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SEGMENTS
 3 Months Ended
Mar. 31, 2024
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 and financial income from external customers less direct costs, which include costs of net revenues and financial expenses, 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:
Three Months Ended March 31, 2024
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues and financial income$2,571 $615 $971 $176 $4,333 
Direct costs(2,010)(391)(747)(155)(3,303)
Direct contribution 561 224 224 21 1,030 
Operating expenses and indirect costs of net revenues and financial expenses(502)
Income from operations528 
Other income (expenses):
Interest income and other financial gains25 
Interest expense and other financial losses(38)
Foreign currency losses, net(34)
Net income before income tax expense and equity in earnings of unconsolidated entity$481 
Three Months Ended March 31, 2023 (1)
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues and financial income$1,639 $787 $610 $150 $3,186 
Direct costs(1,318)(419)(464)(137)(2,338)
Direct contribution 321 368 146 13 848 
Operating expenses and indirect costs of net revenues and financial expenses(430)
Income from operations418 
Other income (expenses):
Interest income and other financial gains23 
Interest expense and other financial losses(34)
Foreign currency losses, net(87)
Net income before income tax expense and equity in earnings of unconsolidated entity$320 
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior year results.
The following table summarizes net revenues and financial income per reporting segment, which have been disaggregated by similar products and services for the three-month periods ended March 31, 2024 and 2023:
Three Months Ended March 31,
BrazilArgentinaMexicoOther CountriesTotal
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
2024
2023 (1)
(In millions)
Commerce services (2)
$1,313 $762 $176 $224 $531 $338 $108 $91 $2,128 $1,415 
Commerce products sales (3)
250 145 24 49 82 60 12 7 368 261 
Total commerce revenues1,563 907 200 273 613 398 120 98 2,496 1,676 
Fintech services and financial income (4)
587 486 295 353 123 75 52 47 1,057 961 
Credit revenues (5)
416 241 119 159 232 135 3 1 770 536 
Fintech products sales (6)
5 5 1 2 3 2 1 4 10 13 
Total fintech revenues1,008 732 415 514 358 212 56 52 1,837 1,510 
Total net revenues and financial income$2,571 $1,639 $615 $787 $971 $610 $176 $150 $4,333 $3,186 
(1) Recast for consistency with the current presentation due to the change in the presentation of certain financial results. Please refer to Note 2 – Summary of significant accounting policies - Change in the presentation of certain financial results and reclassification of prior year results.
(2) Includes final value fees and flat fees paid by sellers derived from intermediation services and related shipping and storage fees, classified fees derived from classified advertising services and ad sales.
(3) Includes revenues from inventory sales and related shipping fees.
(4) Includes revenues from commissions the Company charges for transactions off-platform derived from use of the Company’s payment solution and asset management product, 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, interest earned on cash and investments as part of Mercado Pago activities, including those required due to fintech regulations, net of interest gains pass through our Brazilian users in connection with our asset management product, Mercado Pago credit and debit card fees and insurtech fees.
(5) Includes interest earned on loans and advances granted to merchants and consumers, and interest earned on Mercado Pago credit card transactions.
(6) Includes sales of mobile point of sales devices.
The following table summarizes the allocation of property and equipment, net based on geography:
March 31, 2024December 31, 2023
(In millions)
US property and equipment, net$2 $2 
Other countries
Argentina214 208 
Brazil590 603 
Mexico363 345 
Other countries91 92 
1,258 1,248 
Total property and equipment, net$1,260 $1,250 
The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
March 31, 2024December 31, 2023
(In millions)
US right of use asset, net$3 $— 
Other countries
Argentina46 51 
Brazil381 396 
Mexico376 380 
Other countries66 72 
869899
Total right of use asset, net$872$899
The following table summarizes the allocation of the goodwill and intangible assets based on geography:
March 31, 2024December 31, 2023
(In millions)
US intangible assets at fair value40 $24 
$40$24
Goodwill and intangible assets, net  
Argentina$13$12
Brazil6768
Mexico4544
Other countries4550
170174
Total goodwill and intangible assets$210$198