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SEGMENTS (Tables) | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
Financial Performance of Company's Reporting Segments | The following tables summarize the financial performance of the Company’s reporting segments:
| Six Months Ended June 30, 2024
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues and financial income | $ | 5,357 |  |  | $ | 1,478 |  |  | $ | 2,172 |  |  | $ | 399 |  |  | $ | 9,406 |
Direct costs | (4,120) |  |  | (873) |  |  | (1,754) |  |  | (352) |  |  | (7,099) |
Direct contribution | 1,237 |  |  | 605 |  |  | 418 |  |  | 47 |  |  | 2,307 |
Operating expenses and indirect costs of net revenues and financial expenses |  |  |  |  |  |  |  |  | (1,053) |
Income from operations |  |  |  |  |  |  |  |  | 1,254 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 64 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (77) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (92) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 1,149 |
| Six Months Ended June 30, 2023 (1)
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues and financial income | $ | 3,481 |  |  | $ | 1,642 |  |  | $ | 1,334 |  |  | $ | 314 |  |  | $ | 6,771 |
Direct costs | (2,691) |  |  | (867) |  |  | (988) |  |  | (290) |  |  | (4,836) |
Direct contribution | 790 |  |  | 775 |  |  | 346 |  |  | 24 |  |  | 1,935 |
Operating expenses and indirect costs of net revenues and financial expenses |  |  |  |  |  |  |  |  | (848) |
Income from operations |  |  |  |  |  |  |  |  | 1,087 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 57 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (83) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (269) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 792 |
(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.
| Three Months Ended June 30, 2024
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues and financial income | $ | 2,786 |  |  | $ | 863 |  |  | $ | 1,201 |  |  | $ | 223 |  |  | $ | 5,073 |
Direct costs | (2,110) |  |  | (482) |  |  | (1,007) |  |  | (197) |  |  | (3,796) |
Direct contribution | 676 |  |  | 381 |  |  | 194 |  |  | 26 |  |  | 1,277 |
Operating expenses and indirect costs of net revenues and financial expenses |  |  |  |  |  |  |  |  | (551) |
Income from operations |  |  |  |  |  |  |  |  | 726 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 39 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (39) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (58) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 668 |
| Three Months Ended June 30, 2023 (1)
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| (In millions)
Net revenues and financial income | $ | 1,842 |  |  | $ | 855 |  |  | $ | 724 |  |  | $ | 164 |  |  | $ | 3,585 |
Direct costs | (1,373) |  |  | (448) |  |  | (524) |  |  | (153) |  |  | (2,498) |
Direct contribution | 469 |  |  | 407 |  |  | 200 |  |  | 11 |  |  | 1,087 |
Operating expenses and indirect costs of net revenues and financial expenses |  |  |  |  |  |  |  |  | (418) |
Income from operations |  |  |  |  |  |  |  |  | 669 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 34 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (49) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (182) |
Net income before income tax expense and equity in earnings of unconsolidated entity |  |  |  |  |  |  |  |  | $ | 472 |
(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.
Consolidated Net Revenues by Similar Products and Services | The following table summarizes net revenues and financial income per reporting segment, which have been disaggregated by similar products and services for the six and three-month periods ended June 30, 2024 and 2023:
| Six Months Ended June 30,
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1)
| (In millions)
Commerce services (2) | $ | 2,724 |  | $ | 1,608 |  |  | $ | 437 |  | $ | 467 |  |  | $ | 1,217 |  | $ | 731 |  |  | $ | 252 |  | $ | 193 |  |  | $ | 4,630 |  | $ | 2,999 |
Commerce products sales (3) | 540 |  | 348 |  |  | 70 |  | 108 |  |  | 195 |  | 142 |  |  | 31 |  | 15 |  |  | 836 |  | 613 |
Total commerce revenues | 3,264 |  | 1,956 |  |  | 507 |  | 575 |  |  | 1,412 |  | 873 |  |  | 283 |  | 208 |  |  | 5,466 |  | 3,612 |
Financial services and income (4) | 1,196 |  | 1,010 |  |  | 707 |  | 733 |  |  | 261 |  | 163 |  |  | 108 |  | 96 |  |  | 2,272 |  | 2,002 |
Credit revenues (5) | 885 |  | 504 |  |  | 262 |  | 331 |  |  | 492 |  | 294 |  |  | 6 |  | 3 |  |  | 1,645 |  | 1,132 |
Fintech products sales (6) | 12 |  | 11 |  |  | 2 |  | 3 |  |  | 7 |  | 4 |  |  | 2 |  | 7 |  |  | 23 |  | 25 |
Total fintech revenues | 2,093 |  | 1,525 |  |  | 971 |  | 1,067 |  |  | 760 |  | 461 |  |  | 116 |  | 106 |  |  | 3,940 |  | 3,159 |
Total net revenues and financial income | $ | 5,357 |  | $ | 3,481 |  |  | $ | 1,478 |  | $ | 1,642 |  |  | $ | 2,172 |  | $ | 1,334 |  |  | $ | 399 |  | $ | 314 |  |  | $ | 9,406 |  | $ | 6,771 |
| Three Months Ended June 30,
| Brazil |  | Argentina |  | Mexico |  | Other Countries |  | Total
| 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1) |  | 2024 | 2023 (1)
| (In millions)
Commerce services (2) | $ | 1,411 |  | $ | 846 |  |  | $ | 261 |  | $ | 243 |  |  | $ | 686 |  | $ | 393 |  |  | $ | 144 |  | $ | 102 |  |  | $ | 2,502 |  | $ | 1,584 |
Commerce products sales (3) | 290 |  | 203 |  |  | 46 |  | 59 |  |  | 113 |  | 82 |  |  | 19 |  | 8 |  |  | 468 |  | 352 |
Total commerce revenues | 1,701 |  | 1,049 |  |  | 307 |  | 302 |  |  | 799 |  | 475 |  |  | 163 |  | 110 |  |  | 2,970 |  | 1,936 |
Financial services and income (4) | 609 |  | 524 |  |  | 412 |  | 380 |  |  | 138 |  | 88 |  |  | 56 |  | 49 |  |  | 1,215 |  | 1,041 |
Credit revenues (5) | 469 |  | 263 |  |  | 143 |  | 172 |  |  | 260 |  | 159 |  |  | 3 |  | 2 |  |  | 875 |  | 596 |
Fintech products sales (6) | 7 |  | 6 |  |  | 1 |  | 1 |  |  | 4 |  | 2 |  |  | 1 |  | 3 |  |  | 13 |  | 12 |
Total fintech revenues | 1,085 |  | 793 |  |  | 556 |  | 553 |  |  | 402 |  | 249 |  |  | 60 |  | 54 |  |  | 2,103 |  | 1,649 |
Total net revenues and financial income | $ | 2,786 |  | $ | 1,842 |  |  | $ | 863 |  | $ | 855 |  |  | $ | 1,201 |  | $ | 724 |  |  | $ | 223 |  | $ | 164 |  |  | $ | 5,073 |  | $ | 3,585 |
(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 debit card commissions and insurtech fees. (5) Includes interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions. (6) 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:
| June 30, 2024 |  | December 31, 2023
| (In millions)
US property and equipment, net | $ | 3 |  |  | $ | 2 |
Other countries |  |  |
Argentina | 217 |  |  | 208 |
Brazil | 543 |  |  | 603 |
Mexico | 359 |  |  | 345 |
Other countries | 96 |  |  | 92 |
| 1,215 |  |  | 1,248 |
Total property and equipment, net | $ | 1,218 |  |  | $ | 1,250 |
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:
| June 30, 2024 |  | December 31, 2023
| (In millions)
US right of use asset, net | $ | 4 |  |  | $ | — |
Other countries |  |  |
Argentina | 43 |  |  | 51 |
Brazil | 330 |  |  | 396 |
Mexico | 335 |  |  | 380 |
Other countries | 63 |  |  | 72 |
| 771 |  | 899
Total right of use asset, net | $ | 775 |  | $ | 899
Allocation of Goodwill and Intangible Assets Based on Geography | The following table summarizes the allocation of the goodwill and intangible assets based on geography:
| June 30, 2024 |  | December 31, 2023
| (In millions)
US intangible assets at fair value | 36 |  |  | $ | 24 |
| $ | 36 |  | $ | 24
Goodwill and intangible assets, net |  |  |
Argentina | $ | 13 |  | $ | 12
Brazil | 61 |  | 68
Mexico | 41 |  | 44
Other countries | 47 |  | 50
| 162 |  | 174
Total goodwill and intangible assets | $ | 198 |  | $ | 198

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