | $ | 1 |
Property and equipment, net |  |  |
Argentina | 199 |  |  | 188 |
Brazil | 527 |  |  | 514 |
Mexico | 267 |  |  | 206 |
Other countries | 86 |  |  | 84 |
| $ | 1,079 |  |  | $ | 992 |
Total property and equipment, net | $ | 1,081 |  |  | $ | 993 |
Schedule of Operating Lease Right of Use Assets Based on Geography | The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
| September 30, 2023 |  | December 31, 2022
| (In millions)
Argentina | $ | 49 |  | $ | 53
Brazil | 349 |  | 286
Mexico | 330 |  | 245
Other countries | 68 |  | 72
Total operating lease right-of-use assets | $ | 796 |  | $ | 656
Allocation of Goodwill and Intangible Assets Based on Geography | The following table summarizes the allocation of the goodwill and intangible assets based on geography:
| September 30, 2023 |  | December 31, 2022
| (In millions)
US intangible assets, net | $ | 9 |  |  | $ | 9 |
Goodwill and intangible assets, net |  |  |
Argentina | 13 |  | 14
Brazil | 66 |  | 63
Mexico | 44 |  | 40
Other countries | 48 |  | 52
| $ | 171 |  | $ | 169
Total goodwill and intangible assets, net | $ | 180 |  | $ | 178

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