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SEGMENTS
 6 Months Ended
Jun. 30, 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:
Six Months Ended June 30, 2024
BrazilArgentinaMexicoOther CountriesTotal
(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 operations1,254 
Other income (expenses):
Interest income and other financial gains64 
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)
BrazilArgentinaMexicoOther CountriesTotal
(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 operations1,087 
Other income (expenses):
Interest income and other financial gains57 
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
BrazilArgentinaMexicoOther CountriesTotal
(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 contribution676 381 194 26 1,277 
Operating expenses and indirect costs of net revenues and financial expenses(551)
Income from operations726 
Other income (expenses):
Interest income and other financial gains39 
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)
BrazilArgentinaMexicoOther CountriesTotal
(In millions)
Net revenues and financial income$1,842 $855 $724 $164 $3,585 
Direct costs(1,373)(448)(524)(153)(2,498)
Direct contribution469 407 200 11 1,087 
Operating expenses and indirect costs of net revenues and financial expenses(418)
Income from operations669 
Other income (expenses):
Interest income and other financial gains34 
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.
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,
BrazilArgentinaMexicoOther CountriesTotal
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 revenues3,264 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 revenues2,093 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,
BrazilArgentinaMexicoOther CountriesTotal
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 revenues1,701 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 revenues1,085 793 556 553 402 249 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.
The following table summarizes the allocation of property and equipment, net based on geography:
June 30, 2024December 31, 2023
(In millions)
US property and equipment, net$3 $2 
Other countries
Argentina217 208 
Brazil543 603 
Mexico359 345 
Other countries96 92 
1,215 1,248 
Total property and equipment, net$1,218 $1,250 
The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
June 30, 2024December 31, 2023
(In millions)
US right of use asset, net$4 $— 
Other countries
Argentina43 51 
Brazil330 396 
Mexico335 380 
Other countries63 72 
771899
Total right of use asset, net$775$899
The following table summarizes the allocation of the goodwill and intangible assets based on geography:
June 30, 2024December 31, 2023
(In millions)
US intangible assets at fair value36 $24 
$36$24
Goodwill and intangible assets, net  
Argentina$13$12
Brazil6168
Mexico4144
Other countries4750
162174
Total goodwill and intangible assets$198$198