LOANS RECEIVABLE, NET

9 Months Ended

Sep. 30, 2025

The Company classifies loans receivable as “Merchant,” “Consumer,” “Credit cards” and “Asset-backed.” As of September 30, 2025 and December 31, 2024, the components of current and non-current Loans receivable, net were as follows:


	September 30, 2025
	Loans receivable		Allowance for doubtful accounts		Loans receivable, net
	(In millions)
Merchant	$	1,877	$	(668)	$	1,209
Consumer	4,088		(1,114)		2,974
Credit cards	4,803		(1,032)		3,771
Asset-backed	254		(16)		238
Total	$	11,022	$	(2,830)	$	8,192


	December 31, 2024
	Loans receivable		Allowance for doubtful accounts		Loans receivable, net
	(In millions)
Merchant	$	1,205	$	(417)	$	788
Consumer	2,591		(696)		1,895
Credit cards	2,639		(557)		2,082
Asset-backed	138		(8)		130
Total	$	6,573	$	(1,678)	$	4,895

The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $2,859 million and $1,708 million as of September 30, 2025 and December 31, 2024, respectively, which includes $29 million and $30 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the interim condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, the Company is exposed to off-balance sheet unused agreed loan commitment on credit cards portfolio which expose the Company to credit risks for $6,595 million and $2,872 million, respectively. For the nine and three-month periods ended September 30, 2025, the Company recognized in Provision for doubtful accounts a gain of $5 million and a loss of $7 million as expected credit losses, and a loss of $9 million and $5 million for the nine and three-month periods ended September 30, 2024, respectively.

From time to time, the Company sells loans receivable related to its lending solution. In this regard, during 2024, the Company signed a contract with a third party to sell an amount up to $100 million of its loans receivable, as part of its funding strategy. These loans were originated by its Mexican subsidiary and provided to local users. This transaction was accounted for as a true sale and the Company has a continuing involvement related to a servicing fee charged to the purchaser for collection services and regarding a beneficial interest retained by the Company over the transferred assets. Such involvements did not preclude the fact that this operation qualified as a true sale because the purchaser had full control over the transferred assets. During the nine-month period ended September 30, 2025 the Company sold $52 million of loans receivable and recorded a gain of $1 million, related to the aforementioned contract. As of December 31, 2024, the Company sold $44 million of loans receivable and no gains or losses were recorded in the nine and three-month periods ended September 30, 2024.

The following tables summarize the allowance for doubtful accounts activity during the nine-month periods ended September 30, 2025 and 2024:


	September 30, 2025
	Merchant		Consumer		Credit cards		Asset-backed		Total
	(In millions)
Balance at beginning of year	$	417	$	696	$	557	$	8	$	1,678
Net charged to Net Income	502		847		733		10		2,092
Currency translation adjustments	64		88		111		2		265
Write-offs (1)	(315)		(517)		(369)		(4)		(1,205)
Balance at end of period	$	668	$	1,114	$	1,032	$	16	$	2,830


	September 30, 2024
	Merchant		Consumer		Credit cards		Asset-backed		Total
	(In millions)
Balance at beginning of year	$	256	$	591	$	236	$	1	$	1,084
Net charged to Net Income	328		569		406		6		1,309
Currency translation adjustments	(20)		(37)		(39)		—		(96)
Write-offs (1)	(171)		(398)		(116)		—		(685)
Balance at end of period	$	393	$	725	$	487	$	7	$	1,612

(1) The Company writes off loans when customer balance becomes 360 days past due.

The Company closely monitors credit quality for all loans receivable on a recurring basis to assess and manage its exposure to credit risk. To assess merchants and consumers seeking a loan under the lending solution, the Company uses, among other indicators, risk models internally developed, as a credit quality indicator to help predict the merchant’s and consumer’s ability to repay the principal balance and interest related to the credit. The risk model uses multiple variables as predictors of the merchant’s and consumer’s ability to repay the credit, including external and internal indicators. Internal indicators consider user behavior related to credit/payment history, and with lower weight in the risk models, the Company uses number of transactions in the Company’s ecosystem and merchant’s annual sales volume, among other indicators. In addition, the Company considers external bureau information to enhance the model and the decision making process.

The amortized cost of the loans receivable classified by the Company’s credit quality internal indicator was as follows:


	September 30, 2025		December 31, 2024
	(In millions)
1-14 days past due	$	319	$	125
15-30 days past due	217		146
31-60 days past due	281		175
61-90 days past due	254		167
91-120 days past due	259		178
121-150 days past due	227		155
151-180 days past due	236		138
181-210 days past due	222		129
211-240 days past due	238		118
241-270 days past due	211		121
271-300 days past due	183		109
301-330 days past due	191		112
331-360 days past due	168		90
Total past due	3,006		1,763
To become due	8,016		4,810
Total	$	11,022	$	6,573

As of September 30, 2025 and December 31, 2024, renegotiations represented 1.7% and 1.4% of the loans receivable portfolio, respectively.