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Segment reporting
 9 Months Ended
Sep. 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:
Nine Months Ended September 30, 2023
BrazilArgentinaMexicoOther CountriesTotal
(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 operations1,583 
Other income (expenses):
Interest income and other financial gains545 
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
BrazilArgentinaMexicoOther CountriesTotal
(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 operations685 
Other income (expenses):
Interest income and other financial gains142 
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
BrazilArgentinaMexicoOther CountriesTotal
(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 operations685 
Other income (expenses):
Interest income and other financial gains196 
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
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues$1,431 $675 $465 $119 $2,690 
Direct costs(1,209)(376)(384)(121)(2,090)
Direct contribution222 299 81 (2)600 
Operating expenses and indirect costs of net revenues(304)
Income from operations296 
Other income (expenses):
Interest income and other financial gains65 
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 
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,
BrazilArgentinaMexicoOther CountriesTotal
2023202220232022202320222023202220232022
(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,
BrazilArgentinaMexicoOther CountriesTotal
2023202220232022202320222023202220232022
(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.
The following table summarizes the allocation of property and equipment, net based on geography:
September 30, 2023December 31, 2022
(In millions)
US property and equipment, net$2 $1 
Property and equipment, net
Argentina199 188 
Brazil527 514 
Mexico267 206 
Other countries86 84 
$1,079 $992 
Total property and equipment, net$1,081 $993 
The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
September 30, 2023December 31, 2022
(In millions)
Argentina$49$53
Brazil349286
Mexico330245
Other countries6872
Total operating lease right-of-use assets$796$656
The following table summarizes the allocation of the goodwill and intangible assets based on geography:
September 30, 2023December 31, 2022
(In millions)
US intangible assets, net$9 $9 
Goodwill and intangible assets, net  
Argentina1314
Brazil6663
Mexico4440
Other countries4852
$171$169
Total goodwill and intangible assets, net$180$178