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SEGMENTS | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS The Company manages the business country-by-country to understand and focus on the specific needs and opportunities in those markets. The Company’s chief executive officer is responsible for allocating resources and assessing performance and is therefore its chief operating decision maker (“CODM”). The Company’s segments include Brazil, Mexico, Argentina and other countries (which includes Chile, Colombia, Costa Rica, Ecuador, Peru, Uruguay and the U.S.). The CODM makes decisions considering all business lines within a country as whole, taking into account the synergies between the different lines in each of the countries’ integrated digital ecosystems. The CODM evaluates the performance of the Company’s operating segments based on their direct contribution. Direct contribution consists of net revenues and financial income from external customers less segment costs, which include expenses, such as shipping operation costs (including warehousing costs), carrier and other operating costs, provision for doubtful accounts, cost of goods sold, collection fees, funding cost, salaries and wages, marketing expenses and hosting expenses. All corporate related costs have been excluded from the segment’s direct contribution. The following tables summarize the financial performance of the Company’s reporting segments:
| Three Months Ended March 31, 2025
| Brazil |  | Mexico |  | Argentina |  | Other Countries |  | Total
| (In millions)
Net service revenues and financial income | $ | 2,673 |  |  | $ | 1,107 |  |  | $ | 1,313 |  |  | $ | 227 |  |  | $ | 5,320 |
Net product revenues | 409 |  |  | 115 |  |  | 69 |  |  | 22 |  |  | 615 |
Net revenues and financial income | 3,082 |  |  | 1,222 |  |  | 1,382 |  |  | 249 |  |  | 5,935 |
Local operating expenses | (2,457) |  |  | (960) |  |  | (714) |  |  | (193) |  |  | (4,324) |
Depreciation and amortization | (83) |  |  | (45) |  |  | (20) |  |  | (11) |  |  | (159) |
Total segment costs | (2,540) |  |  | (1,005) |  |  | (734) |  |  | (204) |  |  | (4,483) |
Direct contribution | 542 |  |  | 217 |  |  | 648 |  |  | 45 |  |  | 1,452 |
Operating expenses and indirect costs of net revenues and financial expenses |  |  |  |  |  |  |  |  | (689) |
Income from operations |  |  |  |  |  |  |  |  | 763 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 37 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (39) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (55) |
Net income before income tax expense |  |  |  |  |  |  |  |  | $ | 706 |
| Three Months Ended March 31, 2024
| Brazil |  | Mexico |  | Argentina |  | Other Countries |  | Total
| (In millions)
Net service revenues and financial income | $ | 2,316 |  |  | $ | 886 |  |  | $ | 590 |  |  | $ | 163 |  |  | $ | 3,955 |
Net product revenues | 255 |  |  | 85 |  |  | 25 |  |  | 13 |  |  | 378 |
Net revenues and financial income | 2,571 |  |  | 971 |  |  | 615 |  |  | 176 |  |  | 4,333 |
Local operating expenses | (1,937) |  |  | (703) |  |  | (374) |  |  | (145) |  |  | (3,159) |
Depreciation and amortization | (73) |  |  | (44) |  |  | (17) |  |  | (10) |  |  | (144) |
Total segment costs | (2,010) |  |  | (747) |  |  | (391) |  |  | (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 operations |  |  |  |  |  |  |  |  | 528 |
Other income (expenses): |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  | 25 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  | (38) |
Foreign currency losses, net |  |  |  |  |  |  |  |  | (34) |
Net income before income tax expense |  |  |  |  |  |  |  |  | $ | 481 |
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, 2025 and 2024:
| Three Months Ended March 31,
| Brazil |  | Mexico |  | Argentina |  | Other Countries (6) |  | Total
| 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024
| (In millions)
Commerce services (1) | $ | 1,471 |  | $ | 1,313 |  |  | $ | 667 |  | $ | 531 |  |  | $ | 406 |  | $ | 176 |  |  | $ | 157 |  | $ | 108 |  |  | $ | 2,701 |  | $ | 2,128 |
Commerce product sales (2) | 402 |  | 250 |  |  | 111 |  | 82 |  |  | 68 |  | 24 |  |  | 21 |  | 12 |  |  | 602 |  | 368 |
Total commerce revenues | 1,873 |  | 1,563 |  |  | 778 |  | 613 |  |  | 474 |  | 200 |  |  | 178 |  | 120 |  |  | 3,303 |  | 2,496 |
Financial services and income (3) | 606 |  | 587 |  |  | 166 |  | 123 |  |  | 634 |  | 295 |  |  | 67 |  | 52 |  |  | 1,473 |  | 1,057 |
Credit revenues (4) | 596 |  | 416 |  |  | 274 |  | 232 |  |  | 273 |  | 119 |  |  | 3 |  | 3 |  |  | 1,146 |  | 770 |
Fintech product sales (5) | 7 |  | 5 |  |  | 4 |  | 3 |  |  | 1 |  | 1 |  |  | 1 |  | 1 |  |  | 13 |  | 10 |
Total fintech revenues | 1,209 |  | 1,008 |  |  | 444 |  | 358 |  |  | 908 |  | 415 |  |  | 71 |  | 56 |  |  | 2,632 |  | 1,837 |
Total net revenues and financial income | $ | 3,082 |  | $ | 2,571 |  |  | $ | 1,222 |  | $ | 971 |  |  | $ | 1,382 |  | $ | 615 |  |  | $ | 249 |  | $ | 176 |  |  | $ | 5,935 |  | $ | 4,333 |
(1) 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. (2) Includes revenues from inventory sales and related shipping fees. (3) 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. (4) Includes interest earned on loans and advances granted to merchants and consumers, and interest and commissions earned on Mercado Pago credit card transactions. (5) Includes sales of mobile point of sales devices. (6) Revenues from external customers in the U.S. amounted to $10 million and $3 million for the three-month periods ended March 31, 2025 and 2024, respectively. The following table summarizes the allocation of property and equipment, net based on geography:
| March 31, 2025
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Property and equipment | $ | 1,154 |  |  | $ | 803 |  |  | $ | 459 |  |  | $ | 10 |  |  | $ | 192 |  |  | $ | 2,618 |
Accumulated depreciation | (481) |  |  | (263) |  |  | (209) |  |  | (7) |  |  | (95) |  |  | (1,055) |
Total property and equipment, net | $ | 673 |  |  | $ | 540 |  |  | $ | 250 |  |  | $ | 3 |  |  | $ | 97 |  |  | $ | 1,563 |
| December 31, 2024
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Property and equipment | $ | 1,078 |  |  | $ | 713 |  |  | $ | 434 |  |  | $ | 10 |  |  | $ | 178 |  |  | $ | 2,413 |
Accumulated depreciation | (497) |  |  | (239) |  |  | (199) |  |  | (6) |  |  | (92) |  |  | (1,033) |
Total property and equipment, net | $ | 581 |  |  | $ | 474 |  |  | $ | 235 |  |  | $ | 4 |  |  | $ | 86 |  |  | $ | 1,380 |
The following table summarizes the allocation of the operating lease right-of-use assets based on geography:
| March 31, 2025
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Right of use asset | $ | 768 |  |  | $ | 691 |  |  | $ | 78 |  |  | $ | 4 |  |  | $ | 120 |  |  | $ | 1,661 |
Accumulated amortization | (175) |  |  | (141) |  |  | (38) |  |  | (1) |  |  | (44) |  |  | (399) |
Total right of use asset, net | $ | 593 |  |  | $ | 550 |  |  | $ | 40 |  |  | $ | 3 |  |  | $ | 76 |  |  | $ | 1,262 |
| December 31, 2024
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Right of use asset | $ | 618 |  |  | $ | 616 |  |  | $ | 76 |  |  | $ | 4 |  |  | $ | 115 |  |  | $ | 1,429 |
Accumulated amortization | (139) |  |  | (116) |  |  | (36) |  |  | (1) |  |  | (39) |  |  | (331) |
Total right of use asset, net | $ | 479 |  |  | $ | 500 |  |  | $ | 40 |  |  | $ | 3 |  |  | $ | 76 |  |  | $ | 1,098 |
The following table summarizes the allocation of the goodwill and intangible assets based on geography:
| March 31, 2025
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Intangible assets at fair value | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 53 |  |  | $ | — |  |  | $ | 53 |
Goodwill and intangible assets | 98 |  |  | 45 |  |  | 23 |  |  | — |  |  | 71 |  |  | 237 |
Accumulated amortization | (7) |  |  | (4) |  |  | (8) |  |  | — |  |  | (24) |  |  | (43) |
Total goodwill and intangible assets, net | $ | 91 |  |  | $ | 41 |  |  | $ | 15 |  |  | $ | 53 |  |  | $ | 47 |  |  | $ | 247 |
| December 31, 2024
| Brazil |  | Mexico |  | Argentina |  | U.S. |  | Other countries |  | Total
| (In millions)
Intangible assets at fair value | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 49 |  |  | $ | — |  |  | $ | 49 |
Goodwill and intangible assets | 64 |  |  | 43 |  |  | 23 |  |  | — |  |  | 71 |  |  | 201 |
Accumulated amortization | (6) |  |  | (4) |  |  | (7) |  |  | — |  |  | (23) |  |  | (40) |
Total goodwill and intangible assets, net | $ | 58 |  |  | $ | 39 |  |  | $ | 16 |  |  | $ | 49 |  |  | $ | 48 |  |  | $ | 210 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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